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Bohm v. V. Loewer's Gambrinus Brewery Co.

16 Daly (N.Y.) 80 Court N.Y.C.P. Decision date 1890-04-07 English

Delivered by Bischoff, J.

Contents

Majority

p. 80
Rudolph Bohm, Respondent, against V. Loewer’s Gambrinus Brewery Company, Appellant.

Headnote

Defendant, corporation was managed by three trustees, its sole stockholders, two of whom were president and treasurer, respectively. A by-law provided that all contracts involving a liability of the corporation for $500 or more must be in writing, executed by both president and treasurer, and attested by the seal of the company. Held, that no recovery could be had on a written lease to it of premises for eight months, at an annual rental of $900 payable monthly in advance, which was signed by the president only, and was not under seal, and which the treasurer expressly refused to sign, where the premises were never occupied.
Appeal from a judgment of the District Court in the City of New York for the Fourth Judicial District.
The facts are stated in the opinion.
O. J. Cr. Hall, for appellant.
Jacob L. Hanes, for respondent.

Defendant is a corporation managed by three trustees, Loewer, the president, Hall, the treasurer, and Tompkins; they being also the only stockholders. The business of the corporation was the manufacture and sale of beer, and the by-laws-, adopted at a joint meeting of the stockholders and trustees, for the management of the company’s business, among other things provided that no liability on behalf of the corporation should be contracted, exceeding in amount one hundred dollars, excepting with the consent of the treasurer, or at least two of the trustees, and that all contracts involving a liability of the corporation for five hundred dollars or more must be in writing, executed by both the president and treasurer and attested by the seal of the company. On or about August 23d, 1889,, the plaintiff, by an instrument bearing date on that day, and under his hand and seal, undertook to let and rent the premises known as No. 129

p. 81
Orchard Street, in the city of New York, to the defendant for the period of eight months, commencing September 1st, 1889, at the annual rental of nine hundred dollars, payable in instalments of seventy-five dollars each, in advance, on the first day of each and every month. This alleged lease was also executed by Valentine Loewer as president of the defendant, but not by the treasurer, and the seal of the defendant does not appear to have been affixed. No rent ever appears to have been paid, and an action was brought to recover the first monthly instalment due September 1st, 1889. The trial resulted in a judgment in favor of the plaintiff and against the defendant for the sum of seventy-five dollars and fifty-five cents, the amount of rent and interest, with costs, and from that judgment defendant appeals to -this court.

A careful examination of the evidence fails to reveal any legal merit in favor of the plaintiff. The execution of the lease having been denied, it was incumbent upon the plaintiff to prove a lease binding and operative upon the defendant. In this he has utterly failed. The liability sought to be charged upon the defendant under the alleged lease exceeds the sum of five hundred dollars, and comes therefore within the provisions of the defendant’s by-laws limiting its creation to an instrument in writing, executed by the president and treasurer and attested by the corporate seal, and plaintiff was chargeable with notice of these restrictive provisions upon the powers of defendant’s officers (Rathburn v. Snow, 15 Daly 141 ; Westerfield v. Radde, 7 Daly 326 ).

An attempt was made by the plaintiff upon the trial to show a subsequent adoption or ratification of the president’s act by the trustees, predicated upon the neglect of the trustees to repudiate the transaction when it was brought to their notice. But in this attempt the plaintiff was equally unsuccessful. The only trustees who appear to have had notice of the execution of the alleged lease by the president, were the president himself and Mr. Hall, the treasurer. The trustees, however, as such, could not, pursuant to the provisions of the by-laws mentioned, have originally created any liability on

p. 82
behalf of the corporation exceeding five hundred dollars in amount, and it cannot be said that they can by implication do the acts prohibited in unequivocal terms (Peterson v. Mayor, & c., 17 N. Y. 449 ; Brady v. Mayor, & c., 20 N. Y. 312 -319).

Again, when Mr. Hall was requested to sign the alleged lease as treasurer he refused, and his testimony on this point is wholly uncontradicted. No ratification can therefore be based upon his knowledge of the facts.

The judgment must be reversed, with costs, and a new trial ordered.

Larremore, Ch. J., concurred.

Judgment reversed, with costs, and new trial ordered.

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