Leary v. Albany Brewing Co.

The plaintiffs recovered a judgment against the defendant for $291.42 at the Herkimer county trial term. From that judgment and the order denying a motion for a new trial this appeal is taken. The principal question in this case is whether the defendant ratified the contract of one John Sheridan, who was an assumed agent. In November, 1900, William Moore, of Little Falls, with Walter Sheridan and John Sheridan, went to the office of the-defendant in the city of Albany to make arrangements with the defendant to sell its beer. Moore was introduced to the assistant superintendent, Mr. Grey, by Walter Sheridan, who ivas the defendant’s agent for the sale of beer in the counties of Montgomery and Herkimer. Moore informed Grey that he was making arrangements to open a saloon in the city of Little Falls, and that he wanted to-borrow some money to pay for a license. Grey then asked Walter Sheridan how Moore stood generally in the community. Walter in-reply said he was all right, that he was joint heir to some property in Amsterdam, and when that was paid, which would be within a month or two, he would pay it back. Grey advanced the money by giving him a check for $144. Moore and the two Sheridans then went from the office of the defendant to the store of one George Spalt, in Albany, and ordered an ice box, which was shipped to Moore at Little Palls. Shortly thereafter John Sheridan and Moore called on the plaintiffs and made arrangements with them' to do the plumbing to be done in putting in the ice box. It is claimed by the plaintiffs that John Sheridan directed them to go and do the work and charge it to the defendant. It appears that after the work was completed the plaintiffs sent the bill to John Sheridan, who approved it, and forwarded it to the defendant. The bill was returned to the plaintiffs with a letter from Grey, stating, in substance, that they had given no instructions to have the work done and would not pay the bill.

The plaintiffs contend that the contract made by John Sheridan was subsequently ratified by the assistant superintendent of the defendant, in an interview with one of the plaintiffs, John F. Leary, which occurred at the defendant’s office in the city of Albany some four

It is a well-settled rule of -law that a principal is bound only by the authorized acts of his agent. The authority to act may be proved by an instrument in writing creating the agency, or by verbal statements of the principal it may be shown that the principal has held the agent out to the world in other instances as having authority which will embrace the particular act in question. But it cannot be created by the unauthorized representations of the agent. The declarations of an agent, in order to be competent evidence against the principal, must be made in connection with some act done in performance of his duties as agent; or, in other words, the representations of the agent, when not expressly authorized by the principal, must, in order to bind him, be within the scope of his agency. Manhattan Life Ins. Co. v. Forty-Second St. & G. St. Ferry R. Co., 139 N. Y. 151 , 34 N. E. 776 ; Anderson v. Railroad Co., 54 N. Y. 334 .

Applying the principles which have just been stated to the case at bar, they are decisive against the plaintiffs. John Sheridan had no power to make any contract with the plaintiffs in reference to ■doing the work for Moore. The authority which he assumed had never had any existence. All that can be said in behalf of the plaintiffs on this point is that John Sheridan told the plaintiffs that he was the agent of the defendant, and to send this bill to him, and he would O. K. it, and send it to the defendant. It appears that Sheridan was an entire stranger to the plaintiffs. They never knew him .before this occasion, and they never made any inquiry of the

Even the assistant manager of the corporation could have no power to make such a contract unless authorized by the board of directors. He would not have the power to bind the defendant in making contracts outside of the legitimate business which the corporation was authorized to transact under its charter. A corporation like the defendant is created and exists by virtue of the statute laws-of the state, and organized for purposes defined in its charter, and he who deals with such a corporation is chargeable with notice of the purposes for which it was organized, and when he deals with an agent who is an entire stranger to him he is bound to know the agent’s power and the extent of his authority to act in the matter.

In this case the plaintiffs ■ were chargeable with knowledge that-this corporation was organized for the purpose of manufacturing' ale and beer. They were chargeable with notice that it was no part of the legitimate business of the corporation to go into the plumbing; business, or erecting, building, or fitting up saloons for their customers. It can never be presumed that the agent of such a corporation: has authority to transact business which the corporation itself is not by its charter authorized to transact. It was stated by Judge Earl; in Alexander v. Cauldwell, 83 N. Y. 485 , that:

“Every one knows that corporations are artificial creations existing by-virtue of law, and organized for purposes defined in their charters, and he who deals with one of them is chargeable with notice of the purpose for which' it is formed, and when he deals with agents or officers of one of them he is bound to know their powers and the extent of their authority.”

In Filon v. Miller Brewing Co. (Sup.) 15 N. Y. Supp. 57 , a case-somewhat similar to the one at bar, the action was on a lease alleged to have been executed by the defendant corporation as lessee. The plaintiffs were owners of property which was used as a restaurant and summer hotel at Irondequoit Bay. The defendant, the Miller Brewing Company, was a corporation organized under the general, manufacturing companies act, for the purpose of the manufacture and sale of beer and malt. Harris, who purchased and sold the defendant’s beer, applied to the plaintiffs to rent the premises, and they refused to lease to him without security. The secretary of the Miller Brewing Company executed the lease in the name of the corporation) after obtaining the individual consent of a majority of the trustees-. The action was brought against the brewing company to recover the amount due upon the lease. The court held that the action could

In People’s Bank of City of New York v. St. Anthony’s Roman ‘Catholic Church, supra, Judge Andrews says:

“The trustees oí a corporation have no separate or individual authority to ¡bind the corporation, and this although the majority or the whole number, ucting singly and not collectively as a board, should assent to the particular transaction.”

There is no evidence in this case that the board of directors ever authorized its assistant manager to make any contracts outside of its legitimate business.

VVe think that the verdict is contrary to the evidence, and a new trial should be granted, with costs to the appellant to abide the event. All concur.