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

30 N.Y. St. Rep. 424 Court General Term, Decision date 1890-04-07 English

Delivered by Bischoef, J.

Contents

Majority

p. 424
Rudolph Bohm, Resp’t, v. The V. Loewer’s Gambrinius Brewery Company, App’lt.
(New York Common Pleas,
General Term,
Filed April 7, 1890.)

Headnote

1. Corporations—Lease.
Defendant’s by-laws provided that no liability should be contracted exceeding §100 excepting with the consent of the treasurer or of two trustees, and that all contracts involving liability for §500 or more must be in writing, executed by both the president and treasurer and attested by the company’s seal. Plaintiff leased certain premises to defendant at $900 per annum, payable monthly, the lease being executed by defendant's president but not by the treasurer and the seal was not attached. In an action for rent, Held, that the lease came within the provision of the by-laws and was not operative or binding on defendant; that plaintiff was chargeable with notice of the restriction on the powers of defendant’s officers.
2. Same—Ratification.
Ratification of such lease based on neglect of the trustees to repudiate it when brought to their knowledge is not shown by proof that the president who signed it and the treasurer who refused to do so had notice thereof; nor could the trustees by implication create a liability which they were prohibited from directly creating.
Appeal from judgment of the fourth district court in favor of respondent and against appellant for rent.
C. J. G. Hall, for app’lt; Jacob H Hanes, for resp’t.

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 $100 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 $500 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 28, 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 Orchard street, in

p. 425
the city of Hew York, to the defendant for the period of eight months, commencing September 1, 1889, at the annual rental of $900, payable in installments 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. Ho rent ever appears to have been paid and an action was brought to recover the first monthly installment due September 1st, 1889. The trial resulted in a judgment in favor of the plaintiff and against the defendant for the sum of $75.55, 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 $500 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, 3 N. Y. Supp., 925 ; 22 N. Y. State Rep., 227; 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 behalf of the corporation exceeding $500 in amount, and it cannot be said that they can by implication do the acts prohibited in unequivocal terms. Peterson v. Mayor, etc., 17 N. Y., 449 ; Brady v. Mayor, etc., 20 id., 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. Ho ratification can, therefore, be based upon his knowledge of the facts. The judgment must be reversed, with costs, and a new trial ordered.

Larremore, Oh. J., concurs.