Taylor v. Nostrand — 35 N.Y. St. Rep. 332

Majority

p. 332

Grant B. Taylor, Resp’t, v. P. Elbert Nostrand, App’lt.

(Supreme Court, General Term, Second Department,

Filed December 8, 1890.)

Headnote

Corporations — When director liable for services performed for.

Plaintiff was directed by defendant, who was a director, secretary and

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engineer of a water company, to procure contracts for lands for such, company, pursuant to a resolution of the company. Subsequently, he was directed by defendant to take such contracts in the name of one A. as trustee, for which direction no authority of the company was clearly shown. Held, that by reason of such change plaintiff had no claim on the company for his services and that defendant was liable therefor.

(Pbatt, J., dissents.)

Appeal from judgment in favor of plaintiff, entered on the report of a referee.

This action was brought by the plaintiff to recover for services rendered by the plaintiff in securing options or contracts for the purchase of real estate in the town of Highlands, Orange county, JST. Y. The defense was a general denial, and also that the services were not rendered to the defendant, but to the Bamapo Water Company. The issues thus raised were referred to a referee, who decided in favor of the plaintiff, upon which report judgment was entered, and from which defendant appeals. Under a ■stipulation, the value of the services as found by the referee are conceded to be correct, and no appeal is taken therefrom, the appeal being confined simply to the question whether on the proof made the defendant is liable. The evidence shows that on the 14th of •January, 1889, the defendant wrote the plaintiff a letter requesting him to call on him in New York, with reference to “ our water mattersthat in response to such letter the plaintiff did go 'to New York and there saw the defendant and one Lamont, and received instructions from them to secure contracts for the conveyance of lands in the town aforesaid ; that in pursuance of such instructions from time to time, extending over a period of two months, the plaintiff was almost continually employed in securing these contracts; that he almost daily reported the result of his negotiations, and received directions in whose name to make the contracts. Twelve contracts were executed, but not one was 'taken in the name of the Bamapo Water Company. On the contrary, by direction of the defendant or with his approval, all were made in the name of “.William S. Andrews, Trustee.” A resolution of the water company was offered in evidence directing •contracts to be made in the name of the company, but no authority was shown for the contracts being made in any other name, save a statement of Lamont. He says, “ The taking of the contracts in the name of William S. Andrews, trustee, or individually, was never authorized by the Bamapo Water Company in any way, except by myself, the fully'authorized agent of the Bamapo Water Company.” No evidence on the part of the defendant of the agency of Lamont was given, nor was Andrews’ connection with the company in any way shown. The contracts were under seal, and the ■company’s directions included the sealing of them for it.

The defendant offered in evidence a certificate showing that "the articles of incorporation of the Bamapo Water Company had been filed with the secretary of state, but no evidence was offered of their having been filed in the county where the business was proposed to be carried on.

The referee decided that the plaintiff had knowledge that he was employed by the Bamapo Water Company, but that in di

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recting the contracts to be made and sealed in the name of Andrews as trustee the defendant exceeded his authority, and is", therefore, liable to the plaintiff for his services. He- also found that the defendant had failed to show that his alleged principal, the Eamapo Water Company, was a duly organized corporation, and that he was also personalty liable on that ground.

James S. Allen, for app’lt; Howard Thornton, for resp’t.

It seems clear from the evidence that theEamapo Water Company was nothing but an appearance. The defendant was in point of fact all there was of it except the form of a certificate of incorporation which was filed in the secretary of state’s office. The defendant was the promoter of the undertaking or at least an important member of the company who were promoting the enterprise. The defendant was employed to take title or options for land in the name of the company. He did take the same in the name of one Andrews as trustee. No authority was shown given by the company creating Andrews ■ trustee or authorizing the title or contract to be taken in his name. The defendant directed the change and the lands affected thereby were the lands in and about which the plaintiff rendered the service. The defendant justifies the change by reason of the direction of one Lamont No sufficient power to direct the change was proven in Lamont. He testifies that he was authorized, but no resolution of any board of directors or trustees was proven to that effect. No doubt it was safer for the promoters to have control of the-contracts, and in the unsettled state of the company the defendant and Lamont made a change of the mode of transfer which was at first prepared. By the change the plaintiff had no claim on the company and as a consequence thereof he has one against the defendant, who ordered the change.

The judgment should therefore be affirmed, with costs.

Dykman, J., concurs.

This is an appeal from a judgment, entered on the report of a referee in a suit for services claimed by the plaintiff to have been rendered to the defendant The issue was whether the services were rendered to the defendant or to coi’poration known as the Eamapo Water Company.

It appeared in proof that the plaintiff was employed as agent of the Eamapo Water Company in making contracts on property for that company by a resolution duly passed, and notice of such appointment was duly given to the plaintiff and he rendered the services under such appointment, and charged the same to that corporation.

It appears that plaintiff had not only previously rendered services to that company for which he had been paid, but the services for which this suit was instituted were specifically rendered under the following paper:

“New York, January 15, 1889.

“ Mr. Grant B. Taylor, of Newburgh, is hereby appointed agent, of the Eamapo Water Company for the purpose of making con

Dissent

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tracts on property necessary for our purposes in the Fort Montgomery district, in Orange and Rockland counties, in accordance with printed contracts furnished by the company.

“George A. Evans, President.”

It also appears that plaintiff knew that defendant was connected with and agent for the Ramapo Company.

There is no proof that the last-named company ever repudiated .any of the contracts made by the plaintiff for land, or denied its liability for the plaintiff’s services.

The plaintiff claims, however, that the defendant exceeded his .authority in directing him to take contracts in the name of W. S. Andrews, trustee. As to this it may be said that if such a change was authorized or acquiesced in by the company, it would not .affect the liability of the company for his services. It can fairly be inferred from the testimony that such change was authorized, as Mr. Lamont testified without contradiction that he gave the orders that certain of the contracts should be made in the name of Andrews, trustee, and that he (Lamont) was the agent of the company for every purpose connected with its business. Again, as it appears that the plaintiff made the contract, he had no right to follow any instructions which were not authorized by the company.

It seems to be conceded that the services were rendered for the Ramapo Company, and that the defendant should have judgment, except for two reasons: First, that defendant had exceeded his authority, and, second,' that he did not prove that the Ramapo Company was duly incorporated.

The first we have already answered; the second is a matter that was entirely immaterial so far as the defendant was concerned.

The plaintiff made his contract with that company, and it was -a matter for him to ascertain before he made the contract of employment.

The plaintiff gave that company credit, and it having employed him assuming to be a corporation, it was estopped from denying that it had not legal capacity to make the contract. However, for all purposes in a suit by plaintiff to recover for these services, it was a legal corporation.

It follows that the judgment must be reversed.

Judgment affirmed, with costs.