Hamilton Coal Co. v. Bernhard — 40 N.Y. St. Rep. 875

Majority

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The Hamilton Coal Co., Pl’ff, v. Charles Bernhard et. al., Def'ts.

(Supreme Court, General Term, Fifth Department,

Filed October 23, 1891.)

Headnote

1. Corporations—Unauthorized contract by.

A contract of a foreign corporation having an office in this state, which appears to have been executed in the general line of its business and under the direction of its accredited managers, and in pursuance of which some of the product of the corporation had been delivered by it, is admissible against it, even though the person executing the contract was not competent to do so under the by-laws.

2. Same—Ratification.

Even if the agent was incompetent, subsequent delivery under the contract by the corporation is a ratification.

Motion by the defendants for a new trial, after a verdict for the plaintiff directed by the court at the Monroe circuit January 6, 1891, and the exceptions thereon ordered to be heard at the general term in the first instance.

John A. Bernhard, for def’ts; M. A. Gearon, for pl’ff.

This action was brought to recover the price of 371 and 90-100 tons of run of mine coal at the agreed price of eighty cents per ton, and of 69 and 7-100 tons of slack coal at the agreed price of twenty-five cents per ton, which was all sold and delivered by the plaintiff to the defendants during the month of May, 1885. The answer admitted these allegations of the complaint, that the value of the coal was $314.96, and that the same became due and payable June 15, 1885.

" The further answer of the defendants is a counterclaim for damages for breach of a written contract between the parties as follows :

“The Hamilton Coal Company, “Buffalo office, “No. 25 West Swan Street, “ Buffalo, N. Y., May 1, 1885. ^

“ Memorandum of agreement between the Hamilton Coal Company, of Buffalo, N. Y., and Bernhard & Casey, Coal Dealers, of Bochester, N. Y.

“ Said Bernhard & Casey are to have the exclusive sale of our coal in Bochester, N. Y., and that locality, during the year ending May 1, 1886. The coal to be delivered on board cars at Bochester, at the following prices: Screened lump, $2.55; lump and nut, $2.45; run of mine, $2.30; nut, $2.25; nut and slack, $1,95; slack, $1.75 (as dealers ten cents per ton less than these figures], subject, only, to such charges as the board of coal commissioners may direct, and increase or decrease of freight rates; also understanding that to have this exclusive contract at least fifteen thousand tons must be sold. Said dealers looking after and paying the freight charges, payments for the coal to be made on or before

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the fifteenth of the following month. The coal company furnishing none but coal mined from their own mines at Reynoldsville, Pa., at such times as ordered, and are not‘accountable for any delays, such as strikes, railway delays beyond the control of the coal company.

“ Hamilton Coal Company,

“R 0. Rice,

“ Secretary.”

The plaintiff is a corporation organized under the Laws of the state of Ohio, and it had at the time stated an office in the city of Buffalo, N. Y, where it conducted a general business of selling coal. At this office the board of directors occasionally met for the transaction of business. There were usually present the general agent of the company, Mr. Dennison, and the secretary, R. 0. Rice, who was also one of the directors of the plaintiff.

Preceding the execution and delivery of this páper, the plaintiff, by Mr. Rice as its secretary,' had addressed to the defendants a letter bearing date January 10, 1885, which is, in substance, that he had laid before the board of directors the question of the price of coal to be furnished to the defendants, stating such price as follows:

“We will deliver on board cars, at our mines at Reynoldsville, 'Pa., mine run coal, our best quality, at eighty cents per net ton; lump and nut $1 per net ton; lump coal $1.10 per net ton; nut and slack sixty-five cents per net ton; nut coal eighty cents per net ton; slack forty cents per net ton; and on the supposition that you will take our coal continuously during the season; but if only ordering Occasionally, the rate will be five cents per ton higher on all grades. These rates, with one dollar and thirty cents freight, we hope, will enable you to compete successfully with any others.

“(Signed) Hamilton Goal Company.

“By R C. Rice, Secretary.”

On the trial the court properly ruled that the affirmative of the issue made by the pleadings rested upon the defendants. As the complaint and answer were framed, it was clear that the plaintiff was not required to prove any fact to entitle it to the judgment which was directed, namely, the sum of $314.96, unless the affirmative defense, stated as a counterclaim, should prevail in whole or in part.

The defendants called as a witness, upon the question of their counterclaim, the plaintiff’s secretary, R 0. Rice, and upon his evidence, mainly adduced upon cross-examination made by the plaintiff’s counsel, the court rejected from the case, as evidence, the written contract above set forth. To such ruling an exception was taken, and it is upon this exception that the defendant’s case mainly depends.

The testimony of the witness Rice is to the effect that at the time stated he was the secretary of the company ; that he spent a considerable time at the Buffalo office, where there were two other

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employes of the company besides himself ; that Charles W. Dennison was the sole agent for the sale of coal in the state of Hew York, and had power tb enter into any contract for the sale of ■ coal, subject to the board of directors ; that he (the witness) had presented to the board of directors a communication from the defendants, received by him prior to March, 1885, and that in pursuance of the orders of the board he wrote the letter of January 10, 1885; that the written contract above mentioned was signed and mailed by him to the defendants at the solicitation of Mr. Dennison, sales agent of the plaintiff, but that he had had no talk with the defendants about the contract before he wrote it. He testifies that he never was authorized by the plaintiff, or by its board of directors, to make, sign or deliver this instrument. He produced and proved the by-law of the plaintiff, which reads as follows: “Ho contract made by any officer or agent of the company shall be valid without the previous authorization or subsequent ratification of the board of directors.” Such was the substance of the evidence upon which the defense was excluded. Bice,-it appears, however, was permitted to testify, without objection, that the object of the written paper was to enable the defendants to get contracts for coal by having something to show to purchasers that they had the handling of this particular coal at Bochester exclusively, and that they would be able to fill orders for it in large amounts, and that he did not consider this paper a contract between our company and Bernhard & Oasey. He gave further testimony, from which it is argued in behalf of the plaintiff that the coal for which this action was brought was not delivered under the alleged contract, but under a previous contract between ■the parties. This portion of his evidence, however, is contradicted by the defendant Bernhard, who testified that the prices set forth for the coal mentioned in the contract are at the rates specified in the instrument of May 1, 1885, with the freight rates added; and ■that after receiving this contract the defendants purchased coal from the plaintiff and had it shipped to Bochester, where they sold it, and that the coal which they received was ordered under this contract and delivered in the month of May, and is the same •coal for which this action was brought.

It is further shown that the defendants addressed their communications invariably to the Hamilton Coal Company at its Buffalo office, and that the responses came in the manner named, namely, ■signed!''in the company’s name by its secretary.

There is no evidence in the case that the company, in terms, ever repudiated the making of the written contract. The testimony of the witness, Bice, while in form denying his authority to make a contract of this description, shows that he was, at the time of signing the paper in the company’s name, authorized to fix the rates for the price of coal which should be sold and delivered to the defendants, and that this particular instrument was made in pursuance of the request of Dennison who, as Bice testified, was the general agent of the plaintiff for the sale of coal in Western Hew York.

The contract, therefore, which was offered in evidence and re

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jected by the court, appears to have been executed in the general line of the plaintiff’s business and under the direction of its accredited managers, and that consequently the claim set up at the-trial in behalf of the plaintiff, that Eice was not authorized to make the contract, was untenable, especially as it is shown by the defendants’ testimony that the plaintiff had partially executed the contract by delivering a portion of the coal after its execution. The case, therefore, as presented by the appeal papers, is one where, from the evidence, the jury would have been justified in holding that the company had ratified the contract made by its secretary by delivering a portion of the coal, and that, consequently, even by the terms of the by-law which was put in evidence, the plaintiff’s objection to the introduction of the instrument in evidence was untenable.

Unless, therefore, upon a new trial a different state of facts is presented, the defendants will be entitled to the introduction of-this instrument in evidence, to lay the foundation for their affirmative defense, namely, a breach of the written contract.

The defendants’ motion for a new trial should be granted. Yerdict set aside, and the defendants’ motion for a new trial granted, with costs to abide the event Dwight, P. J., and Lewis, J., concur.