Oakes v. Cattaraugus Water Co.

The trial court non-suited the plaintiff, and the principal question presented by the appeal is whether there was proof made which should have been submitted to the jury. The plaintiff made, a request to that effect, which was denied and an exception taken. The defendant is a corporation organized under the provisions of chapter 737 of the Laws of 1873 and the acts amendatory thereof and supplementary thereto for the purpose of supplying the village of Cattaraugus with water. The certificate of incorporation was executed on the 3d day of March, 1890, but not filed in the proper office until the 19th day of May following, at which date, it is assumed on both sides, that the defendant’s corporate existence begun. The statute requires the consent of the town authorities of the town where the operations of the corporation are to be carried on as a preliminary condition of its creation, and this was procured by the parties promoting the organization of the defendant on the 22d day of -February, 1890. The application for this consent was in writing, signed by the seven persons who afterwards became the incorporators, and bears date February 5, 1890, and proves that at that date, if not before, they intended, in case the application was granted, to form the corporation. One George N. Cowan, an attorney at law, seems to have been the principal promoter of the whole enterprise. His name appears first upon the written application to the town authorities for the consent, and in the certificate of incorporation, and is followed by that of his wife and brother with four other persons. Upon the organization of the defendant he and his wife and brother became respectively the president, secretary and treasurer of the corporation. This action was brought by the plaintiff to recover the sum of $1,000 upon a written agreement bearing date February 18, 1890, signed by the plaintiff and by Cowan as attorney for the defendant. The plaintiff’s difficulty in the case arises from the fact that this paper was executed, as will be seen from the dates, before the défendant had any corporate existence, and, therefore, in its inception, it was not the defendant’s contract or binding upon it in any form. By the terms of the instrument the defendant agrees to pay to the plaintiff the sum of $1,000 for his services to defendant in securing right of way, hydrant rental and placing investments and doing things pertaining to the construction of the waterworks for the village, to be paid at the completion of the work. It was further stated that unless the defendant

But it is insisted that the contract, even if regarded as the corporate obligation, is void as against public policy. There was proof given at the trial tending to show that the plaintiff, before entering into the contract with Cowan, contemplated an application in his own name to the town authorities for permission to form a corporation to construct the works, and that the purpose of the agreement was to compensate him for consenting to abandon the enterprise and allow the defendant to obtain the consent and reap the benefit of the enterprise. It is alleged in-the complaint that at the time of entering into the agreement it was understood and agreed between the parties that in addition to the con-, sideratidn mentioned in the writing for the payment of the one thousand dollars, the plaintiff was not to prosecute or carry on the business for which the defendant was subsequently organized, and was not to organize any corporation for that purpose, or to ask or receive a franchise from the town authorities for that purpose. It was further alleged that the plaintiff kept and performed these conditions, which were not expressed in the writing, but fully understood between the parties, but did assist Cowan in his efforts to accomplish the purpose originally contemplated by the plaintiff. These allegations are, however, put in issue by the answer. The proof would have justified a finding by the jury that the plaintiff’s promise to abandon the enterprise and leave the field open to Cowan and his associates was an element that entered into the contract, and an inducement to its execution. No such purpose, however, appears upon the face of the contract. The considera

For these reasons the judgment should be reversed and a new trial granted, costs to abide the event.

(dissenting.)—If, at the time the agreement set forth in the complaint was made, there had been such a corporation as the Cattaraugus Water Company, then it would be quite conceivable that there might be a ratification by it of the act of a person standing in the relation to it of an officer or agent. Batification presupposes the doing of an act by an agent, which a principal could have authorized. It is defined as an agreement to adopt an act performed for us by another and is equivalent to an original authority to do the thing in question. But here Cowan represented no one but himself. He and others were proposing to associate themselves in a corporate project. He was a mere promoter and he had no principal. When the plaintiff entered into the agreement with Cowan, he was bound to inform himself as to whether the latter represented an actual principal. If he neglected to do so, his agreement was worthless, except so far as it

Assuming that a corporation may become obligated by a contract, made for it before its incorporation, through acceptance or adoption, it should at least appear, in order to justify a verdict from the' facts,that those facts'established a knowledge by its agents, of its existence and of its terms; or that the benefits, the acceptance of which is relied upon to constitute adoption, were of that nature as to presuppose and to charge the company or its agents with knowledge of a contract with the person from whom derived.

In this case it is not proved that there was any formal or official action upon the agreement; or that any of the directors knew of such, outside of Cowan himself. There was nothing which /amounted to a representation by the defendant to plaintiff that the contract was subsisting and valid. Wilson v. West Hartlepool Co., 2 DeG., J. & S. *491. There may have been sufficient evidence in the case to warrant the submission to a jury of the question whether the defendant had not, through its chief officer and man

For these reasons the j udgment should be affirmed, with costs.

Earl, Peckhám and Bartlett, JJ., concur with O’Brien, J.; Finch, J., concurs with Gray, J.; Andrews, Oh. J., not sitting.

Judgment reversed.