Adriance v. Room

52 Barb. 399

• Court: New York Supreme Court
• Decided: September 14, 1868
• Status: Published

Opinion

By the Court, Gilbert, J.

It is not contended that Bushnell had any express authority to contract the debt in question. It is urged, however, that he was the general agent of the corporation. Ho doubt a corporation may be bound by the acts of a general agent, in the same manner as private individuals; and persons dealing in good faith with such an agent are not presumed to know the private instructions which may have been given t'o him by his principal. But we think this principle will not aid the plaintiffs in this case. There is no evidence that Bushnell was such an agent. His actual authority was “ to have charge of the manufacturing department of the works, audit bills for material and labor, and to appoint and discharge foremen and workmen.” There is no evidence that the cor-corporation ever conferred upon him, or knew that he exercised, any other authority. On the contrary, the evidence is that he was forbidden generally to sell iron, which was the act out of which the alleged liability in this case arose. It is said, however, that the plaintiffs had a right to assume that Bushnell, being superintendent, possessed the powers implied by his name of office, and were not bound by the restrictions contained in the by-laws. We think the rule of law is otherwise. Officers of a corporation are special and not general agents; consequently they have no power to bind the corporation except within the limits prescribed by the charter and by-laws. The English cases cited by the plaintiffs’ counsel do not conflict with this principle. They are all cases of joint stock companies, and they merely hold that where a personal obligation under the seal of the company had been made by officers authorized to do the act, under a resolution of "the company, the company were prima facie bound, and that no one looking at the deed of settlement and the obligation could come to a different conclusion. The only question was whether the holders were bound to look further and ascertain whether the issuing of the obligation had been authorized by resolution. It was held that they were not.

The principle, however, that persons dealing with the officers of a corporation are charged with notice of the authority conferred upon them, and of the limitations and restrictions upon it contained in the charter and by-laws, is too well established to require tobe supported by a citation of authorities, and we cannot assent to the proposition that there is any grant of power in the name by which the officer is designated; especially when the authority given is specified in the by-laws.

"We are of opinion, therefore, that the court below correctly decided that Bushnell had no authority to contract the debt in question.

The only remaining question is whether the corporation has ratified the transaction. The evidence is that the other officers and directors had'no knowledge of it whatever. The court below found that the corporation had no benefit from it, and we think the evidence is sufficient to bear out the finding. But if otherwise, it would be ineffectual to prove a ratification without the further proof showing the knowledge and acquiescence of the corporation. The case yields no such proof.

[Orange General Term, September 14, 1868.

The judgment .therefore must be affirmed, with costs.

Lott, L. F, Barnard, Gilbert and Tappen, Justices.]