Althouse v. Cobaugh Colliery Co.

76 A. 316, 227 Pa. 580, 1910 Pa. LEXIS 707

• Court: Supreme Court of Pennsylvania
• Decided: February 14, 1910
• Docket: Appeal, No. 240
• Status: Published

Opinion

Opinion by

Mr. Justice Stewart,

March 28, 1910:.

That a president or director of a corporation cannot, recover on the basis of a quantum meruit for services rendered the corporation of which he is an officer, except as an express contract can be shown, may be regarded as settled law in-this-state. That a different rule obtains in some jurisdictions is nothing to the.point; our own policy has been too long, established to be questioned, and the general and continued acquiescence therein is its own sufficient vindication. “Corporate officers,” says Woodward, C. J., in Kilpatrick v. Penrose Ferry Bridge Company, 49 Pa. 118, “have ample opportunities to adjust and fix their compensation before they render their services, and no great mischief is likely to result from compelling them to do so, but if, on the other hand, actions are to be maintained by corporate officers for services, which, however faithful and valuable, were not rendered on the foot of an express contract^ there would be no limitation to corporate liabilities, and stockholders would be devoured by officers.” We have here a.clear statement of the rule and the policy on which it rests. True, in that case, as in Martindale v. Wilson-Cass Company, 134 Pa. 348, the action was to recover for official services,, that is to say, for services rendered by the officer within the scope of official duty, and it is sought to distinguish the present case from these, by the fact that, hqre the services for which recovery was sought were professional, and not such- as appertained to the office of president, under the by-laws of the corporation.. The distinction is apparent, but it marks no substantial difference with respect to rule or policy. There is quite as much reason for requiring a corporate officer to show an express contract for compensation as a condition of recovery in one case as in the other. This feature of the case, however, calls for no argument, in view of the recent adjudication in Brophy v. American Brewing Company, 211 Pa. 596. There the action was brought by one who had been a director, to recover for services rendered as manager and superintendent of the company, services quite as much outside of the proper duties of a director as those this plaintiff rendered were outside the prescribed duties of the president. He failed to show that they were rendered under an express contract. Every consideration relied upon in the present case to support the plaintiff’s claim was urged there — the services rendered were valuable; the corporation availed itself of them; and they were not voluntarily rendered without expectation of being paid for. The court below held that unless the services were rendered pursuant to a contract that they were to be paid for, there could be no recovery.. On appeal to this court the judgment was affirmed in a per curiam opinion in which the law is thus explicitly declared: “The plaintiff during the whole period for which he claimed compensation for services was an acting director and a member of the executive committee of the board of directors. He came therefore within the reason of the settled rule that a corporate officer cannot recover compensation for services rendered the corporation unless there was an express contract of employment before the services were performed. Whether the plaintiff had been employed as superintendent or manager, with all other questions of fact, was fairly submitted to the jury. The instruction that there could be no recovery on the basis of a quantum meruit for services rendered was right.” This is conclusive of the present controversy.

The judgment is affirmed.