Cope-Swift Co. v. John Schlaff Creamery Co.

194 N.W. 550, 223 Mich. 543, 1923 Mich. LEXIS 838

• Court: Michigan Supreme Court
• Decided: July 19, 1923
• Docket: Docket No. 52
• Status: Published

Opinions

Sharpe, J.

Plaintiff brought suit to recover for work and labor performed and material furnished under the following written order:

“Detroit, Mich., October 15th, 1918. “Cope Pattern Works,

“Detroit, Michigan.

“Gentlemen:

“Please ship the following to us at above address:

* ¡¡s M=

“All necessary patterns, castings and machine shop work for one 'Van Horn bottle filling and washing machine, from plans and specifications presented to you by Mr. Almon J. Cordrey.

“Please mail us once each week an itemized statement of the previous week’s work.

“John Schlaff Creamery Co.,

“Per John Schlaff, Mgr. “Furnish no goods without written order.”

This order was written on the stationery of the defendant company. After the proofs were closed, by consent of counsel the jury were discharged and the case treated as though it had been tried before the court without a jury. The procedure on such a trial if review in this court is sought is very clearly pointed out in 3 Comp. Laws 1915, § 12586 et seq., and in Circuit Court Rule No. 45. Recent decisions calling attention to the necessity of compliance therewith will be found in Murphy v. Bonewell, 218 Mich. 171, and Robbins v. Simons Sales Co., 218 Mich. 569. No requests for findings were filed. The trial court, however, filed a “decision” in which certain facts are stated and the law applicable thereto discussed. We feel that we would be justified in declining to consider the assignments of error for a failure to comply with the statute but, as counsel for the appellee raise no objection, we have concluded to treat the record as a compliance with the required procedure.

The right of the plaintiff to recover is dependent upon the power and authority of John Schlaff to bind the defendant company by the order above set forth. On receipt of the order, plaintiff commenced work pursuant to it. On November 12th, it mailed to the defendant company an itemized statement of the previous week’s work, amounting to $507.56, and others on the 18th, 25th and 30th, amounting in all, to $1,380.64. For this it received a check on the bank in which defendant kept its deposits, signed “John Schlaff Creamery Co., John Schlaff, Pres, and Geni. Mgr.,” which was duly paid. Plaintiff afterwards sent statements on December 9th and regularly thereafter until February. 13th, when it was requested to stop work. The defendant company refuses to make further payment, and this suit was brought. The trial court entered judgment for the plaintiff, holding that defendant was legally bound by the order given in its name signed by Mr. Schlaff.

The annual report of the defendant company for the year ending December 31, 1913, was introduced in evidence. It showed that Mr. Schlaff owned 3,275, and his wife 405, shares out of 3,885 shares of stock issued. The board of directors of the defendant company at the time the order in question was given consisted of Mr. Schlaff, William A. Sloan, who owned 5 shares of stock, and Joseph A. Moynihan, who also owned 5 shares. Mr. Schlaff was president and Mr. Sloan secretary and treasurer. Mr. Schlaff was not sworn as a witness. Mr. Sloan, called for cross-examination under the statute, testified that he was connected with an insurance agency and visited the-defendant factory but “a couple of trips a week;” that Mr. Moynihan was practicing law but “often came to the office;” that monthly meetings of the board of directors were held; that the order in question was not discussed or its giving authorized at any of such meetings; that Mr. Schlaff was “the chief executive officer in charge of the plant as well as president;” that he “had the right to sign checks and at that time no counter signature was required,” no other person could sign them; that he knew the check to plaintiff had been drawn; that it was charged to Mr. Schlaff s personal account; that Mr. Schlaff had the right to order a washing and bottling machine if he wanted it and it pertained to the business.

That the machine in question was one suitable for use in defendant’s business admits of no doubt. If it would do what it was expected it would do, the filling and washing of milk bottles would be much expedited and a considerable saving be thereby effected. We have no doubt that it so pertained to the business in which defendant as a corporation was engaged that its board of directors would have had the power and authority to pay for its construction without authorization by the stockholders. Mr. Schlaff and his wife owned nearly 95 per cent, of the stock of the corporation. The directors were men of his own selection. He had entire charge of its business.- The order indicated, on its face, that it was given in the ordinary transaction of corporate business. It was for a machine, useful, if not necessary, in its business. A check of the corporation was sent in payment of the bill first rendered. Of this, the secretary-treasurer had knowledge. That it was charged to Mr. Schlaff’s individual account was not communicated to plaintiff. Other bills were sent from week to week as required by the order. These facts, we think, justified the conclusión of law that the -corporation was legally-liable to pay the balance of plaintiff’s claim.

The following rule seems directly applicable to the facts here presented:

“Where the president is given power as general manager of the business with full direction and charge thereof, he has the power to do any act or make any contract that the president and general managing agent of such a corporation could do or make in the ordinary transaction of the corporate business, and prima facie has power to do any act which the directors could authorize or ratify, unless special limitations or restrictions are put upon such power, of which the party dealing with him has notice, or unless power to do the particular act is expressly given to another officer or agent.” 14A C. J. p. 358.

See, also, Whitaker v. Kilroy, 70 Mich. 635; Hirschmann v. Railroad Co., 97 Mich. 384; Constantine v. Beet Sugar Co., 132 Mich. 480; Lake-Ulricksen Co. v. Grand Lodge, 182 Mich. 653; Hunt v. Motor Devices Co., 215 Mich. 483. See, also, note to Lloyd & Co. v. Matthews, 7 L. R. A. (N. S.) 376 (223 Ill. 477, 79 N. E. 172, 114 Am. St. Rep. 346).

The judgment is affirmed.

Wiest, C. J., and Fellows, .McDonald, Moore, and Steere, JJ., concurred with Sharpe, J.