Cunningham v. Massena Springs & Fort Covington Railroad

70 N.Y. Sup. Ct. 439
CourtNew York Supreme Court
DecidedFebruary 15, 1892
StatusPublished

This text of 70 N.Y. Sup. Ct. 439 (Cunningham v. Massena Springs & Fort Covington Railroad) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cunningham v. Massena Springs & Fort Covington Railroad, 70 N.Y. Sup. Ct. 439 (N.Y. Super. Ct. 1892).

Opinion

PüTNAM, J. :

Plaintiff brought this action to recover a balance claimed to be due for constructing a portion of defendant’s railroad, under a verbal contract alleged to have been made with one Foster, president and general manager of defendant, and which contract Aras afterwards in part reduced to writing. The case was tried before a referee, who found in favor of the plaintiff. The defendant insists that the referee made various errors in his rulings in the course .of the trial and in his findings upon the facts and law, for which the judgment should be reversed.

First. Defendant claims that the referee erred in finding that there was a valid contract entered into between the defendant, through Foster, and plaintiff on the 23d of October, 1884, with the terms and conditions as stated in his report. That the evidence does not sustain such finding.

Plaintiff testified to the making of the contract with Foster. It was shown by several witnesses, without objection, that Foster, who was president of the defendant, was also its general business manager. After the contract it appears that, in the presence of twelve or fifteen of the defendant’s directors, ground was broken and the work was commenced by the plaintiff, and that Foster then and there pointed him out as the contractor who was to build the road. Plaintiff went on with the work in pursuance of the contract made with Foster, and the defendant not only furnished materials necessary to be used in said work, but made payments thereon to a large amount. The testimony indicates that plaintiff, under the contract with Foster, performed the work Avitli the knowledge and consent of defendant’s officers. lie Avas also recognized as a contractor by a resolution passed at a meeting of defendant’s directors.

[441]*441A corporation may become bound by a contract, express or implied, under tlie same circumstances as an individual. To make a corporation liable, it is not necessary to sliow an express resolution passed at a meeting of its directors. Where a party does work or furnishes materials to a corporation under a contract with one assuming to act as its agent, to the knowledge of its officers, without dissent on the part of the corporation, it will be held to have ratified the contract, and to be liable thereunder. (Lee v. Pittsburgh Coal and Mining Co., 56 How., 373; Wilson v. Kings Co. El. R. R. Co., 114 N. Y., 487; Howell v. The Joseph Edwards Dredging Co., 36 N. Y. St. Rep., 803; Marine Bank of Buffalo v. The Butler Colliery Co., 23 id., 318; Martin v. Niagara Falls Paper Mfg. Co., 44 Hun, 130.)

The evidence given in the case amply sustains the finding of the referee in the regard above mentioned. And also his finding that said contract was subsequently and on or about January 21, 1886, partially reduced to writing.

Second. But the defendant says that, although Foster might be authorized to make a contract with the plaintiff to construct the road on defendant’s line, he' was not authorized to contract for the building of a bridge and a piece of road beyond defendant’s line. That such a contract was tdtra vires. Foster could not make it under the authority conferred upon him by defendant’s directors, and the defendant itself could not legally enter into such an agreement.

It was shown on the trial that, under the contract with Foster, plaintiff built a pile bridge and a small piece of road adjoining, but beyond defendant’s line. It also appears, and the referee found, that plaintiff, while constructing said bridge and piece of road, supposed it to be a part of defendant’s line, and did the work in good faith. Defendant furnished a large part of the materials for the bridge and made payments thereon, and liad the benefit of the bridge and road. Defendant so furnished materials and made payments on the bridge to the amount of $1,857.49. The referee made no allowance to plaintiff for work on said bridge over said payments. Practically he determined that plaintiff built the bridge and defendant paid for it. Whether the contract with Foster to build the [442]*442bridge and the small piece of road at the end of and beyond defendant’s line was, or was not, beyond defendant’s po-wer, having been executed by plaintiff in good faith, and the bridge and piece of road having gone into defendant’s possession, the plea of uUi;a vires cannot be sustained. “A corporation cannot avail itself of the defense of ultra vires when the contract lias been in good faith fully performed by the other party, and the corporation has had the full benefit of the performance and of the contract.” (Whitney Arms Co. v. Barlow, 63 N. Y., 70; Bissell v. The Mich. S. and N. I. R. R. Co., 22 id., 259; Woodruff v. Erie R. R. Co., 93 id., 618; The Rider Life Raft Co. v. Roach, 97 id., 381.)

Were it otherwise, however, if plaintiff could not enforce the contract as to the bridge, because beyond the power of defendant to make it, yet defendant having paid $1,857.49 on the illegal contract, could not recover said sum of the plaintiff. (See Knowlton v. Congress and Empire Springs Co., 57 N. Y., 531, 532; Nellis v. Clark, 4 Hill, 424.) “No case can be found where, when money has been actually paid by one of two parties to the other, ujion an illegal contract, both being partioeps crimmis, an action has been maintained to recover it back again.” lienee, if it were the fact that, for want of power to make the contract on the part of defendant, plaintiff could not recover a part of the sum allowed by the referee, it would only be the amount allowed for the small part of defendant’s road between the bridge and defendant’s line •— two or three hundred dollars.

For the reasons above stated, however, I think plaintiff was entitled to recover the value of his work upon the bridge, and also upon this small piece of road.

Third. The claim of defendant, that plaintiff cannot recover in the action because he abandoned the work and failed to fully perform the contract, is not sustained by the evidence. There was evidence given in the case which justified the finding of the referee that the plaintiff ceased work at the suggestion of defendant’s president and manager; that there was no money to go on with and that as soon as defendant collected the money for that purpose plaintiff would be informed; that plaintiff was always ready and willing to continue the work, but never received any such notice.

[443]*443Also, the evidence is clear that defendant could not meet the payments as provided in the contract, and failed to pay plaintiff according to its terms, and for that reason plaintiff could properly refuse to continue the work. (Strack v. Hurd, 41 N. Y. St. Rep., 777.)

It is insisted by defendant that the referee erred in not allowing defendant four items of credit amounting to $1,0/T9.9'T, which it claimed were established by the evidence on the trial. I will not undertake to discuss the testimony given in regard to those items, but I have read and considered it all carefully. There was conflicting evidence given in the case as to the said items, and I think the findings of the able and experienced referee on the questions of fact submitted to him should not be disturbed. The same may be said as to the item for work on the “ abandoned line,” and the item for plaintiff’s services.

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Related

Whitney Arms Co. v. . Barlow
63 N.Y. 62 (New York Court of Appeals, 1875)
Wilson v. Kings County Elevated Railroad
21 N.E. 1015 (New York Court of Appeals, 1889)

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Bluebook (online)
70 N.Y. Sup. Ct. 439, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cunningham-v-massena-springs-fort-covington-railroad-nysupct-1892.