Lee v. Pittsburgh Coal & Mining Co.

56 How. Pr. 373
CourtThe Superior Court of New York City
DecidedMarch 15, 1877
StatusPublished
Cited by15 cases

This text of 56 How. Pr. 373 (Lee v. Pittsburgh Coal & Mining Co.) is published on Counsel Stack Legal Research, covering The Superior Court of New York City primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lee v. Pittsburgh Coal & Mining Co., 56 How. Pr. 373 (N.Y. Super. Ct. 1877).

Opinion

Smith, J.

This is an action to recover for commissions alleged to be due plaintiffs upon the sale of coal for defendant, under an agreement made with the plaintiffs by defendant’s president and manager, in October, 1873, by which plaintiffs were to act as defendant’s agents at Buffalo for the sale of its coal to Canadian railroads, and to receive a commission of ten cents per ton on all coal sold and delivered.

When the former appeal in this case was before us, we held, and are still of the opinion, for the reasons then given, that the plaintiffs, if entitled to recover for commissions on. any part of the coal -sold the Grand Trunk Railway company, were entitled to recover for the whole 30,000 tons.

' On the trial, a conversation between plaintiff Loomis and defendant’s president and manager, and certain letters from the defendant’s secretary and treasurer to'the jilaintiffs, were [375]*375received in evidence against the defendant’s objection. ' We think they were properly received. Mullin, the president, in the conversation, and Wilson, the secretary, in writing the letters, were acting in the direct discharge of official duties in respect to the agreement made by Mullin for defendant with the plaintiffs, and the most efficient means to be taken for its performance. The correspondence and conversation were not casual or accidental,- but for a definite purpose, in the furtherance of the defendant’s business interests, with which both the plaintiffs and Mullin and Wilson were charged. They were a part of the res gestee, as much so as the subsequent negotiations for the sale of coal to the Grand Trunk Company. The letters were also competent as evidence that the defendant had notice that the plaintiffs were employed 'as its agents, and of the acts of Mullin in that respect. In considering the objection to the evidence, we, of course, assume that the agreement made by Mullin, in behalf of defendant, with the plaintiffs was fully binding on defendant, as made by its authorized agent, or, at least, that the evidence on that subject was properly submitted to the jury, and this brings us to the remaining and most important question in the case.

In this case the defendant, in the execution of powers conferred by its charter upon its board of directors, had made Mr. Mullin the president and manager of the corporation, and Mr. Wilson -its secretary and treasurer; they and three others composing its board of directors.

It is now the established rale of law in this country that corporations may enter into and become bound by contracts, express or implied, without other formalities than are requisite in respect to like contracts made by natural persons, and under the same circumstances and conditions. But corporations, of necessity, must act solely through the instrumentality of their officers or other duly authorized agents; and such officers and agents must, like the agents of natural persons, be deemed to be clothed with all the powers and authority necessary or proper to effectuate the purposes of their crear[376]*376tion, in the manner, with the means and appliances, and according to the usages customary in the < conduct of the business and affairs intrusted to them.

What general or special powers were by the board expressly conferred upon Mr. Mullin as such president and manager, or what powers inhered in those offices, we can only determine (in the absence of positive evidence) by inferences from such facts proved as throw light on this point, aided by the presumption that, as the chief executive officer and manager of the company, he must have been clothed with some powers and duties which, of necessity, pertained to those positions, as it was shown that the business for which defendant was organized was the mining, shipping and selling of coal, that it had mines in Pennsylvania, and large quantities of coal for sale, which it sought to market in Buffalo and the neighboring province of Canada. We may fairly presume, further, that the defendant’s president and manager had, by virtue of his offices, authority to make those contracts in defendant’s behalf, which it was necessary that some agent should make for the prosecution of its business, and which the daily exigencies of that business might require. The hiring of operatives to cany on the work of mining coal, the making of contracts for the shipment of coal to the various markets, the employment of agents to receive and take care, of coal at those markets, to attend to its sale, and to collect and remit the proceeds, were necessary to the operations of the corporation; and it was also necessary that some agent should be clothed with authority to make such agreements. The public would have the right to assume that the president and manager of the company claiming such authority, and exercising it, did lawfully possess it, and to treat with him accordingly. Upon similar presumptions all business men deal with the executive officers of banking, insurance, railroad, manufacturing and other corporations whose operations move the vast and complicated machinery of trade and commerce. Their boards of directors may, and, no doubt, often do, adopt rules [377]*377and regulations defining the powers and duties of the various officers through whose agency the corporate powers and franchises are exercised. But such rules and regulations are usually to be found only upon the minutes of the directors’ proceedings, or oilier private records of the corporation. They are not published, nor do the public, with whom the officers of the corporation transact - business, know, or have the means of knowing, what such rules and regulations are. And it often happens — so often as to be the rule rather than the exception — that the chief officers of a corporation exercise a very wide range of powers, virtually grasping the entire direction and control of all its operations, with the tacit consent and approval of the corporation, though it has never by any direct vote or recorded act defined the nature or extent of their authority.

It is, therefore, very difficult, if not impossible, for those having dealings with corporate bodies to determine, except by circumstances and inference, what authority such officers have, or, in case of litigation, to prove their authority by positive evidence. Ought not the same evidence, upon which prudent business men ordinarily infer the existence of the authority, to be satisfactory to courts and juries ? And would not the enforcement of more stringent rules embarrass and hinder the operations of trade and commerce,' and prove vexatious and injurious to the interests of the corporations themselves ?

These considerations lead to the conclusion that, under the circumstances of this case, the plaintiffs had a right to presume that the defendant’s president and manager had lawful power to employ them as the agents of his company to sell its coal in this and the Canadian market, and to agree upon a reasonable compensation for their services. The defendant could only effect the sale of its coal through agents employed for that purpose,' and those agents must be paid. These were conditions incident to the defendant’s business,, and necessarily-attending its operations. The plaintiffs were engaged in the [378]*378coal trade, familiar with its details, had dealt in the defend: ant’s coal, and were located at a point both important as a market and convenient for defendant’s purpose to supply the Canadian railroads.

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Bluebook (online)
56 How. Pr. 373, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lee-v-pittsburgh-coal-mining-co-nysuperctnyc-1877.