Oregon Ry. Co. v. Oregon Ry. & Nav. Co.

28 F. 505, 12 Sawy. 109, 1886 U.S. App. LEXIS 1911
CourtUnited States Circuit Court
DecidedSeptember 13, 1886
StatusPublished
Cited by2 cases

This text of 28 F. 505 (Oregon Ry. Co. v. Oregon Ry. & Nav. Co.) is published on Counsel Stack Legal Research, covering United States Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Oregon Ry. Co. v. Oregon Ry. & Nav. Co., 28 F. 505, 12 Sawy. 109, 1886 U.S. App. LEXIS 1911 (uscirct 1886).

Opinion

Deady, J.

These cases were before this court on April T6th, on (1) motions to strike out portions of the answers; (2) demurrers to so much of the answers as controverted or denied the corporate existence of the plaintiff, and its right to have and exercise the powers and privileges claimed by it, and the power of the defendant to take and have a lease of the plaintiff’s road; and (3) demurrers to the second and third replies to the special defense in the answers of the illegality of the meeting of the directors, at which the resolution authorizing the execution of the lease was passed, — when the demurrers to the re[506]*506plies were overruled, and the motion and demurrers to the answers were so far allowed (27 Fed. Rep. 277) as left the cases for trial on the issues of fact arising on the several replies to the special defense: (1) denying any knowledge or information thereof sufficient to form a belief; (2) a ratification of the lease by the defendant; and (3) two prior adjudications of the question of the validity and binding force and effect of the lease; and the issues made by the replies in Nos. 1,120 and 1,143 to the special defense of a recovery in a former action on the same cause of action, denying the same.

On May 17th the cases were heard by the court without a jury, and submitted for decision.

Briefly stated, the first special defense is as follows: The alleged lease was not executed by the authority of the defendant’s board of directors, for that, at and before the date thereof, — August 1,1881, — - said board consisted of eleven persons, four of whom “assumed to hold a special meeting of said board,” whereat the resolution authorizing the execution of said lease was passed; that thereafter the president of the defendant’s board of directors signed its name to said lease, and the assistant secretary thereof affixed its corporate seal thereto; and that none of the members of said board had notice of such meeting, which was not a regular or stated one.

It is not alleged, in terms, in this defense, that this meeting was illegal or unauthorized, or that it was without the power to pass the resolution in question. But on the argument it was assumed that such was the case without question, under the corporation act of the state. This act provides'(Laws Or. 526, 527, §§ 9,11) that the powers of a corporation “are exercised” by the directors, and that “the powers vested in the directors may be exercised by a majority of them; and any less number may constitute a quorum at all regular or stated meetings authorized by the by-laws of the corporation, in all eases when either the directors or incorporators shall have filed with the secretary of state and county clerk a written statement designating such less number sufficient to form a quorum.”

The facts alleged in this defense are controverted by the denial of the plaintiff. No evidence was offered on the matter by either party, each contending that the burden of proof is on the other. In my judgment, the burden of proof in this respect is on the defendant. It. affirms a particular state of facts, which, if true, overcome the prima facie case made by the admission of the execution of the writing by its president and secretary, under its corporate seal. The issue ia found for the plaintiff.

The evidence in support of the reply of ratification is full and convincing, and leaves no room for doubt. Among other things, it appears that on October 3, 1881, the manager of the defendant issued and circulated the following printed circular:

“The railroad and fixtures of the Oregonian Railway Company, Limited-, having been turned over to the Oregon Railway &' Navigation Company, [507]*507under the lease, J. M. Fillmore, superintendent, and officers and employes subordinate to him, will retain their present positions until further notice; and report to the undersigned. C. H. Prescott, Manager.”

On October 1, 1882, the president of the defendant’s board of directors made his third annual report to the stockholders of the corporation for the year ending June 30, 1882. This report was published in pamphlet form, together with an appendix, signed by the vice-president and secretary of the board, and generally circulated among the stockholders; and on October 1, 1883, a similar report and appendix for the year ending June 30, 1883, was made, published, and circulated in like manner. In both these reports the mileage operated by the defendant during the year by rail and water is given, and the road of the ¡plaintiff is mentioned under the head of “leased lines.” In the accounts given of the receipts and disbursements of the defendant in the appendices, the earnings and expenses of this road are stated, and the rent paid for the same, the amount being $112,700.40 in 1882, and $145,429.28 in 1883. Annexed to the report of 1883 is a map of the defendant’s “system, its branches, and allied lines,” on which the plaintiff’s road is represented in blue, as a part of the “Oregon Railway & Navigation Company’s lines.”

On May 1, 1882. at a regular meeting of the defendant’s board of directors, the purchase of the warehouses on the line of the plaintiff’s road, from the Oregonian Warehouse Company, was authorized, and the leasing of the same to James Steele & Co. provided for.

A corporation, like a natural person, may ratify any act of its agent, or any one professing to act by its authority, which it has the power to perform. Eureka Co. v. Bailey Co., 11 Wall. 491; Gold Min. Co. v. National Bank, 96 U. S. 644; Witt v. Mayor, 5 Rob. (N. Y.) 259; Episcopal C. Soc. v. Episcopal Church, 1 Pick. 375; Pacific Rolling-mill Co. v. Dayton, S. & G. R. Ry. Co., 7 Sawy. 67; S. C. 5 Fed. Rep. 852.

Ratification takes place when one person adopts a contract made for him, or in bis name, which is not binding on him because the one who made it was not duly authorized to do so. Ratification is a question of fact; and, in the great majority of instances, turns on the conduct of the principal in relation to the alleged contract or the subject of it, from which his purpose and intention thereabout may be reasonably inferred. Story, Ag. §§ 253-260. And. generally, deliberate and repeated acts of the principal, with a knowledge of the facts, that are consistent with an intention to adopt the contract, or inconsistent with a contrary intention, are sufficient evidence of ratification.

In this case any one of the several acts of the defendant is sufficient evidence of ratification. In the two years next succeeding the lease there were two annual meetings of the stockholders, at each of which a board of directors was elected, to whom the fact and results of operating this road, as a leased one wore fully reported, without, so [508]*508far as appears, a question or objection from any one. Indeed, no one seems to have thought that there was anything that needed ratifying ; and, on the whole case, it does not even now appear that there was. The entry into possession of the road, and the payment of rent in pursuance of the terms of the lease by the directors, who are the corporation, is of itself plenary evidence of ratification of the lease by the defendant. This issue must be found for the plaintiff.

The facts contained in the other two replies to this defense are stated fully in 27 Fed. Rep. supra, 281, 282.

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Bluebook (online)
28 F. 505, 12 Sawy. 109, 1886 U.S. App. LEXIS 1911, Counsel Stack Legal Research, https://law.counselstack.com/opinion/oregon-ry-co-v-oregon-ry-nav-co-uscirct-1886.