Sullivan v. Detroit, Ypsilanti & Ann Arbor Railway

64 L.R.A. 673, 98 N.W. 756, 135 Mich. 661, 1904 Mich. LEXIS 985
CourtMichigan Supreme Court
DecidedMarch 8, 1904
DocketDocket No. 2
StatusPublished
Cited by29 cases

This text of 64 L.R.A. 673 (Sullivan v. Detroit, Ypsilanti & Ann Arbor Railway) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sullivan v. Detroit, Ypsilanti & Ann Arbor Railway, 64 L.R.A. 673, 98 N.W. 756, 135 Mich. 661, 1904 Mich. LEXIS 985 (Mich. 1904).

Opinion

Grant, J.

(after stating the facts). The theory of [665]*665the declaration and of the right of recovery in this case is that plaintiff had no express contract with the defendant, but that he rendered services for it under such circumstances that the law implies a contract, and presumes a promise by the defendant to pay for the services so rendered, and of which it has had the benefit. Plaintiff’s own evidence conclusively establishes the fact that he had no contract, either express or implied, with the defendant, until the contract of employment of March 15th, but that he made an express contract with the three original promoters of the scheme to perform the services for which he now seeks to recover, upon their agreement that they should make him the permanent attorney of the company. He had no other agreement, and at no time until more than a year after the services were rendered did he make any claim to any of its officers of the contract which he now asserts was made. These promoters could make no contract for the defendant, which was not then organized. That contract could not bind the corporation until it was known to and appróved by it. The knowledge of Messrs. Eussell and Angus, after they became directors, was not the knowledge of the corporation. The only knowledge possessed by Mr. Hawks, its president, was that plaintiff was the personal employé of Mr. Eussell. This statement •did not, of course, bind the plaintiff, but shows that Hawks had no knowledge of plaintiff’s alleged contract.

When, under plaintiff’s version of the contract, did he hegin to render services for the defendant ? Certainly not until the corporation was organized. But his contract with these three promoters was that the scheme should be a success, not that the company should be organized.. If the promoters had secured options for the purchase of the three companies then in existence, and franchises from the townships along the proposed line, before the organization of the company, and it had not been organized until all his services in carrying out his contract had been performed, would the corporation, with new stockholders and new directors, have been liable, either under the express [666]*666contract, or under an implied contract for his services performed under the special contract ? The promoters evidently thought it wise to organize the company early as ‘one of the means to assist, in carrying out the scheme. But plaintiff performed services no more for the corporation in one case than in the other. He made his contract with the promoters. He knew he could not enforce it against the corporation. If he chose to make a contract which he could not enforce against the promoters, under Durgin v. Smith, 133 Mich. 331 (94 N. W. 1044), it is his misfortune. But whether he could enforce his contract with them is immaterial here.

The circuit judge correctly instructed the jury that plaintiff could not recover in accordance with that agreement, but instructed them that, if the plaintiff was entitled to recover at all, he was entitled to recover what his services were reasonably worth. The fatal error of the-charge and of the plaintiff’s theory is that he had an express contract with the promoters, which precludes any possibility of an implied contract with the corporation. Plaintiff, a lawyer, must have known that the contract could not bind the future corporation, unless, after it was formed, it knew of its existence and ratified it.

If we understand the argument of counsel correctly, it is that the defendant never ratified the contract made with the three promoters before the organization of the company, but, having received the benefit of his services-rendered under that contract, the law implies a promise on its ‘«part to pay, not in accordance with the contract, but on a separate and distinct implied contract. If defendant had ratified the contract and appointed plaintiff its attorney in accordance therewith, and that was carried out for a year, and then broken by the defendant, the only remedy of plaintiff would be an action upon the contract for the breach thereof. If, as he contends, his employment was virtually for life, or for the life of the corporation, he could not, in the event of a subsequent violation of the contract by the defendant, recover upon the basis of an implied contract the [667]*667value of his services previously rendered. After six years such claim would be barred by the statute of limitations. A contract will be implied only when no express contract exists. If A. makes an express contract with B. to perform services for C., C. is not liable on an implied contract because he received the benefit. The two contracts cannot exist together, governing the same transaction.

“As in physics two solid bodies cannot occupy the same space at the same time, so in law and common sense there cannot be an express and an implied contract for the same thing existing at the same time. This is an axiomatic truth. It is only when parties do not expressly agree that the law interposes and raises a promise.” Walker v. Brown, 28 Ill. 378, 383 (81 Am. Dec. 287).

So, plaintiff could not have an express contract with these three promoters that they, in consideration of his services in assisting to successfully accomplish the scheme, would make him the permanent attorney of the company, and at the same time have an implied contract with the company to pay him for the same services. Lyndon Mill Co. v. Lyndon Literary Institution, 63 Vt. 581 (22 Atl. 575, 25 Am. St. Rep. 783) Royston v. McCulley, (Tenn.) 59 S. W. 725, 52 L. R. A. 899; Thorp v. Bateman, 37 Mich. 68 (26 Am. Rep. 497); Boughton v. Boughton’s Estate, 111 Mich. 26 (69 N. W. 94).

In Walker v. Brown, S., assuming to act for himself and for defendants, made a contract with plaintiffs to perform certain work. The work was done, but S. had no authority to bind defendants. Thereupon plaintiffs sought to recover from defendants upon an implied contract for the value of the work, which was beneficial to them. The court held that the express contract, executory in its provisions, totally excluded any implication of an implied one.

In Lyndon Mill Co. v. Lyndon Literary Institution, the defendant received the benefit of certain lumber furnished under an arrangement between some of the directors of the two companies. The contract was a personal one between the directors. Plaintiff sought to recover [668]*668from the defendant upon the ground that it had the benefit of the lumber furnished, and that the law implied a promise to pay. The court held that the express contract excluded any liability on the part of defendant.

In Thorp v. Bateman, Bateman made an express contract with Thorp by which Thorp’s infant daughter was to live with Bateman until she became of age. Bateman’s wife died, and Thorp then took his daughter away. Bate-man sued Thorp upon an implied contract. It was held that, if Thorp violated the express contract, “its existence and the breach thereof cannot be the foundation for an implied assumpsit of a wholly different character.”

This is not the case of Davis v. Strobridge, 44 Mich. 157 (6 N. W.

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Bluebook (online)
64 L.R.A. 673, 98 N.W. 756, 135 Mich. 661, 1904 Mich. LEXIS 985, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sullivan-v-detroit-ypsilanti-ann-arbor-railway-mich-1904.