Lyndon Mill Co. v. Lyndon Literary & Biblical Institution

The opinion of the court was delivered by START, J.

The defendant did not take any corporate action with a view to repairing its buildings, and its trustees did not undertake to make the repairs upon the credit of the defendant. Hall, Harris, Thompson and Yail were the defendant’s trustees; but whether they were a majority of the defendant’s trustees does not appear. These four trustees desired to repair *585 the defendant’s buildings; and, shortly before the lumber in question was delivered, they made a personal and private arrangement among themselves, by which Harris and Yail were to put a heating apparatus into the buildings, Thompson was to furnish labor and make certain repairs thereon, and Hall was to furnish the lumber for such repairs. All this was to be done as a gratuity. The lumber was delivered by Hall, who was then president of the defendant’s board of trustees and a director of the plaintiff corporation. The lumber, prior to its delivery to Hall, was the property of the plaintiff and was charged to the defendant as it was delivered ; but by whose direction the charge was so made does not appear.

1. The defendant’s trustees did not authorize Hall to procure the lumber upon the credit of the defendant; on the contrary, it was understood and agreed that Hall should furnish the lumber as a gratuity.' It does not appear that Hall ever undertook to pledge the credit of the defendant in procuring the lumber, except by inference from the fact that the lumber was charged to the defendant. If Hall did direct the plaintiff to charge the lumber to the defendant, such direction was without authority, and the defendant is not liable by reason of a purchase by its authority.

Hall had no authority, by virtue of his office of president, to purchase the lumber upon the defendant’s credit. He could preside at the meetings of the board of trustees ; beyond this he had no more authority than a single trustee. A single trustee or director has no power to act for the institution which creates his office, except in conjunction with others. It is the board of trustees or directors only that can act. If the board of trustees or directors makes a president, trustee, or any'other person, its officer or agent to act for it, then such officer or agent has the same power to act, within the authority delegated to him, as the board itself. His authority is, in such case, the authority of the board. It not appearing that Hall was authorized by a majority *586 of the defendant’s trustees to purchase the lumber in question upon the credit of the defendant, the case must be disposed of upon the assumption that he had no such express authority. Fairfield Savings Bank v. Chase, 72 Me. 226; Cook’s Stock, Stockholders and Corporation Law, ss. 712 and 716; Ashuelot Manufacturing Co. v. Marsh, 1 Cush. 507 .

It is claimed that authority in Hall, as president of the defendant corporation, will be presumed. The weight of authority is against this claim, and surely no such presumption can exist when, as in this cáse, want of authority clearly appears. If Hall had express authority to purchase the lumber upon the credit of the defendant, or general authority to act for the board of trustees, or had exercised the powers conferred upon the trustees, with their knowledge and acquiescence, to such an extent as to justify the presumption that such authority had been delegated to him, then the court below should have found such authority; there is nothing before this court from which Hall’s authority can lie presumed.

It not appearing that Hall, Harris, Thompson and Tail were a majority of the defendant’s trustees, authority to rejrair the defendant’s buildings is not shown. From aught that appears in this case, the repairs were made without the knowledge or consent of a majority of the defendant’s trustees, or the knowledge or consent of any one authorized to act for them, or for the corporation. Hall, Harris, Thompson and Tail, in undertaking to make these repairs, did not profess to act for, or to bind the defendant. They were volunteers undertaking to do what, presumably, the defendant could not do for want of funds. If under such circumstances corporations aré to be held liable, then every corporation holds its projserty by a very uncertain and insecure tenure.

2. The j)laintiff claims the defendant is liable by reason of its having received and used the lumber. It is true that the law usually implies a promise to pay for property transferred from *587 •one party to another, but this rule does not apply when there is an express contract, nor where it is understood by the parties that the property is not to be paid for. King v. Woodruff, 23 Conn. 56 ( 60 Am. Dec. 625 ); Wait v. Merrill, 4 Me. 102 ( 16 Am. Dec. 338 ); Weir v. Weir’s Admr., 3 B. Mon. 645 , ( 39 Am. Dec. 487 ); Walker v. Brown, 28 Ill. 378 ( 81 Am. Dec. 287 ). If there was a contract with the defendant, it was the arrangement made among the four trustees, by which Hall was to furnish the lumber as a gratuity, and the lumber was delivered to the defendant by the party agreeing to so furnish it. The defendant’s officers liad a right to treat the lumber as delivered pursuant to this agreement. There was nothing to put them upon inquiry, or to lead them to believe the lumber was being otherwise delivered, and it appears from the findings of fact that Harris and Vail supposed the lumber was so delivered. If does not appear what understanding Hall and Thompson had regarding this, but nothing is shown that would justify a different understanding on their part. And it does not appear that any of the defendant’s trustees knew, at the time the lumber was received and used, that it was charged to the defendant. Under these circumstances, the law will not imply a promise to pay.

It is claimed that it may be fairly inferable that Hall knew the lumber was charged to the defendant, and that his knowledge is imputable to the defendant, and, by reason of this, it is to be assumed that the defendant received and used the lumber knowing it had been procured upon its credit. Hall having no authority to bind the defendant by express contract, his acquiescence would not make the defendant liable. He could not by his silence bind the defendants when he could not do so by express contract. Hall was an officer in both corporations. When an agent of a ■corporation is also an agent of another corporation, and there are mutual dealings between the corporations through the intervention of such agent, the question of whether either corporation is to be charged with notice of what is known to the agent by virtue *588 of his relation to the other corporation, depends upon the circumstances of each case. Innerarity v. Merchants National Bank, 139 Mass. 332 ( 52 Am. Rep. 710 ); Fairfield Savings Bank v. Chase, supra. In view of Hall’s undertaking to furnish this lumber as a gratuity, and his interest to conceal from the defendant the fact that he had, without authority, procured the lumber upon the defendant’s credit, we hold that Hall’s knowledge is not imputable to the defendant, and that there is no presumption that the defendant knew at the time it received and used the lumber, that it was procured upon its credit.

3. It appears that the demand in this suit was sold tO' George Ide; that he called upon Harris, who was then president of the defendant corporation, for payment; that Harris, without authority from the trustees, proposed to personally make a small payment,, and said the defendant had no funds with whieh to pay the demand. Ide at other times called upon the president and treasurer for payment, and was told the defendant had no funds with which to pay. It was claimed these officers, by failing to deny the liability of the defendant on these occasions, have l’atified Hall’s acts, and that the defendant is bound by this ratification. A ratification of an act done by one assuming to be an agent relates back, and is ecpiivalent to, a prior authority. When, therefore, the approval of a majority of aboard of trustees is necessary to confer authority in the first instance, there can be no valid ratification except in the same manner. It not appearing that the president and treasurer were a majority of the defendant’s trustees, or that authority to bind the defendant by contract had been conferred upon them by the trustees or corporation, they could not affirm an unauthorized contract made by Hall. Despatch Line of Packets v. Bellamy Manufacturing Co., 12 N. H. 205 ; Story on Agency, ss. 235 and 239.

i. It is claimed that the defendant is estopped, from denying its liability, by reason of its failure to disaffirm the contract c aimed to have been made by Hall. This claim is not sustained *589 by tlie facts. The essential elements of an estoppel are not found by the court below. The defendant was not called upon to dis-affirm the pretended contract until it had knowledge that such contract had been made. Saville v. Welch, 58 Vt. 683 . It does not appear that the defendant, or a majority of its trustees, had such knowledge prior to the bringing of this suit; nor does it appear that the plaintiff has been influenced, misled or damaged by the acts of any one authorized to act for the defendant. Boynton v. Braley, 54 Vt. 92 ; Earl v. Stevens, 57 Vt. 474 ; Wooley v. Eclson et al., 35 Vt. 214 .

5. The plaintiff claimed it had sold and delivered the lumber in question to the defendant, through the defendant’s agent, Hall. The defendant claimed Hall was not its agent for that purpose, and that it did not purchase or receive the lumber from the plaintiff, but from Hall as a gratuity. The plaintiff claimed payment for the lumber so delivered by Hall. In view of these claims, the defendant had a right to show from whom, and under what contract or arrangement, it received the lumber; and, for this purpose, the evidence showing the arrangement between Hall, Harris, Thompson and Yail was properly admitted. It had a direct tendency to show that Hall had no authority to procure the lumber upon the defendant’s credit; and that the defendant received the lumber from a party other than the plaintiff, under such circumstances as would preclude a recovery for the same by the plaintiff. Aiken v. Kennison, 58 Vt. 665 ; Armstrong v. Noble, 55 Vt. 428 .

Judgment reversed, and judgment for the defendant and trustee to recover their costs.