Cameron v. Kenyon-Connell Commercial Co.
| Citation | 56 P. 358,22 Mont. 312 |
| Parties | CAMERON v. KENYON-CONNELL COMMERCIAL CO. et al. |
| Decision Date | 20 March 1899 |
| Court | United States State Supreme Court of Montana |
Appeal from district court, Silver Bow county; J. J. McHatton Judge.
Action by Minnie Cameron, as administratrix of Angus D. Cameron deceased, against Kenyon-Connell Commercial Company, a corporation, and M. J. Connell, W. R. Kenyon, J. E. Gaylord C. H. Palmer, and W. A. Clark. Motion for nonsuit as to defendants Kenyon, Connell, Palmer, and Gaylord was granted. From an order denying a new trial as to such defendants plaintiff appeals. Reversed.
T. J. Walsh and J. W. Kinsley, for appellant.
Wm. H. De Witt and John F. Forbis, for respondents.
Plaintiff, as administratrix of the estate of Angus D. Cameron, deceased, brought this action against the Kenyon-Connell Commercial Company, a corporation, and M. J. Connell, W. R. Kenyon, J. E. Gaylord, C. H. Palmer, and W. A. Clark, trustees and agents of the corporation, for damages by reason of the killing of Angus D. Cameron, on January 15, 1895, through force of an explosion of giant powder negligently and unlawfully kept by defendant corporation in its warehouse within the limits of the city of Butte. The corporation denied the negligence and unlawful acts averred. Kenyon, Connell, and Palmer each separately answered, and denied any unlawful or negligent act on his part, and each affirmatively pleaded that the warehouse was the property of the corporation, and that he never authorized or directed any powder to be stored therein, and was ignorant of the fact that any powder was stored therein. Gaylord and Clark each denied the allegations of the complaint, or that he was a managing agent or trustee or officer of the corporation. Trial to jury. Motion for nonsuit by individual defendants was granted. Thereafter plaintiff's motion for a new trial as to defendants Kenyon, Connell, Palmer, and Gaylord was overruled. Plaintiff appeals.
The record discloses these facts: The defendant corporation dealt in hardware, merchandise, and powder. It owned a large frame, iron-roofed warehouse, near a railroad depot within the corporate limits of the city of Butte, where it kept its merchandise, including Hercules powder, a dangerous explosive compound of nitroglycerin and other substances. On the night of January 15, 1895, the warehouse took fire. Plaintiff's intestate, Cameron, was the chief of the fire department of the city of Butte, and commanded the firemen who responded to the alarm. While the firemen were actually engaged in an endeavor to put the fire out, a fearful explosion occurred within the corporation's warehouse, and many persons, including Cameron, were killed. From the beginning of the year 1893, Hercules and giant powder had been kept in the warehouse. Defendants Kenyon and Connell had both been seen in or about the building during 1893, and at divers times up to the time of the explosion,--Kenyon often, Connell very seldom, the other defendants never. The quantity of powder kept in the warehouse about the 1st of each month was from 20 to 50 boxes, larger quantities being stored in a powder magazine three miles out of the city. On the day before the explosion, a witness saw some 7 boxes of powder, 50 pounds in each box, in the warehouse. An employé, one Orcutt, had immediate charge of the warehouse, and ordered the powder put where it was. He said that on the day of the explosion he thought there were somewhere about three to five cases of powder in the warehouse; while another witness, a mining superintendent accustomed to using powder, said he though a ton must have exploded on the night of the fire. Defendant Connell was president of the corporation. Kenyon was general manager. Kenyon's duties were to give attention to the corporation's business, his particular duties being to look after the financial part, and ordering goods, but not to manage or control the warehouse or magazine, which were under the warehouseman Orcutt's direct charge. Neither Connell, the president, nor any of the other trustees, except Kenyon, had anything whatever to do with the actual personal management of the affairs of the corporation.
It is plain that this corporation, like many others in the commercial world, had one head director, to whom all the other trustees gave the entire practical management of the concern. It thus furnishes but a single instance of the common practice among business men to incorporate commercial enterprises, and, in doing so, of their trusting the entire actual management to the one director who is familiar with, and assumes the real control of, the particular business undertaken. This custom has doubtless been the outgrowth of a belief, generally correct too, that, by incorporating mercantile or other undertakings, directors are not liable to creditors in case of business reverses, while those who associate themselves as members of a partnership are. But, notwithstanding all this, there are various unavoidable responsibilities that attach themselves inseparably to the office of corporate directorship, which, in case of negligence or misconduct, often illustrate the risks incidental to accepting such positions of trust in a corporation, and of not prudently guarding against their possible consequences. It is a general rule that the ordinary business of a corporation is managed in the name and on behalf of the corporation by particular agents, chosen by the stockholders. These agents are the directors. For their acts, performed within the apparent scope of their authority, the corporation is responsible, while, e converso, the corporation can act through these agents alone. These principles are generally familiar to business men, as well as to lawyers. They control the relation of the artificial being, the corporation, to the world at large. They find their foundation in the law of agency, which makes the corporation the principal. Still, they are extended, under certain conditions, far enough to inculpate the agents or directors of the corporation, notwithstanding the fact that the principal may also be liable for a wrong done.
Now, bearing in mind that this case presents itself upon a motion for a nonsuit, and that we must accordingly consider as true everything which the evidence tended to prove on the trial, we have before us a corporation guilty of a nuisance, by having kept in a frame warehouse within the limits of an incorporated city, in the vicinity of railroad depots and other buildings, an amount of Hercules powder in excess of the quantity--50 pounds-allowed to be stored therein by the laws of the state. Laws Mont. Ex. Sess. 1887, p. 68; Comp. St. 1887, § 361. Cheatham v. Shearon, 1 Swan, 213. It is very hard to conceive of anything more terrible in its danger to life and property than a quantity of highly-explosive powder kept near to where people live or do business. Such a menace, when known, obstructs that free use of property which the law assures to an owner; while nothing could more seriously interfere with the comfortable enjoyment of life than the knowledge that in one's neighborhood there is a frame building in which nitroglycerin explosives are stored in large quantities. No ordinance of a city could authorize a larger quantity of powder to be kept by a corporation within the city limits than the state statute allows, unless some special exception is to be found exempting the inhabitants of such city from the operation of the general statute. None such affecting Butte is known to us, however; so we must regard the ordinance of that city, pleaded by defendants, which permits 150 pounds of powder to be kept at one time by a company in its warehouse within the limits of that city, as inconsistent with the state law, without force, and immaterial to the case before us. The corporation, therefore, by maintaining this nuisance, became the subject of indictment for misdemeanor (Whart. Cr. Law, § 91), as well as liable in civil action for injury to person or property caused by the nuisance (Heeg v. Licht, 80 N.Y. 579). These propositions are too plain for extended comment. They demonstrate a liability to this plaintiff, assuming always the evidence is uncontradicted. Hence we pass to the more direct inquiry whether the directors of the guilty corporation are also liable for Cameron's death.
As said before, the trustees manage the stock, property, and concerns of a corporation (Comp. St. div. 5, § 450); wherefore it is difficult to see how all responsibility in this management can be avoided as long as the trustees...
To continue reading
Request your trial