Clair v. Rutledge

• Decision Date: 11 November 1902
• Citation: 92 N.W. 234,115 Wis. 583
• Parties: ST. CLAIR v. RUTLEDGE.
• Court: Wisconsin Supreme Court

115 Wis. 583

92 N.W. 234

ST. CLAIR

v.RUTLEDGE.

Supreme Court of Wisconsin.

Nov. 11, 1902.

Syllabus by the Judge.

1. The president of a corporation does not, by virtue of his office, possess authority to bind his company by contract.

2. A corporation can only contract by authority of its board of directors in the absence of extraordinary powers given to some officer to so bind it, by some general or special law of the corporation; but such authority, as regards the public, may be either expressly or impliedly given.

3. A person who contracts with the president of a corporation pretending to act in its behalf is bound to know the extent of his powers; but this must be taken in connection with countervailing rules rendering it dormant where otherwise injustice would be done.

4. Authority may be vested in the president of a corporation to bind it by contract, though no authority in that regard be given to him by any affirmative act of its board of directors, or any act at all intending to confer such authority, it being subject to be bound by the appearance of authority for which it is responsible, the same as a natural person.

5. A corporation is estopped from denying in any particular instance that its president has the power which it has customarily allowed him to exercise in the face of the public.

6. What will effectively evidence authority of the president of a corporation to bind it by contract must be considered with reference to the circumstance that such officer, for his corporation, generally exercises the power of a general agent.

7. The fact that the directors of a corporation, for a long period of time, neglect to hold meetings and exercise their functions as its managing officers, during which time its president is apparently permitted to carry on the corporate business without objection by them or any of them, is sufficient to warrant the conclusion as a fact, as regards innocent third persons, that such president has been duly authorized by such directors to do such business, and without reference to what the actual fact is as between such corporation and such president.

8. As regards the validity of a contract made by the president of a corporation as its act, he is generally presumed to have been duly authorized under some judicial rule, where otherwise injustice would be done. As an illustration of that, in a matter within the ordinary scope of the business of a corporation, one may safely contract with its president if he is customarily found in charge of such business, assuming that he has been duly authorized to act as its agent, such person not knowing that such officer does not possess such power in fact. In such circumstances the official character does not indicate a limitation of power to the mere ex officio authority. It rather tends to give color to the president's status as that of a general agent for his company, in addition to being the president.

9. The president of a corporation, being in apparent charge of its affairs as a general agent, having sold the timber on its lands, giving several years' time to cut and remove the same, the vendee not knowing of his possessing authority in the matter except by appearance, in that he has been permitted for a considerable length of time to conduct the corporate business, and the corporation having treated such particular act as binding and appropriated the consideration paid, largely for distribution among its members, and without any formal action in the matter by the directors so far as known to the vendee, and the president having continued thereafter to manage the corporate business for several years, apparently with the approval of its board of directors, and, while appearances were as indicated, for a consideration moving to the corporation, extended the time for the vendee to cut and remove the timber,-- held, that the circumstances warranted a finding of fact that the corporation was guilty of having clothed its president with apparent authority to grant such extension, and a conclusion of law that it was estopped from changing such apparent position to the prejudice of such vendee.

10. The written evidence of a corporate contract need not be sealed with the corporate seal or signed by the secretary of the corporation in order to give it validity, unless it be one required by some statute to be so sealed and signed.

11. If the president of a corporation, authorized actually or constructively to bind it by contract, signs a written agreement with the name of the corporation, by himself, intending to bind it, the inadvertent omission by him of the title of his office in the signature will not affect the validity of the paper.

12. The waiver of the right to forfeit to the corporation the title to real property is not a conveyance of such property, and is not required by law to be effected by a writing under the seal of the corporation, signed by its president and secretary.

Appeal from circuit court, Eau Claire county; James O'Neill, Judge.

Action by George A. St. Clair against Edward Rutledge. Judgment for defendant, and plaintiff appeals. Affirmed.

Action to quiet title. The complaint is in the usual form. Defendant pleaded title to the timber upon the land and an interest under a tax deed. The court, upon the evidence, found, on matters material to this appeal, in substance as follows:

(1) October 12, 1893, and prior thereto and thereafter till the conveyance to plaintiff, the Peerless Iron & Land Company, a corporation, owned the lands in dispute, except as affected by transactions with defendant hereafter mentioned.

(2) The corporation was organized in 1886, principally for the purpose of dealing in mineral lands and mining properties, prospecting and exploring for minerals, iron and other ores, mining, smelting and manufacturing minerals, granting and acquiring mining options and leases, and platting lands.

(3) By the articles of organization the president, in conjunction with the secretary, was empowered to make conveyances, contracts and agreements as directed by the board of directors, and perform such other duties as might be prescribed by the by-laws, and have general charge and supervisory control of the business and affairs of the company under and subject to the authority of the board of directors.

(4) No by-law was passed or direction given to the president in regard to the transaction with the defendant hereafter mentioned, prior to the occurrence thereof.

(5) The entire capital stock of the corporation was paid by a conveyance to it of certain lands.

(6) C. T. Bowen was president of the corporation from August, 1886, to the spring of 1899.

(7) From October 12, 1893, the president as such sold to defendant the pine, spruce and tamarack timber, 12 inches or more in diameter at the stump, on the lands in question, with the privilege to cut and remove the same at any time before June 1, 1899, the timber then remaining to revert to the corporation, the sale being made by a writing signed by the president and the secretary.

(8) November 1, 1893, the board of directors first acted in reference to the sale to defendant, at which time they ratified the same by a motion in the following words:

“On motion the president and secretary were authorized and empowered to make sale of the pine on Peerless land in town 43--3 east in Ashland county, Wisconsin, and all contracts heretofore made by them in reference to such sale were ratified and confirmed.”

(9) Defendant did not know of such action till after the commencement of this action. From the time he purchased the timber he performed the condition imposed upon him in regard to the land to pay one-half of the taxes on the land during the existence of his interest in the timber.

(10) When said sale was made the corporation had no money with which to do business or pay the taxes upon its lands. The money received upon the sale was used, so far as necessary, to pay back taxes on the lands, and the balance was divided between the stockholders.

(11) The taxes on the land, except one-half paid by defendant, were allowed to go delinquent from 1894 to 1900, during which time defendant obtained a tax deed on one-half interest in some of the land, which deed, however, is admitted to be void.

(12) From about the year 1892 no business of any kind was done by the corporation. It in fact abandoned the purposes of its organization except as the same was attended to by the president, Mr. Bowen, all of whose acts were tacitly assented to by the corporation during such time. Shortly before March 28, 1896, defendant applied to the corporation, by letter addressed to its president, for an extension of time to June 1, 1902, to remove the timber from the land, upon condition of his continuing to pay one-half of the taxes until the timber should be removed.

(13) Bowen, acting as president, with the acquiescence of one or more of the other directors, assented to such request, and by a writing extended the privilege to remove the timber till June 1, 1902. The extension was signed in the following form: “Peerless Iron & Land Company, by C. T. Bowen,” though Mr. Bowen in fact acted as president of the corporation in so signing the extension, the neglect to add the title, “President,” being a mere inadvertence.

(14) Had defendant not obtained the extension he would have removed the timber within the time allowed by his agreement with the corporation as it was originally made. He omitted to do so, relying on the extension referred to.

(15) November 20, 1899, the corporation conveyed the lands in question by quitclaim deed to plaintiff for the sum of $750, he then having full knowledge of the transactions of Mr. Bowen, as president of the corporation, with defendant.

(16) The corporation never in any way repudiated Bowen's transaction with defendant except by the act of making the quitclaim deed.

(17) For a long time prior to the...