Drainage Dist. No. 2 of Dawson Cnty. v. Dawson Cnty. Irr. Co.
| Decision Date | 06 February 1942 |
| Docket Number | No. 31291.,31291. |
| Citation | 140 Neb. 866,2 N.W.2d 321 |
| Parties | DRAINAGE DIST. NO. 2 OF DAWSON COUNTY v. DAWSON COUNTY IRR. CO. |
| Court | Nebraska Supreme Court |
DRAINAGE DIST. NO. 2 OF DAWSON COUNTY
v.
DAWSON COUNTY IRR. CO.
No. 31291.
Supreme Court of Nebraska.
Feb. 6, 1942.
Appeal from District Court, Dawson County; Nisley, Judge.
Action by Drainage District No. 2 of Dawson County against the Dawson County Irrigation Company for the amount due on a drainage contract. Judgment for plaintiff, and defendant appeals.
Affirmed.
[2 N.W.2d 322]
1. Where a jury is waived in a law action, the case is tried to the court, and the final judgment rests upon findings by the court, in order that errors of law occurring at the trial may be considered by this court, the district court's attention must have been called to them by a motion for a new trial.
2. Where, in consideration of money payments to be made to it, one party to a contract has fully performed and the other has fully received all that it contracted to receive, the latter party cannot avoid liability for payment because, in the light of subsequent events, it considers it has made a poor bargain.
3. “Whatever transactions are fairly incidental or auxiliary to the main business of the corporation and necessary or expedient in the protection, care and management of its property, may be undertaken by the corporation and be within the scope of its corporate powers.” Fremont Nat. Bank v. Ferguson & Co., 127 Neb. 307, 322, 255 N.W. 39.
4. “‘An act of an agent, although without actual authority from his principal, may be with such apparent authority as to bind his principal.’ Such apparent authority of the agent cannot be extended or restricted by by-laws or other instructions to the agent by its principal, in the absence of actual notice thereof.” Sindelar v. T. B. Hord Grain Co., 116 Neb. 776, 219 N.W. 145.
5. “The unauthorized acts of an officer of a corporation may be ratified by the corporation by conduct implying approval and adoption of the act in question. Such ratification may be express, or may be inferred from silence and inaction, and if the corporation after having full knowledge of the unauthorized act, does not disavow the agency and disaffirm the transaction within a reasonable time, it will be deemed to have ratified it.” Citizens' Savings Trust Co. v. Independent Lumber Co., 104 Neb. 631, 178 N.W. 270.
6. “A corporation may not, in violation of its charter, enter into a contract, whereby it receives and retains the benefit of its illegal contract, and then shield itself from liability for benefits received by pleading ultra vires as a defense.” Simmons v. Farmers' Union Co-operative Ass'n, 114 Neb. 463, 208 N.W. 144.
Lyman M. Stuckey, of Lexington, for appellant.
York & York, of Lexington, for appellee.
Heard before SIMMONS, C. J., and ROSE, EBERLY, PAINE, CARTER, MESSMORE and YEAGER, JJ.
SIMMONS, Chief Justice.
This is an action to recover the amount due upon a written contract. The cause was tried, by stipulation, to the court without a jury. Defendant appeals from a judgment against it.
Plaintiff's petition alleged that it was a corporation and political subdivision of the state existing by virtue of the laws relative to drains and drainage; that defendant is a private corporation existing by state law; that September 30, 1930, plaintiff and defendant entered into a written agreement, set out in full in the petition, whereby in consideration of plaintiff's agreeing to place a 36-inch-diameter vitrified clay pipe
[2 N.W.2d 323]
under defendant's main canal, of the reclaiming “of other lands” within the drainage district and of draining lands of the defendant, and “other valuable consideration,” the defendant agreed to pay the plaintiff the sum of $2,639.75 in instalments over a period of twenty years. The agreement recited that the contract was in full settlement and in lieu of assessments and apportionment of benefits that have been or might be made against defendant's real estate within the boundaries of plaintiff's district. The plaintiff alleged that it had fully performed its part of the contract; that defendant on November 2, 1937, had paid $395.97 on said contract; that it was in default on all other payments up to and including May 1, 1940, for which plaintiff prayed judgment.
Defendant by answer admitted the corporate capacities of the parties, the demand for payment of the sums alleged to be due and that they had not been paid, and denied generally. Defendant affirmatively alleged that it was incorporated for the purpose of constructing and maintaining a system of irrigation canals and laterals and doing acts necessary to the proper conveyance of irrigation water to lands under its system and set up five separate defenses as follows: (1) That there was no consideration for the contract; (2) that the plaintiff drainage district had no power to assess taxes against defendant's right of way; (3) that the contract is beyond the corporate power of the defendant corporation and is therefore ultra vires; (4) that the president of the defendant company had no authority either express or implied to enter into this contract; (5) that the debt created exceeded the statutory and charter debt limit of the defendant company and is therefore void.
Plaintiff by reply denied affirmative allegations of the answer, and alleged that defendant had retained the benefits of the contract; had ratified it by the payment; and was estopped to interpose the defense of ultra vires of the corporation or of its president.
The record sustains the following statement of facts: The defendant and its predecessors in title have operated an irrigation canal and lateral system for a number of years. It was organized in 1913 with Roy F. Stuckey, its principal stock-holder, as president and managing official. He was in charge of its office, directed its affairs and made all decisions so far as dealings with other parties were concerned. In 1930 and prior thereto land in the area served by defendant needed drainage. Land to the north of it was seeped, and percolating waters and flood waters accumulated on the north side of defendant's ditch and damaged land adjacent thereto. At least one action for seepage damage had been instituted. Plaintiff district was formed to drain the land south of the ditch. Its drainage ditch commenced at the south line of defendant's right of way and ran to the river. Plaintiff had apportioned benefits and proposed to assess defendant for the sum of $639.75. Verbal negotiations were conducted resulting in the contract in suit. Plaintiff did not assess defendant for benefits.
Plaintiff built the drain under defendant's ditch so that flood waters and seepage waters to the north of defendant's ditch could be drained into plaintiff's ditch. There is dispute in the record as to whether this was made of vitrified clay pipe or corrugated iron, and it appears to have been 48 inches in diameter. Apparently no complaint was made until the trial in January, 1941, as to the material used and none as to the size of the drain. That the drain served the purpose for which it was constructed is established by the evidence.
Defendant at no time questioned or denied its liability under the contract until about the beginning of this litigation in April, 1940. Repeated efforts made by plaintiff to collect the payments due failed because the defendant claimed to be short of money. Defendant, however, in November, 1937, did pay the plaintiff the sum of $395.97 to apply on this contract. This is the sum of the first three payments provided in the contract, without penalty interest. This payment was made by the defendant on direction of Roy F. Stuckey and later reported to defendant's board of directors at the annual meeting and approved by it. As late as the spring of 1940 Mr. Stuckey told plaintiff's attorney that the...
To continue reading
Request your trial