Electrical Products Consolidated v. El Campo, Inc.

• Decision Date: 04 November 1937
• Docket Number: 7662.
• Citation: Electrical Products Consolidated v. El Campo, Inc., 105 Mont. 386, 73 P.2d 199 (Mont. 1937)
• Parties: ELECTRICAL PRODUCTS CONSOLIDATED v. EL CAMPO, Inc.
• Court: Montana Supreme Court

73 P.2d 199

105 Mont. 386

ELECTRICAL PRODUCTS CONSOLIDATED v. EL CAMPO, Inc.

No. 7662.

Supreme Court of Montana

November 4, 1937

Appeal from District Court, Eighth District, Cascade County; W. H Meigs, Judge.

Action by Electrical Products Consolidated against El Campo, Inc. From a judgment entered on a directed verdict for plaintiff defendant appeals.

Reversed with direction to enter judgment for defendant.

Rockwood Brown, Franklin Longan, Horace S. Davis, and Melvin Hoiness, all of Billings, for appellant.

Graybill & Graybill, of Belt and Great Falls, and P.J. Gilfeather, of Great Falls, for respondent.

STEWART Justice.

This is an appeal from a judgment of the district court of Cascade county, rendered on a verdict directed by the court in favor of plaintiff, Electrical Products Consolidated, a corporation, respondent here. Plaintiff sought to recover from El Campo, Inc., a corporation, defendant and appellant, $525, with interest and attorney's fees, as damages resulting from the breach of an alleged written contract.

The contract was entered into by Charles Day, as manager of defendant corporation, and the Electrical Products Corporation, the alleged assignor of plaintiff. It purported to be one for the installation of a Claude Neon sign and the maintenance thereof for a period of 36 months. It provided for specified monthly payments to be made by defendant over the same period. A down payment of $42 was made by Day at the time of the execution of the contract. No further payments were ever made and, apparently, from the record it is disclosed that the corporation refused to abide by its terms. The sign was installed in July of 1930, soon after the execution of the contract, and it was repossesed in May of 1931.

The complaint recited the particulars of the execution and carried a copy of the contract. A demurrer was filed to the complaint, and in due time overruled. Later an answer was filed, denying the essential allegations of the complaint, including the execution of the contract by defendant corporation. At the trial of the cause defendant first objected to the introduction of all testimony under the allegations of the complaint, for the reason that the complaint did not state a cause of action. This objection was overruled and the trial proceeded.

At the close of plaintiff's case both sides rested, and finally each side submitted a motion for a directed verdict. Plaintiff's motion was granted. A verdict in favor of plaintiff was returned by direction of the court, and thereafter judgment was entered accordingly. The appeal is from the judgment so rendered on the verdict.

Several assignments of error are urged. They involve the interpretation of the contract, particularly as to whether it was one providing for a penalty, as differentiated from liquidated damages; and the admissibility of oral proof of the assignment of the contract. The most important assignment of error, however, involves the matter of Day's authority to enter into the written contract so as to bind his corporation without written authority in that behalf.

There was a very emphatic difference of opinion between the parties as to the effect of the respective motions for directed verdict. The record discloses that, at the close of plaintiff's case, and after both sides had rested, defendant's counsel announced that he had a motion to make. Plaintiff's counsel suggested that he also had a motion to make, and requested that the jury be caused to retire while the motions were made and argued. The court ordered the jury to retire, where-upon plaintiff's counsel made a motion for a directed verdict on the ground that the only questions involved were questions of law, and that no questions of fact, upon which the minds of reasonable men could differ, were left for decision. Defendant's counsel then asked the court if he should make his motion before the ruling on plaintiff's motion, and the court replied that he should do so and that it would consider both motions together. In response to this request of the court, counsel for defendant made this statement: "Pursuant to the instructions of the court, defendant presents its motion before the plaintiff's motion is ruled upon, and without a waiver thereby of the right to go to the jury, but with the express reservation of that right." Counsel for defendant then made his final motion for a directed verdict on several grounds, one of which was that the authority of Day to bind the defendant corporation had not been established in conformity with our statutes and legal requirements generally.

There then ensued an argument between court and counsel. It was the contention of plaintiff's counsel that the two motions for directed verdict took the case away from the jury and submitted it to the court on both the law and facts. Plaintiff, as respondent here, still adheres to that contention. Counsel for defendant did not then agree that such was the law and does not concede the matter upon this appeal. The court did not take the cause away from the jury, but instructed it to return a verdict for plaintiff, which it did. This, in effect, was a determination of the issues by the court. Consolidated G. & S. Mining Co. v. Struthers, 41 Mont. 565, 572, 111 P. 152; compare, also, Fifty Associates Co. v. Quigley, 56 Mont. 348, 185 P. 155.

The question as to the status of such a matter upon the presentation of both motions is not a new one. There is some conflict in the decisions with relation thereto; however, the majority rule seems to be to the effect that, when motions are made by both parties, in the absence of a request that the jury be required to determine certain questions of fact, there is a waiver of the right to trial by jury, and the court is constituted a trier of all questions of law and facts. There is an extensive annotation on this question in 18 A.L.R. 1433, supplemented in 69 A.L.R. 633; to the same effect see, also, 26 R.C.L., § 83, p. 1080; 64 C.J., p. 434; 2 Bancroft's Pr. & Rem., § 1446, p. 1913; Bank of Commerce v. United States F. & G. Co., 58 Mont. 236, 194 P. 158; Moore v. Crittenden, 62 Mont. 309, 204 P. 1035; Midland Motor Co. v. Norwich Union Fire Ins. Society, 72 Mont. 583, 593, 234 P. 482.

Defendant argues that the express reservation of his right to go to the jury, made at the time of his motion for directed verdict, preserved that right in the event of an adverse ruling. In support of that contention Mack Co. v. Ryan, 80 Mont. 524, 261 P. 283, Stiemke v. Jankovich, 72 Mont. 363, 233 P. 904, and Fifty Associates Co. v. Quigley, supra, are cited. It will be noted, however, that in those cases it is indicated that such a reservation must specifically point out certain fact issues which it is desired to have the jury pass upon notwithstanding the motion. This point is not of persuasive effect here, as will hereinafter appear.

The action of counsel in thus submitting the matter was not binding upon the trial court, if it deemed the evidence upon a vital question in conflict and if it preferred the jury's judgment by way of a special finding upon the question in dispute, or preferred to have the jury return a general verdict in the cause. Mack Co. v. Ryan, supra; Hollingsworth v. Ruckman, 72 Mont. 147, 232 P. 180.

Defendant's motion for an instructed verdict challenged the legal sufficiency of all of the evidence. It was somewhat in the nature of a demurrer to the evidence or a motion for nonsuit. See 2 Bancroft's Pr. & Rem., § 1449, p. 1917; Maki v. Murray Hospital, 91 Mont. 251, 256, 7 P.2d 228; compare McKay v. Montana Union Ry. Co., 13 Mont. 15, 31 P. 999.

We hold that, both parties having made motions for instructed verdicts, the cause was for final decision by the court on both the law and the facts.

The important question for decision was with relation to the agent's or manager's authority to execute the contract on behalf of the corporation and thereby bind it to the fulfillment thereof. The court's direction to the jury to find in favor of the plaintiff in effect declared that that authority had been shown and existed. Resort to the record is then necessary to ascertain just what authority Day really had in the premises. Plaintiff apparently recognized the fact that the contract was one that would ordinarily, fall within the inhibition of the statute of frauds. Section 7519, subd. 1, Rev.Codes. The agent's authority was not in writing (see sec. 7939, Id.; Seymour v. Oelrichs, 156 Cal. 782, 106 P. 88, 134 Am.St.Rep. 154.

Here the contract was in writing, but no evidence was introduced showing written authority of Day to enter into it. Plaintiff sought to avoid the effect of the latter requirement, the absence of written authority, by virtue of the asserted fact that the "manager" was something more than an agent; in other words, that he was a managing official or managing agent of the corporation, and that his act was the act of the corporation, and that it was therefore bound by his action. If this contention were borne out by the record, then we would agree that specific written authority to enter into the agreement, or any agreement of that nature, was not necessary. The controlling question is: Does the evidence sustain such contention?

The only parol evidence in the record with regard to the scope of the manager's authority was that of Rockwood Brown president of the defendant corporation, who was called as a witness for the plaintiff. On direct examination he testified that Day was one of the incorporators along with himself and Mr. Davis, counse...