Holmes v. Bd. of Trade of Kansas City

Citation81 Mo. 137
PartiesHOLMES et al. v. THE BOARD OF TRADE OF KANSAS CITY, Appellant.
Decision Date31 October 1883
CourtUnited States State Supreme Court of Missouri

Appeal from Jackson Special Law and Equity Court.--HON. R. E. COWAN, Judge.

REVERSED.

Gage, Ladd & Small for appellant.

There was no acceptance or use of respondents' work, within any reasonable import of those words. Respondents were not acting in the interest of the board of trade. They were acting for Mr. Alexander. But even if the acceptance and use, mentioned in the first declaration, constitute one element of ratification, its indispensable accompaniment, full knowledge of all the material facts, is wholly wanting. Ratification may be by words spoken or written, or an act done by the party sought to be charged, but in either case the party must have full knowledge of all the material facts. Cravens v. Gillilan, 63 Mo. 28; Middleton v. Railroad Co., 62 Mo. 581; Watson v. Bigelow, 47 Mo. 413; Owings v. Hull, 9 Peters 629; Risley v. Railroad Co., 1 Hun 207. The cases in which it is held that if the principal ratifies and enjoys the benefit of a part of the contract, he cannot repudiate the rest, refer to an intentional ratification with knowledge of all that has been done. Baldwin v. Burrows, 47 N. Y. 215; Smith v. Tracy, 39 N. Y. 79; Nixon v. Palmer, 4 Seld. 401; Seymour v. Wyckoff, 6 Seld. 224.

Tichenor & Warner for respondent.

A contract may be made by the tacit or implied consent of the board of directors. R. S. 1879, § 731; Chouteau v. Allen, 70 Mo. 325; Bank v. Dandridge, 12 Wheat. 83; Dunn v. Rector, etc., 14 John. 118; College v. Township, 13 Ia. 561; Story on Agency, §§ 52, 53. One may be a director, and yet independently of his duties as such, act as the agent of the corporation; if he does so with knowledge of the board, it is bound by his acts in the course of the business conducted by him. Goodwin v. Union S. Co., 34 N. H. 378; Hoyt v. Thompson, 19 N. Y. 215; Hayward v. The Pilgrim, 21 Pick. 277; Fister v. LaRue, 15 Barb. 324; Emmett v. Reed, 4 Seld. 312; Scott v. Railroad Co., 86 N. Y. 200; Abbott v. Herman, 7 Greenl. 119; Beidman v. Goodell, 56 Ia. 592; Angell & Ames on Corp., § 284. In order to bind the corporation no formal vote or resolution of the corporation need be shown. Bank v. Fricke, 75 Mo. 184. A part of the transaction of the one acting as agent, cannot be adopted and the rest repudiated. The act must be taken cum onere. Hovil v. Park, 7 East 164; Ferguson v. Carrington,9 B. & C. 59; Story on Agency, § 250. A treasurer of a railroad may employ an attorney for his company. Turner v. Railroad Co., 51 Mo. 505; Western Bank v. Gilstrap, 45 Mo. 421; Story on Agency, § 253.

HOUGH, C. J.

This is a suit for fees for professional services, alleged to have been rendered by the plaintiffs, as attorneys at law, for the defendant.

It appears from the record that the defendant, being engaged in the erection of a building for its use, found it necessary to effect a loan of $25,000. At a meeting of the board of directors of the defendant, the treasurer, who had been instructed to open negotiations for said loan, reported that it could be obtained from a bank in Massachusetts. Thereupon, A. L. Mason, one of said board, stated that he would like to take the loan of $20,000 or $25,000 without any commission, no expense to the board.” It afterward appeared that Mason was acting for one Ross Alexander, a relative, who lived in Illinois. Mr. Karnes was the regular attorney of the defendant. The proffered loan having been accepted, Mason went to the plaintiffs, who were his attorneys, and said to them that he was proposing on behalf of Mr. Alexander, to loan to the defendant $25,000 on bonds and mortgage, and wished plaintiffs to examine as to the authority of the defendant to borrow money, and to see that the security was put in such shape as to be valid. He then told them he did not wish from them a certificate as to the title of the defendant to the property, as he understood Karnes & Ess had examined it and found it good, but requested them to inquire of Karnes & Ess if they had passed upon the title. He told the plaintiffs to send their bill to the board of trade. He also stated that if the board did not pay the bill he would. The plaintiffs were of opinion that, in order to make the security valid, it must be authorized by the stockholders at a meeting to be held upon sixty days' notice. After consultation and discussion with Mr. Karnes, appellant's attorney, and some of its directors, it was finally agreed that the notice should be given and the meeting held. The notice for the meeting was prepared by one of the plaintiffs, and he urged upon the members of the board the necessity of having a majority of the stockholders present at the meeting.

The testimony leaves it in doubt whether the plaintiffs, or Mr. Karnes, prepared the resolution to be adopted by the stockholders. Mr. Holmes and Mr. Karnes both attended the meeting and explained the resolution to the stockholders, and it was adopted. Thereafter the secretary of the board directed Mr. Karnes to prepare the form of the bonds, but Mr. Karnes suggested that, as they had to pass the inspection of Mr. Dean, one of the plaintiffs, he had better draw the form to suit himself, and then there would be no question of their satisfying him.” Mr. Dean did prepare the form. The deed of trust was also drawn by the plaintiffs. Plaintiffs had the bonds lithographed, as directed by Mason, and had the notice for the stockholders' meeting published, and the defendant paid the lithographers and printers bills. After the bonds were issued and the mortgage was executed and the money obtained, the plaintiffs sent their bill to the defendant. The board of directors refused to pay it, and the secretary so advised the plaintiffs by letter. This letter was sent by the plaintiffs to Mr. Mason. Mr. Dean also spoke to Mr. Karnes about it. The situation was embarrassing to the latter, and he spoke to several members of the board, requesting them to avoid difficulty if possible.

At a second meeting of defendant's board of directors, Mr. Mason was present and made a personal appeal regarding the matter; and upon that the board directed the secretary to offer the plaintiffs $50 as a compromise, which he did, but which was declined. At this meeting any liability on the part of defendant was denied. Karnes testified that he supposed he represented the defendants in the transaction, and charged for it accordingly; and that he supposed the plaintiffs represented the lender of the money. Nofsinger, the president, Holden, the treasurer, and Miller, the secretary of appellant, all testified that the presentation of a bill by the plaintiffs was a surprise; they supposed they were represented by Mr. Karnes, and that the plaintiffs were caring for an adverse interest.

There was some testimony as to the custom in regard to the payment of expenses attending loans, but it was conflicting and unimportant. The cause was tried by the court, without the aid of a jury. The following declarations of law were given, at the request of the plaintiffs:

1. The court sitting as a jury, declares the law to be, that, although the defendant may never have authorized their director, Mason, to employ the plaintiffs, yet, if he did employ them, and, under his direction, they performed work which was afterward accepted and used by defendant, that such action by it, amounted to a ratification of such employment by said Mason, and for which defendant must pay a reasonable compensation.

2. The court declares the law to be, that if defendant employed plaintiffs to perform the services sued for, or if they were employed by a director of defendant, who had no authority to so employ, yet if his acts were afterwards ratified by defendant, then plaintiffs must recover.

At the instance of the defendant, the following were given:

2. The circumstance that A. L. Mason was a member of defendant's board of directors did not authorize him to make a contract with plaintiff, which should bind the defendant.

4. The fact that the...

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