Lawrence Coal Co. v. Shanklin.

• Decision Date: 19 August 1919
• Docket Number: No. 2339.,2339.
• Citation: 183 P. 435,25 N.M. 404
• Parties: LAWRENCE COAL CO.v.SHANKLIN.
• Court: New Mexico Supreme Court

25 N.M. 404

183 P. 435

LAWRENCE COAL CO.

v.SHANKLIN.

No. 2339.

Supreme Court of New Mexico.

Aug. 19, 1919.

Syllabus by the Court.

A corporation may ratify an unauthorized agreement of another person, made in its behalf, and by such ratification become bound thereby.

The principal must ratify the whole of the agent's unauthorized act, or not at all, and cannot accept its beneficial results, and at the same time avoid its burdens.

Where for a sufficient consideration one agrees to assume and pay the debt of another, the creditor is impliedly included as within the privity of the promise, and he may single out the promisor and sue him by direct action.

Appeal from District Court, McKinley County; Raynolds, Judge.

Suit by L. G. Shanklin against the Lawrence Coal Company. Judgment for plaintiff, and defendant appeals. Affirmed.

This is a suit by L. G. Shanklin against the Lawrence Coal Company, a corporation, to recover upon an open account for goods, wares and merchandize of the value of $718.52, alleged to have been sold to the Leyba Coal Company, and as to which it is alleged the defendant “accepted said account and agreed to pay the same.” The facts are set out in the opinion.

The principal must ratify the whole of the agent's unauthorized act, or not at all, and cannot accept its beneficial results, and at the same time avoid its burdens.

A. T. Hannett, of Gallup, for appellant.

E. A. Martin, of Gallup, an McFie, Edwards & McFie, of Santa Fé, for appellee.

BRICE, District Judge.

The testimony in this case is contradictory. It appears that Eleuterio Leyba was in the coal mining business under the name of the Leyba Coal Company in McKinley county, and, having gotten behind with his creditors, agreed to sell a one-half interest in his business to F. S. Lawrence. At the time of such agreement, it does not appear from the evidence whether or not the defendant corporation had been organized; but, if so, no board of directors had been elected, nor had it any officers authorized to transact its business. Leyba testified that Lawrence was acting for the Lawrence Coal Company when he contracted with Leyba for the one-half interest in his property. He also testified that Lawrence was to pay him $10,000 for such interest, assuming as part payment $8,000 indebtedness; the account sued upon being a portion of such indebtedness assumed.

On December 20, 1917, prior to the election of directors and officers of the Lawrence Coal Company, F. S. Lawrence wrote upon the account of plaintiff against Leyba, the following:

“The above account to be paid by Lawrence Coal Company. F. S. Lawrence.”

After the corporation was organized and officers elected, it wrote upon a bill or account sent to it, requesting payment of such debt, the following:

“Do not send this bill to Lawrence Coal Company. They are not responsible for it. Goods purchased by E. Leyba. F. S. Lawrence.”

F. S. Lawrence testified that he did not hold any office with the Lawrence Coal Company at the time of the transaction hereinbefore narrated; that he was only one of the original incorporators of the company. However, he did testify that the Lawrence Coal Company bought the land which was the subject of the contract hereinbefore mentioned from Leyba and his wife, and introduced a deed in evidence, executed by them, conveying such property to the corporation in consideration of “one dollar, and other valuable consideration,” but stated that they bought no other real property from the Leybas.

There is testimony of both Lawrence and Leyba to the effect that Lawrence made the trade personally; also testimony of Lawrence to the effect that he agreed to and did personally pay the debts of Leyba up to $6,500 for the one-half interest in the property; that said property was conveyed to the...