Lyndon Mill Company v. the Lyndon Literary And Biblical Institution

• Decision Date: 01 May 1891
• Citation: Lyndon Mill Company v. the Lyndon Literary And Biblical Institution, 22 A. 575, 63 Vt. 581 (Vt. 1891)
• Parties: LYNDON MILL COMPANY v. THE LYNDON LITERARY AND BIBLICAL INSTITUTION
• Court: Vermont Supreme Court

22 A. 575

63 Vt. 581

LYNDON MILL COMPANY v. THE LYNDON LITERARY AND BIBLICAL INSTITUTION

Supreme Court of Vermont

May 1, 1891

MAY TERM, 1891

General assumpsit. Trial by court at the December term, 1890 Tyler, J., presiding. Judgment for the plaintiff. The defendant excepts.

Judgment reversed, and judgment for the defendant and trustee to recover their costs.

Geo W. Cahoon and W. P. Stafford, for the defendant.

OPINION

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The defendant did not take any corporate action with a view to repairing its buildings, and its trustees did not undertake to make the repairs upon the credit of the defendant. Hall, Harris, Thompson and Vail were the defendant's trustees; but whether they were a majority of the defendant's trustees does not appear. These four trustees desired to repair the defendant's buildings; and, shortly before the lumber in question was delivered, they made a personal and private arrangement among themselves, by which Harris and Vail were to put a heating apparatus into the buildings, Thompson was to furnish labor and make certain repairs thereon, and Hall was to furnish the lumber for such repairs. All this was to be done as a gratuity. The lumber was delivered by Hall, who was then president of the defendant's board of trustees and a director of the plaintiff corporation. The lumber, prior to its delivery to Hall, was the property of the plaintiff and was charged to the defendant as it was delivered; but by whose direction the charge was so made does not appear.

1. The defendant's trustees did not authorize Hall to procure the lumber upon the credit of the defendant; on the contrary, it was understood and agreed that Hall should furnish the lumber as a gratuity. It does not appear that Hall ever undertook to pledge the credit of the defendant in procuring the lumber, except by inference from the fact that the lumber was charged to the defendant. If Hall did direct the plaintiff to charge the lumber to the defendant, such direction was without authority, and the defendant is not liable by reason of a purchase by its authority.

Hall had no authority, by virtue of his office of president, to purchase the lumber upon the defendant's credit. He could preside at the meetings of the board of trustees; beyond this he had no more authority than a single trustee. A single trustee or director has no power to act for the institution which creates his office, except in conjunction with others. It is the board of trustees or directors only that can act. If the board of trustees or directors makes a president, trustee, or any other person, its officer or agent to act for it, then such officer or agent has the same power to act, within the authority delegated to him, as the board itself. His authority is, in such case, the authority of the board. It not appearing that Hall was authorized by a majority of the defendant's trustees to purchase the lumber in question upon the credit of the defendant, the case must be disposed of upon the assumption that he had no such express authority. Fairfield Savings Bank v. Chase, 72 Me. 226; Cook's Stock, Stockholders and Corporation Law, ss. 712 and 716; Ashuelot Manufacturing Co. v. Marsh, 55 Mass. 507.

It is claimed that authority in Hall, as president of the defendant corporation, will be presumed. The weight of authority is against this claim, and surely no such presumption can exist when, as in this case, want of authority clearly appears. If Hall had express authority to purchase the lumber upon the credit of the defendant, or general authority to act for the board of trustees, or had exercised the powers conferred upon the trustees, with their knowledge and acquiescence, to such an extent as to justify the presumption that such authority had been delegated to him, then the court below should have found such authority; there is nothing before this court from which Hall's authority can be presumed.

It not appearing that Hall, Harris, Thompson and Vail were a majority of the defendant's trustees, authority to repair the defendant's buildings is not shown. From aught that appears in this case, the repairs were made without the knowledge or consent of a majority of the defendant's trustees, or the knowledge or consent of any one authorized to act for them, or for the corporation. Hall, Harris, Thompson and Vail, in undertaking to make these repairs, did not profess to act for, or to bind the defendant. They were volunteers undertaking to do what, presumably, the defendant could not do for want of funds. If under such circumstances corporations are to be held liable, then every corporation holds its property by a very uncertain and insecure tenure.

2. The plaintiff claims the defendant is liable by reason of its having received and used the lumber. It is true that the law usually implies a promise to pay for property transferred from one party to another, but this rule does not apply when there is an express contract, nor where it is understood by the parties that the property is not to be paid for. King v. Woodruff, 23 Conn. 56 (60 Am. Dec 625); Waite v. Merrill, 4 Me. 102 (16 Am. Dec. 338); Weir v. Weir's Admr., 3 B. Mon. 645, (39 Am. Dec. 487); Walker v. Brown, 28 Ill. 378 (81 Am. Dec. 287). If there was a contract with the defendant, it was the arrangement made among the four trustees, by which Hall was to furnish the lumber as a gratuity, and the lumber was delivered to the defendant by the party agreeing to so furnish it. The defendant's officers had a right to treat the lumber as delivered pursuant to this agreement. There was nothing to put them upon inquiry, or to lead them to believe the lumber was being otherwise delivered, and it appears from the findings of fact that Harris and Vail supposed the lumber was so delivered. It does not appear what understanding Hall and Thompson had regarding this, but nothing is shown that would justify a different understanding on their part. And it does not appear that any of the defendant's trustees knew,...