M'Arthur v. Times Printing Co.

• Decision Date: 05 February 1892
• Citation: 48 Minn. 319
• Parties: D. A. McARTHUR <I>vs.</I> TIMES PRINTING CO.
• Court: Minnesota Supreme Court

48 Minn. 319

D. A. McARTHURvs.

TIMES PRINTING CO.

Supreme Court of Minnesota.

Argued December 18, 1891.

Decided February 5, 1892.

Appeal by defendant, Times Printing Company, from an order of the district court of Hennepin county, Canty, J., made August 4, 1891, denying its motion for a new trial.

Action brought by D. A. McArthur to recover damages sustained by him from the breach of a contract made by defendant with him. He was employed by it for a year from October 1, 1889, to solicit advertisements for its newspaper, and was to receive $20 a week during October, and $30 a week for the residue of the year, and was

also to receive, at the end of the year, five shares of its stock, of $100 each. He was discharged April 12, 1890. After the year expired he brought this suit. It was tried May 5, 1891, and plaintiff had a verdict for $450. Defendant moved for a new trial. The motion was denied, and it appealed.

Geo. F. Edwards, for appellant.

F. B. Wright, for respondent.

MITCHELL, J.

The complaint alleges that about October 1, 1889, the defendant contracted with plaintiff for his services as advertising solicitor for one year; that in April, 1890, it discharged him, in violation of the contract. The action is to recover damages for the breach of the contract. The answer sets up two defenses: (1) That plaintiff's employment was not for any stated time, but only from week to week; (2) that he was discharged for good cause. Upon the trial there was evidence reasonably tending to prove that in September, 1889, one C. A. Nimocks and others were engaged as promoters in procuring the organization of the defendant company to publish a newspaper; that, about September 12th, Nimocks, as such promoter, made a contract with plaintiff, in behalf of the contemplated company, for his services as advertising solicitor for the period of one year from and after October 1st, — the date at which it was expected that the company would be organized; that the corporation was not, in fact, organized until October 16th, but that the publication of the paper was commenced by the promoters October 1st, at which date plaintiff, in pursuance of his arrangement with Nimocks, entered upon the discharge of his duties as advertising solicitor for the paper; that after the organization of the company he continued in its employment in the same capacity until discharged, the following April; that defendant's board of directors never took any formal action with reference to the contract made in its behalf by Nimocks, but all of the stockholders, directors, and officers of the corporation knew of this contract at the time of its organization, or were informed of it soon afterwards, and none of them objected to or repudiated it, but, on the contrary, retained plaintiff in the employment of the company without any other or new contract as to his services.

There is a line of cases which hold that where a contract is made in behalf of, and for the benefit of, a projected corporation, the corporation, after its organization, cannot become a party to the contract, either by adoption or ratification of it. Abbott v. Hapgood, 150 Mass. 248, (22 N. E. Rep. 907;) Beach, Corp. § 198. This, however, seems to be more a question of name than of substance; that is, whether the liability of the corporation, in such cases, is to be placed on the grounds of its adoption of the contract of its promoters, or upon some other ground, such as...