Mayger v. St. Louis Min. & Mill. Co. of Montana

• Decision Date: 23 October 1923
• Docket Number: 5192.
• Citation: 219 P. 1102,68 Mont. 492
• Parties: MAYGER v. ST. LOUIS MINING & MILLING CO. OF MONTANA.
• Court: Montana Supreme Court

219 P. 1102

68 Mont. 492

MAYGER v. ST. LOUIS MINING & MILLING CO. OF MONTANA.

No. 5192.

Supreme Court of Montana

October 23, 1923

Appeal from District Court, Lewis and Clark County; W. H. Poorman Judge.

Action by Frances Mayger, as administratrix of the estate of William Mayger, deceased, against the St. Louis Mining & Milling Company of Montana. Judgment for plaintiff, and defendant appeals. Affirmed.

McIntire & Murphy and Walsh, Nolan & Scallon, all of Helena, for appellant.

T. B Weir, of Helena, for respondent.

CALLAWAY C.J.

Plaintiff as administratrix of the estate of William Mayger, deceased, brought this action to recover from the defendant the sum of $19,639.50, balance alleged to be due upon an account stated, with interest. Judgment in her favor resulted, from which defendant appeals.

The action is upon an account stated. Defendant alleges that the complaint does not state a cause of action. In this it is wrong. See McFarland v. Cutter, 1 Mont. 383; Voight v. Brooks, 19 Mont. 374, 48 P. 549; Martin v. Heinze, 31 Mont. 68, 77 P. 427; and Noyes, Admr, v. Young, 32 Mont. 226, 79 P. 1063. The answer is a general denial.

The agreement resulting in the account stated having the force of a contract the plaintiff must recover upon it, or fail in the action. Upon its answer, the defendant, in order to prevail must show that there was not any account stated, or that it has paid the amount alleged to be due. Further the defendant may not go, in the absence of a pleading alleging fraud, error, or mistake in the ascertainment of the balance, or in reaching the agreement resulting in the account stated. Martin v. Heinze, supra, and cases cited.

The administrative capacity of plaintiff was admitted, also the corporate capacity of defendant, and that the defendant, during all the times in controversy, was the owner of large mining properties and mills for the reduction of ores in Lewis and Clark county.

The evidence showed, or tended to show, the following facts without substantial contradiction: The plaintiff, Frances Mayger had been secretary and director of the defendant company ever since September 25, 1913. Her husband, William Mayger, had been connected with the company for many years, was elected president on September 25, 1913, and held that office continuously thereafter until the date of his death, January 19, 1918. For a number of years Charles F. Mayger had been vice president of the company, and was such when William Mayger died. On April 13, 1918, he was vice president and acting manager of the company.

At a meeting of the stockholders held July 8, 1887, at which William Mayger was present, by-laws were adopted. Article 2 thereof, so far as material here, reads as follows:

"Section 1. The president shall be the chief executive officer of the company in the management of its affairs, but subject to the control and direction of the board of trustees. He shall, when present, preside at all meetings of the board of trustees, and of the executive committee, and shall report his official acts to the board at regular meetings for approval, and shall perform such other duties as may be required of him by the laws of Montana and by the by-laws of this company and by the board of trustees. He shall sign all documents, deeds, contracts, certificates of stock, drafts, acceptances, notes and checks, and approve all vouchers for the payment of money as may be necessary in the principal office of the company. He shall be ex officio a member of all committees, but shall not vote on matters involving his own acts.

Sec. 2. He shall receive such salary as the board of trustees may fix and allow. * * *"

By article 3 it was provided that in case of the president's inability or refusal to act--

"the vice president shall possess all the powers and perform all the duties of the president, and may receive such compensation for his services as the board of trustees may fix and allow."

During the period inquired about in this controversy, covering a number of years, the president transacted the business of the company without respect to the board of directors, "to the fullest extent." As acting manager and head of the company he made its contracts for supplies, employed the miners, directed them where to work, made contracts with reference to improvements that were done on the mine; compromised and settled claims against the company on behalf of the company, managed the business of the company when the board of directors was not meeting. This course of conduct by the president had existed during his connection with the company, and seemingly the same course was pursued after the president's death by the acting president.

On April 13, 1918, there was an open account existing between the plaintiff in her capacity as administratrix of the estate of William Mayger, deceased, and the defendant, as a result of the relationship which had existed between William Mayger and the company. Plaintiff had caused an audit of the company's books to be made, of which Charles F. Mayger, the vice president and acting president, had knowledge. He had seen the audit. On April 13, plaintiff presented to him two papers, duplicates, which he signed as vice president, and which she attested as secretary, and upon which she placed the corporate seal. The one in evidence reads as follows:

"Helena, Montana, April 13, 1918.

St. Louis Mining & Milling Company to Frances Mayger, administratrix of the estate of William Mayger, deceased.

To balance due William Mayger on account as shown by the books of the St. Louis Mining & Milling Company, $19,639.59.

Approved:

St. Louis Mining & Milling Company,

By Chas. F. Mayger, Vice President.

Attest: Frances Mayger, Secretary.

[Corporate Seal.]"

Plaintiff retained one paper; some time later, probably four or six weeks afterwards, she gave the other one to Charles F. Mayger. Plaintiff made demand on the company for payment of the amount due, but no payment was ever made thereon. Strenuous objection was made to the admission in evidence of the foregoing document, which we shall refer to as Exhibit A. In fact, its admission is the main error assigned.

Counsel insist that the president of a corporation as such has no inherent power to bind it by assenting to an account stated, and they say that, since plaintiff was a director and officer of the defendant company when Exhibit A was executed, it discloses upon its face its own illegality, and before plaintiff can recover she must show the transaction to have been fair in all respects, and that the defendant, in acting with respect to it, did so with full knowledge of all the circumstances.

Here it may be observed that defendant's counsel have taken a wide range in their brief, carrying their contentions beyond the issues made up by the pleadings. It is unnecessary to refer to these contentions further than to reiterate that, in the absence of a pleading on behalf of the defendant alleging fraud, error, or mistake, it is not permissible to inquire into the items which made up the account stated, nor into the bona fides of the transaction.

This court never followed the ancient rule that the president of a corporation has no greater power than any other director. On the contrary, long ago it adopted the more modern, and what Mr. Fletcher (3 Fletcher's Cyclopedia Private Corporations, § 2011) calls--

"the sensible rule, in accordance with the well-recognized ideas of the people at large, that a president of a corporation is the head of the corporation subject to the control of the board of directors as to matters out of the ordinary, but with power to bind the corporation in regard to contracts involved in the everyday business of the corporation."

In Trent v. Sherlock, 24 Mont. 255, 61 P. 650, Mr. Chief Justice Brantly said:

"No principle of law is more clearly settled than that an agent to whom is intrusted by a corporation the management of its local affairs, whether such agent be designated as president, general manager, or superintendent, may bind his principal by contracts which are necessary, proper, or usual to be made in the ordinary prosecution of its business [citing cases]. The fact that he occupies, by the consent of the board of directors, the position of such an agent, implies, without further proof, the authority to do anything which the corporation itself may do, so long as the act done pertains to the ordinary business of the company. Mathias v. White Sulphur Springs Association, 19 Mont. 359, 48 P. 624; Ceeder v. Lumber Co., 86 Mich. 541, 49 N.W. 575; Adams Mining Co. v. Senter, 26 Mich. 76; Marlatt v. Levee Steam Cotton Press Co., 10 La. 583; Siebe v. J. Hendy Machine Works, 86 Cal. 391, 25 P. 14. Even where the contract in question pertains to matters without the ordinary course of business, but within the power of the corporation--that is, such as is not prohibited by its charter or by express provision of law--the authority of the agent may be established by proof of the 'course of business between the parties themselves; by the usages and practice which the company may have permitted to grow up in its business; and by the knowledge which the board, charged with the duty of controlling and conducting the transactions and property of the corporation, had, or must be presumed to have had, of the acts and doings of its subordinates in and about the affairs of the corporation.' Mahoney Mining Co. v. Anglo-Californian Bank, 104 U.S. 192, 26 L.Ed. 707. See, also, Martin v. Webb, 110 U.S. 7, 3 S.Ct. 428, 28 L.Ed. 49; Sparks v. Transfer Co., 104 Mo. 531, 15 S.W. 417, 12 L. R. A. 714."

And see Edwards v. Plains Light & Power Co., 49 Mont. 535, 143 P. 962.

Upon the evidence...