Meating v. Tigerton Lumber Co.

• Decision Date: 18 February 1902
• Citation: 89 N.W. 152,113 Wis. 379
• Parties: MEATING v. TIGERTON LUMBER CO.
• Court: Wisconsin Supreme Court

113 Wis. 379

89 N.W. 152

MEATING

v.TIGERTON LUMBER CO.

Supreme Court of Wisconsin.

Feb. 18, 1902.

Appeal from circuit court, Sheboygan county; John Goodland, Judge.

Action by George Meating against the Tigerton Lumber Company. From a judgment for defendant, plaintiff appeals. Reversed.

The plaintiff brings this action to recover for services alleged to have been performed by him as cook for the defendant. He introduced testimony tending to show that he was hired by H. Swanke, who was president of the defendant corporation, to work for the corporation. No proof was offered by him that Swanke had any authority to hire men, or that he held any relation to the corporation, except that he was president. The evidence of defendant tended to show that the logging camp where plaintiff was employed was operated by H. Swanke & Co., and not by defendant. Such evidence also tended to prove that Swanke was the managing officer of the defendant for two years prior to the time plaintiff was hired. This fact was testified to by the witness Edwards, who was also an officer of defendant, who also said he had charge of defendant's business when Swanke was absent. At the close of the testimony the defendant moved for a direction of a verdict on the ground that it was not shown that defendant was interested in the logging camp at which plaintiff worked, or that plaintiff was ever employed by defendant, or that Swanke was ever authorized to hire men to work for defendant. This motion was granted, and from a judgment for the defendant this appeal has been taken.F. C. Weed, for appellant.

Walrich, Dillett & Eberlein, for respondent.

BARDEEN, J. (after stating the facts).

The court evidently directed a verdict for defendant on the ground that there was nothing in the case to show authority on the part of Swanke to contract on behalf of the defendant. He was president of the defendant corporation. The plaintiff and one witness testify that he hired the former to work for the defendant. These facts alone would not be sufficient to establish liability. The general rule is that the president of a corporation ex officio has no power to contract for the corporation. 2 Cook, Stock & S. § 716. Such authority may be expressly given by the articles of incorporation, or by the board of directors, or it may arise from his having assumed and exercised the power in the past. Being invested with such authority within the lines mentioned, he may enter into such contracts as pertain to the regular course of the corporate business under his direction, and no more. When he goes outside of his express or implied authority, his acts will not be binding upon the corporation. Recent cases in which there is a discussion of this question are as follows: Ford v. Hill, 92 Wis. 188, 66 N. W. 115, 53 Am. St. Rep. 902;McElroy v. Horse Co., 96 Wis. 317, 71 N. W. 652;Fuel Co. v. Lee, 102 Wis. 426, 78 N. W. 584;Calteaux v. Mueller, 102 Wis. 525, 78 N. W. 1082;Hiawatha Iron Co. v. John Strange Paper Co., 106 Wis. 111, 81 N. W. 1034;Heinze v. Dock Co., 109 Wis. 99, 85 N. W. 145. There was no attempt in this case to show that Swanke had express authority from the board of directors. There was, however, testimony tending to show that for two years prior to the time of the contract in question he was the president and acting head of the defendant corporation. The inference is plainly justified from the testimony of Mr. Edwards that he was its managing officer when he was at home. As such he would have the power and authority of similar agents under like circumstances. Roche v. Pennington, 90 Wis. 107, 62 N. W. 946. From the testimony before the court the jury would have been justified in finding that he had authority to make the contract sued upon; hence a direction of a verdict for defendant was erroneous.

The objection that the complaint does not state a cause of action because it is not alleged that the amount earned by plaintiff has not been paid is not tenable. There is no presumption of payment within the period of the statute of limitations. Payment is an affirmative defense, and must be set up in the answer, or evidence of the fact will be excluded.

The judgment is reversed, and the cause is remanded for a new trial.

(Feb. 25, 1902.)

MARSHALL, J.

I concur in the conclusion reached in this case, and with the propositions of law, in the abstract, leading thereto, but am fearful that an idea may be read out of the opinion of the court, not intended by the court or the writer of such opinion. I do not wish by this to be understood as stating as a fact what the court did or did not intend, but what my individual opinion in the matter is, based on the general trend of our decisions in previous years, some of which are cited by the court, and in one of which the doctrine I desire to make significant here is as well stated by my Brother BARDEEN as it can be found expressed anywhere by this court. Fuel Co. v. Lee, 102 Wis. 426, 78 N. W. 584.

The transaction, the validity of which is called in question in this case, was a contract, made by the president of a corporation assuming to act as its general agent, which was one of the ordinary transactions in the regular course of its corporate business. The defendant was a lumber company. It was necessarily obliged to employ laborers of the class to which plaintiff belonged. Its president, as such, made a contract, as is claimed, concerning that subject,--a simple contract of hiring. There was nothing unusual either as to the purpose or the nature of the transaction. These ideas are expressed by the court in regard to that situation: First, the president of the corporation did not, by virtue of his office alone, possess power to bind his company. Second, the mere fact that he made the contract in question as agent of the corporation does not indicate power to do so. Third, a corporation may, by its course of business for a considerable length of time in holding out its president as its general agent, be bound by all his acts which fall within the implied authority of such an agent. Fourth, there being evidence of such holding out in this case, in that there was proof that the president of the corporation, prior to the hiring in question, for a considerable length of time had been the managing agent thereof, the verdict should not have been directed for the defendant on the ground that the evidence did not show or tend to show that its president had power to bind the corporation. Those propositions, though unquestionably correct, might easily be misunderstood without some explanation to point out the scope thereof. For instance, take the third proposition, which, as will be seen, is stated in a restrictive way, and the authorities cited to support it relate, in the main, to the doing of acts by the president of the corporation outside the ordinary business of the company,--acts which a general agent or manager would not have implied power to do. There is room for one to understand that, in the making or enforcement of a contract like the one in question--an ordinary contract made in the course of a corporation's ordinary daily business--a person cannot rely on the mere fact that it is customary for the president of a corporation to act in such matters as its general agent and that he was apparently acting in that capacity in the given case; but that he must comply with the rule which prevailed in Ford v. Hill, 92 Wis. 188, 66 N. W. 115, 53 Am. St. Rep. 902,McElroy v. Horse Co., 96 Wis. 317, 71 N. W. 652, and Calteaux v. Mueller, 102 Wis. 525, 78 N. W. 1082, in each of which cases the act challenged was one that a mere general agent or manager would not have implied authority to do; further, that when the evidence shows that the president of a corporation, in a given case, was apparently acting in the capacity of general manager, without any reasonable ground for an outsider to suspect otherwise, the corporation, though prima facie bound by the appearance of authority, may show want of authority in fact, to the prejudice of the innocent party.

True, the president of a corporation has no power, by virtue of his office alone, to make a contract binding on his corporation, and the mere fact, in any given case, of his making the contract, would not necessarily be sufficient to disturb the effect thereof. That is an ancient doctrine. It is stated in 2 Cook, Stock & S. § 716, as indicated in the opinion of the court, and by substantially all the text writers that have treated the subject. Mor. Priv. Corp. § 537; Elliott, Corp. § 529; Thomp. Corp. § 4617. However, its effect in many jurisdictions, and in none more, as I believe, than in this state, has long since been done away with, so far as otherwise, a person dealing in good faith with the president of a corporation apparently in charge of its affairs, in respect to the ordinary business of his company, would be in danger of having the authority of such officer thereafter questioned by such company to such person's prejudice, or, so far as otherwise a person relying on an instrument made in the name of a corporation by its president, of a class which is ordinarily so made, would primarily be obliged to produce proof of the authority of the president to act in the given case or cases of like character. The doctrine is just as forceful as ever between the corporation and its president, but has been limited by the doctrine of estoppel so far as otherwise it might be used to the prejudice of an innocent person, by the same wise judicial policy that now precludes a corporation from pleading ultra vires where it would be thus used merely as an instrument to enable the pleader to perpetrate a fraud (John V. Farwell Co. v. Wolf, 96 Wis. 10, 70 N. W. 289, 71 N. W. 109, 37 L. R. A. 138, 65 Am. St. Rep. 22;Zinc Carbonate Co. v. First Nat....