Pittsburgh Melting Co. v. Reese

• Decision Date: 03 January 1888
• Docket Number: 235
• Citation: 118 Pa. 355,12 A. 362
• Parties: PITTSB. MELTING CO., LIM., v. T. M. REESE
• Court: Pennsylvania Supreme Court

12 A. 362

118 Pa. 355

PITTSB. MELTING CO., LIM., v. T. M. REESE

No. 235

Supreme Court of Pennsylvania

January 3, 1888

Argued November 7, 1887

ERROR TO THE COURT OF COMMON PLEAS NO. 1 OF ALLEGHENY COUNTY.

No. 235 October Term 1887, Sup. Ct.; court below, No. 320 September Term 1886, C.P. No. 1.

On July 21, 1886, Thomas M. Reese issued a summons in case against the Pittsburgh Melting Co., Limited, an association organized under the limited partnership act of June 2, 1874, P.L. 271. The plea was non-assumpsit.

At the trial on April 9, 1887, the facts appeared: The defendant company was engaged in the business of rendering animal fats and on July 12, 1886, had on hand six hundred tierces of oleomargarine oil. At a meeting of the board of managers on the morning of that day, Mr. Emil Winter being chairman of said board, the price was fixed at 6 1/2 cents. Immediately after the meeting, the chairman verbally contracted to sell the entire lot on hand to Thomas H. Reese at that price. The purchaser at once prepared to receive it and sent his check for $13,260 in full payment, but, on account of some misunderstanding among the members of the board as to the quantity to be sold, delivery was refused. A proper tender of purchase money was made before suit brought. Evidence was introduced that there was no local market for the oil at Pittsburgh, and that the market price at New York and Chicago was 8 1/2 cents.

The court, STOWE, P.J., charged the jury as follows:

The first question for you to determine is whether or not there was an actual sale and purchase of these 600 tierces of oil? If you make up your mind that there was, that Mr. Reese on the one side, and Mr. Winter acting as chairman of the defendant company on the other, got together and made a contract of bargain and sale, the next question is one of law, whether Winter had the right to make that contract so as to bind the defendant, and if under the instructions of the court you find he had, then there is left the question of damages only.

You have heard the testimony of the plaintiff and of Mr. Winter as to whether there was a contract. They both agree that after some preliminary negotiation they did actually make a contract for the sale and for the purchase of this oil. Reese swears he bought it, Winter swears he sold it; and if you believe that, so far as the actual contract was concerned, it is perfectly conclusive and beyond any question, assuming now that Winter had the authority to sell.

Upon the authority to sell you have had very considerable testimony, very much, none of which, in fact, under the law in the case as I hold it to be, amounts to anything. I hold as matter of law, that these gentlemen who compose the Pittsburgh Melting Company were partners, and that under the act under which they are incorporated, each one of the managers, and at all events the chairman, the head of the board, had a right to sell anything they had to sell to anybody that wanted to buy, without special authority from the board; and that the chairman had the right to buy anything, or to contract for anything that the whole board could contract for, subject to the limitation of the act of assembly, that is, where the purchase amounted over $500 there had to be a paper signed by two members of the partnership.

This is a new question, perhaps, but so far as I am concerned I have no doubt about it; at all events it is my duty to instruct you as though I had no doubt. . . .

That brings us to this case. As we instruct you, Mr. Winter had a right to sell this oil. He was chairman of the concern, and -- to put it clearly and without question, apart from the evidence -- we instruct you as matter of law, the very position he had as a member of this firm and as the executive head of it gave him a right to sell any oil they had, whether the whole stock in hand or not, even if there was an agreement between him and the other members of the firm that he should not sell for the price he did sell. If he did sell it to Reese without Reese having any knowledge or information, or reason to believe that any such restriction had been put on his powers, and Reese bought it in good faith, the contract is binding not only upon Winter, but on the defendant, and a breach of that contract either by him or the defendant makes the company liable for any damages sustained by reason of the breach.

This brings us to the points presented by the counsel for the defendant, which raise very nicely and very squarely this question, which, I presume, the Supreme Court will be eventually called upon to dispose of.

1. Under the law and evidence in this case the verdict should be for the defendant.

Answer This is refused. It is based on the idea that there is not sufficient evidence to justify you in finding for the plaintiff. The matter is for you; and if you think the sale was made as claimed by the plaintiff, and made without any fraud or collusion on his part, or any knowledge on his part that Winter -- if there was any restriction put upon him -- had a restriction imposed upon him as to selling, we say it was a good contract and binding on the defendant, and the plaintiff has a good right to recover. The amount of damage is, of course, for you.

2. If the damages in this case exceed five hundred dollars, then the plaintiff cannot recover, because the contract of sale was not reduced to writing and signed by at least two managers.

Answer: This point is refused. We are unable to agree with the counsel for the defendant on this, and hold that the law does not apply in case of contract of sale. It applies, as we understand it, to the purchases, something that involves the company in some liability. I do not understand the act as undertaking to restrict these partnerships in matters of sale.

3. The sale made by Mr. Winter was not binding upon the association unless he had express authority from the board or other managers to make it, or unless he had implied authority from the fact that he had been making similar sales theretofore without objection. There is no evidence that he had such express authority, and the evidence as to implied authority is his own evidence, not supported by any other witness, but contradicted by all the other managers.

Answer: The latter part of that may be true or not. I do not exactly understand it so, but the point as a whole is refused; and, so as to give the defendant a perfectly clear and unmistakable ruling, I instruct you that under the act of assembly and the articles of association, Winter, being chairman of the board of managers, had authority to do business for the defendant, to sell its products in the market without any specific authority to that effect, and that in the absence of fraud or collusion between him and the purchaser, or knowledge on the part of the latter of want of authority to sell, a bona fide purchase by him from Winter was binding upon the company defendant.

If you believe, in view of all the testimony in this case, that Reese and Winter got together, that Reese purchased this oil in good faith, not knowing there was any restriction on Winter selling it, if there was any, and the defendants have refused to comply with the contract, as there is no doubt they did, the plaintiff is entitled to damages, and the rule of the law is that he shall be made whole, that is to say, ...