Robert E. Lee Silver Min. Co. v. Omaha & Grant Smelting & Refining Co.

• Decision Date: 13 February 1891
• Citation: 26 P. 326,16 Colo. 118
• Parties: ROBERT E. LEE SILVER MIN. CO. v. OMAHA & GRANT SMELTING & REFINING CO.
• Court: Colorado Supreme Court

26 P. 326

16 Colo. 118

ROBERT E. LEE SILVER MIN. CO. v. OMAHA & GRANT SMELTING & REFINING CO.

Supreme Court of Colorado

February 13, 1891

Commissioners' decision. Appeal from district court, Lake county.

Appellant (defendant below) was a corporation engaged in mining and producing ores in the years 1883-84, in the county of Lake. Appellee was a corporation engaged in buying, selling smelting, and reducing ores. Appellant was a large producer of ore, and had been prior to December 1, 1883. It had been for some time disposing of most, if not all, of its ore to the appellee at agreed prices for the silver contained in the ore, deducting therefrom a charge of $18.50 per ton for treatment. At the date mentioned one E. A. Guilbault was general manager of appellant's mines, and Henry Head was manager of the business of the appellee at Leadville. Appellee being desirous of obtaining control of all the ore produced by appellant, and it being desirous of reducing the price for the reduction and treatment of the ores, entered into negotiations, resulting on the part of appellee in the following offer in writing, which was accepted and signed by Guilbault (manager) for appellant: 'Leadville, Col December 1, 1883. Robert E. Lee Silver Mining Co., Leadville Col.--Dear Sir: For a period of six months from date we offer for the product of the Robert E. Lee mine as follows: Up to 75 ounces silver per ton, will pay 92 per cent. of New York quotations; 76 to 150 ounces silver per ton, 93 1/2 per cent of New York quotations; 151 to 250 ounces silver per ton, 94 per cent. of New York quotations; 251 ounces up, silver per ton, 95 per cent. of New York quotations. Deducting seventeen dollars and fifty cents ($17.50) per ton for working charges. Price of silver based on New York quotations on day of settlement. Yours, truly, OMAHA AND GRANT S. & R. Co. By HENRY HEAD. R. E. LEE S. M. Co. E. A. GUILBAULT, Manager.' After the signing of the paper of December 1, 1883, and until about the 15th of February, 1884, both parties proceeded under the terms or stipulations contained in the paper; appellant delivering all the ore produced to appellee, and it receiving it. At about the last date appellant leased its mines to one Fritz, who entered into possession, and after that time controlled and disposed of the ores produced from appellant's mines, and declined or refused to deliver them to appellee under the contract, and sold the ores to other parties. After the expiration of the six months from December 1st appellee brought this suit against appellant to recover damages for breach of the alleged agreement. The case was tried before the court without a jury, and resulted in a judgment in favor of the plaintiff for $8,262. No question in regard to the amount of damages awarded is raised. A stipulation signed by the counsel of the respective parties was filed in this court, containing the following: 'Which amount assessed herein is hereby agreed to be correct, provided the supreme court shall be of opinion that no error in any other respect was committed by the court in the findings and rendition of judgment against the defendant.'

ELLIOTT J., dissenting.

L. S. Dixon, for appellant.

C. C. Parsons and Patterson & Thomas, for appellee.

REED, C., ( after stating the facts as above.)

The counsel of appellant in his able argument relies upon two general propositions for the reversal of the judgment. They are stated by him as follows: ' First. That the alleged contract sued upon, under the construction claimed for it by the plaintiff, was not within the scope of the powers possessed by the witness Guilbault, as general manager of the defendant company. Second. That the instrument sued upon did not constitute a contract between the plaintiff and defendant companies for the sale and delivery to the plaintiff of all or of any particular portion of the product of the mine of the defendant for the period of time specified in it. It was not an agreement for the sale and delivery of any portion of such product, but was merely an offer or memorandum fixing the price for such portions of the product as the defendant might see fit to deliver to the plaintiff during the period of time limited. To this latter extent, but no further, can it be said to have any of the elements of a contract for sale or delivery between the parties.' In discussing the first proposition it becomes necessary to examine that portion of the by-laws of the defendant corporation providing for the appointment and defining the duties and powers of a general manager of its mines. It is as follows: 'Art. 8. There shall be a general manager of the company's mines to be employed by the president or board of directors, whose duties shall be to take charge of the business of selling of ores mined, and to look after the development of the mining property, and to attend to all of the details incident to the business of the company at its mines, to keep an accurate account of the receipts and disbursements of the company at the mines, and to furnish monthly statements of the same to the secretary,'--which was put in evidence upon the trial. Other portions of the by-laws pertaining to the officers of the corporation, providing for their election or appointment and defining their duties and powers, were put in evidence, but are not necessarily involved or necessary to be considered in the determination of the question. When unrestricted by the by-laws, or his duties undefined by them, a general manager of a corporation has been defined to be 'the person who really has the most general control over the affairs of a corporation, and who has knowledge of all its business and property, and who can act in emergencies on his own responsibility; who may be considered the principal officer.' And. Law Dict. And such is the judicial definition given in Manufacturing Co. v. Lawson, 57 Wis. 404, 15 N.W. 398, where it is also said: 'The very term implies a general supervision of the affairs of a corporation in all departments.' To the same point, Spangler v. Butterfield, 6 Colo. 356. In the absence of restrictions or controlling usages and customs in the particular class of corporations in which he is employed, he must be considered the principal officer, to whom is delegated the entire control and management of the corporate property, as far as operating the same is concerned. Such must of necessity be the construction of his powers when the president is a non-resident, and when the president is present his duties are well defined by law, and do not necessarily extend to the practical management of the property; while directors commonly act at intervals, when called together as a body. All the other officers of a mining corporation, except the general manager, may be, and frequently are, ignorant of the business of mining, hence the wisdom and necessity of delegating to some experienced and skilled person entire control of the property. Upon his ability and integrity, to a great extent, depends the failure or success of the enterprise. He is, as far as the administration of affairs is concerned, the chief officer, and frequently the only responsible officer, at or in the vicinity of the property, capable of binding the corporation by his contracts. In the absence of defined powers, the powers incident to the office and employment would embrace that of employing the necessary labor, opening, developing, and protecting the mine, the purchasing of necessary machinery, tools, and supplies, and mining and selling the ore, with power to bind the corporation for bills necessarily contracted in the prosecution of the work. It also devolves upon him to provide either from the products of the mine, from the funds of the corporation, or some other source, money to discharge the obligations incurred in the prosecution of such work. These would be his duties and powers, and within the scope of his employment, and incident to the office, if his duties and powers were left undefined by the corporation. Other parties in dealing with the corporation have a right to assume, and act upon the presumption, that all the powers pertaining to the office generally are possessed by the individual in question, unless notified of restrictions and limitations. The by-laws of a corporation are not necessarily public and known. They are for the government of the corporation. The learned counsel for appellant put in evidence some portion of the by-laws, and contends in argument that the public, in dealing with the manager, was bound by the authority conferred by the corporation, whether made public or not. The by-law of the corporation, in speaking of the manager, says: 'Whose duties shall be to take charge of the business of selling of ores mined, and to look after the development of the mining property, and to attend to all of the details incident to the business of the company at its mines,' etc. This is of necessity quite general, does not and could not contain in detail and enumerate all the powers and duties incident to the office, but the latter clause is sufficiently broad and definite to invest him with all the powers incident to the position, while it is fairly inferable from the language used--'at its mines'--that it was contemplated and understood that the other officers were not to be at the mines, and that to him were delegated all the powers and duties necessary for the conduct of the business at that locality. These conclusions are intended to apply only to the managers of mining corporations where, as in this state, the usages, successful prosecution of mining enterprises, and the protection of parties dealing with such mining corporations, require that the powers and duties of the general manager be defined.

The learned counsel...