Santa Clara Min. Ass'n v. Meredith

• Decision Date: 28 June 1878
• Citation: 49 Md. 389
• Parties: THE SANTA CLARA MINING ASSOCIATION OF BALTIMORE v. JOSEPH H. MEREDITH.
• Court: Maryland Court of Appeals

49 Md. 389

THE SANTA CLARA MINING ASSOCIATION OF BALTIMORE v. JOSEPH H. MEREDITH.

Court of Appeals of Maryland

June 28, 1878

Appeal from the Baltimore City Court.

The appellee sued the appellant on the common counts, "for services rendered during 1870, 1871, 1872, 1873 and 1874, in obtaining patent, negotiating loan in London, and various duties in California, Baltimore, Philadelphia and New York."

Exception.--At the trial the plaintiff offered the three following prayers:

1. If the jury shall find from the evidence in this case that the plaintiff was employed by the directors of the defendant corporation to obtain from the Land Office at Washington the several patents for the lands owned by the defendant in California, referred to in the evidence, and that he spent a long time in the obtention of the same, and made many visits to Washington for that purpose; and shall further find from the evidence, that such labor and loss of time were not required of him in his discharge of duty as a director of the association, then the plaintiff is entitled to recover for such labor and loss of time such sum as the jury may find from the evidence to be a just compensation for such labor and loss of time.

2. If the jury shall find from the evidence that the plaintiff was employed by the Board of Directors of the defendant to negotiate in Europe a sale of their property in California or a loan thereon, and that he spent much time in London for that purpose, and finally obtained a loan from McAlmont & Co., (if they so find the obtention of said loan,) for one hundred thousand dollars, which was paid over to said defendant, then the plaintiff is entitled to recover such compensation for obtaining said loan as the jury may find from the evidence to be just and reasonable; provided the jury shall find that said services were not required in the performance of his duties as a director in said association.

3. If the jury shall find from the evidence that the plaintiff, at the instance and request of the Board of Directors of the defendant, went to California to supervise the opening and working of the mines, and remained there for fifteen months attending to the business of the defendant, and shall find that it was no part of the duty of the president to perform such work and labor, then the plaintiff is entitled to recover such sum for said service as the jury may find from the evidence to be just and reasonable for the same.

And the defendant offered the seven following prayers:

1. The defendant prays the court to instruct the jury, if they find from the evidence in the cause that the plaintiff was a director during the time he procured the patent for the lands of the Company in the State of California, and rendered the services in connection therewith, that he is not entitled to recover compensation therefor, unless the Company made an express contract with him to render such services.

2. The defendant prays the court to instruct the jury, if they find from the evidence in the cause that the plaintiff was a director of the defendant during the time he procured the patent for the lands of the Company in the State of California, and rendered the services in connection therewith, that he is not entitled to recover compensation therefor, unless the defendant made an express contract with him to render such services; and the defendant further prays the court to instruct the jury, that the resolution passed by the board on the 16th of July, A. D. 1873, to wit: "On motion of James A. Hooper, it was resolved, that all claims against the association be paid by the treasurer, by checks or cash, and that the claim of the president for cash advances for patent, negotiation of loan, etc., be paid him when the account has been furnished," is not such a contract as will entitle him to such compensation.

3. The defendant prays the court to instruct the jury, if they find from the evidence in the case that the plaintiff was a director during the time he rendered the services for the negotiation of the loan for $100,000 in London, he is not entitled to recover for such services, unless they find he had an express contract with the defendant to render such services.

4. The defendant prays the court to instruct the jury, if they find that the plaintiff was a director of the defendant at the time he rendered the services for the negotiation of the $100,000 loan in London, he is not entitled to recover therefor, unless they find he had an express contract with the defendant to render such services; and he further prays the court to instruct the jury, that the resolution passed by the board on the 16th of July, 1873, to wit: "On motion of James A. Hooper, it was resolved, that all claims against the association be paid by the treasurer, by checks or cash and that the claim of the president for cash advances for patent, negotiation of loan, etc., be paid him when the account is furnished," is not such a contract as will entitle him to such compensation.

5. The defendant prays the court to instruct the jury, if they find from the evidence that the plaintiff was a director of the defendant during the time he negotiated the loan of $100,000 in gold, in London, he is not entitled to compensation therefor, unless they find that he was employed under an express contract to render services in connection therewith and he further prays the court to instruct the jury, that the power of attorney executed by the Company on the 20th of October, A. D. 1871, is not such a contract as will entitle the plaintiff to recover compensation thereon.

6. The defendant prays the court to instruct the jury, if they find that at the time the plaintiff rendered the services to the defendant of superintending the development of its mine in the State of California, he was the president of the defendant, and that the salary of the president had been fixed by a resolution of the association, then the plaintiff is not entitled to recover more for his services than is allowed by such resolution.

7. The defendant prays the court to instruct the jury, if they find that the plaintiff, at the time he performed the services for which he claims compensation, was a director and president of the defendant, and that such services were not rendered in accordance with an express contract, the plaintiff is not entitled to recover, notwithstanding the fact that the Board of Directors passed the resolution of the 16th of September, 1874.

The court (Pinkney, J.,) granted the plaintiff's first and second prayers, and the defendant's sixth prayer, and rejected the plaintiff's third prayer, and the defendant's first, second, third, fourth, fifth and seventh prayers. The defendant excepted.

The jury rendered a verdict for the plaintiff, and judgment was entered accordingly. The defendant appealed.

The cause was argued before BARTOL, C.J., BOWIE, GRASON and MILLER, JJ.

Fielder C. Slingluff, for the appellant.

Unless the appellee can show that the service performed by him was done under an express contract to perform such service, he is not entitled to recover compensation therefor.

If the services rendered were not rendered in accordance with an express contract to render them, they are, in law, construed to be either a part of his duty as director or president of the appellant, or are gratuitous services, the consideration moving him thereto being his public spirit or his interest in the appellant, of which he was a large stockholder and bondholder.

In England it is well settled that a manager or director of a corporation "can recover no recompense from the company, unless by virtue of an express resolution in the nature of a by-law." Dunston v. Imperial Gas Light Co., 3 Barn. & Ad. 125; Collins v. Godefroy, 1 Barn. & Ad. 950.

"It is an office of trust, which, if they undertake, it is their duty to perform fully and entirely." R. R. Co. v. Hudson, 19 E. L. & Eq. 361.

The principles laid down in the above cases have a most apt illustration in the case at bar. The services for which the appellee claims compensation are just such services as it was his duty to perform as the president and director of the appellant. For instance, he claims a commission of 2 1/2 per cent. for renewing a loan of $100,000 with McAlmont, in London. Nothing could be plainer than that one of the duties incidental to the office of a director of a corporation is to provide the necessary funds to carry on the business of the company.

"The directors of the company are, by the nature of their office, the general agents of the company. It may be regarded as one of their duties to provide for the payment of their debts and liabilities." Belknap v. Davis, 19 Me. 455.

And yet here is the director of a company going on a pleasure trip to Europe, who stops on his way in London to renew a loan of the company, which is overdue, and for the payment of which the creditor is pressing; and for such renewal he charges a regular broker's commission, admitting that he had no contract with the company, and relying for his cause of action against the company on its acceptance of the loan, and the power of attorney as his contract of employment.

Another item of $2500 he charges against the appellant for superintending the operation of the company in the State of California, where its works were located and its business carried on, when, by the express terms of the by-laws of the appellant, he is required to perform this very duty.

"He shall have the general direction, control and superintendence of all the affairs of the company, and of the conduct of its business."

The Supreme Court of Massachusetts says, in a case like this:

"The plaintiff has not referred to, nor has the court any knowledge of, a single

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