Taussig v. St. Louis and Kirkwood Railroad Company

• Decision Date: 17 December 1901
• Citation: 65 S.W. 969,166 Mo. 28
• Parties: TAUSSIG, Appellant, v. ST. LOUIS AND KIRKWOOD RAILROAD COMPANY
• Court: Missouri Supreme Court

65 S.W. 969

166 Mo. 28

TAUSSIG, Appellant, v. ST. LOUIS AND KIRKWOOD RAILROAD COMPANY

Supreme Court of Missouri, First Division

December 17, 1901

Appeal from St. Louis City Circuit Court.-- Hon. Franklin Ferris Judge.

Reversed and remanded.

Bishop & Cobbs, Albert E. Hausman and Geo. W. Taussig for appellant.

(1)The court erred in holding that it was necessary for plaintiff to prove his employment to do the services set out in the petition by evidence of a resolution of the defendant's board of directors duly entered on the official minutes of such board, and that plaintiff was not entitled to recover for legal services rendered to defendant while he was a director or secretary or treasurer of defendant, on a quantum meruit or in assumpsit.R. S. 1889, sec. 2511;Preston v Lead Co.,51 Mo. 45;Southern Hotel Co. v Newman,30 Mo. 118;1 Beach, Priv. Corp., sec. 295;United States v. Dandridge,12 Wheat. 69;Weeks on Attorneys (2 Ed.), pp. 394, 385;Osborn v. Bank,9 Wheat. 738;Railroad v. Grove,39 Kan. 731;Santa Clara Ass'n v. Meredith,49 Md. 389;17 Am. and Eng. Ency.Law (1 Ed.), 121, n. 5;Rogers v. Railroad,22 Minn. 25;Railroad v. Ketchum,27 Conn. 170;Henry v. Railroad,27 Vt. 435;Chandler v. Bank, 1 Green (N. J.) 255; Jackson v. Railroad, 2 Thompson & Cook(N.Y.) 653;Hall v. Railroad,28 Vt. 401;Bank v. Elliott,55 Iowa 107;Greensboro, etc., Co. v. Stratton,120 Ind. 294;Gridley v. Railroad,71 Ill. 200;Reeve v. Harris,50 S.W. 658;Flynn v. Columbus(Ind.),45 A. 55;Louisville Bldg Ass'n v. Hegan,49 S.W. 796;Association v. Meredith,49 Md. 389;Bassett v. Fairchild,61 P. 791, 52 L. R. A. 611, 64 P. 1082;Fitzgerald Const. Co. v. Fitzgerald,137 U.S. 98.(2)The defendant is liable for the first item in the account, being for services rendered in preparing the articles of incorporation, the benefit of which it accepted.Farmers Bank v. Smith,49 S.W. 810;Freeman Co. v. Osborn, 14 Col. App. 488.

A. N. Edwards, Dawson & Garvin and Leonard Wilcox for respondent.

(1) An officer or director of a corporation can not recover compensation for services, whether incident to, or wholly outside his duties as such officer or director, unless express provision is made for such compensation and the amount thereof is fixed by resolution, before they are rendered.Remmers v. Seky,70 Mo.App. 367;Rose v. Carbonating Co.,60 Mo.App. 28;Pfeiffer v. Lansberg Brake Co.,44 Mo.App. 59;Besch v. Carriage Co.,36 Mo.App. 337;Beach v. Stouffer,84 Mo.App. 399;Brown v. Silver Mines,17 Col. 421;Association v. Stonemetz,29 Pa. St. 534;Peirce on Railroads, p. 31;Holden v. Railroad,71 Ill. 106;Railroad v. O'Hara,177 Ill. 531;Railroad v. Sage,65 Ill. 328;Ward v. Davidson,89 Mo. 454;Crumlish's Admr. v. Central Imp. Co.,38 W.Va. 403.(2) Such provision must be made by shareholders or directors and at a regularly constituted meeting; and the vote must also be spread on record.4 Thompson on Corp., secs. 3905,4875;Remmers v. Seky, supra;Barcus v. Plank Road Co.,26 Mo. 105;Paper Co. v. Printing Co.,144 Mo. 369;Hyde v. Larkin,35 Mo.App. 370;Maupin v. Mining Co.,78 Mo. 26;Wells v. Railroad,35 Mo. 164;Nat'l Bk. v. Elliott,5 Iowa 104;S. C., 39 Am. Rep. 167.(3) The law implies that services rendered by an officer or director, without any express understanding beforehand as to compensation, are gratuitous, even though such services are outside the duty of the officer.Remmers v. Seky, 70 Mo.App.supra;Inv. Co. v. Rockland Co.,94 F. 337;Pfeiffer v. Brake Co.,44 Mo.App. 59;Pew v. Bank,130 Mass. 396;Sawyer v. Bank, 6 Allen (Mass.), 210;Bailey v. Burgess,48 N.J.Eq. 414;Martindale v. Wilson-Cass Co.,134 Pa. St. 352.And as it is the duty of the directors to conduct and manage the business of the corporation, this implication of law remains the same as to the services of a member of the board or a committee composed of members of the board, rendered by him or them under a delegation of its power by the board to him or them.Hutchinson v. Green,91 Mo. 375;R. S. 1899, secs. 961, 973, 983, 1034;Pew v. Bank, supra;Holden v. Railroad,71 Ill. 107;Association v. Stonemetz,29 Pa. St. 536;Hodges v. Railroad,29 Vt. 220;Ogden v. Murray,39 N.Y. 202.(4) The distinction sometimes made between services of a director which are incident to his office and those which are outside his office, is not sound.The facts in this case show that whatever services were rendered by plaintiff, were regarded by the entire board merely as a part of the duties of the board assigned in part to plaintiff, as other duties were to other directors.(5)The plaintiff was properly nonsuited.Pew v. Bank, supra;McMullen v. Ritchie,64 F. 257;Guenther v. Berkicht,22 Mo. 448;Morris v. Barnes,35 Mo. 415;Bank v. Aull,80 Mo. 202.(6)Plaintiff could not recover for the services mentioned in the first item of his account.Railroad v. Sage,65 Ill. 332;Railroad v. Ketchum,27 Conn. 179;Hall v. Railroad,28 Vt. 401;Railroad v. Perry,37 Ark. 164;S. C., 44 Ark. 383;Hill v. Gould,129 Mo. 116.(7) The amount in dispute, exclusive of costs and interest, is for four thousand five hundred dollars, and, therefore, this court has no jurisdiction.Laws 1901, p. 107.

OPINION

BRACE, P. J.

The plaintiff is an attorney at law, and this action is to recover the sum of $ 4,500 and interest, for professional services rendered the defendant from September 1, 1893, until June, 1896.The defendant was incorporated about September 12, 1893.The plaintiff was one of its incorporators.On its organization he became its secretary and treasurer, and one of its directors, and so continued to be during the period of the rendition of the services thereafter charged for.At the close of the plaintiff's evidence, the court gave an instruction that upon the law and evidence the plaintiff could not recover.Thereupon he took a nonsuit with leave, and his motion to set the same aside having been overruled, he appeals.

It clearly appeared from the evidence that the services were rendered, that they were professional services, that they were of the value charged therefor, that they were performed at the instance of the general manager and directors, and the benefits thereof accepted by the corporation; and from the record, that a recovery was denied him on the ground that his employment was not evidenced by any formal recorded action of the board of directors fixing compensation for such services.The crucial question in the case is whether a promise to pay the reasonable value of such services may be implied in his favor, he being a director of the corporation at the time.

(1) It is well-settled law in this State that the acts of a corporation may be proved in the same manner as the acts of individuals, and that a promise to pay the reasonable value of services rendered and accepted may be implied against corporations as against individuals in the same circumstances.[Southern Hotel Co. v. Newman,30 Mo. 118;Western Bank of Mo. v. Gilstrap,45 Mo. 419;Preston v. Mo. & Penn. Lead Co.,51 Mo. 43;Kiley v. Forsee,57 Mo. 390;Southgate v. Railroad,61 Mo. 89;First Nat. Bank of Springfield v. Fricke,75 Mo. 178;Maupin v. Virginia Lead Mining Co.,78 Mo. 24;Holmes v. Board of Trade Kansas City,81 Mo. 137;Washington Sav. Bank v. Butchers & Drovers' Bank,107 Mo. 133, 17 S.W. 644.]

(2) It is also well-settled law that when a lawyer has rendered valuable services to another person, the benefits of which have been accepted by him, a promise to pay the reasonable value of such services will be presumed against such other person, unless the circumstances show that the services were intended to be gratuitous.[3 Am. and Eng. Encyc. of Law (2 Ed.), 437.]And this court has held that a jury knows more about the value of such services than anybody else.[Cosgrove v. Leonard, 134 Mo. 419.]

(3) But it is also well-settled law, that the directors of a corporation can not recover compensation for their services when rendered in the line of their duty as such, whether eo nomine as directors, officers, members of committees, or otherwise, unless compensation for such services is provided for in its charter or authorized by a by-law, or resolution of the board of directors before the services are rendered.[17 Am. and Eng. Encyc. of Law (1 Ed.), p. 119, sec. 6, and cases cited in n. 3;Martindale v. Wilson-Cass Co.,134 Pa. 348, 19 A. 680;Loan Ass'n v. Stonemetz,29 Pa. 534;Hodges v. Railroad,29 Vt. 220;Railroad v. Sage,65 Ill. 328;Taylor on Priv. Corp.(4 Ed.), sec. 646;1 Morawetz Priv. Corp.(2 Ed.), sec. 508;Beach v. Stouffer,84 Mo.App. 395;Remmers v. Seky,70 Mo.App. 364;Rose v. Carbonating Co.,60 Mo.App. 28;Pfeiffer v. Lansberg Brake Co.,44 Mo.App. 59;Besch v. Western Carriage Man. Co.,36 Mo.App. 333;Bennett v. St. L. Car Roofing Co.,19 Mo.App. 349.]

Generally in these cases, the director was seeking to recover salary or compensation for services as a director, manager, officer, committeeman, or for other like services nearly or remotely incident to his duties as a director, when no compensation had been provided therefor by formal action of the board, and under this rule a recovery was denied.In some of these and other like cases dicta may be found broad enough to support the ruling of the trial court in this case, and in some, perhaps, the judgment on the facts may be said to give it support.But for authoritative precedents for a correct ruling on the facts of this case, we will have to look elsewhere.

(4) Here the plaintiff, an attorney at law, who is a director of the defendant corporation, as also its secretary and treasurer, is suing for the value of services, not within the scope of or incident to the duties of any of those...