Ten Eyck v. Pontiac, O. & P.A.R. Co.
| Decision Date | 15 February 1889 |
| Citation | 74 Mich. 226,41 N.W. 905 |
| Parties | TEN EYCK v. PONTIAC, O. & P. A. R. CO. |
| Court | Michigan Supreme Court |
Error to circuit court, Oakland county; J. B. MOORE, Judge.
Assumpsit by Junius Ten Eyck against the Pontiac Oxford & Port Austin Railroad Company. Verdict and judgment for plaintiff, and defendant brings error.
The plaintiff is, and for many years past has been, an attorney at law residing in the city of Pontiac, and he brought this action against defendant to recover for expenses paid, and services performed, as agent and attorney of the defendant company in securing the right of way for its road, and for obtaining aid notes, raising money, securing loans, and making contracts for the construction of its road, covering a period from September, 1881, to November, 1883. The project originally was to construct a railroad from Oxford to Port Austin, a distance of 84 miles, and a corporation was formed for that purpose on the 23d of July, 1879, with a capital of $672,000, and seven directors. Each director subscribed to 120 shares of $100 each, and plaintiff was one of the directors. Nothing was done under this organization. Two days later the stockholders signed amended articles of association, by which they extended the southern terminus from Oxford to the city of Pontiac, and changed the name of the corporation to the "Pontiac, Oxford & Port Austin Railroad Company." The capital stock was increased to $800,000, and the number of directors to eight. The articles were again amended, on the 24th of September, 1881, by increasing the capital stock to $1,500,000, and changing the termini so as to extend it from Pontiac to Caseville. The plaintiff continued a stockholder and director in the corporation until 1884. On December 5, 1881, plaintiff was re-elected attorney for defendant company. Previous to this, and in the same year, he was employed by the board of directors to go to New York to negotiate a loan and obtain a contract for the construction of the road. These services were successfully performed, and a contract was entered into between defendant and an investment company bearing date November 12, 1881. On the 20th day of December 1881, the following resolution was passed by the board of directors: The plaintiff's counsel was permitted to prove, by oral testimony of the directors, that all of the eight directors were present at the meeting, and voted for the motion, excepting himself. Plaintiff also offered in evidence from the records kept by the corporation the following resolution, passed at a meeting of the board of directors on the 29th of May, 1882, viz.: The record shows a quorum present. The plaintiff was also permitted to show by parol that all of the directors were present at the meeting, and each, excepting himself, voted for the resolution. The claims for expenses paid out in the services of defendant were not seriously disputed or resisted at the trial. Testimony was given showing that nearly the entire time of plaintiff was consumed in the service of the company, and his practice as a lawyer was almost entirely given up, clients turned away, and that his services for the company were worth $5,000 annually. The jury returned a verdict for the plaintiff. The errors complained of may all be summarized under three heads: (1) The court erred in excluding from the jury all testimony relative to the investment company, and the rights acquired and now held by them from the railroad company. (2) In permitting parol evidence to be given of the action of the board of directors in the absence of any record of such action, and in adding to what was shown by the record as to what number of directors were at the meeting of the board, and that they all voted for the motion and resolution, except Ten Eyck, who did not vote. (3) That, being a director of the company, he could not be employed and paid for performing services for the company as attorney or otherwise, and especially would such action be illegal when applied to services already performed.
As to the first point, the error is based upon the fact, which defendant desired to show, that the investment company that built the road are the owners in fact of all the stock property, and franchises of the Pontiac, Oxford & Port Austin Railroad Company, and the corporation exists only in name, for the purpose of maintaining the franchises of a corporation for the investment company's benefit, and that the claim set up is unjust...
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