Valley Lumber Co. v. McGilvery

• Decision Date: 18 December 1908
• Citation: Valley Lumber Co. v. McGilvery, 16 Idaho 338, 101 P. 94 (Idaho 1908)
• Parties: VALLEY LUMBER COMPANY, a Corporation, Appellant, v. D. J. MCGILVERY and JOHN W. GIVENS, Respondents
• Court: Idaho Supreme Court

101 P. 94

16 Idaho 338

VALLEY LUMBER COMPANY, a Corporation, Appellant, v. D. J. MCGILVERY and JOHN W. GIVENS, Respondents

Supreme Court of Idaho

December 18, 1908

VERDICT OF JURY-SUFFICIENCY OF EVIDENCE-POWER OF OFFICERS OF CORPORATION TO CONTRACT-PAYMENT FOR GOODS SOLD-RELEVANCY OF MATTERS PLEAD-MOTION TO STRIKE.

1. Under the provisions of sec. 4824, Rev. Stat., as amended by Laws of 1907, p. 483, the verdict of a jury will not be set aside where there is substantial evidence to support such verdict.

2. Held, evidence in this case examined and held to support the verdict.

3. The vice-president of a corporation, acting as president and general manager of such corporation, has authority to sell the stock in trade of such corporation in the ordinary course of business of such corporation, and to receive and to accept in payment therefor cash, or accounts against any other person.

4. Where a corporation, through its vice-president, acting as president and general manager, submits a bid for furnishing the manufactured articles of such corporation, and a contract is awarded to such bidder in excess of a bid submitted by another bidder, with the understanding and agreement made between the purchaser and the vice-president of such corporation, that such bid will be accepted, on condition that the corporation accept as part payment therefor an account held by the purchaser against the president of said corporation, and such contract is fulfilled by furnishing the goods so sold and partial payment is received therefor, such corporation cannot question the authority of such vice-president to make such contract, in a suit to recover the balance due after such partial payment has been made.

5. Where there is no limitation upon the power of a vice-president of a corporation, acting as president and general manager, in the by-laws or articles of incorporation of said company, the court will presume that such officer has authority to dispose of the articles manufactured by said corporation in the ordinary course of trade, and accept in payment therefor cash or an account against an officer of said corporation held by the purchaser.

6. The power of the vice-president and general manager to sell the stock in trade of a corporation implies the power to accept payment therefor, and the power to sell and accept payment implies the power to determine the nature and character of such payment.

7. Where the vice-president, acting as president and general manager of a business corporation, makes sales of the stock in trade of such corporation, in the ordinary course of business, such corporation will not be permitted to escape a liability upon the contract made by such officer making such a sale, upon the ground that the same was made without the knowledge or concurrence of said corporation.

8. Where the vice-president, acting as president and general manager of a corporation, deems it to the advantage of such corporation, in order to sell its manufactured goods, that an account due from the president to the purchaser of such goods shall be accepted as part payment for the purchase price of said goods, such officer will be presumed to have authority to make the same.

9. An affirmative defense is not insufficient because it does not allege an agreement in writing to pay the debt of another where the facts plead as a defense are not plead for the purpose of showing an agreement to answer for the debt or default of another.

10. The subject matter of a plea is not sham irrelevant or redundant because it states the facts more in detail than required under the statute to constitute a cause of action or defense.

11. Where some parts of the matter attempted to be stricken out from a pleading upon the ground that the same is sham redundant and irrelevant, are intermingled with facts which are relevant and proper, it is not error to overrule said motion, as it is necessary to separate, in the motion, the particular parts claimed to be sham, irrelevant and redundant from those which are relevant and proper.

(Syllabus by the court.)

APPEAL from the District Court of the Second Judicial District, for the County of Nez Perce. Hon. Edgar C. Steele, Judge.

Action to recover a debt. Judgment for defendants. Affirmed.

Judgment affirmed. Costs awarded to the respondents.

C. H Lingenfelter, for Appellant.

The lower court erred in not sustaining the plaintiff's demurrer to the defendant's affirmative defenses, for the reason that the defendants have set up a special defense in avoidance, alleging a purported agreement by which the agent for the plaintiff bound the plaintiff to answer for the debt of another, and that there is no allegation therein taking said agreement out of the provisions, subd. 2 of sec. 6009, Rev. Codes. (Allen v. Richard, 83 Mo. 60; Billingslea v. Ward, 33 Md. 48; Livingston v. Smith, 14 How. Pr. (N. Y.) 490; Gulley v. Macy, 84 N.C. 434; Bernhardt v. Walls, 29 Mo.App. 209; Traver v. Purdy, 30 Abb. N. C. (N. Y.) 443; Coquillard v. Suydam, 8 Blackf. (Ind.) 24.)

"The president's power as an agent must be sought in the organic law of the corporation, in a delegation of authority from it, directly or through its board of directors, formally expressed or implied from a habit or custom of doing business." (Wait v. Nashua Armory Assn., 66 N.H. 581, 49 Am. St. 630, 23 A. 77, 14 L. R. A. 356; Lyndon Mill Co. v. Lyndon Literary etc. Inst., 63 Vt. 581, 25 Am. St. 783, 22 A. 575; Crawford v. Albany Ice Co., 36 Ore. 535, 60 P. 14.) The power of the president is not implied. "In general to release the debts due the corporation or otherwise give away the assets." (Thompson v. McKee, 5 Dak. 172, 37 N.W. 367; State Sav. etc. Co. v. Stewart, 65 Ill.App. 391; 10 Cyc. 908, and cases cited.)

"A corporation is not, as a general rule, any more than a natural person bound by any acts or engagements of its agents which are not within the limits of the authority conferred on them." (Hartford Bank v. Hart, 3 Day, 491, 3 Am. Dec. 274; Brooklyn Gravel Road Co. v. Slaughter, 33 Ind. 185.) "A corporation is bound only by such acts of its officers or agents as have been either expressly or by implication authorized." (Kelsey v. Sargent, 40 Hun, 150; Purdy's Beach Priv. Corp., sec. 776, and cases cited.)

"The implied power and authority of a general manager, no matter if such office may be had in conjunction with that of president, director, secretary or other officer or agent, is limited to do only those things which are incident to the usual business of the corporation, or to that branch intrusted to his management." (Sarmiento v. Davis etc. Co., 105 Mich. 300, 55 Am. St. 446, 63 N.W. 205; Boynton v. Lynn Gas Light Co., 124 Mass. 197; Baird Lumber Co. v. Devlin, 124 Ala. 245, 27 So. 425.)

"If the officers of a corporation have no power to bind the corporation, by making or authorizing a particular contract, the corporation does not ratify the contract by the mere failure of the officers to repudiate a claim arising out of it and presented against the corporation." (Hotchin v. Kent, 8 Mich. 526; Lyndon Mill Co. v. Lyndon Lit. Co., 63 Vt. 581, 25 Am. St. 783, 22 A. 575.) Knowledge, by the corporation, of all the material facts and terms of the unauthorized contract, is essential to show, in attempting to hold that the corporation impliedly ratified it. (Pneumatic Gas Co. v. Berry, 113 U.S. 322, 5 S.Ct. 525, 28 L.Ed. 1003; Combs v. Scott, 12 Allen (Mass.), 493; Sanders v. Chartrand, 158 Mo. 352, 59 S.W. 95; Blen v. Bear etc. Co., 20 Cal. 602, 81 Am. Dec. 132.)

On Rehearing.

The court has held that the agreement in controversy as to the Allen account, so called, was not within the statute of frauds; but, to take it out of the statute, the agreement can only be considered as a novation, and as a novation it is of no force or effect, for the reason that it was not agreed to by all the parties necessary to constitute a valid novation. (Bonnemer v. Negrete, 16 La. 474, 35 Am. Dec. 217; Cornwell v. Megins, 39 Minn. 407, 40 N.W. 610; 37 Cent. Dig. 1506, and cases cited; Hancock v. Morgan, 34 Ind. 524; Reid v. Degener, 82 Ill. 508; Dean v. Ellis, 108 Mich. 240, 65 N.W. 971; Buchanan v. Paddleford, 43 Vt. 64.)

"A private corporation has no power to lend its credit to another or to pledge its property to secure the debt of another in a matter in which it has no interest or which is not for its benefit. Such acts are ultra vires and incapable of ratification." (Wheeler v. Home Sav. Bank, 188 Ill. 34, 80 Am. St. 161, 58 N.E. 598.) "The assuming of a debt against a third person is not in the usual course of business, and some special authority so to do must be shown." (Stark Bank v. United States Pottery Co., 34 Vt. 144; Hamilton v. Bates (Cal.), 35 P. 304.)

James E. Babb, for Respondents.

There can be no reversal for errors committed against one who, it is apparent, is not entitled to succeed in his action or defense in any event. (3 Cyc. 385; Thompson on Charging the Jury, sec. 118; Greenup v. Stoker, 8 Ill. (3 Gil.) 202.)

Plaintiff having collected, without objection, the check for $ 356.71, which was received by plaintiff with a statement of account which showed that the check was transmitted in full of account, is conclusively precluded from disputing the final nature of the settlement. (Lapp v. Smith, 183 Ill. 179, 55 N.E. 717; Davenport v. Wheeler, 7 Cow. 231; Schuyler v. Ross, 13 N.Y.S. 944; Bevan v. Cullen, 7 Pa. 281; Creighton v. Gregory, 142 Cal. 34, 75 P. 569.) "A settled or stated account is conclusive, in the absence of fraud, mistake or error, and the burden to impeach it by clear and convincing testimony rests upon him who, on such grounds, would escape its binding force." (1 Cyc. 454; Hendy v. March, 75 Cal. 566, 17 P. 702; Standard...