Whitney v. Wyman

• Decision Date: 01 October 1879
• Citation: 101 U.S. 392,25 L.Ed. 1050
• Parties: WHITNEY v. WYMAN
• Court: U.S. Supreme Court

101 U.S. 392

101 U.S. 392

25 L.Ed. 1050

WHITNEY v. WYMAN.

October Term, 1879

ERROR to the Circuit Court of the United States for the Western District of Michigan.

The facts are stated in the opinion of the court.

Mr. J. W. Champlin for the plaintiff in error.

Mr. Mitchell J. Smiley, contra.

MR. JUSTICE SWAYNE delivered the opinion of the court.

This action was brought to recover the value of certain machinery manufactured by Whitney, which he alleged he had sold and delivered to Wyman and the other defendants.

The defendants insisted that they had contracted for and received the machinery in behalf of a corporation which they were officers, and that hence were not personally liable.

The plaintiff lived in Massachusetts and the defendants in Michigan.

The latter addressed a letter to the former, which was as follows:

'GRAND HAVEN, Feb. 1, 1869.

'BAXTER WHITNEY, ESQ., Winchenden, Mass.:

'SIR,—Our company being so far organized, by direction of the officers, we now order from you, manufactured and shipped, at as early date as possible—for the manufacture of the Mellish fruit basket—1 large rounding lathe, 1 quart do. do., 2 lathes for peach basket bottoms, 3 do. do. quart do. do., pint do. do. Also the necessary small fixtures for clasping, &c., of which Mr. Whitney is advised, and will give you more definite order.

'CHARLES WYMAN,

'EDWARD P. FERRY.

'CARLTON L. STORRS,

'Prudential Committee Grand Haven Fruit Basket Co.'

To which the plaintiff replied:——

'WINCHENDEN, MASS., Feb. 10, 1863.

'GRAND HAVEN FRUIT BASKET COMPANY:

'GENTLEMEN,—Yours of the 1st inst. is received, in which you order machinery for fruit baskets, &c. I had already anticipated your order by commencing on the machinery on Mr. Whitney's verbal order, and I am now driving it with all the force I can get on it.

'Yours respectfully, BAXTER D. WHITNEY.'

The plaintiff wrote further, as follows:——

'WINCHENDEN, April 14, 1869.

MESSRS. C. E. WYMAN, E. P. FERRY, C. L. STORRS:

'GENTS,—I herewith send bill of machinery ordered by you Feb. 1st, and have drawn on you at sight for the amount, $6,375. The machinery was delayed two days in order to get into one of the blue line cars. It has gone from the depot now and I have to send to Fitchburg for through bill of lading, which I expect to-night, and will forward it as soon as I procure it.

'Yours respectfully, BAXTER D. WHITNEY.'

The plaintiff charged the defendants individually on his books for the machinery. His draft was protested, and he thereupon wrote as follows:——

'WINCHENDEN, MASS, May 14, 1869.

'MESSRS. CHARLES E. WYMAN, EDWARD P. FERRY, CARLTON L. STORRS:

'GENTS,—I have just received notice of protest of my draft on you. Reason given, machinery not arrived. I doubt not the machinery has arrived before now, and if so, I hope you will forward me draft on New York at once. I need the money very much, from the fact that parties here on which I relied for money have been burned out and they are unable to pay me at present.

'Yours respectfully, BAXTER D. WHITNEY.'

The last two letters were not answered.

The machinery was delivered at Grand Haven, and the freight was paid by Edward P. Ferry as the treasurer of the corporation. The draft of Baxter was protested, because it was addressed to the drawees individually. They claimed that he had no right so to draw on them.

The corporation was organized under a statute of Michigan which authorized mining and manufacturing companies to be created pursuant to its provisions. It took the name of 'The Grand Haven Fruit Basket Company.'

On the 5th of January, 1869, thirty-two stockholders, including the defendants, subscribed the articles of association and acknowledged their execution before a notary public.

On the 21st of the same month there was a meeting of the stockholders, at which a code of by-laws was adopted. It provided for the election of seven directors, and of a president, secretary, and treasurer; and that the directors should elect out of their number one who, with the president and treasurer, should be a prudential committee, and that the committee should be charged with such duties as might be devolved upon it by the board of directors. The defendants and four others were elected directors.

On the 25th of the same month the board of directors elected the defendant Storrs president, the defendant Ferry treasurer, and the defendant Wyman for the third member of the prudential committee.

The articles of association were filed with the Secretary of State on the 19th of February, 1869, and with the county clerk on the 12th of May following. The statute declares that they shall be so filed before the corporation shall commence business. The notary public who certified the acknowledgment of the articles was himself a subscriber, and his name is included in his certificate. It was proved, by parol evidence, that the directors authorized the prudential committee to contract for the machinery.

The corporation received the machinery, bought an engine to run it, manufactured baskets with it, and carried on the business until some time in the year 1870.

On the 3d of March, 1870, Lyman and Fairbanks, two of the directors, were authorized to settle with the plaintiff on the best terms they could obtain.

The court instructed the jury in substance, that the letter of the prudential committee of Feb. 1, 1870, bound the corporation and not the defendants, if there was then a corporation and the defendants were authorized by it to give the order, and that if the corporation had acted as such and exercised its franchises, then it was a corporation de facto, and that in such case any irregularity in its organization was immaterial.

The plaintiff excepted to these instructions, and took numerous other exceptions in the course of the trial, which are set forth in the record.

The jury found...