Case ID: ad_2/html/0369-01.html
Source: Caselaw Access Project
Author: {"author": "Patterson, J.;", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Simon B. Camacho, Appellant, v. The Hamilton Bank Note and Engraving Company, Respondent.
    
      Corporation—powers of a general manager to bind the corporation by a contract for a term of yems —proof of apparent cmthority—ratification.
    
    In an action brought to recover damages for the breach of a contract for the plaintiff’s services, the plaintiff alleged' that the defendant, a corporation, on the 17th day of June, 1893, entered into a written contract with him for his services for a period of’ three years, which, as embodied in plaintiff’s letter, provided that hi‘s compensation for the first three months was to he at the rate of §2,000 per annum and to he increased upon a sliding scale so that in the third year he was to be paid at the rate of §4,840 per annum. This statement, which included an agreement'that the plaintiff was to receive some official title under the corporation, was, in a letter written by Charles E. Gray, who was its vice-president and general manager, stated to be confirmed and made binding upon the defendant.
    Upon the trial of the action the court excluded the letters upon the ground that the corporation was not hound by the acts of Gray, in regard to whose authority it appeared simply that he employed and discharged ordinary servants employed for short periods.
    Upon the question of ratification it appeared that the president of the corporation saw the plaintiff rendering services; that just before the plaintiff was discharged he showed the correspondence relative to his employment to the presi-' dent of the corporation, who expressed indignation and also some pity for the plaintiff; and that the letters were copied into the letter book of the corporation, it would seem, by the direction of Gray.
    
      Reid, that the plaintiff could not recover;
    That Gray, as general manager of the corporation and charged with the executive administration of its current business, had no authority, upon the proof, to enter into a contract which would bind the corporation for a term of years;
    That there was no proof in the case of any acts of Gray, known to and acquiesced in by the officers of the corporation, which would have justified the plaintiff in relying upon the apparent authority of Gray to make the contract;
    That ratification must he made with knowledge and that there was no proof in the case of the ratification, of the acts of Gray with such knowledge.
    Appeal by the plaintiff, Simon B. Camacho, .from a judgment of the Court of Common Pleas for the city and county of New York in favor of the defendant, entered, in the office of the clerk of said court on the 7th day of November, 1895, upon the dismissal of the complaint upon the merits, directed by the court, after a trial before the court and a jury.
    
      
      Eustace Gonwa/y and George Eoadly, for the appellant.
    
      William L. Turner, for the respondent.
   Patterson, J.;

In the complaint in this action it was alleged that the plaintiff and the defendant corporation,' on the 17th day of June, 1893, entered into a contract in writing, by which the former was employed to render services to the latter for a period of three years from the date mentionéd, and upon a.sliding scale of compensation, viz., that for the first three months being at the rate: of- $2,000 a year and an. increase at fixed periods in an agreed ratio, so that for the last year’s services the compensation would be at the rate ’ of $4,840.' The writings claimed to contain the terms of this- contract consist, as set forth in the complaint, of two letters, one of which is signed by the, plaintiff and directed to Charles E. Gray as vice-president, and general manager ¡of the-defendant. This letter-is in the following words: I beg to state herein my understanding of - the agreement made between your company and myself,which “understanding please confirm. ' I am -to enter into., the service of your company for the term of three years from the, 19-th day of June, 1893, with such an «official title as you may hereafter designate ; to advance said company’s interests, to assist you in the conduct of its business and -to sell the goods manufactured by it either at home <or abroad to the full extent of my ability.” Then follows the statement as to salary. In answer to -this, Gray, signing as- vice-president apd manager, wrote to the plaintiff under the same date, as. follows: “ I am in receipt of yoitr favor .of to-day in which" you- name the' understanding of the agreement made between this company and you for ••a period of three years, which understanding I hereby confirm and "bind this company to carry out.” The plaintiff then proceeds to state that on the 9tli day of September, 1893,. he. demanded payment of a month’s salary under the said contract,,and that on the 19th of October, 1893, he demanded payment of another month’s salary under the contract. The action was brought to recover on such two causes of action. The answer is substantially, a general ■denial of liability. When the case came on for trial, the counsel for the plaintiff offered in evidence the two letters which-were, set forth in. the complaint, and which are above referred to, and they were rejected by the court on the ground that no authority was shown on the part of Mr. Gray to enter into the contract, and that there was no evidence sufficient to establish a ratification of the plaintiff’s employment, and thereupon, for lack óf any evidence to support the }3laintiff’s case, the comjfiaint was dismissed, to which ruling the plaintiff duly excepted, and that ruling is now the only subject for review which upon this record comes properly before us.

It is conceded that there is nothing appearing in the case to show that Mr. Gray had, by virtue of any powers conferred upon him by the by-laws of the corporation, or by the express delegation of the directors, the ability to make a contract binding upon the corporation of the character of that in suit. But it- is claimed by the plaihtiff that in making his arrangement with Gray, he was entitled to rely upon the apparent authority which he exercised as general manager, and upon the assumption that as general manager it was within his province to make this contract of employment. In the absence of proof óf what exact authority belongs to a person descriptively styled a general manager, there is no rule by which a court can be guided in determining what the j>owers of such an official really are, except such as the evidence in a particular case may furnish of what the person has done in the general course of the business of the corporation. That the words “ general manager.” would import that the person bearing that title is a general executive officer for all the ordinary business of the corporation is all that may properly be inferred, and this would justify, .in connection with proof of acts done, a conclusion that all ordinary contracts made by such an official are authorized by the corporation. But no presumption of law can be indulged in that, because a person acts-as such a manager, he has the power to bind his principal to contracts of an extraordinary nature and of such a character as would involve the corporation in enormous obligations and for long periods of time. If a general manager, simply by virtue of his being charged with the ordinary , conduct of the business, would have the right to bind his principal to a contract for service for three years, involving the obligation to pay thousands of dollars of salary to an employee, why may not that power extend indefinitely, so that he may make contracts for all employees for indefinite periods and thus assume to himself a power which it cannot be supposed was ever intended tobe lodged in him? That this position pf the plaintiff was an important one and outside of the usual' contracts of employment, is apparent from the fact that not only is the compensation larger in amount and the period a long one, but it seems that it was regarded by the plaintiff of so much consequence that it waste be dignified with an official title for which even a stipulation was-made.

The cases referred to by the counsel for the appellant, concerning the holding out of an agent to a party dealing with' him in good faith, require no consideration. The doctrine they announce is not to be disputed. It is á question of fact though, whether Gray was acting within the scope of an apparent authority when he undertook to bind the defendant by this contract.

It, therefore, remains to be .ascertained whether or not, acting as manager, Mr. Gray performed such duties or made such contracts as would' j ustify this plaintiff in relying upon an apparent authority; that is to say, an authority derived from acts of the agent,, recognized by the principal, and which, therefore, may be presumed to be within the authority conferred upon the agent. Upon this subject we have no evidence whatever except, the testimony given by the plaintiff himself. He states that Mr. Gray was in the habit of employing and discharging employees ; but there is nothing whatever to show that any of the employees thus hired or discharged by Mr. Gray were more than ordinary servants' of the company employed for short periods; and there is nothing to show that Mr. Gray ever made any contract with any employee for any fixed period of time, or involving any other than a temporary employment subject to discharge at the volition of the agent or general manager or of other officers of the corporation. That testimony is utterly insufficient "to lay the foundation for an inference that the general manager possessed an authority to make so extensive and unusual a contract as that which is set up by this plaintiff.

It is also claimed on the part of the plaintiff that although there may have been an absence of original authority, still -there was a ratification, of the act of Mr. Gray in making the contract counted upon in the complaint. Of course, if this contention is well founded, the right of recovery would be as absolute as. if an original binding contract had been proven. But here we find that the evidence completely fails to establish the ratification. Certainly it is not to be deduced from any relation to the subject of Mr. Seebeck, who was president of the company at the time the letters were written. The plaintiff testifies that Mr. Seebeck was in and out and shw him rendering services. The mere fact that such services were rendered would not put the defendant upon inquiry as to_the existence of a contract in writing. Nor is it a ratification of any terms oh conditions of any employment which might have, been made without due authority. (Harrington v. Bank, 1 T. & C. 361.) But it is obvious from the plaintifE’s own testimony that Mr. Seebeck was not aware of the facts connected with the employment, and there can be no ratification without knowledge of the facts. The plaintiff testifies that at a certain interview, had just before his discharge, Mr. Schaeffer and Mr. Seebeck were present. He says: “ I told both of these gentlemen the circumstances of having come into the company’s employ, and showed them the press copy letter and his (Mr. Gray’s) answer, at which they expressed great surprise, and Mr. Seebeck some indignation, and some commiseration for me.” The mere copying of letters into the letter book of the defendant corporation does not constitute a ratification if that were directed by Mr. Gray and no knowledge brought home to other officers of the company. The copying of letters into letter books would have no more significance than Gray’s signing bis name to the original letter.

We are of opinion that, upon the whole case, the court was right in rejecting the evidence of the two letters alleged to have constituted the contract, and upon these grounds :

First. That it is not to be inferred as matter of law that an agent who was a mere general" manager of a business, by which term is meant one charged "with the executive administration of the current business of the corporation, has the authority to bind his principal to any contract to run for a series of years, in the absence of proof of authority to make such a contract.

Second. That, while such an authority may be inferred from evidence of acts of the general manager, known to and acquiesced in by the officers of the corporation, yet the proof in this case is wanting in that element, and there is no proof of such acts as would have justified -the plaintiff in relying upon an apparent authority to make the contract on which this action is, brought..

Third. That there is no; 'proof of ratification with knowledge of the contract. ' . .

The plaintiff having sued on the contract, and not upon a qucmbump meruit, and the effect of a judgment in his favor being to make, a binding adjudication entitling him- to-recover for subsequent.breaches, , the jndgmónt must be affirnred, with costs. '

Van Brunt, P. J., Williams,. O’Brien and Ingraham, JJ., concurred.

Judgment affirmed, with costs.