Case ID: ad_135/html/0307-01.html
Source: Caselaw Access Project
Author: {"author": "Ingraham, J.: Scott, J.(dissenting):", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Katharine McDuffie, Appellant, v. The Financier Company, Respondent.
    First Department,
    December 10, 1909.
    Corporation—authority of officers to bind company—action to recover sums advanced to corporation on request of president — facts raising questions for jury.
    Where the affairs of a business corporation organized to finance other companies is left in the control of its president he has power to bind the corporation in the general and ordinary conduct of its business.
    The plaintiff, a stenographer employed by such corporation, at the request of its president advanced certain moneys to he invested in stock, lie promising that it would be returned to her. She also advanced money on a similar request to enable the corporation to pay its employees. Thereafter in consideration of her promise to remain in the service of the company for a certain period and in consideration of a return of the stocks purchased by her, she was given an order on the company, signed by the president, requiring it to pay her a certain sum with interest. Interest was subsequently paid on this order and the amount indorsed thereon. In an action against the corporation to recover the moneys advanced, as evidenced by such order,
    
      Held, that it was for the jury to say whether the plaintiff was entitled to recover the full amount named in the instrument, or at least the amount actually advanced to the president for the corporation, and that a direction of a verdict for only part of the claim was error..
    Laughlin and Scott, JJ., dissented, the latter, with opinion.
    
      Appeal by the plaintiff, Katharine McDuffie, from a judgment of the Supreme Court-in favor of the plaintiff, entered in the office of the clerk of the.county of Mew York on the 25th day of March, 1909, upon the verdict of a jury rendered by direction of the court, and also from an order entered in said clerk’s office ón the 23d day of March, 1909, denying the plaintiff’s motion for a new trial made upon the minutes.
    
      Theron G. Strong, for the appellant.
    
      Henry B. Twombly, for the respondent.
   Ingraham, J.:

The plaintiff was in the employ of the defendant, a corporation engaged in financing or procuring capital for other corporations and' business. Among the corporations which were being financed by the defendant was fhe Ewing-Essick Engine Company and the Ewing Publishing Company. Plaintiff testified that the president of the defendant, who was in entire control of its business, recommended to her, whq was employed by the defendant as a stenographer, that she should invest some of her earnings in the stocks of these two companies. The president of the defendant told her that ■ these stocks would be all right; that they were sure because they were being financed by the defendant. Plaintiff then' gave the president of the defendant $2,000 to invest in these two corporations. At another time the plaintiff delivered to the president of the defendant company .$1,000 in money which he wanted to put in some bank stock in which the defendant was interested. He assured the plaintiff that if she would give him the money it would be returned to her. In one instance he told the plaintiff that lie wanted $500 for the defendant’s payroll which the plaintiff advanced and received an order on the company for the amount. There was another advance of $500 by the plaintiff to the defendant, making in all $4,000. Subsequently the plaintiff told Mr. Ewing, the president of the defendant, that she wished to leave the employ of the company and desired the return of the-money that she had advanced. In reply to that, the president of the defendant said: Miss McDuffie, I do not want you to leave the company. I know what you hare said is true, and the company will return to you everything that yon have put into it — everything. I know that you have done a good deal in the office of the company besides having done my regular work, and if you will agree to stay at least until the beginning of next year, when the company will be in better shape, all this will be returned to yon; and to make up for the lack of interest which yon have not got I will give you an order on the company_for $1,000 more than you really have paid into the company.” The plaintiff then returned to the president of the company all the orders that she had and all the stock, and the president issued anew order on the company covering everything that plaintiff had given to the company amounting to $5,000. The old orders were all marked paid and destroyed. This order then given to the plaintiff wap then produced and offered in evidence and was as follows :

“ The Financier Company,.
“ 22 Thames. Street,
“ New York, June 11, 1906,
“Pay to the order of Miss K. McDuffie Five thousand dollars ($5,000.00) with interest at from date.
“ J. E. EWING,
lí Prest J

Indorsed on this ivas “ Interest pd. to Dec. 11, 1906,” and on the margin was written: “ (This includes Ewing-Essick Engine Co. and Ewing Pub. Co. Investments, profit on all different stock investments, and deposits at different times in my personal bank account, and is payable with interest at 6%).”

At the bottom of this instrument was written :

“ I hereby agree that payment of the above will not be demanded until January 1st, 1908.
Miss K. McDUFFIE.”

Mr. Ewing, the president of the company, died February 25,1907. After his death the plaintiff presented to his successor as president this order or check, when the president said to the plaintiff that he would neither deny nor dispute it; to give him time to turn around ; and the plaintiff agreed that she would not do 'anything until the first of the next year, and in consequence of that understanding they dictated the indorsement upon this instrument that she agreed not to demand payment until January 1, 1908. The indorsement of interest paid on December 11, 1906, was in Ewing’s handwriting. Hazen, Ewing’s successor as president of the compapy, testified that when the plaintiff presented these checks to him he. told her that there was no possible chance to get any money out of. the defendant or out of the estate of Ewing at that time, and that he would refer it to Mr. Compton and the attorney for the company. It was shown that the method by which the company paid its obligations and transacted its business was for the president to give an order or draft on the company in the. form given to the plaintiff and that on presentation of these drafts to the president of the company they were paid!

It seems to me that upon this evidence there was a question presented as to the right of the plaintiff to recover at least the' amount that she had paid to Ewing as president of the company and the liability for which he recognized by giving the draft in' question. This defendant, which was financing these other companies, had recommended to the plaintiff, an employee, to invest her money in the stocks of the companies that the deféndant was. financing with a promise that the money should be returned to her. She delivered.back the stock, asked for the return of her money, and was given this obligation of the company as a compliance with that understanding. The company recognized it by paying.interest on it up to December eleventh, shortly before Ewing’s death. In business companies of this kind where the business is substantially left in the control of its president the president certainly has the ' power to bind the company in the general and ordinary conduct of its business. The company had received the plaintiff’s money; had delivered to her stock for it; had received back the stock and'given her an obligation'to repay her the money; and certainly there arose a. legal liability of the company to the plaintiff to fulfill that obligation. The complaint alleged that the defendant had become indebted to the plaintiff in this sum of money and that the defendant had agreed to pay to the plaintiff this sum of $5,000 in consideration of the plaintiff continuing to .remain in the service- of the company and render services to it, and to carry out that agreement made and executed this instrument in writing, a copy of which is set up in the complaint.

When the testimony was all in the defendant moved to dismiss the complaint. In answer to that motion the court said to the defendant: “ You have moved to dismiss, and you have raised the point that there wits not any evidence of an account stated, and I have not liad time to look into it, but one thing is clear, that there is evidence that this company owes her $1,000, with interest, two years and three months’ interest, and that would be $1,135. I have considered the case carefully and I am disposed to direct a verdict against your client for $1,135.” Defendant’s counsel then withdrew the objection on the ground that it was not an account stated when the court directed a verdict against the defendant for $1,135. To that.the plaintiff’s counsel excepted.. • The plaintiff then requested the court to submit to the jury the question as to whether there was an account stated between the plaintiff and defendant evidenced by plaintiff’s Exhibit 2, which was denied and plaintiff excepted. Plaintiff then requested the court to submit to the jury whether there was an agreement between- the plaintiff and defendant that the plaintiff would agree to forbear to prosecute her claim for one year on or about May 10, 1907, which was denied and plaintiff excepted. The plaintiff made other requests to submit various questions in the case to the jury, all of which were denied. I think there was a question for the jury as to whether she could recover either for the full amount of this instrument or at any rate to recover back the amount that was actually advanced to the president on his promise to repay it to carry out which he had given this instrument in question, and I do not think the verdict should stand.

The judgment should, therefore, be reversed and a new trial ordered.

Patterson, P. J., and McLaughlin, J., concurred ;. Laughlin and Scott, JJ., dissented.

Scott, J.(dissenting):

This is an action upon what is called an account stated.” The defendant is a domestic corporation incorporated under the act of 1848 (Laws of 1848, chap. 40, as amd.) for the purpose of printing and publishing books, pamphlets and newspapers and selling the same, and. particularly of printing, publishing and selling a newspaper devoted to financial matters ,to be- called' and known as The Financier and of carrying on such business as may be incidental thereto and connected therewith.” Plaintiff was a stenographer in the employ of the company, of whicli J. E. Ewing was president. •

The so-called account stated ” consists of an order drawn on the corporation by Ewing, its-president, for the sum of $5,000. It'was-not accepted by the company, and in fact was not presented until after Ewing’s death. It appears from plaintiff’s testimony that-Ewing from time to time advised her to make certain investments and received from her at different- times $3,000, with which he purchased for her stock in two corporations known as the “ EwingEssick Engine Company ” and the “ Ewing Publishing Company,” and spine kind of interest in.a Boston bank.. Mono of these corporations belonged to defendant, and so far as appears defendant received no benefit from plaintiff’s investments therein. Plaintiff also loaned Ewing two sums of $500 each, which he in turn advanced to defendant to pay salaries. - The investments turned outto.be unprofitable and about June, 1906, plaintiff expressed a desire to have her money back, and to leave defendant’s employ. Ewing thereupon in order to satisfy her gave her the paper relied on as an account stated.

The sum of $5,000 was made up of the $3,000 given Ewing by plaintiff for investment,' the $1,000 given for payment of wages, and an additional sum of $1,000 which Ewing said was to cover the cost of interest. Ewing died in 1907 and plaintiff presented claims against the company aggregating $7,000, of which $2,000 was concededly due from Ewing personally and was paid. The company asked for time to investigate the present claim, and made some sort of a proposition to settle it, but nothing- came of that. The court, with the acquiescence of defendant, directed a. verdict for the $1,000 advanced and used to pay wages, with interest. Plaintiff being dissatisfied with this appeals. The plaintiff’s own evidence makes it abundantly clear that the company never owed plaintiff any part of. the $5,000, except possibly the $1,000 which went to pay salaries aiid for which she has a judgment. She say's over and over again that the $3,000 was given to Ewing to.invest for lmf and that he did invest it. Mo authority whatever was shown in Ewing to bind tlie company to repay her what the company did not owe and in fact the order signed by him does not even purport to be an obligation of the company.

The judgment is at least as favorable, if not more so, than plaintiff was entitled to and should be affirmed, with costs.

Judgment and order reversed, new trial ordered, costs to appellant to abide event.