Case ID: iowa_84/html/0101-01.html
Source: Caselaw Access Project
Author: {"author": "Beck, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Western Publishing House, Appellant, v. District Township of Rock, Appellee.
    1. Contracts with Officers of Corporations: ratification. A contract in writing for school hooks, wherein the contracting parties on one side describe themselves as members of the hoard of directors of a certain school district named, and agree to pay the price therein stipulated, is hut the individual contract of such directors and the subsequent passage of a motion by the hoard of directors of such school district “to ratify the contract of those members of the hoard who signed” the same, could not have the effect of a ratification by the school district, as the contract did not by its terms purport to be binding upon it.
    2. -: adoption. Neither would such action of the school district amount to an adoption of said contract .if the adoption was not accepted by the other contracting party before the district had rescinded its action.
    
      Appeal from Cherokee District Court. — Hon. C. H. Lewis, Judge.
    Wednesday, December 16, 1891.
    Action upon a contract for the purchase of eight copies of a hook called “Yaggy’s Anatomical Study.” A demurrer to the petition was sustained, and judgment rendered thereon. The plaintiff appeals.
    
      Affirmed.
    
    
      Earnest C. Herrick, for appellant.
    
      J. D. F. Smith, for appellee.
   Beck, C. J.

I. As the only question in the case involves the sufficiency of the petition to support the action it is necessary for a correct presentation of the facts pleaded to fully set out the parts of the petition stating the cause of the action. They make the following allegations:

“That on the fifth day of July, 1888, Levi. Forsyth, Jacob Heller, John White, John Peters and Horace Cook were members of the board of directors of the defendant; that on said date the said members executed to the plaintiff a certain written contract or order for eight sets of Yaggy’s Anatomical Study, published by the plaintiff, and for which the said members agreed to pay the sum cif thirty-five dollars each, making a total amount of two hundred and eighty dollars; that by the further terms of said order the said studies were to be shipped by American Express» C. O. D., and the plaintiff agreed in said order to take in payment therefor a warrant or order on the treasurer of said district township of Bock, payable at the nearest American Express office; that a copy of said order is hereto attached, marked ‘Exhibit A,’ and made a part hereof; that by the further terms of said order, it was provided that said studies were to be shipped to John White, who was the president of the board of' directors at that time; that in accordance with the said order the said studies were duly shipped by express to said John White; that said studies were so ordered by the said members of said board of directors for the use and benefit of defendant in its schools; that afterwards, to-wit, on or about the ninth day of February, 1889, at a regularly called meeting of the board of directors of the defendant, the said board of directors passed a vote to ratify the said purchase of said studies by the said individual members of said board, and a copy of which said action of said board of directors, as shown by its official record thereof, is hereto attached, marked ‘Exhibit B,’ and made a part hereof; that afterwards, at the regular annual meeting of the electors of said district township on the eleventh day of March, 1889, the board of directors of the defendant were duly authorized by said electors to place said Anatomical Studies in each of the schools of said township, there. being eight subdistricts in said township, and a copy of which said action at said annual meeting, as shown by the official record of said meeting, is hereto attached, marked ‘Exhibit 0,’ and made a part hereof. The plaintiff further states that, at the time of the ratification by said board of directors of the said contract of said members for the purchase of said studies, there was in the contingent fund of said district township over five hundred dollars unappropriated; that on the eighteenth day of March, 1889, the board of directors of the defendant did, at a regularly called meeting of said board, adopt the following resolution, namely: ‘Moved and seconded that the act of the board ratifying the contract of purchasing eight anatomical charts is hereby repealed. Carried.’ That at the time when said resolution was adopted the said Yággy’s Anatomical Studies, being the same charts referred to in said resolution, were in the office of the said express company, where they had remained from the date of the said ratification of said contract, as hereinbefore alleged, the said charts having been duly shipped per said express company at once after the said order therefor was given, and having been in said office from prior to said ratification of said contract until after the said resolution of March 18, 1889, and being now in said office.”

The petition further alleges that the plaintiff demanded the order or warrant upon the treasurer of the defendant, which was refused, and that the books have been sent pursuant to the contract, and are now in possession of the express company, ready for delivery upon payment as provided by the contract. The order or contract designated in the petition as “Exhibit A” is in the following language:

“Agreement between the undersigned members of the board of directors of the district township of Bock, in the county of Cherokee, and state of Iowa, and the Western Publishing House, of Chicago, Illinois, for the goods specified on the back of this contract to be shipped on or about July 30, A. D. 1888, and delivered to the American Express Company at Chicago, Illinois, properly packed and marked as specified. 'We, the undersigned, hereby order shipped to us, as named below, eight copies of Yaggy’s Anatomical Study, at thirty-five dollars each, provided a majority of said board sign this agreement. We agree to pay for the above-named goods,-, 188 — . The Western Publishing House agrees to ship said articles in good condition by express, C. O. D., as specified, on or about July 30, 1888, and further agree to accept in payment an order on the treasurer of said district township, for the amount, with -— per cent, interest, which order shall be payable at the nearest express office (American), where the Western Publishing House will send it for collection. Dated July 5, 1888.
“For and in consideration of the above agreement, the Western Publishing House guarantees that- the goods shall be in every respect equal to sample; otherwise the subscribers are not compelled to accept the same.
“[Signed] P. 0. Address. •
“Levi Forsyth, Washta, Iowa.
“Jacob Heller, Cherokee, Iowa.
“John White, Cherokee, Iowa.
“John Peters, Cherokee, Iowa.
“Horace Cook, Quimby, Iowa.
“Treasurer’s name is D. Liffering, P. 0. address, Cherokee, county of Cherokee, state of Iowa!
“N. B. Our agents are authorized only to sell our goods at proper prices. All collections are to be made by us, unless the agent has written authority granting him this right.
“Western Publishing- House.
“By J. Walter Leahy.”
Indorsed on the contract are these words:
4‘Western Publishing House, 315-321 Wabash Ave.
(Cor. Congress St.), Chicago, HI.
“Oentlemen: — Please ship by American Express Company to John White, of Cherokee,, county of-Cherokee, state of Iowa,. eight copies of ‘Yaggy’s Anatomical Study,’ at thirty-five dollars each, in accordance with specifications in contract on this sheet.
“John White. J. Waltee, Leahy,
“Agent.”

On the ninth day of February, 1889, at a meeting ■of the board of directors, a motion was made and •carried, in the language of the. minutes of the proceedings, “to ratify the contract of those members of the board that signed the contract of charts.” At a meeting of the board of directors held on the eleventh day of 'March, 1889, a motion was made and carried authorizing the board of directors to place in each subdistrict one of Yaggy’s Anatomical Studies. The petition, it will be observed, alleges that on the eighteenth day of March, 1889, “the act of the board ratifying the contract of purchasing eight anatomical charts was repealed.”

II. A consideration of the agreement upon which the plaintiff bases its right to recover discloses the fact that it does not purport to be the contract of the defendant, the school ¿pstrict, and that there is not one word in it indicating the purpose of the directors to bind the district, or the intention of the plaintiff to require it to be bound by the agreement. The obligors in the instrument describe themselves as directors of the school district; but it does not appear that the goods sold were bought for the use of the defendant, or pursuant to its authority or order. It is stipulated in the contract that the goods shall be shipped to the directors, not to the defendant or its officers. On the face of the instrument, it is plainly shown that the persons who signed the instrument, and who are designated therein as “directors,” are ,alone bound by it as obli-gors. Tbe plaintiff agrees in tbe instrument to accept in payment an order or warrant issued by tbe defendant, but tbis stipulation does not bind it to look to tbe defendant for payment, or. make tbe instrument its contract. Upon tbe face of tbe instrument tbe defendant is not bound, and tbe intention clearly appears to bind tbe signers individually. Tbe petition does not allege or sbow that tbe defendant is bound by the contract, or was intended by the parties to be bound. It specifically alleges that tbe “members [of tbe board of directors] agree to pay for tbe books.” It alleges that tbe books were “ordered by said members of said board of directors for the use and benefit of defendant, in its schools.” It is not alleged that tbe contract was made pursuant.to any prior order, request, or authority of tbe defendant; and it is averred that tbe books “are now” in tbe express office, thus showing and averring, negatively, that tbe goods have never come into possession of tbe defendant, and have never been used in its schools.

III. Tbe plaintiff, while inferentially conceding that tbe contract was made without authority, insists that it was afterwards ratified. But as tbe contract did not purport to bind tbe defendant, it could not ratify it. There is no such thing as the ratification of a contract by an obligor made by another, when it does not purport to bind him, but binds tbe other. In such a case tbe obligor cannot become bound by a ratification. He can only become bound by a new contract assuming or adopting tbe obligation of tbe prior one. If it be assumed that tbe defendant did adopt tbe contract (which is not alleged in tbe petition) it must appear what tbe terms of tbe contract adopting it are, and that they have been performed. But no such showing.is made in tbe petition.

IV. If tbe action of tbe board ” of directors of March 11th be regarded as tbe adoption of tbe individ- , . ual contract of the directors, it does not , appear that the plaintiff assented to or accepted it at any time. Nor is it shown that the defendant acquired the right under such adoption, by the assent of the plaintiff, to take the property. It is not shown that the plaintiff in any way accepted such adoption of the contract so as to bind the defendant. Until that was done, it could withdraw its adoption of the contract, which it did do by the resolution and action of its board of directors in their meeting of March 18, 1889.

We reach the conclusion that the contract was not intended to bind the defendant, and therefore was not ratified by it, and that, if the act claimed to be a ratification may be regarded as a contract of adoption, it was rescinded before it was accepted, and before the plaintiff acquired thereby any rights by reason of such adoption. These considerations lead us to the conclusion that the judgment of the district court ought to be aeeirmed.