Case Name: Fernekes and another, Respondents, vs. Nugent Sanitarium, Appellant
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1914-11-17
Citations: 158 Wis. 671
Docket Number: 
Parties: Fernekes and another, Respondents, vs. Nugent Sanitarium, Appellant.
Judges: 
Reporter: Wisconsin Reports
Volume: 158
Pages: 671–673

Head Matter:
Fernekes and another, Respondents, vs. Nugent Sanitarium, Appellant.
October 30
November 17, 1914.
•Corporations: Contracts: Authority of officers: Entire contract: Recovery for partial performance.
1. The owner oí a sanitarium transferred it to a corporation of which he owned or controlled nearly all of the stock. He became its general manager and dominated the. business about as completely as before. Up to the time in question the directors of the corporation had not acted as such. The president knew and approved of a proposed addition to the sanitarium. Held, that the corporation was bound by the act of the manager in employing architects to prepare plans for such addition.
2. Where architects employed to prepare plans for a building were advised that the owner had concluded not to go on with it and that the plans were therefore not wanted, they properly discontinued work and were entitled to recover the reasonable value of their services already performed.
Appeal from an order of tbe circuit court for Milwaukee •county: Oscar M. Eritz, Circuit Judge.
Affirmed.
Action to recover reasonable value of services as architects in preparing plans and specifications for an addition to defendant’s sanitarium. Defenses: (1) Preliminary sketches only were furnished under an agreement that they were not to be paid for unless adopted and used, and they were not adopted and used. (2) Nugent, the officer of defendant with whom the transaction took place, had no authority to bind the corporation. The civil judge before whom the action was tried without a jury found the issues in plaintiffs’ favor and awarded them judgment. On appeal to circuit court, judgment affirmed. Errors assigned in this court: (1) The corporation made no contract with plaintiffs. (2) If it did, the contract was entire and was never performed, and no re covery can be bad for part performance. (3) No recovery can be bad because tbe plans and specifications were never delivered. (4) No competent proof that plaintiffs sustained damages to the amount of $400. .
For tbe appellant the cause was submitted on a brief signed by Walter 8china, attorney, and Geo. A. Bowman, of counsel.
For tbe respondents there was a brief by Williams & Stern, and oral argument by F. ‘0. Stern.

Opinion:
BaeNes, J.
1. Early in 1910, M. J. Nugent, being tbe owner of a sanitarium, transferred it to tbe defendant corporation. Plaintiffs were employed, if at all, in tbe fall of 1910. At this time Nugent was tbe general manager of tbe corporation, owned or controlled nearly all of its stock, actively conducted its business, and dominated its affairs about, as completely as be did tbe business of bis sanitarium before it was incorporated. Practically be was dealing with bis own property through a corporate agency as absolutely as be might deal with it as an individual. Up to tbe time tbe alleged contract was made tbe directors did not assume to direct anything. Dr. Gillen, tbe president of tbe corporation,, knew of tbe proposed improvement and apparently was in favor of it. It is quite clear that tbe corporation was bound by Nugent's act in employing plaintiffs. Haynes v. Kenosha E. R. Co. 139 Wis. 227, 239, 241, 119 N. W. 568, 121 N. W. 124; St. Clair v. Rutledge, 115 Wis. 583, 92 N. W. 234; Northwestern F. Co. v. Lee, 102 Wis. 426, 78 N. W. 584; Swedish Ann. Nat. Bank v. Koebernick, 136 Wis. 473, 476, 117 N. W. 1020; Bullen v. Milwaukee T. Co. 109 Wis. 41, 85 N. W. 115; McElroy v. Minn. P. H. Co. 96 Wis. 317, 322, 71 N. W. 652. Indeed, tbe answer admits tbe making of an agreement between plaintiffs and tbe corporation, but alleges that tbe agreement was essentially different from that claimed by plaintiffs.
2. Tbe second and third points made by the appellant may be considered together. Plaintiffs did not complete the plans and specifications because they were advised that defendant concluded not to go on with the building and the plans and specifications were not wanted for this reason. It was not only the right but the duty of plaintiffs to discontinue the work under these circumstances. Badger State L. Co. v. G. W. Jones L. Co. 140 Wis. 73 (121 N. W. 933) and cases cited on p. 79; Richards v. Manitowoc & N. T. Co. 140 Wis. 85, 88, 121 N. W. 937.
3. There is sufficient evidence in the record to support the assessment of damages made by the trial court.
By the Court. — Order affirmed.