Case Name: W. Lyman Rathbun, App'lt, v. Alfred D. Snow, Resp't
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1890-10-21
Citations: 33 N.Y. St. Rep. 600
Docket Number: 
Parties: W. Lyman Rathbun, App’lt, v. Alfred D. Snow, Resp’t.
Judges: 
Reporter: New York State Reporter
Volume: 33
Pages: 600–603

Head Matter:
W. Lyman Rathbun, App’lt, v. Alfred D. Snow, Resp’t.
(Court of Appeals,
Filed October 21, 1890.)
1, Corporations—Authority of agent of corporation to bind by con TRACT TO PURCHASE SUPPLIES.
Third persons dealing with the agent of a mining or similar company, who has been constituted its general resident manager, and who is engaged in carrying on the business of the foreign principal in a distant land, have a right to assume, in the absence of notice, that the manager’s authority extends to all such usual dealings as are necessary to carry on the business from day to day, such as procuring the necessary supplies or ordinary implements for the work, and to pledge the credit of the principal for the payment of debts contracted for these purposes.
3. Same,
But the bare appointment of an agent by words in preesenii, but having reference to a business to be entered upon at some future time, does not confer any authority on the agent in the interim to hind the principal, although the appointment does not state that the agency is not to become ffectual until a future time.
Appeal from judgment of the New York common pleas, general term, affirming judgment in favor of defendant
Eugene L. Bushe, for app’lt; Joseph M. Pray, for resp’t.
Affirming 22 N. Y. State Rep., 227.

Opinion:
Andrews, J.
This action presents a somewhat novel question in the law of agency. The action is to recover from the defendant the amount of an alleged debt against The Belen Agricultural Mining Company, a corporation in this state, organized under chap. 40 of the Laws of 1848, and the amendments thereto, for supplies furnished by the plaintiff at Colon in the United States of Columbia in the year 1883, on the order of Kingman, for the use of a mining camp at Veraguas in the state of Panama. The defendant, who is one of the trustees of the company, is sought to be made liable for the debt because of the failure of the company to file a report as required by the act. The certificate of incorporation of the company was filed in May, 1882, and it sets forth that the company was formed for conducting and carrying on the business of agriculture and mining, the development of agricultural and mining lands, the purchase, sale and leasing of land, mining property and machinery, and the milling, reduction, shipment and sale of ores; that some part of its business was to be carried on in Veraguas in the state of Panama and other places in said state, but that the principal place of business in which the operations of the company were to be carried on is in the city of New York.
The company was not organized by the election of officers until November 20, 1882, and on the same day the board of trustees adopted by-laws which, among other things, provide that no debt should he contracted by any officer or agent of the company, nor any obligation created imposing any liability on the company, unless expressly authorized by a majority of the board of trustees at a meeting of the board. On the 1st of December, 1882, at a meeting of the board of trustees a resolution was passed appointing " H. J. Kingman superintendent and resident manager of the company." Kingman, who at this time was in ¡New York, left that city on the 2d of December for Panama, where he had resided for many years, and subsequently contracted the debt upon which this action is brought, upon the representation to the plaintiff that he was superintendent and manager of the company and authorized to contract in its behalf.
When the supplies furnished by the plaintiff were purchased Kingman was engaged in erecting buildings and making explorations upon lands in Veraguas, for which he and two associates had obtained a conditional concession from the government of the United States of Colombia, the conditions relating to certain things to be done on the lands, and which were to be performed before the grant became operative. Kingman and his associates had agreed to assign this grant to the Belen Agricultural & Mining Company in exchange for its entire capital stock, and the stock, prior to the contracting of the debt in question, had been issued to the associates. But the company never acquired any title to the land included in the grant.
The facts, however, although obscurely stated, justify the inference that it was a part of the agreement between the company and the associates that the latter should make the expenditures on the land required to fulfill the conditions contained in the grant from the United States of Colombia, at their own expense, before the company should be vested with the title to, or undertake the management of, the property. There is also evidence from which a judge or jury might find that it was understood between the company and Kingman that his agency as superintendent and resident manager was not to become active, and that the company were not to commence operations, until after the associates had performed the conditions of the grant, so as to secure the title to the land.
The work being done.on the land when the supplies in question were furnished was required or was suitable to be performed in fulfilling the conditions of the concession. The liability of the Belen Agricultural & Mining Company for the supplies furnished by the plaintiff depends on the existence of an agency, express or implied, in Kingman to bind the company therefor. There can be little doubt that if the operations which Kingman was carrying on at Varaguas were in the prosecution of the busines sactually undertaken by the company at that place, his appointment as " superintendent and resident manager," under the resolution of December 1, 1882, would carry with it, as a reasonable and usual incident of such an agency, the power to purchase necessary supplies for the daily wants of the camp in the prosecution of the business on the credit of the company.
Third persons dealing with the agent of a mining or similar company who has been constituted its general resident manager, and who is engaged in carrying on the business of the foreign principal in a distant land, would have a right to assume in the absence of notice that the manager's authority extends to all such usual, dealings as were necessary to carry on the business from day to day, such as procuring the necessary supplies or ordinary implements for the work, and to pledge the credit of the principal for the payment of debts contracted for these purposes. The authority of such an agent to the extent indicated is supported by adjudged cases. Hawken v. Bourne, 8 M. & W., 703 ; Leake on Con., 534, and cases cited; Scudder v. Anderson, 54 Mich., 122.
It follows from the general principle, now well settled, to the effect that third persons may act upon the apparent authority conferred by the principal upon the agent, and are not bound by secret limitations or instructions qualifying the terms of the written or verbal appointment, that the defense, based upon the limitation in the by-laws of the company, of which the plaintiff had no knowledge, cannot be sustained. By-laws of business corporations are, as to third persons, private regulations, binding as between the corporation and its members or third persons having knowledge of them, but of no force as limitations per se as to third persons of an authority which, except for the by-laws, would be construed as within the apparent scope of the agency. Fay v. Noble, 12 Cush., 1; Mechanics' Bank v. Smith, 19 Johns,, 115 ; Smith v. Smith, 62 Ill., 493 ; Morawetz on Corp., § 593, and cases cited.
The difficulty which the plaintiff encounters in this case is that although Kingman was appointed superintendent and resident manager of the company by words in praesenti, nevertheless the agency, according to the intention of both the company and King-man, was provisional; that is to say, it was not to commence until after the associates had performed the conditions annexed to the concession of the government of the United States of Colombia. At least the evidence would have justified the conclusion, and in support of the judgment the fact may be assumed. The work; being prosecuted by Kingman when he ordered the goods was, as is claimed by the defendant, performed- on his own account in, fulfillment of his obligation to the company and to satisfy the conditions of the grant.
Kingman represented to the plaintiff "when he purchased the goods that he was carrying on the mine as agent and manager of the company, and if this had been true in fact and in law the company would have been bound, as has been stated, by the contract of purchase. But the plaintiff relied on Kingman's declaration alone. He exhibited no written authority and none had been furnished him. Indeed it appears that early in 1882 he had dealings with the plaintiff in which he claimed to be the company's agent, wdien in fact he had at that time no authority whatever. The company is not chargeable as having held out King-man as its agent. It had passed the resolution of December 2, ' 1882, but the plaintiff had no knowledge of the fact. The company had at the time .no notice of, nor has it recognized or adopted the dealings of Kingman in its name. There is no element of estoppel in the case.
It is a question of actual authority in the particular transaction. It cannot, we think, be maintained that the bare appointment of án agent by words in praesenti, but having reference to a business to be entered upon at some future time, confers any authority on the agent in the interim to bind the principal, although the appointment does not state that the agency is not to become effective until a future time. If it should appear that a party dealing meanwhile with the agent has been actually misled to his prejudice by the exhibition by the agent of a power of attorney from the principal denoting that the agency is present and immediate, a question would be presented not now before us. We think there is no legal error in the judgment. There is evidence from which opposite conclusions of fact might have been reached from those herein indicated.
But it cannot, we think, be said that the judgment is unsupported by evidence, and it should, therefore, be affirmed.
All concur.