Case Name: BELKIN v. THERMO DYNAMICS, INC.
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1968-06-10
Citations: 381 Mich. 37
Docket Number: Calendar No. 1, Docket No. 51,651
Parties: BELKIN v. THERMO DYNAMICS, INC.
Judges: Souris, J., concurred with T. E. Brennan, J.
Reporter: Michigan Reports
Volume: 381
Pages: 37–44

Head Matter:
BELKIN v. THERMO DYNAMICS, INC.
Decision of the Court.
1. Brokers — Commissions.
Trial court’s judgment for plaintiff broker in his action against corporation to recover commission on sale of used machinery to the corporation is affirmed.
Separate Opinion.
Souris and T. E. Brennan, JJ.
2. Contracts — Corporations—Financing—Indorsement by Directors.
Agreement of corporation to purchase machinery “subject to financing,” held, binding as a contract of the corporation even though financing could not be obtained because directors of the corporation refused to indorse the corporation’s notes, where the parties intended the phrase “subject to financing” to mean “by our usual method of financing, including indorsement by directors, if necessary”.
3. Corporations — Contracts—Directors.
A corporation is liable on its promise that its directors will indorse notes to secure financing for a purchase.
4. Same — Contracts—Directors.
A corporation can promise individual action by directors and will be liable if directors do not perform the promised act.
References for Points in Headnotes
12 Am Jur 2d, Brokers § 157 et seq.
19 Am Jur 2d, Corporations § 980 et seq.
19 Am Jur 2d, Corporations § 1271 et seq.
19 Am Jur 2d, Corporations § 1034 et seq.
19 Am Jur 2d, Corporations § 1341 et seq.
17 Abj Jur 2d, Contracts § 240 et seq.
5. Contracts — Words and Phrases — Subject to Financing.
Finding of trial court that phrase “subject to financing”, used in written contract by which defendant corporation agreed to purchase machinery “subject to financing”, was intended by the parties to mean “our usual method of financing, including indorsement by the directors, if necessary”, is not disturbed by an appellate court.
Dissenting Opinion.
Dethmers, C. J., and O’Hara, J.'
6. Contracts — Corporations—Financing.
Agreement by corporation to purchase machinery “subject to financing” was not binding on corporation where 'there was no evidence to support a finding and no finding was made that financing was available to the corporation from any source without the signatures of the directors.
7. Corporations — Contracts—Financing—Directors.
Corporation cannot be held liable for failure of directors to . .. sign personal notes for financing, absent a specific finding that the corporation promised that Us directors would sign, even if the contracting parties assumed or thought that the directors would sign.
8. Same — Contracts—Directors—Financing.
Agreement by corporation approved by its board of directors is not the agreement of its individual directors and no contradictory, inconsistent, or deceitful action can be ascribed to the corporation if the individual directors refuse to sign notes personally for financing purchase made on agreement “subject to financing.”
9. Same — Contracts—-Financing.
Directors’ refusal to sign personal notes for corporation which agreed to malee purchase “subject to financing” is not an act of the . corporation which' would support a finding that it caused its own failure to obtain financing or failed to do what it reasonably could or should have done to obtain financing.
10. Contracts — Corporations—-Directors.
Judgment in favor of defendant corporation which .had agreed to purchase machinery “subject, to financing” is affirmed, where financing was unavailable and where there was no evidence or finding that the directors ever promised to assume a personal obligation, that they were in any way obligated to do so, or that plaintiff and defendant corporation could have required them to do so.
11. Same — Corporations.
Court cannot alter contract by'reading out the phrase “subject to financing” and when financing is unavailable to g corporation without personal signatures of directors, who are not obligated to sign, the corporation is not obligated to perform.
Appeal from Court of Appeals, Division 3, Burns, P; J., and Fitzgerald and Watts, JJ., reversing Ottawa, Smith (Raymond L.), J.
Submitted January 9, 1968.
(Calendar No. 1, Docket No. 51,651.)
Decided June 10, 1968.
5 Mich App 53, reversed.
Complaint by Major M. Belkin against Thermo Dynamics, Inc., a Michigan corporation, for broker’s commission upon contract to purchase heat treating furnace. Judgment for plaintiff reversed, in Court -of;Appeals. Plaintiff appeals.
Reversed, and circuit court judgment for plaintiff affirmed.
‘Cornelius Wiarda, for plaintiff.
James W. Bussard, for defendant.

Opinion:
T, E. Brennan, J.
This action by a machinery broker plaintiff was brought to recover a commission on the sale of used machinery to the defendant corporation.
Defendant concededly entered into a written contract which provided that its obligation to purchase the machine was "subject to financing." The trial court found that the -parties intended by this phrase to mean that the purchase of the machine would be accomplished with the aid of the personal indorse ment of the directors of the defendant corporation, if necessary.
The Court of Appeals reversed (5 Mich App 53), holding that:
"There was no written or oral promise given to plaintiff by the directors or their agents that they would personally indorse the papers necessary to finance the purchase of the furnace. When a person selling machinery to a corporation concludes his contract with the corporation rather than with the representatives of the corporation, the seller is bound to look to the corporation for performance on the contract. Whitney v. Wyman (1879), 101 US 392 (25 L Ed 1050)."
The principles of law thus noted by the Court of Appeals are correct, but they are inapplicable. This action is not against the directors; there is no attempt to hold them personally liable for the broker's commission. The trial court found that the corporation promised to buy the machine, and that the words "subject to financing" were intended by the parties to mean "our usual method of financing, including indorsement by the directors, if necessary."
A can promise 33 that C will do something. If A is not C's agent, C will not be bound to do it. But nonperformance by C will be a breach of contract by A. This is the typical situation of an agent's liability upon implied warranty of authority.
So, it was possible for defendant corporation to promise plaintiff that its directors would indorse notes for the furnace, if that step was necessary to secure financing for the purchase of it.
The trial court found that the contract was ambiguous on this point, but that this was the true intention of the parties.
This factual determination by the trial judge, who observed the demeanor of the witnesses, should not have been disturbed by the Court of Appeals.
The Court of Appeals is reversed, and the judgment of the circuit court is affirmed. Costs to appellant.
Souris, J., concurred with T. E. Brennan, J.
Kelly, Black, T. M. Kavanagh, and Adams, JJ., concurred in result.