Case Name: Augustus B. De Bost agt. Albert Palmer Company
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1885-03
Citations: 1 How. Pr. (n.s.) 501
Docket Number: 
Parties: Augustus B. De Bost agt. Albert Palmer Company.
Judges: 
Reporter: Howard's Practice Reports
Volume: 3
Pages: 501–506

Head Matter:
SUPREME COURT.
Augustus B. De Bost agt. Albert Palmer Company.
Corporations—By-laws — To what extent by-laws of corporations evidence as to authority of officers—Practice—Bequests of counsel to charge—When refusal by court error.
The by-laws of a corporation, containing restrictions and limitations upon powers of the officers are competent evidence as to the authority of the officers.
Persons dealing with a corporation are required to take notice of the limitations imposed in the by-laws upon the authority of an officer or agent (Citing Adriance agt. Borne, 62 Barb., 399 ; Dabney agt. Stephen, 10 Abb., 89 ; Alexander agt. Cauldwell, 83 N. Y., 480 ; disappi-oving Mwrowitz on Corporations, sec. 64).
A refusal of the court to pass upon a question of law requested by a counsel to be charged is an error for which the judgment should be reversed. J
This is so even though the requests be unreasonable in number.
First Department, General Term, March, 1885.
Before Davis, P. J., Brady and Daniels, JJ.
The action was brought against the corporation to recover upon a written contract signed by the president, and upon the trial the defendant’s counsel offered in evidence the by-laws of the corporation, duly authenticated to prove certain restrictions and limitations on the authority of the officer signing the contract. The counsel for the plaintiff objected on the ground that no notice of the existence of the provisions of the by-laws was shown to be given by the corporation to the plaintiff. The court sustained the objection and exception was taken.
At the close of the testimony the defendant’s counsel submitted certain requests to charge ; and the court at the close of the charge said as follows :
Counsel — “I desire to call your honor’s attention to certain propositions embodied in the written request to charge which I have submitted to —
The Court — “I decline to charge further than I have ' already.” The defendant excepts.
A motion for a new trial was made on these grounds and denied, Hr. justice Potteb writing an opinion.
James JB. Dill {Dill <& Chandler, attorneys), for the appellant, argued:
I. That the refusal of the court to admit the by-laws of the corporation after proper authentication was error. Persons dealing with thé corporation are chargeable with notice of the restrictions upon the authorities of officers and agents contained in the charter or by-laws (Adriance agt. Rome, 52 Barb., 399; Debaney agt. Stephens, 10 Abb. [N. S.], 39; Macullough agt. Morse, 5 Denio, 575; Alexander agt. Cauldwell, 83 N. Y., 480.)
II. The court erred in refusing to entertain defendant’s request.to charge. It is a legal right of counsel to submit propositions in due form and at the proper time, with a request to the court to charge the same; and the court must charge particular requests, as requested, or give the counsel the benefit of an exception (Citing Betts agt. Connor, 7 Daly, 550; Chapman agt. McCormack, 86 N. Y., 479).
Alexander & Creen, opposed:
A person dealing with a corporation is not required to take notice of its by-laws (Marowitz on Corporations, sec. 64, and cases cited; Miner agt. Mechanics’ Bank, 1 Peters, 46). A request to charge numerous propositions of law, presented in bulk, presents no exception (Citing Hoyt agt. L. I. R. R. Co., 57 N. Y., 679 ; Wyult agt. Pacific Bank, 47 N. Y., 576).

Opinion:
Davis, P. J.
— This action is brought' upon two alleged causes of action: First. To recover commissions upon sale of certain real property belonging to the defendant under an oral agreement alleged to have been made between the plaintiff and the defendant. Second. To recover commissions upon an agreement in writing, alleged to have been made by the defendant with the plaintiff for the payment to the latter of commissions upon the sale of the same lands.
The answer put in issue the making of the alleged agree ment and especially denied that the written instrument, the copy of which was annexed to the complaint, was executed by the defendant or ever ratified by it. The defendant is a corporation created under the laws of this state. The instrument (exhibit A), annexed to the complaint appears to be an agreement of the defendant corporation and four individuals, as owners of certain real property therein described, and recites that they had entered into a written agreement with one Leon DeBost for the sale of the lands to him for $45,000; the sale was made by Augustus B. DeBost, the plaintiff, as their agent, with the understanding that upon payment of the sum of $45,000 they would allow and pay him $500 for making the sale. It then in substance provides for the payment of that commission to the plaintiff by the several parties in proportion to their respective interests ; the interest of the defendant corporation being stated at one-tenth, and the amount to be paid at one-tenth of $5,000.
This instrument was signed and sealed by the several individual parties to it, and so far as the corporation is concerned, as follows:
A. ~W. PALMEE, President, [l. s.]
It was acknowledged before a notary public by the individuals arid by A. W. Palmer, individually, and not as president in the usual form of acknowledgments. On the trial it became an important question whether or not this instrument was executed in such form as to bind the corporation. Palmer was its president. He testified that he was not authorized to sign it for the company, and that he told the plaintiff so at the time he signed the contract. Eor the purpose of showing the extent of his authority as president in the making of contracts, the defendant's counsel produced the by-laws of the corporation, which were conceded to be the original by-laws of the company in force and without change since January 18,1879, and offered them in evidence to show what authority the president had in respect to the making and execution of contracts, for the corporation.
The eleventh article of the by-laws provided " that no debt' or liability except as hereinbefore provided shall be contracted by any trustees or any officer of the company, except as provided in these by-laws, and that no contract or liability shall be authorized and be the act of this company unless the same shall be first audited and passed upon by the board of trustees, except as here provided, and the evidence of such indebtedness shall be executed as provided in article fifteen."
That article declared that " a suitable seal shall be provided which shall be under the charge of the president and treasurer, and the affixing of the seal to contracts and instruments, together with the signature of the president and secretary or treasurer shall bind the company."
The plaintiff's counsel objected to the admission of these by-laws on the ground " that inasmuch as defendant's counsel states that he does not propose to show notice to us, the proof offered was immaterial, irrelevant, and not evidence against the plaintiff." The objection was sustained, and the evidence excluded, and the defendant excepted. We are unable to see any ground upon which the exclusion of this evidence can be sustained. The defendant clearly had a right to show, if it could, that the contract was not authorized by the corporation and not so executed as to bind the corporation. The president of the company was an agent having a special power and authority declared and defined by the by-laws of the corporation. All persons dealing with him in the matter of the corporation are bound to take notice of the nature and extent of his authority when he assumed to act as president oE the corporation in making any contract; and it was certainly competent to put in evidence the by-laws of the corporation for the purpose of showing the extent of his authority.
The objection was not well taken and should have been overruled, and the exception raises, in our opinion, a point fatal to the judgment. The rule on this is an extremely well settled one as will be found by reference to numerous authorities (Adriance agt. Roome, 52 Barb., 399; Dabney agt. Stephens, 10 Abb. [N. S.], 39; Risley agt. I. B. and W. R. R., 1 Hun, 202 ; Alexander agt. Caldwell, 83 N. Y., 480).
The court of appeals state the rule as follows: " Everyone knows that corporations are artificial creations existing by virtue of law and organized for purposes defined in their charters, and lie who deals with one of them is chargeable with notice of the purpose for which it was formed, and when he deals with agents or officers of one of them he is bound to know their powers and the extent of their authority. Corporations, like natural persons, are bound only by acts and contracts of their agents done and made within the scope of their authority." The by-laws of the corporation were therefore competent evidence for the purpose of showing what power had been conferred upon its president as its special agent. It was, we think, error to exclude them.
It is not necessary to consider the other numerous exceptions in the case, most of which were of no importance. Allusion should be made to one, which presents, we think, a fatal error. At the close of the testimony the counsel for the defendant submitted to the court a volume of requests to charge, unreasonable and unnecessary in number. In charging the jury the court did not embody all these requests and the defendant's counsel after taking some exceptions to the charge said, " I desire to call your honor's attention to certain propositions embodied in the written request to charge which I have submitted." At this point the court interfered, saying, "I decline to charge further than I have already." The defendant excepted. We think it was an erroneous disposition of the matter. The counsel was attempting to call attention to certain propositions embodied in the request to charge. He was not asking to charge the whole as a body and he was entitled to distinguish and point out the specific part he desired to have charged. The court prevented him from doing this, and this deprived him of what seems to us to have been a clear legal right.
In Chapman agt. McCormack (86 N. Y., 479), the counsel said, " I want to ask the court * and the counsel excepted."
In reversing the judgment the court of appeals said: " It may be, a subject of exception, to be submitted to the jury." We think the counsel is entitled to select from his numerous requests, that had been already handed up, either or any upon which he thought the court had not sufficiently or properly charged, for the purpose of procuring a charge thereon, or availing himself of a distinct exception if it were refused and the mode of disposing of his requests was equivalent to an absolute refusal to permit him to do that on the evidence in the case. There were questions of fact to be submitted to the jury, especially upon the question of ratification of the contract by the corporation.
The judgment should be reversed and a new trial ordered, with costs to abide the event.