Case Name: Adolph Rebadow et al., Plaintiffs, v. The Buffalo Savings Bank, Defendant
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1909-05
Citations: 63 Misc. 407
Docket Number: 
Parties: Adolph Rebadow et al., Plaintiffs, v. The Buffalo Savings Bank, Defendant.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 63
Pages: 407–410

Head Matter:
Adolph Rebadow et al., Plaintiffs, v. The Buffalo Savings Bank, Defendant.
(Supreme Court, Erie Special Term,
May, 1909.)
Contracts — Interpretation of contract — General rules of interpretation — Incorporating existing laws — By-laws of corporation. Corporations — Power of corporation to make contracts and effect of ultra vires contracts — Estoppel to set up plea of ultra vires.
Where the by-laws of a savings bank authorize the bank to appoint an attorney, who shall hold office at the pleasure of the trustees and be paid a salary, to be fixed by the board, which shall be reimbursed to the bank from charges to be made to borrowers for examining titles, and the trustees appoint an attorney for one year from the date of the appointment, such appointment will be construed as an appointment at the will or pleasure of the hoard but not longer than for one year.
In such a case, in an action by the attorney to recover his compensation, a complaint, which alleges the appointment of and the performance of services by the attorney, and the collection by the bank from the parties to whom it made loans of the charges made by the attorney for such services, is sufficient.
And, where such complaint alleges in another count the appointment of the attorney and the performance of services and that such services were worth the amount stated, another cause of action is sufficiently stated.
It matters not that it was ultra vires for the bank to pay for the examination of titles, or that the complaint can he read as alleging an ultra vires contract, since defendant has received the full benefit of the attorney’s services and cannot plead the invalidity of the contract to defeat his action for compensation.
Demurbeb to complaint.
Bartlett & Chamberlain, for plaintiff.
Dewitt Clinton, for defendant.

Opinion:
Pound, J.
The complaint separately states and numbers three alleged causes of action.
The demurrer is to the complaint as a whole, on thie ground that it does not state facts sufficient to constitute a cause of action; and, if the complaint well and sufficiently states any cause of action, the demurrer must be overruled. Wheeler v. Connecticut Mut. Life Ins. Co., 82 N. Y. 555.
The action is brought to recover certain fees alleged to be due to the surviving members of the former partnership of Marshall, Eebadow & Thomas, attorneys at law, for the services of the late Charles D. Marshall, a member of the firm, as attorney for the defendant, and by reason of an alleged wrongful discharge of said Marshall from his employment as such attorney before the expiration of the term of his employment, and for an accounting.
The complaint alleges that the by-laws of defendant provide that the trustees at their annual meeting in February should appoint an attorney, who should hold office at the pleasure of the trustees and be paid a salary to be fixed by the board, which should be reimbursed to the bank from charges to be made borrowers for examining titles; that said by-laws further provide that it should be the duty of the president of the defendant to fix the amount to be paid by borrowers for the examination of titles to property, having in view the repayment to the bank of the salary of the attorney; that, on or about February 4, 1906, Mr. Marshall was duly appointed attorney of the defendant for one year from that date, and that his compensation for such services as he might perform for the defendant during that period was fixed by the trustees as the charges fixed by the president of the defendant to borrowers for examinations of titles to property offered as security; and that Mr. Marshall performed all the duties of attorney until about August 1, 1906, when he was wrongfully discharged.
The first cause of action- pleaded is for $315 for charges fixed by the president for examination of titles actually examined by Mr. Marshall as attorney for the bank prior to August 1, 1906.
The second cause of action pleaded is for $315 as the reasonable value of the same services of Mr. Marshall in examining the same titles referred to in the first cause of action pleaded.
The defendant demurs to these causes of action on the ground that the Banking Law, section 120, provides that, when the trustees of a savings bank make loans, " all the expenses of the searches, examinations and certificates of titles shall be paid by the borrower," and that, if the defendant has received any money for such examination, the defendant holds the money in trust and plaintiffs' action should be for money had and received.
The third cause of action alleged is for the fees for the examination of titles from and after Mr. Marshall's alleged wrongful discharge, on or about August 1, 1906, to the end of the year of his employment; which services it is alleged Mr. Marshall had the right to perform, and for which the defendant became indebted to plaintiff in the amount of the fees fixed by the bank therefor.
This third alleged cause of action is demurred to, on the ground that it appears on the face of the complaint that the defendant had the right to remove the attorney at any time. Plaintiffs contend that the words in the by-law, " the attorney shall hold office at the pleasure of the trustees," should be construed as meaning that the attorney shall hold office " for a term to be fixed by the trustees at their pleasure;" that, having once exercised their choice or pleasure by fixing the term of the attorney at one year, they could not " at pleasure " terminate his employment during that period; and that Mr. Marshall was, therefore, legally employed for a fixed period of time and plaintiffs may recover for his wrongful discharge.
It is conceded that the' action of the trustees in appointing an attorney for a fixed term, if not authorized by the by-laws, is ineffectual, either to create an office or a contract. Mr. Marshall dealt with the defendant with full knowledge and notice of this by-law and is bound thereby. The language is too plain to permit the court to boggle at it. The attorney is not.holding office "at the pleasure of the trustees " when it is their pleasure that he should not hold the office. The action of the trustees merely fixes a maximum term. Read in connection with the by-law the meaning is that the attorney shall hold office at the will or desire of the trustees, but not longer than one year. Brendon v. Worley, 8 Misc. Rep. 253.
The facts stated in plaintiffs' third cause of action are insufficient to impose legal liability upon the defendant.
The first and second causes of action are sufficiently pleaded. A salary is a fixed sum to be paid by the year or periodically for services. Burrill's Law Diet. The complaint contains no allegation of any fixed salary to be paid to the attorney. It appears, rather, on the face of the complaint, that no such salary was fixed, but that the compensation of the attorney consisted of the various sums to he paid from time to time to the bank by applicants for loans from the bank for the examination of their titles. This was contingent, shifting, and in no proper sense a salary. But the complaint alleges, in the first count, that Mr. Marshall fully performed the services of attorney for the agreed compensation, and that the defendant refuses to pay the same, and, in the second count, that the reasonable value of the services rendered is the same as the agreed compensation.
Assume that it is ultra vires for the bank to pay for the examination of titles, or that the complaint can he read as alleging an ultra 'vires contract, defendant has received the full benefit of the attorney's services and it cannot plead the invalidity of the contract to defeat the other party. Appleton v. Citizens Central Natl. Bank, 190 N. Y. 417.
As the complaint states facts sufficient to constitute two causes of action the demurrer is overruled, with leave to defendant to serve an amended demurrer, or to answer, on payment of costs of demurer.
Demurrer overruled, with leave to defendant to serve an amended demurrer, or to answer, on payment of costs.