Case Name: The Himrod Furnace Company v. The Cleveland and Mahoning Railroad Company
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1872-12
Citations: 22 Ohio St. 451
Docket Number: 
Parties: The Himrod Furnace Company v. The Cleveland and Mahoning Railroad Company.
Judges: Welch, C. J., and Day and West, JJ., concurred.
Reporter: Ohio State Reports, New Service
Volume: 22
Pages: 451–462

Head Matter:
The Himrod Furnace Company v. The Cleveland and Mahoning Railroad Company.
1. "Where an agent has been authorized, by an instrument of writing, to enter into a contract on the part of his principal with a third person therein named, and all the terms and conditions of the proposed contract are contained in the instrument, and the same is signed by the principal, or by some other person thereunto authorized, the agent may, in the execution of the power, deliver such instrument to the person named as and for the proposal of his principal; and when such person assents to and accepts the proposal thus made, the contract is complete; and the agreement thus entered into is “ in writing and signed ” by the proponent within the meaning of section 5 of the statute of frauds and perjuries.
2. A railroad company agreed with K. and his associates, in consideration that they would build an iron furnace on the line of its road, to transport ore and metal to and from such furnace at a given rate for the term of ten years, “when by them required so to do.” And K. and his associates, in consideration of the promise and agreement of the railroad company, erected a furnace according to the stipulations of the agreement. Held, that the promise of the company to carry freight at the rates agreed upon is not void for want of a sufficient consideration, nor for want of mutuality of obligation between the parties; and held, further, that the right thus secured under the contract by K. and his associates was transferable by assignment to a subsequent purchaser of the furnace property.
3. "When an exception is taken to the ruling of a court in rejecting testimony offered by the party taking the exception, it is not necessary that the testimony so offered and rejected should be set out in the bill of exceptions; it is sufficient if the hill state the facts which such testimony tended to prove.
Error to the Court of Common Pleas of Cuyaboga county. Reserved in the District Court.
The plaintiff brought its action, in the court below, to re cover of defendant damages for the non-performance of an alleged contract. The allegations of the petition were, in substance, that Kimball, BLimrod, Kelly, and their associates, contemplating the building of an iron furnace on the line of defendant’s railroad, applied to defendant for the terms upon which it would carry ore and iron to and from their furnace in case it should be erected. That the board of directors of the defendant thereupon met on the 13th of June, 1859, at "Warren, Ohio, and adopted the following minute and resolution, viz:
“ Warren, O., June 13,1859.
“ At a special meeting of the board convened this day, at the office of Frederick Kinsman, upon the call of the president, present Messrs. Tod, Hitchcock, Smith, Kinsman, and H. B. Perkins, Mr. Perkins was appointed secretary pro tem. Mr. Tod submitted to the board a proposition from certain parties asking terms from this company for freight on iron ore and pig-metal, in consideration of their erecting furnaces in the Mahoning Valley, on the line of this road.
“Thereupon, on motion of Mr. Hitchcock:
“ Resolved, That for the purpose of securing the erection of such furnaces, the superintendent be authorized to enter into contract with the Akron Manufacturing Company, and also with Kimball, Himrod, Kelly, and their associates, agreeing, on the part of the company, for the term of ten (10) years from the blowing in of the iirst furnace, the erection of which shall be commenced by either of said parties within sixty days from this date, to transport for them, by the car-load, all such pig-metal as shall be manufactured at such furnaces, when by them required so to do, from the depot-nearest to such furnaces, or the switches belonging to said furnaces, to Cleveland and intermediate points, at the same freights and on the same terms a-» shall be then charged by this company for the transportation of the quality of coal known as Briar Iiill coa-1, between the same points, and also agreeing that this company will receive and dock for such parties all such iron ore as shall be delivered by them for the use of said furnaces at Cleveland, and transport the same to the station nearest to said furnaces, or to the switches belonging to them, for the term of five years from the blowing in of the first furnace, the erection of which shall be commenced as aforesaid, at a freight not exceeding one dollar per ton of two thousand pounds, and for a further term of five years at a freight not exceeding one dollar and twenty-five cents per ton of two thousand pounds, and not exceeding the lowest freights charged others during the whole period of ten years — to be unloaded at the station where delivered by the consignees; and thereupon the board adjourned.
“ H. B. Perkins,
“Secretary pro tem.” That soon after the 13th of June, 1859, the superintendent of the defendant called upon said Kimball, Himrod, and their associates, and delivered to them a copy of such resolution, signed by H. B. Perkins, secretary pro tem. of the meeting at which it was passed, and notified them of the action of the board, and that the resolution contained the terms upon which he was authorized to enter into a contract with them. And he requested them to inform him whether the terms proposed would be satisfactory to them, and accepted and agreed to by them. That having examined the paper, said Kimball, Himrod, and others informed the superintendent that the terms and conditions expressed in said resolution were satisfactory to them, and that they accepted of and agreed to the same on.their part, and that they would commence, within the sixty days named, the building of said furnace works. And that theu and there, by reason of the said premises, an agreement was made and concluded upon, between the said defendant and said Kimball, Himrod, Kelly, and their said associates, whereby, in consideration that they would build and erect a blast-furnace works on the line of defendant’s railroad, at or near Youngstown, aforesaid, the erection of which they were to commence within sixty days from the 13th of June, 1859, the defendant, on its part, agreed and undertook to do and perform all the conditions and promises on its part to be done and performed according to the terras and stipulations contained in said resolution.
And that the said Kimball, Himrod, Kelly, and their said associates, in pursuance of said agreement, and in performance thereof, on their part, did, within sixty days from the 13th day of June, 1859, commence the erection of a blast-furnace establishment on the line of said railroad near Youngstown aforesaid, and prosecuted the same with reasonable diligence, and had the same ready to blow in, and did blow in, the first furnace thereof, on the 15th day of February, 1860.
And that on or about the 20th day of March, 1860, the said Kimball, Himrod, Kelly, and their said associates became incorporated as a manufacturing corporation, in the name of this plaintiff, and shortly afterward, and some time in the month of May, the said Kimball, Himrod, Kelly, and their said associates assigned, transferred, and conveyed to this plaintiff the said agreement so made by them, with defendant, as aforesaid, for the transportation of their ore and metal, and all their said furnace works, and property of every kind.
That from the blowing in of the first furnace, on the 15th day of February, 1860, until the incorporation of plaintiff, and the transfer of said works to i't, the defendant continued to fulfill and perform said agreement, on its part, and the said Kimball, Himrod, Kelly, and their said associates fully kept and performed the said agreement on their part; and the defendant continued to perform said agreement with the plaintiff, as such successor and assignee of said associates, until about the 1st day of November, 1864, and had become bound and obligated to keep and fulfill said agreement with it, the same a3 if the plaintiff was the original party to the same; yet the said defendant, on or about the date last aforesaid, absolutely and utterly refused to longer perform said agreement on its part, and from thence' hitherto has refused to receive and carry the said ore of plaintiffj from Cleveland to said furnace works, at the price stipulated in said agreement, to the damage of the plaintiff of the sum of seventy-five thousand dollars.
The answer of the defendant set up two defenses. First, while admitting many of the allegations of the petition, it denied that any contract was made by defendant with Kimball and his associates, or that any contract was transferred to plaintiff. Second, that if any such contract as is alleged was made, by its terms it was not to he performed within the space of one year; and there was no note or memorandum thereof in writing, signed by defendant, or any agent of defendant thereunto lawfully authorized.
On the trial of the cause, the plaintiff gave, in evidence, the record of the proceedings of the directors at the meeting of Junel3,1859. And thereupon the plaintiff offered to give in evidence a copy of the minutes and resolutions ma'de at said meeting, signed by II. B. Perkins, secretary fro tern, (the genuineness of the signature being admitted), but the court refused to allow the same to be read to the jury; to which ruling the plaintiff excepted. And further, the plaintiff offered the testimony of witnesses produced tending to prove that said paper (copy of minutes and resolutions) was, a few days after the 13th of June, 1859, by Charles L. Rhodes, who was then a director and superintendent of the defendant, delivered to Samuel II. Kimball, David Himrod, William Kelly, William Van Arsdale. and George Greer, they beiug the said Kimball, Himrod, Kelly, and associates, in the resolution named, as a proposal on the part of the defendant to contract upon the terms and_ conditions therein set forth; and also tending to prove that said parties then .and there accepted of and assented to the proposal. And also offered to prove, by other parol testimony, the allegations of its petition. All and every part of which oral testimony the court refused to allow the plaintiff to give to the jury, except so much as tended to prove the amount of damages. To which ruling the plaintiff excepted, and filed its bill of exceptions.
Verdict and judgment were rendered against the plaintiff, and thereupon this proceeding iu error was commenced in the District Court to reverse the judgment of the Common Pleas, and afterward was reserved for decision here.
8. O. Griswold, with whom was Sherlock J. Andrews, for plaintiff in error:
There was error in the refusal to admit testimony offered to prove that the resolution of June 13, 1859, was adopted and acted upon by the parties as their agreement.
The writing “B,” delivered to K. and his associates, in connection with said resolution, contains all the essentials of the agreement set out in the petition, and was signed by an agent lawfully authorized to sign it for the purpose of making it an instrument of the defendant, and so satisfies the statute of frauds. Chase v. City of Lowell, 7 Cray, 33; Fowle v. Freeman, 9 Vesey, Jr. 351; Coles v. Trecothic, 9 Vesey, Jr. 250; Tawney v. Crowther, 3 Brown’s Chancery, 263; Browne on Frauds, sec. 346, and the cases there cited; Ib. secs. 115,365; Tufts v. Plymouth Gold Mining Co., 14 Allen, 407; Johnson v. Trinity Church Society, 14 Allen, 123; Stoddert v. Vestry of Port Tobacco Parish, 2 Gill & Johnson, 227; Barry v. Combs, 1 Peters’ S. C. 64; Ives v. Hazard, 4 R. I. 14; Penniman v. Hartshorne, 13 Mass. 87.
These authorities establish the proposition, that an offer in writing, signed by the party making it, or his agent, to another party, which contains all the essential terms of an agreement, may be accepted in parol, and when accepted, becomes a sufficient memorandum under the statute.
That the acceptance and performance by the party receiving the offer may be established by parol proof, see, in addition to Chase v. Lowell, Tuft v. Mining Co., and Ives v. Hazard, before cited, the following: Sanborn et al. v. Flagler, 9 Allen, 470; Warner v. Willington, 3 Drewry, 523; Meynell v. Sureties, 31 Eng. L. & Eq. 475; Smith v. Neale, 40 Ib. 240; Reuss et al. v. Picksley et al., 1 Exch. 342; 1 Sugd. Vend. (12. ed.) 164.
Fstep Burke, for defendant in error:
The resolution merely conferred power to make a contract; aud it furnishes no evidence of what was done under the power. The statute requires tbe additional fact, the execution of the power in a legal manner, to appear in writing.
The memorandum must bo executed subsequent to the formation of the contract by the parties, Browne on Frauds, sec. 352, and cases cited in note 2; and it must be signed with the intent to make it evidence of an agreement, Browne, sec. 354, and cases cited in note 2; and such signing by the party to be charged, or by some one by him duly authorized, can not be dispensed with. Browne, 355; Bowdes v. Amhurst, Prec. in Ch. 402; Hawkins v. Holmes, 1 P. Wms. 770; Selby v. Selby, 3 Muir, 2; Hubert v. Moren, 12 Moo. 216; Hubert v. Turner, 4 Scott (N. R.), 486; Bailey v. Ogden, 3 Johns. 399; Anderson v. Harold, 10 Ohio, 399, and 10 Humph. (Tenn.) 495.
If not delivered as an agreement, it can not bind the signer. Browne, 354; Grant v. Levan, 4 Barr (Penn.), 393; Johnson v. Brook, 31 Miss. 17; Sanborn v. Sanborn, 7 Gray, 142.
There is a want of mutuality; K. and his associates were not boun d by the alleged agreement; the defendant’s promise was naked — without consideration. See Dayton, etc. v. McCoy, 13 Ohio St. 84.
The exclusion of evidence can not avail the plaintiff in error, because his bill of exceptions does not set out the evidence it proposed to offer; it is not enough to state what it tended to prove.
The contract sued on is strictly personal, and its assignment by parol conferred no right upon the plaintiff iu error as against the defendant in error,

Opinion:
McIlvaine, J.
The only questions in this case arise upon the rejection, by the court below, of certain testimony offered by the plaintiff.
I. Did the rejected testimony tend to prove an agreement in writing and signed by the defendant, within the meaning of the fifth section of the statute of frauds aud perjuries.
The statute provides that no action shall be brought whereby to charge the defendant upon any agreement that is not to be performed within the space of one year from the making thereof, unless the agreement or some memorandum or note thereof shall be in writing and signed by the party to be charged therewith, or some other person thereunto by him or her lawfully authorized. The only writing relied upon to take this case out of the operation of the statute, was a copy of the minute and resolution of the board of directors of the defendant, signed by H. B. Perkins, secretary pro term., at the meeting of the board, when the minute and resolution were made. The resolution was adopted; as appears from the minute of the meeting, upon consideration of a proposition from Kimball, Himrod, Kelly, and others, relating to the subject matter of the alleged contract; and it fully embodied the terms and conditions upon which the defendant was willing to contract with the parties therein named. It also, in terms, authorized the superintendent of the defendant to enter into a contract with the parties named, agreeing, on the part of the company, to the terms and upon the conditions therein specified. This resolution, together with the minute of the board, was copied and signed by the secretary of the meeting and placed in the hands of the superintendent, who delivered the same to Kimball, Himrod, Kelly, and their associates. No doubt, the primary object in placing this instrument in the hands of the superintendent was to show his authority for entering into the proposed contract; but inasmuch as the instrument contained all the terms of the contract he was authorized to make, as well as the names of the parties with whom it was to be made, and contained no instructions as to the mode in which the business was to be transacted, or as to the manner or form in which the evidence of the contract was to be preserved, a majority of the court are of opinion that he was fully authorized to deliver the instrument itself to the parties therein named as and for the proposal of his principal for their acceptance; and when the parties to whom delivered assent to and accept the terms therein proposed, the contract is complete, and the instrument thus delivered becomes the primary evidence as against the proponent of the terms of the contract so made.
A written proposal, containing the names of the contracting parties and all the terms of the proposed agreement, signed by the proponent or by some other person thereunto by him lawfully authorized, when accepted and assented to by the party to whom the same is made, is sufficient to take an action against the proponent, founded thereon, out of the operation of the statute of frauds. And the delivery of such instrument as a proposal, and the acceptance thereof, and assent thereto by the party to whom it is made, may be proved by parol testimony. Chase v. Lowell, 7 Gray, 33; Tuft v. Mining Co., 14 Allen, 407; Ives v. Hazard, 4 R. I. 14; Sanborn v. Flagler, 9 Allen, 470; Reuss v. Picksley, 1 Ex. 342 ; Thayer v. Luce et al., 22 Ohio St. 62.
II. Did the ruling of the court in rejecting the testimony offered tend to the prejudice of the plaintiff?
It is claimed by the defendant, that, had the testimony been received, the judgment ought nevertheless to have been rendered against the plaintiff, because it is said the alleged agreement was void for want of consideration, and that it was also void for want of mutuality of obligation ; and it is also claimed that the alleged contract was personal to Kimball and associates, and no rights thereunder could be transferred to the plaintiff.
1. The consideration for the defendant's promises was the building of a lurnace by Kimball and associates on the line of defendant's road, which we think was sufficient to support the contract. True, at the time it was made, the promise of the defendant was conditional, and may be regarded in the nature of a continuing offer; but when Kim-ball and his associates had performed all the conditions on their part to be performed, and the consideration was thus fully executed, the promise of the defendant became absolute ; and although, by the terms of the contract, the defendant could not be put in default until a request to perform had been made, still the right to make the request and insist npon performance had been secured to Kimball and associates. It matters not, in our jndgment, whether Kimball and associates were or were not bound to defendant to erect a furnace according to the condition of the agreement; for having done so at the request of defendant, and relying on the faith of its promise, they have a right to insist npon performance on its part. Nor does it matter whether Kimball and associates were bound to deliver freight to the defendant, as they have executed the consideration for defendant's promise to carry freights for them at a given rate for a specified time when requested.
2. Did the plaintiff acquire any right or interest by the assignment of the contract to it by Kimball and his associates ?
The court is of opinion that the rights of Kimball and associates, under this contract, were transferable by assignment, and that the plaintiff1, as assignee, succeeded, in equity, to all the rights secured by the terms of the contract to its assignors; and also, that it may sue in its own name for any refusal of the defendant to transport ore or metal to or from the furnace erected in pursuance of the agreement, and of which it is the owner. The freights to be carried for the period and at the rates named were limited,'by express terms, to ore and metal to and from such furnaces as might be erected under the agreement. But we are unable to find any intention to restrict the enjoyment of the right to such freights to Kimball, Himrod, Kelly, and their associates personally, or to them only for such time, within the period of ten years, as they might continue to be the owners and operators of the furnace. Erom its nature, as well as from the terms of the agreement, the right secured was capable of profitable exercise by them after they ceased to be such owners and operators; and this being so, we can see no reason for holding (in the absence of express prohibition) that such valuable interest in a contract is not capable of being transferred generally. But in this case the transfer wrns made to their successor in the ownership of the furnace: and not only so, but the transfer itself was more formal and technical than real. The assignee, though a body corporate, was composed solely of Kimball, Himrod, Kelly, and their original associates, and was formed by them for the mere convenience of carrying on the business of the furnace, and in a large sense it held all its property (including the furnace as well as the contract for transporting freight to and from it) in trust for the use and benefit of the natural persons of whom it was composed. All these facts the rejected testimony tended to prove, as well as the further fact that the defendant, for several years, with full knowledge of all the facts, recognized and dealt with the plaintiff as the successor of Kimball and associates, and entitled to all the benefits of said contract.
We think, therefore, that the court below erred, to the prejudice of the plaintiff, in rejecting the testimony.
III. When an exception is taken to the ruling of a court in injecting testimony offered by the party excepting, it is not necessary that the bill of exceptions should set out the testimony offered and rejected; it is sufficient, in such case, to state the facts which such testimony tended to prove. The judgment of the Common Pleas must be reversed and the cause remanded.
Welch, C. J., and Day and West, JJ., concurred.
White, J. I am unable to concur in this decision. I do not dispute the proposition that an offer, or proposal, in writing, signed by the party to be charged, or his authorized agent, and accepted by parol by the party to whom it is made, is a sufficient memorandum, or note, of an agreement to satisfy section 5 of the statute of frauds. But the terms of such writing must show that it is intended as an offer which the party to whom it is addressed is authorized to accept. If it is not in legal effect an offer or proposal of the pai'ty making it, no act of any other party can make it such.
The resolution in the present case shows, in my opinion, that it was not intended as an offer or proposal to he presented to Kimball and his associates for their acceptance* It was intended only as authority to the superintendent to enter into a contract with them if he saw fit. The authority, it is true, was limited and defined, but he was not bound, at all events, to enter into the contract, although the other parties might be willing to do so. The authority of an agent does not cease to be such, and become something else, because it is special and limited.
But it is said the superintendent did make such contract with the parties by delivering to them the resolution as an offer or proposal of the defendant for their acceptance.
I admit the delivery of an offer in writing may be proved by parol, but I deny that a writing, which is not by its terms an offer from the party to be charged, can be changed into one by parol evidence, and thus be made to perform an office, for which, as shown by its terms, it was not designed, without violating the statute.
The attestation of Perkins, the secretary pro tem., was only designed to authenticate' the writing as a resolution of the board. A true copy of the resolution would have had the same effect against the defendant without such act of authentication. The attestation of the secretary did not change its legal character.
By the terms of the resolution, which constitutes the only writing on which it is sought to charge the defendant, the assent of the superintendent, the only agent of the defendant authorized to make the contract, was indispensable to accomplish that purpose. There is no evidence in writing that he did so assent, and • his parol assent can not, in my judgment, be proved under the statute.