Court Opinion

ID: 8187436
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:10:07.236933+00
Date Added: 2024-06-11T16:40:28.392451
License: Public Domain

Cassoday, O. J.
On the former appeal it was held that:
“Where services are rendered to a corporation by one of its officers, which are clearly outside of his official duties, a recovery may be had therefor under implied contract, if the circumstances be such as to fairly imply that it was expected that the services were to be paid for.” Lowe v. Ring, 106 Wis. 647, 82 N. W. 571.
In that case it was further held that:
“Where a bank is creditor of the estate of a decedent, and vitally interested in a wise administration thereof, it may contract, either expressly or by implication, to pay one of its officers for his services as administrator of the estate.”
Among the questions submitted to the jury upon the last trial were seven, each of which called upon the jury to determine whether the services therein mentioned were “performed under a contract with the bank” that it should pay for the same. Such questions left the jury to infer that the defendant could not recover unless the bank expressly agreed to pay, even though he was employed by the bank to perform *580suck services and the same were outside of his duties as president of the bank. The misleading tendency of the questions does not seem to have been cured by the charge. In determining such questions, it was important for the jury to know what constituted such a contract. Was it necessary that it should have been an express contract, in order to be binding ? And if so, was it necessary to be in writing? The court, after explaining the difference between an express and an implied contract, charged the jury that:
“A corporation, however, can only make an express contract through an agent authorized for that purpose, or through its board of directors. The usual way for a board of directors to enter into a contract is by a formal motion or resolution adopted by such board of directors at a meeting of such board, regularly called or appointed, or at which all directors aro present. If, however, a proposition is made to' such board of directors at such a meeting as I have described, and all of the directors present assent thereto, and the party contracting acts upon such promise of the board of directors, so made, the corporation will be bound, even though a formal vote or resolution is not adopted. Anything less than this will not' constitute an express contract with a corporation. Loose talk had with directors outside of a meeting, or at a meeting not regularly called or appointed, when the directors were not all present, will not suffice to malee an express contract with a corporation.”
We are referred to no authority in support of such proposition, and we find none. “It is a well-settled principle of corporation law,” says a standard authority, “that a corporation, except in so far as it may be restricted by its charter, has the same power as an individual to enter into any contract that may be necessary or usual in the course of the business for which it was created, or that is reasonably incident thereto. This power is always implied in the absence of a positive restriction in its charter.” 1 Am. & Eng. Ency. of Law (2d ed.) 155, citing numerous cases, and, among others, one in this court, where it was held to be competent *581fox the cashier of a hank, as agent for its hoard of directors, to execute a promissory note for money borrowed to' use in its business, and the bank will be hound thereby. Ballston Spa Bank v. Marine Bank, 16 Wis. 120. See, also, Houghton v. First Nat. Bank, 26 Wis. 663; Winterfield v. Cream City B. Co. 96 Wis. 239, 71 N. W. 101. This court,' following the decisions in other states, held, in effect, that an officer of a corporation, haring the general management of its business, may, with the knowledge and acquiescence of the directors, or with their subsequent acquiescence, enter into any contract necessary or usual in the course of the business for which the corporation was created, or reasonably incident thereto, without authority first being given therefor by formal vote of the directors, and that such authority may be inferred from •the conduct of the directors, or from their knowledge of the facts and a failure to make objection. Ford v. Hill, 92 Wis. 188, 195, 66 N. W. 115, and cases there cited; Northwestern Fuel Co. v. Lee, 102 Wis. 426, 430, 78 N. W. 584. It seems that tire rule as to retaining attorneys is less formal in this country than in England, and less stringent than in earlier times. Weeks, Att’ys at Law, §§ 185, 186, 190. Accordingly, it has been held, in effect, that corporations may retain counsel to prosecute or defend actions in which they are interested, under a parol employment, without any formal vote of the directors, and without making the same a matter of record. Id.; St. Louis, Ft. S. & W. R. Co. v. Grove, 39 Kan. 131, 18 Pac. 958; Manchester Bank v. Fellows, 28 N. H. 302, 301; McCabe v. Fountain Co. 46 Ind. 380. In the first of these cases it was held that:
“Where the general manager of a railroad company retains a practicing attorney to attend to the legal business for the company, the company is liable for the services of the attorney, unless the general manager had no authority to make the employment, and the attorney knew, or might have known by using ordinary diligence, that he had no such authority.”
*582This court Ras Reid tRat tRe authority of an attorney who appears in court for a corporation is presumed. Shroudenbeck v. Phœnix F. Ins. Co. 15 Wis. 633. See, also, Lisbon v. Holton, 51 N. H. 209, and St. Clair v. Rutledge, post p. 583, 92 N. W. 234. We must Rold tRat tRe portion of tRe cliarge quoted was not only misleading, but erroneous. ,'
2. Error is assigned because tRe court cRargéd the jury, under tRe fifteenth question submitted, to tRe effect tRat “there was no express contract” tRat tRe bank would pay tRe defendant for Ris services in settling tRe ArcRer estates TRe' evidence on tRe part of tRe defendant tended R> prove tliat tRe bank, by its directors, expressly agreed to 'pay tRe defendant for sucR services. In view of wRat Ras already been said; it was certainly error to- take that question from tRe jury. TRe same is true as to a portion of tRe charge to the jury under the seventeenth question, to the effect that there was “no testimony of any express contract” that the bank would pay the defendant a salary for Ris services as president of tlie bank.
3. The defendant testified to tRe effect that, at the time of the dissolution of the firm of Ping & Youmans, all of the accounts and business of tRe firm were transferred to Rim, except a few matters wRicR Rad been retained by Youmans, but “that none of the items which Re claimed as an offset in this action were excepted in that settlement.” TRe portion of such testimony so quoted was stricken out by the court without specifying any ground therefor. And yet the twenty-third question submitted to the jury required them to find whether, at the .time of the dissolution of the firm, it was agreed that’ the defendant “should succeed to all the rights of said firm to charge for and collect for services theretofore rendered to tRe bank by said firm as attorneys.” As indicated, there was no claim or pretense on the part of the defendant that Re Rad succeeded to’ all of such rights of the firm. TRe material question was whether Re Rad succeeded *583to the rights of the firm as to the particular items which he had alleged as an offset in this action. That question was not submitted to the jury. It was immaterial whether the defendant had succeeded to all the rights of the firm mentioned in the question so submitted. The striking out of such testimony, and the submitting of the question in such form, was error.
4. Error is assigned because the court refused to allow the defendant to testify as to what, if anything, he was. directed to do in connection with the Archer estate by the directors of the hank,- — -what they said on that subject. This was manifest error.
Other errors- are assigned, hut what has been here said, and on the former appeal, will be a sufficient guide for a new trial.
By the Court.- — -The judgment of the circuit court is reversed, and the cause is remanded for a new trial.