Court Opinion

ID: 6821343
Source: CourtListenerOpinion
Date Created: 2022-07-23 19:07:31.495803+00
Date Added: 2024-06-11T16:04:08.491487
License: Public Domain

Spratle y, J.,'
dissenting.
I am of opinion that the judgment against the corporation should be affirmed.
I have no quarrel with the legal principles enunciated in the opinion of the majority. My departure from their conclusion is based on my evaluation of the evidence and fair and reasonable implications therefrom. I reach the same conclusion as the members of the jury who saw and heard the witnesses testify.
The evidence is in sharp and direct conflict. It presents a picture of double dealing by the officers of the corporation, who talk and act one way when it is'to their supposed advantage and another way when they are fearful of a *802prospective loss. Their testimony is actually in conflict as between themselves.
The Mosell Corporation is a close corporation, its stock being owned in equal shares by three men, Kaplan, its president, Goldman, its vice-president, and Banks, its secretary and treasurer. Kaplan and Banks resided in Norfolk, where the property of the corporation was located, Goldman in Durham, North Carolina. By common consent, all of its business and affairs were handled by Kaplan and Banks. They were so held out to the public. Nor, so far as we know, were their powers restricted under the by-laws of the corporation. Although there was a request to produce the by-laws, they were withheld, from the record. Goldman did not require that he be consulted with reference to the corporate affairs. He accepted the judgment and transactions of the other two officers and went along with them, taking the gains and profits and absorbing the loss, if any. He took no part in the conduct or management of the corporate business or purposes. In fact, he testifies that he did not even know that he was an officer of the corporation and attended only an annual meeting of the board of directors.
During several separate negotiations for the sale of the property, including that here involved, no question was raised as to Kaplan’s authority to bind the corporation. The charter itself, now that we know its provisions, contradicts the testimony of Kaplan and Banks that it was not organized to engage in the buying and selling of real estate.
The evidence of the appellee supports the finding that Kaplan and Banks were held out to the public as having full and complete authority to act in all matters for their principal, including full authority to dispose of its real estate holdings. They were more than merely rental agents, they were the chosen agents to do any and all things which might result in a gain to their corporation. ' This apparent authority was n&t denied until Kaplan thought it was to his advantage to repudiate the contract made with the appellee. *803To justify that denial he stated that he had been told by Goldman in an interview with the latter that Goldman was not willing to sell the property. Goldman denied that there was any such interview or that he had been consulted about the sale. It seems apparent that Goldman did not expect to be consulted, and it was only after Kaplan had disavowed the contract that the present attitude of Goldman was sought to support the position taken by Kaplan.
The facts were peculiarly for the jury. Their verdict is binding on us because, as I see it, it is supported by evidence to the following effect:
The defendant in error dealt with Kaplan as authorized agent of the corporation. He would not have attempted a sale of the property if he had not been assured by the actions and attitude of both Kaplan and Banks, the president, and the secretary and treasurer of the corporation, that the property was for sale. The nature of the information requested from them, the amount of the indebtedness against the property, the details of its leases and the amount demanded of the purchaser signified clearly the purpose of the defendant in error. None of this information, especially that of a private nature and the sale price of the property, fixed by those controlling the property, would have been furnished otherwise, nor unless a sale of the property was contemplated and desired by the corporation.
It appears that Kaplan had full authority when anything was to be gained but none when anything was to be lost. We should, therefore, give Kaplan the character which the close corporation through all of its stockholders and directors saw fit to confer on him when' dealing with the defendant in error rather than the character which they now see fit for the occasion to assume. Under the peculiar circumstances common sense should govern rather than the strict legal principle applicable under a different situation. See Paramount Communities v. Abramson, post, p. 922, 33 S. E. (2d) 771, as to the effect of the actions of the officers of a close corporation, and Moore v. Aetna *804Cas., etc., Co., 155 Va. 556, 568, 155 S. E. 707, and cases therein cited.
For these reasons and those given by Mr. Justice Holt, I join in his dissent.