Court Opinion

ID: 6164213
Source: CourtListenerOpinion
Date Created: 2022-02-05 18:29:01.00239+00
Date Added: 2024-06-11T08:55:33.898113
License: Public Domain

Fitzsimons, J.
The defendant is a corporation duly authorized to purchase, hold, sell, improve, and lease real estate and buildings, manufacture, purchase, sale, use of building stone, lumber, and other materials, and to do its business within certain counties of this state. In pusuanee of its corporate privileges, the defendant purchased certain lands in Bellport, Suffolk county, FT. Y.; and, desiring to improve said property so as to be better able to sell the same, its president, Mr. Walker, engaged the plaintiff as its agent to induce persons to organize corporations or companies who would locate on the property of defendant, and manufacture their goods there, and agreed to pay him for such services 2 per cent, on the capital stock of such companies. The plaintiff caused to be organized two such corporations, the aggregate capitalization of which amounted to $36,000. One of these corporations manufactured shirts; the other one, cigars. This action is brought to recover the compensation fixed by the above contract, viz., $720. The main defense is that said contract was and is ultra vires and void, and that the person making the same was not authorized to do so. The action was tried without a jury, and judgment rendered in plaintiff’s favor, which, in my opinion, should be affirmed. The defendant, it appears, is mainly engaged in the business of buying and selling suburban lands, and undoubtedly buys as cheaply as possible and sells at the highest obtainable prices. To enjoy the latter advantage, such lands must, of course, be made attractive; and I think that one of the most valuable, substantial, and enduring aids to the accomplishment of that end is the presence of factories, which invariably attract both capital and la-' bar; and these two powerful factors in turn attract various other kinds of business, and also people seeking homes, all of which would certainly very greatly assist the defendant to carry out the practical purpose of its incorporation,—to sell its lands. In fact, I cannot conceive a surer way to do so. The contract made by defendant’s president when he engaged the plaintiff greatly aided the defendant in the prosecution of its business. He had the right to employ the plaintiff as defendant’s agent, to induce persons and corporations to locate and do business on its lands. Such act was not ultra vires, but was clearly within the scope and policy of defendant’s incorporation. The defendant further contends that, even if such contract is not ultra vires, it is void, because it does not appear that its president was authorized to make the same. However that may be, it is certain that it accepted the benefits and profits flowing from that contract. Fair dealing, honesty, and the law, I think, now require it to bear its burden. When a person is employed by a corporation, by one assuming to act on its-behalf, and renders services according to the agreement, with the knowledge of its officers and without objection on their part, the corporation will be held to have- sanctioned the contract, and will be compelled to pay for the services according to the agreement. O'Hara v. Manufacturing Co., 2 City Ct. R. 159. It is now very well settled that acorporation cannot avail itself of the defense of ultra vires when the contract has been fully performed by the other party, and the corporation has had full benefit of the performance and of the contract. “Upon the general ground of reason and justice, no such answer can beset up.” “The executed dealing of corporations must be allowed to stand for and against both parties, where the plainest rules of good faith require.” Arms Co. v. Barlow, 63 N. Y. 70, 71. The judgment appealed from should be affirmed, with costs.
Van Wyck, J., concurs.