Court Opinion

ID: 6273118
Source: CourtListenerOpinion
Date Created: 2022-02-18 15:51:31.490209+00
Date Added: 2024-06-11T08:59:58.350752
License: Public Domain

William W. Porter, J.,
dissenting:
I agree with the majority of the court that the question raised by the affidavits of defense is one of authority in the president of the defendant company to make the contract upon which the plaintiff sues, but differ from the conclusion reached. I hold that the question is not one which, on the affidavits, should be sent to a jury for trial. Two affidavits have been filed. It may fairly be assumed that every fact beneficial to the defendant’s case has been set forth in them. The allegation is that no contract of employment with the plaintiff for a year at $150 per month, was reported to, or approved by, the board of directors of the company, and that the plaintiff had, before the date of the alleged contract, been employed by the company by the month at $100..
It is in effect contended, not that the contract was not made, but that the approval of the board was not given to the making of the contract for the year. I am of opinion that it is fairly within the apparent scope of the authority of the president of a company engaged in the business of mining and shipping coal, to change the employment of a selling agent from a monthly to a yearly employment and to increase his compensation. To subject an employee to the necessity of showing a by-law or resolution of the board of directors, giving authority to the president to make the contract, is imposing an undue burden. The employment of agents necessary to the conduct of the legitimate business of the corporation is within the implied power of the executive head of such a corporation. See Wright’s Appeal, 99 Pa. 425. In holding that the president of a company had power to lease an office., the Supreme Court in 1850, in Steamboat Co. v. McCutcheon, 13 Pa. 13, said : “ Who then was the proper person to make the contract ? Certainly the president. . . . The president of a company presents himself to make a contract, evidently connected with the business. He declares the object and purpose of the contract. Who doubts him? We are a dealing people. Is he asked to produce the charter and the books of the company to show that he is authorized to make the contract secundum artem ? Such is not the custom, . , , This contract whether it is considered, ex*324pressed or implied .... was within the scope of the authority of the president of the company.” Again, in Turnpike Co. v. Pass. Ry. Co., 194 Pa. 144, Mr. Justice Brown, in holding valid a corporate contract, sealed with the corporate seal and signed by the president in the absence of authority from the board of directors, approves the following doctrine announced by the Supreme Court of the United States: “ Where a party deals with a corporation in good faith — the transaction is not ultra vires — and he is unaware of any defect of authority or other irregularity on the part of those acting for the corporation, and there is nothing to excite suspicion of such defect or irregularity, the corporation is bound by the contract, although such defect or irregularity in fact exists. If the contract can be valid under any circumstances, an innocent party in such a case has a right to presume their existence, and the corporation is estopped to deny them: Merchant’s Bank v. State Bank, 77 U. S. 604, 644.”
Further than this, the affidavits are defective in this, that they fail to set up all of the by-laws applicable to the subject-matter. Two quotations are made from the by-laws. One is as follows: “ The business and property of the company shall be managed (except as herein provided) by six directors who shall be elected,” etc. No explanation of the exception in parenthesis is vouchsafed and the quotation of the section of the bylaw itself is left incomplete. We may well assume from this excerpt that elsewhere in the by-laws the management of the company was entrusted, at least in respect to usual and ordinary matters of business, to the executive officer; The other quotation from the bjUaws refers to the president and provides, ‘‘ He shall have power to remove any officer or employee and substitute another in his place, and shall fill all vacancies, as well in the office of directors as in the office of secretary and treasurer.” It is not overstraining this by-law to hold that the president had authority to make the contract set up by the plaintiff. He had power to remove the plaintiff from his previous monthly employment and to substitute another employee. There are no expressed restrictions of the terms of such substitution. In making it, the terms, whether of increase of salary or other change if made for the benefit of the company in the honest judgment of the president, would doubtless be within *325the scope of his authority. If then, the president might substitute- a different person on different terms, I can see no objection to his retention of an old employee by changing the terms of his employment from a monthly to a yearly engagement, and even upon advanced compensation, in the absence of any proof of wrongdoing or collusion.
Finally, I am confirmed in the view herein expressed, by the fact that for a considerable time the company received the services of the agent under the new employment and paid for them at the rate of $150 per month. I would affirm the judgment.