Court Opinion

ID: 5251695
Source: CourtListenerOpinion
Date Created: 2022-01-06 18:15:27.488115+00
Date Added: 2024-06-11T08:27:57.512096
License: Public Domain

Shearn, J. (dissenting):
The plaintiff seeks to recover the reasonable value of personal services rendered by him to the defendant corporation at its special request, but without an express agreement that he should be paid for the services. The complaint has been dismissed because it appeared that, during the period covering the rendition of the services, the plaintiff held the office of vice-president and was a member of the board of directors of the defendant. Plaintiff contends that there was an issue for the jury because (1) his services were outside of the duties of his office, and (2) the circumstances were such as to warrant a finding of an intention to charge and to pay for the services. The facts are clearly stated in the opinion of Mr. Justice Merrell.
No one questions the rule that directors and officers of corporations serve presumptively without compensation, and that they are entitled to no compensation for performing the' usual and ordinary duties pertaining to the office, in the absence of some express provision therefor by statute, charter or by-laws or by agreement. But we are dealing with services which were, in my opinion, clearly outside the official duties of the plaintiff, and in such case the rule requires some *767qualification. Generally stated, no one can recover from another for services rendered unless there is a contract. Where there is no express contract and one person performs services for another at the latter’s request, the law creates a presumption and implies an agreement that such services are to be paid for. In certain cases, however, where from the nature of the relationship of the parties it would be natural for the services to be performed without any expectation of reward or compensation, the law raises no such presumption, and in this latter class of cases falls the case of an officer or director of a corporation performing services therefor. But, concededly, the corporation must pay if it has agreed to. The rule, therefore, is directed to the method and necessity of proving the understanding and agreement between the parties. The presumption of an agreement to pay, instead of being, as usual, in favor of the party seeking payment for services rendered at the request of another, is in the case of an officer of a corporation, for reasons of public policy, against such party. But, presumptions aside, the agreement to pay may be established in the same manner as any other fact. In other words, it may be deduced or inferred from satisfactory evidence. In the case of services outside the usual duties of an officer, the agreement on the part of the corporation to pay may be established, as in any other case, by proof of circumstances which tend to show that the services were rendered with the understanding and expectation on both sides that they would be paid for. Without extending this opinion by quotation, it will be found, I believe, that what has just been said is well supported by the cases of Bagley v. Carthage, W. & S. H. R. R. Co. (165 N. Y. 179); Gaul v. Kiel & Arthe Co. (199 id. 472); Barril v. Calendar Waterproofing Co. (50 Hun, 257); Bogart v. N. Y. & L. I. R. R. Co. (118 App. Div. 50; affd., 191 N. Y. 550); Corinne Mill, Canal & Stock Co. v. Toponce (152 U. S. 405), and Young v. U. S. Mortgage & Trust Co. (214 N. Y. 279). In my opinion, instead of dismissing the complaint, the learned trial justice should have done as was approved by the Court of Appeals in the Bagley Case (supra), where the trial judge submitted to the jury the questions (1) whether the plaintiff rendered any service outside of his duties as director and president of the corporation, and *768(2) whether there was an agreement on the part of the directors to employ him to perform such services.
I cannot agree with my brother Merrell that the services which the plaintiff rendered during the period for which he claims remuneration “ were no different from those usually performed by one occupying bis official relationship with the corporation.” It is well understood that the ordinary duties of a vice-president consist solely in acting in the absence of the president. There is nothing in the case showing that any of the services performed by the plaintiff were performed as vice-president. As for plaintiff being a director, it must be borne in mind that a director does not act as an individual, but only as a member of the board. (Corinne Mill, Canal & Stock Co. v. Toponce, supra.) There is nothing in the case to show that any of the work performed by the plaintiff was performed as a member of the board of directors. On the contrary, some of the services performed were, to my mind, clearly outside the usual duties of a board of directors. For example, at the request of the president of the defendant, plaintiff drew up various maps, plans and photographs of the ditch system of the company and prepared a long and technical letter, describing the nature of the company’s property and the manner in which it could be worked to the best advantage in order to further a contemplated sale or lease of the property. Such work is not that usually pertaining to the office of a member of a board of directors. It is said that the plaintiff acquired the knowledge and information that enabled him to make these maps, etc., while in the actual pay of the defendant and that the latter was entitled to the benefits of his knowledge and information. Undoubtedly, but it does not follow that the defendant was entitled to detain the plaintiff in New York city or in any other place for an extended period of time and require him to get out maps, plans, etc., at his own expense. Neither was it any part of the usual duties of a member of the board of directors of a mining corporation for the plaintiff to draft a lease of the defendant’s property, requiring time, technical and special knowledge to enable the plaintiff to do the work. Many other important services might readily be specified which the jury would have been warranted in finding were outside of the scope of plaintiff’s *769duties as a director. Then too it was a significant fact for the jury that plaintiff had previously been paid by the defendant for doing similar work. It is stated that this work was paid for by Messrs. Cutler and Fallows, who controlled the corporation, but the fact is as I see it that they advanced to the corporation the money with which to pay the plaintiff. Mr. Justice Merrell states: “ It is a highly significant fact that plaintiff only went to Alaska in August, 1913, upon the personal assurance of Messrs. Cutler and Fallows that his services and expenses would be paid.” The significance that I would draw from that is that the plaintiff, who had only a $50 interest in this $500,000 corporation, which was merely the convenient method under which Messrs. Cutler and Fallows were carrying on their mining operations, knew that the concern had no financial responsibility and wished to be assured that the gentlemen for whom he was really working, although ostensibly employed by their corporation, would see that his services were paid for. However, I take it that such inferences were for the jury and that the importance that is attached to this fact is only another indication of why the case should have been submitted to the jury.
The judgment should be reversed and a new trial ordered, with costs to appellant to abide the event.
Laughlin, J., concurred. ■
Judgment affirmed, with costs.