Bellinger v. Bentley

E. Darwin Smith, J. The motion made at the circuit for a non-suit should, I think, have prevailed. The contract upon which the action was brought was, in fact, and in legal effect, the contract of the Little Utica Cheese Manufacturing Company. It purports to be made by the trustees of such corporation, who, the proof shows, were clearly and fully authorized to make it in behalf of the corporation. The defendants describe themselves as such trustees.' The contract is for the benefit of the corporation upon its face. It stipulates for the use of the corporate property (the cheese factory), by the plaintiffs in the manufacture of cheese, the particular business of said corporation in the factory of said company. The plaintiff agreed to manufacture and make cheese at the said factory during the season of making cheese in 1870. The proof shows that the affairs of said corporation were to be managed by three trustees, and that the trustees named in the said agreement were such trustees for the year 1870, and two of them were authorized by the by-laws to constitute a quorum for the transaction of business, and two of them in fact signed the agreement. This made it a valid contract of the corporation. The plaintiffs knew that the defendants were contracting for the corporation — one of [74] them was a stockholder and the other his son. The factory was on the land of the elder Bellinger, one of the plaintiffs, and was leased to the corporation by him for the use qf such factory, and he was a stockholder in said company. There is nothing in the contract or circumstances indicating that the defendants had any private interest in said factory or in the business of making cheese therein, or in said contract, any more than the other stockholders of said company, or that they intended to bind themselves individually. They made a clear, plain palpable contract in behalf of said company, and for its sole benefit, and they had full authority to make such contract, and the said corporation could clearly have been sued on such contract as binding upon it. If the defendants had made and signed this contract without authority to do so, they would doubtless have been personally liable on the contract within the cases of Bush v. Cole, 28 N. Y. 269; Pumpelly v. Phelps, 40 id. 67, and numerous other cases. But when officers or other agents contract for a corporation and have full authority to do so, and the work to be done, or the property purchased is for the exclusive benefit of the corporation, and that is known at the time of the making of the contract, the agent is not bound personally unless he binds himself by some particular personal contract, or fails to make a contract binding upon his principal. In Randall v. Van Vechten, 19 Johns. 60, it was held that the principal was liable in assumpsit on a contract made by persons acting as a committee of a city corporation, who signed it with their private seals as was also the case in Haight v. Schlar, 30 Barb. 218, where the persons making the contract signed it with their private seals as a building committee. The same principle is asserted in Worrall v. Munn, 5 N. Y. 241, and numerous o fcher cases, are there cited as asserting the same rule, and the case of Randall v. Van Vechten is approved as it is also in Dubois v. Delaware Company, 4 Wend. 288. In this case it appears that the corporators ratified their contract and made payments to. the plaintiff under it to the' amount of $1,071.50, leaving due to the plaintiffs a balance of only $250 for the cheese manufactured by them at such factory during the season. In Bush v. Cole and Pumpelly v. Phelps, supra, the principal was unknown to the parties contracted with. In Rush v. Cole, the opinion stated that the defendants signed the contract as the agents of an undisclosed principal, and as they did so without authority, were personally liable as the contracting parties. In Pumpelly v. [75] Phelps, the contract was signed by the defendant simply as trustee, and the case states that there was nothing in the contract to intimate of whom he was trustee. But in this case, on the contrary, the defendants describe themselves as trustees, etc., in the body of the contract, and state expressly the name of the corporation of which they are trustees, and for whom they are acting. I think the defendants fully showed at the circuit, that the contract they made was binding on such corporation, and that they had full authority to make it, and that it was a valid contract of such corporation, and that they were, therefore, not individually liable thereon. The verdict should, therefore, be set aside and a new trial granted with costs to abide the event. Mtjllin, P. J., did not vote. Ordered accordingly.