Zearfoss v. Farmers & Mechanics Institute

Richards v. Institute. Per Curiam, In accordance with provisions of the act of April 22, 1874, the parties dispensed with trial by jury and submitted the decision of their case to the court. The findings of fact are clearly stated in the opinion of the learned trial judge, and their correctness is not challenged by any of the specifications of error. The latter are all directed exclusively to some of his conclusions of law. Among other things, he found that the acting, or de facto directors, had possession of the books of the corporation defendant, and control of its property, real and personal. Under their management and direction, the buildings were put in order, and all necessary preparations were made for holding the fair, including the offer of premiums to exhibitors, etc. They conducted the fair, received proceeds of entrance and admission fees, etc. He also found that plaintiff exhibited cattle at the fair, paid entrance fee therefor, and was awarded premiums amounting [454] to 164.75, which constitutes his claim'in this suit; that, for several years before, plaintiff was a stockholder of the corporation and voted at elections for directors, but there was no evidence that he knew of any proceedings pending to oust any members of the board. In view of these and other facts found and embodied in his opinion, the learned judge held that the acts of the de facto directors were binding upon the corporation. In that we think he was clearly right. Contracts entered into by a corporation de facto are binding after having been executed bjr either party: 2 Morawetz on Corp., secs. 750, 752. The act of an officer de facto is good whenever it concerns a third person who had a previous right or had paid a valuable consideration for it: Angelí & Ames on Corp., 11th ed., secs. 287, 286, 299. An officer de facto is one whose acts, though not those of a lawful officer, the law, upon principles of policy and justice, will hold valid, so far as they involve the interests of the public and third persons: State v. Carroll, 38 Con .449. Our own cases are to the same effect: Riddle v. Bedford, 7 S. & R. 392; McGargell v. Hazleton Coal Co., 4 W. & S. 425. In the latter it was held that “ a corporation may act by means of an officer de facto as fully and effectually, as regards the public and third persons,» as by an officer de jure, ” in all matters within the scope of the corporation’s ordinary business. The learned counsel for defendant, in a very able and ingenious argument, contended that there is a distinction between de facto officers of public corporations and de facto officers of private corporations. While such a distinction appears to be recognized. in some of the cases cited and relied on by him, we are not convinced that it is sound. The weight of authority, in this country especially, is decidedly against it. In the case of public corporations, the reasons for holding the acts of de facto officers binding on the corporations they represent are doubtless stronger than in the ease of,private corporations; but, to some extent at least, they are the same in both, differing only in degree. We find nothing in the record that requires a reversal of the judgment. Judgment affirmed. March 20, 1893: Zeareoss & Hilliard v. Institute. Per Curiam:, In its main features, this case is similar to Richards against same defendant, in which an opinion has just been filed in No. 425 January term, 1892; and what is said there, in regard to the liability of defendant for acts of the de facto directors, is applicable to this case. The nature of the claim, etc., is somewhat different. In this case, the claim is for lumber delivered to defendant corporation, on its own premises, and used in the construction of buildings thereon. The lumber was delivered on the order of Mr. Edelman, one of the members of the de facto, or acting, board. Part of it was furnished prior to the organization of the legal board and before the decree of court ousting any of the members of the de facto board, and part of it after-wards. Prior to furnishing any part of the lumber, plaintiffs had notice of pending litigation for the purpose of determining the right of the de facto board to act as directors of the corporation. The lumber delivered by plaintiffs was retained, as the property of the corporation defendant, after the de facto board was ousted, and remained in its possession when this suit was brought, and at the time of trial. There is nothing in the difference, between the facts of this case and that above mentioned, to exempt the defendant from liability. We think the learned trial judge was right in entering judgment against the corporation defendant for the price of the lumber. It actually received, retained, enjoyed, and is still enjoying the full benefit of the lumber delivered by plaintiffs. Justice requires that it should be paid for. Judgment affirmed.