Hoosac Mining & Milling Co. v. Donat

Helm, J. It may be important to note at the outset that this is not a suit for possession under the lease mentioned in the pleadings; it is an action for damages arising from an alleged violation of the contract. A careful examination of the record before us shows clearly that Elliott, who undertook to execute this lease, acted without sufficient authority in the premises. We shall assume that because of this want of authority the lease was originally not binding upon the company, and proceed to inquire whether the company’s subsequent acts or omissions rendered it liable to plaintiff under the pleadings. A proper answer to this inquiry involves the consideration of two questions: First. Did the pleadings entitle plaintiff to the benefit of evidence tending to establish liability through the doctrines either of ratification or estoppel? and, second, if such proofs were admissible under the pleadings, did plaintiff thereby maintain his right to relief in the premises? [533] The answer alleges as new and affirmative matter that when the company learned of the so-called lease it refused to recognize the same, or to be bound thereby, and expressly repudiated the agency and act of Elliott in connection therewith. Defendant contends that plaintiff’s failure to deny these averments of the answer was an admission of their truthfulness, and deprived him of the right to introduce evidence in support of a subsequent ratification by the company. We do not think this position well taken. The proposition is elementary that a corporation acts only through its officers and agents. It is a rule of pleading scarcely less elementary, that the allegation in the complaint that defendant made and executed the written contract referred to sufficiently avers the making of the instrument in behalf of the company by its duly authorized officers or agents. “The legal effect is the same whether it is said the company made the contract, or that it was made by the president and directors of the company. They both mean the same thing.” Insurance Co. v. McDowell, 50 Ill. 120; Partridge v. Badger, 25 Barb. 146. But the averment that a certain contract was made by the corporation, through its authorized agent or officer, may be sustained by proof ,of subsequent ratification. Since the ratification is admitted to have a retroactive effect, it is treated by the decisions as tantamount to original authority. “The ratification by a principal of an unauthorized act of an agent has a retroactive efficacy; and being equivalent to an original authority, we think that an allegation of due authority is sustained by the proof of such ratification.” Hoyt v. Thompson’s Ex’r, 19 N. Y. 207. The court in that case held that evidence of a subsequent ratification by the corporation was properly admitted, although the pleadings referred only to the making of the contract in the first instance. We conclude that it was competent for plaintiff to sustain the averment in his complaint by proof, showing either an original execution of the lease [534] with due authority, or a subsequent ratification of Elliott’s unauthorized act. This being true, it follows that we must regard the allegations of the answer relating to ratification as stating no new matter calling for denial by replication; in legal effect they amount only to a traverse of matter already set out by the complaint. • This brings us to the second question above stated, viz. : Is plaintiff entitled to recover upon the evidence introduced? Without discussing at length the subjects of ratification by corporations, or their estoppel by conduct, we shall answer this question affirmatively. Conceding that, under the company’s by-laws, a lease of part of its realty could only be made of ratified by act of its board of directors; conceding also that such action as a matter of fact was never had in the case at bar, — liability to the plaintiff is not thereby avoided. Ratification of an unauthorized contract is often presumed from the failure of the principal to repudiate within a reasonable time after notice of its existence; provided the other party in good faith proceeded to and did expend money or labor under it. For more than one hundred days after notice (by due course of mail) was given its president and secretary, the company remained silent. In the meantime plaintiff was permitted, by its agents in charge, to expend both labor and money, without return, in developing its property. USTor is this all; during upwards of sixty days of the time mentioned plaintiff acted under the additional authority of Calhoon’s letter. Calhoon was the superintendent and duly accredited agent of the company; he was its sole representative in Colorado, and had entire control of its property and business here; he did not undertake to act upon his own responsibility with reference to the lease; on the contrary, he informed plaintiff that he had no sufficient authority; he corresponded with the company, and according to the weight of evidence, including his letter, gave plaintiff to understand that the company by proper proceeding had sanctioned the lease. Under these cir [535] cumstances defendant cannot be held free from liability. But, while holding that plaintiff was entitled to recover, we must hold the sum awarded excessive. He tendered no evidence showing the amount of his expenditures; he did not undertake to prove the exact number of days’ work he performed individually under the lease, nor the value of such work. Neither did he offer any other proofs from which a court or jury could determine the extent of his injury in connection with the transaction. No punitive damages were asked, and, under the present rule in this state, none could be given. Murphy v. Hobbs, 7 Colo. 541. Nominal damages only should have been allowed plaintiff upon his own evidence. But under the terms of the lease he was to have eighty per cent, of the proceeds from ore extracted by him. The certificates of mill-runs introduced by defendant show that the sum of $68.53 was realized by it in this way. We think the court might have awarded him eighty per cent, of this amount, but can find nothing to justify the recovery of $1,010.60. We deem it unnecessary to remand the cause for a new trial. The judgment of the court below will be modified, and judgment entered in this court awarding plaintiff $51.83’. The costs of the appellate proceedings will be ■equally divided between the parties. Judgment modified,.