Extension Gold Mining & Milling Co. v. Skinner

Mr. Justice Gabbert delivered the opinion of the court. The contract upon which plaintiffs base their right to recover from the company was not binding on the latter unless Fair was its agent, authorized to make such contract, or the company ratified this act. The defendant could only act through its lawfully authorized agents. One dealing with a corporation is bound to take notice of the extent of the authority of its agents and officers with whom he contracts. 17 Enc. Law, 142. According to the articles of incorporation and by-laws of the company, the board of directors and president were the only officers vested with the general management of its affairs. The directors could' only act as a board, and not individually. Lockwood v. Thunder Bay Boom Co., 42 Mich. 536; Baldwin v. Canfield, 26 Minn. 43; Herrington v. District Twp., 47 Iowa, 11. Hence, the individual action of Fair, although a member of the board, did not bind the company. As secretary and treasurer he had no authority to enter into the contract in question. His declarations were not competent to prove that he was authorized to make such contract. Union Mining Co. v. Rocky Mt. Bank, 2 Colo. 565; Columbia Bank v. Rice, [240] 67 N. W. Rep. 165. There was no other evidence tending to prove that he was an agent of the company, with power to enter into the agree, ment, upon which plaintiffs, rely. The fact that the assignee executed the agreement for the sale of the property to a prospective purchaser who,, had been secured through the efforts of plaintiffs, or , that the president of the company signed the petition of the assignee for leave to enter into this contract, would not be a ratification of the unauthorized agreement made by Fair with plaintiffs. On this subject counsel for plaintiff in error, in their brief well state: “In order to constitute ratification of an unauthorised act the act relied on as such ratification must be performed with knowledge of all the material facts.” The consent of the company to the contract executed by the assignee was without knowledge on the part of any of its officers or agents, except Fair, that the latter had entered into an agreement with plaintiffs to pay them a commission for securing a purchaser, so this act of the company did not result in ratifying the act of Fair. It could not ratify a contract regarding which it had no knowledge. Columbia Bank v. Rice, supra; Nichols v. Bruns, 37 N.W.Rep. 752; Reynolds v. Ferree, 86 Ill. 570; Wheeler v. N. W. Sleigh Co., 39 Fed. Rep. 347; Owings v. Hull, 9 Peters, 608; 11 Curtis, 497. The burden of proof was upon the plaintiffs to establish that the contract made with Fair was binding upon the company. The evidence upon their part not only failed to prove such a contract, but, on the whole, established affirmatively that the company was not bound by the original contract, and that it was not ratified. The judgment of the district court is reversed and the cause remanded for a new trial. Reversed and Remanded.