Chicago & North-Western Railway Co. v. James

DixoN, C. .J. The court instructed the jury, “ that if P. TT Smith is a director or vice-president of the company, and, in point of fact, in the actual charge of the lands of the company, appointing agents to protect- them from trespasses, or to sell the lands or timber, as they shall be advised, and the jury in the absence of testimony, may presume that Smith had authority to the extent to which he assumed to act.” The language of the instruction is somewhat inaccurate and ambiguous, and there are doubtless some mistakes either with the writer or printer. The words “ and the jury,” at the beginning of the last clause, probably should read “ then the jury.” But with this correction, the ideas of the judge are not very clearly expressed. As we understand the instruction, however, it was in substance, either that Mr. Smith, as director or vice-president of the company, had power, ex officio, to take charge of the lands, and to appoint agents to protect them from trespasses, or to sell them or the timber, as they might be advised; or else, that being such director or vice-president, without such power ex officio, yet if he assumed to have it and did take actual charge of the [198] lands and appoint agents to protect them from trespasses, or to sell them or the timber, the jury might presume, in the absence of testimony, that he had authority to the extent to which he thus assumed to act. Neither proposition is in point of law correct. We are not informed as to what the peculiar powers or duties of a director or vice-president of this company may be, by its charter, nor do we care to examine. It is enough that no such extraordinary powers are claimed or shown to have been conferred by the charter. We assume that a director possesses the powers usually given in such cases; and that he is authorized to act as a member of the board in all matters touching the business concerns of the corporation and the management of its' affairs; but that, when not acting as a member of the board, he has no authority to represent the corporation, or to bind it by his acts, unless authorized by some proper action of the board, in which case he acts -precisely like any other agent of the corporation, and upon the same authority. And so, too, of the vice-president. We consider that his duty, in addition to that imposed upon him as a director, is to preside at meetings of the board in the absence of the president. These principles with regard to the general powers and duties of such officers, are elementary. In Walworth County Bank v. Farmers’ Loan and Trust Company, 14 Wis., 325, it was held by this court that the president of a railroad company had no power, by virtue of his office merely, to make a sale of the property of the company; and his is certainly an office of more dignity and importance than that of a vice-president or director. See that case, and the authorities there cited, and also Angelí and Ames on Corporations, §§ 299 to 802, inclusive. As to the other proposition, its incorrectness is manifest from what has already been said. If Mr. Smith had no ex officio power, then Ms authority as agent must be shown by [199] some competent testimony, the same as that of any other agent; and it cannot, in the absence of testimony, be presumed from the mere fact that he assumed to act as agent. Such authority may be shown in various ways: as by resolution of the board of directors; or by vei’bal appointment under their authority, or with their approbation; or by proof that Mr. Smith took actual charge of the lands, and did appoint agents to sell theta, or the timber, with the knowledge of the directors, who tacitly acquiesced or took no action to prevent it. These, or some such evidence of authority, must be given before the company can be bound. The mere facts that Mr. Smith was director or vice-president and did the acts, are not sufficient. Previous authority must be shown, or actual knowledge of the transactions must be brought home to the directors. The case of Bridgeport Bank v. New York & New Haven R. R. Co., 30 Conn., 231, is inapplicable, for the reason that , there the act complained of was the act of an actual agent of the company, acting within the scope of his official power. The same observation may be made of several of the other cases cited by counsel for the defendants. The rale in such cases is, that corporations, like natural persons, are bound, and bound only, by the acts and contracts of their agents done and made within the scope of th'eir authority. As Jhe judgment must for these reasons be reversed, and a new trial awarded, it bec'omes unnecessary for us to examine any of the other numerous exceptions noted in the bill. By the Court. — Judgment reversed, and a venire de novo awarded.