Robbins Co. v. Cook

WHITING, J. Action brought to recover the agreed selling price of certain goods, wares, and merchandise alleged to have been sold by plaintiff to defendants. At the close of the trial, both parties moved for a directed verdict, the trial court withdrew the case from' the jury, entered findings of fact and conclusions, and rendered judgment thereon in favor of plaintiff. From such judgment and an order denying a new, trial the defendants have appealed. The following facts found by the trial court are absolutely undisputed: The defendants voluntarily associated themselves together under the name and style of the South Dakota Panama-Pacific Exposition Commission for the purpose of promoting a suitable exhibit to advertise this state at the P'anama-Pacific Exposition. One of the methods determined upon for raising money to finance such exhibit was through the purchase and sale of souvenier coins, pins, brooches, etc. Plaintiff, a corporation engaged in the manufacture of such goods, being notified of a prospective meeting of such association and requested to submit prices on coins, pins, and badges, sent a representative to such meeting. At this meeting these defendants were present. Believing that they could make a success of their contemplated [139] scheme, defendants, through one of their number fully authorized by the others, entered into, a contract whereby plaintiff was to and did furnish a large number of 'brooches, pins, and badges, for which defendants have refused to pay. No question is raised as to the good faith, of any of the parties. Defendants failed in their efforts to make a success of this plan for raising money — they disposed of but a small part of the goods purchased of plaintiff. ' [1] It is the contention of defendants that they were acting “for the state in aid of a patriotic purpose,” and that it was well known by all parties that they had no legal authority to bind the state. They have cited numerous authorities holding that one is not personally liable who purports to act as agent for and to bind a principal by contract where the party with! whom he contracts knows that he is not such agent and has no authority to bind his alleged principal. And there can be no question -but what if defendants had contracted in the name of ‘the state of South Dakota, purporting- to act as agents of such state, the plaintiff, if aware of their lack of authority, could not hold them personally liable; but this rule of law and. the authorities cited have not the remotest bearing upon the situation presented by the facts of this case. It is the law fixing the liability of members, of a voluntary association that governs under the facts of this case, and not the laws relating to liability of unauthorizr ed agents. While it is true that the defendants were induced to-organize as such association because 'of a re’qiuest or socalled “appointment” of the then Governor of this state, no. claim is made that any party hereto understood that such' appointment was authorized by any law of this state. The defendants are exactly in the same position as though they had acted entirely on their own initiative. The defendants, prompted by the best motives, undertook to devise some means by which this state would be properly represented at such exposition; and to such end they contracted, not in the name of the state, bur in the name that they had assumed for such voluntary association. It is certainly true that they fully expected, as undoubtedly did the plaintiff, that they, as had like bodies in' other states, would be able to make a success of the plan adopted and would be able to pay for the goods purchased out of the proceeds of the sale thereof; but [140] there is no evidence whatsoever to support any claim that it was agreed that plaintiff should look to ihe proceeds of the sale of these buttons for its pay — a defense pleaded ¡by defendants, but now clearly abandoned because not supported by a scintilla of evidence. It is perfectly clear that defendants never contemplated a liability on the part of the state. It might well be asked: Who did they suppose were buying these goods ? The answer is obvious: Themselves. While it is a matter for regret that these defendants must stand the loss resulting' from- their failure to strccessfully carry out their plans, there is absolutely no- rule of fair dealing among men, and hence no rule of law, that can excuse defendants from paying plaintiff for the goods purchased by them. [2] Defendants contend that this case is to be distinguished from the cases of Winona Lumber Co. v. Church, 6 S. D. 498, 62 N. W. 107, and Lynn v. Commercial Club, 31 S. D. 401, 141 N. W. 471, in that, in this case, the defendants had absolutely no pecuniary benefit in view. Without suggesting the class to which the above cases belong', we concede there are two classes of voluntary associations — one where the associations are organized for profit, the other where the associations are organized without any hope or expectation of profit. But the only difference as regards liability of the members is that, in associations of the first class, the members ax*e, in legal effect, partners and individually liable fo'r debts contracted in the naxne of the associatioxrs by other members--; while, in associations of the second -class, the liability of the individual members is controlled by the law of agency, and to hold a member liable it must be shown that he actually or constructively assented to or ratified the contract upon which liability is predicated.. 5 C. J. 1363; Evans v. M. C. Lilly & Co., 95 Miss. 58, 48 South. 612, 21 Ann. Cas. 1087, and notes in 21 Ann. Cas. 1088-1092; Heath v. Goslin, 80 Mo. 310, 50 Am. Rep. 505; Sheehy v. Blake, 72 Wis. 411, 39 N. W. 479; Id., 77 Wis. 394, 46 N. W. 537, 9 L. R. A. 564; Willcox v. Arnold, 162 Mass. 577, 39 N. E. 414; Clark v. O’Rourke, 111 Mich. 108, 69 N. W. 147, 66 Am. St. Rep. 389; Burton v. Grand Rapids School Furniture Co., 10 Tex. Civ. App. 270, 31 S. W. 91. The authorities are unanimous in holding that, under facts such as this case presents, the defendants would be liable. As peculiarly in point, [141] see Clark v. O’Rourke, Heath v. Goslin, and Willcox v. Arnold, supra. The judgment and order appealed from are affirmed.