Bocock's Ex'or v. Alleghany Coal & Iron Co.

Richardson, J. (after stating the case), delivered the opinion of the court. After a pains-taking examination of the record, we are of opinion that there is no error in the decree complained of, and that the same should be affirmed. The burden of proof was on the appellants. The allegation of the bill that the defendant company was the real purchaser of the land sold by the appellants on the 14th of June, 1881, to “F. B. Deane and his associates,” was positively denied by the answer of the defendant company, and the appellants wholly failed to prove the allegation. By the constitution of the company, as we have seen, only its board of directors, or the executive committee, composed of four of its members, was authorized to make contracts to bind the company, or to select an agent or agents to make such contracts. There was no pretence of evidence in the cause to establish that said contract of sale was made either by the board, or by its executive committee, or by any agent appointed by either, or that said contract, having been made by Deane without due authority, was validated by any subsequent ratification of said board or committee. The appellants, dealing, as they claimed to have done, with this corporation through Deane, were bound to take notice of its charter and by-laws. This court, per Hinton, J., in Bockover v. Life Association of America, 77 Va. 91, quoting from the Supreme Court of the United [920] States, in Rolfe v. Rundle, 13 Otto, 222, said: “Every person dealing with a corporation is bound to take notice of its constitution, by-laws and ways of doing business.” And to the same effect is the opinion of Fauntleroy, J., speaking for the court in Haden v. Mechanics Fire Association, 80 Va. 691. The appellants, then, were bound to ascertain whether or not Deane had been armed with authority to bind the defendant company by his contract of purchase, by either its board of directors or by the ■ executive committee of the board; and not having done so, they dealt with him as such supposed agent at their own peril, and cannot be heard now to complain of the refusal of the company to assume the responsibility of Deane’s unauthorized contract. The same is true of the allegation—if the faltering and equivocal alternative proposition to the effect that, “if in the progress of the cause, it should turn out that McNeill and Parsons, or either of them, were the real purchasers of the said land, then the same relief is prayed for against them, or either of them, as is asked for against the Alleghany Coal and Iron Company, can properly be denominated an allegation, then such allegation is emphatically denied by the answer of the respondent, Parsons. Nor did the appellants adduce sufficient evidence to overcome the'effect of this answer. Deane deposed that he had been employed by Parsons as president, at $100 a month, to devote his whole time to the development of the company’s properties and to promote its interests, and that Parsons referred him to McNeill for instructions as to his duties. Surely this did not empower Deane to make a contract binding Parsons to buy this land. All else testified to by Deane, is as to conversations with, and as to directions oral and written given him by, McNeill. These could not bind Parsons without his consent or subsequent ratification, though they do implicate McNeill, and show that he made Deane his dupe. [921] Horsley deposed that he went to Richmond, saw there, at the office of the Alleghany Coal and Iron Company, G. McNeill, explained to him the difficulties concerning the title to the “Pratt farm,” and that McNeill said he would have to see Parsons before deciding whether or not to take the farm, and requested him to call the next day; that he did call again the next day, and that McNeill said that they had determined to take the farm, and requested the deponent to go and have the sale confirmed. It was McNeill who said all this; and when Parsons was not present. It is all merely hearsay. There is nothing in the record to show that McNeill was authorized to represent Parsons in any contract for the purchase of anything. Deane confirms Horsley’s testimony. But all this, and there is nothing else, is wholly insufficient to overcome the responsive denials in the answer of Parsons. Moreover, we have here the case of a written contract for the sale of land, entered into by the appellants (the vendors) on the one part, and on the other part by “F. B. Beane and his associates.” Who the “associates” were is not disclosed by anything in the record. The contract thus entered into was assigned or transferred to Murillo Spaulding, and the decree of the circuit court of Buckingham obtained ratifying and confirming the sale, and directing the conveyance to be made to Spaulding, and the deed was made accordingly and delivered to Horsley, the company’s, attorney, who evidently acted under the mistaken supposition that Deane was authorized to buy the land for the company. Yet, in the face of all this, the contract solemnly confirmed to Spaulding is sought to be specifically executed against other parties who are not proved to have had any knowledge of or connection with it. Surely,, in the light of the doings of the active parties to the contract, as disclosed by the record, if Deane had any associates, they were McNeill and Spaulding. We do not, however, mean to [922] intimate, nor does the record permit it, that Deane improperly-entered into collusion with McNeill and Spaulding, or with either of them, though it is manifest that he was overreached by McNeill, and did exceed his authority as employee of the company. Moreover, after carefully looking into every fact and circumstance disclosed by the record, the conclusion is inevitable that in their reckless anxiety to effect the sale of their land the appellants negligently failed to ascertain the identity of the parties with whom they were conducting the transaction and the authority of Deane to act for those whom he described as “his associates.” This being so, they must bear the consequences of their own default. But it is evident they made out their case against McNeill, though they failed as to the other defendants. For these reasons we are of opinion that the decree complained of is free from error, and must be affirmed. Decree aeeirmed.