Berry Bros. v. Estate of Hooper

BROOKE, J. (after stating the facts). The learned trial judge denied the claims of the defendant estate upon the following grounds: (1) The statute (section 6083, 2 Comp. Laws, 2 How. Stat. [2d Ed.] § 5429), under which claimant is organized, provides: “That no debt shall be contracted nor liability incurred for said association except by one or more of said managers, and ño liability for an amount exceeding $500.00, except against the person incurring it, shall bind the said association, unless reduced to writing and signed by at least two managers.” It was conceded that no written contract existed between Berry Bros, and Alfred Hooper. (2) That, while a corporate officer may recover for services outside the scope of his duties as such officer, he can do so only when he can show that such services were rendered “under circumstances indicating that both the corporation and the officer in question understood that remuneration was to be given for such extraneous service,” and that his corporate duties did not include the work' done. Under the rule adopted by the association defining the authority of its board of managers, the evidence shows that the services rendered by Hooper were within the scope of his duties as a manager of the association. While the second position may be tenable (which we do not determine), we are of opinion that decision may be more safely predicated upon another ground. It is strongly urged on behalf of claimant that the “Smith” letters were inadmissible as evidence, and many authorities are cited upon the proposition. For the purposes of this case, however, we will assume their competency. The record conclusively shows, indeed it is admitted by counsel for the defendant estate, that the $5,000 paid Hooper each year was as and for salary. We think it is equally clear that that sum was considered [75] both by Hooper and the association as in full of salary. The fact that his overdrafts were, at the end of each year, carried forward to his account in the next year, and interest charged thereon with his knowledge and consent, and that this course was followed for some 15 years without protest upon his part, conclusively established the fact that the sum named was his agreed salary during the period in question. This, of course, negatives the assumption that there could have been any agreement or understanding between him and the association that he was entitled to demand further compensation for his services. Now, what do the letters show? The first and second may be dismissed as unimportant. The third, giving to its contents the greatest probative force, merely indicates that Joseph H. Berry (one of five managers of a partnership association limited) had often told Mr. Smith that it was his intention, at some time in the future, to readjust the matter of Hooper’s compensation; that the debit balance would be “disposed of in (by a distribution of) the large surplus which'had accumulated.” Again, assuming that Joseph H. Berry had the sole power to accomplish this end, which, under the law governing the concern, he did not possess, his statements, as recorded in the “Smith” letters, import no legal liability. They indicate, at most, an intention upon his part to, at some indefinite time in the future, make a new contract with Hooper covering the question of compensation, or perhaps to forgive and wipe out the overdraft. This promise of a new contract or a future gratuity carried with it no legal obligation and was never performed. The record, shows that on June 16, 1908, there was a partial distribution of the surplus of the association. Hooper’s share of this surplus amounted to $84,313.06. This may have been the very method in [76] tended by Joseph H. Berry for the readjustment of Hooper’s account. We are satisfied that the verdict was properly directed. The judgment is affirmed. McAlvay, C. J., and Kuhn, Stone, Ostrander, Bird, Moore, and Steere, JJ., concurred.