Skene v. Union Casualty & Surety Co.

BLAND, P. J. — I. Under the provisions of section 7, article 2, of the by-laws, G-aty had power to negotiate the contract with plaintiff but the contract could not be made binding on the corporation unless it was approved or ratified by the executive committee or the board of directors. The contract for the salary of two thousand dollars was approved by the executive committee. The supplemental contract claimed to have been subsequently made, to-wit, on August 23, 1897, for the contingent interest in profits and on which a recovery was had, was not reported to or approved by the executive committee or by the board of directors and is, therefore, not binding on the corporation unless Gaty, as general manager, was clothed with apparent authority to make the contract, and the defendant relying on his apparent authority entered into it without notice of his want of authority or notice of facts from 'which the inference of such notice might be drawn. Breckinridge v. The American Central Insurance Company, 87 Mo. 62; Washington Mutual Fire Insurance Co. v. St. Mary’s Seminary, 52 Mo. 480; Van Cleave v. Union Cas. & S. Co., 82 Mo. App. 668; Kaes v. Lime Co., 71 Mo. App. 101; Nicholson v. Golden, 27 Mo. App. 132. The authority of the superintendent of a private corporation is presumptively limited to the usual and ordinary means of accomplishing the business entrusted to him. Roche v. Pennington, 90 Wis. 107; Williams v. Getty, 31 Pa. St. 461. He is not the alter ego of the corporation, and third persons dealing with him, to bind the corporation, must show that his act was “directly and intentionally conferred by the voluntary act of the principal” or that the power which he exercised was “reasonably necessary and proper to carry into effect the main powers conferred and were not known to plaintiff to be prohibited,” or that the “power exercised was added to the general power conferred by usage and custom” and was in contemplation at the time Gaty was appointed superintend [132] ent, or that the act was ratified by the corporation after it bad full knowledge of the fact. Mechem on Agents, sec. 282. The evidence in the case is that the power to make the contract was not conferred on Gaty by the act of the corporation, but on the contrary is, that it was reserved and lodged exclusively with the executive committee or board of directors. The contract of plaintiff was an employment of him as superintendent or general manager of a separate and distinct department of defendant’s insurance business — the individual accident department. The nature of the plaintiff’s employment constituted him a general agent of the defendant with “power to do acts of a class.” Cross v. A., T. & S. F. R. R. Co., 141 Mo. l. c. 147. The employment of a general agent of a corporation is not an incident to the power of the superintendent, but it is the peculiar office and duty of the board of directors as a body, or by a committee raised out of it, to select and employ all general officers and agents of the corporation. Besch v. Western Carriage Co., 36 Mo. App. l. c. 336. No custom to the contrary was proven at the trial and there is no pretense that the defendant ratified* the agreement made by Gaty (if such an agreement was made), to give plaintiff an additional compensation out of the profits of the individual accident insurance department. There is, therefore, an utter want of evidence to establish the fact that Gaty was authorized to make the contract. II. In Gaty’s letter of August 6, 1897, he informed the plaintiff that he would submit the whole matter to the executive committee on August 10, and that he thought the committee would not object to a contingent interest in the profits of expired business. On August 10, he wrote him that, “The entire matter was submitted to the executive committee to-day, and they have agreed to employ you at a salary of two thousand dollars per annum. The matter of contingent interest was not submitted for the reason that it is so difficult [133] to reach any definite conclusion in this particular. The more we examine into it the more difficult the problem is to our understanding.” By these two letters, plaintifi was informed that the whole matter, about which he and Gaty had had correspondence, had been submitted to the executive committee and that the matter of contingent interest was so difficult of comprehension that it was not taken up by the committee, and that the committee and not Gaty, had employed him at a salary of two thousand dollars per annum. Gaty neither employed plaintiff in the first instance nor assumed the authority to do so, and it is strange that plaintiff, after notice that he had been employed by the executive committee, should go to Gaty for a supplemental contract instead of the executive committee; and the inference is irresistible that he had information that the power to contract in this particular matter was lodged with the executive committee and not Gaty. The demurrer to the evidence, after the close of all the evidence, should have been given, wherefore, the judgment is reversed. Judge Goode, concurs; Judge Barclay dissents.