Opinion
Civ. No. 802.
October 18, 1910.
APPEAL from a judgment of the Superior Court of Los Angeles County, and from an order denying a new trial. George H. Hutton, Judge.
The facts are stated in the opinion of the court.
Edw. L. Payne, for Appellant.
L. R. Wharton, and Louis W. Myers, for Respondent.
Plaintiff sought to recover upon an alleged contract with defendant corporation through which he claimed $389.50 on account of money paid out for the use and benefit of the corporation, and $1,900, less a payment of $525, on account of services rendered. The court found in favor of plaintiff for each of the amounts claimed, the judgment aggregating $1,764.50. From the judgment and an order denying a new trial defendant appeals upon a statement settled and allowed.
The record discloses that the defendant corporation was organized under the laws of Arizona April 10, 1908; that the first meeting of the board of directors was held April 30, 1908. That prior to the organization of the corporation the promoters thereof authorized plaintiff to incur an indebtedness of $369.50; that after the filing of the articles of association, but before the first meeting of the board of directors, plaintiff personally paid the indebtedness so authorized by the promoters. There is nothing in the record tending to show any affirmative act by the board in connection with this indebtedness or its payment; nor any resolution or minutes in the meetings of the board from which ratification can be claimed. Nor is there anything in the record indicating that the corporation had any agents or anyone authorized to transact business in its name, other than the board of directors, before the 30th of April. The evidence in the record to the effect that the articles of incorporation named the officers may be disregarded. In the absence of proof to the contrary, it will be presumed that the laws of Arizona are similar to our own, and in this state the selection of the corporate officers is not a matter within the power of the organizers, but is a duty devolving upon the board of directors.
Respondent's contention is that the services being for the benefit of the corporation, and the corporation having accepted such benefits, it is either estopped to deny the authorization, or that the acceptance of such benefits amounted to a ratification. It is incumbent upon a party claiming a resulting benefit to show actual ratification, or some affirmative act from which it may be inferred. Ratification will not be presumed, even when the corporation has received benefits, unless actual knowledge of the specific contract out of which the benefits arose is made to appear ( Pacific Bank v. Stone, 121 Cal. 202, [53 P. 634]), and the same knowledge is essential in considering the question of estoppel. ( Gribble v. Columbus Brewing Co., 100 Cal. 71, [34 P. 527].) The most that can be claimed in support of ratification or estoppel, from this record, is that two members of the board of directors had knowledge of the contract and the services, but nothing appears showing such knowledge upon the part of the other member of the board. In addition to this, the two members having notice were interested parties to the contract. We are of opinion, therefore, that neither ratification nor matter amounting to an estoppel as against the corporation appears in the record. The corporation, then, not having authorized the $389.50 payment, nor having ratified the contract or payment, it must follow that there is no evidence in the record to support the finding of the court that this money was laid out and expended by plaintiff at the instance and request of the corporation, but, on the contrary, it affirmatively appears that the same was a debt of the promoters for which the corporation is not liable.
There is evidence in the record ample and sufficient in support of the findings of the court with reference to the indebtedness arising on account of the services rendered after June, 1908. The contract with reference to these services was made by the president, and it is shown that the minutes of the board authorized the president "to make any contract he saw fit, to employ whom he pleased." While such general authority could only extend to matters relating to the usual and ordinary conduct of the corporate business, yet the contract under consideration here was a contract the authority to make which could properly be delegated by the board to the president.
It is insisted by appellant that the contract with plaintiff, which was one for the payment of a weekly salary and commissions on sale of corporate stock, was invalid under the provisions of subdivision 6 of section 1624, Civil Code. This subdivision only relates to agreements authorizing or employing an agent or broker to purchase or sell real estate for compensation or commission. The mere fact of plaintiff being authorized to sell corporate stock under an agreement with the purchasers that certain land should be conveyed in the nature of a bonus to such purchasers does not bring the contract within the purview of the subdivision last cited. Plaintiff's employment was not to sell land, nor was he to receive any commissions or brokerage on account thereof; on the contrary, he was to receive a commission on account of the sale of corporate stock as an incident to his general employment upon a salary as an agent of the corporation. We think this contract was such as might rest in parol, and that the judgment for the amount unpaid with reference to the service under such contract, was warranted.
In our opinion, the entire judgment as rendered exceeded the amount which should properly have been awarded to plaintiff to the extent of $389.50, and it is ordered that if the plaintiff, within thirty days from the filing hereof, shall file with the clerk of this court his written consent that the judgment of the superior court be modified by deducting the sum of $389.50 therefrom, leaving the judgment to stand for $1,375, together with interest thereon from August 4, 1909, and costs as therein provided, said judgment shall be modified accordingly and the judgment and order denying a new trial affirmed. Otherwise and in case plaintiff fails to file such consent in writing, the judgment shall be reversed. In any event, it is ordered that the appellant recover its costs on this appeal.
Shaw, J., and James, J., concurred.