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Lyon v. West Side Transfer Co.

Supreme Court of New York, Appellate Division

June 11, 1909


Appeal from Trial Term, New York County.

Action by Leroy M. Lyon against the West Side Transfer Company for services in selling its property. From a judgment entered on dismissal of the complaint at the close of plaintiff's case, he appeals. Reversed.

[117 N.Y.S. 650] Ellison, MacIntyre & Davis (Arnold L. Davis, of counsel, and Claude A. Thompson, on the brief), for appellant.

Almet Reed Latson, for respondent.



The defendant is a domestic corporation, and was the owner of two parcels of improved real property in the borough of Manhattan. The plaintiff was a fruit merchant, with a place of business at 330 Washington street, in the said borough, and had been acquainted for many years with the president and treasurer of the defendant company. Said corporation seems never to have conducted the business for which it was organized; but its activities were confined to the renting of offices and the collection of the rents due upon the property, which it owned. It had its office in the store of the plaintiff. The plaintiff's story was that the president and treasurer of the defendant agreed with him that, if he should find a customer for the defendant's real estate at $78,500, he might retain for his services whatever he could get above said amount; that he procured a customer who agreed to pay $85,000 for the property; that it was conveyed to said customer for that price, and he sues for the difference, $6,500.

At the close of plaintiff's case the complaint was dismissed, upon the ground that the authority of the executive officers of the defendant company to employ the plaintiff had not been shown. The plaintiff asked leave to go to the jury, not only upon the question of the contract between the defendant and the plaintiff in respect of compensation for his services at the difference between $78,500 and $85,000, but also upon the question of reasonable value of those services, which motion having been denied, he duly excepted.

If the sole question in this case was upon the specific contract sued on, we think that the evidence failed. It is the law that acts done by the executive officers of a corporation within the apparent scope of their authority in regard to the regular business of the corporation are presumed to be the acts of the corporation and binding upon it, and the person dealing with such officers under such circumstances is not required to prove specific authority from the board of directors, and is not affected by any secret provisions of the by-laws not brought to his attention. But in this case the transaction was not within the apparent scope of the corporation's business, its transfer business, but was the sale of all its tangible property. It was not conducted through a real estate broker, nor at a fixed or customary fee; but the corporation was to be divested of all its property upon a certain price, with an agreement that all above that price should go to the person procuring the customer. That certainly was an unusual and extraordinary transaction, and required the party asserting it to prove the authority of the officers alleged to have made the contract.

But it is also true that a corporation may ratify the acts of its officers not previously duly authorized. It is urged that when the corporation sold this property to the customer procured by the plaintiff, [117 N.Y.S. 651] at the price obtained by him, it ratified the acts of its officers in procuring his services and received the benefit thereof, and that, having shown this, plaintiff had made out a prima facie case, and was entitled to go to the jury upon the question of such ratification and the reasonable value of the services so rendered. The corporation had the right to sell its property, and its directors, it must be presumed, had the power to authorize its executive officers to enter into a contract for the sale of the property and to employ persons to bring about such sale by obtaining customers. Where the contract is one which the directors had power to authorize their officers to make, or to ratify it after it had been made, the burden was on the persons denying the contract to show that it was not authorized or ratified by the board. Patterson v. Robinson, 116 N.Y. 193, 22 N.E. 372.

The contract being made by the president in the name of the corporation, and one which the corporation had the power to authorize him to make, or to ratify after he had made it, the presumption was that he had the power to make it, and the burden was on the corporation to show that it had not done so. Norman v. Loomis Manning Filter Co., 123 A.D. 739, 108 N.Y.Supp. 261.Therefore, while it may be that the unusual character of the agreement for compensation takes it without the rule of the presumption of power in the executive officers to make it, we do not think it extends so far, under the circumstances of this case, as to prevent the plaintiff from going to the jury upon the quantum meruit; the sale having been completed to the person and at the price obtained by him. Although the complaint is upon a contract for a specific sum, it contains sufficient averments to enable the plaintiff to recover the value of the services rendered, without reference to the allegation of an agreed compensation. Sussdorff v. Schmidt, 55 N.Y. 319; Sturgis v. Hendricks, 51 N.Y. 635; Barney v. Fuller, 133 N.Y. 605, 30 N.E. 1007.Enough was shown to put defendant to its proof, and the dismissal was error.

The judgment appealed from should therefore be reversed, and a new trial ordered, with costs to the appellant to abide the event.

SCOTT and HOUGHTON, JJ., concur.

INGRAHAM, J. (dissenting).

The action is brought upon a contract by which, at the special instance and request of the defendant, the plaintiff rendered services to the defendant as agent and broker in the sale of certain parcels of real estate; that the defendant promised and agreed to and with the plaintiff that it would pay to him for his services in procuring a purchaser for the said property all over the sum of $78,500 which such purchaser should pay therefor. It is alleged that the plaintiff therafter procured a domestic corporation as a purchaser of the said real property at the sum of $85,000, and thereafter the said two parcels of real property were sold by the defendant to the said purchaser at the price stated; that by reason of the ...

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