Severson v. Bi-Metallic Ex. M. & M. Co. , 18 Mont. 13 ( 1896 )

De Witt, J.

No question of practice is raised by the briefs of either party in this case, and we will therefore take up and consider the appeal as it is presented by the record.

All the testimony which was introduced is brought up in the transcript. This we have read, and from it we find that testimony was introduced which tended to prove that the plaintiff, while he was trustee and vice president and shareholder of the defendant, performed services for the defendant as its superintendent, and that the services were of some value. There was also evidence which tended to prove that ttóse services were clearly outside of the ordinary duties of the plaintiff as director or stockholder; also that before the performance of the services the officers of the corporation well understood that plaintiff was to perform them, and that they were services outside of his duties as director and vice president, and were services that some one must perform. The evidence also tended to show that it was understood by the corporate officers that these were services which should be paid for by the corporation as those of a superintendent. These facts, in our opinion, bring the case within the decision of Felton v. West Iron Mountain Min. Co., 16 Mont. 81. The court, therefore, erred in granting the nonsuit, as there was evidence tending to prove all the material allegations of the complaint, and the order of the court in setting aside the order for a nonsuit and the judgment, and granting the new trial was correct.

As noted above, the question of practice in this respect is not noticed by counsel. It may be conceded that the doctrine is correct as announced in the many cases cited by the appellant that a director, trustee, or officer of a corporation cannot recover for services which he renders as such when there is no express contract to that effect. We are of opinion also that when such officer of a corporation seeks to recover for services rendered to the corporation without an express contract it should very clearly appear that such services were wholly apart from his office and duties as trustee, director or officer of the corporation. This principle is thoroughly recognized in the instructions given in Felton v. West Iron Mountain Min. Co., supra. But when the services rendered by such corporate officer are clearly distinguishable, and separated from his ordinary duties as an officer of the corporation, we are of opinion that he may recover upon quantum meruit, under the facts and circumstances as shown in Felton v. West Iron Mowntain Min. Co., supra, and in the ease at bar as well. Most of the cases which appellant cites are upon the general principle above set forth. They do not treat the case of a corporate officer rendering services, as under the circumstances of this case.

In the case of Gill v. N. Y. Cab Co., 48 Hun, 524, 1 N. Y. Supp. 202, upon which appellant chiefly relies, the court said : ‘ ‘An examination of this evidence, however, fails to show that there was any understanding or idea upon the part of the directors of this corporation, certainly as a body, that the plaintiff was to receive any compensation for his services except his salary as vice president. The evidence upon the part of the plaintiff himself tends to confirm this view, in that the only 'claim that he ever made to the corporation during the time that these services were rendered was that his salary as vice president should be raised. ” It is observed that these facts differ materially from those of the case before us.

Our decision in Felton v. West Iron Mountain Min. Co., supra, is sustained in Santa Clara Min. Ass’n v. Meredith, 49 Md. 389. That case was thoroughly briefed by counsel, who called the attention of the court to the leading cases upon this subject. The court, by Grason, J., in delivering the opinion, said : “We have carefully examined the authorities referred to by the counsel of the respective parties, and without in this opinion entering upon a review of them in detail we deem it sufficient merely to state the principles of law which they establish. To entitle a president or director of a corporation to recover for services rendered his corporation, he must prove an express contract of employment, if the services for which he claims compensation are within the line and scope of his duties as president or director. To this effect are nearly all the cases cited in the briefs, and this general principle is admitted by the counsel of the appellee to be correct. But if a president or director of a corporation renders services to his corporation which are not within the scope of, and are not required of him by his duties as president or director, but are such as are properly to be performed by an agent, broker or attorney, he may recover compensation for such services upon an implied promise. See Ang. & A. Corp. page 316, § 317; Chandler v. Bank, 13 N. J. Law, 260; Henry v. Railroad Co., 27 Vt. 455; Hall v. Railroad Co., 28 Vt. 408; Railroad Co. v. Ketchum, 27 Conn. 181; Evans v. City of Trenton, 24 N. J. Law, 769.”

We quote the following from Bank v. Elliott, 55 Iowa 104, 7 N. W. 470 : “We understand the rule0 to be, when an officer of a corporation performs the usual and ordinary duties of his office as defined by the charter or by-laws, he cannot recover compensation therefor unless it has been so specially agreed. He cannot, in such case, recover what the services are reasonably worth. (Railroad Co. v. Ketchum, 27 Conn. 180; Association v. Stonemetz, 29 Pa. St. 534; Merrick v. Coal Co., 61 Ill. 472; Cheeney v. Railroad Co., 68 Ill. 570; Holder v. Railroad Co., 71 Ill. 106; Kilpatrick v. Bridge Co., 19 Pa. St. 121.) * * * It may be conceded, for extraor-' dinary services, such as do not pertain to the office there may be a recovery although it has not been so specially agreed. ’ ’

It is said in Railroad Co. v. Sage, 65 Ill. 328: “There was some evidence tending to show services rendered and ex-pensés incurred by the plaintiff since the organization of the company, apart from his duty as a director. For all such he may recover upon a quantum meruit. ’ ’

Mr. Beach, in his work on Private Corporations (volume 1), says : ‘ ‘ To entitle a president or director of a corporation to recover for services rendered his corporation, he must prove an express contract of employment, if the services for which he claims compensation are within the line and scope of his duties as president or director. * * * But when the charter of a corporation provides that certain officers may be elected, and their salary fixed, by a board of directors, and a president is thus elected, but without a salary being named, the law raises an assumpsit on the part. of the corporation to pay a reasonable compensation for his services rendered after election. And generally for services beyond their regular employment the president and directors of a company may recover a quantum meruit. 7 ’ (Section 208.) 1 ‘ It is not customary to compensate directors for services rendered by them to the company in the regular course of their duty, and they cannot recover therefor except upon some express agreement entered into between them and the company before the rendition of the services, or under a previously existing charter provision or by-law. But for services beyond the scope of their official duty, directors, like other persons, may demand a quantum meruit compensation.5’ (§ 236.) See, also, Cook, Stock, Stockh. & Corp. Law, page 925, § 657.

Thompson, in his Commentaries on the Law of Corporations, says : ‘ ‘ On the other hand, a director or other officer o.f a corporation can recover on an express or implied assump-sit for services rendered the corporation, provided such services are clearly outside the scope of his duties as such officer. ’7 (Vol. 3, § 4386.) See, also, sections 3527, 4387.

We are satisfied that the authorities sustain the view taken by us in Felton v. Iron Mountain Min. Co., and that the facts and circumstances of this case bring it within that decision. The order of the district court is therefore affirmed.

Affirmed.

PembertoN, C. J., and Hunt, J., concur.