Gill v. New York Cab Co. ( 1888 )

Van Brunt, P. J.

Two causes of action were set up in the complaint: one for $250, an unpaid balance of a sum voted to plaintiff by the defendant’s board of directors for services rendered; and,the second for $3,500, as the reasonable value of services rendered to the defendant between the 6th of September, 1883, and the 10th of January, 1886. The plaintiff was a director of the defendant, and during the last-mentioned period was the secretary and executive officer of the defendant’s executive committee, and also vice-president of the company. As to the first cause of action, the question seems to have been one for the jury upon a conflict of evidence, and we cannot disturb the result arrived at by the jury.

As to the recovery upon the second cause of action, greater difficulties are presented by the record. The company was organized in July, 1883, and in September, 1883, the plaintiff was elected secretary of the executive committee. In April, 1884, the defendant’s by-laws were amended, and the office of second vice-president was created, with a yearly salary of $1,500. The duties of the new office were prescribed by article 7 of the by-laws, which is as follows: “The second vice-president shall have full supervision and control of the cheap cab service of this corporation, and shall make a weekly report to the president of all matters relating to this branch of the company’s business. ” In connection with the defendant’s business there was also a livery department, and subsequent to his election as second vice-president the plaintiff rendered numerous services in connection with this department; and it is for the services thus rendered that a recovery has been had in this action. It is claimed, upon the part of the defendant, that the plaintiff, being a director, cannot recover for services rendered to the company, unless there was an actual employment to render those services, and a promise to pay; that, in the case of a director or officer of a corporation, no implied promise results from the mere fact of accepting the services; and that a director stands in an equally different relation from a stranger to the corporation, in that he owes services to the corporation, and in the rendition of those services he is presumed to act as director, rather than as employe, and unless there is some express understanding to-the contrary no recovery can be had by him against the corporation. The foregoing contention seems to be expressly recognized in the case of Smith v. Railroad Co., 102 N. Y. 190, 6 N. E. Rep. 397, where great stress is laid upon the fact that the party claiming was neither a stockholder nor a director, and that he had simply been elected as secretary of the corporation; and that, although there was no express agreement for compensation, he stood in nO different position from an employe of any other character who has rendered services at the request of the corporation. Upon the contrary, the plaintiff claims that a promise to pay arose from the fact of employment; and that, if a director does things which are not directly within his duties as director, a promise to pay naturally arises, the same as it would with a person who was not connected officially with the corporation; and, further, that in this case there is some evidence from which a promise to pay, and an expectation to pay, may be inferred. Various authorities are cited, upon the part of the plaintiff, tending to show that directors may recover from a corporation, and our attention is called to evidence from which it is sought to be inferred that the corporation promised to pay the plaintiff for these services. 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. If his present claim is correct, then, even if his salary as vice-president had been raised, and he had performed services outside of the duties belonging to the office of vice-president, his right of action to recover therefor would have been precisely the same as it is now, his salary not having been raised. The necessary conclusion to be drawn from this circumstance is that he considered that the compensation for those services which he was rendering to the company was to be paid for by the salary which he drew as vice-president. As to the authorities which had been cited in support of the plaintiff’s claim, it is sufficient to say that in each one of these cases the prominent features which were to appear, were that the services by the director were out of the course of his ordinary duties, and that there was an expectation upon the part of the corporation to pay for the same. In the case of Jackson v. Railroad Co., 2 Thomp. & C. 653, the recognition of the claim of the director was expressly found as the basis of the recovery; and, to support the finding that there was an expectation to pay, there had been in that case a partial payment for the identical services sued for, which was proof that there was an expectation to pay, and an actual employment. Although the services which were claimed to have been rendered by the plaintiff in this case may have been beyond that which ordinarily belonged to the office of director, and beyond the scope of the duties defined by the by-laws as belonging to the office of second vice-president, yet from the mere fact of the rendition of those services no presumption of a promise to pay can arise.

There is another question which makes it necessary to reverse the judgment in this case; and that is, there is no proof whatever of the value of the services which the plaintiff rendered to the defendant for which he seeks to recover. The only proof is as to what he earned prior to the organization of this company. That was entirely immaterial upon the question of the value of these particular services; and, without sdme evidence of such value, the court was bound to grant the request of the defendant to charge the jury that he was only entitled to recover nominal damages. Leeds v. Gaslight Co., 90 N. Y. 26; Staal v. Railway Co., 107 N. Y. 623, 13 N. E. Rep. 624.

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

Bartlett and Daniels, JJ., concurring.