Hatch v. Coddington

95 U.S. 48 (____)

HATCH
v.
CODDINGTON.

Supreme Court of United States.

Mr. E.W. Stoughton for the plaintiff in error.

Mr. William M. Evarts and Mr. S.P. Nash, contra.

MR. JUSTICE STRONG delivered the opinion of the court.

We concur with the Circuit Court in the opinion that Mr. Rice was authorized by the resolution of the board of directors of July 13, 1858, to make the contract with the defendant, which it is claimed he made on the 21st of April, 1859. That resolution was very broad. As appears from its preamble, it aimed to provide, promptly, means for the construction of one hundred miles of the company's railroad, and to guard against default in the performance of the conditions upon which the credit of the State had been loaned; and these aims were intended to be secured, in part, with the aid of the State loan, that is, with the aid of the State bonds delivered to the company. The preamble, having avowed such purposes, was followed by a resolution which expressly conferred upon Mr. Rice, the president of the company, several distinct powers. The first was to sell or hypothecate the first-mortgage bonds of the company (thereafter to be issued) for such sum or sums as he might think for the interest of the company. A second power given was to borrow money on behalf of the company in such sums, for such length of time, and at such a rate of interest as he might think proper. And, thirdly, he was empowered to purchase iron rails, locomotives, machinery, &c., for the company, on such terms as he might deem advisable; and, to enable him to carry out these powers and authority, he was empowered to make, execute, and deliver obligations, bills of exchange, contracts, and agreements of the company. It is difficult to see what words would have been more comprehensive for the grant of power to do every thing which, in the judgment of Mr. Rice, was necessary or advisable, either for borrowing money or purchasing iron for the company. A general power to borrow money includes authority to give to the lender the ordinary securities for the sum borrowed. Among these are bonds, notes, or acceptances, and collaterals. But the resolution went further. It conferred power to make contracts and agreements, such as would enable Mr. Rice to borrow money or to make purchases of railroad iron; not merely contracts of purchase, but contracts and agreements that might enable him to effect a purchase. An engagement to give collaterals as a security for money borrowed, or for the payment of a debt incurred for iron, is surely within the limits of such a power. This disposes of the first question raised by the assignments of error. We hold that there is nothing in the agreement of April 21, 1859, transgressive of the power with which the president of the company was clothed by the resolution of the directors.

We are also of opinion that the power thus conferred was not revoked or withdrawn by the subsequent resolutions of Jan. 23 and Feb. 3, 1859. They made no reference to the action of the board in 1858, or to any powers conferred by that action upon the president of the company. Undoubtedly, they conferred authority upon Mr. Nelson, acting as president of the company in the absence of the president, to dispose of the bonds; but such authority was not inconsistent with the concurrent existence of the like power in Rice. Two persons may be employed separately to negotiate the sale or hypothecation of bonds, and either may thus dispose of them. If a disposition be made by one, of course the other will be unable to exercise the power with which he was clothed; but, until a sale or hypothecation is made, either may make it. Moreover, in this case there is no evidence that knowledge of the resolutions of Jan. 23 and Feb. 3, 1859, was ever communicated or intended to be communicated to the defendant. The authority given to Mr. Rice was exhibited to him. On its face it was a continuing authority, on which he had a right to rely until notified of its revocation. Persons who deal with an agent before notice of the recall of his powers are not affected by the recall. 2 Kent, Com. 644, note; Fellows v. Steamboat Company, 38 Conn. 197; Tier v. Sampson, 35 Vt. 179; Morgan v. Stell, 5 Binn. (Pa.) 305. It follows, therefore, very plainly there was no error in the refusal of the circuit judge to instruct the jury, that, if the resolution of July 13, 1858, conferred upon Mr. Rice authority to make the contract, the authority was withdrawn by the resolutions of Jan. 23 and Feb. 3, 1859.

At the trial in the court below there was some evidence that the contract set up as a defence by the defendant was not unconditionally delivered. The plaintiff alleged that when it left the hands of Mr. Rice, on its way to the defendant, after his signature, two conditions accompanied it. One was that it should not be binding, and that the delivery of the bonds should be inoperative, unless the board of directors of the company, after being advised thereof, should approve, ratify, and confirm it. The other condition alleged was, that if forty of the bonds, making up, with the forty-five deposited with the defendant, the eighty-five called for by the contract, had been disposed of at St. Paul by the proper officer of the company who had them in charge, the contract should not be binding. Whether such conditions had been imposed was a question of fact properly submitted to the jury, with the instruction that, if they had been, the contract was not binding unless the company afterwards ratified and adopted it. It therefore became a material inquiry in one aspect of the case whether there had been such an adoption or ratification; and the defendant asked the court to instruct the jury that there had been no ratification by the railroad company, and especially that a certain resolution of the company, adopted May 13, 1859, and communicated to the defendant, was not a ratification. The court declined to give such instructions, and, we think, properly. We think the resolution referred to was a plain acknowledgment that the contract made by Mr. Rice with the defendant was binding upon the company, and, as it was communicated to the defendant, it was notice to him that the company acknowledged its obligation. In the resolution and its preamble there is nothing which denies that the contract to which it refers had been made, or asserts that no obligation had been assumed. On the contrary, all its language is appropriate to a contract perfected. It is an admission that the company had confirmed and accepted it. It speaks of the contract as made, not merely proposed, and asserts an impossibility to comply with its terms, not of an impossibility to enter into the engagement. It authorizes Newton to procure a surrender of the contract and a return of the bonds, which it states had been transferred to Coddington & Co. upon such terms as might be agreed upon. All this is plain recognition of the contract as a binding obligation, and an assertion of a wish to obtain a release from it. To say the least, it is inconsistent with any intent to treat the contract as imperfect and inoperative. In view of it, we think the court was justified in refusing to charge the jury as requested; and, if there was error in the mode in which the question of ratification was submitted, it was error of which the plaintiff cannot complain.

It is unnecessary to notice the other assignment of error, in view of what we have said.

Judgment affirmed.