Connecticut. Supreme Court of Errors.

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and control, as found by the fact of conversion of the articles,
and also by the schedule annexed to the finding. The com-
mittee does not find the intent of the mortgagees or of the
assignee in giving possession as a fact. It is to be derived
from all the circumstances. We claim that all the articles
sued for were intended to be embraced in the mortgage, and

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Gaylor V Harding.

that under the reasoning of the Court in Capen v. Peekhamj
35 Conn., 94, it is perfectly apparent, taking into considera-
tion the " nature and adaptation" of the articles to the uses
and purposes for which they were applied, that the entire
property, qwad the world and inter parteSy was intended to
be included in the description, and is so far a part thereof,
if indeed it is not of the realty, as to pass legally under the
description. Alvord Carriage Mamrfacturing Co. v. CHeason^
86 Conn., 86.

Sbtmour, J. This is an action of trover, to recover for the
alleged conversion by the defendants of a large amount of
property, mostly machinery pertaining to a woolen manufac-
turing establishment.

Both plaintiff and defendants claim title under the Mill
River Woolen Manufacturing Company, the original owners
of the property.

The plaintiff claims as trustee in insolvency by an assign-
ment dated May 28d, 1867, under which the property came
into his hands and was duly inventoried. The defendants
claim as mortgagees by deed dated September 12th, 1866.

None of the property in dispute is particularly described
in the mqrt^age deed, nor enumerated in the schedule thereto
attached. The deed was however duly recorded, and general
words of description are used which, as between the parties,
would embrace and convey all the machinery. After a de-
scription of the real estate the deed goes on to say, ^^ together
with all the machinery, tools and implements contained in
said buildings; also all machinery, tools and implements
which may from time to time be added to or substituted for
those now used upon said premises and in said buildings."

Some of the property described in the plaintiff's declara-
tion is manifestly fixtures, and passes as such witli the real
estate. For reasons hereinafter stated we shall advise a fur-
ther enquiry in regard to what of it is real and what personal,
and now confine our attention to such of the property as is
personal, and the bulk of it is clearly such.

By tbe condition of the mortgage deed Ibe mort^agcnrs

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FEBRUARY TERM, 1871. 617

Gaylor p. Harding.

were to continue in the possession of the real and personal
estate and cafiry on business as they had done, and no pos-
session was taken by the mortgagees until November 20th,
1867, at which time they did take possession of the entire
mortgaged premises, including the property in dispute ; and
it is for this taking that the present action is brought, claim-
ing the taking to have been unlawful.

Two important questions are presented by the record. Ist.
Is the conveyance of tlie property, without possession taken
by the mortgagees, good under the circumstances against
creditors ? 2. Does the plaiutifif as trustee, claiming by as-
' signment from the Mill River Manufacturing Company, stand
as a creditor would do who had attached the property, in a
position to attack the conveyance ?

We have a statute under which a valid mortgage of ma-
chinery may be made and the mortgagor still retain posses-
sion ; but it is not claimed that this mortgage describes the
machinery in the manner and with the particularity which
the statute requires. The defendants therefore take no ben-
efit of the provisions of that statute, and the main questions
in this case are the same which were decided in Swift v.
ThompBon^ 9 Conn. R., 63, and we are called upon to say
whether we will abide by the rulings in that case or whether
we will overrule them. In that case the court were unani-
mous in holding that the ordinary machinery of a cotton mill
is personal estate, and that it is subject to the same rules as
other personal property respecting the necessity of a change
of possession to perfect the title of the vendee or mortgagee
against creditors.

As already stated, the bulk of the property for the conver-
sion of which this action is brought is personal, but some of
it is obviously parcel of the realty and passes as such with
the real estate. The attention of tiie committee before whom
the cause was tried does not appear to have been directed to
a separation of the permanent fixtures from the moveable
machinery, and we advise that a fiirther hearing be had for
the purpose of making such separation. In regard to the
moveable machinery and other personal property, we think,

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Gaylor v. Harding.

ill the first place, that the law of Connecticut requires that a
change of possession should accompany the .mortgage, and
without such change the property is open to attachment by
creditors of the mortgagor. On this point the case of Sunft
V. Thompson is, we think, decisive. The two cases are alike,
except that in the case of Swift v. Thompson there was no
provision in the mortgage itself for continued possession by
the mortgagor. We think tliis difierence cannot aflFect the
result. It is the continued possession of the mortgagor by
consent of the mortgagee which marks the transaction as
constructively fraudulent against creditors, and it can make
no diflFerence whether the consent of the mortgagee be, as in
the present case, expressed in the writings, or be tacit and
implied, as in the case of Swift v. Thompson. Thus far the
law of Connecticut has been uniform and unquestioned. But
it is itrenuously contended that in a case where there is no
evidence of actual fraud, and where the fraud is merely con-
structive from retention of possession by the mortgagor, an
assignee in insolvency is not an attaching creditor, and not
entitled to the privileges of such a creditor. The argument
is that the assignee takes by conveyance from the mortgagor
and therefore takes only the same rights which the mortgagor
himself has, and that as the mortgagor cannot set aside his
own conveyance so his assignee in insolvency cannot. There
are cases where the equity of the assignee in insolvency has
been decided to be less than that of an attaching creditor,
but such assignee has always been held in this state to be the
representative of creditors in respect to treating as void all
conveyances actually or constructively fraudulent.

In giving the opinion of the court in Bood v. Welchy Judge
Sanfoed says, (28 Conn. R., 163, 4,) " The possession of
the property being retained by the mortgagor, the mortgage
is to be regarded as primd facie fraudulent and void, so tliat
the mortgagee has no title to interpose against the trustee's
claim." So in 29 Conn. R., 264, the same judge says — ^"A
conveyance which is deemed fraudulent and void against an
attaching creditor himself, must be invalid also as against a
trustee, who stands in the place of and represents creditors/'

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FEBRUARY TERM, 1871. 619

Gajlor V. Harding.

These authorities are so decisive that we have no occasion
to re-examine the question on principle.

The defendants brought a petition to the Superior Court
and obtained a decree of foreclosure of their mortgage. The
trustee was made party respondent to that petition, but did
not appear. The decree is in the usual form, cutting oflF all
rights of redemption. It is now suggested that this decree
has some bearing on the rights involved in the trial before us.
But the decree does not purport to decide what property
passed by the mortgage deed ; it only bars all rights of re-
demption in whatever property the mortgage embraces. The
plaintiff here sets up no rights subject to the mortgage, and
no rights that can be barred by the decree. The rights which
the plaintiff here sets up are in opposition and adverse to the
mortgage, and not mere rights to redeem.

Another claim was made by the defendant's counsel, namely,
that the trustee had allowed the defendants to take posses-
sion of the property, so that they may be regarded as having
taken actual possession before suit brought, but the trustee
was in possession of the property as such on the 8d of June,
1867, and the possession taken by the defendants was about
the 20th of November, 1867. The plaintiff claimed the prop-
erty in dispute as trustee. We think it clear that he waived
none of his rights as such in the transaction alluded to in
this claim of the defendants. He merely abstained from re-
sisting the removal of the property by the defendants, leaving
them to take it at their peril.

We therefore advise that the plaintiff is entitled to judg-
ment for the value of so much of the property described in
the declaration as is personal estate ;' and advise that a fur-
ther hearing be had to ascertain whether portions of the
property are not permanent fixtures which pass as part of ihe
real estate.

In this opinion the other judges concurred.

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Perry v. Simpson Waterproof Manf. Co.

Henry Perry vs. Simpson Waterproof Manufacturing Com-

I 37 ~^^ PANY.

A entered the senrice of B, who soon thereafter sold and transferred his hosiness
to C, after which A continued in the service of C, but supposed that he was in
B*8 employ. B gave no notice to ^ of the change, and A was chaigeable
with no laches in not knowing it. Held that B was liable for the wages of A
after the sale.

The president of a corporation, as snch, has no power to bind the corporation
hj any act outside of his official dutj.

The president, like any other person, may be an agent of the corporation, and
that agency may be proved as in other cases of agency.

Where the president of a corporation executed a contract in its behalf, but with-
out authority, and the corporation reoetVed and retained the substantial bene-
fit of the contract, the contract was held binding upon the corporation.

The secretary of a corporation, acting also as a general agent, informed the other
contracting party that a contract signed by the president for the corporation,
was duly executed to bind the company. The party in good &ith relied and
acted upon such information. • Held that the corporation was estopped from
denying the president's authority.

The knowledge of an agent in matters pertaining to his agency, and within the
scope of his anthority, is the knowledge of the principal. Thb principle is
peculiarly applicable to corporations.

And where a corporation has two agents of equal power and authority, notice to
one is constructive notice to the other, and therefore notice to the corporation.

The president of a corporation without anthority signed the corporate name to

• a contract ; the secretary, who was one of two agents with full power in the
premises, knew of the contract and its terms ; the other agent knew of the
existence of the contract and of some of its provisions ; the president and one
of the agents were directors ; a supplemental agreement relating to the con-
tract was signed by the secretary and perfbrtned by the company ; the contract
was partially executed by the other party as to time, and in respect to the ap-
parent object and purpose of the corporation in procuring the contract it was
fully executed; the execution of the contract was intimately connected with
important and radical changes in the business afikirs of the corporation ; and
no agent, or other person in behalf of the corporation, objected to the con-
tract or its execution by the other party. Held that the corporation ratified
the contract.

The plaintiff contracted to serve the defendants for two years, but was discharged
without cause before the expiration of the time. Held that the plaintiff was
not entitled to recover the stipulated price for the whole time, but that the

. court should take into consideration the value of the plaintiff's time to him-
self for the remainder of the term.

The defendant is liable in such a case only for proximate damages. A loss to
the plaintiff resulting from his neglect to nse reasonable means to procure
other employment, is too remote.

[By CAvnTQ, VotTB, and Pasiips, Js. ; Buiin, 0. J. and Pass, J., dtwentlng.]

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FEBRUARY TERM, 1871. 621

Perry v. Simpson Waterproof Manf. Co.

Assumpsit for the breach of a contract of the defendants
to employ the plaintiff in their service, and for s^rrices ren-
dered under the contract, with a general count for work and
labor; brought to the Superior Court in Fairfield county,
and tried on the general issue with notice, closed to the
court, before JUinoTj J. The court found the following facts:

The defendants were a legally incorporated company under
the laws of the state of New York, with a capital of $300,000,
and had their office in New York city, where their presi-
dent and a majority of the stockholders and directors resided,
and where their meetings were held and records kept. The
company leased a factory in Bridgeport, in this state, which
was the only factory they operated, and owned most of the
machinery therein, and carried on the manufacture of a kind
of goods known as enameled cloth, and other oiled goods, in
which manufacture they were engaged in the summer of
1865, and had been long previously thereto.

The company needed a competent foreman to manage and
oversee the manufacture of their goods at the factory, and
previously to September Ist, 1865, their president, Simon
Stevens, applied to the plaintiff, and representing himself to
be the president of the company, offered him the position of
foreman and urged him to accept the same ; and at his re-
quest the plaintiff went with him to the factory to inspect it
and the machinery. The factory was then idle for want of a
competent foreman, and the negotiation with the plaintiff was
continued at Bridgeport by Stevens and by R. D. McEwen,
the secretary of the company. The negotiation resulted in
no contract until some time in July, 1865, when McEwen
went to Boston, where the plaintiff was eng^^ed in a lucra-
tive contract as head-workman and overseer in a manufac-
turing establishment in the same line of business with the
defendants, at which time and place the contract below
given was executed and delivered. It had been previously
drawn and was executed on the part of the company in its
name by Mr. Stevens, the president, and McEwen stated to
the plaintiff that it was duly executed to bind the company.

Vol. xxxvn.— 66

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Peny v. Simpson Waterproof Manf. Co.

The plaintiff thereupon signed anddelivered it The contract
was as follows :

"An agreement between the Simpson Waterproof Manu-
facturing Company of New York, by Simon Stevens, its pres-
ident, of the one part, and Henry Perry, of Newark, New
Jersey, of the second part, witnesseth : That the said Simp-
son Waterproof Manufacturing Company is desirous of pro-
curing the services of said Perry as foreman at the foctory
of said company in Bridgeport, Connecticut, and said Perry
is willing and desirous of entering into the employment of
said company in the capacity aforesaid. It is mutually agreed
as follows, viz : That in consideration of the entire time and
best services of the said Perry to be rendered to said company
in the manufacture of leather cloth and other oiled goods,
for two years from the 1st day of September, 1865, said com-
pany hereby agrees to pay to said Perry for such services the
sum of $2,500 per annum, payable in weekly installments of
$50, and said company further agrees to give in trust for said
Perry fifty shares of the capital stock of said company. But
if said Simpson Waterproof Manufacturing Co. shall be sold
or transferred to the Bridgeport Rubber Co., then there shall
be secured to said Perry one hundred shares of the stock of
the Bridgeport Rubber Co., in lieu of the stock of the Simp-
son Waterproof Manufactiu'ing Co., one-half of said stock to
be transferred to said Perry absolutely at the end of the first
year and the other half at the end of the second year. Wit-
ness our respective signatures at the city of New York this
13th day of July, 1865.

Attest, The Simpson Watebpeoop Mp 'o Co.,

George C. Stach weather, Smon Stevens, President

R. D. McEwen. H. Pbbet.*'

In less than a week afterwards the plaintiff saw Mr. Ste-
vens in New York, and the latter expressly ratified the cort-
tract by word of mouth.

Solely in consideration of the plaintiff's signing the con-
tract, McEwen drew up and signed the following memorandum
on the back of the original contract. " The Simpson Water-
proof Manufacturing Co., agree to pay to Mr. Henry Perry

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FEBRUARY TERM, 1871, 628

Peny v. Simpson Waterproof Manf. Co.

forty dollars per week from the 19th day of August to the 1st
of September, 1865, in consideration of signing above con-
tract. R. D. McEwEN, Secretary."

The payments provided for in this memorandum were duly
made. In fulfillment of the original contract on his part the
plaintiff abandoned his situation in Boston, and on the Ist
day of September, 1865, entered into the employment of the
defendants at their factory.

There were six directors of the company, among whom
were Mr. Stevens, and one Edwin L. Simpson, a stockholder.
Simpson and McEwen were the main business men of the
company, and in charge of the factory, and were then and
during the whole time of the plaintiff's service residing near
the factory and attended daily to its concerns, and paid the
plaintiff whatever was paid him at the rate of $50 per week
for his services.

The defendants objected to the admission of the contract
in evidence, as the plaintiff offered no direct evidence of the
authority of Stevens as president to execute the instrument.
It was found by the court that Stevens, without any authority
from the by-laws or articles of the company, and without any
vote or other authorization by the board of directors, and
without the knowledge of any other person connected with
the company except McEwen, executed and delivered the
instniment to the plaintiff, and that thereby the plaintiff was
induced to come to the factory and render services to the de-
fendants. It was also found that during the whole time that
the plaintiff continued to work at the factory, Stevens and
McEwen knew of the terms of the contract and of the
amount of compensation to be paid to the plaintiff under it ;
and that Simpson understood the amount to be paid weekly
to the plaintiff under the contfact, but knew nothing farther
of the existence of the contract or of its terms ; and that
besides these, there was no evidence that any other officer or
director of the company knew of the existence of the con-
tract ; also that there was no ratification of the contract by
the company or its directors, except so far as such ratification
might be inferred from the facts found. It further appeared
that Stevens had never before made any contracts for the

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Peny v. Simpson Waterproof Manf. Co.

employment of ordinary workmen for the company. Upon
these facts the court excluded the contract from consideration
so far as the same was offered as a contract binding on the

At the time the plaintiff came to work at the factory it was
in contemplation by the defendants to sell all their property
to the Bridgeport Rubber Company, a corporation to be organ-
ized under tlie laws of Connecticut, in which state its presi-
dent and a majority of its directors and stockholders resided,
and having a capital of $150,000, for the purpose of manufac-
turing all kinds of waterproof goods, and the same kind of
enameled goods manufactured by the defendants, but more
especially rubber goods, under certain patents held by the
Rubber Company. In pursuance of this intention the de-
fendants did, on the 3d of October, 1865, and while the plain-
tiff was working in the factory, sell and transfer to the Bridge-
port Rubber Company all their property, including their lease
of the factory, and in good faith delivered possession, and
thereafter ceased to have any right or interest in or control
over the property or the business carried on in the factory,
and the Bridgeport Rubber Company thereafter occupied the
factory and held its stockholders' and directors' meetings m
the office thereof, and kept all its books and conducted all its
business and correspondence in the office and factory under
its own name and for its own benefit.

The court however found that no notice whatever of such
sale and transfer was given by any one to the plaintiff, and
tliat he was entirely ignorant of the same and so continued
until the bringing of the present suit, and supposed during
all the time that he was still in the employ of the defendants,
and continued to work, as he had begun, without interruption,
at the same place, at the sanft business, and under the same
supervision, until February 1st, 1866.

Simpson and McEwen, who had been the managing men
of the defendants' company, still continued to be the manag-
ing men of the Bridgeport Rubber Company, and ^ such
still continued to direct and pay the plaintiff, and to employ
him iu the same manner and in the same kind of manufSsu)-

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FEBRUARY TERM, 1871, 625

Feriy v. Simpson Waterproof Manf. Co.

ture as he had been before employed in and during all the
time from September Ist to February Ist, there was no ap-
parent change in the business of the establishment, and dur
ing all that time the plaintiflF fulfilled all the provisions of his
contract on his part to be performed and worked faithfully
for the interests of his employers.

The plaintiff was regularly paid the sum of $50 per week
by Simpson and McEwen up to the 9th day of November,
1865 ; and from that time to February 1st, 1866, the same
parties made irregular payments to him, so that at the time
of bringing this suit there was due him the sum of $350. At
the time of the sale there was nothing due him, but there was
no rest in the account, or dose of the same with him, at that
time or afterwards by the parties making the payments.

On the 1st day of February, 1866, the plaintiff was dis-
charged from all employment in the factory, and refused any
future work or pay, without any sufficient reason, and without
any reason whatever being given him ; and the defendants
then refused and have ever since refused to pay him according
to the agreement, although he has ever been willing to con-
tinue his services, and has repeatedly proffered the same
within the life of the contract to Stevens, as president of the
defendants' company, and also at the factory building, and
demanded that the contract be performed on the part of the
defendants, which offers of service and demand have always
been refused.

Since his discharge the plaintiff has sought employment
of the same character and in the same capacity as that from
which he was discharged, and in which for many years he
has successfully labored, but during the life of the contract
he was not able to find any. He could have foimd employ-
ment of a lower grade as journeyman or common laborer in
similar establishments in New Jersey, but not in Bridgeport
or its vicinity.

The Bridgeport Rubber Company did not publish its arti-
cles of association, as by statute provided, nor deposit the
certificates required by law with the secretary of the state
and town clerk of the town, until February 26th, 1866, and

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Perry v. Simpson Waterproof Manf. Co.

until fourteen days after the present suit was commenced.
But in all other respects the organization of the company
was complete and according to law, and the omissions above
stated occurred through the oversight of the secretary and
not through any intentional negligence on the part of the
corporation or any of its officers.

• The plaintiff claimed that facts appertaining to the change
from the defendants to the Bridgeport Rubber Company con-
stituted no defence against his claims, and that the change
was not effectual and bond fide as to him, and asked the
court so to decide ; but the court decided that the change was
effectual and bond fide^ both in fact and as to the plaintiff.
The plaintiff further claimed that upon the facts the law was
so that he could recover an amount of compensation equal to

Online LibraryConnecticut. Supreme Court of ErrorsConnecticut reports: containing cases argued and determined in ..., Volume 37 → online text (page 47 of 61)