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that specified in the contract for the full time specified there-
in ; but the court held that he could only recover for the wages
unpaid on the first of February, 1866, namely, the sum of
$350, and interest thereon.

Tlie defendants claimed that upon the facts they were not
liable, either under the written contract, or for any wages
that accrued to the plaintiff after the transfer to, and while
he was in the employ of, the Bridgeport Rubber Company.
But the court rendered judgment against the defendants for
the simi of $350, and interest thereon from the 1st day of
February, 1866.

Both the plaintiff and the defendants moved for a new
trial. Tlie plaintiff also filed a motion in error. The grounds
of the plaintiff's motions were, that th'e court decided — 1st,
that the contract was not legal and binding upon the defend-
ants ; 2d, that the plaintiff was not entitled to recover the
full amount of compensation provided for by the contract
and for the full term embraced therein ; 3d, tliat the change
from the defendants to the Bridgeport Rubber Company was,
as to the plaintiff and his rights, effectual and bond fide ; 4th,
t^at the contract was not legally ratified and confirmed by
the defendants! The ground of the defendants' motion was
that the court held that they were liable for the services of
the plaintiff after the transfer of their property to the Bridge-



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FEBRUARY TERM, 1871. 627

Perry v. Simpson Waterproof Manf. Co.

port Rubber Company and their ceasing to have tlie benefit
of his services.

The case was argued before this court at its February term
1870, by Sanford and E. W. Seymour for the plaintiff, and
by Treat and Blake for the defendants, and was re-arguod at
the present term by order of the com-t.

Sanfordj with whom was M. W. Seymour^ for the plaintiff.

Before entering into the discussion of the case, it is impor-
tant to consider the changes wrought of late in the powers,
duties and liabilities of corporations in reference to making
contracts. These powers and liabilities have been greatly ex-
tended. 2 Kent Com., 291 ; Ang. & Ames on Corp., §§ 112,
228, 237, 238, 240 ; Story on Agency, § 53 ; 1 Parsons on
Cont., (5th ed.,) 138. With these principles in view we
claim that —

1. The contract in question was legal and binding on the de-
fendants. — 1st. Although it does not appear that the presi-
dent was specially autliorized to execute and deliver the con-
tract, yet as no one had special power for that purpose, and
the necessity of the company demanded the execution thereof,
it was within the general scope of his power. 2 Kent Com.,
291, note, 614 ; Judson v. SturgeSy 5 Day, 556 ; Cabot v.
Q-iveriy 45 Maine, 144 ; Beers v. Phoenix Glass Co.^ 14 Barb.,
858 ; DeGroff v. Am. Linen Thread Co., 21 N. York, 124 ;
Messenger v. City of Buffalo, id., 196 ; Smith v. Law, id., 296 ;
Beverly v. Lincoln Gas Light Co., 6 Adol. & El., 829.— 2d.
The company are estopped from asserting that the contract
was not binding, for the secretary expressly stated that it
" was duly executed to bind the company," and the president
ratified the same, and both were held out to the world as per-
sons bound to know the proper form of contracting with the
company. Story on Agency, § 139. — 3d. If a person not
duly authorized make a contract for a corporation, and the
corporation take and hold the benefit derived fi-om such con-
tract, it is estopped from denying the authority of the agent ;
or if the agent is held out to the world as authorized. 1 Par-
sons on Cont., (5th ed.,) 139 ; Bulkley v. Derby Fishing Co.^



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628 FAIRFIELD COUNTY.

Perry v, Simpson Waterproof Manf. Co.

2 Conn., 254 ; 2 Kent Com., 288, 614 ; Soaker v. Sagle
Bank, 30 N. York, 83 ; N. York ^ N. Haven B. B. Co.y
V. Hoody 22 Conn., 502 ; PerkvM v. Washington Ins. Co.j
4 Cowen, 645; Aug. & Ames on Corp., §284; iV. York
^ N. Haven R. B. Co. v. Schuyler, 84 N. York, 53 ; Mumr
ford V. Hawkins, 5 Denio, 855; Burtxs v. Buffalo ^ State
Line B. B. Co., 24 N.York, 269; Chrosvenor y. N. York
Central B. B. Co., 39 id., 87.

2. In absende of proof as to how the contract should be
executed, it must be held binding. Sher^ian v. Filch, 98
Mass., 59, 63.

8. There was a suflScient ratification of the contract. — 1st.
The president and secretary of the company knew of the
terms of the contract and that the plaintiff was working under
it for the company. Simpson, the superintendent, knew of the
amount of salary and times of payment, and tliat the plaintiff
was working for the company. The president, the secretary
and superintendent were tliree of the six directors, the other
tliree being out of the state, and paying no attention to the
affairs of the company. BeuterY. Electric Telegraph Co., 87 Eng.
L. & Eq., 189 ; U. States Bank v. Dandridge, 12 Wheat., 68 ;
Fay V. Noble, 12 Cush., 1. McEwen had as much authority
as a " managing man" as Simpson. They two ran the con-
cern like partners. The act of either bound the company.
Hov^ V. Heeler, 27 Conn., 538.— 2d. The company knew of
the memorandum endowed by McEwen on the contract, and
of its terms, and faithfully executed it. It would be against
sound policy to permit them to avail themselves of so gross
negligence as would be implied in their failure to know what
the contract was upon which it was endorsed and to which it
referred. — 3d. The defendants knew their factory was idle for
the want of a foreman. They must have known that that want
was supplied when their factoiy resumed operations. Their
silence in these circumstances was a ratification. Peterson T.
Mayor ^c. of New York, 17 N. York, 458 ; Dunn v. St. An.
drew^s Church, 14 Johns., 118 ; Chrannis v.Branden, 5 Mass.,
80 ; Hoyl v. Thompson's Exr., 19 id., 207 ; BisseUy. Michigan



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FEBRUARY TERM, 1871. 629



Perry v. Simpron Waterproof Manf. Co.



Southern R. R. Co., 22 id., 258 ; Benedict t. SmUh, 10 Paige,
126 ; St. Mary's Church v. Cagger, 6 Barb., 681 ; Bankof
Columbia y. PaUerson, 7 Cranch, 306 ; Am. Ins. Co. y. Oakley,
9 Paige, 496 ; Andover ^c. Turnpike Co. y. Gould, 6 Mass.,
40 ; Salem Bank v. Gloucester Bank, 17 id., 29 ; Brigham v.
Peters, 1 Gray, 147. By not disavowing the acts of his agent,
as soon as they come to his knowledge, a party makes those
acts his own. Benedict v. Smith, 10 Paige, 126 ; Brigham v.
Peters, 1 Gray, 147 ; Hoyt y. Thompson's JExrs., 19 N. York,
207. — 4th. Notice to the president, secretary and superintend-
ent, they also being directors, was notice to the defendants.
Fulton Bank v. N. York ^ Sharon Canal Co., 4 Paige, 127 ;
Ang. & Ames on Corp., § 805 ; Bank of U. States v. Davis,
2 Hill, 452 ; Farmers' ^ Citizens' Bank y. Payne, 25 Conn.,
444.

4. The full price for the full term of tlie contract should
be awarded as damages. Costigan v. Mohawk ^ Hudson R.
R. Co., 2 Denio, 609 ; GandeU v. Pontigny, 4 Camp., 875 ;
Shannon v. Comstock, 21 Wend., 457 ; Busted v. Craig, 86
N. York, 221 ; 1 Parsons on Cont., 619, 520, note ; Sedgwick
on Damages, 95, note 2 ; id., 120 and note ; Remelee y. Hall,
81 Verm., 682.

6. The change in the corporations was not valid as to the
plaintiff. Tlie Simpson Waterproof Manufacturing Company
has not ceased to exist as to its legal liabilities ; or it is
merged into the Bridgeport Rubber Company.

Treat and BuUocky for the defendants.

1. Tlie contract was properly excluded as evidence. On
its face it does not disclose any authority in Stevens other
than as president ; and the principle is well settled that a
corporation is not bound by a contract made by its president
simply because he is president. B'Arcy v. Tamar, Kit-hiU
^ Catlington Railway Co., Law Rep., 2 Exch., 158 ; Bacon
Y. Miss. Bis. Co., 81 Miss., 116; Curtiss v. Murry, 26 Cal.,
688; Crump v. U. States Mining Co.^ 7 Gratt,, 852; Mt.
Sterling Turnpike Co. v. Looney, 1 Mete. (Ky.,) 550 ; Olney
Y. Chadsey, 7 R. Isl., 224 ; Spyker v. Spence, 8 Ala., 888;

Vol. xxxvii. — 67

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630 FAIRFIELD COUNTY.

Perry v. Simpson Waterproof Manf. Co.

Blen V. Bear River ^ Auburn Co.^ 20 Cal., 602 ; Farmers^
Bank v. McKee^ 2 Peim. S. R., 318 ; Ashuelot Mani^factur-
ing Co. v. Marshy 1 Cush., 507 ; EaH v. Stone, 30 Conn., 94:
Chicago ^ Quincy R. R. Co. v. Coleman^ 18 111., 297 ; Hart-
ford Bank v. ffarty 3 Day, 495. But the defendants are a
New York corporation, established for manufacturing pur-
poses ; and under the laws of that state the trustees, as they
are there termed, are entrusted with the entire management
of the affairs of the company, including the adoption of by-
laws and the appointment of officers. Tlie law of New York
is the same as in other states. Life ^ Fire Ins. Co. v. Jtfe-
chanics* Fire Ins. Co.^ 7 Wend., 81 ; Benedict v. Lansing^ 5
Denio, 283 ; MoOullough v. Moss^ id., 575 : Clark v. Farmers*
Woolen Manf, Co.^ 15 Wend., 256; Brouwer v. Appleby^ 1
Sandf., 158, 171 ; Donovan v. 3Iayor ^c. of K York, 33 N.
York, 291. The court will not presume that Stevens had au-
thority. The plaintiff must prove it. He had as president
no more authority than any other director. He could bind
the company only while acting within tlie scope of his author-
ity. Chicago ^ Quincy R. R. Co. v. Coleman, 18 111., 297.
Stevens clearly had no express authority. The court finds
not only that he had no authority from the by-laws or articles
of association, or from the directors, but that of six directors
not one besides himself ever saw it, or knew that it was ever
made or ever contemplated. He had none by usage. The
court finds that " he iad never before made any contracts for
the employment of ordinary workmen." Usage must be
proved. The plaintiff did not show that lie ever made a con-
tract of any kind for the defendants. He had none of neces-
sity. If authority be claimed on this ground then such ne-
cessity must be the measure of the authority. The plaintiff
claims that there was a necessity, and the court finds that
the defendants " needed, and that their factory was idle for
want of, a competent foreman." Now tliis must have been
a temporary, not a permanent want ; an apparent, not a real
need. There was no necessity for the defendants to carry on
business at all. Indeed they intended to stop and sell out,
of which both Stevens and tlie plaintiff had knowledge, as



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FEBRUARY TERM, 1871. 581

Perry v. Simpson Waterproof Manf. Co.

appears in the contract itself. But whether the necessity, if
any existed, should be supplied or not, was for the directors
to decide. The contract was for two years, the necessity was
limited to the term of the defendants' corporate existence.
Of course if Stevens, as president, tad not authority as pres-
ident, McEwen had not as secretary.

2. The contract was never ratified. Tlie court finds there
was no express ratification by the directors and no knowledge
by them of the contract. There can be no ratification with-
out knowledge. Ang, <fe Ames on Corp., §§311, 312, 504.
A ratification implies knowledge. Blen v. Bear River ^
Auburn Co.^ 20 Cal., 602. The plaintiff says the contract
was ratified by Simpson and McEwen. The same rule of law
applies to them as to Stevens. They could, as agents, bind
the company within the scope of their agency or authority.
Now, what authority had they ? Here as before the burden
of proof is upon the plaintiflF. This contract is a very extra-
ordinary one, and the plaintiflF must be held to strict and
ample proof of authority. As much authority is required to
ratify a contract as to make it. " The power to ratify neces-
sarily supposes the power to make the contract in the first
instance, and the power to ratify in a given mode supposes
the power to contract in the same way." Zottman v. San
Francisco y 20 Cal., 96 p Dubuque Female College v. City of
Dubuque^ 13 Iowa, 555. Neither Simpson as director, nor
McEwen as secretary, nor both, could make or ratify the
contract. All the court has found is that Simpson and
McEwen " were the main business men," were the " manag-
ing men," and were " resident near and in charge of the fac-
tory, and attended daily to its concerns." For aught tliat
appears, neither nor both of them ever made a contract of
any kind, much more one like this. Was their agency or
authority, if they had any, joint or separate ? If joint, could
one act without the other ? Kupfery. South Parish^ 12 Mass.,
185. If separate, what part of the business did each attend
to ? The finding speaks of them only as acting together,
and we must take the plaintifi^s case as he presents it. The
essential ingredients of the contract were price and time.



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532 FAIRFIELD COUNTY.

Perry v. Simpson Waterproof Hanf. Co.

McEwen knew of both ; Simpson only of the price per week.
It is said that notice of the acts of agents will be implied.
This is true if the acts were within the scope of their agency
and not otherwise. And the same rule applies to the knowl-
edge of agents. Fairfield County Turnpike Co. v. Thorpy 13
Conn., 173. An estoppel in this case must depend upon
knowledge. Freston v. Manny 26 Conn., 118. No negligence
is imputed to the defendants.

3. The transfer to the new company was valid against the
plaintiff. The court finds that the sale was band fide^ and
that the new company was a Connecticut corporation, with a
majority of its directors and stockholders residents of the
state, organized for the purpose of manufacturing the same
goods as the defendants, and also all kinds of waterproof
goods, but more especially rubber goods, under certain patents
held by the new company. The only ground therefore upon
which the plaintiff can claim against us is, that he had no
notice of the transfer. But he had notice of our intentions,
and his ignorance is his own fault. The court must have
found against us upon an implied contract. But the defend-
ants before the sale had no power to make a binding contract
with the plaintiff to work for another company. And can an
implied contract be enforced which could not be if express ?

4; The plaintiff claims as damages the full price for his
full term. He cannot receive wages as such. An action for
breach of contract is only for damages. Tlie rule seems not
to be well settled. In a recent English case it was holden
" that the plaintiff was entitled only to so much as would
compensate him for loss of opportunity to earn the contract
price, against which should be set something for the saving
of his time and labor in not having had to earn it,*' McKean
V. Conlei/y 7 L. T., N. S., 828. Substantially the same rule
is laid down in other cases, although expressed differently.
French v. Brooke y 4 Moore & Payne> 11. In Gordon v. Brews-
tevj 7 Wis., 855, the court say : " The rule of damages is the
rate of salary from the time of the breach up to the time of
trial, less the amount the plaintiff might have earned in the
meantime." " The plaintiff is entitled to the actual dam-



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FEBRUARY TERM, 1871; 633

Perry w. Simpson Waterproof Manf. CJo.

ages he sustained in his disappointment and loss of equally
profitable employment." Whilaker v. Sandifer, 1 Duvall,
261. ^^ Actual damages, all the circumstances considered,
would be the true measure." Wright v. Falkner^ 37 Ala.,
274. The true rule would seem to be that for breach of con-
tract only actual damages can be recovered.

Carpenter, J. Each party filed a motion for a new trial
in this case-; the defendants, op the ground that the court
erred in ruling that they were liable for the services of the
plaintiff rendered for the Bridgeport Rubber Company ; and
the plaintiflF, on the ground that the court erred in ruling
that the contract annexed to the finding of the court was
not admissible in evidence.

- We will first consider the question presented by the defend-
ants' motion. We are all agreed that under the circumstances
detailed in the finding of facts, the ruling of the court below,
that the plaintiff was entitled to recover for services actually
performed, although for another corporation, was correct. It
is not denied .that whatever contract there was in relation to
such services, whether express or implied, was made with the
defendants. He went into their employment September 1st,
1865, and so continued, as he supposed and believed, until
February 1st, 1866, when he was discharged. The defend-
ants sold out their business to the Bridgeport Rubber Com-
pany about the first of October, 1865 ; but it was done in
such a manner, and the change of business was so made,
and the business subsequently so conducted, as to leave the
plaintiff entirely ignorant of the change. The defendants
failed to notify him that they were no longer carrying on the
business. It was clearly their duty to have given such notice
if they would relieve themselves of their liability to him.
Although the contract signed by him contemplated the possi-
bility, and probability even, that such a change would be
made, yet there was no certainty of it, and there is nothing
in the contract or in the circumstances of the case to show
that the plaintiff was to take notice of the transfer at his
peril, or which placed him under obligation to make inquiry.



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y



634 FAIRFIELD COUNTY.

Perry v. Simpson Waterproof Manf. Co.

Of course there was no laches in the plaintiflF in remaining
ignorant of the transfer. On the other hand, the defendants
knew of tlie transfer as soon as made, and could, without in-
convenience, have given the plaintiflF notice. Until such
notice they remained liable for his services. It is true the
Rubber Company were liable upon an implied promise, if the
plaintiff had elected to pursue his remedy against them ; but
that in no way aflTects the defendants' liability. But it is un-
necessary to pursue this branch of the case further, as the
views of a majority of the court upon the questions presented
by the plaintiflF's motion, if sound, show conclusively tliat
the defendants are not entitled to a new trial.

That brings us to consider the question whether the court
below did right in excluding the contract as evidence in the
cause, on the ground that it could not be regarded as the con-,
tract of the corporation.

We thinTc it is quite clear that the president of a corpora-
tion, merely as president, has no power to bind the corpora-
tion by any act of his aside from his oflScial duties. It is
equally clear that the president, like any other person, may
be constituted an agent for the transaction of its business.
His authority so to act may be fomid in the charter or by-laws,
in a direct vote of the corporation or board of directors, or in
usage acquiesced in by the corporation. A corporation will
also be bound by the unauthorized acts of its pi^esident if it
subsequently ratiQes those acts, or so conducts itself with
reference to them as that it ought to be estopped from deny-
ing his authority ; and generally, the doctrine of estoppel
will apply whenever the corporation receives and retains the
benefit of the contract.

Now the consideration of this contract, moving from the
plaintiflF, is two-fold ; — 1st, the inconvenience or injury to him
in consequence of giving up a lucrative situation ; and 2d,
services to be rendered by him for the defendants. Those
services were chiefly important to the defendants on account
of the peculiar situation of their works, then standing idle
for the want of a competent foreman, and the skill and expe-
rience of the plaintiff in the business in which he was to be



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FEBRUARY TERM, 1871. 535

Peny v, Simpson Waterproof Manf. Co.

engaged. At the request of the president and secretary of
the corporation, the plaintiff relinquished his previous situa-
tion, to his own iiyury, thereby performing fully his part of
the contract in that respect, and the defendants received the
full benefit of it. The plaintiff entered the service of the
defendants, and performed faithfully all the duties required
of him, until he was, without cause, and against his will, dis-
chaiged by the defendants or their assigns. The services
rendered prior to the transfer to the Rubber Company were
rendered for the defendants; those subsequently rendered
were, as between these parties, and in contemplation of law,
also rendered for their benefit. As the plaintiff was ready
and willing to fulfil his contract, we may say truthfully, in a
legal sense, that the defendants. had the benefit of it ; at least
the benefit of services actually rendered, and certainly it was
no fault of the plaintiff that they did not receive the benefit
of his services for the full period of two years. In estimat-
ing the value of those services to the defendants, it must be
borne in mind that that value consisted, not merely of so
much time devoted to their service, and of the employmient
for their benefit of his skill and experience, but it was largely
enhanced by the peculiar circumstances of the defendants.
Their mill had stood idle for two months at least, for the want
of a suitable man to act as foreman in operating it. They
contemplated a sale of their entire property to a corporation
to be organized under the laws of this state. In order to
effect an advantageous sale, it would seem important that the
mill should be put in operation. For that purpose, and until
a sale, the defendants needed a foreman. After a sale they
did- not need one. For so short a time a competent man
could not easily be obtained. Probably none could be had
for less than two years ; otherwise they would hardly have
employed one for so long a time, especially as they contem-
plated a sale so soon. In one month after the mill started
the contemplated sale took place, and four months afterwards
the plaintiff was discharged. It is therefore reasonable to
infer that the principal object had in view by the president
and secretary of the corporation was to place the property of



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536 FAIRFIELD COUNTY.

Periy r. Simpson Waterproof Mauf. Co.

the defendants in a position to be advantageously 8old« No
other reasonable construction can be put upon the finding.
K a sale could as well have been effected without resuming
operations at the mill, why was it not done ? What necessity
for contracting with the plaintiff for a term of years extend-
ing beyond the contemplated existence of the corporation
itself? But whether we are right in this inference or not is
not very material, for it is certain that the corporation chose
to use the time, skill and experience of the plaintiff, after
subjecting him to the inconvenience referred to, precisely in
that way. They deemed it for their interest to do so, and
the effect upon the plaintiff was the same whether they orig-
inally intended it or not. The corporation therefore received
substantially the full benefit of the contract.

In view of these iacts, is it consistent with honesty and
fair dealing for the defendants, through the instrumentaUty
of this contract, to accomplish their object, and then repudi-
ate the contract and turn the plaintiff out of employment ?
Who can believe that the plaintiff, could he have foreseen
what was to be, would have entered into tliis contract ? If
not binding, does it not operate as a fraud upon him ? And
oan this court lend its sanction to a fraud so gross and pal-
pable?

But there is another ground, as it seems to me, on which
the defendants ought to be estopped from denying that this
was their contract. The president represented to the plain-
tiff that he was authorized to sign the contract for the cor-
poration. Before the plaintiff executed it he was informed
by McEwen, the secretary, that the contract thus signed "was
duly executed to bind the defendants." He relied and acted
in good faith upon these representations. If it was a ques-
tion of diligence on his part, it is difficult to see how he
could have done more. To whom else should he have gone
for information ? The secretary was the legal custodian of the
records of the corporation, and ordinarily, and therefore pre-
sumptively in this case, of the reoords of the board of di-
rectors also. It was natural for the plaintiff to presume that
he knew what they were, and that he understood the powers



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FEBRUARY TERM, 1871. 637

Perry v. Simpson Waterproof Manf. Co.

and duties of the agents and officers of the coiporation, and
especially that he knew who was the proper person to sign
contracts in its behalf. I cannot think therefore that there



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