In 1902 and 1903 Daugherty & Albers, a corporation formed under the laws of the State of New York, was selling the mining stock of Mine La Motte Lead and Smelting Company. The defend-' ant was acting as managing agent- at Poughkeepsie, and as such agent sold to the plaintiff on or about March 27, 1903, fifty shares of said stock for the sum of $425. As part of the transaction the defendant executed to the plaintiff an instrument of which the following is a copy :
“ Poughkeepsie, H. Y., Mck. 27,' 1903.
“AS:
“ Henry C. Sherman, of Oneonta, H. Y., being the holder of fifty shares of the capital stock óf the Mine La Motte Lead and Smelting Company, purchased at Eight 50-100 Dollars per share, we,, the *596undersigned, hereby agree to and with said Sherman to buy said shares of him at the price paid for the same on his giving thirty days’ notice in writing after Jan. 1st, 1904.'
“ (Signed) DAUGHERTY & ALBERS.”
Thereafter plaintiff, having become dissatisfied, made application to Daugherty & Albers to repurchase .the stock pursuant to this agreement, which Daugherty & Albers refused to do, claiming that the agreement was executed'without authority: This plaintiff thereupon brought this action against the defendant upon his implied warranty of authority to execute said contract. . The-defendant has. been charged with a judgment representing the difference in value between the price-paid for the stock and one dollar and twenty-five cents- per share, the value at the time the plaintiff demanded its repurchase by Daugherty & Albers, together with interest to the date .of the judgment.
The referee has found the purchase by the plaintiff of the said stock, the execution of the agreement to repurchase .ás a part of said transaction, and that Daugherty.& Albers was a domestic corporation at the time of the execution of said agreement. He then finds that the by-laws of the said corporation provided : “Ho debts shall be contracted or liability incurred or contract entered into by and in behalf of'this company unless the same be authorized and directed.by a resolution of the board‘of directors, or a majority of them, and the .resolution shall be entered in the minutes of said directors ; ” further, that its “ officers, agents and employees shall respectively have such powers and perform such duties in-the management of the property and affairs of the corporation, subject always to the control of said board of directors, as may be prescribed for them by the1 said board of directors.” It was further found that there was no resolution or other entry in the minutes of the directors conferring Upon the defendant, or any officer or agent of the corporation any power or authority to execute or deliver the agreement1 in question, and that the corporation had no knowledge-of the execution and delivery of said agreement by the defendant to the plaintiff until plaintiff demanded the fulfillment thereof by said corporation. . As a conclusion of law it was found that the act of the defendant in executing the agreement was without authority,’ *597expressed or implied, from the corporation, and did not bind the corporation; that the said corporation did not ratify the same, and that the plaintiff was entitled to judgment against this defendant.
It was insisted upon the trial and upon this appeal that the by-law of the corporation quoted limited the authority of the defendant to a contract that was authorized by the board of directors by resolution duly entered, and apparently such was the view taken by the learned referee. In this I think the referee fell into an error. First, the by-law as found by the referee is not the by-law offered in evidence. The by-law as it appears in the evidence reads: “ No debts shall be contracted or liability incurred- or contract made and entered into by and in behalf of this com'pany, by any officer of this company, unless the same be authorized,” etc. The by-law as found by the referee leaves out the words “ by any officer of this company.” This clause seems to me a most significant one in construing the by-law. The contracts therein referred to are clearly such contracts as would only be made by an officer of the company, and do not limit the authority of a managing agent intrusted with the sale of its securities to make a contract verbally authorized by those controlling the corporation as an incident to such sale. Daugherty & Albers were practically the owners of the stock of this corporation. Daugherty was its president, but remained in the West; while Albers was the secretary and treasurer, having apparent charge of the business of the corporation in the selling of this stock. The evidence of the defendant is to the effect that he was authorized by Albers to make such contracts, where such contracts were necessary to effect a sale. Albers himself had made such a contract two months before this contract was'made with the plaintiff, and the fact that such contracts had been made by the corporation became generally known, so that it was natural that intending purchasers should demand such a contract as had been given to former purchasers. Copies of letters written to the corporation by the defendant indicate his understanding of his authority to make such contracts when necessary. It is clear that both the defendant and corporation had full confidence in the value of the stock being sold. The defendant’s confidence was such that in some instances he gave his personal guaranty for stock, which he had been compelled to redeem. Where, however, he gave the *598guaranty of-the-corporation, if authorized by the corporation-so to do, the liability is that of the corporation and not his own, and to the corporation alone must the plaintiff look for compensation. ■
. The referee undoubtedly had the right to disregard the testimony of the defendant-and to find that lie had no authority from Albers to make such a contract in behalf of the corporation and we are authorized to presume that'the"referee has so found.in support of this judgment. The burden of proof, however, was with the plaintiff to prove want of. authority. The testimony of the defendant as to his authority was explicit and uncontradicted, and in view of the course that had been taken by the corporation was even probable. Inasmuch as the referee has apparently given an undue effect to a by-law of the corporation as limiting , the authority of ■the defendant, the interests of justice in my judgment require that there should be a new trial, wherein the question of the defendant’s authority from Albers to execute such contract may be specifically ■ determined. The judgment should, therefore, be reversed on law and facts and the referee discharged, and a new trial granted, with costs to appellant to abide the event.
All concurred, except -Kellog'g, J., dissenting in opinion, in which Cochrane, J., concurred.