On appeal from the Hudson County Circuit Court.
For the defendant-appellant, Kelsey & Ludwig.
For the plaintiffs-respondents, Hiram Elfenbein and Stanley Cohen.
The opinion of the court was delivered by
WELLS, J. This is an appeal from a judgment entered upon the verdict of a jury after a trial at the Hudson County Circuit Court.
Plaintiffs are partners doing business as accountants and auditors in New York. Defendant is a New Jersey corporation doing business in this state and having an office in New York. Its capital stock consisted of twenty thousand shares of $100 par value stock issued and outstanding. On this stock it paid an annual franchise tax of $2,000.
Under date of November 24th, 1928, plaintiffs wrote the following letter (Exhibit P-1) to defendant:
"As a result of careful investigation we have discovered that your company has been making a needless expenditure of approximately $1,400 annually and that this amount may, in a purely legal manner, be eliminated from your annual expense.
"We will gladly submit our findings and point out exactly how this saving can be effected.
"There will be absolutely no obligation on your part unless our information or advice is made use of and a reduction in expense is actually effected, in which event, our fee shall be an amount equal to fifty per cent. of the first year's reduction.
"Upon advice from you we will be pleased to submit our data without obligation to you as stated above."
This letter was addressed and delivered to the New Jersey plant of defendant.
Paul Kuhne, a director and treasurer of the defendant since its organization in 1920, received the letter at the defendant's office and showed and gave it to Mr. Lukenbach, president of the corporation.
On December 5th, 1928, on the letterhead of Lukenbach Trap Rock Corporation, a company affiliated with the defendant, Kuhne wrote from the New York office of the defendant the following letter (Exhibit P-2) to the plaintiffs:
"With reference to your letter of November 24th, which was directed to our River Road plant, please advise us what you have in mind."
The letter was signed "P. Kuhne, Treasurer." This letter, he says, he was not authorized by the board of directors to write but that he wrote it of his own volition and in the same way that he answered many letters directed to the company that related to matters that he had charge of.
At the time he wrote the letter the president of the company was out of the office but he brought the letter to the president's attention.
On December 6th, 1928, plaintiffs sent a letter (Exhibit P-3) in reply to Exhibit P-2, directed to defendant at its New York office, "Attention of Mr. Kuhne, Treasurer," setting out in detail a plan by which the defendant could amend its certificate of incorporation by changing its $100 par stock to no-par stock, and thus reduce its tax on the same number of shares from $2,000 to $600. It also pointed out that a further reduction could be accomplished by reducing the number of shares outstanding, and that in order to make the reduction effective on the 1929 tax, the amendment would have to be made by December 31st, 1928.
Mr. Kuhne brought this letter also to the attention of the president, but couldn't say whether the president brought it to the attention of the ...