
    No. 351
    KOBLITZ v. MORRIS ARNOFF REALTY CO.
    Ohio Apepals, 8th Dist., Cuyahoga Co.
    No. 5490.
    Decided Feb. 2, 1925
    865. OFFICERS—Of corporation cannot receive compensation for services rendered in connection with corporation, unless expressly or impliedly provided for by authority of board of directors.
    Attorneys—Squire, Sanders, and Dempsey, for Koblitz; Reed, Meals, Orgill, and Maschke for Arnoff Realty Company; all of Cleveland.
   SULLIVAN, J.

Morris Arnoff was involved financially by reason of ventures into the construction of apartment houses in Cleveland. In order to protect creditors, as well as the property, a Creditors Committee was formed at a meeting of all the creditors, as was the incorporation of the Morris Arnoff Realty Co. Lawrence Koblitz was a member of the Creditors Committee and also secretary-treasurer of the corporation. Arnoff agreed to deed to the newly organized corporation, all property involved, and the company was to execute a mortgage deed of trust to the amount of the creditors claims, to the Guarantee Title & Trust Co. as security for payment of their claims. Morris Arnoff, the holder of almost all the stock, was to transfer the same to Trust Co.

By 1920 all the creditors had been paid their claims, and their bonds had been turned back with the exceptions of the Farr Brick Co., one of the creditors, of which company Koblitz was treasurer. Koblitz refused to execute an affidavit that its bonds had been stolen, as it claimed, and give proper indemnification because of an amount claimed by him on a “quantum meruit” basis for services rendered in behalf of the Realty Co. while connected with it. Action was brought by Arnoff in the Cuyahoga Common Pleas to recover $9200 for his services; but judgment in that court was rendered in favor of the Realty Co. Error was prosecuted and the Court of Appeals held:

1. Officers of corporations are precluded from receiving compensation for services connected with the Corporations unless express or implied authority is derived from board of directors. The record showed no testimony of authority from the directors to bind the corporation to pay anything to Koblitz for any services.

2. Arnoff as general manager of the incorporation did most of what work there was to be accomplished.

3.Conversation of Koblitz brought out the fact that he did not expect to get paid for his services.

The judgment not being contrary to the weight of the evidence, is affirmed.  