Gould v. Norfolk Lead Co.

63 Mass. 338
CourtMassachusetts Supreme Judicial Court
DecidedMarch 15, 1852
StatusPublished
Cited by4 cases

This text of 63 Mass. 338 (Gould v. Norfolk Lead Co.) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gould v. Norfolk Lead Co., 63 Mass. 338 (Mass. 1852).

Opinion

Shaw, C. J.

This was an action of assumpsit, to recover the amount of a draft alleged to have been accepted by the defendants.

The suit was brought May 15, 1848, and was resisted on the grounds that Adams had no authority to accept the draft, so as to bind the corporation; and, secondly, that the acceptance was conditional, and the corporation had not received funds to pay the acceptance, according to its tenor. Inasmuch as it became necessary to ascertain the state of Cox’s accounts with the defendants, the account was referred to an auditor, whose report is a part of the case. It comes before the court on various exceptions, taken by the defendants.

1. At' the trial in the court of common pleas, the plaintiffs offered Adams as a witness, to prove that he was an agent of the corporation, and, as such, authorized to accept the draft in question; to which the defendants objected. The court, however, overruled the objection, and permitted him to testify to his agency and authority. This, we think, was according to the rule, that an agent, acting under a parol authority, is competent to prove his own agency by his testimony; a rule founded on convenience and necessity, and supported by general usage, and it does not come within any of the exceptions to the rule.

[343]*3432. The agent testified that he had paid, as agent of the company, numerous drafts and orders drawn on them, and not previously accepted by them. This evidence was objected to, because it was attempting to prove the contents of written instruments without showing their loss, or giving notice to the defendants to produce them; and because the payment of such drafts had no tendency to prove authority to accept drafts. The court overruled these objections, arid instructed the jury, that the payment of a draft not accepted included its acceptance, and, therefore, was evidence of an authority to accept drafts.

As to the first part of the objection, it is obvious that, if the drafts were thus paid, they were paid by the corporation, and for their account. A corporation must act by and through agents, directors, or trustees, because it can act in no other way. Perhaps the presumption is that these drafts, having been so paid, were cancelled or destroyed; but if otherwise, and if they may be presumed still to exist, it is to be presumed that they are held by the company, and could be produced by them, and so notice to produce should have been first given. If the case depended upon this point, we should say sufficient notice for this purpose might have been given at the trial; and, in a new trial, a very short notice would probably be deemed sufficient.

3. The second branch of this objection is entitled to more consideration. The instruction of the court, that the payment of a draft not accepted included its acceptance, and was evidence of an authority to accept drafts upon the company, was, in our opinion, incorrect in point of law. The acceptance of a draft is an executory undertaking to pay it at a future day, and the authority to make such an agreement is not incident even to the authority of an agent to purchase and pay for goods. The authority to accept is one of a very high character, particularly in the case of a trading corporation, to whose business credit, and the use of that credit, is constantly necessary. It has been argued, that such authority may be inferred from the course of trade, and the payment of unaccepted drafts upon the companv on other [344]*344occasions. But this implication does not follow from such payments; for, either the agent had funds of the company for the purpose of paying such drafts; which does not imply that he had authority to pledge their credit; or he paid them from his own funds, relying on the credit of the company, and their previous undertaking and liability to reimburse him for all his advances, which implies no authority whatever to bind them to a future payment of money, by an acceptance. I shall not go into an examination of the cases on this subject, but will refer to that of Webber v. Williams College, 23 Pick. 302, where the question was much considered, and many cases were cited.

The case of Emerson v. The Providence Hat Manuf. Co. 12 Mass. 237, goes to the point that, constituting one a buy* ing and selling agent of a trading company does not imply authority in him to give the negotiable note of the company.

In the case before us, the agent, by accepting the draft, bound the corporation, if he bound them at all, to account with another person than Cox, which might be very injurious to them, as it would exclude them from setting off what might be due to them from him. The authority to pay drafts applies only to that specific class of transactions, and, therefore, there can be implied from it no ■authority to agree to pay at a future day. If Adams paid the drafts from his own funds, he did so relying on his own authority, as agent, to that extent, to reimburse himself, or on the subsequent ratification of his acts by the company, as otherwise he was without remedy; for no man can make himself the creditor of another without his consent, express or implied. Without such consent, he pays in his own wrong.

4. The next point is, that the plaintiff’s counsel was permitted to argue from the fact, that the agent had made a contract with Cox for building certain machinery for the defendants, that he was authorized to pledge the credit of the company by his acceptances. We think the evidence had some tendency to prove that he was a general agent of the defendants, and, in that respect, was competent, though certainly it was very remote. The name of general agent might [345]*345imply, that he had authority to purchase materials for carrying on the defendants’ business, but it had little tendency to show authority to accept drafts for them.

5. The defendants then put in a vote of the directors of the corporation, that the proposition of Mr. Cox for building machinery be referred to Mr. Adams, and put in also a written proposition, made by Cox, which was different from the terms of the contract afterwards executed between him and the defendants; and the defendants’ counsel asked the court to rule, that this vote was a sufficient authority to Adams to make and execute the contract which was finally made, and, therefore, had some tendency to show an authority in Adams to pledge the defendants’ credit. But the court, on the other hand, ruled, that the vote of the directors merely authorized Adams to consider and report upon the proposition, and not to make a contract. The defendants then asked leave to prove by the directors, who had sold and transferred their stock in the company, that they understood the vote to confer upon Mr. Adams full authority to make and execute the contract. This the court refused to do, because the vote was in writing. This, we think, was correct; because the vote was a written instrument, and must be construed by its terms alone, with reference to the subject-matter to which it applies. If the terms of the vote imported the authority to make the contract, no parol testimony was necessary; if it did not, such testimony could not be competent to control and vary those terms.

6. The defendants’ counsel objected to the auditor’s report, because it stated that

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Bluebook (online)
63 Mass. 338, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gould-v-norfolk-lead-co-mass-1852.