Johnson v. Smith

Hawley, for the defendants,

contended, 1. That the notes bound the society; the power to raise money authorizing the raising of it, in the ordinary manner, as it was raised here.

There was no necessity for the concurrence of all, nor even of a majority of the committee in giving the notes. The specific thing to be done was authorized and directed. It was a mere ministerial act; there was no judgment nor discretion to be exercised, as to whether it should be done or not, nor otherwise, in relation to it. It was an act that could as well and as effectually, for all the purposes of the society, be done by one as by many. In ascertaining the nature of a power, we look at the intent of the person who confers it; and in ascertaining that intent, regard the character and nature of the act to be done. A power to seven, or any of them, would undoubtedly authorize three to do the act. And here, the nature of the act to be done, the character of the committee, and the nature of their office, shew, that such was the power conferred by the vote. The power of officers of a municipal corporation is joint and several; and where no judgment or discretion is to be exercised, any one may act. A purchases Black-Acre of B, for 1,000 dollars. He is to pay the money at a given time and place, and then receive the deed and place it on record. He empowers three to do these acts for him; one only of the three, at the time and place, pays the money, takes the deed, and puts it on record. Is not the payment effectually made, and a title acquired by the deed?

2. That the note is, inform, sufficient to bind the society. Hovey v. Magill, 2 Conn. R. 282. Magill v. Hinsdale, 6 Conn. R. 465. The addition of “vestry-men,” &c., imports that they act in behalf, not of themselves, but of the society. And the place of the date of the note, and the fact that there is an Episcopal society in Brookfield, (and only one,) shews, that that society was intended. Besides, the parol testimony puts all doubt, on this point, at rest.

*632 3. That the parol testimony was admissible. It was not o ffered to vary any stipulation of the note, but to prove a fact—the fact of the plaintiff’s knowledge of the character in which the defendants acted. The plaintiff having that knowledge, cannot look to the defendants for payment. And even if the form of the contract were such, that without such knowledge, the agents might be bound, yet on showing such knowledge, they are not bound; especially, if the form of the contract be such that the principal may be bound, consistently with its tenor. Hovey v. Magill, 2 Conn. R. 680. Wilson v. Hart, 7 Taun. 295. Garrett & al. v. Handley, 4 B. & Cres. 664. (10 E. C. L. 438.) Bateman v. Phillips, 15 East, 272. Angell on Corp. 283. & seq. Mott v. Hicks, 1 Cowen, 513. 532, 3, 4, 5, 6.

4. That the process of foreign attachment, shown in this case, furnishes no defence to the Episcopal society, in the present suit.

Church, Ch. J.

It is obvious, that only one debt became due to this plaintiff, by reason of his loan of money, as set forth in this record. This being true, the only question is, who owes it—the society, the corporation of St. Paul’s Church, or these defendants? We answer, the former.

The money was raised, by direction of the society, for its sole use; it has received and used it, and, by its treasurer, has, from the beginning, annually paid the interest upon it, to this plaintiff and Lacy his assignee, the holders of these notes, who have recognized the society, and no one else, as their debtors. Nor has claim been made upon these defendants, until since the process of garnishment has been served upon St. Paul’s Parish, for the debt of Lacy. The society received the money directly from the plaintiff, through the avowed and recognized agency of these defendants as its officers; they were not middle men, borrowing from the plaintiff, and lending to the society.

We do not think that these defendants were ever liable upon these notes: they are the notes of the society.

The defendants signed the notes as vestrymen of the Episcopal society, which society the superior court has found was identical with the society of St. Paul’s Church, and not for themselves. The word “ vestry-men,” ex vi termini, imports *633 agency, and is of the same significancy as the word agents, committee, &c. And the defendants were in fact vestrymen of said society, and, with others, specially constituted a committee, and empowered to raise these funds.

That a note thus signed, by authorized agents of a corporation, is the note of the corporation, and not of the agents executing it, was very deliberately decided, by the courts of this state, long ago, in the cases of Shelton v. Darling, 2 Conn. R. 435. and Hovey v. Magill, Id. 680; and the same principle, recognized and settled in those cases, has been followed here ever since. Magill v. Hinsdale, 6 Conn. R. 465. Ferris v. The Stamford Bank, 17 Conn. R. 259.

Judge Swift, in expressing the opinion of the court, in the case of Hovey v. Magill, says: “It will be agreed that no precise form of words is required to be used in the signature; that every word must have an effect, if possible; and that the intention must be collected from the whole instrument, taken together:" and again: "I can see no good reason for the addition of agent, but to render the note obligatory on the company, and exclude all idea of individual liability. This is the plain language of the transaction, and we ought to give it the obvious meaning, and not entrap men, by the mere form of words.”

We need not look abroad for a doctrine more common sense like, or more consistent with obvious intention, on this subject, than is expressed by the court, in the case referred to, if indeed a different doctrine has been intentionally recognized elsewhere. And unless we are disposed to yield to the authority of technicality, in opposition to good sense and substantial equity, we shall adhere to what we suppose is the authority of our own law on this subject.

No one, as we think, can doubt, when reading this note, that the purpose of the defendants was, to give a society note, and that the plaintiff supposed he was receiving such a one, and was giving exclusive credit to the society, for money loaned to it; he was a member of the society himself; and whether the defendants, or either of them, were persons to whom he would give credit personally, we do not know.

There is some apparent confusion in the decided cases, out of this state, on this subject; but we are satisfied, upon *634 a view of them all, that the doctrine of our law is the doctrine of most of them. Story on Agency, § 154. 155. 263. Angell & Ames on Corporations, 170. 2 Kent's Com. in loc. Rathbon v. Budlong, 15 Johns. R. 1.

This confusion has arisen, perhaps, in some measure, from not always distinguishing between the execution by agents of sealed instruments, as deeds of conveyance, covenants, &c., in which greater precision of form has been required, and simple and mercantile contracts; and also between cases of corporations and mere voluntary associations, acting by agents. Story on Agency, § 154.

That an agent may bind himself personally, even when acting really or professedly as agent, is not denied; and in the execution of a simple contract, as well as a specialty; and this will be so, in all cases, where, by language clearly expressive of such an intent, he has substituted his own responsibility for that of his principal. So also, if in language of personal obligation in the body of the contract, although he may sign as agent, he will bind himself, if he had no authority to bind, and has not bound, his principal, by his act; as the plaintiff hereafter insists, in the present case. But in case of a defective power to bind the principal, if the agent speaks only in the language of the principal, and does not use apt language to bind himself, he will not be liable on the contract thus made, but collaterally only, for a false assumption of authority to act for another. Jones v. Downman, 4 Adol. Ell. N. S. 234. n. (45 E. C. L. 234.) But in the present case, the form of the notes and the circumstances under which they were executed, show no intent, on the part of the defendants, to assume an individual obligation.

The strong ground of claim, by the plaintiff, here, is, that if, by the form of the notes and manner of execution, the defendants were not made personally responsible, they became so, because by the manner in which their agency was executed, they imposed no obligation upon the corporation to pay them. This claim is predicated upon the fact, that the society, by its vote, appointed its wardens and vestry, consisting of six persons, to raise the money for which these notes were given, and the notes were signed only by three of them.

*635 We admit the principle, that, where a power of mere private confidence is entrusted to a number of persons, all must concur; and if of a public or more general nature, a majority, at least, must act, in order to bind the body conferring the power. And although, in the present case, a majority of the wardens and vestry did not sign this note, yet who is it that objects ? Not the corporation, which alone is affected by the act, but a third person. The society, whose officers de facto the defendants were, has never objected to or repudiated their act, and never can. If the signing of these notes was not its act originally, it has adopted and sanctioned it, so as to be itself estopped. It could not, as we think, ever have objected to the original act of signing or executing those notes. The defendants were their officers and agents, and authorized to do just what they have done; and the avails of their agency were for the immediate benefit of the society, and for which they were then legally liable. All was right, except that one or more of the committee, neglected to join in the act of executing the notes.

But if a subsequent ratification was necessary to create a binding obligation upon the society, it has been most effectually done, by receiving and using the money, and by an annual payment of the interest upon these notes, and entering them upon its book, as its own debts. “A ratification,” says Judge Story, “ when fairly made, will have the same effect as an original authority, to bind the principal, not only in regard to the agent himself, but in regard to third persons.” In short, it is treated throughout as if the act were originally authorized, for the ratification relates back to the time of the inception of the transaction, and has a complete retroactive efficacy: Omnis ratihabitio retrotrahitur. Story on Agency, § 244. Broom's Maxims, 381. Addison on Contracts, 397.

And so it has been holden, if a person, without previous authority, sign a memorandum required to be in writing by the statute of frauds, a subsequent adoption or assent, by the principal, will take the case out of the statute, as effectually as if the agent had authority at the time of signing. McLean v. Dunn, 4 Bing, 722. (15 E. C. L. 129.) The case of Saunderson v. Griffiths, 5 B. Cres. 909. (12 E. C. L. *636 404.) on the first reading, might appear to be an exception to the almost universal doctrine of the law on this subject; but it involved really only a question of variance, and a nice discrimination in a matter of pleading. And some other cases are to be found forming apparent exceptions, in which the discrimination “is one of considerable nicety, and stands upon reasoning not very satisfactory or clear.” Story on Agency, § 246. and notes.

It will be recollected, that the vote of the society authorizing the wardens and vestry to act, was not imperative as to the time or manner of their action: it was only that ‘‘they be directed to raise 500 dollars for Mr. Osborne, the builder of the new church,” leaving the manner of doing this entirely at the discretion of that board. There was no direction that the committee or board should execute any bond, note or other specific form of security, or if given, that it should be executed under the hands of the whole, or a part of the committee. That board was to devise the means, and direct as to the manner of raising the specified funds; and if, by its direction or approval, these defendants alone signed the notes for the money for which a majority had negotiated, why would not this be a reasonable and legal execution of the power conferred by the society? Such a mode of proceeding, we believe, is not uncommon. One or more select-men of a town, less than a majority, often execute the powers conferred by the law or the towns upon the board of select-men, and especially, when no objection is interposed, by the other select-men or the town; and this upon the presumption of an assent, by the whole, or a majority of the select-men. May we not fairly presume such to have been true, in the present case, as to the mere manner of executing the notes in question?

These suggestions are made in view of the doctrines recognized by the supreme court of the United States, in the case of Fleckner v. Bank of United States, 8 Wheat. 338 . The plaintiff in that case claimed title to the note in suit, by virtue of an indorsement of it, by the cashier of the Planters’ Bank. The defendant insisted, that the cashier had no authority to make the transfer. The facts were, that the board of directors of the Planters’ Bank, on the 21st day of October, 1819, passed a resolution, “ that the *637 president and cashier be authorized to adopt the most effectual measures to liquidate, the soonest possible, the balance due to the office of discount and deposite in the city of New-Orleans,” &c. To effect this object, the cashier indorsed the note in question; and on the 27th day of June, 1820, the directors of the Planters’ Bank ratified this act of the cashier. The objection was made by the defendant, on the ground that the cashier alone had acted, without the president of the bank. On this point, the court says: “ The resolution was merely directory to the president and cashier, and leaves them to decide as to the time, the mode and the means. They might, therefore, agree, that the cashier should indorse the note in question, &c. The presumption that this was an exercise of authority, sanctioned by the president, as well as contemplated by the directors, is almost irresistibly proved, by the fact that the Planters’ Bank has never complained, but has ratified and approved the whole transaction.” The court goes on to say, that the resolution of June 27th, 1820, was conclusive and binding on the bank; and if so, it was binding upon all other persons who have not an adverse interest. No maxim, say the court, is better settled in reason and law, than the maxim, Omnis ratihabitio retrotrahitur; at all events, where it does not prejudice the rights of strangers. P. 363. We believe that the reasonable doctrines of this case, in this respect, are quite applicable to the case before us. And if so, as well as upon the other views expressed by us, a majority of us are of opinion, that this action against these defendants, cannot be sustained.

We have not thought it to be necessary, therefore, to consider any questions which may be supposed to arise from the garnishee process, set out in this record.

In this opinion the other judges concurred, except Hinman, J., who dissented.

Judgment for defendants.