Raleigh Banking & Trust Co. v. Safety Transit Lines, Inc.

BbogdeN, J. The record presents the following questions of law: 1. Is the acceptance of the lease by Safety Transit Lines, Inc., void by reason of the fact that the corporate seal was not affixed thereto ? 2. Was Gresham, president of Safety Transit Lines, authorized to consent to said lease? 3. Did the Safety Transit Lines, Inc., ratify said lease by taking possession of the property and using the same until the receivership ? 4. Did the failure of Seashore Transportation Company to sign the lease release the obligation of Safety Transit Company ? No statute of this State has been called to our attention requiring a lessee to sign the lease. The provisions of C. S., 1138 apply to conveyances, and it has never been held in this jurisdiction that the assent of a lessee to the terms of the lease is a conveyance. Hence, the failure to affix the corporate seal to the acceptance of the lease by the lessee would not seem to be vital. Indeed, it was held in Mershon v. Morris, 148 N. C., 48, 61 S. E., 647, that: “The ancient rule that a corporation could act only by its seal has been greatly relaxed in later times, if, indeed, not wholly abrogated.” In discussing the absence of a seal upon a title retaining contract for personal property in Mershon v. Morris, supra, this Court said: “There was no necessity for the corporate seal. For the varied transactions of a business or manufacturing corporation it would be impracticable to require every letter, order, contract, note, check or draft to have the corporate seal attached.” Even if the corporate, seal be affixed it is only prima facie evidence that it was so affixed and that the conveyance was executed by proper authorities. Duke v. Markham, 105 N. C., 131, 10 S. E., 1017; Edwards v. Supply Co., 150 N. C., 173, 63 S. E., 740; Chatham v. Realty Co., 174 N. C., 671, 94 S. E., 447. The court finds that Gresham as president of Safety Transit Lines, Inc., had no express authority to assent to the lease or sign said lease agreement. There is no finding that said president had no implied authority to accept said lease or that Royall, the lessor, had notice of any lack of such authority. The president of a corporation is ex vi termini its general agent. Davis v. Ins. Co., 134 N. C., 60, 45 S. E., *680 955; Bank v. Oil Co., 157 N. C., 302, 73 S. E., 93; Cardwell v. Garrison, 179 N. C., 476, 103 S. E., 3. In the Cardwell case, supra, there was a resolution passed by the directors that no contract or valuable papers should be valid without the signature of the secretary and treasurer. The president endorsed notes of the corporation to the plaintiff. The court said: “This being true, the legal title to these notes would, in our opinion, pass by the endorsement of the president of the company, notwithstanding the resolution of the directors establishing limitations upon his powers. Such endorsement being within the scope of his apparent powers, and coming under the accepted and wholesome rule that a principal who has clothed his agent with apparent authority to do an act may not repudiate such authority, and the effect of it by reason of private instructions or limitations uncommunicated or unknown to the other party.” Again in Morris v. Basnight, 179 N. C., 298, 102 S. E., 389, in discussing a contract to convey land, signed by the secretary, the Court said: “The contract to convey is sufficient in form, and having been executed by the general manager of the company, apparently within the course and scope.of his powers, and in the line of the company’s business, is prima facie binding on the company. And, if it were otherwise, the company having acquired the plaintiff’s interest in his father’s land and the timber thereon under and by virtue of the act of the secretary and general manager, are concluded on this question. They will not be allowed to accept and hold the benefits of the agreément and repudiate the authority of the agent by whom it was made.” In the case at bar the president of the Safety Transit Lines was dealing with the plaintiff for a period of six months. The company was required to join in the erection of a bus station. The act of the president was, therefore, in line with the company’s business, and the negotiations for the lease were in furtherance of such business. Indeed, it appeared that the company was required to secure a bus station by order of the Corporation Commission, and hence the president in so acting was discharging for his corporation a duty duly imposed by lawful authority. Under these circumstances and in the absence of notice to the plaintiff of any limitations upon the general power of the president, it cannot be held that the contract was not binding upon the defendant, Safety Transit Lines, Inc. It is also suggested that the other bus companies did not sign the acceptance of the lease or lease agreement. However, it is further found as a fact that Gresham, president of Safety Transit Lines, Inc., stated to the plaintiff, Royall, “that he had a verbal agreement with other bus companies using the bus station for a partial contribution of the expense thereof.” *681 Moreover, tbe court further found as a fact “tbat tbe said bus station is now and bas been since its completion under tbe control and management of tbe four bus companies operating in tbe city of Goldsboro; tbat under tbe order and direction of tbe Corporation Commission tbe said bus lines verbally agreed to contract for rental and division of tbe rent.” There is no evidence or finding tbat tbe contract between tbe plaintiff and Safety Transit Lines, Inc., was conditioned upon tbe signature of other parties. Clearly, tbe aforesaid statement of Gresham was a waiver of tbe signature of other parties so far as tbe Safety Transit Lines, Inc., is concerned; and tbe further fact tbat possession of tbe bus station was taken under and in accordance with tbe terms of said paper writing would of itself constitute a waiver of such signature. Tbe court found as a fact tbat there bad been no breach of contract upon tbe part of Safety Transit Lines, Inc., or its receivers. Tbe court also found as a fact tbat “tbe receivers at no time indicated a purpose or .desire to take over said contract or to ratify or be bound by tbe terms of tbe same, but on tbe contrary, immediately after tbe receivership, denied any obligation thereunder.” Tbe court also found as a fact tbat tbe assignee or purchasers of tbe lease at tbe receiver’s sale, to wit, Safety Transit Company, also repudiated tbe lease and refused to assume any responsibility thereunder. Ordinarily tbe positive repudiation of a lease or denial of liability thereunder would work a breach thereof as a matter of law. However, tbe findings with respect to this particular phase of tbe case are inconsistent and conflicting, and we are unable to determine tbe merits of tbe question of law involved upon tbe present state of tbe record; and for this reason we are minded to remand tbe cause to tbe Superior Court of Wayne County in order tbat it may be specifically and definitely determined whether there bas been a breach of tbe lease by tbe Safety Transit Lines' Inc., or its receiver or tbe purchaser of tbe lease at tbe receiver’s sale. Fullenwider v. Rendleman, 196 N. C., 251. There is no finding tbat tbe amount of damages claimed by tbe plaintiff is based upon an erroneous theory or not supported by both tbe law and tbe facts. Therefore, we do not discuss this phase of tbe ease. Apparently tbe claim is based upon tbe theory of damages approved by this Court in Monger v. Lutterloh, 195 N. C., 274, 142 S. E., 12. Remanded.