Asbury v. . Mauney

Allen, J. There are several objections to the right of tbe plaintiff to maintain this action. In the first place, it does not appear tbat tbe stockholders entered into any agreement to pay tbe debts of tbe corporation. It is stated in tbe minutes tbat a motion to this effect was made and seconded, but it does not appear tbat it was voted upon or adopted, and this omission has particular significance in view of tbe evidence of all of tbe stockholders who were present at tbe meeting except tbe plaintiff, tbat after tbe motion was made and seconded, objection was raised, and it never came to .a vote, and tbat tbe plaintiff, who was examined as a witness in bis own behalf did not contradict them, but contented himself with stating tbat tbe minutes contained a true account of the-meeting, and that they were read over to tbe stockholders. Again, the stockholders’ meeting of 16 September was a call meeting for a special purpose, and at such meetings no action can be 'taken which will be binding upon tbe corporation unless every stockholder has notice (Hill v. R. R., 143 N. C., 552), and if tbe meeting is called for a special purpose, business not embraced in tbe notice will be void unless all tbe members of tbe corporation are present and give their consent or tbe action is' thereafter ratified. 10 Oyc., 327. In this case notice was given to .all of tbe stockholders, but tbe notice did not suggest tbat any action would be taken or considered as to tbe imposition of personal liability upon tbe stockholders for tbe debts of tbe corporation, and the action of tbe stockholders, if they agreed to become personally liable, could not be corporate action, and would amount in any event to no more than a personal agreement between tbe stockholders. Tbe agreement also if made, was not the act of tbe corporation, •because it did not purport to deal with tbe property of tbe corporation or the conduct of its business, but simply undertook to determine tbe relationship between tbe stockholders themselves as to their liability for the debts of tbe corporation. . . ¥e must then treat tbe stipulation in tbe minutes as an effort to bind tbe stockholders to pay tbe debts of tbe corporation, for which *458 they were not liable, and when so considered it is apparent that it was not the purpose of those present at the meeting to assume the debts, but that this liability should be imposed on all the stockholders as the resolution introduced does not say that the debts remaining after the application of the proceeds of the goods shall be paid by the stockholders present, but by “the stockholders,” which means all the stockholders, and as so understood it was in the nature of a proposal, which did not become effective because of the refusal of the absent stockholder to give his consent. If, however, we accepted the view of the plaintiff that the minutes furnish evidence of an agreement between the stockholders to pay the debts of the corporation, and that this agreement would be void under Revisa!, sec. 974, unless in writing and signed by the party or by “some other person -thereunto by him lawfully authorized,” we would not adopt the conclusion of the plaintiff that the minutes are a sufficient memorandum of the agreement. The defendant did not sign the minutes and the plaintiff must, therefore, show, in order to maintain his position, that he himself when signing- the minutes as secretary of the corporation was signing as the duly authorized agent of the defendant. The first objection to this position is that the plaintiff did not purport to sign the minutes as .agent for the defendant, but as secretary of the corporation, and, again, it seems to be well settled that one of the contracting parties cannot be the agent of the other for the purpose of binding him by his signature under the statute of frauds. Lord Ellenborough said in Wright v. Dannah, 2 Camp., 203: “The agent must be some third person and could not be the other contracting party.” Abbott, C. J., in Fairbrother v. Simmons, 5 Barn, and Ald., 120: “The agent contemplated by the Legislature, who is to bind a defendant by his signature must be some third person and not the contracting party.” And the same doctrine is declared in Sharman v. Brandit, 6 Q. B., 722, as follows: “One of the parties cannot be tire agent of the other for the purpose of signing the contract.” In Brown on the Statute of Frauds, sec. 367, the author says: “The statute does not require the party’s own signature to the memorandum, but allows it to be signed by some other person thereunto by him lawfully authorized. . . . One rule, however, has been settled, both under the fourth and seventeenth sections, that neither party can be the other’s agent to bind him by signing the memorandum,” and this is quoted with approval in Wilson v. Mill Co., 150 N. Y., 314, and the same principle is declared and approved in 20 Cyc., 276; Wingate v. Herschauer, 42 Iowa, 508; Leland v. Creyon, 1 *459 McCord (S. C.), 100; Bent v. Gobb, 9 Gray (Mass.), 397; Tull v. David, 45 Mo., 444; and we have found nothing to the contrary. The reason for the rule is stated with great clearness in the ease from Massachusetts, and it is pointed out that if the party was permitted to sign the contract as the agent of the other party, the statute, instead of preventing fraud, would encourage fraud and perjury. It would enable one to draw a contract to suit himself, and then, by proving his authority by his own oath, to bind the other party to a contract which he had not made, and to establish a liability by parol when the statute ¡says it can only be done by writing. In the case from Missouri the Court quotes with approval from the opinion of Bigelow, J., in Bent v. Cobb, as follows: “The great mischief intended to be prevented by the statute would still exist if one party to a contract could make a memorandum of it which would absolutely bind the other,. If such were its true construction, it would be a feeble security against fraud, or, rather, it would open a door for its easy commission. A vendor could fasten his own terms on his vendee. If it was a written contract binding on the purchaser, he could not show by parol evidence that the terms of the bargain were incorrectly or imperfectly stated.” If it be objected that a third party might also incorporate terms in the agreement which had not been assented to, the answer is that the danger here is not great, because the disinterested agent has no inducement to commit fraud or perjury, which would be present with an interested party. There are other questions raised by the defendant as to the rights of .a creditor to sue upon the agreement between the stockholders, assuming it to have been made, and as to the consideration, but as what .we have said disposes of the case, it is not necessary to consider them. The case of Armstrong v. Asbury, 170 N. C., 161, has no bearing upon the question now before us, as in that case a judgment by default had been taken, and the only question before the court was as to the admissibility of evidence, which would have destroyed the effect of the judgment, if admitted and found to be true. Affirmed.