Goodwin v. United States Annuity & Life Insurance

Storrs, J. The exceptions, taken by the plaintiffs, to the rulings of the superior court, on the trial of this case, will be noticed in the order in which they are presented on this motion. 1. The plaintiffs, under the count upon an account stated, rested their case on proof of an entry in what they claimed to have proved to be a book of the defendants, containing the proceedings of their directors, which entry consisted of a vote of the directors at their meeting on the 16th of January 1851, approving of the bill ofthe plaintiffs, the amount of which was sought to be recovered in this case, and directing the same to be paid. The defendants claimed that this was not a genuine, or authentic record book of the proceedings of their directors, but that it was spurious and unauthorized, and that no such vote was passed at that meeting; and on this point introduced two other books, purporting to contain, among others, the proceedings of the directors, at their meeting on said 16th of January, and in which said vote did not appear, accompanied with evidence that they were the true and genuine record books of the directors, and contained the minutes of their proceedings, and were treated as such — 600 — by the defendants. The plaintiffs objected to this evidence, on the ground that it did not conduce to show that the book which they had produced was not genuine, and that the books offered by the defendants did not conduce to show that the directors did not pass said vote. In order to render the book, offered by the plaintiffs, evidence against the. defendants, it was necessary for the former to prove that it was authentic and genuine, and it was competent for the defendants to rebut that proof by any testimony proper for that purpose. We are of opinion that the evidence, so offered by the defendants, conduced to show that the book, introduced by the plaintiffs, and which contained entries of a character different from, or inconsistent with those in the books introduced by the defendants, was spurious, and that the latter books, if found to be genuine, inasmuch as they did not mention any such vote as that relied on by the plaintiffs, conduced to prove that it was not passed. The evidence, therefore, was properly received. 2. The defendants, for the purpose of showing that, if a meeting of the directors was held on the 16th of January, it was illegal and the votes therein passed consequently void, were permitted, against the objection of the plaintiffs, to prpve that the meeting of the directors of the 15th of January, the entries of the proceedings of which, adduced by the plaintiffs, stated that it was adjourned to the 16th of January, was, in fact, adjourned, not to that day, but to the 17th of January. The plaintiffs insist that the entries or minutes of the proceedings of the directors, adduced by them, were conclusive, and could not be contradicted. We are referred to no case in support of this claim, nor do we think it sustainable. Where the affairs of a corporation, like that of the defendants, are managed by a board of directors, they are only the agents of the corporation, and their acts are binding on it, when they act within the scope of their authority, however that authority may be conferred ; but they do not constitute the corporation itself. The character of their — 601 — authority is the same as that of a managing board of an unincorporated association. It is not necessary, from the nature of their authority, that the acts of either of these bodies should be done by writing or vote, and the inconvenience of transacting all the numerous details of their business in that mode would be intolerable. They may act in the same manner as the agents of any other persons. It is consequently not necessary to the validity of their acts that they should be recorded, although this is perhaps usually done. It may be, and is frequently, required by the charter, or by-laws, of a corporation, that its directors shall make a record of their proceedings, in which case it is their duty to do so; in that case, however, it is at least questionable whether such requirement is not merely directory, but there is no claim that there was any such requirement as to the defendants’ corporation. If a record is kept of the proceedings of the directors of a corporation, it constitutes legal evidence of those proceedings; but as such records consist merely of the written entries of their acts made by a clerk appointed by them for that purpose, for the convenience only of themselves, or the corporation for whom they act, we think that they are not of so high or solemn a character as to be conclusive, and that they may therefore be contradicted by any person whose interests may be affected by them. Such entries stand on the same ground only, as the entries of the acts of any other persons made in their private books. The evidence, introduced for the purpose of such contradiction, was therefore properly admitted. This disposes also of the exception taken by the plaintiffs to the charge of the court below on this point. 3. The defendants claimed that if the meeting of the directors on the 15th of January was adjourned to the 16th of that month, and there was a meeting of directors on the latter day, it was not held in pursuance of said adjournment; that notice of it was not given to any of the seven directors of the company except the three who were present thereat, — 602 — and who, by the by-laws of the company, were sufficient to constitute a quorum; and that the meeting was not held fairly and openly, but that it was held secretly, and concealed intentionally from the knowledge of the other directors. For the purpose of showing such secrecy and concealment, we are of opinion that, in connexion with the other evidence which appears to have been adduced by the defendants in support of this claim, it was competent for them to prove that other meetings of directors were held about the same time, at other places than the building where the directors’ meetings were usually held, and to which the meeting of the 15th of January was adjourned. The clandestine object, which the proof of the defendants, especially that as to the manner in which the holding of the meeting of the 16th was communicated to some and withheld from the other directors, tended to show, would be more successfully accomplished by holding that meeting at some other place than that to which it had been adjourned, and the circumstance, that meetings were held about that time at other places, was one which was proper to be considered on the enquiry whether the meeting in question was held at one of those places. 4. The testimony of Waterman was plainly admissible to prove the claim of secrecy and concealment in regard to the meeting of the 16th of January. 5. The evidence, offered by the defendants to prove that the vote, relied .on by the plaintiffs, was rescinded by a vote of the directors passed at a subsequent meeting, was properly admitted for the purpose of showing that the defendants did not acquiesce in the former vote, but repudiated it when it became known to the directors who were not present when it was passed ; as it repelled the inference which might otherwise be drawn’ of their assent to it. 6. The court charged the jury that if, as the defendants claimed to have proved, the premium paid by them on their stock, when they bought it of the plaintiffs, was paid by them to, and received by the latter to reimburse them for the — 603 — expenses of obtaining the defendants’ charter, and the plaintiffs, when the vote relied on by them was passed, concealed that fact from the directors who passed it, and the latter were ignorant of it, such concealment was a fraud which would defeat the plaintiffs’ recovery. The plaintiffs except to this charge on the ground that the account stated, as evidenced by that vote, was conclusive as to the amount due to them. Without enquiring into the applicability of the rules on the subject of an account stated, where there is no positive, direct statement of an account, but the promise on a count upon an account stated, is only a matter of inference, or implication, from other circumstances, it is sufficient to say that, however the law stood anciently on the effect of stating an account, it is now the established doctrine that an account stated may be impeached for fraud or mistake. Trueman v. Hurst, 1 T. R., 42. Perkins v. Hart, 11 Wheat. R., 237. Barger & ux. v. Collins, 7 Har. & Johns., 213. Harden v. Gordon, 2 Mason R., 541, 561. Thomas adr. &c. v. Hawkes, et al., 8 M. & W., 140. The case last cited is exactly analogous to the present, in which the plaintiffs, from the admission, (evidenced by the vote on which they relied,) sought simply to infer the promise alleged in the count in question. The charge on this point was therefore correct, as on the facts claimed by the defendants, there was both fraud on the part of the plaintiffs and mistake on that of the defendants. This disposes also of the objection, raised by the plaintiffs, to the evidence of their declarations that they had been reimbursed for the expenses, sought to be recovered in this case. 7. The plaintiffs except to the charge below because the court did not instruct the jury that the vote of the 16th of January was binding on the defendants, and that the account between the parties was not liable to be opened, although the bill presented by the plaintiffs to the directors who passed that vote, and on which it was founded, misrepresented the — 604 — purpose for which the expenditures of money, in the course of procuring the defendants’ charter, were made by the plaintiffs, and a fraud was intended to be thereby perpetrated on the defendants, if those directors knew the facts and were not misled by those misrepresentations; but instructed them that if the plaintiffs intended that the bill should not give true information to the defendants in regard to the object of those expenditures, the misrepresentation would be evidence of fraud, proper to be considered by the jury, notwithstanding the knowledge of the directors. This charge was obviously correct. The fraudulent misrepresentations, under which that vote was procured, would plainly avoid the promise, or admission, evidenced by it, if the directors had no knowledge that they were false. Their knowledge that they were untrue, when they passed the vote, showed a combination between them and the plaintiffs to cheat the defendants. No reasoning is necessary to prove that a promise, or admission, by an agent, whether of a natural or artificial person, derives no validity against the principal, from the fact that it was obtained by a fraudulent conspiracy between such agent and the person to whom it was made. A new trial is not advised. In this opinion, the other judges,” Ellsworth and Hinman, concurred. New trial not granted. — 609 — these cases that of Mather v. McDonald, 6 Hill, 93, which will be relied upon by the defendant, is fully commented upon and explained. The plaintiff is entitled to recover, by the laws of the state of New York, upon the common counts, either upon the note now in suit, or by virtue of the defendant’s endorsement. Cayuga Co. Bank v. Warden &c., 2 Sel., 19.