Opinion
(June Term, 1860.)
In an action against a subscriber to the stock of a railroad company on a bond for the payment of an instalment of such stock, it was Held that the existence of a president and an engineer, acting and purporting to act for and in behalf of the corporation, and a charter authorizing the appointment of such officers, were sufficient to establish its organization as against the defendant and all others dealing and treating with them in their corporate capacity.
DEBT on a bond, tried before Shepherd, J., at last Spring Term of ROBESON. Pleas, Non est factum and, specially, that the bond is void as being against public policy; also, that the bond has been discharged by a material alteration of the charter subsequent to its execution.
Person and Strange for plaintiff.
William McL. McKay and D. G. Fowle for defendant.
The plaintiff declared on a bond which had been given for an instalment of the stock subscription. To show the organization of the company, the plaintiff, after showing the charter of the company passed by the Legislature by which the company, when organized, are authorized to appoint a president, directors, engineer, and other officers, proved that H. W. Guion was acting as president and that John C. McRae was acting as engineer for and on behalf of the company at the time the bond in question was executed. The plaintiff also offered in evidence the minutes of the proceedings of a meeting of the subscribers, held in the town of Wadesboro, previously to the execution of the bond sued on.
The execution of the bond was duly proved. The defendant insisted that there was no competent evidence to show that the corporation had been organized, and asked his Honor so to instruct the jury, but he declined doing so, and held that the evidence was admissible for that purpose, and that, if it was believed, the corporate existence of the company was sufficiently established. The defendant excepted. There were other exceptions sent to this Court, but not insisted on by the defendant's counsel here.
Verdict and judgment for the plaintiff, and appeal by the (388) defendant.
Most of the exceptions taken by the defendant on the trial and set forth in his bill of exceptions have been properly abandoned by his counsel in the argument here.
That the bond on which the suit was brought is not against public policy, and void on that account, was settled by the decision of the Court in McRae v. Russell, 34 N.C. 224, and we are not disposed to disturb it or call it in question.
The defendant comes with a bad grace to object to an alternation of the charter which he had concurred in recommending. It was surely not erroneous in the court to require him to prove that he had subsequently dissented from the amendment, if, indeed, such a dissent could then have availed him.
The testimony which he offered for the purpose of showing that the agent of the plaintiff had made misrepresentations to him with regard to the route of the road, that the route selected was not the "most eligible," and that the bond which another subscriber had signed was clear of erasure or interlineation when he first saw it, was properly rejected by the court. R. R. v. Leach, 49 N.C. 340.
The only exception relied upon by the counsel for the defendant in the argument before us is that there was no evidence of the organization and corporate existence of the plaintiff at the time when the bond in controversy was given, and that, consequently, it was a nullity for the want of an obligee, as was decided in this Court in R. R. v. Wright, 50 N.C. 304. Upon the question which was mainly debated between the counsel, whether the paper which purported to contain the proceedings of the subscribers for stock in the organization of the company (389) was admissible as evidence for that purpose on the part of the plaintiff, and, if so, whether it proved such organization, is, in the view which we have taken of the case, unnecessary for us to decide. The plaintiff produced the acts by which the charter was granted, and then showed that at the time when the bond in controversy was executed there was a president and an engineer acting and purporting to act for and in behalf of the corporation. That, we think, was enough to be shown to establish the existence of the corporation as to those who treated and acted with it in its corporate capacity. We so decided in R. R. v. Saunders, 48 N.C. 126, and the same doctrine had been previously held in Navigation Co. v. Neil, 10 N.C. 520. The principle is that the officers of the corporation, acting on its behalf, were so de facto, and that those who treat with and enter into obligations to them cannot be permitted to repudiate such obligations. It is the sovereign alone who has the right to complain of the usurpation, when such exists. The spirit of this principle was applied, at the last term, to the case of the commissioners de facto of a town, and it was found to be supported by the highest authority in England. Commissioners v. McDaniel, ante, 107; Scadding v. Lorant, 5 E. L. Eq., 113.
This doctrine is not at all opposed by the decision in R. R. v. Wright, supra, for there it is stated expressly that there was no evidence that the plaintiff had a corporate existence at the time when the note sued on was given.
PER CURIAM. No error.
Cited: Dobson v. Simonton, 86 N.C. 496; Cotton Mills Co. v. Burns. 114 N.C. 355.
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