Case ID: mass_10/html/0395-01.html
Source: Caselaw Access Project
Author: {"author": "Sewall, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Daniel Hayden and Another versus The Middlesex Turnpike Corporation.
    An aggregate corporation may be liable in an action of assumpsit; the evidence in support of which action may be some express stipulation made by the agent or directors of the corporation; or the duty may arise on some act or request of such agency, within their authority, where no express stipulation is to be proved.
    The declaration was in case, and consisted of three counts: 1. Indebitatus assumpsit on an account annexed for labor, &c., in making the said turnpike. 2. Quantum meruit for the same labor, &c. 3. A special count, stating, in substance, that, by an act or law passed on the 23d of June, 1806, by which the route and course of the said turnpike is altered, it is, among other things, enacted and provided “ that the aforesaid corporation shall pay for all labor which has been performed, and all damages which have been sustained, before the passing of the said act, in the town of Chelmsford,, by order of the directors of the said corporation, in making the road according to the route or directions pointed out in the act, to which the act before mentioned is m addition.” And whereas the [ * 398 ] said Hayden * Sf Read, by order of the said directors, before the passing of the said act, had done certain labor and sustained damages, other than those in the said account annexed, but similar thereto, in making the said road according to the said route or directions, the said corporation, by force of the statute aforesaid, became liable, and, in consideration thereof, at Chelmsford aforesaid, on the same 23d day of June aforesaid, promised the said Hayden Sf Read to pay them for the said labor, &c., so much money as they reasonably deserved to have therefor. And the said Hayden Sf Read aver that they reasonably deserved to have for the said labor, &c., the sum of 102 dollars, of which the said corporation thercafterwards on the same day had notice ; yet though requested, &c.
    The action was tried upon the general issue at the sittings here after the last November term, before Parker, J., and a verdict taken for the plaintiffs, for the just amount of their claim, subject to the opinion of the Court, whether the evidence in the case rendered the corporation liable in this action.
    The labor, services, and articles furnished were all on account of work done upon a part of the turnpike which the directors had agreed to make, and which had been put under the direction of General Bridge, one of the directors. Hayden, one of the plaintiffs, employed the men, and paid them out of the store of Hayden Sf Read, the two plaintiffs. General Bridge was frequently present, knew the work was going on, and from time to time gave directions as to the manner of executing it. Others of the directors were frequently present; and O. Holden, one of their number, testified that he supposed the work was going on by order of the directors.
    By the fourth article of the by-laws of the corporation, it is provided that “ the directors shall have power to do whatever the corporation may lawfully do, which they may think will be for the benefit of the corporation.”
    On the 29th of November, 1805, the directors “ voted [" * 399 ] * that General Bridge be a committee to stake out the road from Biscuit Bridge to Chelmsford meeting-house, according to the location of this evening; and if he shall find a deviation necessary, of more than the width of the road from a straight line, he shall previously give notice of it to the directors in their meeting.” “ Also, that he be authorized to contract for making any part of said road, as soon as he shall meet with contractors for the same; one third part to be paid in shares.” On the 26tb of December, 1805, the directors “ voted that all contracts made by commitees in behalf of the corporation shall be made in writing, and delivered to this board, to be filed with their papers.” ‘Voted that it is the intention of this board that all contracts made for making the road according to the vote of November 29, be one third paid for in shares in the road, additional to all shares subscribed for before such contract.” “ Voted to accept Walker’s contract with Read,” &c. “Voted to reconsider all votes passed, previous to the present meeting, for making contracts for making any part of the road, excepting such contracts as are already made by any committee, agreeably to the order of the board, and now accepted.” General Bridge was present at this last meeting, but did not mention any contract made by him, although several other contracts were considered and accepted.-
    It was contended at the trial, that the corporation was not answerable upon any implied assumpsit; and that General Bridge had not authority to bind them in this case; which was overruled by the judge. It was also contended that Hayden alone should have brought the action; but the plaintiffs being general partners, and the labor, &c., being paid for out of the company stock, and the account thereof kept in- the book of the company, this point was also overruled; on which two grounds a new trial was moved for by the defendants.
    
      Peabody, for the defendants,
    contended, 1. That an aggregate corporation cannot be charged on an implied assumpsit; and, in support of this position, he cited the authorities in the margin. 
    
    * 2. If chargeable generally, yet the defendants are [ * 400 ] not chargeable in this action, because Bridge, not pursuing the authority given him by the directors, must be holden to have acted on his own responsibility, and not in behalf of the directors.
    
      Stearns, for the plaintiffs.
    The want of precedents in ancient books for this action is but a slender argument against its being supported at the present day. Assumpsit originally lay only upon express promises in writing. The liberality of the law continued to extend its application gradually, until Slade’s case  established the principle.  A corporation is bound by the contracts and engagements of their authorized agent.  So a corporation can contract by its vote; and, if so, there is no reason why an implied assumpsit cannot be maintained. 
    
    The action being continued nisi for advisement, judgment was rendered for the defendants at the next March term in Suffolk.
    
    
      
       1 Chitty on Pleading, 98.—5 East, 243. —2 Lev. 252.—3 Dallas, 496. — 3 Salk 103. —6 Vin. Abr. 268, 287, 288, 292. — 1 Bl. Comm. 475. — 1 Kyd on Corporation 259, 268, 449, 450, 300.
    
    
      
       4 Co. 92.
    
    
      
       2 Lord Raym. 1216. — Loft, 208.
    
    
      
       3 P. Will. 419.
    
    
      
      
        Doug. 526, note [1]. —13 East, 290. — 1 Binney, 27. — 7 Johns. 315. — 3 Mass Rep. 365. — 8 Mass. Rep. 265, 326, 445, 495.
    
   Sewall, J.

With us incorporations are by statute either mediately or immediately ; and the powers, incidents, duties, and liabilities, of the corporation, are to be determined by the statute or statutes in which the corporation originates.

Towns, parishes, and proprietors of common lands, who hold meetings and regulate their proceedings under divers provisions of statutes enacted upon those subjects, are said to be quasi corporations, and have certainly many of the incidents of corporations aggregate; and as to these, there can be no doubt of their liability in actions of assumpsit. The practice of bringing actions against them in that form, and of maintaining such actions by evidence of parol promises, both express and implied, has been in long-continued and frequent use, and has never been questioned.

Aggregate corporations, in the sense which those terms have at rommon law, have been created also by private and particular statutes, in which the incidents, powers, duties, advantages, and liabilities, of the corporations are generally stated in some detail. [ * 401 ] * There are general statutes, to declare what shall be the incidents of all incorporations established for certain purposes; and accordingly the corporations since created are, by the statutes incorporating them, established with a reference to the general statute, by which corporations for those purposes are regulated.

But it may be said, as to all corporations created by' special statutes, that in the statute of incorporation, either expressed therein, or by reference to the more general statute respecting incorporations of that character or use, that they have an authority and capacity granted them, to establish such rules and regulations as shall be necessary for the well-ordering of the affairs thereof.

We are therefore to look at their rules, and their mode of doing business, of well-ordering their affairs, which they themselves nave adopted; and if they have practically, or by the rules established, neglected or dispensed with any precautions which at common law were deemed essential to the security of aggregate corporations, still, if there is sufficient evidence of a common consent, .of a joint and corporate act, they must be considered as liable, especially where individuals, who have trusted to th’e good faith of a corporation, would be injured and deprived of their remedy if any othei construction of the doings of the corporation were adopted.

In short, this question, if there has been no direct decision upon it, has been impliedly determined by this Court in several cases that have occurred. The case of Gray vs. Portland Bank may be mentioned as one where the point was suggested; but the suggestion was overruled upon the authority of the case in Douglas, cited in the argument for the plaintiff, where the Bank of England were said to have been considered liable in this form of action. Indeed, where the promise arises by implication of law upon proving a duty, applicable and incident to the whole aggregate corporation, their concurrence in the contract seems to be proved, as fully as it can be in any case.

* It is necessary to prove the duty upon which the [ * 402 ] assumpsit is supposed to arise. This may appear by evidence of some express stipulation fairly made in the name of the corporation, by their agent or directors, authorized by their rules and regulations, or by corporate votes. The duty may arise upon some act or request of the same agency, and within their authority, where no express stipulation is to be proved. But where the duty is fully implied and understood, and arises upon a meritorious and valuable consideration, the party entitled by the consideration may maintain this action of assumpsit.

The doubt, principally arising in the case at bar, is upon the evidence offered to prove a duty of this corporation, as arising upon the consideration by which the plaintiffs would entitle themselves. They prove no request of General Bridge, or of the directors, as such, or of any person acting or professing to act, in the name and behalf of the corporation. The plaintiffs claim the amount of their disbursements for work done on the turnpike road. The disbursements, or the application of them, are not disputed, and General B. and other members of the corporation saw the men at work, who were employed and paid by the plaintiffs. But this evidence does not prove a request to the plaintiffs by the corporation, or by the directors, or by their authorized agent; or any stipulation, expressed or implied, to authorize a charge against the corporation for these disbursements. What is proved may have happened under a con-' tract with General B., for himself individually, or in behalf of the corporation; and this contract it may be convenient, in certain events, to suppress. In the votes of the directors, and the authority given to General B., he was directed to make his contracts for the corporation in writing; and contracts not reported and recognized at a certain meeting were there rescinded, at least so far as to revoke the authority given to General B., or any other agent of the directors, for any contract not then reported for allowance and confirmation. General B. was then present, and stated nothing of any contract with the plaintiffs.

* It is also to be observed that the authority to General B., and to the other agents, seems to have required invariably a stipulation to pay one third in turnpike shares. No contract by General B., as agent of the corporation, would be valid-to charge them, from which that stipulation was omitted.

, No individual member can represent the corporation in their aggregate capacity, but in consequence of their consent. The requisite evidence of this, at common law, was a deed under the seal of .the corporation. Aggregate corporations established by statute are not restricted to that formality. They have powers given them to order their affairs, and to appoint and employ agents by votes, or in such other manner as the corporation may by their by-laws direct. But no person is an agent for them who proceeds without any authority, either by letter of attorney or by a corporate vote, or who acts beside the authority given him; that is, his acts will not charge them, unless subsequently assented to by some act of the corporation.

Upon the whole, we see no sufficient evidence of any authority which General Bridge had to bind the corporation, so as to subject them to this demand of the plaintiffs. The verdict taken in the case is therefore set aside, and

A new trial granted, 
      
      
        Stat. 1804, c. 125. —1808, c. 65.
     
      
       1 Chitty, 98. — 5 East, 239, 242. — 6 Vin. Abr. 137, pl. 49.
     
      
       3 Mass. Rep. 364.
     
      
      
        Co. Lit. 66, b. — Com. Dig., tit. Franchises, 11,12, 13.
     
      
      
         [Overseers, &c., North White Hall vs. Overseers, &c., South White Hall, 3 Serg. Rawle, 117. — Bank of Columbia vs. Paterson, 7 Cranch, 299. — Danforth vs. Schoharie Turnpike Comp. 12 Johns. 227. — Dunn vs. St. Andrew's Church, 14 Johns. 118.
      — Clark vs. Corporation of Washington, 12 Wheat. 40. — Bank U. S. vs. Dandridge, 12 Wheat. 64. — Magill vs. Kanfmow, 4 Serg. & Rawle, 317. — Proprietors Canal Bridge vs. Gordon, 17 Mass. Rep. 297. — Foster vs. Essex Bank, 17 Mass. Rep. 479.
      — Salem Bank vs. Gloucester Bank, 17 Mass. Rep. 1. — See Slack vs. Highgate Archway Company, 5 Taunt. 792._— Murray vs. East India Company, 5 B. & A. 204. — Garvey vs. Colcock, 1 Nott & M’Cord, 231. — Broughton vs. Manchester Waterworks, 3 B. & A. 1. —Ed.]