Case ID: ad_87/html/0251-01.html
Source: Caselaw Access Project
Author: {"author": "O’Brien, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Coney Island Automobile Race Company, Respondent, v. Paul Boyton, Appellant.
    
      Contract signed on behalf of a corporation — proof required as to the authority of the person signing it — it need not precede proof of the genuineness of his signature — option to disaffirm, a contract of sale — when confined to the vendor.
    
    In order to charge a corporation with liability upon a contract purporting to be signed in its name by an individual as its treasurer, it is necessary for the party alleging such liability to prove that the individual signing the contract had authority, either express or implied, to do so on behalf of the corporation and to represent and bind it.
    In such a case it is not necessary that proof be given that the individual who signed the contract had authority to do so, before proof of the genuineness of such individual’s signature may be given.
    The Coney Island Automobile Racé Company delivered to Paul Boyton two automobiles and certain tracks under a written contract, which recited that the automobile company sold such property to Boyton and that Boyton was to pay therefor the sum of $1,500 in two notes of $750 each payable at different dates.
    It further recited: “ Boyton agrees to forfeit the sum of $500, and return without costs * * * the two automobiles and tracks should he * * * • default in the payment of the first note; ” and that after the payment of the last note the automobile company would deliver to Boyton “a clean bill of sale.”
    
      Semble, that the contract did not confer upon Boyton the option to return the property and forfeit $500 and then refuse to pay the notes, but that the option to permit such a disposition of the matter rested with the automobile company alone.
    Patterson, J., dissented.
    Appeal by the defendant, Paul Boyton, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 26th day of December, 1902, upon the verdict of a jury rendered by direction of the court.
    The action is to recover on a promissory note for $750 given by the defendant to the plaintiff due August 10, 1902. The defense is that the note was delivered pursuant to a written contract, a copy of which is annexed to the answer, and that thereunder the sum named is not payable. The instrument referred to is in the form of an agreement between the parties and recites that the plaintiff sells to defendant two automobiles and trackage, the defendant to pay to plaintiff the sum of $1,500 therefor in two notes of $150 each, payable respectively July 10 and August 10, 1902 (the latter being the note for which this suit is brought); and' further recites that' “ Capt. Paul Boyton agrees to forfeit the sum of $500, and return without costs * * * the two automobiles and tracks should he * * * default in the payment of the first note; ” and after the payment of the last note the plaintiff shall give to defendant “ a clean bill of sale.” ' This paper is not dated except as of “ February, 1902 ; ” 'and it is signed “ Coney Island Automobile Race Co. Robert Meissur, Treas.”
    The answer avers that prior to the date when .the first note became, due the defendant tendered to the plaintiff the automobiles and trackage and agreed to forfeit the $500 and plaintiff refused to accept the automobiles and trackage and $500 which plaintiff was and is ready, to deliver.
    At the trial the, plaintiff offered the note in evidence and rested. The defendant then called a witness whose testimony appears in the record as follows: “I am a stockholder in the Coney Island Automobile Eace Company. I know Eobert Meissner. [Showing paper.] Do you know whether that- is his signature ? .[Objected to on the ground that it is not shown that Eobert Meissner was authorized to execute this instrument or that this was authorized by the Board of Directors. * * * Objection sustained. Excép-' tion.] * * * Meissner is the secretary of the company. * * ”
    The defendant was then called but was not allowed to testify whether he made a- purchase of automobiles from the plaintiff or entered into an agreement with it for automobiles or signed a contract for the delivery of a note ; nor whether the note was given in pursuance of the written agreement between him and plaintiff, nor whether he had tendered the automobiles back and offered the sum of $500, exceptions being taken. The plaintiff’s attorney was then put on the stand and asked if he had the contract in his possession, but the question was not allowed, nor was the defendant permitted-to ask another witness if the defendant had tendered the automobiles.
    • Thereupon the case was closed and the court directed a verdict for the plaintiff, and from the judgment so entered the defendant appeals. '
    
      
      T. Ellett Hodgskin, for the appellant.
    
      C. B. Plante, for the respondent.
   O’Brien, J.:

The principal questions are whether the defense is good, and- if so, whether it was established or the defendant prevented from establishing it by competent evidence which was offered and which, under the objections of the plaintiff, was excluded by the court.

We say these are the principal questions, because it is conceded that the plaintiff is entitled to recover upon the note unless the defense pleaded is one that, if legally established, would exonerate the defendant from liability thereon.

The first proposition, as to whether the defense is good, turns upon the construction to be given to the terms of the written agreement relied upon in the answer and whether thereunder the defendant had the option and right to refuse to pay his notes and to return the property and forfeit $500, or whether it rested with the plaintiff to elect whether it would proceed upon the notes, allowing the defendant to retain the property, or would insist upon its return and exact the payment of the forfeiture of $500. The agreement was in form a conditional sale, and under it the defendant received, has used and still retains the property; and were we called upon to determine the question, which we are not, our inclination would be to hold that the option or election under the terms of the agreement was given, to plaintiff and could be exercised by it alone. It is not necessary, however, for us to decide this question, upon both sides of which an argument could be made, our conclusion being that upon the trial, assuming that the defendant had the right to forfeit the $500 and return the property, no competent proof was offered to establish the making of the agreement upon which the defendant relied.

The plaintiff, after introducing in evidence the note, rested, and the defendant took up the burden of making out his defense. For that purpose he called a stockholder of the plaintiff company and asked him whether he knew Robert Meissner, and upon his answering that he did, asked him, showing him the paper, “ Do you know whether that is the signature % ” This was objected to on the ground that it was not shown “ that Robert Meissner was authorized to execute this instrument or that this was authorized by the Board, of Directors,” and the Objection was sustained and exception; taken. It is true that the witness was not asked nor was it shown that he knew the handwriting of Robert Meissner, and it might therefrom be. claimed that h§ was not a competent witness, to prove his. signature. The objection, however, was not upon the. ground that he had no knowledge of the signature, and had such defect been siiggested it might have been cured. We are, therefore, to conclude that it was not because a proper foundation had not been laid for the proof of the signature, but because no proof had been given showing that Robert Meissner was authorized to execute the agreement, that the question was excluded. This ruling, is erroneous, but in view of what subsequently appeared upon the trial, it must be regarded as harmless.

In proceeding with the discussion we shall assume that the witness had. stated that he knew that the signature attached to the agreement was that of Robert Meissner. There was, however, another step which it was necessary, for the defendant to take before he could introduce in evidence the agreement. This witness testified that Meissner was the secretary of the company, although the instrument purports to be signed by him as treasurer; but whether he was secretary or treasurer,' or both, there was no proof offered or attempt made to prove what were his duties, or whether or not he had any authority to contract for the corporation, either by resolution óf the board of directors or by acts or dealings which would have a tendency to show that in signing such an agreement he was acting within the scope of his authority, real or apparent. In other words, no attempt was made to prove that he had the necessary authority, express or implied, to bind the company by a written agreement.

It requires no citation of authorities for the proposition which is well settled that in order to bind a corporation it is necessary to prove that the one who it is claimed acted for the corporation had authority, either express or implied, to do so; and where it is sought to hold a corporation in any transaction, it is incumbent upon the. one alleging the fact to show that the person who claimed to act for it had authority, express or implied, to represent and bind it. The failure to introduce or offer such evidence was a failure on the defendant’s part to sustain the burden which rested upon him before he could introduce in evidence the written agreement pleaded as a defense.

Having failed to .prove the written agreement, and hence being unable to introduce it > in evidence, the defendant was precluded from showing its contents by parole evidence, and the rulings which excluded such proof of its terms were right.

Upon the ground, therefore, of the defendant’s failure to establish by competent evidence the written agreement upon which lie relied for a. defense, the judgment in favor of the plaintiff, as directed by the court, must be affirmed, with costs.

Van Brunt, P. J., Hatch and Laughlin, JJ., concurred; Patterson, J., dissented

Judgment affirmed, with costs.