Case ID: wis_15/html/0334-01.html
Source: Caselaw Access Project
Author: {"author": "PAINE, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Dennison vs. Austin and others.
    A note sued on was as follows: “ April 1st, 1858. One year after date, for value received, we, as trustees of the Summerfleld M. E. Church, for and in behalf of the said church, promise to pay Diana Taylor the sum of fifteen hundred dollars, with interest, &c. Geo. E. Austin, Edwabd Emeby, M. Steever, W. A. Chapman, R. P. Elmore, Trustees Summerfleld M. E. Church.” SelH, that whatever might be the conclusion as to the personal liability of the trustees in case they had bound the church, if they did not bind the church, they bound themselves.
    The evidence did not show .any vote by the board of trustees, at an authorized meeting, to execute said note orto borrow the money for which it was given, but the negotiation appeared to have been conducted principally by one of the trustees, and the loan effected without any such previous action, and two of the trustees signed the note, and the lender’s agent then took it to the others and procured their signatures. SelH, that the note was not binding upon the church.
    Under sec. 12, chap. 66, R. S., 1858, regulating the mode in which trustees of religious societies shall act, the individual, disjointed action of the different trustees, at different times and places, although assenting to a thing which a majority might do when properly assembled, would not be binding upon the church corporation.
    Whether the trustees of a religious society incorporated under said chapter, have authority to borrow money for the corporation without any direction from the members of the body, queers.
    
    APPEAL from tbe Circuit Court for Milwaukee County.
    This was an action by tbe assignee of Liana Taylor, against tbe defendants personally, as tbe makers of a note of which the following is a copy: “ $1545. Milwaukee, April 1st, 1858. One year after date, for value received, we, as tees of the Summerfield M. E. Church, for and in behalf of the said church, ^promise to pay Diana Taylor the sum of fifteen hundred and forty five dollars, with interest at the rate of twelve per cent per annum, payable semi-annually. Geo. F. Austin-, Edward Emery, M. Steever, W. A. OhapmáN, E. P. Elmore, Trustees of the Summerfield M. E. Church.” The material allegations of the answers to the complaint were, that at the time of the execution of said note, the defendants were trustees of a religious society, duly incorporated under the name of the “Summerfield M. E. Church,” and signed the note in their official capacity as such trustees, for a debt due from said church to the payee of said note for money borrowed of her for the sole use of said corporation, of all which the said payee had full notice; that said note is the note of said corporation, and not the note of the defendants, and the money mentioned therein is duff from said corporation, and not from them.
    On the trial, the plaintiff having read the note in evidence and rested, the defendants gave evidence tending to show that they, together with Mr Lakin and one other person, were the trustees of the Summerfield M. E. Church, at the time the note in'suit was given; that the money for which the note was given, was borrowed for-the purpose of paying a lien on the church building and was used for that purpose; thatE. S. Taylor, who was the agent of Diana Taylor-in lending the money, knew at the time for what purpose the money was borrowed, and that a mortgage on the church property was given at the same time with the note, to secure its payment ; but there was evidence also tending to show that no order authorizing the execution of the mortgage had been obtained from the circuit court, as required by the statute. •
    
      Mr. Austin, sworn on his own behalf, was asked by the plaintiff if it was not understood at the time Mr. Taylor agreed to loan the money, that he was to have the personal responsibility of the trustees. An objection to the question was overruled, and the witness answered. “ It was not; we had the understanding that we should not be personally liable.” Tbe defendants gave in evidence also, several receipts for interest on tbe note, signed by Mr. Taylor as agent for Diana Taylor, one of which was as follows: “Sept 15, 1859. Received this day from Mr. George F. Austin, $113, to be applied on account of interest due Mrs. Diana Taylor from the Summerfield M. E. Church;” and an order drawn by Mr. Taylor, as agent, in 1859, in these words: “ The Trustees of the Summerfield M. E. Church will please pay H. O. T., or order, eighteen dollars, and charge to account of Mrs. Taylor.”
    E. S. Taylor, called as a witness for the plaintiff, was asked by him to state “ the circumstances connected with the negotiation and loan of the money mentioned in the note, from the commencement of the negotiation up to the time of the loan.” The defendants objected to this evidence, so far as it might relate to any agreement on their part outside of the note. The objection was overruled, and Mr. Taylor testified as follows: “ After the close of an evening prayer meeting, Mr. Austin said he understood I had some money to loan, and he wished I would loan it to pay the debt on the church. I told them I would let them have the money if I could be well secured. He said he would give me a mortgage on the church. I told him I could not be secured thus, as there were two prior mortgages, or a question as to tbe title; that if they would be personally responsible, they might have the money to pay the debt with; (by the word “ they ” I meant the persons personally interested). Mr. Austin then remarked, that they would see the money paid ; that I should have the individual obligation of the trustees. Several members of the church were present at the conversation, and one other of the trustees. Within a day or two afterward, Mr. Austin called, and said he then wanted the money ; that they were then prepared to take it. I was about leaving town, and told Mr. Cary, who had charge of the money for me, that currency might be drawn for the amount, $1500. A short time afterwards, perhaps two weeks, I told Mr. Austin I wanted the necessary papers, and he told me to draw them up. I made out a mortgage, and an ordinary note of hand. He took them to Mr. Steever, who told him that the note would make bim personally liable. Mr. Austin said be did not know that be could sign sucb a note, being already involved for tbe cburcb, and that be would get Mr. Steever to draw up a note. I told bim that in whatever form they drew it up, I should look to them individually for tbe debt. Mr. Steever then drew up the note in suit. I told Mr. Austin it would still be their individual obligation. Mr. Austin asked Mr. Lakin to sign it. .He declined, saying that be bad not been consulted in negotiating tbe loan, and was not willing to bind himself individually. Mr. Austin argued with me about being personally responsible, and at first refused to sign that note, but finally signed it. I called on tbe other trustees for their signatures, and all signed it, except Mr. Danville and Mr. Lakin. Mr. Steever said tbe note might be regarded as tbe note of tbe cburcb. I said it made no difference, as I regarded tbe matter as an individual one.”
    Tbe circuit court instructed tbe jury, at tbe request of tbe plaintiff, that if they believed from tbe evidence that it was tbe intention of all parties to bind the corporation and not tbe defendants personally, and that tbe note and tbe mortgage given on tbe real estate of tbe corporation to secure it, were given by tbe defendants to Diana Taylor to secure tbe money so loaned; still if they were also satisfied that tbe defendants bad no legal authority to give said note and mortgage, then tbe plaintiff was entitled to recover. Tbe court gave also a general charge, as follows : “ It is claimed that tbe signatures are in an official capacity. This is a religious corporation, organized under tbe statute; trustees can build churches, &c. ; the particular form of official action is prescribed in section 12; so a meeting must be called together by at least two, and a quorum must be together, and a quorum thus together may act. It strikes me very clearly, that tbe trustees, when they act, must act officially when so called, and can only act officially when so called together; I think it was necessary for them to adopt an official action in order to contract this debt; they could not otherwise make tbe corporation liable; tbe fact that a majority bad executed would be sufficient evidence that it was a corporate act; but tbe testimony shows that sucb was not tbe case; there is no evidence of a meeting, and it appears that tbe note was pre-at Steever’s office, and Taylor procured tbe signatures foy going around; if tbe jury should come to tbe conclusion that tbe note was thus executed, tbe cburcb would not be bound. This may be a misfortune, but tbe law cannot belp that; if it should appear that this was not authorized by tbe official proceedings of tbe corporation, it was not a corporate act; if this was not authorized' by a resolution, or by consent and concurrence of tbe trustees, at a regular or special meeting, tbe corporation is not bound.” Tbe defendants excepted to tbe above charge. Several other instructions were given at the request of each party, and several asked by each party were refused; but as tbe above embraces the points upon which tbe decision of tbe case turned in this court, tbe others are omitted. Yerdict and judgment for tbe plaintiff.
    
      Butler & Martin, for appellants:
    . Tbe note, on its face, is the note of tbe corporation. In unsealed instruments, it is sufficient if tbe name of tbe principal is disclosed and it appears from tbe whole instrument that tbe intention was to bind tbe principal. Story on Agency, chap. 7, § 147, note 4, and § 154 (a); 4 Barb. (S. C.), 274; 15 John., 1; 4 Hill, 351. Tbe trustees of tbe cburcb are tbe corporation. R. S., 1849, chap. 47, sec. 4. Tbe fact that they are tbe corporation is evidence of their authority to bind it. Broclcway vs. Allen, 17 Wend., 40. The payee of tbe note knew that tbe money was borrowed for tbe use of tbe cburcb, and that tbe defendants were tbe trustees, and acted in their official capacity. They are, therefore, not liable personally. Broclcway vs. Allen, supra; 9 Mass., 835; 22 Pick., 158; 15 John., 1; 10 Wend., 271; 4 Barb. (S. 0.), 274; 1 Cow., 513. It was proper to show on tbe trial tbe nature of the transaction. To that extent only was parol evidence admissible. 2. Tbe respondent claims that by virtue of sec. 11, chap. 47, R S. 1849, tbe appellants should have proved that two of tbe trustees bad called a meeting at which they bad resolved to borrow tbe money and give tbe note of tbe corporation for it. Tbe trustees are tbe corporation. Sec. 4, chap. 47, supra. Tbe fact that five out of tbe seven trustees signed, tbe note is evidence of corporate assent to or appointment of tbe defendants as agents, wbicb is the same thing, a declaration that they acted as such. Broclcway vs. Allen, supra. Oan it be that under tbe section above cited, no action of tbe board of trustees is valid unless taken at a meeting convened by two of their number ? That section of tbe statute is intended merely to restrain a minority from preventing any action of tbe board, and to enable a majority to act when such restraint is attempted to be exercised. Tbe statute of New York, at tbe time Broclcway vs. Allen was decided, contained a section wbicb was in substance tbe same as ours. The question to be decided here is, In view, of tbe form of this note and the facts proved, can tbe corporation be held liable ? If tbe corporation is liable, tbe appellants are not. Tuthill vs. Ayers, 2 Penn., 682. When it is necessary in tbe appointment of an agent by a corporation, to have a vote of tbe trustees or directors taken, tbe vote may be implied by tbe fact that tbe person has been held out as an authorized agent of tbe corporation. A corporation may act by its authorized agents, and is bound by their acts as an individual would be. No formal resolution appointing an agent and defining bis power is necessary. A contract may be implied against a corporation as against an individual. TheBanh of Lyons vs. Demmon et al.} Hill & De-nio, 398 ; Reuter vs. Electric Telegraph Go., 37 Eng. Law & Eq., 189; Bargate vs. Shortridge, 31 id., 44; Bank of U. S. vs. Bandridge, 12 Wheat., 64; Gom. Bank of Buffalo vs. Kortright, 22 Wend., 348 ; Ang. & Ames on Corp., §§ 284, 240, and cases cited. 3. The corporation having used tbe money for its own benefit, and paid interest upon tbe note, cannot now say that tbe debt is not its own.
    
      Gary & Pratt, for respondent:
    1. There is a descriptio personarum contained in tbe note, but, unexplained, it is the promise of tbe defendants and not of the corporation. Rupert vs. Madden, 1 Chand., 146; 10 Wend., 88 ; 7 'Cow., 453; 9 Johns., 334; 2 Brod. & Bing., 460; 6 Mass., 58. The defendants’ liability in this ease, as in all others, must be determined from tbe terms of tbe note. -Gregory vs. Hart, 7 Wis., 532, and cases there cited; Racine 
      > County Bank vs. Keep et al., 13 Wis., 209. 2. Tbe mode of . corporate action of tbe trustees of religions societies is clearly pointed out by tbe statute. It is not pretended tbat there was a meeting of tbe trustees, or any other corporate action in relation to borrowing tbe money or giving the note and mortgage in question ; but it is shown affirmatively by tbe defendants, tbat no such action was bad. It would be as monstrous to bold tbat tbe majority of tbe trustees, by separately signing a note or other contract which bad not been previously considered and authorized at a regular or special meeting, could thereby bind tbe corporation, as to bold tbat tbe legislature, or tbe common council of a city, could bind tbe state or city by tbe signature of tbe individual members composing one or tbe other. If such a doctrine is held, only a majority of a bare quorum may bind tbe corporation by their separate and individual action. Tbe charge of tbe judge was correct upon tbat point. Neither tbe note nor mortgage was authorized by tbe corporation or is binding upon it; and though intended jas corporation acts, the note must be held to be the individual note of tbe parties executing it. 13 Johns., 307 ; 9 id., 534; 19 id., 60; 4 Mass., 595 ; 7 Term R., 207. If at tbe time tbe note was given, it was not authorized so as to be binding on tbe corporation, no subsequent ratification by tbe corporation or by tbe payee would discharge tbe defendants. 8 Wend., 495.
    May 15.
   By the Court,

PAINE, J.

We think the judgment in this case must be affirmed upon tbe ground upon which it was decided by tbe court below. Whatever might be tbe conclusion to be derived from tbe authorities, as to tbe personal liability of tbe trustees, in case they bad bound tbe church, it is conceded tbat if they did not bind tbe church, they bound themselves. Now tbe court below held tbat their action was not binding upon tbe church, for tbe reason tbat it was not taken in tbe manner prescribed by law, and tbat there was in fact no authoritative action by tbe trustees as a body. Tbe evidence does not show any vote by tbe board of trustees, at an authorized meeting, to borrow this money, or to execute this note. But tbe negotiation seems to have been entered into without any such previous action, and after having been conducted principally by one of trustees, the loan was effected and4wo of them signed the note, and the lender’s agent then took it to the others and procured their signature. Section 12, chapter 66, R. S., 1858, provides the mode in which such trustees shall act. It is as follows: “ Any two of the trustees may at any time call a meeting of the trustees, and a majority of them, being lawfully convened, shall be competent to do and perform all matters and things which such trustees are authorized to do and perform.” Now it seems to us very clear, under this statute, that the individual, disjointed action of the different trustees, at different times and places, although assenting to a thing which a majority might do when properly assembled, would not be binding upon the church. The uncertainties that might arise from such a loose mode of transacting business, as well as the advantages of mutual consultation and discussion upon a proper notice to all who have a right to participate, are too obvious to need suggestion. Angell & Ames on Corporations, chap. 13; Arden vs. Commissioners of Allen County, 3 Blackf., 501; Campbell vs. Brackenridge, 8 id., 476.

We think, therefore, that the case was properly decided, assuming that the trustees had authority to borrow money for the corporation without any direction of the members of the body. It has occurred to us, on an examination of the provisions of the statute concerning religious societies, that there may be some room for doubt on that point. But as the question was not raised or discussed, we shall express no opinion upon it.

The judgment is affirmed, with costs.