Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1906-03-22
Law Court Settles Point Of
Corporations Liability
For Acts and Contracts Of Promoters
Before The Organization.

contracts or promoters of the corpora
ticn before formation is established.
Inc suit was on note of $4,000 in which
the plaintiff recovered judgment in the
lower court for the full amount.
Beyond balance of $1400 due on a
note assumed by the corporation, the
defendants We're not liable for any I'M
derstanding between the plaintiff and
the promoters Of the defendant corpor-
alton not afterward ratified by the; di-
rectors of the corporation. The motion
for new trial was sustained by the
court. The rescript:
State of Maine-Sagadahoc County,
Mary H. D. futile VS.. George A Tut
Il" Co, ct al. Rescript, Peabody, J.
Assumpsit on promissory note. The
case came before the law court on mo-
!, ton OF defendants for new trial. The
action was on a joint promissory note
Of the defendants to- the plaintiff for
$4,000, dated Feb. II. 1902, with interest
at 6 per cent. payable on demand. The
verdict was for the plaintiff for the full
amount of the note and interest.
The plaintiff is the wife of Edward
p. futile. The defendant John S. Mil
A. L
tie Co., and owner Of the majority of
tie stock. The defendant Walter f..
futile, is the executor of the will of
George A. futile. George A. futile had
carried on a dry goods business in
Bath, but, on account of ill-health, was
obliged to give up his business and on
the eighth of February, 902, the defend
ant corporation was organized and
George 4 futile transferred to the cor
pnration all the merchandise and as
sets of George A. Tuttle & Co., for
which stock was issued in part pay
ment.
The plaintiff claimed that the note
was founded upon the following eonsid-
erations: First, balance due on prom
issOry note of George A. futile & Co.
to the plaintiff, assumed by the cor
pOration as one of the obligations Of
the business purchased in accordance
with the Vote Ct the directors: second,
services of the plaintiff and her hus-
band in raising $4,000 and loaning it to
the company and the .indorsing by Ed
ward +. futile of a pr6missory note for
$1,000 made by George lA.NTuttIe to w.
w. PendeNter, dated FEB. 6, 1902,
whereby the defendants. We're enabled
to buy out and unite. The business of
Pendeyter and futile &, Co; third, SER
vices of Edward p. futile rendered in
buying out PendeXter. effecting the or
ganization Of the corporation and
thereafter supervising ana directing it's
business.
The defendants clain-t that there was
no consideration for afaMo liability on
the note beyond the amount of s14OO.
the balance remaining due on the old
obligation of George A. futile & Co. In
order to find a verdict for the plaintiff
for the whole amount sued for, the jury
must have found in the evidence facts
supporting the second and third claims
Of the plaintiff.
The plaintiffs second claim is in no
wise established by the testimony Of her
principal witness. T.. p. futile testi-
fies as to the offer made by him and his
WIFE to the promoters Of the corpora
ton prior to it's organization, that if
the corporation should give my wife
note for $4,000 we would surrender the
note for s1400; that the $4,000 note could
stand as long as affairs looked all
right for reasonable length of time,
they to pay the interest on the same
quarterly. In reply to the question.
"What was the $4,000 note to be forpn
he says. For securing the business for
them, securing the location and the
stand. advancing $4,000 cash payment
ana indorsing the note of my brother.
The loan obtained for the corporation
by Mr.. and Mrs. futile and that Sc
cured by Mr.. Tuttle's Endorsement were
afterwards paid and it cannot be SUM-
posed that the $4,000 note in this suit
so far Is it relates to these transac tions
was never intended to be more than Sc
curity for the protection of Mr.. and
Mrs. Tuttle in temporarily lending their
credit to the company or it's promoters
Inc third claim, that of a considera-
ton rounded upon the personal services
OF Il. r. futile, is Of a more plausible
character; but the services in question
seem but slightly connected with the
circumstance of executing this note and
to have been rendered for other req ICONS
Oh personal interest. But a final de-
iense 10 this action is the absence of
any promise by the corporation. one of
tne JOINT parties defendant, beyond the
amount of the $1,000 liability of George
A. Futile & Co. to the plaintiff.
The following is the record of the III.
rectors authorizing the note: "Feb 8.
1902. Special meeting of the board Of
directors, called by the president, pur-
suant TO the power given him in the
pvlaEs. Present. George A. Tuttle and
Jonn ;. Millen. 1t was voted: That the
company purchase the stock and flx-
lures, furniture and business, Including
the good viii of George A. futile, paw
Ing therefor $1,000 cash and in capital
STOCK OF the corporation IS shares and
mat the company assume all outstand-
ing liabilities Of the business conduct-
ed by George A. futile and none other.
Voted: That the president be di-
rected to give to Mrs. Mary H. d. Tut
Tie the note of the company for $500
payable on demand. with interest at
per cent. per annum, payable every
three months. said note being given to
cover the outstanding liability of the
business of George A. Tuttle.'
1t appears clearly from the record of
the case that whatever rights accrued
10 the plaintiff or her husband beyond
the original SIa00 urara &, - $1,000 =