Case Name: The Saco Manufacturing Company vs. Whitney
Court: Maine Supreme Judicial Court
Jurisdiction: Maine
Decision Date: 1831-04
Citations: 7 Me. 256
Docket Number: 
Parties: The Saco Manufacturing Company vs. Whitney.
Judges: 
Reporter: Maine Reports
Volume: 7
Pages: 256–260

Head Matter:
The Saco Manufacturing Company vs. Whitney.
W. gave his promissory note to a manufacturing corporation, in consideration of the written engagement of R. who signed as agent of the corporation, but without authority, to procure the obligation of the treasurer for certificates of two shares of their capital stock. R. obtained the obligation of the treasurer to deliver certificates of two shares on payment of the note ; and requested W. to call at his house and receive them. Hereupon it was held, that R. was personally bound by his engagement; — that this was a sufficient consideration for the note, the promises being mutual and independent; — that no tender of the tieas-urer’s obligation was necessary, the possession of R. being the possession of W.and that the condition of payment of the note, therein inserted, was proper, and not inconsistent with R’s engagement.
This was an action of assumpsit on a promissory note made by the defendant July 9, 1828, for 1500 dollars, payable to Isaac C. Pray, treasurer of the Saco Manufacturing Company, or his order, in eighteen months and grace ; and by him indorsed in blank, both in his private capacity, and again with the addition of his office.
The consideration .of the note was a written promise in these words: — “ Saco, July 9, 1828. Received of Aaron Whitney, his note of hand of this date at eighteen months and grace, for fifteen hundred dollars, payable to Isaac C. Pray, treasurer of Saco Manufacturing Company, for which I promise'his obligation for certificates -of two shares of stock in said compiany. Robert Rogers, agent Saco Manufacturing Company.”
At the trial before Parris J. the plaintiffs offered in evidence a vote of the corporation passed July 9, 1828, authorizing the directors to increase the shares to a number not exceeding six hundred; and to dispose of. the same as they might deem proper, at not less than seven hundred and fifty dollars for a share, on a credit equal to ■eighteen months without interest. They also proved by parol testimony that the directors did so increase the number of shares ; that Rogers, on the 13th day of September, procured the obligation of Mr. Pray, as treasurer, to convey to Whitney a certificate of two shares in the stock of the company, on payment of his note ; and that he called on the defendant and informed him that he had the obligation, requesting him to call and receive it in exchange for his own above mentioned; but made no formal tender of it.
They further offered in evidence a written communication of the defendant to them, dated Jan. 15,1830, proposing a mode of payment for one of the shares, and the transfer of that share as security for the residue of the note ; together with the detention of a hundred dollars out of certain funds in their hands towards the same object. Also, an indenture dated Dec. 16, 1829, by which all the property of the corporation was assigned to trustees therein named.
The defendant objected to the admissibility of parol proof of the creation of the new stock by the directors ; contending that their records were the best evidence of the fact; but the judge overruled the objection. The defendant then produced certain by-laws of the corporation •, from one of which it appeared that all contracts, bonds and notes, signed by the treasurer in pursuance of a vote of a majority of the directors, should be binding on the corporation ; and by another of which it vras provided that the directors might employ such agents or superintendents as they might deem expedient, whose duty should be defined in writing.
Hereupon the defendant contended, and the judge, proforma, ruled, that the action was not maintainable ; and a nonsuit was entered by consent, subject to the opinion of the Court.
D. Goodenow, for the defendant,
contended that the note was without consideration to support it. The corporation was not bound by the undertaking of Rogers, because he was neither the treasurer, nor an agent constituted by written authority and instructions from the directors, agreeably to the by-laws; which, by implication, exclude all other modes of binding the corporation. Neither did he bind himself. He derived no benefit from the transanction ; nor did he stipulate by deed. Frontín v. Small, Ld. Raym. 1418; Sumner v. Williams, 8 Mass. 187 ; Rann v. Hughes, 7 D. & E. 350 ; Pearson v. Henry, 5 D. & E. 6 ; Tippets v. Walker, 4 Mass. 595 ; Thacher v. Oinsmore, 5 Mass. 299 ; 8 Mass. 193.
The contract, moreover, has not been performed on the part of the plaintiffs ; for the paper signed by Pray is conditional, and is not such as was originally to have been procured; and the plaintiffs have never tendered such an obligation to the defendant. Until this is done, the contract remains open and unexecuted. And the plaintiffs have rendered themselves incapable either to perform the contract, or to maintain an action on the note, by the assignment of all their property to trustees.
J. & E. Shepley, for the plaintiffs,
cited Reed v. Cummings, 2 Greenl. 82; Gore v. Grafton, 15 Mass. 73; Northampton hank v. Pepoon, 11 Mass. 291; Dugan v. The United States 3 Wheat. 172; Thaeher v. Dinsmore, 5 Mass. 299 ; Stinchfield v. Little, 1 Greenl. 231; Harper v. Little, 2 Greenl. 14 ; Fowler v. Shearer, 'll Mass. 14; Smith v. Sinclair, lb Mass. 171 ; Little v. O’Brien, 9 Mass. 423; Bowman v. Welch, lb Mass. 534; Raymond v. Johnson, 11 Johns. 488; Brigham v. Marean, 7 Pick. 40; Weston v. Codman, 3 Crunch 207; Fose v. Handy, 2 Greenl. 322.

Opinion:
Mellen C. J.
delivered the opinion of the Court at the ensuing May term in Kennebec.
The promissory note declared on was given by the defendant for the price of two shares of stock in the company, and was made payable to Pray, treasurer of the company; and was indorsed in blank by Pray as treasurer, and also in his private capacity. The consideration for which the note was given, was the memorandum signed by Rogers, calling himself agent for the company, by which he promised to the defendant that Pray, the treasurer, should give his obligation for certificates of two shares of stock in the company. It does not appear that Rogers had any authority from the company to enter into any such stipulation in behalf of it. Numerous objections have been urged against the plaintiff's right to recover.
It is contended that the defendant's promise was not founded on any legal consideration. " It is a known rule of law that to make a contract or agreement obligatory, the consideration must be either a benefit to the person promising, or some trouble or prejudice to the party to whom the promise is made." 1 Comyn on Contr. 13; 1 Comyn's Dig. tit. Action on the case upon Assumpsit B. and numerous cases cited; Yelv. 184, and note 1, We must consider the defendant as desirous of becoming the owner of two shares in the stock of the company, and as giving the note in question in consideration of the agreement of the plaintiff to procure them for him. This agreement was a benefit to him. Here was promise for promise, which is a good consideration. 1 Com. on Contr. 14.
It is contended, however, that here was not one binding promise for another j because Rogers had no authority to bind the company; and that the promise did not bind him personally. It is true he subscribes the note with his name, adding the words " agent Saco Manufacturing Companybut as he was not agent for the purpose, the words following his name may be considered merely as descriptive, but he personally bound himself.
It is said that Rogers received no benefit from the contract made with the defendant, because Whitney's note was made payable to Pray as treasurer of the company ; but if it was not any advantage to Rogers, the performance of tlie promise would have been an advantage, and the broach of it an injury to Whitney ; and thus, according to the principle above cited from Comyn, the promise on each side was binding.
Again it is said that the promise of Pray to deliver to Whitney a duly executed certificate of the shares, was a conditional one, as to üie time when it shall ho delivered ; namely, on payment of the note and interest, and so does not agree with the contract or promise of Rogers ; but this objection is not maintained by facts. Rogers describes no particular form of the certificate in his agreement with Whitney; besides, it appears to be in conformity to the vote of the directors, giving to the treasurer the power to sell shares and give certificates of them to purchasers.
Again ; it is contended, that this action cannot be maintained, because, tbougb Rogers procured a certificate of the said shares to be duly issued by the treasurer, and iuformed the defendant of the fact and requested him to receive it in exchange for the accountable receipt which he then held, still he did not carry the same to tile defendant and deliver or tender it to him. We think the answer to this objection by the plaintiff's counsel ma.y be considered a sufficient one; which is, that Rogers, in the above transaction, was act ing as the agent of the defendant, and that his possession must be deemed the .possession of the defendant. But, as we have said before, the promises were mutual and independent; and therefore, if the note had been made payable to Rogers, he need not, in an action on it in his own name, have averred or proved a delivery of the certificate to the defendant; and for the same reason the present plaintiffs need not do it.
Again it has been urged that the note declared on has been assigned to trustees, and so the plaintiffs have no authority to maintain an action in it. It appears, however, that it was produced on trial by the plaintiffs, and we may and ought to presume that it has been lawfully reconveyed to them, with power to recover it, if due. 3 Wheat. 172, 183. Besides, the defendant seems to have no interest in this arrangement.
The last particular we shall notice is, the language of the defendant in his communication to the company, bearing date January 15, 1830; in which he proposes a negotiation, by which he might transfer one share to the company by way of security for the very note now in suit, and that the interest, and $100 in part of the principal, should be retained by the company for the purposes proposed by him; thus treating the note as valid, due and uncontested. In view of all the facts and objections which we have examined, we are all satisfied, that the ruling of the judge was correct, admitting parol proof of the creation of new shares under the vote of July 9, 1828 $ and that his ruling was incorrect, that the action was not maintainable. This last, however, was a ruling pro forma, as it appears* The result is that the defendant must be called.