Case Name: SCOTTON MOTOR COMPANY v. J. L. SCOTTON
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1925-09-30
Citations: 190 N.C. 194
Docket Number: 
Parties: SCOTTON MOTOR COMPANY v. J. L. SCOTTON.
Judges: 
Reporter: North Carolina Reports
Volume: 190
Pages: 194–195

Head Matter:
SCOTTON MOTOR COMPANY v. J. L. SCOTTON.
(Filed 30 September, 1925.)
Corporations — Minutes of Meetings — Evidence—Presumptions.
Tbe recorded minutes of a stockholders meeting are presumed to cover their entire subject-matter, but it may be shown by parol evidence that they were fragmentary and incomplete as to material matters in controversy.
Appeal by plaintiff from Bond,, J., at April Term, 1925, of JoiiNSTON.
Tbe plaintiff alleges tbat in a regular meeting of its stockholders it was unanimously resolved tbat tbe corporation should increase its capital stock for tbe purpose of buying a site and building a garage; tbat tbe defendant and all tbe other stockholders .subscribed $6,000 to tbe capital stock to be paid in this way: tbat each stockholder was to subscribe for sixty shares of stock, of tbe par value of $100 a share, in tbe Smithfield Building & Loan Association paying a certain sum each week, for which tbe Building & Loan Association was to lend tbe plaintiff $2,500; tbat all the stockholders, including tbe defendant, subscribed for said shares, after which tbe loan of $2,500 was made; tbat tbe defendant discontinued bis payments to tbe Building & Loan Association without tbe plaintiff’s knowledge, and liquidated bis stock therein, and now refuses to pay any part of bis subscription to tbe capital stock of tbe plaintiff. Tbe plaintiff alleges tbat tbe defendant is due tbe plaintiff $6,000 witb interest from 1 August, 1920.
Tbe defendant filed an answer admitting certain allegations and denying others. He set up an alleged agreement to tbe effect tbat since bo bad been removed from tbe board of directors be should be released from any obligation on account of bis subscription to tbe Building & Loan Association and should be at liberty to liquidate bis stock. He alleged tbat be bad sold bis stock in tbe Association and tbat tbe plaintiff was not indebted to it.
At tbe trial tbe plaintiff offered in evidence tbe minutes of a meeting of tbe stockholders, of tbe plaintiff company held 30 January, 1920: “Stockholders’ meeting as of 1 August, 1919. Motion by R. P. Holding to pay each director one hundred dollars per month. Seconded by W. H. Austin. Motion prevailed. Motion as of 1 January, to pay 4% dividend on capital stock. Motion prevailed. Motion of F. K. Broadhurst for each stockholder to take out 60 shares of Building and Loan. Motion prevailed. Motion by F. 3L Broadhurst to appoint trustee to hold stock, E. P. Holding elected trustee. Motion' for each stockholder to pay in $500.00. Building committee instructed to put up a temporary building at once. Also to sell the dwelling-house. Motion to adjourn prevails.”
The plaintiff offered evidence tending to show that this record is not a full and comprehensive report of the proceedings had on 30 January, 1920; tending to show why each stockholder took shares in the Building & Loan Association and why a trustee was appointed to hold stock; and that the defendant made payments to the association for the benefit of the plaintiff upon the shares allotted him. This evidence was excluded and the plaintiff excepted.
Ed S. Abell and Ed F. Ward for plaintiff.
Parker & Martin and Wellons & Wellons for defendant.

Opinion:
Adams, J.
The general rule is that the recorded minutes of a corporation are presumed to cover the entire subject-matter or transaction and constitute the best evidence. But if the entire transaction is not recorded or the record is incomplete and fragmentary the presumption is not conclusive and parol evidence may be introduced to show what in fact was done. The incomplete records of private corporations are generally open to explanation by parol evidence. This position is sustained in numerous cases. Rose v. Ind. Chevva Kadisho, 64 At. (Pa.), 401; Produce Co. v. Stephens, 133 N. W. (Minn.), 93; S. v. Guertin, 119 N. W. (Minn.), 43; Selley v. Am. Lubricator Co., 93 N. W. (Ia.), 590; 4 Fletcher Cyc. Cor. 4054; 14 C. J., 376, sec. 494. We think the plaintiff's proposed evidence should have been'admitted.
New trial.