Case Name: Jacob S. Gould & others vs. The Norfolk Lead Company
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1852-03
Citations: 9 Cush. 338
Docket Number: 
Parties: Jacob S. Gould & others vs. The Norfolk Lead Company.
Judges: 
Reporter: Massachusetts Reports
Volume: 63
Pages: 338–347

Head Matter:
Jacob S. Gould & others vs. The Norfolk Lead Company.
An agent, acting under a parol authority, is a competent witness to prove his own agency.
To prove the authority of an agent of a corporation to accept drafts for the company, it was proposed to introduce the agent’s testimony that he had paid, as such agent, drafts and orders drawn on the company, and not- previously accepted ; and it was held, that, if such drafts and orders might be presumed still to exist, it was to be presumed that they were held by the company, and notice should first have been given to the company to produce them.
The payment of an unaccepted draft upon a corporation, by its agent, is no evidence of his authority to accept drafts upon the corporation; and the fact that such acceptor acted as general agent, has little tendency to show such authority.
A recorded vote of the directors of a corporation, being a written instrument, must be construed by its terms alone, with reference to the subject-matter to which it applies; and parol evidence is not admissible of the sense in which it was under- ' stood by a director.
A draft on a corporation was accepted by their agent, payable “ when in funds,” after a certain other draft upon them should have been paid. In an action on the draft, an auditor appointed to state the accounts between the drawer and the corporation, reported that the corporation, were in funds; ” and it was held, that this was a statement of fact, within his province, and that his report was prima facie evidence of such fact.
A witness may be discredited by evidence that he has made a different statement on a former occasion, although the precise language then used by him cannot be shown; and he need not be first asked, whether he has ever testified differently. But such previous statement cannot be used to prove the facts to be as then stated by the witness.
This was an action of assumpsit, to recover the amount oí a draft alleged to have been accepted by the defendants, a corporation duly established by law. The draft was in the following words and figures : —
"$850. Boston, May 10,1847.
Please pay J. S. Gould & Co. or order, eight hundred and fifty dollars, value received, and charge the same to account of yours, , S. AlbeRt Cox.
To Norfolk Lead Co.”
“ Accepted thus:— May 15,1847.
Accepted, to pay when in funds, after paying draft in favor of Fulton Iron Foundry, heretofore accepted.
For Norfolk Lead Co. N. Adams, Agent.”
The writ was dated May 15,1848. The defendants pleaded the general issue, and denied, first, that Adams had authority to make such acceptance ; and, secondly, that the defendants were ever in funds to pay the acceptance, according to the tenor thereof.
The case involving an. investigation of accounts between Cox, the drawer of the draft, and the defendants, it was sent to H. G. Hutchins, Esq., as an auditor, to state those accounts, and his report was read in evidence by the plaintiffs.
For the purpose of showing that Adams was an agent of the corporation, and, as such, authorized to make the acceptance in question, the plaintiffs offered Adams as a witness to those facts. ' The defendants objected to the competency of the witness, on the ground of interest, alleging that he would be himself personally liable to the plaintiffs, if he had made the acceptance without authority. But the presiding judge, Mellen, J.,. overruled the objection, and permitted the witness to testify to his agency and authority in the premises.
Adams testified that he had paid, as agent of the defendants, numerous orders or drafts drawn on the company, to a large amount in the aggregate, in favor of other persons than the plaintiffs, which had not been previously accepted by the defendants. The defendants objected to this evidence, because it was an attempt to prove the contents of written instruments, without proving the loss of the instruments, or giving the defendants notice to produce them; and because the payment of drafts had no tendency to show authority to accept drafts. The judge overruled the objection, and permitted the evidence to go to the jury, and instructed the jury, that the payment of a draft not accepted included its acceptance. For the purpose of showing that Adams was an agent of the defendants, and, as such, pledged the credit of the company in some form, and with its consent or subsequent ratification, the plaintiffs introduced witnesses, who testified that Adams, as agent of th& defendants, had contracted with them, the witnesses, for wood, blacksmith’s work, carpenter’s work, &c., on a credit, and that their bills were subsequently paid by the defendants. The defendants objected to this testimony as immaterial, but the judge ruled that the evidence was competent, though remote, and permitted it to go to the jury.
The defendants introduced in evidence a contract in writing between Cox and the defendants, under which Cox manufactured the machinery and did the work which constituted the .account between Cox and the defendants, which was sent to the auditor to be" stated and reported upon. The contract was signed and executed by Adams, for and in behalf of the defendants. It was offered by the defendants for the purpose of showing that there were overcharges in the account of Cox. The plaintiffs contended that this contract, being executed by Adams as agent of the defendants, was evidence that Adams had authority to use the credit of the defendants, inasmuch as this contract did pledge their credit, and they claimed the performance and fulfilment of the contract on the part of Cox. The defendants then read a vote from the records of then- directors, which was in the following words: “ Voted, that the proposition of Mr. Cox, for building machinery, &c., be referred to Mr. Adams.” They also introduced a written proposition made by Mr. Cox, which was different from the terms of the contract, as" executed between Cox and the defendants; and then requested the judge to rule that this vote was a sufficient authority to Adams to make and execute with Cox the contract which was finally executed between him and the defendants, and, therefore, had no tendency to show the authority of Adams to pledge the credit of the defendants. The judge refused so to rule, and, on the other hand, ruled that the vote of the directors authorized Adams to consider and report upon the proposition of Cox, and not to make and execute a contract, as would appear by the terms of the vote. The defendants then asked leave to prove by the directors, who had made themselves competent as witnesses by selling and transferring their stock in the company, that they understood the vote, when it was passed, to confer upon Mr. Adams full authority to make and execute a contract. Upon objection by the plaintiffs, the judge refused to admit the testimony, because the vote was in writing, and could not be varied by parol testimony.
The defendants objected to the auditor’s report, because the auditor stated the fact that the defendants were in funds ; alleging and requesting the judge to rule, that it was not competent for the auditor to pass upon this question; and, therefore, that that part of his report which stated that the defendants were in funds should be stricken out. The judge refused so to rule, and, on the other hand, ruled that it was within the province of the auditor to pass upon that question, and that his report was primd facie evidence of the facts Within his province to report.
Edward Crane, one of the directors of the company, was a witness on behalf of the defendants, at the hearing before the auditor and at the trial in the court of common pleas. Charles E. Parsons was introduced by the plaintiffs, and testified at the trial, that Crane had testified to the same subject-matter, in a certain other trial between other parties, and he stated substantially what Crane’s testimony was on that other occasion. Parsons testified that he could not give the precise and exact words used by Crane in his testimony on the former occasion, but he could give the substance and import, of them. The defendants objected to the admission of the testimony of Parsons, because he could not state the precise words, as they had been used by Crane, and because the. plaintiffs had not interrogated Crane, while on the stand as a witness, whether he had ever testified differently from what he then testified. The judge overruled both objections, and permitted Parsons to testify.
The jury returned a verdict for the plaintiffs, and the de fendants brought the case to this court by exceptions.
L. Mason, (with whom was R.. Choate,) for the defendants,
cited 1 Greenl. Ev. §§ 395, 416, 417, 260-563; Byles on Bills, 15; Hogg v. Snaith, 1 Taunt. 347; Hay v. Goldsmidt, cited in Hogg v. Snaith, 2 Archbold’s N. P. 7, 9; Attwood v. Mannings, 7 B. &. C. 278; Davidson v. Stanley, 2 Man. & Grang. 721; Atkinson v. St. Croix Manufacturing Co. 11 Shepley, 171; Angelí & Ames on Corp. (5th ed.) § 291 a; Allen v. Hawks, 11 Pick. 359; Lazarus v. Commonwealth Ins. Co. 19 Pick. 81, 97; Whitwell v. Willard, 1 Met. 216; Jones v. Stevens, 5 Met. 373 ; Taunton Iron Co. v. Richmond, 8 Met. 434; Bradley v. Clark, 1 Cush. 293.
J. P. Heady, for the plaintiffs,
cited 1 Greenl. Ev. §§ 416,417; Putnam v. Tillotson, 13 Met. 517; Rice v. Gove, 22 Pick. 158; Jones v. Stevens, 5 Met. 373 ; Tucker v. Welsh, 17 Mass. 160.

Opinion:
Shaw, C. J.
This was an action of assumpsit, to recover the amount of a draft alleged to have been accepted by the defendants.
The suit was brought May 15, 1848, and was resisted on the grounds that Adams had no authority to accept the draft, so as to bind the corporation; and, secondly, that the acceptance was conditional, and the corporation had not received funds to pay the acceptance, according to its tenor. Inasmuch as it became necessary to ascertain the state of Cox's accounts with the defendants, the account was referred to an auditor, whose report is a part of the case. It comes before the court on various exceptions, taken by the defendants.
1. At' the trial in the court of common pleas, the plaintiffs offered Adams as a witness, to prove that he was an agent of the corporation, and, as such, authorized to accept the draft in question; to which the defendants objected. The court, however, overruled the objection, and permitted him to testify to his agency and authority. This, we think, was according to the rule, that an agent, acting under a parol authority, is competent to prove his own agency by his testimony; a rule founded on convenience and necessity, and supported by general usage, and it does not come within any of the exceptions to the rule.
2. The agent testified that he had paid, as agent of the company, numerous drafts and orders drawn on them, and not previously accepted by them. This evidence was objected to, because it was attempting to prove the contents of written instruments without showing their loss, or giving notice to the defendants to produce them; and because the payment of such drafts had no tendency to prove authority to accept drafts. The court overruled these objections, arid instructed the jury, that the payment of a draft not accepted included its acceptance, and, therefore, was evidence of an authority to accept drafts.
As to the first part of the objection, it is obvious that, if the drafts were thus paid, they were paid by the corporation, and for their account. A corporation must act by and through agents, directors, or trustees, because it can act in no other way. Perhaps the presumption is that these drafts, having been so paid, were cancelled or destroyed; but if otherwise, and if they may be presumed still to exist, it is to be presumed that they are held by the company, and could be produced by them, and so notice to produce should have been first given. If the case depended upon this point, we should say sufficient notice for this purpose might have been given at the trial; and, in a new trial, a very short notice would probably be deemed sufficient.
3. The second branch of this objection is entitled to more consideration. The instruction of the court, that the payment of a draft not accepted included its acceptance, and was evidence of an authority to accept drafts upon the company, was, in our opinion, incorrect in point of law. The acceptance of a draft is an executory undertaking to pay it at a future day, and the authority to make such an agreement is not incident even to the authority of an agent to purchase and pay for goods. The authority to accept is one of a very high character, particularly in the case of a trading corporation, to whose business credit, and the use of that credit, is constantly necessary. It has been argued, that such authority may be inferred from the course of trade, and the payment of unaccepted drafts upon the companv on other occasions. But this implication does not follow from such payments; for, either the agent had funds of the company for the purpose of paying such drafts; which does not imply that he had authority to pledge their credit; or he paid them from his own funds, relying on the credit of the company, and their previous undertaking and liability to reimburse him for all his advances, which implies no authority whatever to bind them to a future payment of money, by an acceptance. I shall not go into an examination of the cases on this subject, but will refer to that of Webber v. Williams College, 23 Pick. 302, where the question was much considered, and many cases were cited.
The case of Emerson v. The Providence Hat Manuf. Co. 12 Mass. 237, goes to the point that, constituting one a buy* ing and selling agent of a trading company does not imply authority in him to give the negotiable note of the company.
In the case before us, the agent, by accepting the draft, bound the corporation, if he bound them at all, to account with another person than Cox, which might be very injurious to them, as it would exclude them from setting off what might be due to them from him. The authority to pay drafts applies only to that specific class of transactions, and, therefore, there can be implied from it no authority to agree to pay at a future day. If Adams paid the drafts from his own funds, he did so relying on his own authority, as agent, to that extent, to reimburse himself, or on the subsequent ratification of his acts by the company, as otherwise he was without remedy; for no man can make himself the creditor of another without his consent, express or implied. Without such consent, he pays in his own wrong.
4. The next point is, that the plaintiff's counsel was permitted to argue from the fact, that the agent had made a contract with Cox for building certain machinery for the defendants, that he was authorized to pledge the credit of the company by his acceptances. We think the evidence had some tendency to prove that he was a general agent of the defendants, and, in that respect, was competent, though certainly it was very remote. The name of general agent might imply, that he had authority to purchase materials for carrying on the defendants' business, but it had little tendency to show authority to accept drafts for them.
5. The defendants then put in a vote of the directors of the corporation, that the proposition of Mr. Cox for building machinery be referred to Mr. Adams, and put in also a written proposition, made by Cox, which was different from the terms of the contract afterwards executed between him and the defendants; and the defendants' counsel asked the court to rule, that this vote was a sufficient authority to Adams to make and execute the contract which was finally made, and, therefore, had some tendency to show an authority in Adams to pledge the defendants' credit. But the court, on the other hand, ruled, that the vote of the directors merely authorized Adams to consider and report upon the proposition, and not to make a contract. The defendants then asked leave to prove by the directors, who had sold and transferred their stock in the company, that they understood the vote to confer upon Mr. Adams full authority to make and execute the contract. This the court refused to do, because the vote was in writing. This, we think, was correct; because the vote was a written instrument, and must be construed by its terms alone, with reference to the subject-matter to which it applies. If the terms of the vote imported the authority to make the contract, no parol testimony was necessary; if it did not, such testimony could not be competent to control and vary those terms.
6. The defendants' counsel objected to the auditor's report, because it stated that " the defendants were in funds," and requested the court to rule, that it was not competent for the auditor to pass upon that question, and that that part of the report which contained such statement should be stricken out; but the court ruled that it was within the province of the auditor to pass upon that question, and that the report was primd facie evidence of the facts within his province to inquire into.
Now, what does this objection apply to? The objection is, that the auditor expresses an opinion upon a question of fact, a question which it is for the jury to pass upon ; but, in looking at the report, we find it is not open to that objection. The auditor was appointed to state the account between Cox and the defendants, to see what money he had earned under his contract with the defendants, and what money of his was in their hands, to answer his drafts upon them ; to see if the balance in their hands, after deducting a sufficient sum to pay the Fulton Iron Foundry, was sufficient to pay this draft of the plaintiffs. He found that the balance was sufficient, and reported, in the language of the acceptance, that they were in funds; that is, in the condition indicated by the acceptance as that in which their liability to the plaintiffs should take effect. This result depended upon the state of the accounts between the parties, and was a matter of fact, not the expression of an opinion. It was not an independent substantive statement of fact, but the result of the inquiry which he was directed to make, into the state of the accounts, and so was within his province. The items of the account, from which this result was drawn, were submitted, at the same time, for the examination of all parties, by which the correctness of such result could be readily tested.
7. Edward Crane, one of the directors of the company, was a witness introduced at the hearing before the auditor, and at the trial in court, by the defendants, and Charles E. Parsons was called by the plaintiffs, and testified, at the trial, that Crane had testified concerning the same subject-matter, on another occasion, in a certain trial between other parties; and he stated substantially what his testimony then was. The defendants' counsel objected to the admissibility of this testimony, because the witness could not state the precise words used by Crane on that occasion, and because the plaintiffs' counsel had not interrogated Crane, while upon the stand, as to whether he had ever testified differently from what he then testified. These objections the court overruled, and we think very properly. This point of practice is well settled, and the ruling conforms entirely to the practice in this commonwealth. Evidence respecting the testimony of a deceased witness, to which the counsel'taking this exception manifestly referred, stands upon quite other grounds. If it is practicable to show the precise words of the deceased person, so as to give his own testimony exactly, then it is competent, otherwise not. 1 Greenl. Ev. \ 163, 165. But the present case depends on an entirely distinct rule. It is substantially an impeachment of the credibility of the witness. It cannot be used to prove the facts to be as stated by the witness on the previous occasion; but merely to show that he then gave a different account of the same transaction. This affects the value of his testimony. It shows he has made a statement conflicting with the one he gives at the trial. If under oath on the. prior occasion, the evidence against his credibility is so much the stronger, but it is not necessary that he should have been sworn. The fact that he has stated the facts differently, shows either a failure of memory, that he has forgotten what he once knew, or else it shows a want of integrity, and either way it impairs the value of his testimony. But it is no evidence whatever that the facts are as he formerly stated; and, though appeals are sometimes made to a jury that it is so, it is the province of the court to inform them that it is not so. As to requiring a witness to be asked, while testifying in chief, whether he has ever made a different statement, as a basis for afterwards contradicting him, that is the English rule, but we have always adopted a different rule. After it has been shown, however, that the witness has made conflicting statements, he may be recalled for the purpose of explaining or reconciling them.
These are all the grounds necessary to be considered. The verdict must be set aside, and a new trial had in this court.
Exceptions sustained.