Court Opinion

ID: 6411637
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:53:08.38709+00
Date Added: 2024-06-11T15:51:23.653201
License: Public Domain

Bigelow, J.
Several of the rulings, to which exceptions were taken in the course of the trial of this case, were erroneous.
1. Evidence of conversations between divers persons, which took place before the act incorporating the company of which the plaintiffs are assignees was passed, was clearly incompetent. The corporation certainly could not be bound by the declarations of persons, made before they had any existence, and the plaintiffs as assignees stood in the same position as the corporation. A party cannot be affected by any statements, unless they are shown to be made by him or by some one authorized to speak in his behalf. The fact that the persons whose declarations were admitted were subsequently oificers or stockholders in the corporation did not show any adoption or ratification of these previous statements by the corporate body after its creation and organization. Nor was it even made to appear that they were known to those who constituted the majority of the stockholders of the corporation, and who took part in its establishment and organization. Under these circumstances, we are at loss to see on what possible ground such evidence could be held to be admissible.
*4152. The return made by the corporation to the secretary of the Commonwealth, in compliance with the provisions of the statutes, was irrelevant and immaterial to the issue before the jury, unless accompanied by further evidence that the defendant saw or knew of such statement, and was thereby deceived, and entered into contracts of insurance with the corporation, relying in some degree on the statements which it contained. The corporation were entitled to enforce contracts made by the defendant with them, notwithstanding their insolvency, unless he had been induced to enter into them by some fraudulent misrepresentations which were intended and allowed by the corporation to operate on his mind; and it was wholly immaterial that they had made false statements in their returns to the secretary, unless in some way they were brought home to the defendant, and were suffered to influence him in signing and delivering the notes in suit. Alliance Mutual Ins. Co. v. Swift, 10 Cush. 433.
3. The same reasons are applicable to the contract offered in evidence, between the corporation and their agents in New York. There was no evidence offered to show that the defendant had any knowledge of the existence of such a contract; and if he had known of it, we do not see that it tended to prove the fact of the insolvency of the corporation, for which purpose i was admitted. It was certainly very slight and remote evidence to prove the fact.
4. Evidence of the declarations of Dolliver was incompetent. He was a special agent only, with a limited authority to receive and transmit applications for insurance to the corporation. By virtue of such agency, he had no authority to make declarations concerning the condition of the company or the payment of their capital stock. The power of an agent to speak for his principal is confined strictly within the scope of his authority. 1 Greenl. Ev. § 113. Any statements concerning matters beyond this are hearsay and inadmissible.
5. The instructions to the jury were in one respect deficient in accuracy, and tended to mislead them. It was not a sufficient defence to the notes declared on, that the corporation had *416at some previous time made false and fraudulent representations concerning their solvency and the condition of their capital stock, for the purpose of inducing persons generally to deal with them, unless such representations were held out at the time when the defendant gave the notes, and to induce him to give them. .This qualification was omitted. As the case was left to the jury, they might have found a verdict for the defendant on the ground of false statements or inducements, although they were not shown to have been continued or authorized when the defendant entered into the contracts of insurance in consideration for which the notes were given. The corporation through its agents may have been guilty of falsehood and fraud to other persons at other times. But they were not to be held responsible therefor in this action, unless it was proved that the circumstances were such as to lead to the inference that such misrepresentations were intentionally allowed to operate on the mind of the defendant in inducing him to execute and deliver the notes on which the plaintiffs now seek to recover judgment.

Exceptions sustained.