Court Opinion

ID: 9574718
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:07:31.672796+00
Date Added: 2024-06-11T12:44:52.907585
License: Public Domain

*477Barnhill, C. J.
There was no error in the order of the court below declining to strike the quoted excerpt from the further answers of the defendants. It was the duty of the architect in charge to exercise general supervision of the construction of the buildings contemplated by the building contract for the' purpose of determining whether the builder was furnishing the type of building material and constructing the buildings in accordance with the plans and specifications. Consequently, the defendants will have the right to offer competent evidence in support of the allegation. Hence, inclusion of said allegation is neither irrelevant nor immaterial.
The appellants discuss in their brief the alleged error of the court below in declining to make McLean a party defendant. But there is no exception to sustain this assignment. Upon the signing of the order from which the defendants appealed, they elected to particularize their objections to the order in the following language: “The defendants . . . each excepts separately to so much of the foregoing order as strikes paragraphs 2 and 3 of their respective further answers and defenses, and the judgment entered, and each appeals to the Supreme Court.” Thus the defendants, at the time, elected to direct their attack upon the order to so much thereof as struck paragraphs 2 and 3. They did not except to the refusal of the court to make McLean a party defendant. Currie v. Malloy, 185 N.C. 206, 116 S.E. 564. And, in any event, the refusal of the court to make McLean a party defendant was well advised. The purchase of the outstanding common stock from the then owners thereof was by McLean as an individual. He signed the so-called release as an individual. Hence, these defendants may not be permitted to try any action they may have against McLean in this suit.
The so-called release executed at the time and as a part of the contract of purchase and sale was executed by the then owners as parties of the first part and by McLean as the party of the second part, as individuals. Neither the vendors nor the vendee purported to act for the corporation.
"While it is alleged that McLean, in executing the release, “was acting in behalf of and as agent of the plaintiff; that he had authority to so act and that the plaintiff, as principal, is bound by the acts of the said Malcolm P. McLean, Jr., in executing and delivering said contract to Park Builders, Inc.,” the other specific facts alleged completely refute this allegation and make it nothing more than a conclusion. At the time McLean signed the release contract, he was not a stockholder, director, or officer of plaintiff corporation, and there is no allegation that he was an employee possessing any authority whatsoever to act in behalf of plaintiff.
Since McLean, in executing the release contract, did not purport to act as an agent of plaintiff, the question whether he had authority to act in behalf of that corporation does not arise. That question’does not arise *478until and unless be professes to contract for and in bebalf of bis alleged principal. Air Conditioning Co. v. Douglass, ante, 170.
A corporation is bound by tbe acts of its stockholders and directors only wben tbey act as a body in regular session or under authority conferred at a duly constituted meeting. “As a rule authorized meetings are prerequisite to corporate action based upon deliberate conference, and intelligent discussion of proposed measures.” O’Neal v. Wake County, 196 N.C. 184, 145 S.E. 28; Tuttle v. Building Corp., 228 N.C. 507, 46 S.E. 2d 313, and cases there cited.
“The separate action, individually, without consultation, although a majority in number should agree upon a certain act, would not be the act of the constituted body of men clothed with corporate powers.” Angel & Ames on Corporations, sec. 504. “Indeed, the authorities upon this subject are numerous, uncontradicted, and supported by reason.” Duke v. Markham, 105 N.C. 131; Tuttle v. Building Corp., supra, and cases there cited; 13 A.J. 465; 3 Fletcher, Cyc. of Corporations, 2917; Ballentine, Manual of Corporation Law and Practice, 591.
It is apparent that at the time McLean acquired the stock of plaintiff corporation, the vendors were under the impression they might be liable individually in an action for breach of the building contract and were seeking to protect themselves against a suit for such breach. It would seem, therefore, that the release contract was made a part of the purchase and sale of the stock primarily for the protection of the vendors. In any event, the action of McLean in becoming a party to said contract was not binding upon plaintiff corporation. Whether Park Builders, Inc. has a cause of action against the vendors of the stock under said release contract will be determined by the verdict and judgment in this cause. If plaintiff recovers herein, Park Builders, Inc. may then assert its rights, if any, under said release contract.
McLean is not a necessary party to this action. The rights of plaintiff may be fully litigated without making him either a party plaintiff or defendant. The action of the court in declining to make him a party defendant cannot be held for error. The motion of the defendants for leave to amend their answers was interposed for the purpose of making allegations against McLean. Since McLean was not made a party, the motion to 'amend is clearly without merit. In any event, it was a matter of discretion resting in the presiding judge. His action in declining to grant leave to amend is not reviewable. Hooper v. Glenn, 230 N.C. 571, 53 S.E. 2d 843; Motor Co. v. Wood, 238 N.C. 468, 78 S.E. 2d 391; Goode v. Barton, 238 N.C. 492, 78 S.E. 2d 398.
Query: Since McLean has acquired all the stock of plaintiff, is it now a corporation % This question is not presented by this record.
The judgment entered in the court below is
Affirmed.