Court Opinion

ID: 3235521
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:10:10.764767+00
Date Added: 2024-06-11T08:43:04.671780
License: Public Domain

The appellee filed this bill against the appellant, seeking, in the alternatives asserted, remedies and reliefs that the appellee conceives to be its due, consequent upon the failure or refusal of the appellant to pay for certain machinery and attachments that were sold, on terms, by appellee to appellant to constitute and, being installed, now constitute, a part of the waterworks system of the appellant. The demurrer to the bill was overruled, to review which action this appeal is alone concerned. The transaction was reduced to writing, exhibited in copy with the bill.
A primary question raised by the demurrer is whether the contract so exhibited was efficaciously executed on the part of the municipality. There is no contention that the appellee did not efficiently execute the writing. Assuming, for the occasion only, that the statute to be quoted applied to this municipality, the particular basis for the objection that the writing was not efficiently executed by the town is found in the provisions of Code, § 1183. So far as pertinent that section reads:
"Contracts entered into by a municipality shall be in writing, signed and executed in the name of the city or town, by the officers authorized to make the same, and by the party contracting. In cases not otherwise directed by law or ordinance, such contracts shall be entered into and executed by the mayor in the name of the city or town, and all obligations for the payment of money by the municipality, except for bonds and interest coupons, shall be attested by the clerk."
In the third paragraph of the original bill it is unequivocally averred — with special reference to the contract in question — that the mayor, E. W. Berry, and the town clerk. D. H. Matthews, were "both duly authorized by proper ordinance or resolution" to act in the premises, thus refuting, by express averment, *Page 120 
any possible implication or conclusion that the mayor and the town clerk, whose names appear on the writing as reproduced below, were not shown to have been vested with power and authority to engage as the contract contemplated. The quoted allegation of authority on the part of the mayor and town clerk to effectually act in the premises was sufficient. Alley v. Jesse French Co., 148 Ala. 303, 304, 42 So. 623; McGeever v. Harris, 148 Ala. 503, 41 So. 930. Even in proceedings rested upon an ordinance, it is not necessary to set out the ordinance. Rosenberg v. City of Selma, 168 Ala. 195, 197, 198,52 So. 742.
The ground of demurrer (tenth) taking this objection to the bill was ill-founded. The writing in question, that was in the form of a proposition from the appellee to the appellant, was captioned or addressed in this way: "To Town of Camden, Purchaser." At the end of the paper, following the signature of the appellee, by its agent, this appears:
"The above proposal is hereby accepted this 10th day of Feb., 1916.
                        "E. W. Berry, Mayor, "B. H. Matthews, Town Clerk, "Camden, Alabama.
"Town seal lost at present. E. W. Berry, Mayor.
"Signed in presence of J. N. Stanford, Judge of Probate.
"Approved at New Orleans, La. Fairbanks, Morse  Co., by Jno. Jones, Manager. OK J. OK WH."
The subject of this bargaining was seasonably delivered and installed in the town's waterworks system, and, according to the averments of the bill, the appellant paid, on November 27, 1916, $1,500 in cash on the purchase price ($3,107.75), and, by agreement, was given a credit thereon of $194.20 as of December 20, 1916. The reference (quoted above, over the name of the mayor) on the paper to the "town seal" denotes, unmistakably, that the design was to engage for the town of Camden, through the impress of the "town seal," and to excuse its use for the reason there given, viz. its loss at the time. However, the omission of a corporation to execute an instrument under, over, or against its corporate seal is not essential to the valid execution of a contract required to be in writing; "the doctrine," to quote Judge Freeman in 13 Am. Dec. 562, "that a corporation cannot make or authorize a contract except under its corporate seal is entirely exploded in this country." 10 Cyc. p. 1004; Everett v. United States, 6 Port. 166, 30 Am. Dec. 584; 2 Page on Contracts, § 558. In this state it has been repeatedly affirmed that the only effect of the use, by officers, of the corporate seal in executing instruments, is to afford evidence, prima facie, of the authority of the officer in the premises. Amer., etc., Bank v. Smith, 122 Ala. 502, 505,27 So. 919, and decisions therein cited; Allen v. Alston,147 Ala. 609, 612, 41 So. 159. No statute establishing the use of the corporate seal in the execution of municipal contracts as a prerequisite to their effectual consummation appears to exist in this state. In the absence of such a statute or law, the rule stated is applicable and must be observed.
It is well settled here, as it is generally, that slight mistakes in the names of corporations undertaking to execute contracts do not avoid contracts otherwise validly executed. Douglass v. Bank of Mobile, 19 Ala. 659, 662; Mayor, etc. v. Smith, 137 Ala. 382, 386, 35 So. 120. The third headnote to Douglass v. Bank of Mobile supra, tersely states the principle:
"When a corporation is a party to a deed, a mistake in setting out its name will not vitiate the deed, if it is apparent from the face of it that the corporation was intended thereby."
Recurring to the statute (Code, § 1183), a substantial compliance therewith is all that could be required to meet its demands. To affirm otherwise would involve an abrupt and unjustifiable departure from the view, always prevailing here, that the mandates of statutes governing the form and method for executing instruments, even of the most solemn character, are met if there is a substantial compliance therewith. Illustrations of this rule are familiar and readily accessible. The written proposition submitted by the appellee, together with the averred acceptance thereof by the municipality, operated to impose the duties and obligations of a contract, provided the requirements of Code, § 1183, with respect to the signing of the acceptance thereof by or for the municipality, were substantially met. That the contract, contemplated as evidenced by the writing, was the engagement of the municipality, and not that of the individuals (Berry and Matthews), whose names appear on the paper, is too plain to admit of doubt.
The case of Hall v. Cockrell, 28 Ala. 507, holds nothing to the contrary. It is without bearing in the present materially different circumstances. The instrument there considered was signed by the individuals only, against and under their individual seals, and, as the court observed, did "not purport on its face" to be the act of the corporation; that it only bore "covenants of the individuals," who, as individuals, and as "the parties of the second part," entered into them. The terms of the instrument and the circumstances disclosed by the averments of the bill (2 Page on Contr. § 1123) demonstrate that the only contract contemplated was between the appellee and the municipality, the appellant; there being no manifestation whatsoever of an intention to deal with or to impose contractual obligation upon the individuals, Berry and Matthews. Hence the contract's *Page 121 
efficacy and force depend entirely upon its effectiveness as imposing obligations upon the municipality, appellant. Where an instrument is fairly susceptible of two interpretations, one of which will accord its effect and operation, and the other will render it wholly abortive, the judicial disposition and duty is to adopt the interpretation that will sustain and give effect to the instrument. Adams v. Adams, 26 Ala. 272, 279; Evans v. Sanders, 8 Port. 497, 33 Am. Dec. 297; 2 Page on Contr. § 1120, among others.
This writing bears the signature of the mayor and of the town clerk as such. It is recited over the signature of the mayor that the "town seal" was "lost" at the time. The terms of the acceptance, over the signature of the mayor and town clerk, refer, unmistakably, to the proposition, made by the appellee, to the "Town of Camden, Purchaser." The words "Camden, Alabama," are (in this record, which appears to follow the form of the original) set in immediately below the name of the town clerk. The fact that the true corporate name, viz. Town of Camden, Alabama, was not used — the omission being of the words "Town of" — did not avoid the instrument because of ineffectual execution, under the mandate of Code, § 1183, quoted before. It was but a slight mistake, a quasi misnomer, that was not even capable of misleading. Authorities supra. The words "Camden, Alabama" — the merely imperfect name of the municipality — were evidently put there by the mayor and town clerk, who, the bill avers, were "duly authorized" in the premises. The only argument possible is predicated of the relative place of the words "Camden, Alabama," on the instrument. If "Camden, Alabama," had been written above the signature of the mayor, no rational doubt could have been entertained that the mandate of Code, § 1183, was substantially observed. Every circumstance, as well as the writing, discloses the intent of all parties to bind the municipality. That corporation accepted the subjects of the sale and installed them. It paid over half of the purchase price named in the writing. It had secured the necessary electoral authority to issue bonds to raise money to construct a waterworks system, of which the subject of this sale was bought to afford, and was made, a part. There can be no reasonable doubt of the intention entertained by all the parties. In order to complete the basis for the argument indicated, the word "of" must be regarded as interposed after the words "Town Clerk" — taking the place of the comma there used — to the end that the words "Camden, Alabama," may be interpreted as denoting the post office address of the mayor and the town clerk. The courts often transpose, and upon proper occasion eliminate, expressions from writings of a contractual nature (2 Page on Contr. §§ 1124, 1125), but they never transpose or read in a word or phrase in order to annul a contract otherwise validly made. There is no reason shown for so limiting the words "Camden, Alabama." So to interpret them is to seek for ground on which to avoid a valid obligation; whereas, the rule is that the courts will seek, by all fair, reasonable means, to sustain contracts. It has been often decided that the place on any instrument where a signature is made is not material to its effectual execution. 9 Cyc. p. 301.
It results from the foregoing considerations that this instrument, exhibited with the bill, had authoritatively affixed thereto the name of the municipality, the appellant, and that it was effectually executed by and for the municipality through its mayor and town clerk, who, the bill avers, were duly authorized in the premises.
In the contract, thus bindingly made, the appellee reserved the title to the property until it was fully paid for, and also expressly provided against its becoming a part of the realty. As the bill is now framed, no sufficient facts are averred conducing to the conclusion that, notwithstanding the stipulation last stated this property became a part of the realty, so as to subject the entire plant to the lien of an equitable mortgage within the doctrine (if applicable) of Ross v. Perry, 105 Ala. 533, 16 So. 915 — a doctrine that the writer, together with Anderson, C. J. and Gardner, J. (dissenting), took account of in Kerlin v. Ramage, 200 Ala. 428,76 So. 360, L.R.A. 1918A, 142. According to the facts averred in this bill, the appellee (complainant) had and has an adequate remedy at law to recover the subject-matter of the conditional sale shown by Exhibit A to the original bill; and hence the bill is without equity, and the court, in my judgment, erred in overruling appellant's demurrer taking that objection thereto. It is manifest from the averments of the bill that the debt limit, fixed by the Constitution (section 225), would be illegally exceeded, if any general liability whatsoever was visited upon this appellant in consequence, however resulting, of this contract. The fund produced by the sale of the waterworks bonds should have been exclusively applied to that purpose. A devotion of any part of that fund to another purpose was illegal, an act that could not operate to impose on the municipality an obligation or liability in excess of the debt limit fixed by the Constitution.
On the considerations stated, the decree should, in my opinion, be reversed; and I therefore dissent from the conclusion announced.