Tappan v. Bailey , 45 Mass. 529 ( 1842 )

Shaw, C. J.

In regard to the competency of Wilder as a witness, it appears to us, that upon the ground mainly relied upon, the objection goes to his interest in the question, and not in the event of the cause. The ground is, that having assumed to act and make this note, in the name and by the authority of the company, if he was not so authorized, he was personally bound by the contract, so that charging the company would tend to relieve himself from that responsibility. This is obviously an interest in the question only, because the judgment in this case, on whichever side it may be given, could not be given in evidence in a suit against him. Besides ; by the general rule, an agent is competent to prove the authority, under which he acted, and the acts done under it. As a mere member of the company, Wilder is called to testify against his interest, because it is to charge the company with a debt, to the payment of which he will be liable to contribute. Blackett v. Weir, 5 Barn. & Cres. 385. Hall v. Curzon, 9 Barn. & Cres. 646.

And upon the general question, the court are of opinion, that the articles constitute the signers a joint stock company, unincorporated, and thereby made them partners. Looking at the general purposes expressed in the articles, and the name assumed by the company, indicating' that they were not a mere land company, to purchase lands, in the expectation of a profit on the resale ; and considering the manner in which they immediately went'into operation, there is sufficient evidence to show, that the object of this partnership was, that of felling and getting out lumber from the tract of land mentioned in the articles, and other tracts of land in Maine, contemplated to be bought ; preparing and getting such lumber to market; and selling it for the mutual profit and benefit of the shareholders. And it is a well known rule of law, that an agreement to carry on business by two or more jointly, and to share the profits, makes them responsible for all losses, and binds them by all contracts made by any of the partners or their agents, which are necessarily incident to carrying on the contemplated business. And in this case, we do not think that the complete formation of the partnership depended on the condition of 100 shares being subscribed for ; there being no such condition expressed in the articles.

Then the remaining question is, whether Wilder, the agent, had authority to give a negotiable promissory note to bind the company. This must depend upon the terms of the articles of partnership, and the nature and purposes of the business to be carried on. If these are such, as from their nature, to require the drawing, indorsing and negotiating of bills of exchange and promissory notes, the agreement would imply an authority to the parties respectively, and to the agents employed to carry on the business of the company, so to draw, indorse, accept and negotiate bills of exchange and promissory notes. Supposing the object of the company were to carry on the business of banking, where private banking is not prohibited by law ; we could have no doubt that such authority would be implied from the nature of the contemplated business. So if the object were to establish a trading company, in which the use of a large capital is necessary, and in the conduct of which it is convenient and use • ful, if not necessary, to make negotiable contracts, and it it usual to do so.

In this case, the articles are voluminous, and it is difficult, without an attentive examination, to ascertain precisely the objects of the subscribers. We think, however, it sufficiently appears that one object was, to get out lumber and bring it to market. The articles provide for the annual election of directors, and they authorize the directors to appoint agents. They also provide for the choice of a president, who shall superintend the doings of all other officers ; and the president and directors are charged with the general management of the interests of the company. The evidence proves the appointment of Wilder, as the general agent of the company, to carry on the lumbering business in Kennebec, that the president was occasionally there, to superintend the proceedings, and that he reported his doings from time to time, to the company.

Here it is in proof, that the note in question was given for services actually done and performed by the promisee. Now without deciding whether this was so far a trading company, either by the express provisions of the articles, or by the nature of the business to be carried on, as that the company would be bound to an indorsee, on bills of exchange or promissory notes, simply upon proof of the drawing, indorsement, acceptance or promise of an agent, and without proof of consideration, we are of opinion that the agent_ had authority to make contracts for labor and services, in the business of getting out lumber, and to give the negotiable promissory note of the company, in satisfaction of such labor and services, and that an action may be sustained upon it, by an indorsee. We think the consideration may be proved by evidence aliunde, and that it is satisfactorily proved that the note, in the present case, was given on a consideration, showing that it was within the scope of the agent’s authority; and there is no intimation that the defendants have any set-off, or other defence which would have availed them, if the suit had been brought by the promisee.

Defendants defaulted.