Danforth v. President of the Schoharie & Duanesburgh Turnpike Road , 12 Johns. 227 ( 1815 )

Thompson, Ch. J.,

délivered the opinion of the court. This case comes before the court on a general demurrer to the decíaration. The action is assumpsit, and the two first counts in the declaration set forth articles of agreement entered into between the parties, under seal, relative to the making of a road. All necessary averments of performance, on the part of the plaintiff, and breaches on the part of the defendants, are duly made, and ,set forth, and' a balance of 4000 dollars, is alleged to be due the plaintiff; and thereupon a special promise is alleged, on the part of the defendants, to pay such balance. The third count is for work, labour, and services, &c.; and alleges a promise to pay, &c. '

"No objection was made, on the argument, to the form of the action, or that it should have been covenant, founded upon the articles entered into between the parties. The action is founded upon the promise to pay the balance, and the covenant is only set out as inducement. (2 Term. Rep. 483, note.) The objection taken to the declaration goes on the broad ground, that an action of assumpsit, will not lie against a corporation; for they cannot make a valid and binding contract, except under their corporate seal. The proposition, in this latitude, is certainly not tenable. Although it may be laid down by elementary writers, as a general rule, that corporations can do Ho act without a seal, and such would seem to be the doctrine of some old adjudged cases; yet the law of the present day seems to be otherwise well settled. Corporations, in many cases, have been considered bound by their acts and agreements, not under seal. In Rex v. Bigg, (3 Peer. Wms. 419.) it was held that a corporation might, without seal, duly authorize an agent to sign notes. And in Rex v. The Bank of England, (Doug. 424.) the court refused to grant a mandamus to the bank, to transfer stock, because there was a remedy by an action on the case, if they refuse, and a special action of assumpsit was afterwards brought against the bank. The principle of this case has been recognised in this court. ^(a)

An attempt has, in some cases, been made,.to distinguish between express and implied promises, as to the liability of a corporation. (3 Mas. Rep. 364. 3 Dal. 496.) But in a late case of the Bank of Columbia v. Paterson’s administrators,^(b) decided in the Supreme Court of the United States, all such distinctions are disregarded, and the court seem to go the full length, of giving the same remedies, against bodies corporate, in matters of contracts, as against individuals. The old cases arethere reviewed, showing that the law has been progressively altering, with respect to the validity of acts done by corporations, not under their seal. The court observe, upon the English authorities referred to, that as soon as it was settled, that a regular appointed agent of a corporation, could contract, in its name, without a seal, it was impossible to maintain any longer, that a corporation was not liable upon promises ; otherwise, there would be no remedy against the corporation; and the court concluded, by saying, that-it is a sound rule of law, that whenever a corporation is acting within the scope of the legitimate purposes of the corporation, all paroi contracts made by its Authorized agent, are express promises .of the corporation, and all duties imposed upon them by law, and all benefits conferred, at their request, raise implied promises, for the enforcement of which, an action will lie. It is unnecessary, upon the present demurrer, to go the full length of this case, or to decide any thing more than that a corporation may make a valid contract, not under its seal. Whether the promise in this case was made by the board of directors, and entered upon their minutes, or by a committee, or other agent duly authorized for that purpose, or in any other manner that would be binding, are questions which must arise and be determined upon the proof offered at the trial, and cannot properly come under consideration upon the present demurrer. We are accordingly of opinion, that the plaintiff is entitled to judgment.

Judgment for the plaintiff, ^(c)

(a) See Shipley and others v. Mechanics' Bank, (10 Johns. Rep. 484.)

(b) 6) This case was citecj and read to the court, from a Gazette, dated March 18,1815.

(c) In Hayden v. The Middlesex Turnpike, (10 Tyng's Mass. Rep. 397.) the Supreme Court of Massachusetts, decided that assumpsit would lie against a corporation, where there $s an express stipulation by an agent of the corporation, or a duty arising from some act or request of such agent, within their authority,