Hilliard v. Upper Coos Railroad

Neither the president nor a director of a corporation has power by virtue of his office to bind the corporation. Holland v. Association, 68 N.H. 480; New Boston Fire Ins. Co. v. Upton, 67 N.H. 469; Wait v. Association,66 N.H. 581; Buttrick v. Railroad, 62 N.H. 413, 418; Lyndon Mill Co. v. Institution, 63 Vt. 581.

The only evidence to toll the bar of the statute rests in the statements claimed to have been made in 1906; for whatever was said and with whatever authority in 1901, no statement then made could prove a promise within six years before the bringing of the suit in 1908. Assuming as the most favorable interpretation that can be put upon the plaintiff's account of VanDyke's statements in 1906, that he then admitted the items sued for were valid claims against the defendants and in their behalf promised to pay them, the fact that he held the office of president does not make his admission and promise the acts of the corporation. They are not such unless he was expressly or impliedly authorized to make them in behalf of the defendants. It is conceded there is no evidence of express authorization, and no evidence is found of a course of dealing from which such authorization could be inferred. Although the plaintiff testified that VanDyke had supervision of the railroad and another witness said he was "hustling around" when the road was being built, there is no evidence of any acts performed by him upon which either conclusion was based. It does not appear that he ever bought any material upon the credit of the defendants. The items sued for were sold by the plaintiff upon VanDyke's credit, and the plaintiff expected to be paid by an adjustment of VanDyke's personal account against him. There is no evidence of any statements by VanDyke during the treaty for the goods or their delivery, or while he was doing any act as the agent of the defendants, which would tend to charge them. The statements relied upon were made while he and his counsel were employed in VanDyke's personal business — the defence of the plaintiff's suit against him — long after the transactions upon which the present claims are based. Upon the plaintiff's account, he had a valid claim against VanDyke, even if, in fact, the material was purchased by him as agent for the defendants. An agent who contracts in his own name for an undisclosed principal is personally liable. 1 Sto. Ag., s. 266; Kaulback v. Churchill, 59 N.H. 296.

If the plaintiff chose to release VanDyke and accept instead the agreement of the company to pay for the goods, he might do so; but VanDyke had no power to bind the corporation for the purpose of securing his own discharge from liability. "The directors or trustees of a corporation, in accepting their appointment to office, impliedly undertake to give the company the benefit of their best care and judgment, add to use the powers conferred upon them solely in the interest of the corporation. They have no right under any circumstances to use their official positions for their own benefit or the benefit of any one except the corporation itself. It is for this reason that the directors have no authority to represent the corporation in any transaction in which they are personally interested in obtaining an advantage at the expense of the company. . . . Accordingly, it has been held in numerous cases that the directors of a corporation have do authority to bind the company to any contract made with themselves personally, or to represent it in any transaction with third persons, in which they have a private interest at stake. The principle acted upon in these cases is a general principle of the law of agency and applies to every agent of a corporation, whatever may be his position." 1 Mor. Corp., s. 517; Pearson v. Railroad, 62 N.H. 537, 540; Wardell v. Railroad,103 U.S. 651, 658.

The alleged agreement of the defendants to waive the statute of limitations was made, according to the plaintiff's evidence, as part of the settlement of his suit against the president of the corporation. The only consideration for such a contract was the release of the president from his personal liability. Charged with knowledge of VanDyke's personal interest in the alleged contract, the burden is on the plaintiff to show the authority of VanDyke to make such a contract as agent of the corporation, or its ratification of it. Farrington v. Railroad, 150 Mass. 406, 409; Campbell v. Bank, 67 N. J. Law 301; West St. Louis Bank v. Bank,95 U.S. 557, 559.

The defendants also excepted to the evidence of VanDyke's statements. Not being made in the course of any action by him in behalf of the defendants, the evidence was inadmissible without some evidence tending to prove his authority to bind the corporation. Westminster Bank v. Electrical Works, 73 N.H. 465, 481; Cate v. Blodgett, 70 N.H. 316; Guerin v. Company, 70 N.H. 133; Nebonne v. Railroad, 67 N.H. 531, 532; Low v. Railroad, 45 N.H. 370. The absence of authority has already been discussed. Whether what the evidence tended to prove VanDyke said authorizes the finding of a new promise, if authority to make such promise had been shown, is obviously an immaterial question.

Excluding the incompetent evidence, there was nothing for the jury and a verdict should have been ordered for the defendants. That order is now made.

Verdict and judgment for the defendants.

All concurred.