Constructors' Ass'n v. Furman

Opinion by

Reno, J.,

At the new trial awarded by this Court, Constructors’ Association of Western Pennsylvania v. Furman, 165 Pa. Superior Ct. 248, 67 A. 2d 590, the jury returned a verdict for Furman. The Association moved for judgment n.o.v. and a new trial. Judgment n.o.v. was refused and the Association appealed to No. 96 April Term, 1951. A new trial was granted and Fur-man appealed to No. 95 April Term, 1951.

The Association sued Furman for $1233.33, representing membership dues from 1941 to 1946. In the first trial Furman stood upon an alleged parol contemporaneous agreement exempting him from the payment of dues. After the case was remanded for a new trial he amended his answer by the averment: “That some time during the period between April 16, 1941 and April 22, 1942, the Complainant Association, by proper action of its Board of Governors in accordance with Section 13 of its By-Laws, expelled the Defendant from the Association so that the relationship between Complainant and the Defendant was terminated by a written notice, mailed to and received by tbe Defendant, tbe said Roy E. Furman, during that period of time.” By an amended- reply the Association denied tbe expulsion. Tbe trial revolved exclusively around this issue.

According to tbe Association’s by-laws, introduced in evidence, tbe board of governors is authorized to expel “members for practices of acts which appear to be improper and injurious to tbe industry and tbe Association.” The board may expel only upon charges “presented in writing by at least two members in good standing,” and thereon a “bearing before tbe Board shall be arranged not later thán one week after tbe receipt of tbe charges. Should tbe accused member not be willing to appear before tbe Board, but willing to present bis arguments in writing, tbe majority vote of the Board shall determine tbe penalty in either case.” (By-Laws, §13.) Provision is made for an appeal from tbe action of tbe board to tbe members of tbe Association.

Tbe burden of proof was upon Furman. Since only tbe board was authorized to expel him, Furman was obliged to prove action by tbe board. Tbe best evidence of tbe action of the governing body of a corporation is tbe record of tbe proceeding contained in its minutes. Costa v. Croatian Fraternal Union of America, 122 Pa. Superior Ct. 447, 185 A. 869. Where tbe minutes omit reference to tbe proceeding tbe action of tbe corporation may be proven by parol evidence. Loeffler’s Estate, 277 Pa. 317, 121 A. 186; Rose v. Independent Chevra Kadisho, 215 Pa. 69, 64 A. 401; Lincoln v. Christian, 94 Pa. Superior Ct. 145. In any event and by some method Furman was required to prove that tbe board exercised its power to expel him. Instead, over objection, be was allowed to testify that be bad received a letter, which be subsequently destroyed, which informed him that he “was no longer a member.” In answer to the question, “Who signed the letter, Mr. Furman?” he replied, “I think the executive secretary, Mr. MacGregor.” MacGregor, formerly the executive secretary, died between the first and second trial.

Furman’s testimony was incompetent and, as the court below held on the Association’s motion for a new trial, should not have been received. Apart from the fact that the letter did not inform Furman that he had been expelled but merely notified him that he “was no longer a member”, it was at most secondary evidence of a fact, the primary evidence of which was readily available to him, since the Association’s minute books covering the period in question had been produced and authenticated at the trial. “Statements of officers of a corporation are not the best evidence of the official acts of the corporation”: Costa v. Croatian Fraternal Union of America, supra, p. 451.

Another, and a more compelling, reason excludes Furman’s testimony. Furman was testifying to a declaration of a supposed officer of the corporation which, in this controversy between the Association and a member, constituted an admission against the interest of the corporation. Iii- the absence , of proof that MacGregor possessed authority to bind the corporation by such admission, Furman’s testimony was not admissible. Johnston v. The Elizabeth B. & L. Ass’n., 104 Pa. 394; Equitable B. & L. Ass’n. v. Roland, 198 Pa. 643, 48 A. 866; Erthal v. Glueck, 10 Pa. Superior Ct. 402 ; Helping Hand B. & L. Ass’n. v. Buss, 13 Pa. Superior Ct. 343; Haspel v. McLaughlin-Lyons, 38 Pa. Superior Ct. 334. The secretary of a corporation has no inherent power “to bind the corporation by letters or documents.officially signed by. him”: 13 Am. Jur., Cor: p.orations, §908. “The secretary or treasurer of a coj*: poration cannot bind it by declarations or admissions unless they accompany the doing of some authorized act”: 19 O. J. S., Corporations, §1071.

Moreover, although referred to below and in the arguments here as an officer of the corporation, MacGregor was actually a mere employe. The by-laws provide for the election of officers, including a secretary, and fixed their terms of office at one year. Section 10 of the by-laws provides: “(a) The Board shall employ an Executive Secretary and fix his salary and shall approve the appointment of other field or office help and fix the salaries for their services, (b) The duties of the Executive Secretary shall he defined hy the Board, (c) The Executive Secretary shall hold office at the discretion of the Board.” (Emphasis added.) Manifestly, without proof of the duties and powers assigned and delegated to MacGregor by the board, his declarations or admissions against the interest of the corporation were not admissible.

Upon the motion of the Association for a new trial the learned trial judge held that he had erred “in submitting to the jury the question whether or not defendant [Furman] had been expelled from membership in plaintiff association prior to April 22, 1942.” Ac: cordingly, he granted a new trial for a legal error committed in the instant trial, and his order will be affirmed.

The Association’s motion for judgment n.o.v. was also refused, and properly so. Only by expunging from the record Furman’s incompetent testimony could the court below or this Court enter a judgment for the Association. But all the cases hold that in entering judgment n.o.v. under the Act of April 22, 1905, P. L. 286; as amended, 12 P.S. §681, et seq., the judgment mtist be entered upon the evidence in the record in the court below as it stood at the close of the trial. The trial court and the appellate courts cannot eliminate evidence which may have been improperly admitted or insert offers of evidence which should have been admitted but were excluded. In either case the sole remedy is a new trial. For a vivid illustration of the application of the principle, see Kotlikoff v. Master, 345 Pa. 258, 27 A. 2d 35. See also the cases theré cited* and Henry Shenk Co. v. Erie, 352 Pa. 481, 43 A., 2d 99; Gaspero v. Gentile, 160 Pa. Superior Ct. 276, 50 A. 2d 754; Dixon v. Metropolitan Life Ins. Co., 136 Pa. Superior Ct. 573, 7 A. 2d 549.

In No. 95, the order of the court below awarding a new trial is affirmed.

In No. 96, the order refusing judgment n.o.v. is affirmed.