Sec. 343. 2. Sufficiency and effect of a seal. JACKSONVILLE, MAYPORT, PABLO RY. & NAV. CO. v. HOOPER.' 1896. IN THE SUPREME COURT OF THE UNITED STATES. 160 U. S. Rep. 514-530. [Action by Hooper to enforce covenants under a lease of a hotel to the railway company by plaintiffs. The declaration was in covenant, and an exhibit was attached purporting to be the lease sued upon, to which the signature of the company was as follows: "Jacksonville, Mayport, Pablo Railway and Navigation The defendant denied it had authority to execute it. ing defendant's demurrer. MR. JUSTICE SHIRAS. "Company. [Seal] "By Alex. Wallace, President." had executed the lease, or that Wallace Decision below for the plaintiff, overrulError brought.] The defendant demurred on sev eral grounds, one of which was as follows: "That attached to the said declaration is a paper purporting to be the contract which is the basis of this suit, which paper is alleged to be a lease between the defendant company and the plaintiffs, and which paper is referred to in each and every count of said declaration, and asked and prayed and made a part of said declaration; that each and every count of same declares in covenant, and yet the same contains on the face thereof and the face of the paper made part thereof that the said cause of action will not lie because the said paper is not under seal; that there is no seal of the defendant company to said paper.' The theory of this demurrer appears to be that there should have been an averment on the face of the instrument that the seal attached, on behalf of the company, was its common or corporate seal. However, there was an averment that the parties had set their hands and seals to the paper, and the attesting clause alleged that the railroad company had signed, sealed and delivered in the presence of two witnesses, who signed their names thereto. On demurrer this was plainly sufficient. But it is urged in the third and fourth assignments that it was error to permit to be put in evidence the certified copy of the lease, as likewise the duplicate lease, because they were not shown to be under the seal of the company, but appeared to be under the private seal of Alexander Wallace, the president of the company. But, in the absence of evidence to the contrary, the scroll or rectangle containing the word "seal" will be deemed to be the proper and common seal of the company. A seal is not necessarily of any particular form or figure. 1 Only that part of opinion relating to seal is given. In Pillow v. Roberts, 13 How. 472, 474, this court said, through Whether an instrument is under seal or not is a question for the ub. supra. The defendant did not produce the original in order that it might Whether, therefore, the instrument put in evidence was merely a Note. As to the sufficiency of the seal, it seems that any device adopted Dec. 551; 1820, Berks Turnpike Road v. Myers, 6 S. & R. 12, 9 Am. Dec. 402; 1826, Perry v. Price, 1 Mo. 664, 14 Am. Dec. 316. But if the contract is shown to have been executed by the proper officers with authority, any seal present will be presumed to be the corporate seal: 1852, Susquehanna, etc., Co. v. General Co., 3 Md. 305, 56 Am. Dec. 740; 1855, Phillips v. Coffee, 17 Ill. 154, 63 Am. Dec. 357; 1867, Musser v. Johnson, 42 Mo. 74, 97 Am. Dec. 316; 1894, Benbow v. Cook, 115 N. C. 324, 44 Am. St. Rep. 454. See next case and note. Sec. 344. (b) As evidence of agents' or officers' authority. LITTLE SAW MILL VALLEY TURNPIKE OR PLANK ROAD COMPANY v. FEDERAL STREET AND PLEASANT VALLEY PASSENGER RAILWAY CO.1 1899. IN THE SUPREME COURT OF PENNSYLVANIA. Rep. 144, 75 Am. St. R. 690. 194 Pa. St. [Action by road company upon a contract made with it by the president of the railway company, whereby the latter guaranteed to pay annually to the road company any deficiency in its tolls, due to the change of the motive power of the railway company using the road, from horse power to electricity.] * BROWN, J. It is insisted, however, that the railroad company was not bound by the contract, because it was made by the president without authority from the corporation or its board of directors. It is signed by the president. The corporate name attached was apparently in the handwriting of the secretary, and the common seal was affixed. Neither officer was called to deny authority to act, and the presumption was that it had been given. The maxim, Omnia praesumuntur rite esse acta, applies to acts done on behalf of corporations, and it can never be presumed that a corporate agent is acting wrongfully; or that an act which might have been a proper act to do on behalf of the corporation was done under circumstances rendering it improper: Taylor on Private Corporations, section 204. "Where a party deals with a corporation in good faith-the transaction is not ultra vires-and he is unaware of any defect of authority or other irregularity on the part of those acting for the corporation, and there is nothing to excite suspicion of such defect or irregularity, the corporation is bound by the contract, although such defect or irregularity in fact exists. If the contract can be valid under any circumstances, an innocent party in such a case has a right to presume their existence, and the corporation is estopped to deny them." Merchants' Bank v. State Bank, 10 Wall. 644. "When the common seal of a corporation appears to be affixed to an instrument, and the signatures of the proper officers are proved, the courts are to presume that the officers did not exceed their authority, and the seal itself is prima facie evidence that it was affixed by proper authority." Angell and Ames on Corporations, section 224. The second point submitted 1 Statement abridged. Only the part relating to the effect of the corporate seal is given. by defendant was properly refused. The second and third assignments of error are overruled and the judgment affirmed. Note. The presence of the corporate seal is prima facie evidence of the agent's authority to act for the corporation, and to affix the seal, and also that the corporation has taken the necessary steps to authorize the contract to be entered into: 1820, Berk's Turnpike Road v. Myers, 6 Serg. & R. 12, 9 Am. Dec. 402; 1832, Leggett v. New Jersey, etc., Co., 1 Saxton Ch. (N. J.) 541, 23 Am. Dec. 728; 1833, Gordon v. Preston, 1 Watts (Pa.) 385, 26 Am. Dec. 75; 1839, Kinzie v. Chicago, etc., 2 Scam. (Ill.) 187, 33 Am. Dec. 443; 1840, Burrill v. Nahant Bank, 2 Met. 163, 35 Am. Dec. 395; 1859, St. Louis Pub. Schools v. Risley, 28 Mo. 415, 75 Am. Dec. 131; 1863, Koehler v. Black River Falls, etc., Co., 2 Black 715; 1867, Musser v. Johnson, 42 Mo. 74, 97 Am. Dec. 316; 1867, Sheehan v. Davis, 17 Ohio St. 571; 1869, Miner's Ditch Co. v. Zellerbach, 37 Cal. 543, 99 Am. Dec. 300; 1874, Central Nat'l Bank v. Charlotte, etc., R., 5 S. C. 156, 22 Am. Rep. 12; 1890, Sherman, etc., Co. v. Swigart, 43 Kan. 292, 19 Am. St. Rep. 137; 1891, Mullanphy Sav. Bank v. Schott, 135 Ill. 655, 25 Am. St. Rep. 401; 1894, Benbow v. Cook, 115 N. C. 324, 44 Am. St. Rep. 454; 1895, B. S. Green Co. v. Blodgett, 159 Ill. 169, 50 Am. St. Rep. 146, note 150; 1899, Ellison v. Branstrator, 153 Ind. 146; 1900, In re West Jersey Tract. Co., 59 N. J. Eq. 63, 45 Atl. Rep. 282; Contra, 1898, Morrison v. Wilder Gas Co., 91 Maine 492, 64 Am. St. Rep. 257-but see note here, p. 260. The corporation can be shown to have no authority to make the contract: 1832, Leggett v. New Jersey, etc., Co., 1 Saxton Ch. (N. J.) 541, 23 Am. Dec. 728; 1866, Conine v. Junction R. Co., 3 Houst. 288, 89 Am. Dec. 230. So, too, the agent's authority may be questioned: 1845, Gibson v. Goldthwaite, 7 Ala. 281, 42 Am. Dec. 592; 1876, Luse v. Isthmus, etc., Co., 6 Ore. 25 Am. Rep. 506. Sec. 345. (c) As evidence of a consideration. LORD CAMPBELL, C. J., IN THE MAYOR, ETC., OF NORWICH v. THE NORFOLK RAILWAY COMPANY. 1855. IN THE QUEEN'S BENCH. 82 Eng. C. L. (4 El. & Bl.) Rep. *367, on *443-6. [Action against the railway company on a covenant under their seal to pay £1,000 in case certain works were not completed, whether a certain act of parliament should be obtained or not, as agreed under seal. It was averred that the works were not completed, though plaintiff had performed all conditions precedent.] Although the agreement be under seal, we may examine to see whether there was any, and what consideration for the contract to pay money, when we are to determine whether the contract was or was not ultra vires. The mere circumstance of a covenant by directors in the name of the company being ultra vires, as between them and the shareholders, does not necessarily disentitle the covenantee to sue upon it. For example, if the directors of a railway company were to enter into a contract under the seal of the company for the purchase of a large quantity of iron rails and to pay for them at a fixed price, as the vendor had reasonable ground for supposing that the rails were wanted for the purpose of the railroad, it would be no defense to an $345 action for the price, or for not accepting them, that the rails were illegally purchased on speculation, to be resold by the directors for their own profit. But suppose that the directors of a railway company should purchase a thousand gross of green spectacles, as a speculation, and should put the seal of the company to a deed covenanting to pay for these goods, here would be a clear excess of authority on the part of the directors; this excess of authority would necessarily be known to the covenantee; and, he being in pari delicto, I conceive that the maxim would apply potior est conditio possidentis. This would be an illegal contract to misapply the funds of the company; and the illegality might be set up as a defense. So, if, without any consideration whatever, the directors of a railway company were to put the company's seal to a deed covenanting to pay a mere stranger £1,000, this would be ultra vires, to the knowledge of the covenanWhen the tee, and he could not maintain an action to recover the £1,000 from the funds of the company in fraud of the shareholders. excess of authority, with the knowledge of both parties, is shown by plea, this joint violation of the law, I apprehend, is a bar to the action. It has been contended, I am aware, that the deeds of such companies are to be treated like the deeds of individuals or of common partnerships. But there seems to be an essential distinction between them. The individual may do what he likes with his own, and he may bind himself by a deed disposing of his property, however capriciously, and without any consideration, so that no fraud has been practiced upon him. In such a case, want of consideration is immaterial; no one is injured, and there is no illegality to be pleaded. "To look upon a railway company," says Lord Langdale, in Coleman v. Eastern Counties Railway Company, 10 Beav. 1, 14, "in the light of a common partnership, and as subject to no greater vigilance than common partnerships are, would, I think, be greatly to mistake the functions which they perform, and the powers which they exercise of interference, not only with the public, but with the private rights of all individuals in this realm. We are to look to these powers as given to them, in consideration of a benefit which, notwithstanding all other sacrifices, it is to be presumed and hoped, on the whole, will be obtained by the public;" "and I am clearly of opinion, that the powers which are given by an act of parliament like that now in question, extend no farther than is expressly stated in the act, or is necessarily and properly required for carrying into effect the undertaking and works which the act has expressly sanctioned." The same learned judge, in answer to an argument that the directors may apply the funds of the company as they please, so that their object is to increase the traffic upon the railway, and thereby to increase the profits of the shareholders, exclaims, "surely that has nowhere been stated; there "Unless acts so is no authority for saying anything of that kind." done can be proved to be in conformity with the powers given by the statutes under which those acts are done, they furnish no authority whatever." |