Phillips v. Interstate Land Co.
| Decision Date | 14 November 1917 |
| Docket Number | 416. |
| Citation | 94 S.E. 12,174 N.C. 542 |
| Parties | PHILLIPS v. INTERSTATE LAND CO. |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Scotland County; Webb, Judge.
Action by J. D. Phillips, administrator of M. M. Morgan, against the Interstate Land Company. Judgment for plaintiff, and defendant appeals. Error.
This is an action upon a note begun by the plaintiff's testator. Before his death, and at his instance, A. A. James, the president, and W. L. Fields, secretary, of defendant company were examined before the clerk under Revisal,§§ 865 and 866. Their testimony was taken down in writing by the clerk, said Morgan being present, and filed in the case. The plaintiffs' testator filed his complaint declaring upon the note. The answer alleged that the note was invalid as against the defendant, for the reason that it was an accommodation paper and without consideration, and for the further reason that its president, A. A. James, at the time of the execution of the note advised said M. M. Morgan that the note was invalid as to the defendant company because its rules and by-laws required all its notes to be countersigned by its secretary, which was not done in this case.
On the first trial the plaintiff's testator testified fully in regard to the whole transaction between him and A. A. James touching the execution of the note. There was a mistrial, and on the second trial, M. M. Morgan having died, his administrator, J. D. Phillips, was made a party to the action. He put the note in evidence proving the handwriting of James and the defendant's admission that James was president when he executed the note. The defendant then offered in evidence the examination of James and Fields taken before the clerk at the instance of Morgan, and upon objection by the plaintiff the examination was excluded.
The presiding judge found the following facts:
The defendant then called A. A. James as a witness to show the facts touching the execution of the note, but upon objection by plaintiffs he was excluded. The defendant then offered to show by its secretary that the note was not properly executed, and that the defendant did not receive any consideration for the note. This was also excluded. The defendant then offered in evidence the entire testimony taken at the former trial, and it was excluded. The defendant then offered in evidence the examination of A. A. James and W. L Fields taken before the clerk and the evidence of M. M. Morgan subsequently given on the trial which controverted the examination of James and Fields before the clerk. All of this was excluded, and the defendant excepted to the ruling in each instance.
The defendant also offered to show that, while it had no written rules and by-laws, it had verbal rules and by-laws which forbade the execution of notes in its name except when attested by the secretary, and asked the witness A. A. James to state whether or not the Interstate Land Company at any of its meetings adopted rules prior to the execution of this note governing the execution of notes. This was excluded, and also evidence was offered by the defendant to show that the witness A. A. James advised Morgan that he did not have authority to execute the note, and that there was no consideration for it, and that it was executed as accommodation paper. All this was excluded, and defendant excepted.
The court charged the jury that, if they believed from the evidence in the case that James signed the note sued on, it would be their duty to answer the issue, "Yes; $2,000 with interest thereon from January 10, 1912." From the verdict and judgment the defendant appealed.
Cox & Dunn and Russell & Weatherspoon, all of Laurinburg, for appellant.
E. H. Gibson and Walter H. Neal, both of Laurinburg, for appellee.
It is true that the president of the corporation is ex vi termini its general agent. Bank v. Oil Co., 157 N.C. 307, 73 S.E. 93; Davis v. Ins. Co., 134 N.C. 60, 45 S.E. 955. But his authority may be restricted by the by-laws of the corporation or its charter, and when the authority of the president to bind the corporation is challenged his authority can be shown by proof, and it should be left to the jury to determine from the evidence whether the power exercised by the president was restricted in this case by its by-laws ( Bank v. Bank, 10 Wall. 644, 19 L.Ed. 1008), and it was error to exclude evidence of such by-laws, and that M. M. Morgan had notice of such restriction. It was also competent as between the parties to show that there was no consideration for the note, and that it was merely accommodation paper.
Revisal, § 865, under which James and Fields, the president and secretary, were examined as adversary parties at the instance of Morgan, it is true, did not make them witnesses for the plaintiff (Coates v. Wilkes, 92 N.C. 386; Shober v. Wheeler, 113 N.C. 377, 18 S.E. 328), nor did it compel the plaintiff to use such testimony on the trial (Shober v. Wheeler, 113 N.C. 370, 18 S.E. 328), but Revisal, § 867, provides:
"The party to be examined" under the preceding sections "may be compelled to attend in the same manner as a witness who is to be examined conditionally; and the examination shall be taken and filed by the Judge, clerk or commissioner, in like manner, and may be read by either party on the trial."
If, therefore, M. M. Morgan had been living at the second trial, from which this appeal is taken, the above evidence of James and Fields taken under Revisal, § 865, could have been read in evidence for the defendant. We know of no reason why it was rendered incompetent under Revisal, § 1631. The object of that section is to close the mouth of a witness who is a party to the cause, or interested in its event, as to the transaction of a communication with a deceased adverse party, because the other party has no opportunity to be heard. But in this case the examination was taken at the instance of Morgan, who was present thereat, with opportunity to cross-examine the adversary witnesses, and he testified himself, and all the evidence duly taken down at such examination, both that of Morgan and of James and Fields, was offered in evidence in this case, and should have been admitted.
Furthermore, Morgan himself testified at the former trial, and it was error to exclude evidence of his testimony at that trial coupled with the evidence of James and Fields.
The examination of W. L. Fields and his testimony as to the by-laws of the company was competent even though that of James was excluded, for he was not a party to the transaction, but an agent, and besides was offered to testify as to matters...
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