Southern Hotel Co. v. Newman

• Decision Date: 31 March 1860
• Citation: 30 Mo. 118
• Parties: SOUTHERN HOTEL COMPANY, Respondent, v. NEWMAN, Appellant.
• Court: Missouri Supreme Court

30 Mo. 118

SOUTHERN HOTEL COMPANY, Respondent,

v.NEWMAN, Appellant.

Supreme Court of Missouri.

March Term, 1860.

1. Acts of corporations may be proved in the same manner as the acts of individuals; if there be no record evidence, they may be proved by the testimony of witnesses.

2. Held, in a suit on a subscription to the stock of an incorporated company, that it was competent for the defendant to show by oral testimony, in the absence of record evidence, that the subscription list, upon which defendant's name appeared, was annulled and abandoned, and that another subscription was subsequently opened and made the basis of the organization of the company by the stockholders.

Appeal from St. Louis Court of Common Pleas.

The facts sufficiently appear in the opinion of the court.

Garesche & Bakewell, for appellant.

I. The court required an impossibility. It was impossible for the defendant to produce a record that did not exist, or to account for the absence of a record that never had an existence. It was competent for the defendant to prove by the corporators, or any one of them, facts which directly and by virtue of the provisions of the charter came within their knowledge, and of which there was no record evidence. Plaintiff's evidence showed that there was no organization prior to February 10, 1857, and there were no records or minutes prior to that date. The corporators had the right to abandon and annul the subscriptions obtained and open new books. The part payment of his subscription by defendant is of no importance as it was made under a mistake as to the facts.

Currier, for respondent.

II. It is a legal presumption that a corporation keeps records of its transactions. (4 Wheat. 424; 3 Metc. 282; 1 How. (Miss.), 479; 12 Wheat. 68; 10 Johns. 154.) Parol testimony could not be let in without first accounting for the absence of the record. No legal defence is set up in the answer or offered to be proved. There was not in plaintiffs a right of rescission of the subscription. It could not be rescinded without the consent of both parties. The case shows that after the pretended rescission of the contract it was ratified and confirmed by the parties. On the 26th of June, 1857, defendant paid the assessment of fifty dollars on the stock. At later dates he impliedly admitted his liability.

EWING, Judge, delivered the opinion of the court.

The question in this case arises upon the offer of the appellant, (who was a subscriber to the capital stock of the Southern Hotel Company), to prove by one of the corporators, Joseph Chambers--who was also a member of the first board of directors--that the subscription list, on which the witness' name appears as a subscriber for one hundred shares and that of the appellant for five shares, was opened and completed prior to the month of October, 1856; and that the said subscription was afterwards abandoned and annulled by the said corporators. This evidence on the objection of the respondent, was excluded by the court, on the ground that the facts could only be proved by the record showing the action of the corporate authorities, unless the absence of such record was accounted for. To this ruling of the court the appellant excepted, and this is the only question the record presents for our consideration.

The answer alleges substantially that the corporators entered into an agreement for a lease of certain premises on which to erect their hotel, and commenced obtaining subscriptions to the capital stock; that they afterwards annulled the contract for a lease, and opened a new subscription book; and, when the new subscription was filled up to fifty thousand dollars, they organized the company on the 10th of February, 1857; that the appellant was a subscriber for five shares in the first opened book, which was set aside and abandoned, and never became a subscriber on the second on which the company was organized. He further alleges that the payment made by him on his subscription was under a mistake and without knowing at the time that said subscription had been abandoned. The books and papers containing the proceedings of the stockholders and directors of the company were produced by the secretary--the first, consisting of the proposition of Mr. Gibson and a...