Lawrence Lewis.

American and English corporation cases : a collection of all corporation cases, both private and municipal (excepting railway cases), decided in the courts of last resort in the United States, England, and Canada [1883-1894] online

. (page 60 of 73)
Online LibraryLawrence LewisAmerican and English corporation cases : a collection of all corporation cases, both private and municipal (excepting railway cases), decided in the courts of last resort in the United States, England, and Canada [1883-1894] → online text (page 60 of 73)
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the majority of the members of a town school board signed a writing
ordering certain school supplies, and promising to ratify the contract at
a meeting of the board to be called for the purpose. The supplies were
duly delivered, but at the special meeting the board refused to ratify the
contract.

It was held that the members of the board had no authority to act ez-
9 Cor. Gas.— 37



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578 STRONG V. DISTRICT OF COLUMBIA.

cept at a board meeting, and that the contract to ratify was void as against
public policy. The language of the court is instructive : " The board is
constituted by statute a body politic and corporate in law, and as such is
invested with certain corporate powers, and charged with the perform-
ance of certain public duties. These powers are to be exercised and
these duties discharged in the mode prescribed by law. The members
composing the board have no power to act as a board except when to-
gether in session. They then act as a body or unit. The statute re-
quires the clerk to record, in a book to be provided for that purpose, all
their official proceedings."

In the case of Jeflferson County v, Slagle, the county commissioners
had contracted with one D to build a court-house. D made a contract
with the plaintiff to supply him with brick. After the plaintiff had de-
livered part of the brick called for by his contract, he refused to deliver
the rest on the ground that D had not paid for the bricks delivered as
agreed.

Two of the county commissioners thereupon went to the plaintiff and
told him to proceed with the delivery of the bricks and that they would
pay him. The law provided that two county commissioners should form
a board for the transaction of business, and, when convened in pursuance
of notice or according to adjournment, should be competent to perform the
duties appertaining to their office. It did not appear that the other
county commissioners were consulted with or notified beforehand of the
contract made with plaintiff, or that such contract was being contem-
plated. The question was submitted to the jury whether the two com-
missioners acted in their official capacity in promising to pay for the
bricks, or merely as individuals, and the jury, found that they acted in
their official character. This verdict was sustained by the Supreme
Court on review of the case. Jefferson County v, Slagle, 66 Pa. St. 202.

At a Meeting of a Public or Municipal Board a Majority
OF THE Members may Act for the Board.— When a power is sub-
mitted to three or more persons under an agreement of individuals, and
no other provision is made in the agreement, all the persons to exercise
the power must not only meet together, but all must agree in the result,
or else nothing can be done by them. The People v. Walker. 23 Barb.
(N. Y.) 304. But where a number of persons are entrusted with a power,
not of mere private confidence, but in some respects of a general nature,
it is not necessary that all the members should concur in the result, or
even that all should meet. If all members are duly notified of a meeting
and a majority attend, a majority of the entire number may act for the
whole. People v. Walker, supra (citing The King v. Miller, 6 T. R.
269) ; Inhabitants of Plymouth v. County Commissioners of Plymouth,
16 Gray (Mass.), 341 ; People ex reL McSpedon et aL v. Board of Super-
visors, 18 How. Pr. (N. Y.) 152; Louk v. Woods, 15 111. 256; Withnell
V, C^rtham, 6 T. R. 388; Blucket v, Blizard, 9 Bam. &C. 851. In John-
son 2/. Dodd, 56 N. Y. 76, it seems to have been held that all must meet
and confer, but that the majority had the power to act. See also In the
Matter of Building the Thirty- fourth Street Sewer, 31 How. Pr. (N. Y.) 42,



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STRONG V. DISTRICT OF COLUMBIA. 579

In Gildersleeve v. Board of Education, 17 Abb. Pr. R. (N. Y.) 201, a
statute providing that " whenever any duty or authority is confided by
law to three or more persons, and whenever three or more persons are
authorized or required by law to perform any act, such act may be done,
and such power, authority, or duty may be exercised and performed by a
majority of such persons or officers upon a meeting of all the persons or
officei^ so entrusted or empowered, unless special provision is otherwise
made." It was held that ** the interpretation to be put upon this pro-
vision in its application to bodies entrusted with the management of mat-
ters of public concern is that when all the members of the body are noti-
fied that a meeting is to be held, and a majority of the whole number at-
tend, the majority so attending may organize and legally proceed to the
transaction of business. ... If all have been duly notified, it is, within
the meaning of the statute, 'a meeting of all the persons;' and if a ma-
jority of the whole number attend, it is competent for that majority to do
any act or exercise any power confided by law to the body collectively."

There can be no Meeting of a Judicial or Quasi-Judicial
Board or Body Unless all the Members are Present. — When
the public duties imposed upon a board are judicial in their nature, the
entire board must meet and confer, but the majority can decide or take
final action. People v. Walker, supra; Grindley v. Barker, i Bos. & Pull.
236. Both parties are entitled to the presence of all the judges, and to
have the benefits of the consultation of each with every other. All must
therefore meet together and consult, but a majority may decide.

Where all members of a judicial board meet, and a matter is brought
before the board for it to take action upon, and the minority, being un-
able to agree with the majority, withdraw from the meeting before any
action is ta)^en in the matter, the majority may lawfully act in their ab-
sence in regard to such matter. Ex parte Rogers, 7 Cow. (N. Y.) 526.
The court, in their opinion, say: "The commissioner, one of the three
appraisers, dissents, and declares himself absent, and not a member of the
board. He had assumed the trust delegated to him by the legislature,
and had been actively engaged in its execution as a member for a long
time. After a full investigation he had, it is to be presumed, joined in
carrying on the deliberations of the board from time to time till the
eve of the final decision. Can his simple declaration of absence at that
point of time subvert his character as a member of the appraising body?
We are warranted in saying his counsel had been bestowed, and that the
other members had heard and appreciated his advice ; because every offi-
cer is presumed to have done his duty. Such advice is the object of the
rule which requires all to associate, but at the same time allows a ma-
jority to decide. After so full a compliance with the spirit of the rule, we
cannot admit that this desertion of the board should have the effect to
invalidate the assessment. It is no more in effect than a ceasihg to confer
farther on the question, a point to which every discussion must come
when the arguments for and against are exhausted.*'

But where two of three assessors revised the assessment list without
notice to the third, and without his taking part in their deliberations, it



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580 SCALLAY V. COUNTY OF BUTTE.

was held that the revision was invalid. In re Beekman, 31 How. Pr. R.
(N. Y.) 16.

A Board or Body Cannot Meet and Proceed to Transact Busi-
ness UNTIL All its Members have been Appointed. — Where the
law provides for a board of a definite number of members, the board is
not legally constituted until all its members are chosen and have duly
qualified ; consequently a majority of the members cannot proceed to the
transaction of business before the minority have been chosen and have
qualified. Schenck v, Peay. i Woolw. (U. S. C. Ct.) 175. But see, contra^
Hartshorn v, Schoff, 58 N. H. 197. In this case the validity of an act of
a board of three fence commissioners was in question. All were present
at the hearing, made the decision, and signed the report ; but only two of
them took the oath prescribed by the statute. It was held that, as by
statute a majority was empowered to decide, the decision of the two com-
missioners would have been binding if the third commissioner had not
taken part in it ; and that the fact that he did so take part in the decision
did not invalidate it.

To Constitute a Meeting of a Joint Body Composed of Two
OR More Definite Bodies, a Majority of each Body must be
Present. — To constitute a valid meeting for the transaction of business
of a joint body composed of two or more definite bodies, it is necessary
that a majority of each of the separate bodies should be present. Gilder-
sleeve V, Board of Education, 17 Abb. Pr. R. (N. Y.) 201 ; King v.
Bower, i Bam. & Cr. 492. But when the meeting has once been or-
ganized the identity of the component bodies is lost, and the vote of the
majority of the persons present controls, even though one of the bodies
should leave before the vote is taken. Gildersleeve v. Board of Education,
supra : Whiteside v. People, 26 Wend. 634.



SCALLAY
V.

County of Butte.

{Advance Case, Calif amia. July 30, 1885.)

§§ 4000, 4001, 4003, and 4046 of the Political Code of California confer
upon the board of supervisors of a county the authority to retain lawjrers
to collect debts and other property of the county ; but, in the exercise of-
that power, they have no right to delegate to others the power to deter-
mine whether to commence a suit or not ; the matter of the selection of
attorneys to prosecute the suit ; nor to abdicate the control of the suit in
the matter of compromise or settlement of the suit. These powers are
conferred upon the board of supervisors as a public trust and cannot be
vicariously exercised.

Appeal from a judgment of the superior court of Butte



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SCALLAY V. COUNTY OF BUTTE. 58 1

county, entered in favor of the defendant. The opinion states
the facts.

Wm. Pierson and H. C. Newhall for the appellant.

/. S, Belcher y John C. Gray^ Chas. F. Lotty L. C. Granger and
A. F. Jones for the respondent.

McKee, J. — In the year 1876 Butte county was the owner
and holder of two hundred railroad bonds of the California
Northern R. R. Co., secured by mortgage, the principal and
interest of which had become due and payable ; pacw.
but the company would not pay and the county was desirous
of collecting them. Under those circumstances, two per-
sons — W. S. Watson and William Corcoran — proposed to
the board of supervisors of the county that they would collect
them, without attorney's fees, expenses, or costs to the county,
for fifty cents on the dollar. The board accepted the pro-
posal, and on the third of October, 1876, a written contract to
that effect was drawn and signed by the chairman of the
board, in the name of the county, and by Watson and Corco-
ran ; and the contract, thus signed, was ratified hy the board.

By the terms of the contract, the bonds were to be deliv-
ered to Watson and Corcoran for collection ; they were to
commence, within sixty days, "proceedings," or "negotia-
tions," or " a proper suit," for their collection, and " prosecute
the matter without any unnecessary delay," without costs or
charges, or attorney's fees, and when collected, retain to their
own use fifty per cent of the amount collected " in full pay-
ment of themselves, their agents, attorneys and employees em-
ployed or engaged in the matter." It was also " mutually
understood and agreed that either of the parties thereto may
compromise the matter of paying said bonds with said railroad
company, upon such terms and conditions as they may deem
just and equitable, but no compromise so made shall be final
or binding without the express written consent of the parties
hereto."

On the second of December, 1875, foreclosure proceedings
upon the bonds and mortgage were commenced against the
railroad company. These were continued for about seven
years without other result than the recovery of a final judg-
ment for the principal and interest due upon the bonds, but
for the execution of this judgment, so far as it appears from



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582 SCALLAY V. COUNTY OF BUTTE.

the complaint, no steps were taken ; and under these circum-
stances the board of supervisors of the county, on the fifteenth
of May, 1883, compromised and settled with the railroad com-
pany, without the consent, written or otherwise, of Watson
and Corcoran, and received from the company twenty thou-
sand dollars, which it accepted in full satisfaction of the bonds
and release of the mortgage. It is alleged that " when this
settlement was made there was due and payable on said bonds
the sum of forty^even thousand and fifty-eight dollars and
eighty cents, which could- and would have been collected and
received by the county but for the unauthorized compromise
and settlement by the board." Five months after this settle-
ment, Watson and Corcoran assigned the contract to the
plaintiff and appellant, who presented a claim to the board of
supervisors for twenty-three thousand three hundred and
twenty-nine dollars and forty cents, due upon said contract.
The claim was rejected, and hence this suit. The answer of
the county to the complaint is that the contract was ultra vires.

When the contract was made the powers of the several
counties of the State, as defined by the legislature, were con-
tained in the following sections of the political code :

" Sec. 4000. Every county is a body politic and corporate,
and as such has the powers specified in this code, or in special
statutes, and such powers as are necessarily implied from
those expressed.

'* Sec. 4001. Its powers can only be exercised by the board
of supervisors, or by agents and officers acting under their
authority or authority of law.

" Sec. 4003. It has power: •

"I. To sue and be sued.

'' 3. To make such contracts, and purchase and hold such
personal property as may be necessary to the exercise of its
powers.

"4. To make such orders for the disposition or use of
property as the interests of its inhabitants require."

And the board of supervisors, as agents of the county, were
clothed with the following jurisdictions and powers :

"Sec. 4046. The boards of supervisors, in their respec-
tive counties, have jurisdiction and power, under such limita^
tions and restrictions as are prescribed by law.

" 8. To purchase, receive by donation, or lease, any real or



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SCALLAY V, COUNTY OF BUTTE. 583

personal property necessary for the use of the county, pre-
serve, take care of, manage and control the same.

" 10. To sell at public auction at the court house door, after
thirty days* previous notice ... to the highest bidder for
cash, any property, real or personal, belonging to the county.

" 15. To direct and control the prosecution and defense of
all suits to which the county is a party. ^

" 26. To do and perform all other acts and things required
by law, not in this title enumerated, or which may be neces-
sary to the full discharge of the duties of the chief executive
authority of the county government," etc., etc.

These provisions constituted the charter of the county upon
the subjects to which they relate ; and for the declared pur-
poses and objects within its jurisdiction, the board could ex-
ercise the powers expressly granted to it, and those which
were necessarily or fairly implied in or incident to them.

Railroad bonds belonging to a county are property, upon
which the county may sue, and about which the board of
supervisors may make such orders as it may deem Jgg^JJ 2
best for the interests of the county, with reference wlJ^SSL*^""
to the use or disposition of the same, in the mode prescribed
for the exercise of its powers. No orders were made for the
sale of the bonds in the mode prescribed by subdivision 10 of
section 4046, ^pra. The contract was for their collection by
negotiations or other proceedings, or by suit. No question
is made as to the power of the county to sue. Such a power
implies the power to employ an agent to commence and pros-
ecute a suit, unless the law itself has provided for the county
a law oflficer whose duty it ig to commence and prosecute
suits for the county. Such an officer has been provided in
the district attorney, whose duty it is, as the legal adviser
of the county ..." to defend all suits brought against . . .
his county, and prosecute ... all actions for the recovery of
debts, fines, penalties, and forfeitures accruing to . . . his
county ;" and to collect and receipt for the same in his official
capacity. Subs. 3, 4, sec. 4256, political code.

In Homblower v. Duden, 35 Cal. 660, it was held, upon the
authority of Smith v. The Mayor of Sacramento, 13 Id. 533,
that, while the power to employ other counsel than the dis-
trict attorney to commence and prosecute suits for the county
was not expressly conferred on the board of supervisors, it



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584 SC ALLAY V. COUNTY OF BUTTE. *

was obviously embraced in the general power to do and per-
form all such other acts and things as may be strictly neces-
sary to the full discharge of the powers and jurisdiction con-
ferred on the board and in the power to control the prosecu-
tion and defense of all suits to which the county is a party.

Accepting that as a correct rendition of the powers con-
ferred on the board of supervisors in respect to the prosecu-
tion and defence of suits to which the county may be a party,
POWER OF the contract under consideration is not of that
TOoSStMnwiro character. The plaintiff does not alleee that his

TO COLLECT ITS , * °

<^™»- assignors were attorneys or counselors at law, or

that they, or the board of supervisors, contracted for legal
services to be rendered by them in connection with or inde-
pendent of the district attorney. The subject matter of the
action was the collection of choses in action which belonged
to the county. Without obtaining any order or instructions
from the board to sue, the contracting parties agreed " to
commence a proper suit, or proceeding, or negotiation, for the
collection of the amount due upon said bonds, within sixty
days from date, and to faithfully and diligently prosecute the
same until a final judgment or settlement, without any cost
or charge to the county ; . . . and to accept in full for all ser-
vices to be rendered by them, or attorneys they may employ
in the matter, the sum of fifty per cent upon each and every
dollar so collected by them of the amounts due upon said
bonds," etc.

It may be conceded that the board of supervisors had
power to contract for the collection of the property of the
county ; but in the exercise of that power it had no authority
to delegate to others, whom it employed for that purpose, the
power to determine whether to commence a suit in the name
of the county and to select and employ attorneys to commence
and prosecute such a suit ; nor to abdicate its control of the
prosecution of such a suit, or to make its compromise or set-
tlement dependent upon the written consent of strangers.
The commencement of a lawsuit, the selection and employ-
ment of attorneys to commence and prosecute it, and the
compromise and settlement of the same are acts which involve
the exercise of judgment and discretion ; and it is well settled,
that powers conferred upon a municipal corporation to do
such acts can not be delegated to others. Such powers are



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GOODWIN V. BATH. 585

in the nature of public trusts conferred upon the corpoi'ation
for the public benefit, and cannot be vicariously exercised.
Cooley's Const. Lira. 204. Hence the contract in suit was
ultra vires ; and the court below sustained the demurrer.

•Judgment affirmed.

Ross, J., and McKinstry, J., concurred.



Goodwin



Bath.

{Advance Case, Maine, August 6, 1885.)

The holder of an interest coupon, severed from the bond and which
by mistake is for a larger sum than that named as interest in the,
bond, cannot recover the sum named in the coupon without proof that
he, or some one under whom he claims, acquired the same before
maturity and without notice of the error.

Action on an interest coupon. The opinion states the
case.

Wilbur F. Lunt for plaintiff.
Francis Adams for defendant.

Emery, J. — The writing declared upon in this suit is a
coupon for the forty-fourth instalment of inter- paom.
est upon a bond for $100 issued by the defendant city. It
is not the original contract for the interest. The original,
f undaml^ntal undertaking to pay the interest is found in the
bond itself. The bond expresses the original real con-
tract for both principal and interest The coupon is an in-
cident of the bond. It is of the nature of a check or ticket
for the interest. It is issued rather for convenience than to
express the original obligation to pay interest. It is de-
signed to pass from hand to hand, like a baggage check, and
the lawful holder is entitled to the interest it represents.
When taken up it is a convenient voucher for the officer
paying the interest. It represents that interest ^^^j^ ^^
promised in the bond, and no other, nor different «>'^"-
interest Arents «/. Commonwealth, 18 Gratt. 764; City v*



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586 GOODWIN V. BATH.

Lamson, 9 Wall. 482 ; McCoy v. Washington County, 3 WalL
Jr.; s. c, 7 Am. Law. Reg. 196, cited in 4 Myers' Fred.
Dec. 876.

So clearly is the coupon an incident of the bond, and not
an original independent undertaking, that actions upon it,
though it be without seal, are not barred by any lapse of
time, short of that required to bar an action upon the bond
itself. The coupon draws its Ufe from the bond, lives as
long as the bond, and dies with the bond. Clark v. Iowa
City, 20 Wall. 583.

In this case the city of Bath was authorized to issue its obli-
gations, " with coupons for interest attached, payable semi-
annually." Special Laws of i860, chap. 450, § 2. In this
$100 bond to which the coupon was attached, the stipulation
was to pay six per cent interest, which would make the
forty-fourth instalment, one for $3 only. At the time of the
issue of this bond the statute against usury was in force.
The city could not lawfully stipulate in the bond for more
interest, nor lawfully attach to the bond a coujxjn for more.
The sum of $3, the amount of the instalment promised in the
bond, is what the lawful holder of the coupon is entitled to,
and is as much as the city was authorized to pay, or to prom-
ise to pay.

The plaintiff, however, urges that, whatever may be the
nature of the coupon while attached to the bond,
coupoj Lnmo when it is separated from the bond it becomes a
IS5S^?5f'p™ separate and a negotiable instrument. This cou-
B0Kr".''5?^ pon was separated from the bond when purchased
HOLDBu ^^ ^^^ plaintiff, and he claims that he, as the hold-

er of the separated coupon, is not affected by any mistakes or
excesses of authority in the issue, but can recover the sum
named in the coupon, whatever was the sum promised in the
bond.

The case as made up by the mutual admissions, without any
objection to their legal admissibility, shows that there was not
a full consideration for such a coupon, and that the coupon
was issued by mistake for a sum larger than that authorized
by law and by the terms of the bond. Such facts legally
appearing, it is incumbent on the holder, if he would avoid
them, to show that he, or some prior holder whose rights he
has succeeded to, acquired the coupon in good faith, before



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KANSAS V. SCHOOL DISTRICT NO. 3, CHAUTAUQUA CO. 587

maturity, and without notice of the true state of affairs.
Roberts v. Lane, 64 Me. iii ; s. c, 18 Am. Rep. 242. Does
the case show this? The bond with coupon attached was
delivered to the Androscoggin Railroad Company, by whom
it was put on the market That company, holding both bond
and coupon, must be held to have known the discrepancy,
and to have known the true amount of the forty-fourth
instalment of interest Every subsequent holder of both
bond and coupon would be chargeable with similar notice.
There is no evidence of any separate ownership of coupon or
bond until the plaintiff acquired the coupon. There is a pre-
sumption that there was no such severance, and that the
• holder of the coupon was also the owner of the bond. McCoy
V, Washington Co., 3 Wall. Jr. 381 ; Deming v. Houlton, 64
Me. 261 ; s. c, 18 Am. Rep. 253. The plaintiff, the first one
shown to have a separate ownership of the coupon, acquired



Online LibraryLawrence LewisAmerican and English corporation cases : a collection of all corporation cases, both private and municipal (excepting railway cases), decided in the courts of last resort in the United States, England, and Canada [1883-1894] → online text (page 60 of 73)