Miller v. Morrill

| Me. | Jul 1, 1862

The opinion of the Court was drawn up by

Appleton, C. J.

This suit is on a memorandum signed by the parties, in these words : —

"Oct. 31, 1858.

" The sum of $6000 being required to meet the payment of coupons of the York & Cumberland Railroad Company, falling due on the 1st November, 1853, Mr. Miller, the president, proposes to advance to the company $1000 on the company’s note on demand. Messrs. Woodbury, Morrill, Pierce, Warren, and Barnes propose to advance respectively, the sum of six hundred dollars each on the company’s note, payable to'them on demand.

"Mr. Miller further proposes to advance two thousand dollars to the company for which he will take the company’s note on demand, with the assurance from the other five, that at the next meeting of the directors they will cause provision to ho made for his indemnity for the excess advanced by him, so that ho shall be reimbursed or adequately secured for the excess advanced by him over and above qne-sixtb part of the $6000 now required.

"P. Barnes, " Levi Morrill,

"N. J. Miller, "Geo. Warren,

"N. L. Woodbury, "Josiah Pierce.”

By this memorandum, it appears that the York & Cumberland Railroad were in immediate need of funds to the amount of $6000, to pay the coupons of the company which matured the 1st Nov., and that the plaintiff and the defendants agreed to advance the sum of $4000 in cex’tain specified proportions on the notes of the company. But this was xiot sufficient for the emergency. The plaixxtiff advaixced $2000 more oxx the assurance of the directors that, at the next meeting of the boax*d, he should be x-eimbursed or secured "for the excess advanced by him over and above one-sixth part of the $6000 now required.” It is abundantly manifest that the ixxtention of all parties was, that the plaiixtiff should have a priority for the $2000 by him advanced over the other advances made by the other directors aixd himself. This sum, by mutual agreement, was to be first paid or secured.

The next meeting of the directors was held on the 11th of November following, and for want of a quorum was adjoxxrned from time to time to Dec. 2, whexx, the plaintiff being present, it was voted, (1st,) "that the president be authorized to dispose of, by sale or pledge, four of the company’s mortgage bonds now in the possession of the treasurer, or any of them, upon the best tex’ms that may be obtained in the market for the purpose of receiving such amount of cash thereoxx as may be indispensably reqxxired to meet present claims against the company.”

It appears that, on July 6,1851, the treasurer of the company delivered the plaintiff four of the compaixy’s mortgage bonds, each for the sum of one thousaxxd dollax’s, and, as it would seem, of the value of seventy cents oix the dollar, to be returned or accounted for by him on demands against the company.

The plaintiff, by the vote above recited axxd the reception of the mortgage bonds, had in his own haxxds the means of reimbursing himself "for the excess advaixced by •him.” The proceeds of the bonds wex’e to bo applied "'to meet present claims against the company.” The payment of the coupons, as they fell due, was "indispensably required” for the credit of the company. Indeed their payment was deemed to be so "indispensably required” that the directors from their own means supplied the funds for that purpose. The notes given represent the coupons and were on demand. They were within the very terms of the vote, for they were "present claims” against the company. Of the notes, the one given the plaintiff for $2000, being the excess by him advanced, was first to be paid or secured, and the vote of the company and the deposit of the mortgage bonds with him enabled him at his own option to reimburse himself.

The plaintiff was fully authorized to dispose of the bonds in the market "for the purpose of raising such amount of cash thereon as may be indispensably required to meet present claims against the company.” But, upon reference to the account as adjusted, it will be perceived that the proceeds of the bonds were not applied to meet "present claims.” The only claim, which could be deemed as embraced, within that category, was the note given th'e plaintiff' on the day the memorandum was signed for his sixth of the sum then advanced. But, as between these parties, it has been seen that the payment of that sum was to be postponed to that of the $2000 advanced by the plaintiff on the faith of the memorandum in suit, dated Oct. 31, 1853. There was no peculiarly indispensable necessity of paying the plaintiff’s salary, nor had it then been earned. The other demands bear date long after the vote of the directors.

The plaintiff, then, had the means of reimbursement, and, if he neglected to make the proper appropriation of the funds under his control, it is not the fault of the defendants nor should they suffer therefor.

At the adjourned meeting of the directors, on Dec. 2, 1853, it was voted, (2,) " that the treasurer, under the direction of the president, be authorized in behalf of the company to execute one or more mortgages of the movable property of the company to such persons holding claims against the company, that may be willing to accept the same and are not otherwise adequately secured.”

This vote enabled the plaintiff to secure himself by mortgage on the movable property. ' He was present at the meeting and took no exception to the form of the vote. He was president of the corporation. The direction was left with him as to the making of the mortgages. The option was with him whether he would take a mortgage or not. The provision to be made, was by the defendants, as directors, and from the funds of the company.' The security to be given was upon the property of the company. It is not the fault of the defendants that the security proffered may have been inadequate, if such was the fact.

The defendants would seem to have fully complied with all the assurances by them given.

Upon carefully examining the instructions given, we think the plaintiff has no just grounds of exception.

Exceptions and motion overruled.

Rice, Cutting, Davis, Kent and Walton, JJ., concurred.