Conowingo Land Co. v. McGaw

Boyd, C. J., delivered the opinion of the Oourt. The appellee sued the appellant on three certificates of indebtedness, two being for $5,000 each, and the other for $3,150. The form of the three (except as to the amount) is the same and is as follows: “This is to certify that the Oonowingo Land Company of Cecil County, Maryland, a corporation, is lawfully indebted to bearer in the sum of five thousand dollars ($5,000.00) with interest at the rate of six per centum per annum from the first day of April, 1902, until paid. The same being a part of the purchase money advanced and paid for the real estate of said company, and in order to secure its repayment, with interest, this certificate of indebtedness and negotiable instrument is made, executed, issued and delivered, pursuant to resolutions authorizing the same, duly passed by the Board of Directors of said Land Company.

(Oonowingo Land Company Incorporated 1902 of Cecil County) Attest: Chas. It. McConkey, Secretary.” Witness the signature of the Imasvism, togdksc mth Am seal of said corporation, annexed hereto, duly attested by its Secretary. Geo.

X. McGaw, Treasurer. The narr. originally contained six common counts, and a special count, but later the seven counts were withdrawn, with leave of Court, and an amended declaration was filed containing three counts, in each of which it is alleged that on the 13th day of January, 1903, the defendant by its writ ⁶⁴⁶ ing obligatory in the following language (one of the certificates being then set out in each count) promised to pay, etc. The defendant filed six pleas: 1st. That the alleged cause of action did not accrue within three years before the institution of this suit; 2nd, that it did not accrue within three years before the filing of the amended declaration; 3rd, that the alleged deeds are not the defendant’s deeds; 4th, that the alleged paper writings were procured by the fraud of the plaintiff; 5th, that the alleged writings obligatory were procured by the fraud of the plaintiff; and 6th, that defendant was never indebted as alleged. The plaintiff demurred to the first and second pleas, joined issue on the third, traversed the fourth and fifth and joined issue on the 6th.

The demurrer to the first and second pleas was sustained and there was a joinder1 of issue on the replications to the fourth and fifth pleas. The case was tried before the Court and resulted in a verdict for the plaintiff for $22,618.00, and this appeal was taken from the judgment rendered thereon. 1. The appellant contends that the papers sued on were not writings obligatory—not to be treated as specialties—and hence the limitation of three years was applicable. It is true that it does not necessarily follow that because the 'seal of a corporation is attached to a note it is a specialty, but the cases cited by the appellant support, rather than refute the theory that these certificates are instruments under seal.

In Jackson v. Myers, 43 Md. 452 ; Muth v. Dolfield, 43 Md. 466 , and Smith v. Woman's Medical College, 110 Md. 441 , in determining whether the instruments sued on were specialties, the Court emphasized the fact that there was nothing on the face of either of them to indicate that the seal was intended to be affixed. In Smith v. Woman’s College it is said: “As no reference is made in the body of the instrument sued on in this case to the corporate seal impressed thereon, and as there is nothing on the face of the paper to indicate that it was intended to be issued as. a specialty, we think that unquestionably, under the previous decisions of this Court, as well as upon the authority of the text writers quoted above, ⁶⁴⁷ the instrument must be considered a simple contract obligation, and riot a specialty.” The cases cited in addition to those in 43 Md. were Hamburger v. Miller, 48 Md. 317 , and Metropolitan Life Insurance Co. v. Anderson, 79 Md. 375 , and the text books referred to were 4 Thompson on Cor., see. 5053, and 2 Cook on Slock and Stockholders and Corpora,lion Law, sec. 7(51. The instruments before us on their face expressly provide for the seal being annexed—“Witness the signature of the treasurer, together with the seal of said corporation, annexed hereto, duly attached by its secretary”—and the corporate seal was affixed to each. If the corporation intended to execute specialties, it would have adopted the language used, or something equivalent to> it, and in the absence of anything on the face of the certificates 'showing a contrary intention, we are of the opinion that these instruments are specialties.

But in addition to that, the amended declaration declared on them as writings obligatory. In Smith v. Woman’s College, supra, where the declaration was framed in debt on a specialty, and the pleas filed were that the defendant was never indebted as alleged and it did not promise as alleged, this Court held that the pleas were not good, and therefore the lower Court erred in entering judgment against the plaintiff for his refusal to reply to them. That Avas a suit under tile Practice Act of Baltimore City (Chapter 184 of the Acts of 1886), and although, the Court held that the instrument sued on was not a specialty, yet because the declaration was framed in debt on a specialty those pleas were held to be bad. So in this case, as the instruments were declared on as specialties, pleas of the statute of limitations applicable to simple contract debts were not good, and hence the demurrer was properly sustained. 2.

Ton exceptions Avere taken to rulings on evidence. Some of them do not now seem to he pressed, and without discussing all of them separately, we are of opinion that there Avas no injurious, error in the rulings. The fifth exception was taken to the Court’s permitting the three papers sued ⁶⁴⁸ on to be offered in evidence. The reasons alleged in the appellant’s brief for excepting to that action of the Court are: (a) Because they were not writings obligatory; (b) “Because according to the uncontradicted evidence there was no consideration for the.appellant to give to McGaw, or any other person the obligations sought to be collected in this proceeding”; (c) “Because under the facts disclosed by the record in this case the said paper writings were illegally and fraudulently issued”; and (d) Because the proceedings of the directors and stockholders of the appellant in reference to these instruments were ultra vires.

Objection (a) is answered by what we have already said. Treating the plea of non est factum as a good plea, which we will discuss later, it was incumbent on the plaintiff to prove the execution and delivery of the certificates; and when that was done they were at least prima facie valid, being signed by the treasurer and the seal, attested by the secretary, being affixed, as in our judgment the signature of the president in the absence of some by-law or something to require it, was not necessary.' The offer of the certificates in evidence at the time they were was possibly permature, but the resolutions of the' directors authorizing the debts alleged to be due the plaintiff and Mr. Harlow to be secured in some way were already in evidence, and if it can be said that their execution and delivery were not then sufficiently proved they were proven subsequently, and hence the defendant was not injured. In Edelin v. Sanders, 8 Md. 118 , on page 180, it was said that: “Proof of execution and possession is sufficient evidence, prima facie, of delivery, and, in the absence of all proof on the part of the obligor, would entitle the obligee to a verdict. The seal importing a consideration, the latter, as such, cannot be inquired into under this plea”—referring to a plea of non est factum.

They could not have been excluded from evidence on the ground that they were alleged to be fraudulent, nor could they have been excluded because they were ultra vires, as will be seen later, in discussing the prayers. ⁶⁴⁹ It may be well, in passing, to say that in order to be writings obligatory it was not necessary that these instruments should contain an express promise to pay the amounts respectively named. In Cover v. Stem, 67 Md. 449 , Chief Judge Alvey said: “Do precise form of words is necessary to create a bond or obligation. Therefore, any memorandum in writing under seal, whereby a debt is acknowledged to be owing, will obligate the party to pay; for it is said that any words which prove a man to be a debtor, if they be under seal, will charge him with the payment of the money.” In Feeser v. Feeser, 93 Md. 716 , an instrument under seal by which the obligor declared that a certain sum was due to the obligee, but making it payable after his death by the obligor’s executor, was held to be a valid obligation binding on the estate of the maker, since it created a debitum in praesenli. See also Junkins v. Sullivan, 110 Md. 539 .

As these instruments read: “This is to certify that the Oonowingo Land Company * * is lawfully indebted to bearer,” etc., and were under seal, there can be no doubt that they show on their face the company to be a debtor, and it is charged with the payment of the money, unless of course some sufficient defense is made and sustained. 3. The Court granted the following prayer offered by the plaintiff: “The plaintiff asks the Court to instruct the Court sitting as a jury that under the pleadings and evidence in this case the plaintiff is entitled to a verdict for the full amount of all three of the writings obligatory offered in evidence, with interest thereon at six per cent from the 2nd day of April, 1902.” There was error in granting that prayer, as it not only excluded from the consideration of the Court, sitting as a jury, all questions of fact, but it is too general. Without now discussing them, there were disputed questions of fact to be passed on. It is contended, however, on the part of the appellee, that by reason of Section 9 of Article 5 of the Code, the ruling of the Court on that prayer cannot be objected to in this Court, as there was no special exception to it.

The ⁶⁵⁰ appellee relies on Morrison v. Hammond, 27 Md. 604 , Everett v. State, 28 Md. 207 , and Franklin v. Claflin, 49 Md. 24 . It may be admitted that some of the expressions in the