Wilmington & Manchester Rail Road v. Wright, 50 N.C. 304, 5 Jones 304 (1858)

June 1858 · Supreme Court of North Carolina

50 N.C. 304, 5 Jones 304

WILMINGTON AND MANCHESTER RAIL ROAD CO. v. JOHN WRIGHT.

A corporation authorised to be constituted under an act of Assembly, cannot take a bond, payable to it, until the pre-requisites have been performed to give it corporate existence.

ActioN of debt, tried before Ellis, J., at the Fall Term, 1857, of Wayne Superior Court.

The plaintiff declared on the following bond:

“ On demand-promise to pay to the Wilmington and Manchester Rail Road Company, or order, twenty-five dollars, for value received, being the first instalment of five per cent, on five shares of stock subscribed, by-■ in said company. October 30th, 1847. J. Weight, [seal.']

The plaintiff also declared for the remaining instalments of the five shares, which was resisted, on grounds, relating to the validity of the subscription, the want of proper advertisement, &c., but as these points are not considered by the Court, the exceptions relating to them, are omitted.

The defendant’s counsel resisted the recovery on the bond, upon the ground, that there was no proof whatever, that on the 30th of October, 1847, the date of the said bond, and when it was presumed to have been executed, that the plaintiffs had a corporate existence, under the act of Assembly, by which they were chartered.

His Honor instructed the jury against the defendant on this point. Defendant excepted. The charge of the Court on the other points, becomes immaterial.

Verdict for the plaintiff on the bond, also for the remaining instalments. Judgment. Appeal by defendant.

J. H. JBrya/n and JDortoh, for the plaintiff.

Wm. A. Wright, for the defendant.

Pearson, J.

To make a grant, there must be a grantor, a grantee and a thing granted; to make a bond, there must be an obligor, an obligee, and a thing to be done. The paper sued on in this case, as a bond, is of no force and effect, because there was no obligee capable of receiving it. The plaintiff was not in esse — had no legal existence at the time the bond bears date. The act of the Legislature gave to it an inchoate existence, but it did not become a corporate body capable of acting for itself a/nd in its own oíame, until certain pre-requisites had been complied with, which was not done until after the date of this instrument.

As the error, in respect to the alleged bond, entitles the defendant to a venvre da oiovo, it is not necessary to consider the other points made in the case. It will be an interesting question, how far the nullity of the bond may affect the validity of the subscription, and the liability of the defendant in respect to the several instalments, for which lie is sued.

Peb CubiaM, Judgment reversed and a venire da oiovo.