it does not support such a conclusion since there is no purpose stated whatsoever. The check stubs or vouchers and corporate records are to the contrary. The vouchers show the checks were issued to cover 'expenses' and 'promotional expenses'; the other corporate records show nothing as to any liability on the note in question. The checks were drawn to plaintiff in her individual not her representative capacity. They were deposited in her account and disbursed therefrom for individual purposes. At best there is contradictory evidence; the alleged oral promises versus the other circumstances.
Would a New Jersey court decide, that in view of the conflict, plaintiff had not met her burden as a matter of law? In Rogers v. Newton, 71 N.J.L. 469, 58 A. 1100, it was not clear who made the payment on account; in Smith v. Gavin, 136 A. 428, 5 N.J.Misc. 323, the dispute was whether payment was in full or on account; likewise in Sellick v. Forster, supra. In Dietrich v. National Camp, Patriot Order of America, 143 A. 77, 6 N.J.Misc. 753, there apparently was something in the check itself to identify the debt in question. See Haines' Adm'r v. Watts' Adm'r, 53 N.J.L. 455, 21 A. 1032 at page 1033, which holds by analogy that here the debtor is confronted 'not with the mere words of an adversary, but with his own contemporaneous conduct; not asked to contradict what it is said that he promised to do, but simply to explain what he himself did * * * .' See note 36 A.L.R. 346; 156 A.L.R. 397, at page 405. As to the Pennsylvania rule, see McPhilomy v. Lister, 341 Pa. 250, 19 A.2d 143, 142 A.L.R. 385; Brandeis v. Charter Mut. Benefit Ass'n, 163 Pa.Super. 204, at page 209, 60 A.2d 449.
In view of the test to be applied on consideration of the current motion we feel a New Jersey court and a Pennsylvania court would submit this question to a jury. See Parker v. Butterworth, 46 N.J.L. 244, 50 Am.Rep. 407; Becker v. Oliver, 3 Cir., 111 F. 672, at page 677.
Was the payment and/or promise binding on the corporation?
Assuming arguendo D'Agostino made the promise outlined by plaintiff, did it constitute a binding corporate obligation? Defendant asserts: (a) lack of authority of the president to bind the corporation; (b) failure to comply with the New Jersey Statute of Frauds, N.J.S.A. 25:1-5, Rev. Stats. N.J. 1877, p. 445, Sec. 5, which requires an agreement which is to be performed over a period in excess of a year to be in writing.
Although D'Agostino owned a half interest in defendant corporation and his mother the other half, plaintiff testified that on occasion he had trouble with his family. Besides D'Agostino there were other members of the Board of Directors, a Chairman of the Board, a Vice-President and a Treasurer. There is not a shred of evidence to indicate that any one, other that D'Agostino, connected with the defendant corporation had any knowledge whatsoever of the note itself; of the alleged promise to pay the note; or of the alleged purpose of the checks, i.e., as payments on the note; all of the corporate records were apparently to the contrary.
To hold the defendant, plaintiff had the burden of proving D'Agostino had authority to act for the corporation
in order to make it liable on a promise to pay $ 13,417 principal, $ 21,735 interest, or $ 35,152.64 with interest of six per cent on the unpaid balance; an obligation to which the corporation had what it contends was a complete release; and certainly a complete defense by way of the statute of limitations.
Of course the statute may be waived by express agreement. Where, however, it is by a written promise or acknowledgment, New Jersey adheres to the strict view (cf. Williston Id., Sec. 164) that an acknowledgment by an agent would be insufficient. DeRaismes v. DeRaismes, 70 N.J.L. 15 56 A. 170, affirmed, 71 N.J.L. 680, 60 A. 1133. cf. Davenport v. Kimble, supra. Even though part payments are not within the statute, to bind a defendant they must be voluntary and in pursuance of the debtor's consent or direction; made by the debtor himself or an authorized agent. P. Ballantine & Son v. Macken, 94 N.J.L. 502, 110 A. 910, 10 A.L.R. 836; Fidelity Union Trust Co. v. Fitzpatrick, 134 N.J.L. 250, 46 A.2d 837.
Prima facie, authority to manage a business does not include authority to make unusual or extraordinary contracts. Restatement Law of Agency, Sec. 73, comment b. While an officer of a corporation, may in some cases, under proper authorization, waive the right to plead the statute of limitations, as a general rule in the absence of evidence to show such authority, a president of a corporation can not qua president bind the corporation in this regard, either by promise or part payment. See 12 Am.Jur.Corpns., § 930, p. 896; note 161 A.L.R. 1443. We have found no case in point in New Jersey and only one case on the question in Pennsylvania. Where the question has arisen elsewhere, most courts have ruled as a matter of law that such power was non existent.
In a few cases because of the extraordinary power granted to the particular president, the courts found the power to waive did exist.
In Liberty Baking Co. v. Heiner, 3 Cir., 37 F.2d 703, a tax case, the waiver was for the corporation's benefit.
The distinction between usual and extraordinary duties is generally applied where the question of authority of the president to bind the corporation arises. See 19 C.J.S.,Corporations, § 1001. There is an excellent statement of the rule in Pennsylvania in Kelly, Murray, Inc., v. Lansdowne Bank and Trust Co., 299 Pa. 236, at page 242, 149 A. 190. And see Severance v. Heyl and Patterson, 123 Pa.Super. 553, at pages 559 and 563, 187 A. 53. The New Jersey cases are in accord.
We cite as an example, Mausert v. Christian Feigenspan, 68 N.J.Eq. 671, 63 A. 610, at page 611, 64 A. 801. 'The act of the president of a corporation, unless it is shown to pertain to his official duty, or to be within the scope of his employment, cannot be regarded as the act of the corporation, and is not binding on it. * * * His powers over its business and property are strictly the powers of an agent, powers delegated to him by the directors, who are the managers of the corporation, and the persons in whom the control of its business and property is vested. He may, without any special authority from the board of directors, perform all acts of an ordinary nature, which, by usage, or necessity, are incident to his office, and may bind the corporation by contracts in matters arising in the usual course of business. To this extent, by virtue of his office, he is the agent of the corporation; but beyond this his official position gives him no more control of its property, funds, or business, than any other director.'
And see Economy Auto Supply Co. v. Fidelity Union Trust Co., 105 N.J.L. 206, 144 A. 30.
The same rule applies in a family corporation. Yeskel v. Murray Holding Co., 140 N.J.Eq. 195, 54 A.2d 224, affirmed 141 N.J.Eq. 195, 54 A.2d 224, affirmed 141 N.J.Eq. 366, 57 A.2d 390. See Cintas v. American Car and Foundry Co., 131 N.J.Eq. 419, 25 A.2d 418.
Where the evidence is undisputed, the trial court must determine its effect as a matter of law. See Kelly, Murray, Inc. v. Lansdowne Bank and Trust Co., supra. And as to New Jersey, see the cases cited in Grinnell Co., Inc., v. Miller, 3 Cir., 150 F.2d 345, at pages 355, 356.
In our judgment the plaintiff failed to show that the promise of D'Agostino, if made, was binding on the corporation. As to the promise and the checks, there was absolutely no evidence to support either conscious adoption or ratification. Judgment must, therefore, be granted to the defendant pursuant to his motion under Rule 50(b).
An order to that effect will be handed down this date.