14 U.S.

85
1 Wheat. 85
4 L.Ed. 42

ANDERSON
v.
LONGDEN.
February Term, 1816
1

ERROR from the circuit court for the county of Alexandria.

This was an action of debt instituted by the defendants in error, (plaintiffs in the
circuit court,) as directors of the Domestic Manufacture Company of
Alexandria, against Robert Anderson, (the plaintiff in error,) on a bond given
by him and others as sureties for John Mac Leod, agent of the said company, to
the said directors, to recover the amount of money and merchandise which the
said agent had received for the use of the company, and for which he had failed
to account.

On the 17th of November, 1809, a number of persons in Alexandria associated

'Art. 2. As soon as the whole, or 1,000 shares of the said capital stock, shall
have been subscribed for, and the first payment made thereon, a meeting of the
stockholders shall be called by public notice in the Alexandria and Washington
newspapers, to meet in the court house of Alexandria, either in person or by
proxy duly authorized, at which meeting the stockholder, either personally or
by proxy, shall elect by ballot seven of their own body to act as directors of the
said company for one year.'

'Art. 3. The affairs of the said company shall be carried on in the town of
Alexandria, under the superintendance and control of the said directors, of
whom any four shall form a board or quorum. They shall choose a chairman
from among themselves, and in case of vacancy by death, resignation, or
otherwise, such vacancy shall be immediately filled by themselves from among
the stockholders. And the said directors shall in no case whatever contract

debts or engagements, by bill, bond, or otherwise, for, or on account of, the

'Art. 4. The directors, when elected, shall proceed, without delay, to appoint an
agent and such other officers as may be requisite, all of whom shall hold their
offices during the pleasure of the board, and who shall, before they enter upon
their functions, give bond, with sufficient security, to the said directors, and
their successors in office, for the faitnful dishcarge of their duties, as prescribed
by the board of directors.'

The company having proceeded to elect directors, John Mac Leod was
appointed agent by them; and on the 13th of February, 1810, the said agent,
with the plaintiff in error and others, his sureties, executed and delivered to the
defendants in error, directors of the said company, their joint and several bond,
in the penalty of 10,000 dollars, the condition of which was, 'that the said John
Mac Leod should, in all respects, faithfully execute and perform the duties
assigned to him as agent, according to the terms and meaning of the articles of
association, and also such other duties as are, or from time to time should be,
assigned to the office of agent by the board of directors, and should, from time
to time, when called upon, render a just and true account of all money, goods,
&c. of the said company which should come to his hands, and should apply the
same as he should be directed; and should, in all respects, whilst he held the
office, conduct himself with honesty, and fidelity, and attention to the interest
of the company.' The said agent continued in the service of the company,
without any new appointment, until June, 1812, when he was dismissed; and
having gone out in arrears to the company, this suit was brought against the
plaintiff in error, to recover the amount due to the company. To this suit the
defendant in the circuit court, taking oyer of the bond, pleaded, 1st. 'Conditions
performed;' to which the plaintiff replied, specially setting forth, as the
breaches relied on, 'that money and merchandise, the property of the company,
had come to the hands of J. Mac Leod, as agent, &c., to the amount of 4,000
dollars, for which he had failed to account, though required by the directors,
and which he did not deliver over to his successor, as ordered by the directors.
On this replication issue was taken. The defendant in the circuit court pleaded,
2dly. That the plaintiffs (Longden and others) ceased to be directors at the
expiration of one year from the time of their appointment, and were not
directors when the suit was brought: to this plea the plaintiffs demurred
generally.

In his third plea the defendant states that John Mac Leod was appointed agent
on the 13th of February, 1810; and that for one year from the time of such
appointment, and during the time the plaintiffs acted as directors, he had
faithfully executed and performed his duty, &c.

To which the plaintiffs (protesting that he had not faithfully performed his
duties for one year) replied that J. Mac Leod had continued in office for more
than one year from the 13th of February, 1810, under the said appointment, and
after the plaintiffs ceased to be directors; during which time merchandise, & c.,
to the amount of 4,000 dollars, came to his hands, &c., which he had failed to
account for; to which the defendant demurred.

10

The defendant pleaded, 4thly, that the plaintiff had not instituted any suit at law
against Mac Leod for the breach of the condition of the bond; to which the
plaintiff demurred generally.

11

The law on the demurrers was adjudged by the court for the plaintiffs,
(Longden and others,) and on the trial of the issue the jury found for the
plaintiff, and assessed damages, &c.

12

The record presents a bill of exceptions, which states that the defendant offered
in evidence to the jury the books of the company, from which appeared that the
agent had been in the habit of selling merchandise on credit, from the month of
January, 1810, until June, 1812; which books were open to the examination of
the directors; that it appeared from the books that sales on credit had been made
to three of the directors, plaintiffs in this suit; that the defendant also offered a
copy of the report of a committee of directors made on the 19th of September,
1812, in pursuance of an order of the 6th of June, preceding.

13

Evidence was also offered to prove that the directors, to the number required by
the articles, held meetings, at which they gave directions for the management
of the affairs of the company; that their proceedings were regularly reduced to
writing, and signed by the chairman.

14

On which evidence the defendant's counsel moved the court to instruct the jury,
'that if from the evidence aforesaid they should be of opinion that the directors
of the company had permitted the said credits to be given, and had acquiesced
in the same, the defendant would not be liable for the merchandise sold on
credit, and appearing on the books of the company;' which instruction the court
refused, and instructed the jury, 'that the evidence did not, in law, justify an
inference that the directors, acting as a board under the articles, had authorized

the agent to sell the merchandise aforesaid, on credit, and that the agent could
not, in law, be justified in selling on credit by any direction of the directors,
individually made, when not acting as a board under the articles;' to which
opinion and instruction the counsel for defendant excepted.
15

Swann, for the plaintiff in error, argued, that the bond must conform to the
articles of association, which was not incorporated. He cited the case of the
Commonwealth v. Fairfax et al., where the words 'so long as he shall continue
in office,' in the condition of a sheriff's bond, were construed not to extend to a
second and new appointment.

16

Lee, for the defendant in error, was stopped by the court.

17

MARSHALL, Ch. J.

18

The case of the sheriff's bond is very different. The commission of sheriff, in
Virginia, is annual; of course, his sureties are bound for one year only. It is
true, the directors of this company are elected annually; but the company has
not said that the agent shall be for one year only: his appointment is during
pleasure. The sureties do not become sureties in consequence of their
confidence in the directors, but of their confidence in the agent whose sureties
they are. The court is unanimously of the opinion that the judgment of the
circuit court ought to be affirmed.

19

Judgment affirmed.