Bank of Commerce v. Baird Mining Co., 13 N.M. 424

Bank of Commerce v. Baird Mining Co.

13 N.M. 424 | N.M. | 1906

OPINION OF THE COURT.

MANN, J.

— The only question involved in this case is whether the Baird Mining Company, Limited, is liable for the acts of Rishworth in drawing the three sight drafts iit question and authorizing the bank to credit same to the company’s account, or in other words whether Rishworth had the authority, or the seeming authority from the 'ácts and conduct of the company, to pledge its credit to the bank,

1 There can be no doubt that the Baird Mining Company had held Bishworth out as its managing agent in New Mexico, and that it is bound by such acts as came in the direct scope of his authority as manager of the company, but a managing agent of a corporation, other than a cashier of a bank, has no implied power to bind the .corporation by making, accepting or indorsing negotiable paper, and when such a power in him is claimed it must be sought for in some special aúthorizar tion, or in such a continued exercise of it- as amounts to a holding out of him, by the corporation as possessing it, raising the implication of it as a previous authorization or a subsequent ratification. * 10 Cyc. 292; New York Iron Mine v. First National Bank, 39 Mich. 644; The Floyd Acceptances, 7 Wall. 666; 4 Thompson on Corp. Sec. 5746.

2 It is a well settled rule of law that those dealing with a known agent of a corporation or of an individual, do so at their peril, as to his authority,' where the act. is not within the regular scope of the ordinary power of an agent. In the Floyd Acceptance’s 7 Wall. 666, Mr. Justice Miller lays down the rule as follows: “An individual may, instead of signing with his own hand, the notes and bills which he issues or accepts, appoint an agent to do these things for him. And his appointment may be a general power to draw or accept in all cases as fully as the principal could, or it may be limited authority to draw or accept under given circumstances, defined in the instrument which confers the power. But, in each ease, the person dealing with the agent, knowing that he acts only by virtue of a delegated power, must, at his peril, see that the paper on which he relies comes within the power under which the agent acts.”

The case of Bank of Deer Lodge v. Hope Mining Company, 3 Mont., 146, is a ease somewhat similar to the case at bar, the question there being as to the right of an-agent to draw a bill of exchange for his principal. Mr. Justice Blake, speaking for the court at page 150- (supra.) says-: “Some of the principles, which are applicable to-these questions have been .announced by this court in the case of Herbert v. King, 1 Mont. 475. It .was held that the principal is responsible for the acts of his agent, when they have been done within the scope of his authority, and that courts will not tolerate any enlargement of his liability. The bill shows that Alger claimed- to be the agent of the respondent, and it was the duty of the officers of the appellant to ascertain the extent of his power -before they discounted it. In Mechanics Bank v. N. Y. and N. H. R. R. Co., 3 N. Y. 631, Mr. Justice Comstock says: “Whoever proposes to deal with .a security of any kind, appearing on -its face to be given by one for another, is bound to inquire whether it has been given by due authority, and if he omits that inquiry he deals at his peril.” ' -

It is'not seriously contended that Rishworth had any express authority to discount these drafts, or have them treated as cash items by having the bank advance the money upon them before they were presented for payment, but the contention of the bank is that the Baird Mining Company, having allowed him to do so in several instances, making no objection, thereto and paying the drafts upon presentation, thereby ratifying such acts, held Rishworth out' as having- such authority and are estopped to deny it. ...

That the company might be bound by the unauthorized acts of its agent, if ratified by them with knowledge of his acts, or if they had knowingly indulged Mm in obtaining money by the method used, there is no doubt. Principals who knowingly permit their agents to pledge their credit repeatedly in a certain way, and receive the benefit of such acts, certainly should, and would be held responsible for such acts, but in the case at bar, while Rishworth had cashed several drafts exactly like the ones in controversy, the evidence shows that it was without the knowledge of the Baird -Mining Company. The testimony of Mr. Strickler shows that no officer of the company ever was informed b}r the bank that it was advancing the money on these bills, before they were presented for payment and Ryckman, the secretary-treasurer of the company, swears positively that the company had no knowledge of such facts. There ’was nothing about the drafts so drawn which were paid, that indicated that they were cash items belonging to the bank and not merely held by it for collection.

We must conclude that the Baird Mining Company had no notice that Bishworth was cashing these drafts a the bank before presentation for payment and that the payment of some of them by Byekman,. its secretary-treasurer, without such knowledge was not a ratification of the acts of Bishworth.

3 Appellants assign as error that the court did not make special findings of fact and conclusions of law. as provided by Section 2999 of the Compiled Laws of 1897. The attention of the trial court, however, was not called to this omission by the motion for a new trial or otherwise, and plaintiff will not bo beard to complain of such omission here. Again Section 2999 of the Compiled Laws of 1897, is not mandatory. The supreme court of South Carolina has construed a statute of that state which in language is almost identical with Section 2999 as being directory merely, and not mandatory, Stepp v. National Association, 37 S. C., 417; Joplin v. Carrier, 11 S. C. 329; Briggs v. Briggs, 24 S. C., 377.

The judgment of the lower court in dismissing plaintiffs cause of action was right and is affirmed.

William J.' Mills, C. J., John B. McFie, A. J., Wm. íT. Pope, A. J., Frank W. Parker, A. J., concur. Abbott, A. J., did not sit.