134 Minn. 445 | Minn. | 1916
Plaintiffs have a department store in the city of New York, and have a banking department therein, in which they carry on the business of private bankers and buy and discount commercial paper. On January
The Knox-Burchard Mercantile Company was a Minnesota corporation, organized in 1911, which did business in St. Paul as wholesale dealer and jobber in general merchandise until August, 1914, when it was dissolved and defendant Cushman was appointed as receiver to wind up its affairs. Of the notes held by plaintiffs, the one first due had been paid by some one other than the Knox-Búrchard Company; the other three were unpaid and were filed with the receiver as claims against the company. They were disallowed. The district court, however, made an order that a complaint and answer be filed as in an ordinary action, and that the case be tried as an ordinary action at law. This was done, and, at the close of the trial, the court directed a verdict for defendant. Plaintiffs made the usual alternative motion for judgment non obstante or for a new trial, and appealed from the order denying this motion.
The answer denied the execution or indorsement of the notes by the Knox-Burchard Company, or that that company had ever received*^consideration for them. In a verification attached to the answer, the secretary of the company, after showing himself qualified to speak authoritatively for the company, specifically denied that the company had executed the notes. Consequently section 8448, G. S. 1913, does not make the fact that they purport to have been executed by the company evidence that they were so executed.
The facts are briefly as follows: The Knox-Burchard Company purchased goods from Isaacs Brothers from time to time; but it does not appear that they ever received credit or gave notes for such purchases, and no claim is made that they were indebted to Isaacs Brothers at the time of the transactions in controversy. While in New York, in January, 1914, Knox, who was president of the company and had general charge of its affairs, was requested-by Moe A. Isaacs, the head of the firm of Isaacs Brothers, to execute some notes in the name of the company for the ac
Plaintiffs claim to be holders of the notes “in due course” within the meaning of the negotiable instruments act. The evidence would at least warrant a jury in finding that such was the fact, and the court could not rule as a matter of law that plaintiffs were not such holders. Consequently, the action of the court in directing a verdict for defendant can only be sustained on the ground that defendant is not liable upon the notes, conceding that they have passed into the hands of a good faith purchaser.
The company denied executing the notes; and, unless there be evidence that the company executed them, or had become obligated in some way to pay them, the ruling of the court was correct. It was incumbent upon plaintiffs to show that Knox had express, implied or apparent authority to execute the notes. Dispatch Printing Co. v. National Bank of Commerce, 109 Minn. 440, 124 N. W. 236, 50 L.R.A. (N.S.) 74; Grant v. Duluth, M. & N. Ry. Co. 66 Minn. 349, 69 N. W. 23; Gould v. W. J. Gould Co. 134 Mich. 515, 96 N. W. 576, 104 Am. St. 264, 2 Ann. Cas. 519; City Electric Street Ry. Co. v. First Nat. Exch. Bank, 62 Ark. 33, 34 S. W. 89, 31 L.R.A. 535, 54 Am. St. 282; Star Mills v. Bailey, 140 Ky. 194, 130 S. W. 1077, 140 Am. St. 370; Elkhart Hydraulic Co. v. Turner, 170 Ind. 455, 84 N. E. 812; People’s Bank v. St. Anthony’s R. C. Church, 109 N. Y. 512, 17 N. E. 408; 3 Clark & Marshall, Private Corporations, § 709. The statute (G. S. 1913, § 6147), requires the certificate of incorporation to specify the board in which the management of the corporation is vested, and pursuant thereto the certificate of in
Plaintiffs proved that Knox had borrowed bioney for the company from St. Paul banks upon notes executed in the name of the company by himself as president without the signature of the secretary, and that
“Implied authority is that which the principal intends his agent to possess, and which is proper, usual and necessary to the exercise of the authority actually granted. It includes all such ‘acts and things as are directly connected with and essential to the business in hand.’ 2 Enc. L. & P. 948. Apparent authority is that which, though not actually granted, the principal knowingly permits the agent to exercise or which he holds him out as possessing.”
In the present case it cannot be said that the company intended its president to possess the power to execute promissory notes, for it adopted a by-law expressly requiring such notes to be executed by both its president and secretary, and such by-law could be changed only by its stockholders, G. S. 1913, § 6154. It is true that actual authority, whether it be express or implied, may be inferred from facts and circumstances and the acts and conduct of the parties where the nature and extent of the power given to the agent is not specifically defined. Best v. Krey, 83 Minn. 32, 85 N. W. 822. But where the principal has expressly required
No rights resting upon the doctrine of estoppel or upon the exercise by an officer of apparent authority are here involved. The company never authorized the issuance of the notes, did not know that they had been issued, and never received any benefit from them. The officer who executed them had no express authority to execute notes by his act alone; and implied authority cannot be inferred in the face of the by-law which required the act of two officers to execute such instruments for the corporation. Dispatch Printing Co. v. National Bank of Commerce, 109 Minn. 440, 124 N. W. 236, 50 L.R.A. (N.S.) 74; William Deering & Co. v. Kelso, 74 Minn. 41, 76 N. W. 792, 73 Am. St. 324.
It follows that plaintiffs failed to establish a right to recover upon the notes and the order appealed from is affirmed.