7 Wash. 487 | Wash. | 1893
The opinion of the court was delivered by
Respondent alleged the execution and delivery to her by appellant, a corporation, of its two certain promissory notes for $500 and $550, respectively, which were unpaid; and that, as accommodation indorser, she
The first and second notes were signed: “P. S. & C. R. R. Co. By L. P. Ouellette, President; W. S. Elwell, Man. & Supt.;” the third: “P. S. & C. R. R. Co., W. S. Elwell, Mgr.'' The manager was the husband of respondent, and his signature, and that of the president, was proven. Respondent loaned the money for which the first two notes were given, and paid the amount of the third one. The .proceeds of all the notes went into the bank account of the appellant, and were checked out and appropriated to pay its debts. The manager and the president, of course, were two out of the five trustees. The manager testified that before the first of these note's was made, he had made other like notes which had been paid with appellant’s funds. These notes were not brought to the attention of the board of trustees; witness told some of the members of the company of them. The principal place of business of the corporation and the place of its corporate meetings was Port Gamble; the transactions in question took place at Olympia.
The president testified that in a conversation had between himself, the manager and one Ames, also a trustee, at Port Gamble, he told Ames that he and the manager had had to borrow money from respondent, which was used to buy certain cattle. Could not say whether he
For the appellant it appeared that the records of the company showed no authorization to the president or manager to execute'notes. The corporation was engaged in a general logging business, and the manager's authority was limited by the by-laws to the supervision of the logging railroad, attending in detail to all matters pertaining to its successful operation, and keeping accurate accounts of the time and services of employes, and of all timber and logs cut and transported. No officer was designated by any article of incorporation or by-law to borrow money or execute notes.
The evidence thus summarized did not warrant a recovery upon the notes. Whatever else the general agent of an industrial corporation may do to bind his principal by contracts made by virtue of his implied authority, when it comes to uttering negotiable paper, to which, in the hands of innocent holders, there can be practically no defense, a strict rule applies. The agent must either have express general authority to issue such paper, or express authority to issue the particular paper, or there must be implied general authority arising from such frequent exercise of the power by the agent, followed by ratification, as to constitute a custom of the corporation. Duggan v. Pacific Boom Co., 6 Wash. 593 (34 Pac. Rep. 157); or there must be ratification of the particular act, or an estoppel to deny that the agent had authority. Implied general authority, ratification and estoppel are each invoked in this case. But the substance of all the evidence on these points
The consideration that, as matter of fact, the proceeds of these notes went into the possession of appellant’s agents and were used to pay its debts, is not entitled to any weight in this action. In a proper action, where all defenses legal and equitable can be made, all sums which respondent contributed to the appellant’s benefit can be recovered.
Judgment reversed, and cause remanded for dismissal.
Anders and Hoyt, JJ., concur.
Dunbar, C. J., dissents.