35 Mo. App. 365 | Mo. Ct. App. | 1889
Lead Opinion
The facts necessary to be stated to an understanding of the contested point in this case are, that the Star Coal and Mining Company was a domestic corporation engaged in mining and selling coal. That defendant Larkin owed the company an account for coal, the sum of five hundred and sixty dollars. That the corporation had a president and general manager who borrowed a sum of money of plaintiff and, as security therefor, assigned to him the account against defendant. That the money so borrowed of plaintiff was used by the president in paying hands engaged in the service of the corporation.
It appears that the board of directory never authorized the money to be borrowed or the assignment of the account. It does not appear that they knew that the money was borrowed, or that the account was assigned. It does not appear that it was the usage, or that it was customary for the president to borrow money, or assign the accounts of the company, nor does it appear that he ever did so, save in this instance.
If it did so, it must be by reason of the power and authority of the president and general manager nirtute officii, to assign the choses in action or assets of a corporation of this character. In order that the act of officers or agents may bind a corporation, when not expressly authorized, the act “must be such as is in the line of their duty or agency.” Winsor v. Bank, 18 Mo. App. 665.
The corporation is bound “for all such acts of the agent as are usually performed in that particular class of business.” Morawetz on P. Cor., sec. 587. The authority of some agents, such as cashiers and tellers of banks, is fixed by general custom, of which the courts will take judicial notice. In other instances, the scope of the agent’s authority is determined either by the terms of the appointment, by the nature of the company’s business, and by the practice which has been acquiesced in by the company. Morawetz on P. Cor., sec. 590. In Hazelton Coal Co. v. Megargel, 4 Barr. 324, Chief Justice Gibson, after stating that there was no proof of any special authority, says: “And what is the authority of the president of a company incorporated, not for purposes of banking or any object connected with currency, but for mining and marketing coal? The powers of such an officer are much more restricted than the operations of a banking one.” In the case of the New York Iron Mine v. Bank, 39 Mich. 651, it was insisted by counsel that the general agent of a mining corporation as a mattter of law, by virtue of his appointment, had authority to bind it by commercial paper and that the court should take notice of his authority as it would of the authority of a bank cashier ; but the court held that issuing promissory notes is not a power necessarily incident to the conduct of the business of mining. That it was a power so susceptible of abuse
“It is true” as is stated in Winsor v. Lafayette Co. Bank, supra, “ that a corporation may by a course of conduct with its officers and the public give them authority, and confer upon them powers, they would not have as such officers, but for the usages of the corporation.”
In this case there is no proof of any thing of this nature. Many of the authorities cited by plaintiff have reference to banking corporations and as such I do not consider them applicable to the case at bar. As has been stated implied powers delegated to a bank cashier are exceptional. It results in part at least, “from the universal necessities of commerce.” Ringling v. Kohn, 6 Mo. App. 333.
The case of McKernan v. Lenzen, 56 Cal. 61, has been urged as authority directly in point. Most of the legal propositions advanced in that case are very generally recognized as sound, though some of them are
We cannot assume that assigning the choses in action, or transferring the assets of the Star Coal and Mining Company, was in the line of the duty of the president and manager of the company, or that such acts are usually performed by the general managers of such corporations. Such power or authority does not belong to the president and manager of such a corporation, mrtute officii.
The cases cited from this state have been examined and are not [considered as trenching on the views presented.
, We find no evidence of ratification by the corporation. There could be no ratification without knowledge and it does not appear that the board knew the account was assigned or even that the money used in paying the hands was borrowed.
The judgment, with the concurrence of the other judges is reversed and the cause remanded.
Rehearing
on rehearing.
It may be conceded that by using the money, borrowed of plaintiff, in payment of its hands, the corporation became liable to plaintiff in an action by him for the amount of the loan, notwithstanding the act of the president in borrowing was unauthorized. But that does not reach the question before us; that question is whether the unauthorized assignment of the assets of the corporation to secure the loan has been ratified ? In order to have been ratified it must have been known to the corporation. Knowledge of payments, made to the hands with borrowed money, is knowledge that in borrowing that money, the agent has made an unauthorized transfer of assets to secure it. If the ratification by the corporation, of the unauthorized contract of its agent, consists in its having received the consideration of the
In this case, of the seven directors, from whom the officers were selected, none knew of the transfer, but the president who did it, or the treasurer who received it. The latter’s knowledge in acting for himself could not, of course, be chargeable to the company. Johnson v. Shortridge, 93 Mo. 227. An agent cannot, at the same time, serve two masters whose interests are antagonistic. DeSteiger v. Hollington, 17 Mo. App. 382, 388.
The knowledge of the president, who did the unauthorized act, and who has not been shown to have communicated it, or attended any meeting of directors before whom it was brought up, cannot be imputed to the corporation, from the fact that if the knowledge, that an agent has of his own unauthorized act, can be imputed to the corporation, there need never arise any question of ratification. All that would be required would be to show that he did the act and that he has never repudiated it. Twelvth St. Market Co. v. Jackson, 102 Pa. St. 269; First Nat. Bank v. Kimberland, supra; Blen v. Bear River & A. W. & N. Co., 20 Cal. 602.
The judgment is reversed and the cause remanded.