Luse v. Isthmus Transit Railway Co.

| Or. | Dec 15, 1876

By the Court, Shattuck, J.:

The assignments of error in this case are substantially as follows: 1. The court erred in failing to find that a payment had been made on said mortgage, the particulars regarding the same, as to when and by whom made; 2. The court erred in omitting to find that Wm. Utter had done the entire business for said defendant since its éxistence, and drawn drafts and promissory notes in its name, and with its consent; 3. The court erred in its conclusions of law. The arguments of appellant’s counsel assumes 'and suggests that the circuit court should not merely have found that Wm. Utter was president and business and financial agent of the corporation under the by-laws, but should also have set out in the finding the by-laws themselves, so that the court might interpret them, and determine therefrom the nature and extent of Utter’s authority; that the by-law was a fact in itself to be considered and found, and that without this fact no correct conclusion of law, relative to the authority of the agent, can be formed. The counsel also assumes and suggests that the circumstances attending the alleged payment on the note ought to have been set out and found in detail, and that the court should have decided the effect of such payments to be a ratification of Utter’s act in executing the mortgage.

We find nothing in this record to sustain these positions of counsel. Every material issue made by the pleadings has been met and determined by the findings of the circuit court. The main issue was the authority of Utter to execute the mortgage. The findings of the court are in effect that there was a by-law making Utter business and financial agent of the corporation, thereby conferring such powers only as are incident to the office of president, and implied from the terms “business and financial agent,” and the court also finds that there was do special order or direction by the directors of the corporation to Utter to execute the mortgage.

The pleadings admit the payment without any averment on either side concerning time or circumstances, so that,' as to payment, there was no issue, and the court had nothing to find. If there was in the by-laws of the corporation any express grant of general authority to the president to mortgage the property of the corporation, or any power conferred which the finding of the court does not imply, or if there was in the conduct of the corporation, relative to the payment or relative to Utter’s management of its affairs, anything in the nature of acquiescence in or ratification of Utter’s acts in making this mortgage more than is implied from the admitted fact of payment, which counsel desired should appear in the record, they should have applied' to the circuit court for a further and more specific finding on these matters, or procured them to be embodied in a bill of exceptions. Now, if these particular. matters appear to be necessarily involved in the issues made, or to be suggested by the pleadings, they were matters arising in the evidence, if at all; and the mere failure by the circuit court to find them in detail is no cause for reversing the judgment. The'appeal must be decided by what the pleadings and the findings of the circuit court disclose.

Assuming that Wm. Utter, in the capacity of president, and financial agent, and pretending to act for the corporation; in its name and using its corporate seal, execute.d the mortgage set out in the complaint, the question of the authority of Utter, and the validity of the mortgage, as a lien on the property of the corporation, is to be determined by the third and fifth findings of the circuit court. These findings in effect say that Utter, at the date of the mortgage, was president and business and financial agent of the corporation; and that there was no order or direction of the directors of the corporation to Utter to execute said note or mortgage. Do these findings authorize the conclusion that Utter had authority to mortgage the locomotive in question? If they do the judgment should be reversed. Otherwise it should be affirmed. The solution of the question requires a determination of what authority is implied by the terms “president, business and financial agent of the corporation.”

Referring to the general incorporation law of this state, section 9, we find that the president of a corporation is authorized to preside at the meetings of the directors, and “to perform such other special duties as the directors may authorize.” By section 11, he is authorized to act as inspector of corporation elections, and to certify who are elected directors. No other authority seems to be conferred by the general law, on the president of the corporation. All other authority, except to preside at the meeting, be inspector of elections, and certify who are elected directors, must be derived from some by-law of the corporation, or some special order, or must be implied by some acquiescence or ratification on the part of the corporation, whose powers under our law are exercised by the directors.

In this case then, the fact that Utter was president did not, itself, imply the authority claimed for him. What power he had must be found confirmed, as this case is presented, by the by-laws. These simply appoint him, according to the finding, “business and financial agent.” Do these terms imply an authority to mortgage the property of the corporation ? A great variety of acts may unquestionably be included within the function of a “business and financial agent.” But this court in Fink v. The Canyon Road Co., 5 Or. 305, indicated what ought to be the limitation of the authority of such agents. It said, “Corporations are certainly bound by their simple contracts, and by other acts of their officers and agents made and performed in the discharge of their ordinary duties; and the courts have carried this doctrine so far as to hold, that they may take notice of the general nature of the duties of a cashier, in and about a banking office, and without evidence of usage or express authority, hold' him authorized to do all incidental acts necessary to the performance of those general duties. (Watson v. Bennet et al., 12 Barb. 196" court="N.Y. Sup. Ct." date_filed="1851-11-03" href="https://app.midpage.ai/document/watson-v-bennett--white-5458155?utm_source=webapp" opinion_id="5458155">12 Barb. 196.) This case presses closely upon the very verge of the law, and further, we think the courts ought not to go.”

The doctrine here recognized is that the acts of a general agent, which will be binding on the corporation without express and special authority, and acts done in the discharge of “ordinary duties.” And Mr. Eedfield holds, 2 Eedfield on Eailways, 582, that the general business agents of a company have only authority to transact those functions of the company which come under the general denomination of business. All the business of a company does not imply anything but ordinary business, “what is called the proper business of such a company,” that is, in the case of a railway, the construction and operation of their road. It requires no argument or evidence, we think, to render it apparent that this attempt of Utter to mortgage' — in effect to sell — the locomotive which was in actual use on the company’s road, for a precedent debt, was beyond and outside of the ordinary business of the corporation. It was not necessarily incident to the construction or operation of the company’s road, but was rather a stride in the direction- of annihilating its business, and defeating the operation of the i’oad.

The use of the corporate seal by Utter in his attempt to execute this mortgage, does not add anything to the validity of the instrument, when its validity, as the deed of the corporation, is disputed. It seems to be assumed, in this case, that the instrument was one that ought to be executed under the corporate seal, and something seems to be claimed for the instrument, because it was so executed. But the corporate seal affixed does not make the writing the contract of the corporation, unless it was affixed by authority, (Angell and Ames on Corp., secs. 223-24), and the courts have held that “it is safe to say that when the sale, assignment, or transfer of the property of the corporation requires the use of the common seal, it cannot be made without the assent and authority of the boar(d” of directors. (Hoyt v. Thompson, 5 N. Y. 335.)

There was, then, no error in the conclusions of law found by the circuit court, and the judgment below should be affirmed. It should be stated, however, that we do not understand that the question as to the validity of the promissory note referred to in the pleadings, or of the debt evidenced thereby is involved in this appeal, and upon that point we express no opinion.

Judgment affirmed.