141 Ind. 352 | Ind. | 1895
This action was brought by appellant against appellees to set aside two mortgages held by the Vigo County National Bank, purporting to have been executed by the Sanford Fork and Tool Company, and to recover judgment on certain notes held by appellant on said tool company.
The amended complaint is in four paragraphs, and the facts alleged in the different paragraphs are substantially the same.
After the averments concerning the indebtedness of the tool company to appellant, the only allegations necessary for the determination of the sufficiency of the complaint (the only question presented) are, in substance, that said tool company is otherwise indebted in the sum of $250,000, and is wholly insolvent, and was wholly insolvent on the 17th day of March, 1890; that on the 25th day of April, 1890, William Kidder, the president of said corporation, executed, in the name of the Sanford Fork and Tool Company, two chattel mortgages to secure $28,000 each, to himself, as trustee for the Vigo County National Bank, one of the appellees, on all the personal effects of said company, which mortgages were filed for record the 1st day of May, 1890;
Demand for judgment on the claims sued upon and that said mortgages be set aside.
The Vigo County National Bank demurred separately to each paragraph of complaint, which was sustained and exceptions reserved.
The only error assigned is that the court erred in sustaining said demurrer to each paragraph of complaint.
The statute under which the tool company was organized provides that the business of the corporation shall be managed by a board of directors, a majority of whom shall constitute a quorum. Section 3854, R. S. 1881, section 5054, R. S. 1894.
The president of a corporation, by virtue of his office merely, has very little authority to act for the corporation; his powers depend upon the nature of the company’s business and the authority given him by the board of directors. The board of directors may invest him with authority to act as the chief executive officer of the company; this may be done by resolution or by acquiescence in the course of dealing and manner of transacting the business of the corporation. Taylor Corp., sections 202, 236, 238, and notes; Martin v. Webb, 110 U. S. 7; Northern, etc., R. R. Co. v. Bastian, 15 Md. 494; Dougherty v. Hunter, 54 Pa. St. 380; Stokes v. New Jersey Pottery Co., 46 N. J. Law, 240; Louisville, etc., R. W. Co. v. McVay, 98 Ind. 391; 17 Am. and Eng. Encyc. of Law, pp. 135, 136, 137, and notes; Jones Chat. Mort., section 51.
When a contract is made in the name of a corporation by the president, in the usual course of business, which the directors have the power to authorize him to make, or to ratify after it is made, the presumption is that the contract is binding on the corporation until it is shown that the same was not authorized or ratified. Patterson v. Robinson, 116 N. Y. 193; Eureka Iron and Steel Works v. Bresnahan, 60 Mich. 332; 1 Morawetz Corp., section 538; 1 Beach Corp., section 203; 17 Am. and Eng. Encyc. of Law, p. 124.
One dealing with the president of a corporation, in the usual course of business, and within the powers which the president has been accustomed to exercise without objection from the directors, has the right to assume that
Each paragraph of the complaint, however, alleges that said mortgages were executed without any authority whatever, and were never ratified after they were executed, and we are of the opinion that the second, third and fourth paragraphs were sufficient to withstand the demurrer.
There was no error in sustaining the demurrer to the first paragraph of the complaint for the reason that it is therein alleged that before the filing of the amended complaint a receiver had been appointed in this action, and had taken possession of the property of the tool company. If a receiver had been appointed for, and taken possession of, the property of the corporation, as alleged, he represented the creditors, and was the proper person to maintain actions such as this, as the right of the creditors in that respect become vested in him. High Rec., sections 314, 315 and 320; Beach Rec., sections 439-442; Taylor Corp., sections 542, 814; 20 Am. and Eng. Encyc. of Law, pp. 286-288, and notes; Curtis v. Leavitt, 15 N. Y. 9; Attorney-General v. Guardian, etc., Ins. Co., 77 N. Y. 272; Porter v. Williams, 9 N. Y. 142, 59 Am. Dec. 519, and notes on p. 524; Vail v. Hamilton, 85 N. Y. 453; Gray v. Davis, 1 Wood (U. S. Cir. Ct.), 420; Davis v. Gray, 16 Wall. 216; Hutchinson v. First Nat’l Bank of Michigan City, 133 Ind. 280, and cases cited; Voorhees v. Carpenter, 127 Ind. 300, and cases cited.
Other allegations in the complaint are discussed by counsel, but-as the complaint is sufficient without them the same will not be considered except to repeat what has often been held by this court: that in this State, by
Judgment reversed, with instructions to overrule the demurrer of the Vigo County National Bank to the second, third and fourth paragraphs of amended complaint.