124 Wash. 26 | Wash. | 1923
This was a suit upon a promissory note alleged to have been given by the defendant, Pacific Storage Warehouse Company, Incorporated, a corporation. There was a judgment for the plaintiff, which was based upon the verdict of a jury in his behalf. The Pacific Storage Warehouse Company, Incorporated, has appealed.
It is first contended by the appellant that its motion for a nonsuit should have been granted.
The note was for $1,000, and was payable ninety days after date to the order of the Modern Dairy Company, and was signed, “Pacific Storage Warehouse Inc., by M. Newell.” The respondent introduced the note in evidence and made some proof to the effect that M. Newell was, at the time of its execution, the manager of appellant, and that the respondent had purchased the note, before maturity, for a valuable consideration. This was sufficient to make a prima facie case. Many authorities hold that there is no presumption that the manager of a corporation has any authority to execute and deliver promissory notes on behalf of his corporation, and that the burden to show such authority is on the plaintiff. At an early date, however, this court took an advanced view of this question and held that, where the manager of a corporation had executed a contract on its behalf, the presumption is that he has power and authority so to dó. Carrigan v. Port Crescent Imp. Co., 6 Wash. 590, 34 Pac. 148. Discussing this question, the court said:
“Under these circumstances it will be presumed that it was "the contract of the corporation until the*28 contrary is made to appear. When a corporation names some person as its manager, and as such allows him in large measure to control all of its business transactions, it must be held responsible for the acts of such manager in the name of the company until it has been affirmatively shown by it that as a matter of fact such acts were unauthorized. This is, perhaps, an extension of the general rule, but, in our opinion, such extension is necessary to prevent great hardships being cast upon those who deal with corporations. The very use of the word ‘manager’ as applied to the officer conveys the idea to the ordinary mind that to one thus named has been committed the management of the affairs of the company and. to hold that one dealing with a person so held out must, before the company can be held liable for his acts, show affirmatively that it had authorized them, would often result in great hardships.”
The doctrine of this case was approved in Citizens’ National Bank of Tacoma v. Wintler, 14 Wash. 558, 45 Pac. 38, 53 Am. St. 890.
Under these authorities (with which we are still well satisfied), it is manifest that the respondent made a prima facie case and that appellant’s motion for non-suit was properly denied.
A more important question arises upon the refusal of the court to grant appellant’s motion for judgment notwithstanding the verdict.
The appellant had plead, and its chief defense was, and is, that its manager, who executed the note in suit on behalf of the company, had no authority so to do. There is nothing in the respondent’s testimony which even tended to show such authority, other than the presumption which we have mentioned. The appellant’s testimony conclusively shows the following state of facts: The corporation had a president, a vice president, a secretary-treasurer and a manager. All of the stock was owned by Mrs. S. A. Newell and her
The circumstances under which the note was given were these: The Modern Dairy Company, a corporation, was operating at Tacoma and had made some assertions to Mr. Newell that, if the appellant would
The foregoing is, in substance, all of the evidence which tends to show any authority or lack of authority in the manager, Mr. Newell, to execute the note on behalf of the appellant. It is plain from‘this testimony, which is undisputed, that Mr. Newell, as manager, had absolutely no authority, direct or indirect, to execute the note. He was neither a stockholder nor a trustee of the appellant. By undertaking to purchase the stock of another corporation, he was manifestly going far outside of the ordinary duties of a manager. Not only does the testimony show that this note was executed without direct authority, but it shows conclusively that the appellant had not, at any time or in any way, ratified the action of its manager in making the note, or ever held him out as having authority so to do. The appellant’s testimony, undisputed as it was, completely overthrows the presumption that its manager had authority to execute the note in suit, and left nothing to submit to the jury.
It is probably true that courts should be slow to unllify an instrument executed by an officer of a corporation and thus injure innocent purchasers; but, on the other hand, reasonable protection of corporations
Main, C. J., Mackintosh, Holcomb, and Mitchell, JJ., concur.