117 P. 413 | Or. | 1911
Opinion by
There is but one question before us: Had the president authority to sign the note? and this seems to be determined in favor of the plaintiff by the language of Article 4, Section 3, of the by-laws, by which he is made the general executive officer of the corporation and is given general charge of the business affairs of it, and is authorized to sign promissory notes on its behalf. By the' succeeding clause, it is provided that he shall have no power to incur indebtedness, but in this case the liability was incurred by the corporation which was adjusted and the amount ascertained by it, and by its authority a draft was issued upon itself for the payment of the amount, which was presented to Skelley. at McKeesport for payment, and he, being unable to pay the draft, executed the note sued on as evidence of the debt. This was within the express authority given him by the by-laws. It is not questioned that the corporation owed the debt evidenced by the note.
The authorities cited by defendant’s counsel in support of its contention, relating to the power of the managing agent of the corporation, are cases of implied authority, and most of them are expressly placed upon the ground that there was no express authority to the agent. Cases in this court fully settle this question: Crawford v. Albany Ice Co., 36 Or. 535 (60 Pac. 14), upon which defendant largely rests its case, recognizes the distinction between the express and implied authority, in which Mr. Justice Bean says:
“No by-law or resolution was ever adopted by the corporation authorizing its president and secretary or any one else to make and execute promissory notes for or in its*377 behalf. * * It is elementary law that the president and secretary of a corporation, as such, have no power to bind the corporation by the execution of promissory notes or other contracts, but such authority '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.’ ”
And in Baines v. Coos Bay Nav. Co., 45 Or. 307 (77 Pac. 400), after stating that Mr. Graham, the general manager of the defendant corporation, had no express authority to execute negotiable instruments on behalf of the corporation, Mr. Chief Justice Moore says:
“The rule is general that no managing agent of the corporation * * possesses implied power to bind it by issuing, accepting or indorsing on its behalf negotiable instruments. * * The law requires that such an agent must possess express authority before he can bind his principals by putting in circulation negotiable instruments.”
This is a statement of the general rule and then the opinion discusses the exceptions.
We think the by-law quoted is not of doubtful meaning, and disposes of the case against defendant’s contention. In the by-law quoted the words in brackets — “subject to the control of the directors” — means that they may control his acts even in the matters expressly delegated to him, but, unless they do take some action, the acts authorized may be done by him without other authority from the board. That language is a reservation in the board of a right to control his acts, but the authority is complete in the matters enumerated until the board has affirmatively directed otherwise. See Bates v. Keith Iron Co., 7 Metc. (Mass.) 224.
The judgment is reversed and the cause remanded.
Reversed.
