81 S.W.2d 881 | Ky. Ct. App. | 1935
Affirming.
The appellants, Philip Preece and R.C. Burton, assign three reasons why the judgment against them on a $5,000 note should not have been rendered and should now be reversed. As the last of several successive renewals they, with the three officers and only stockholders of the Hope Construction Company, as accommodation indorsers, signed its note to Mrs. Cora Burns, dated December 24, 1930, due March 15, 1931, and calling for 10 per cent. interest. The court undertook to purge the debt of usury and no question is here raised as to the amount of the judgment.
The petition merely alleges that the corporation by its president executed and delivered the note, indorsed by the five individual defendants, which was to be paid on or before March 14, 1931, by its terms "in words and figures as follows, to-wit." The note is copied in full and is in the usual form, reciting "we promise to pay," etc. It also provides, "the makers and endorsers of this note hereby waive presentment, demand and notice of dishonor." Default judgment was rendered against the company and the other three indorsers.
(1) It is insisted that the demurrer to the petition *841
should have been sustained, since it fails to allege there was any promise to pay the note and does not aver that any demand or presentment for payment was made, nor that protest or notice of dishonor or presentment were waived. The allegation is only that the note was executed and delivered, which is not a sufficient plea. There must be an averment of a promise to pay and the disclosure of a breach thereof. Bank of Anderson County v. Foster,
(2) The plea, in effect, of non est factum on the part of the principal is that the articles of incorporation of the Hope Construction Company did not authorize the borrowing of money, and that the corporation had not empowered its president by action of its board of directors to execute the note. This corporation, like many others, was but little more than a formal partnership in the way it conducted its business. There were but three stockholders, and they had no formal meetings and kept no minute books or corporate records. It appears these men simply agreed on the title of one another as the respective officers of the company and would from time to time agree on what should be done in its name. Such was the manner in which this note and its predecessors had been executed.
The articles of incorporation provided that its indebtedness *842
should not exceed $50,000; that its affairs should be conducted by a vote of three directors, and that the president should be its chief executive officer. But our decision is based upon the fair and just doctrine that a corporation is bound by the acts of its officers or agents who have been held out as having the authority which they exercise, or by its custom of dealing. This is especially so where the corporation accepted the benefit of the act of its officers, as was established in this record. Not only was this note signed formally by the president of the company, but all the stockholders personally indorsed it, and the money was received and used in the company's business. The point of non est factum is without merit. Star Mills v. Bailey,
(3) Appellants made an effort to escape liability upon the ground that the payee had extended the time of payment without their consent. Section 3720b-120, Statutes; Bradford v. Union Trust Co.,
The judgment is affirmed. *843