Russell v. Washington Savings Bank, 23 App. D.C. 398

Russell v. Washington Savings Bank

23 App. D.C. 398 | D.C. Cir. | 1904

Mr. Justice Morris

delivered the opinion of the Court:

Undoubtedly much of the testimony sought to be introduced in this case, and which was excluded by the trial court, is objectionable by the laws of evidence and was properly excluded. Liable to this criticism is a very large part of the deposition of George O. Ferguson, whereby it was sought to prove his declarations and statements as those of the authorized agent of the bank to the plaintiffs before there was any proof of his agency. An agent is not incompetent to testify to facts showing or tending to show his own agency; but, until there has been some proof of such agency, representations and statements by the alleged Agent are not competent to be introduced in evidence. 1 Greenl. Ev. §§ 184c, 416, and cases there cited; 2 Greenlf. Ev. § 63. And such is the well-acknowdedged rule of law upon the subject, under which a great part of the deposition in question is inadmissible, as Ferguson was interrogated as to the representations and statements made by him to the plaintiffs before there was any proof introduced as to his agency, or any offer *407thereafter to prove such agency so as to malee these representations admissible.

Moreover, most of the interrogatories are subject to the just criticism that they are of a leading character, as is plainly shown by the fact- that in a great many instances the answers are yes or no. For this reason, if for no other, the interrogatories are objectionable. Clearly if this deposition is to be used again, it should be recast.

But while we fully concur with the learned justice who presided in the court below at the trial of this case in most of his rulings, we find ourselves unable to concur in the view that there was no sufficient testimony to go to the jury on the question of the agency of George O. Ferguson, and his authority to bind the defendant bank in the transaction with the plaintiffs. Agency-in such cases is usually proved by circumstances and by the apparent relations and conduct of the parties. A corporation can only act by agents, and its duly elected officers are within the scope of their respective duties, its agents to deal with third parties. Their duties may be prescribed or limited by the charter of the incorporation or by by-laws and regulations of the body corporate; but in the absence of specific limitations brought home to the knowledge of those who deal with them, or of which those who deal with them are bound to take notice, the officers of a corporation, as its agents, are authorized to bind the corporation to third parties so long as they act within the ordinary scope of "their duties. While the board of directors or trustees, or by whatever name it may be called, is the usual governing body of all private corporations and entitled to direct and control all its business, great or small, and to give direction to its other officers, yet the president and other officers, and not the board of directors, are those who are usually brought into contact with third parties in the conduct of the business of the organization; and custom and usage, and the necessities of the social order, demand that these executive officers shouid be regarded as entitled to bind the organization in all matters which such organizations are accustomed to transact through such officers. This is ele*408mentary law in regard to corporations, but it seems proper to recall it in this case.

Now, that the president of a bank is its chief representative and entitled to act as its general agent in the transaction of its business cannot be questioned. That among the things to which he can undoubtedly bind his bank is the employment of counsel to appear for it and defend its interests in pending or prospective litigation, is a proposition which seems to receive the unqualified approval of counsel on both sides of this case. Indeed, the employment of Louis E. Doyle in the present instance to take charge of the litigation of the bank for the protection of its interests in the matter of the bonds and notes given by the Arkell Publishing Company would appear to have been the act exclusively of the president of the bank; and if the president of a bank, under the scope of his general authority, has the right to employ counsel to represent the bank in pending or prospective litigation, it is not apparent why the vice president, or any other-officer acting for the time in the place and stead of the president,, should not have the same authority in cases of emergency arising during his incumbency of the office and demanding prompt action by him. The person acting in the place of the president during the absence of the latter is to all reasonable intents and purposes the president for the time being, and there is no warrant in reason or in any adjudicated case for denying to him the-right to exercise the usual and ordinary functions of the president so far as they are required for the occasion. -What the president within the scope of his duty may do the vice president acting in his place may do. This is the very purpose for which vice presidents are provided to be chosen — to perform the functions of the president in the absence of the latter. In ordinary business organizations, as a general rule, the vice president has. no function or duty whatever to perform other than to take the-place of the president in his office.

Assuming, then, that when litigation arises in which it is expedient that a bank should be represented by counsel, the president, of the bank has the authority, as such president, to employ such counsel; and assuming also, as we are of opinion that we,*409must assume, that the vice president of a bank, acting as president in the absence of the latter, has the same right to employ counsel in an emergency arising during his incumbency of the presidential office, do we find anything in the present case that militates against the application of this rule ? Here we have a bank vdtli four vice presidents, instead of one, without any designation, either numerically or otherwise, of their order or precedence — an arrangement-, it would seem, of very unusual occurrence, and one which does not appear to have been brought to the knowledge of the plaintiffs before the 1st of September, 1898; and we have also a set of by-laws, of which the plaintiffs had no notice until long after this time, whereby, among other things, it was provided that certain specified duties, therein provided to be performed by the president, should, in his absence, be performed by the vice presidents in such order as the board of directors should indicate. These specified duties do not, either expressly or by implication, include the matter of the employment of counsel to conduct necessary litigation; but we may assume that the one of the vice presidents designated under these by-laws to perform the duties so specified would be the proper and the only person competent to transact the general business of the bank ordinarily performed by the president.

Now, it appears very clearly in evidence here that, when in the month of August, 1898, the emergency arose for the employment of counsel to represent the Washington Savings Bank in the prosecution or protection of its interests against the Arkell Publishing Company, the president of the bank was absent in New England in attendance upon a sick child, and was not performing the duties of president. It also appears that, in an advertisement of the business of the bank inserted in a Washington newspaper of the date of Angust 29, 1898, inserted by authority of the bank, the advertisement purports to be signed by J. D. Taylor as president, George O. Ferguson as vice president, C. H. Davidge as treasurer, and J. F. B. Goldney as cashier, thereby holding out Ferguson as the sole vice president, authorized as such to act in the absence of the president. It also appears that, during the period of the employment of his firm, *410the plaintiff Russell had several interviews at the bank with Ferguson, as well as other officers of the institution, and he found him in the private office of the bank apparently in authority there and transacting its business. It appears also that when, after the employment of the plaintiffs by Ferguson, the plaintiffs advised Ferguson to have the bank sell the bonds of the Arkell Company, which it held, at public auction, and bought in by the bank, the bank thereupon caused these bonds to be advertised for sale, and only withdrew them afterwards on the order of Taylor, the president. All these are circumstances tending to show that Ferguson was acting as the president of the bank in the absence of Taylor, admitted in evidence and properly admitted for that purpose. It cannot therefore well be said that there was no testimony to show the authority and the agency of Ferguson. On the contrary, in the absence of countervailing testimony, it might well have been inferred that Ferguson was the principal executive officer in charge of the affairs of the bank during the absence of the president. The weight of it, of course, was for the jury to determine; but we think that they ought to have been allowed to consider it, as we think that, on the other side, they should be allowed to consider and determine whether the employment of the plaintiffs by Ferguson was on behalf of the bank or for his own individual interest, which, under the circumstances, was not wholly in accord with that of the bank.

We think there was error in the direction of a verdict in this case for the defendant. For that error the judgment must be reversed, with costs, and the cause must be remanded to the Supreme Court of the District with directions to vacate such judgment and to award a new trial.

Reversed. And it is so ordered.