217 N.W. 391 | S.D. | 1927
This case is here on rehearing. The opinion of the court on the former hearing is reported in 210 N. W. 988. In that opinion we used the following language:
“One of' the notes evidencing indebtedness by a stockholder to the bank is executed by a corporation, and it is contended by appellant that it is not shown that the president of the corporation, who executed the note, had any authority to bind the corporation. This question might be serious if it were material. But it is not material, because other notes, the validity of which is not questioned, aggregate more than 50 per cent of the paid-up capital of the bank. This note may be entirely disregarded, and still the indebtedness of the stockholders is sufficient to constitute the offense charged.”
In making the foregoing statement, we overlooked the fact that on the trial of the case the state had elected to rely on the note in question as constituting a portion of the indebtedness of the stockholders to the bank. This being the case, it is material whether such note really evidenced a liability on the part of the purported maker of the note to the bank.
The circumstances under which this note was executed and delivered to the Elkton bank are as follows: Among the assets of the bank were certain notes that were either slow or uncollectible. The Security Investment & Mortgage Company was a domestic corporation doing 'business at Brookings. This company was a stockholder in the Elkton bank and interested in bolstering up the assets of the bank. With this end in view, the president of the company executed and delivered to the bank the $4,000 note in question. When this note was offered in evidence, it was objected to by defendant on the ground, among others,’ that no proper foundation had been laid. It was not shown that the said, corporation had authority to become liable to the Elkton bank under the existing circumstances. Neither was it shown that the president of the corporation had been authorized by.the board of' directors, by resolution, -by-law, or otherwise, to execute the note. Under these circumstances the execution and delivery .of the note did not constitute an indebtedness against the corporation. • The corporate powers of a corporation can be exercised only by the'board of directors. Section 8784, R. C. 1919; Des Moines M. & S. Co. v. Tilford M. Co. 9 S. D. 542, 70 N. W. 839; Wells & Co. v. Sharp,
The judgment and order appealed from are reversed.