44 Minn. 65 | Minn. | 1890
This action is upon a promissory note for $5,000, dated September 1, 1887, payable in 90 days to the order of Piood & Maxwell, purporting to be executed by the defendant the Marine Lumber Company, a corporation, by J. C. Maxwell, and indorsed by Rood & Maxwell to the plaintiff. The defence is that Maxwell had no authority from the lumber company to execute the note in its name. On the trial.the evidence established, beyond any question, these facts: The. note was executed and indorsed in renewal of a precisely similar note, except that it. was dated April. 29, 1887, and was payable in four months, which note was also indorsed by Rood & Maxwell to the plaintiff, and was held by it at the time of the renewal. J. G. Maxwell was president of the lumber company, and also a member of the firm of Rood & Maxwell. That firm were, and for two or three years before the note of April 29th bad been, customers of the plaintiff to a large amount; so that it is to be presumed the plaintiff then knew that J. C. Maxwell was
The case comes directly within the rule that an agent cannot, by virtue of his general authority as agent, bind his principal by a contract made by him, on behalf of such principal, with himself. The case illustrates the wisdom of that rule. The reason for the rule is that to permit such a thing would allow an agent to place his private interest in antagonism to his duty to the principal, in which case — for men cannot always resist temptation — duty might fall. The law will not permit agents, or those acting in a trust relation, to subject themselves to such temptation, and, to prevent it, avoids such contracts, unless the principal or cestui que trust choose to abide by them. If we were to suppose that issuing the note of this corporation merely for the purpose of its being discounted by and for the sole benefit of the payee came'within the general scope of its corporate business, and so within the general authority of its managing
On the matter'of notice to plaintiff of this defect, there can be no question. The note, on its face, conveyed notice that one of the payees had assumed, as agent, to bind the corporation by the execution of its note to himself, or, what was the same thing, to his firm, which he could not do by virtue of any general authority as its agent. That made it the duty of the plaintiff, before taking the note, to ascertain that the agent had express authority to execute it.
Order affirmed.