23 Colo. App. 143 | Colo. Ct. App. | 1912
delivered the opinion of the court.
Appellee brought its suit ag’ainst the appellant, a Colorado corporation, and Frank J. Macarthy, upon a promissory note for the sum of $3,850, executed by the said Macarthy and payable to the order of appellant. The note bore the endorsement in blank of the appellant’s corporate name, by the said Macarthy as president. It was alleged in the complaint that the note so endorsed was, in due course of business, delivered by appellant to one E. A. Colburn, and that thereafter appellee became the owner “by delivery of said note to it by said Colburn.” Macarthy made no defense. Appellant denied delivery of the note to it, as well as its endorsement and delivery to Colburn in due course of business, or otherwise, put in issue the bona fides of the bank as the holder of said note, and alleged that appellant was a corporation organized under the laws of Colorado, with limited powers, without authority to execute or endorse promissory notes for accommodation; that said Macarthy, at the time of the execution, endorsement, and delivery of said note, was president of the appellant company, but with limited power to act for it; that he had no authority to endorse or deliver the note in the name of or for the company, and that the corporation at no time received or was the owner of the note; that the endorsement was without consideration moving to appellant; that it had no knowledge of the existence of the note, or the endorsement, until the day before its maturity when, upon receipt of written notice thereof from Colburn, it promptly repudiated the transaction.. It further alleged that the note was executed, endorsed and delivered by Macarthy to Colburn in the purchase of an automobile from Colburn, for the private use of Macarthy, and upon his sole and individual liability; that without authority or knowledge of the company he so made, endorsed, and
The cause was tried to a jury. At the close of the testimony the court directed a verdict for the plaintiff, to which action of the court, as well as to the verdict and judgment, appellant duly excepted.
The chief error assigned and relied upon by appellant is that of the court in directing a verdict in favor of the plaintiff, and the conclusion reached by the court, upon that objection, is decisive of the case here, and renders any extended discussion of other assignments unnecessary; but some of them will be first disposed of. In view of Colburn’s testimony that he had not sold the note to the bank, but only delivered it for collection, the case will be considered as if commenced and prosecuted by Colburn.
1. Defendant objected to the calling and examination of Macarthy as if under cross-examination, and assigns as error the overruling of such objection in view of Macarthy’s default in making any defense. Macarthy was “a party to the record,” and we think came within the provisions of the statute permitting such examination by the adverse party. The court did not err in permitting him to be so examined.
2. Error was assigned to the action of the court in admitting statements made by Macarthy to Colburn at and prior to the time of the purchase, as to his agency and extent of authority. It is well settled that neither the fact of agency nor the extent of authority can be proved by the declarations of the alleged agent; and it is equally as well established that when an agent makes a contract, or does any act, representing his principal, his declarations made at the time, explanatory of the act,
3. Had Macarthy,. as president and general manager, authority to purchase the machine in question and obligate the company for the purchase price, and did the court err in directing a verdict in favor of the plaintiff? The determination of these questions requires an investigation of the evidence.
Certain pertinent facts are undisputed, namely, that appellant was a corporation organized for the purpose of, and engaged in, buying and selling irrigated farm lands; that it- had offices in Des Moines, Iowa, and in Denver, Colorado; that Macarthy was its president and general manager, and, at the time of the execution and delivery of the note was, and for a long time prior thereto had been, practically in exclusive control and management of its business • in Colorado; that its chief business had been buying and selling lands located near G-reeley, Colorado, and that prospective purchasers, arriving from the east, were received at Denver and conveyed to and from the lands by automobiles, and that advertising matter sent out from Des Moines headquarters so advised the public; that at first autos were hired, but later Macarthy bought and used for the purpose a number (six or more), some of which were owned or claimed by him, but whether any belonged to the company is in dispute. The expense of maintaining and
Colburn testified that in June, 1906, Macarthy approached him with regard to the purchase of a Locomobile “for the use of The Western Investment and Land Company,” stating that he was president of said company and had full authority to carry its business on, and wanted an automobile for the purpose of taking passengers to and from the land, as they came from the east; that he wanted to buy the machine on credit, and offered to give in payment one note due in six months, and one due in a year. Colburn made some inquiry about the standing of the company, and thereafter offered to sell the car on time if both the land company and Macarthy were bound. When Macarthy offered the notes they were in the form shown by the note sued upon in this ease, namely, executed by Macarthy, payable to the land company and endorsed in blank in the company’s name by Macarthy, its president. Colburn objected to the notes in that form, but accepted them upon Macarthy’s insisting that such was customary in the execution of notes by his company, and that he wanted them that way.
There is no question of the power or authority of a company or corporation such as this to make purchase of automobiles that are necessary or useful in the operation of its business, and to give its promissory notes in payment therefor. — Daniels on Negotiable Instruments, section 382. Power of such corporation to execute notes or endorsements for accommodation is denied by the preponderance of authority.
The by-law of the company to which reference is elsewhere made, effectually disposes of any question of express authority conferred by the company on its president and general manager to obligate the company by the contract of purchase under consideration, for the
In the present case the evidence shows that the company did not expressly clothe its manager with power to make the contract sued upon. There is evidence strongly, tending to show that it clothed him with power to do acts which included those other acts, and more strongly to prove that, through negligence or otherwise, it allowed him to.possess, in the face of the public, the appearance of such power, and that his acts pursuant to such apparent power came to the knowledge of Colburn. There is also evidence that both the directors and the stockholders, after the execution of the note, ratified all the acts of the company’s president and general manager. But the evidence as strongly tends to show that the company had no. knowledge of the execution of the note, or of the company’s endorsement, or the purchase of the car as' the company’s property, at the time of such ratification. From all of the evidence there is grave doubt of the authority assumed by the agent as well as of ratification by the company, with such knowledge as would bind it; and good reason to doubt the acceptance of the note by Colburn considering the company as anything but accommodation endorser for Macarthy.
Certain other matters were directly in issue the determination of which depends upon the evidence intro
The evidence is not so clear and satisfactory that the court can say that there was no dispute as to material facts, or that different men might not honestly draw different conclusions or inferences from such facts. It is our conclusion that the questions in dispute should have been submitted to the jury under appropriate instructions, and that the trial court erred in directing a verdict in favor of the plaintiff.
Other assignments of error have not been overlooked, but it has not been considered necessary to dis-' cnss them, as, even if the objections should have been sustained, it will not be presumed that the errors will be repeated upon a new trial.
For the error of the court in withdrawing the cause from the jury and directing a verdict, the judgment will be reversed and the cause remanded for a new trial.
Morgan, J., not participating.