White v. K. B. Johnson & Sons, Inc.

CnARjtsoN, J. The note in controversy was signed, “K. B. Johnson and Sons, Incorporated, by K. B. Johnson, president.” The note was for $2,000. Payable at 60 days. Nothing has been paid on the note except one payment of interest to 2 January, 1932. The plaintiff testified that “he lent $2,000 to K. B. Johnson and Sons, Incorporated, and received as evidence of the debt a note for $2,000.” C. S., 3004: “Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration, and every person whose signature appears thereon to have become a party thereto for value.” O. S., 3008: “Absence or failure of consideration is matter of defense as against any person not a holder in due course, and partial failure of consideration is a defense pro tanto, whether the failure is an ascertained and liquidated amount or otherwise.” C. S., 3041: “The maker of a negotiable instrument by making it engages that he will pay it according to its tenor, and admits the existence of the payee and his then capacity to indorse.” The defendant did not set up the plea of payment, fraud or mutual mistake. The defendant attempted to show (1) that the money received from plaintiff was to pay a note of the Hanover Land and Timber Company, endorsed by K. B. Johnson and others; (2) that K. B. Johnson, the president of defendant’s company had no authority to execute the note sued on. This evidence was excluded by the court below and defendant excepted and assigned errors. We think the court below was correct in excluding this evidence. In Beck v. Wilkins-Ricks Co., 186 N. C., 210 (214), we find: “C. S., 1145, says: 'Every corporation organized under this chapter shall have a president, secretary and treasurer, etc.’ *775 Under tbe facts in this case, we are of opinion that L. P. Wilkins, secretary and treasurer of defendant corporation, had a right to make the promise, and it was in the implied scope of his employment. The business of the corporation could not be successfully carried on if he was so limited that in transactions of this kind he had no authority. Strickland v. Kress, 183 N. C., 537; Powell v. Lumber Co., 168 N. C., 632.” Lumber Co. v. Elias, 199 N. C., 103. The interest was paid and the giving of the note was impliedly ratified. Morris v. Y. & B. Corp., 198 N. C., 705. In Caldwell v. Garrison, 179 N. C., 476 (478) : “This being true, the legal title to these notes would, in our opinion, pass by the endorsements of the president of the company, notwithstanding the resolution of the directors establishing limitations upon his powers. Such endorsement being within the scope of his apparent powers, and coming under the accepted and wholesome rule that a principal who has clothed his agent with apparent authority to do an act may not repudiate such authority, and the effect of it- by reason of private instructions or limitations uncommunicated or unknown to the other party.” “The president of a corporation is ex vi termini its general agent.” Trust Co. v. Transit Lines, 198 N. C., 675 (679). Another sound principle is applicable to the facts in this ease in Thompson v. Assurance Society, 199 N. C., 59 (69). “Where one of two persons must suffer loss by the fraud or misconduct of a third person, he who first reposes the confidence, or by his negligent conduct made it possible for the loss to occur, must bear the loss.” R. R. v. Kitchin, 91 N. C., at p. 44; Bank v. Liles, 197 N. C., at p. 418. In law, we find no error in the judgment, of the court below. No error.