Clark v. Titcomb

By the Court, Geo. G. Barnard, J. The plaintiff holds this note as trustee of an express trust. The action was therefore properly brought in his name. (People v. Norton, 5 Seld. 178. Lewis v. Graham, 4 Abb. 108.) The transfer of the note in question with others was authorized by the board of directors. The president merely acted as the instrument to make the indorsement. It being the usual custom of the company to transfer its notes by the mere indorsement of the president, such indorsement is all that is requisite to effect a transfer of the title, where the transfer itself is authorized by a resolution of the directors. It may be that if any statute, or the charter or by-laws, required notes to be indorsed in a particular way to transfer them, a transfer to be valid would have to follow such requirements. It is not necessary to consider this question, as there does not appear to be any thing in the charter or by-laws of this company, or in any statute, requiring the notes of this company to be transferred in a particular way. An objection was made that the corporation had no power to transfer these notes. It is well settled law in this state, that any corporation may borrow money for the ordinary business, and to accomplish the objects, of the corporation, [125] and may give its obligations for the money thus borrowed. In the absence of proof to the contrary, this must be assumed to be the law of Massachusetts. [New Yobk General Term, May 2, 1864. A corporation having the power to issue its own obligations for money so borrowed has also the right, instead of giving its own obligation, to turn out its assets to secure the payment of money so borrowed. The two powers stand on the same principles. In the case at bar the note in suit was transferred to secure money borrowed for the immediate use of the company. The transaction, therefore, came within the powers of the corporation. Judgment affirmed, with costs. Leonard, Glerlee and Geo. G. Barnard, Justices.]