Blue Goose Mining Co. v. Northern Light Mining Co.

HUNT, Circuit Judge (after stating the facts as above). The vital point in the case is as to the jurisdiction of the state court of California to render the judgment which the Blue Goose Company complains of. The judgment roll in the state court recited that: W. S. Andrews, Esq., and A. H. Brandt, Esq., appeared as counsel for the plaintiff, and Messrs. Fink and White appeared on behalf of the defendant, and continued: “It appearing to the court that the defendant had been regularly served with a copy of the summons and complaint in said cause in the city and county of S'an Francisco, state of California, and that the defendant had duly appeared, by filing a demurrer and answer in said action, and had not objected to the jurisdiction of said court, the court proceeded to hear the said cause. * * * That the defendant is, and at all time involved herein was, a corporation organized and existing by virtue of the laws of the district of Alaska.” Unquestionably the record of the judgment of the superior court of California that defendant appeared by counsel was prima facie evidence that the appearance of counsel was authorized. 23 Cyc. 1581; Kline v. Insurance Co., 80 Wash. 609, 142 P. 7. Defendant, however, complains because, when plaintiff offered the judgment, the court declined to receive evidence offered by it to prove the want of jurisdiction in the state court preliminary to admitting the judgment in evidence. We do not perceive that the court was in error in so ruling. The plaintiff, having to make a prima facie case, met the demand by the introduction of the judgment roll. Until the defendant advanced to its case the court was not obliged to permit the defendant to refute the prima facie case by the introduction of matter which was properly affirmative defense. 38 Cyc. 1352. Nor was there error in the action of the court in permitting the certified copies of the record on appeal from the judgment, which appeal appears to have been taken from the superior to a higher court in the state. The rule of practice is that, when an appeal is taken, the [632] action is still pending, and the judgment does not become final until the appellate court has passed its order. Affirmance of the judgment was had on August 7, 1917. Code Civ.Proc.Cal. § 1049; Sewell v. Price, 164 Cal. 270, 128 P. 407. There can be no successful dispute over the argument that the recitals in the record of a judgment given in one state against a foreign corporation may be assailed by proof that the defendant was not served and did not appear in the action, or that where an appearance has been entered by an attorney that the appearance was unauthorized, and that such proof is proper even where it contradicts the record. Cooper v. Newell, 173 U.S. 555, 19 S.Ct. 506, 43 L.Ed. 808. But these contentions are for the larger part inapposite in this case, for here it is conceded, and correctly, too, that the record showing that counsel did appear in the action in the state court, filed demurrer, then an answer, acted for the corporation at the trial, and until after judgment was rendered made a prima facie case of authority of counsel to appear. Here, inasmuch as the evidence shows without dispute that the president employed such counsel to represent the corporation in the action in California, it is plain that if, in employing them, he did not exceed his authority as president, then the case resolves itself into one where the corporation voluntarily appeared; and, if that is found to be correct, it would be immaterial whether or not the corporation was engaged in business in California, or had property therein, or had complied with the state statute requiring the corporation to designate an agent in the state upon whom service might be had. We say this because we think it logically follows the indisputable proposition that a corporation of one state may by its legally constituted board of directors adopt a resolution directing the president of the company to employ attorneys to represent it in a suit against it in another state, and that such action may be had without regard to the question of ownership of property or doing of business where the suit is pending. Accepting this general rule, the inquiry here is at once narrowed to determining whether, by virtue of his official relationship to the corporation and under his authority con [633] ferred by the by-laws, the president could employ counsel to appear in behalf of the company. Our conclusion is that Lindeberg, as the “general executive of the corporation” as president, had power to employ counsel to defend the corporation unless forbidden to do so. Beebe v. Beebe Co., 64 N.J.Law 497, 46 A. 169. If the court had permitted the defendants to prove by the minutes of the directors’ meeting that there was no direction on the part of the directors to employ counsel or to appear, it would not affect the question, because the minutes of the corporation failed to show that the directors ever took any action whatsoever in the matter of the suit in the California courts. Had defendants offered to prove the expression of a positive or express direction not to employ counsel, or that there was a general direction to the president to take no steps to defend any action brought against the company, and the court had rejected such offer, clearly it would have been error. But, the rule being that the president of a corporation, with general executive authority, has authority to employ counsel to appear in defense of an action against his corporation, and to manage the defense, omission to confer such authority is immaterial. Winfield Trust Co. v. Robinson, 89 Kan. 842, 132 P. 979, Ann.Cas.1915A, 451. It is said, however, that the by-laws which were offered by defendant negative such power in the present case as the president assumed to exercise. The by-laws seem to us to affirm rather than to deny the general implied power. They provide that: “The president shall be the general executive officer of the corporation, * * * shall sign all stock certificates and written contracts of the corporation, and perform generally all the duties usually appertaining to the office of president of a corporation. He shall have general charge (subject to the control of the board of directors) of the business affairs of the corporation, may sign and indorse bonds, bills, checks, and promissory notes on behalf of the corporation, and may borrow money in its name; but he shall have no power without the previous consent of the board of directors to incur any debt on behalf of the corporation in excess of the sum of five hundred dollars, or without such consent to bind the corporation by any obligation involving a liability in excess [634] of said sum. He shall at all times keep the directors advised as to the affairs of the corporation.” Of course, the “general charge” of the business vested in the president was subject to the control of the board of directors but unless the directors otherwise provided or took some action, in the matter, there was no subtraction from the power of the president, with managing authority, to employ counsel to defend the suit against the corporation. As more or less pertinent to the questions involved we cite: Knowles v. Gaslight & Coke Co., 19 Wall. (86 U.S.) 58, 22 L.Ed. 70; Moulin v. Insurance Co., 24 N.J.Law, 222; Moulin v. Insurance Co., 25 N.J.Law, 57; National Condensed Milk Co. v. Brandenburgh, 40 N.J.Law, 111; Colorado Iron Works v. Sierra Grande Mining Co., 15 Colo. 499, 25 P. 325, 22 Am.St.Rep. 433. In his testimony the president said that he paid $1,000 to the. attorneys employed by him, payment being made out of the funds of the Pioneer Mining Company, and that afterwards this sum was charged to the account of the Blue Goose Mining Company. It is urged that in agreeing ■ to pay more than $500 without the previous consent of the board the president had exceeded his power under the by-law heretofore quoted. But, if we are right in the view that the president had authority to employ counsel in his “general charge of the business” of the corporation, the fact that he had agreed to pay counsel more than $500 would not make the employment invalid. As these views lead to an affirmance of the judgment, it is unnecessary to consider whether there was a ratification of the act of the president. Affirmed.