McDonald v. Chisholm

Mr. Justice Craig delivered the opinion of the Court: It is said that the judgment should be vacated, for the reason that, under the agreements executed by the parties when the $1200 note was given, no part of the $1200 became due until the boiler was completed. Conceding that the notes upon which judgment was confessed were not due at the time the judgment was entered, that alone is not a sufficient ground to set aside the judgment. The warrants of attorney attached to the notes authorized the entry of judgment upon them at any time after the date of the notes, and in Adams v. Arnold, 86 Ill. 185, it was held that a judgment confessed under a warrant of attorney of that character was valid, although the notes at the time were not due. Whether the fact that the notes were not due appeared from the face of the notes or from a collateral agreement executed at the same time that the notes were given, can make no difference. The principle that governs in the one ease must control in the other. It is also claimed that the two notes upon which judgment was rendered were not properly executed, and that they were not obligatory obligations against the Circulating Boiler Company. We will consider the objections to the $1200 note first. It appears from the evidence that the $1200 note was properly executed by A. J. McDonald, and the power to confess judgment, attached to the note, on the same sheet of paper, was duly executed by McDonald and “The Circulating Boiler Co., by A. J. McDonald, Prest.,” with the corporate seal attached, but by an oversight the name of the Circulating' Boiler Company was not signed to the note on the date it was drawn -up and executed by McDonald. On the 11th day of January, 1887, however, when the $600 note was executed, the secretary of the company added to the $1200 note the signature of the company, by the direction of McDonald, acting as president. If McDonald authorized Graham, secretary of the company, to put the name of the Circulating Boiler Company to the note, with the corporate seal attached, and under the authority conferred the secretary did so, we think this might be regarded as sufficient to cure the supposed-defective execution of the instrument. McDonald denies that he authorized Graham to sign the name of the company to the note, but Graham and Chisholm both testify that he did, and we think the evidence clearly preponderates in favor of that view. Moreover, the power of attorney attached to the note, which was properly executed by the corporation, in plain terms imposes upon it an obligation to pay the $1200 named therein. It is also claimed that McDonald was not authorized by the boiler company to execute a power of attorney to confess judgment on the $1200 note. Under the contract dated December 16, 1886, executed by the boiler company, under which Chisholm entered into the arrangement to advance $1200, it was expressly agreed that 'the $1200 note should be given with a power of attorney to confess judgment. It is nowhere claimed that this contract was not executed by the authority of the boiler company, nor is its validity disputed. If, therefore, McDonald, as president of the company, had the authority to execute this contract for and in behalf of the boiler company, as the power of attorney to confess judgment on the note was provided for and authorized by the contract, the authority to execute the power of attorney to confess judgment on the note is beyond dispute. We now come to the $600 note, and warrant of attorney to confess judgment thereon. There is a conflict in the evidence in regard to what was said and done when the $600 note was executed. Graham, who was, at the time, secretary of the company,—and, so far as appears, entirely disinterested,— testified, in substance, that he and Chisholm, on January 11, 1887, called at the house of McDonald, who, at the time, was “sick in bed; ” that Chisholm told McDonald that all the money he had advanced had been already expended, and that to the best of his judgment it would require about $600 more to finish the boiler. McDonald said he was too sick to sign the note; Chisholm said I would do just as well, and McDonald said to sign his name, and stamp the name of the Circulating Boiler Company with the stamp I had with me. He said the note was to be the same as the former one,—the $1200 note. ” The testimony of this witness was fully corroborated by Chisholm, and as it is only contradicted by McDonald, an interested witness, the execution of the note as declared by Graham may be regarded as established. It thus appears the name of the company was signed to the note, and power to confess judgment, by the secretary of the company, under and by the direction of the president and manager of the company, with the seal of the corporation attached. Where a promissory note and warrant of attorney are executed in the name and under the seal of the corporation, it will be presumed that such instruments were executed by the authority of the corporation. (Phillips v. Coffee, 17 Ill. 154; Smith v. Smith, 62 id. 493; Sawyer v. Cox, 63 id. 130; Life Ins. Co. v. White, 106 id. 67.) In Angell & Ames on Corporations, (sec. 224,11th ed.) the author says: “When the common seal of a corporation appears to be affixed to an instrument, and the signatures of the proper officers are proved, courts are k> presume that the officers did not exceed their authority, and the seal itself is prima facie evidence that it was affixed by proper authority.” It is true that no resolution or vote of the board of directors authorizing the execution of the note and warrant of attorney was introduced in evidence, and it may be, as contended, that there was no such resolution or vote in existence. But McDonald was president, and general manager of the corporation. He had executed, in behalf of the corporation, a contract, which, it is conceded, was authorized, under which Chisholm had made the advances to pay for the construction of a boiler; he had executed a $1200 note, with warrant of attorney attached, to cover such advances, which had proved insufficient; he had also executed another note, to the Park National Bank of Chicago, with a warrant of attorney to confess judgment attached, and his authority to do so was not, so far as appears, questioned, but ratified, by the corporation. From this course of dealing, and from the further fact that the note and warrant of attorney were executed to carry out the original design of the contract executed by the boiler company, under which Chisholm made advances to pay for the construction of the boiler, it is but fair to- presume that the execution of the $600 note and warrant of attorney by him were within the scope of the apparent powers entrusted to him by the corporation. Under such circumstances, appellee, who was a stranger to the corporation, could not be required to inquire as to the extent of power conferred upon him by the corporation. The rule on this subject is well stated by Morawetz on Corporations, (vol. 2, see. 697,) as follows: “The general rule is established, that if an act performed by an agent would, under ordinary circumstances, be within the authority delegated to the agent, a person dealing with him, in good faith, on the faith of his apparent powers, and without notice of facts showing that the act was unauthorized, may hold the principal liable, whether the act was authorized or not.” Chisholm knew that McDonald was authorized to bind the corporation for money advanced to pay for the construction' of a boiler, because he had done so to the extent of $1200, with the acquiescence of the corporation. His apparent power to act was thus established, and Chisholm, acting in good faith, had the right to deal with him as an authorized representative .of the corporation. We think the notes and warrants of .attorney were binding on the corporation. It appears -that at the time the judgment was rendered, Chisholm had paid out, under the contracts between him and McDonald, only the sum of $1034, and it is claimed that the judgment in excess of that amount should, in any event, be set aside. This position is fully met by the evidence, which shows, that in addition to the amount actually paid, Chisholm had incurred indebtedness on account of the construction of the boiler, under the contracts, in a sum exceeding the amount of the judgment. Under such circumstances, we think Chisholm was entitled to judgment for the full amount of the notes. The judgment of the Appellate Court will be affirmed. Judgment affirmed.