Leigh v. American Brake Beam Co.

Mr. Presiding Justice Waterman delivered the opinion of the court. To the action of the plaintiff appellant sets up as a defense two things: First, that appellee had under its charter, no authority to loan money, and that any loan made by it would have been ultra vires. Second, that he never borrowed any money from appellee and never received any money for its use; the transaction under which he received the drafts in question and the money called for by them, being, as he claimed, an advance of money made to him by H. D. Laughlin, to be used by him, appellant, for the joint benefit of him and Laughlin in certain transactions in which thev were engaged and with which appellee had nothing to do, nor any interest therein. Appellee claims that the ledger of appellee shows that at the time of the reception by him of the second draft, Laughlin had standing upon the ledger of appellee to his credit, more than the amount of such draft, and that as the ledger account shows that several months after the second draft was received, Laughlin had a credit balance upon the ledger of appellee to a large amount, Laughlin had at the time he made the second draft a right to take the money of appellee and appropriate it to his own use, and that appellee has lost nothing by the conduct of Laughlin in issuing these drafts. Appellant did not offer to show that the excerpt from appellee’s ledger showed the real or true condition of accounts, debts and credits, between Laughlin and appellee. Nor did appellee offer to show that by any action of the stockholders or directors of the American Brake Beam Company, Laughlin was authorized to loan or advance this money for his, Laughlin’s, use or in his private business, or that such conduct by him had ever been ratified by appellee. Whether H. D. Laughlin, having standing a balance to his credit upon the books of appellee, might not have drawn his order upon appellee for such balance and given the same to appellant, who might thereby have become entitled to receive the money from appellee, is not a question presented in this case, because Laughlin did not do anything of the kind. What he did do was, as the general manager of appellee, to make these drafts upon a bank and give the same to appellant, such drafts being, according to the contention of appellant, for money to be used in no way or xvise for the benefit of appellee, or in the discharge of its obligations, but for the joint benefit of him, Laughlin, and appellant. Appellant was notified bv the drafts that the money of appellee was being taken by its president to be used, as appellant says he understood, for the joint benefit of him and Laughlin. In taking and using the money called for by these drafts appellant took upon himself the burden, as against appellee, of showing that Laughlin had been authorized by appellee to make use of these moneys for such purpose. Mo principle of the law of agency is better settled than that a person can not act as the agent of another in making a contract for himself. Chrystie v. Foster, 61 Fed. Rep. 551-552. That a director or officer of a corporation acting avowedly for himself or on behalf of another with whom he is interested in any transaction can not be treated as the agent of the corporation therein, is beyond question. Santiago Innerarity and others v. Merchants’ Nat. Bank, 139. Mass. 332-335. Appellant has called our attention to the case of Kissam v. Anderson, 145 U. S. 435. That case is essentially variant from the present. In that it appeared that the defendants, who bad received money from the cashier of the Albion Bank, as the court say, “returned this money to the Albion Bank. They deposited it with the Third Mational Bank, the correspondent of the Albion Bank and the bank from which they received the money on the checks of the Albion Bank. In fact, therefore, the money was planed where it was before it was taken in the possession and under the control of the Albion Bank. Mot only that, the Third Mational Bank in its due course of business by monthly reports, informed the Albion Bank that they had received this money and held it subject to its order, and it was subsequently used by the Albion bank in drafts drawn by it in favor of other parties.” In this action at law, neither the equities nor the legal rights existing between appellant and H. D. Laughlin can be adjusted. • If, as between Laughlin and appellant, the former should pay or account to appellee for the money received upon its drafts, appellant having paid the judgment in the present case, will have a right of action against Laughlin. Mo claim is made that Laughlin is not pecuniarily entirely responsible for the amount of the judgment that has been rendered against appellant. So soon as appellant received money upon either of these drafts, if, as appellant has failed to show, Laughlin was not authorized to make the use of them he did, a right of action accrued to appellee for the amount respectively received upon each of these drafts. If the transaction were to be regarded as a loan made by appellee to appellant, we do not think it one in which the defense of ultra vires could be successfully interposed. As appears, the transaction by which these moneys were obtained by appellant, was had entirely between Laughlin and appellant. That appellant could obtain by such means through the agency of Laughlin alone, a loan for the benefit in no way or wise of appellee, but to the knowledge of appellant for the joint use of him and Laughlin, and then he. appellant, be heard to say that such loans made through the agency entirely of the president of appellee and for his and appellants’ benefit was on the part of appellee an ultra vires act, and that it could not recover its money thus unlawfully taken, we are not prepared to hold. The material facts entitling appellee to the judgment it obtained were not disputed by appellant, nor did he offer to show anything in avoidance thereof. The judgment of the Circuit Court is affirmed.