Western Grocer Co. v. Lackman

The opinion of the court was delivered by Greene, J.: This was an action against D. B. Johnson and William Lackman .on a promissory note payable to the plaintiff and signed as follows: “The Kansas City & Olathe Electric Ry. Co., Wm. Lackman, President, D. B. Johnson, Secretary.” . A verdict was returned for defendants, upon which the court rendered judgment. The plaintiff prosecutes error. ’ Some questions are argued by both parties which may be eliminated at once. The answer was not a denial of the execution,of the note; there was no evidence of any mistake having been made in the execution of the note;' and neither question was submitted to the jury by the instructions. The actual defense, and the one which was tried and submitted to the jury, was, Did the defendants when executing the note intend to bind themselves or did they intend to bind the. corporation? It has been held in this state that where it is uncertain from the face of the note whether it was intended. [36] to be the note of the corporation or of the individuals signing, or both, if the litigation arises between the original parties evidence may be introduced to explain the ambiguity. (Kline v. Bank of Tescott, 50 Kan. 91, 31 Pac. 688, 18 L. R. A. 533, 34 Am. St. Rep. 107; Benham v. Smith, 53 Kan. 495, 36 Pac. 997.) Upon the question whether a note signed as above is the obligation of the corporation or of the individual signers the cases are so conflicting that it would be useless to attempt to reconcile them. Plaintiff assigns error in the refusal Of the court to instruct the jury that before the defendants could show that the note was signed by them as the obligation of the corporation only they must prove that it was such a corporation as was authorized to execute promissory notes and that the directors had authorized them to execute the note in question for it, and it cites Gardner v. Cooper, 9 Kan. App. 587, 58 Pac. 230, 60 Pac. 540, as authority. That action was on an indemnity bond to which the bank was not a party. It was signed “H. H. Gardner, Cashier.” In an action thereon Gardner attempted to prove that the bond was that of the bank of which he was cashier at the time. The court of appeals held that before Gardner could disprove his prima facie personal liability he must show that it was signed for and on behalf of the bank, that the bank had authority to sign such an instrument,’ and that it had authorized him to sign the bond for it. Banks generally have no authority to sign such instruments, and prima facie a cashier has no authority by reason of his position to sign such bonds for the bank of which he is cashier, but the rule is different with railroad corporations. Such corporations may bind themselves by bonds and notes, and they can only execute them by the president and secretary. The court instructed the jury generally that if they found from the evidence that it was not the intention of the defendants to execute their personal note to- the plaintiff but only to execute the note of the corporation [37] the plaintiff could not recover. Error is predicated on this instruction, for the reason that it limits the inquiry to the intentions of Lackman and Johnson, without reference to the intention or understanding of the plaintiff at the time the note was accepted. It appears from the evidence that when the note was executed the plaintiff had no representative present and no explanation was made when the note was delivered. It was accepted without any express understanding between the parties as to whether it was the note of Lackman and Johnson or the corporation or whether it was their joint note. So the inquiry was necessarily limited to the intention of Lackman and Johnson when signing the note. Since it is not claimed that there was any representation ■ by Laekman and Johnson which induced the plaintiff to accept the note, and since it drew its conclusion and understanding from the note alone, what it understood from reading the note could not deprive Laekman and Johnson of their defepse or broaden the inquiry to include the intention or understanding of the plaintiff. It is contended that there was error in permitting the defendants to testify to the conversation had between them and the attorney for the corporation when the note was signed as to the manner of signing it for the corporation. The ruling was not prejudicial. The judgment is affirmed.