Parsons v. Guarantee Investment Co.

Bond, J. Plaintiff filed as his cause of action in a justice’s court the following note: “Chicago, Oct. 10, 1893. “$200.00. “Ninety days after date we promise to pay to the order of L. H. Parsons two hundred dollars, at 211 Adams Express Building, Chicago, Ills., value received, 7 per cent from date. • “The Guarantee Investment Co., “By Geo. M. MacDonald, “Prest. & Gen’l Mgr.” The execution of the note was denied under oath. There was a trial before the justice, judgment for plaintiff and an appeal to the circuit court, where a trial de novo was had before the court, a jury being waived, and a judgment rendered for plaintiff. No declarations of law were asked or given. Defendant appeals and asks for a reversal of the judgment, because the signature of the name of the defendant corporation to the note in suit by its president was unauthorized by its by-laws. For the purpose of disposing of this point, we will discuss the case as if the by-laws (which were excluded) [35] had been received in evidence. Conceding that a note executed in the name of a corporation by its president, contrary to the provisions of its by-laws-, is prima facie unenforcible, still it is not conclusively so, and if it further appears that the corporation with knowledge of the act has ratified it, or has accepted the consideration of the note, it will be as much bound as if the note had been originally ' executed in exact conformity with the provisions of its by-laws. Washington Savings Bank v. Butchers and Drovers’ Bank, 107 Mo. loc. cit. 145; First National Bank of Spingfield v. Fricke, 75 Mo. 178; Sparks v. The Dispatch Transfer Company, 104 Mo. 531; Morawetz on Private Corporations, sec. 629; Welsh v. Brewing Company, 47 Mo. App. 613. In the present case the undisputed evidence shows that plaintiff held a bond issued by defendant for $1,000, which was about to mature; that one MacDonald, the assistant general manager of defendant, represented to plaintiff that his corporation needed the money which it held for the payment of the bond belonging to plaintiff and the bonds of other parties living near him, in order to make up a fund of $100,000, required by law to be deposited with the state treasurer, to authorize the conduct of defendant’s business in this state. He, therefore, offered to give in exchange for said bond two certificates of the corporation, duly executed by it, for $500 each, evidencing an agreement of the corporation to issue its preferred stock Tor the amount of such certificates in ninety days, or to pay the $1,000 with seven per cent interest. Plaintiff and other holders of the maturing bonds of defendant accepted these terms. Plaintiff assigned and delivered over his bond to a party suggested by defendant’s assistant general manager, and received two certificates for $500 each. This assignment of plaintiff’s bond was made on July 6, 1892. In September, 1893, [36] plaintiff drew upon the defendant corporation for the amount of one of the certificates given him in exchange-for said bond. This draft was paid by the corporation. In October, 1893, plaintiff' having declined a proposition to receive the note of the corporation in exchange for his remaining certificate, surrendered it to the defendant for the check of defendant for $300, and its note for $200, both signed in defendant’s name by said MacDonald, who had then become the .president of the defendant corporation. This check was paid by the defendant. The evidence tended to show that the party to whom the plaintiff originally delivered his bond for $1,000 subsequently indorsed the same to-one Adams, the cashier of the defendant corporation, who received the amount due thereon. The fair effect of this evidence is to show that the-defendant corporation held out the said MacDonald as fully authorized to bargain on its behalf for obtaining its bond for $1,000 held by plaintiff. To effect this trade defendant provided said MacDonald with its formal certificates, regularly signed and executed in blank under its corporate seal, of the tenor above ■stated. By using these, MacDonald secured the delivery (and, as he stated, for the benefit of defendant) of a valid obligation against defendant for $1,000, held by plaintiff. He practiced the same methods in securing the maturing bonds of other holders. With full knowledge that its certificates had been thus used, the-defendant never questioned the propriety of the transaction nor the validity of such certificates. On the contrary it paid the first one held by plaintiff in cash, and, when the proffer of its note for the last was refused, it settled by giving the plaintiff its check for $300 and its note for the remaining $200, each instrument made in its name by MacDonald as its president. Clearly the payments on the certificates were a ratifica [37] tion by defendant of the contract whereby plaintiff held them, and when it is remembered that defendant .got the last of these certificates, and still holds it, by a partial payment and the giving of the note in suit, it will be seen that a clear case of estoppel to deny the •authority of the president to sign the note is created against defendant, who is enjoying the consideration •of the note by retaining possession of the certificate which plaintiff parted with for said note. The trial .judge was fully warranted in drawing the foregoing conclusions from the evidence. Appellant claims that the statement of MacDonald to plaintiff, that he wanted the original bond assigned "to a third party, should have put the plaintiff upon inquiry as to MacDonald’s authority to act for the corporation. The effect, if any, of this statement in imparting notice to plaintiff is not reviewable by us, «ince no declarations of law were asked or given in the •case. The judgment, therefore, in this case is for the right party, and must be affirmed. All the judges •concur.