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were

grounds, to be true."21 Such an assertion promissory notes

“without considera

tion, being merely given for accommodation, must have been caused, surely, by a failure

had no connection at all with the business to distinguish between the necessity for

of the Moyse Real Estate Company, which is knowledge of the falsity of representations

a corporation, and were without authority in actions at law and in suits in equity. either in law or in fact, and were ultra vires While this distinction is perhaps of little of the corporation, which was not authorized consequence in states which have blended to give the same, and had no power under its

charter to give the same." The third plea is the systems of law and equity under the

non est factum. The fourth plea is practically code of civil procedure, still in the federal

the same as the third, and both are sworn to. courts and in the courts of states where law Plaintiff filed a replication, properly verified and equity are administered separately it is denying the averments of the second, third, and of paramount importance. Even the lawyer fourth pleas, and files as an exhibit the charter

of the corporation. practicing in code states, therefore, should

[1] We do not doubt that the charter of have a clear conception of these funda

the corporation confers ample power upon mental principles, which may be summed up the corporation to execute promissory notes. as follows: Equity will refuse to decree spe- We will concede, for the purposes of this decific performance against a party who has

cision, that the charter does not give the power been misled by a misrepresentation relating

to the company to make accommodation paper,

and that the evidence shows the notes sued to and connected with the contract, and in

on were in fact accommodation and without con" many instances will allow him to rescind, sideration. The evidence also demonstrates while the common law, unless the represen- that the plaintiff purchased the notes in the tation is construed as a condition or war

due course of trade, and that it had no in

formation, or reason to suspect, that the notes ranty, will afford no remedy in the absence

were given for the accommodation of the of either positive or constructive fraud.

payee.

In this state of the record we believe HAROLD R. BRANINE.

that the plaintiff's right to recover is in no Hutchinson, Kan.

wise affected by the fact that the notes were

without consideration. The power to execute (21) Southern Development Co. v. Silva, 125 U. S. 247.

promissory notes being conceded, we are. unable to distinguish this case from a case where

in the maker of notes is a natural person. CORPORATIONS-AUTHORITY OF OFFI. [2] The plaintiff assumed the burden and CERS.

proved affirmatively that the notes were ex

ecuted by the then president of the company, MOYSE REAL ESTATE CO. v. FIRST NAT. and the question for us to decide is whether BANK OF COMMERCE.

the law will presume that the president had

been given authority to sign same, in the abSupreme Court of Mississippi. Feb. 21, 1916. sence of any evidence to the contrary. The

trial court instructed the jury peremptorily 70 So. 821.

to find for the plaintiff. The correctness of

this instruction is challenged by the defendant. In action accommodation note

Stated concretely, the defendant, appellant here against the corporation maker by a purchaser for value without notice, proof by the plaintiff' earnestly and ably contends that no presumpthat the president of the corporation executed

was prima facie evidence of his au- tion can be indulged that the president of a thority to bind the corporation in that manner.

corporation had any inherent power to bind COOK, P. J. This is an appeal from the

the corporation in contracts of this nature, and circuit court of Forrest County by the de- that the mere proof that the president signed fendant below. The declaration declares up

the name of the corporation to the notes in on two promissory notes, for $3,500 each,

this case signifies nothing, and the plaintiff payable to H. G. Lea, or bearer, and signed has failed to successfully carry the burden im. "Moyse Real Estate Company, by J. L. posed upon him by the law. Moyse, President." It is alleged that the Counsel on both sides have shown great inplaintiff paid value for the notes. Four pleas dustry and consummate ability in the presentawere filed by the defendant. The first plea tion of their sides of this vexed question. They is non debet. The second plea says that the have exhausted the subject. It is quite ap

an

on

an

the note

parent, after a careful and painstaking study ordinarily does not have the power to sign of the authorities, that the decisions are in such instruments, and the execution had been irreconcilable conflict. No decision of this put in issue by properly verified plea, as is the court upon the precise question has been called case here, then it would be necessary to go beto our attention, and we have not been able yond the mere fact of the execution of the into find anything in our books which arrays strument and prove the authority of the agent our court on the one side or the other. Thomp- to execute the same; but when the contract is son on Corporations, vol. 2, § 1457 (2d Ed.), properly executed for the corporation by its speaking of the conflict in the authorities, has president, and it is such a contract as the corthis to say:

poration might lawfully make, the proof of the "The effect of these divergent views, on the

execution by the president is all that is reone hand, is to relieve the complaining party

quired, in the absence of any evidence to the of making proof of the president's authority, contrary showing that the contract was not for the reason that, where he is in active con- made by the authority of the corporation." duct and management of the business, he must Nearly all of the big business and a large be presumed to have all the powers of any part of the small business is now conducted agent exercising like control and management, by corporations, and if it be the law that perand to have authority to do what is usually and sous dealing with the president of a corporaordinarily done by such agents or managers. tion about matters of business clearly within On the other hand, and under the other cases, the powers of the corporation to transact must the burden is cast upon the party seeking to deal at arm's length, and demand that the charge the corporation upon a contract made president exhibit his credentials before enterby the president of proving his authority in ing into contracts with him, it seems to us some of the recognized modes, reducing the that not only the corporation, but also those proposition to a question of fact rather than dealing with corporations, will be seriously of law."

hampered. It is not our purpose to hold that We think that the wiser and more prac

a president of a corporation has the inherent tical rule is expressed by the Supreme Court

power to bind the corporation, but we do hold

that the fact that the president of a corporaof Illinois in Lloyd & Co. v. Matthews, 223 Ill. 477, 79 N. E. 172, 7 L. R. A. (N. S.) 376, 114

tion has executed a contract for his corporation Am. St. Rep. 346, viz.:

is prima facie evidence that the president had

the authority to bind the corporation. "It is contended that, even though it be conceded that George E. Lloyd & Co., by E. C. If it be true that the president did not Williams, its president, signed the guaranty, possess the authority assumed by him in the still, as a matter of law, the corporation can- present case, the proof of his lack of authority not be held liable without proof of special au- was in the possession of the corporation, and thority from the corporation to its president to there would have been no difficulty in the way execute the contract of guaranty. A corpora- ! of its production. On the other hand, it might tion can act only through its agents, and the be very difficult and expensive for the plaintiff president of a corporation, as the agent and to have secured the evidence to show his aucorporate representative, has the power, in the thority. This corporation was domiciled in ordinary course of business and in furtherance New York City, and while there are means of the corporate interest, to execute contracts whereby the plaintiff might have secured afand to bind the company in so doing. He is, by

firmative proof, yet it is conceivable that the virtue of his office, recognized as the business ! unwilling corporation might see fit to throw head of the company, and any contract pertain. many obstacles in the way. Presidents of coring to the corporate affairs, within the general porations generally exercise the powers of a powers of such officer, executed by the president general agent, usually by the tacit consent of on behalf of his corporation, will, in the ab- the corporation, and the public rarely stops sence of proof to the contrary, be presumed to to inquire about his authority. National Bank have been done by authority of the corporation.

v. Vigo Bank, 141 Ind. 352, 40 N. E. 799, 50 Atwater v. American Exch. Nat. Bank, 152 Ill. Am. St. Rep. 330; Patterson v. Robinson, 116 605, 38 N. E. 1017; Bank of Minneapolis v. N. Y. 193, 22 N. E. 372. The acts done by the Griffin, 168 Ill. 314, 48 N. E. 154; Anderson president pertaining to the business of the v. South Chicago Brewing Co., 173 Ill. 313, 50 corporation, not clearly foreign to his powers, N. E. 655; Anderson Transfer Co. v. Fuller, will, in the absence of proof to the contrary, be 174 Ill. 221, 51 N. E. 251; Williams v. Harris, presumed to have been authorized by the cor198 Ill. 501, 64 N. E. 988. If the contract in poration. This, we think, is a salutary rule, question had been executed by some agent who and imposes no hardship upon either party

to the contract. The corporation selects its president, and the ordinary business man, generally speaking, assumes that the man made president is the head and front of the corporation. If it be true that the president of any particular corporation is a mere figurehead, with no powers or duties, except as a presiding officer of the board of directors, this fact can be readily established by the corporation.

Affirmed.

NOTE.Prima Facie Validity of Corporate Note Executed by Corporation's President.—It seems to be claimed that though the early rule was that a president of a corporation had no power virtute officii to bind his corporation by issuing a promissory note in its name, yet this rule has changed to conform to modern methods in corporate administration. But this change cannot be said to have taken place except as to trading corporations.

Thus in St. Vincent's College v. Hallett, 119 C. C. A. 647, 201 Fed. 471, it was ruled by Seventh Circuit Court of Appeals, that the president of a college presumptively has no authority to issue a promissory note in the name of a college, a non-trading corporation.

This case concerned an Illinois transaction and the court ruled that, assuming Illinois decision to hold that a corporation was presumptively bound by such a promissory note, yet said that all of the cases announcing it concerned trading corporations and in Illinois the question as regards a non-trading corporation had never been expressly decided. It was said that "no court has held, so far as we have been able to find, a charitable corporation bound on the contracts or notes of its president or other officers, in the absence of some showing either of authority, ratification or estoppel. All the authorities are the other way."

In People's Bank v. St. Anthony's Roman Catholic Church, 109 N. Y. 512, 17 N. E. 408. notes were signed by the president, secretary and treasurer of the corporation. It was said: “It is not common usage or understanding that the president, secretary and treasurer of a religious corporation possess power, by virtue of their offices, to borrow money or issue notes of the corporation. The same rule is applied to a nontrading business corporation. Craft v. So. Boston Street R. R. Co., 150 Mass. 207, 22 N. E. 920, 5 L. R. A. 641. There it was said that: "Whatever may be true of trading corporations, there is nothing in the nature of the business of a horse-rairoad corporation, or of the duties of a treasurer of such a corporation, which implies that the treasurer, by virtue of his office, has authority to borrow money for the company and give its notes therefor."

In Jewett v. West Somerville Corporation Bank, 173 Mass. 54, 52 N. E. 1085, 73 Am. St. Rep. 250. it was held that a treasurer of a co-operative savings bank cannot create a liability for it by signing notes. It was said: “There is a material difference between the implied powers of treasurers of manufacturing and trading corporations and those of treasurers of corporations organized for special purposes, which ordinarily do not have occasion to use com

mercial paper in the transaction of their business."

It is said that virtute officii a president even of a trading corporation has very little authority but if he has been held out as its general agent, the matter is different. St. Clair v. Rutledge, 115 Wis. 583, 92 N. W. 234, 95 Am. St. Rep. 964; Trephagen v. South Omaha, 69 Neb. 577, III Am. St. Rep. 570; Wait v. Nashua Armory Assn., 66 N. H. 581, 23 Atl. 77, 49 Am. St. Rep. 630.

In Iowa Nat. Bank v. Sherman, 17 So. Dak. 396, 97 N. W. 12, 106 Am. St. Rep. 778, it was held that the president of a manufacturing corporation is presumed to have authority to transfer bv indorsement a note payable to the corporation. It was urged in this case that there was no authority virtute officii to do this, but the court said that "much of its (corporation's) business was transacted by way of notes taken by it for machinery delivered, and that it was in the habit of transferring such notes to plaintiff bank by the indorsement of the president." Here it seems was what amounted to a holding out.

In Gould v. W. J. Gould & Co., 134 Mich. 515. 96 N. W. 576, 104 Am. St. Rep. 624, the ruling was against liability of the corporation on a note signed by the president in its name. The record does not disclose what the corporation was organized to do. It was said: “The ruling of the circuit judge apparently rests upon the idea that the president and secretary are presumed to have authority to execute commercial paper, and proof that commercial paper was signed by them shifts the burden of proof upon the defendant. We think this holding cannot be sustained upon authority.” If there had been proof the president was engaged in managing the business, the matter might be different, and that this power was requisite in the conduct of the business.

Remarks by Seventh Circuit Court of Appeals in St. Vincent's College y. Hallet, supra, seem not inapt in estimating the value of all cases where even trading corporations have been held liable upon promissory notes signed by the president in the name of the corporation. It was said that in all of the Illinois cases there was some accompanying fact, such as ratification or benefit received or a particular holding out by the cornorations and the question as one of pure abstract law was not passed upon. Thus seems the rule also in Michigan and very probablv an analysis of the cases from other states will show there was no decision upon a pure question of principle.

Thus it was held in Ninth Circuit Court of Appeals, that if the corporate seal is attached to an instrument signed by officers, courts will assume it was affixed by proper authority and the execution was duly authorized. Pacific State Bank v. Coats. 123 C. C. A. 634, 205 Fed. 618. But even in this case it is recited that the instrument. a mortgage, was executed hy the president and secretary, not only the sole trustees of the corporation, but its sole stockholders receiving money for the benefit of the cornoration.

In Blakely Artesian Ice Co. v. Clarke. Ga.. 70 S. E. 526, it was said that the corporate seal attached to a paner signed by the president created a rebuttable presumption of authority.

C.

ITEMS OF PROFESSIONAL

INTEREST.

HUMOR OF THE LAW.

BAR ASSOCIATION MEETINGS FOR 1916–

WHEN AND WHERE TO BE HELD.

“Never mind, old man,” said the sympathetic friend. “You've got the law on your side.”

“I know it,” replied the man who was trying to recover damages from a soulless corporation, “but the lawyers are on the other side."

A lawyer noted for his laconic style of expression sent the following terse and witty note to a refractory client who paid no attention to reiterated demands for the payment of his bill:

“Sir, if you pay the enclosed bill, you will oblige me. If you don't, I shall oblige you.”— American Legal News.

American-Chicago, August 30, 31 and September 1.

Alabama-Decatur, July 14 and 15.
Arkansas-Little Rock, May 30 and 31.
Florida-Atlantic Beach, June 16 and 17.
Georgia—Tybee Island, June 1, 2 and 3.
Illinois—Chicago, June 1, 2 and 3.
IowaDubuque, June 29 and 30.
Kentucky-Louisville, July 6 and 7.
Louisiana—Opelousas, May 5 and 6.
Maryland-Deer Park, June 29, 30 and July 1.
Michigan-Battle Creek, June 30 and July 1.
Mississippi Laurel, May 2.
Montana-Missoula, latter part of July.

New Hampshire-Newcastle, June 30 and July 1.

New Jersey-Atlantic City, June 16 and 17.

North Carolina-Wrightsville Beach, June 28 and 29.

Ohio–July 11, 12 and 13. Place not fixed. Oregon-Portland, November 21.

Pennsylvania-Bedford Springs, June 27, 28 and 29.

Wisconsin-Oshkosh, June 28, 29 and 30.

BOOKS RECEIVED.

Federal Employers' Liability Act. Practic tioner's Manual; Digest of Decisions under Act; Judicial Law in Language of Court Interpretations; Forms of Pleading under Re quirements of Act; Safety Appliance and Hours of Service Acts. By John A. Walgren, of the Chicago Bar, Associate Editor of Illinois Annotated Statutes and Continental Legal History Series. Price, $2.00. Chicago. T. H. Flood & Co. 1916. Review will follow.

A former St. Louis judge tells this one:

It was before the existence of the FamousBarr Company and the Barr store was one of the leading retail establishments of the city.

On the first day that the judge was to sit on the bench after his election, Henry, the aged negro porter, entered the Judge's office and announced that he was ready to "spruce the jedge up a little.” Much to his disappointment no whisk broom could be found. Each morning the negro appeared, but still there was no broom.

Finally he remonstrated with the judge. "It's shore a shame for you to 'pear on dat bench without being brushed off. Why don't you get a broom?” said Henry.

That afternoon the judge called Henry into his office and gave him a check for $25 and said: "Henry, take this to the bank and get it cashed for me and on the way back stop at Barr's and buy a whisk broom." Henry brought back the money with the exception of fifteen cents and received a 10-cent tip.

The next morning the judge called Henry into his room and said:

“Now, Henry, you can use that new whisk broom on my clothes."

Henry looked mystified and asked if his honor had purchased a whisk broom.

"Henry, don't you remember that I told you to go to Barr's and buy a whisk broom? You kept 15 cents out of the change I sent you after. Did not you get the broom?" asked the judge.

“Lawd sakes, jedge," replied Henry, "I shore thought you told be to go to the bar and get a whisky."-St. Louis Post-Dispatch.

Commercial Mortmain. A Study of the Trust Problem. By John R. Dos Passos, of the New York Bar, author of "The Law of Stock Brokers & Stock Exchanges," "Interstate Commerce Act," "Commercial Trusts," “The Anglo-Saxon Century," "The American Lawyer.” Price, $1.35. New York. The Bench and Bar Company. 1916. Review will follow.

WEEKLY DIGEST

Weekly Digest of ALL the Important Opinions

of ALL the State and Territorial Courts of Last Resort and of ALL the Federal Courts.

Copy of Opinion in any case referred to in this digest may be procured by sending 25 cents to us or to the West Pub. Co., St. Paul, Minn.

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Arkansas..

68, 86, 104, 111 California

6, 13 Colorado

34, 48 Connecticut

96 Georgia

28, 37, 72, 76, 89, 93, 101 Idaho

70 Illinois.

50, 85, 90, 101, 110, 112 Indiana.

.27, 53, 54, 58, 83, 106 Iowa

40 Kentucky

3, 4, 20, 38, 55, 67 Louisiana

105 Maine

52, 65 Maryland.

.92, 99 Massachusetts

.43, 47, 60, 102 Minnesota

.44, 49, 61 Mississippi

97 Missouri

16, 17, 19, 22, 42, 46, 77, 78, 84 New Jersey

26, 73, 79, 103 New York.

1, 8, 29, 30, 35, 36, 51, 62, 66, 81 North Carolina.

98 Oklahoma

21, 39, 64, 108 Oregon

15, 80 Pennsylvania

23 Rhode Island

114 South Carolina

109 Tennessee

.45, 91, 113 Texas

5, 57, 63, 87, 88, 95 U. S. C. C. App..

9, 10, 14, 24, 100 United States D. C.

.11, 12 United States S. C.

18, 25, 32, 75 Vermont

31, 41, 59, 94 Virginia

82 West Virginia

74 Wisconsin

-7, 33, 56, 69, 71 Wyoming

2

dered thereunder on preliminary examination 01 ine accuseu, though ine court, aistrict allorney, and accuseu acquiesceu. IOCK V. Ekern, W18., 156 N. W. 16.

8. bail- Production of Principal.-A surety on an undertaking for an appearauce to answer lo an inuictment at a slven Luain OL Court responsible for nis appearance, 1101 Ouly 0. arst day of the lern, Du upun ally Suuseyucu uay luereor winout notice; and the lule LC Saine when ne Surety undertakts lo prvuuse nis principal al wnichever term ur vuuri wetumes Proper.-Icopie V. Paris, N. I., ill. L.

9. Bankruptey Corporation. Tue uluslee for a bankrupu corporation may niaintain action under section D60L ne New IUIK poialion Law against a trustee uuer a watu iecover payments made wnen isoivent and will intent lo prefer the Creunior paiu-arauzu brooklyn Trust Co., S. C. L. A., 420 reu. 333.

10.- Corporation.-It is the general rule mat the jurisdiculon 01 a court of Nankrupicy urer ne aaministration of the alairs ΟΙ in01tul corporations is exclusive anu paramount.--commerciai Trust & Savings Dak V. Buscn-Giave L’roduce Co., U. S.C. C. d., 228 red. UU.

11.- -Corporation.-Corporation's principai place of business, within DankrAct, 2 (1), neid a question of Iaco

Ποί conclusively ut terinined by ine artícies or incorporation or by location of the larger amount ou ils properly. -in re k. H. Pennington & CO., U. S. D. L., 228 Fed. 388.

12.- Insurance.--Where right to change beneficiary is reserved, rigni lu casn surrtuuri value here to pass to trustee in bankrupicy, ullless there nas peen a Dona nde assignment UI tne wnole policy.-in re fiauigan, U: S. D. L., 223 ea. 309.

13. -Lien.-Order on petition of trustee in bankruptcy, autnorizing juugment ci'tuitos whose lien had been aissolved in tne nalne OL the trustee and for the benellt OL tne eslace lu proceed 10 annul vankrupl's conveyance LU plaintif, his wife, held to aulnorize creditor tu proceed as it might deem best, or in the uame or the trustee.-Wills V, E. Wood Lumwer & Muls Co., Cal. App., 154 Pac. 613.

14.--Unliquidated Claim.-A claim against a bankrupt for breacn of promise lo marry, on which suit was pending in a state court, neid an unliquidatea claim, which the court properly ordered liquidated by trial in ine state cour'l.in re Martin, U. S. C. C. A., 228 Fed. 184. 15. Banks

and Banking-Bank Stock-A transfer or bank stock to another pyuereuuanc who had given practically wortnless properly therefor, held not to protect defendant ironn liability in a suit by the superintendent or banks for the value of the stock, wnere it appeareu that the transaction was in fact a retransfer to the bank.-Sargent v. American Bank & trust Co. of Portland, ur., 154 Pac. 759.

16.---Check.-Under Rev. St. $ 9980, bank paying check, whicn its depositor, an insurance company, through fraud of its agent, had made payable to a nctitious person in settlement or death claim, held entitied to the same protection as if the check had been payable to bearer.

-Equitable Life Assur. Society of the United States v. National Bank of Commerce in St. Louis, Mo. App., 181 S. W. 1176. 17.

-Deposits.-Where broker turned plaintiff's note over to defendant bank for collection, and the bank, with knowledge that it was not tne broker's, applied the proceeds to a debt or broker to the bank, the bank was liable to plaintist as for conversion.-Gillespie v. Bank or ChilTicotne, Mo. App., 181, S. W. 1198.

18. Carriers of Goods-Delay.-Damages for loss of market for unreasonable delay in transportation en route are within provision of Carmack Amendment.--New York, P. & N. R. Co. v. Peninsula Produce Exch. of Maryland, U. S. Sup Ct., 36 S. Ct. 230.

Carriers of Passengers-Loss of Baggage. -In a passenger's action for loss of baggage, where the contract of carriage as contained in

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1. Abortion-Evidence.-That drugs prescribed for purpose of producing miscarriage were not administered in doses sufficiently large to produce that result, held not to prevent acts constituting offense under Crimes Act, $ 119. --State y. Mandeville, N. Y. Supp., 96 Atl. 398.

2. Adjoining Landowners—Notice.-Notice to an adjoining landowner that an excavation was to be made was not notice that it would be made in a negligent manner, but that ordinary and reasonable care and prudence would be used and that the excavation would be made in a workmanlike manner.—Bank of Wheatland v. Gray, Wyo., 154 Pac. 593.

3. Adverse Possession-Evidence.-One hold ing a parcel of land under the mistaken belief that it was the part of another survey holds it adversely, and his continued holding will ripen into title.-Le Moyne v. Neal, Ky., 181 S. W. 1119.

4. Animals-Joint Tort-feasors.-A son, who owned a dog and lived with his mother on whose premises he kept the animal with her consent, and mother were jointly liable to the mother's guest, bitten by the dog, under Ky. St. $ 68a, subsec. 5, providing that every person owning or harboring a dog shall be liable to the party injured.--Davidson v. Manning, Ky., 181 S. W. 1111.

5. Assault and Battery-Guardian and Ward. -A guardian having emancipated his ward cannot justify an assault and battery on her because of the relationship.-Eitel v. State, Tex. Cr. App., 182 S. W. 318.

6. Attorney and Client-Disbarment.-An attorney cannot be disbarred solely on a record of conviction, where he has been pardoned.-In re Emmons, Cal. App., 154 Pac. 619.

7.-Public Policy.--A contract with the complaining witness in a prosecution whereby an attorney agreed to assist the district attorney therein was void as against public policy, and the attorney could not recover for services ren

19.

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