Grant v. George C. Treadwell Co.

FOLLETT, J.

At the close of the plaintiff’s case, the court, on defendant’s motion, dismissed the complaint, and the plaintiff excepted, and asked that the question of the power of the president to execute the notes be submitted to the jury, which request Was refused, and the plaintiff excepted. The inherent power of the defendant corporation to bind itself by promissory notes was not questioned on the trial. The sole question litigated at circuit was whether the president of the defendant had authority to bind it *703by these promissory notes; and the only question presented on this motion is, was the evidence sufficient to authorize the jury to find that the president had such power? George H. Treadwell held two offices. He was the president and also the general manager of the corporation, and was the largest stockholder in the company. The by-laws prescribed the power of the president as follows:

“The president of the company shall be the general executive officer of the company, and shall have general supervision of its business affairs. * * * He shall preside at all the meetings of the board, and generally he shall perform all duties appertaining to the office of president.”

The powers of the general manager were prescribed by the bylaws as follows:

“The general manager of the company shall * * * have power to purchase goods for the said company, both in the United States and in foreign countries, and to fix and establish the price for which goods are to be sold, both at wholesale and retail. He shall have power to employ and discharge clerks, porters, and servants connected with the purchase and sales department of the said business, and shall, under the president of said company, have supervision of the whole business of the said company, and shall perform such further duties as shall from time to time be assigned to him by the board of directors.”

How many directors there were does not appear, but it seems from the case that they did not, as a board, exercise any control over the affairs of the corporation during 1893, but left the whole management of the business to the president, and to him was left the duty of raising money and paying the debts of the defendant.

A by-law of the corporation was introduced which provides:

“He [the treasurer] shall, together with the president or the secretary, accept and indorse drafts, and sign and indorse promissory notes for the purpose of the purchase of merchandise for the company’s use and sale and other necessary expenditures, to the amount that shall not exceed at any one time outstanding twenty per cent, of the paid-up capital.”

It is urged that under this by-law the note, not having been signed by the treasurer, is not binding upon the company. In National Spraker Bank v. George C. Treadwell Co., 80 Hun, 363, 30 N. Y. Supp. 77, it was held that the fact that a promissory note was not signed by the defendant’s treasurer, in accordance with the by-laws, constitutes no defense to an action on a note in the hands of a bona fide holder, the corporation having received the benefit of the proceeds. In this case it was shown that the president executed, in the name of the corporation, other notes for its benefit, some of which were paid before the defendant passed into the hands of a receiver, and some were not, and there is no pretense that the president’s acts have been repudiated or even questioned by the directors, nor is it asserted that he was guilty of any wrongdoing, or that he had diverted the. obligations of the company or of their proceeds. The fact that the defendant received the avails of these notes, together with the other facts in the case, was sufficient to have sustained a finding that the president was authorized to execute these two notes, or that their execution had been ratified, which is the equivalent of original au*704thority. Whether the president was authorized to make the notes should have been submitted to the jury; and the court erred in dismissing the complaint of the plaintiff, whose exceptions should be sustained, and a new trial granted, with costs to him to abide the event. All concur.