Africa v. Duluth News Tribune Company

• Decision Date: 23 January 1901
• Docket Number: 12,231 - (99)
• Citation: 84 N.W. 1019,82 Minn. 283
• Parties: WALTER G. AFRICA v. DULUTH NEWS TRIBUNE COMPANY
• Court: Minnesota Supreme Court

84 N.W. 1019

82 Minn. 283

WALTER G. AFRICA v. DULUTH NEWS TRIBUNE COMPANY

Nos. 12,231 - (99)

Supreme Court of Minnesota

January 23, 1901

Action in the district court for St. Louis county to recover $1,000 and interest on a promissory note. The case was tried before Ensign, J., who directed a verdict in favor of plaintiff for the amount demanded. From an order denying a motion for judgment notwithstanding the verdict or for a new trial defendant appealed. Affirmed.

SYLLABUS

Promissory Note.

In an action to recover upon the promissory note of a corporation it is held:

Corporation -- Authority of Officer.

1. That the president and general manager of the corporation, who possessed and exercised, with the assent of the corporation, general and unrestricted charge and control of the management of its affairs, and who was the sole stockholder thereof, had implied authority to borrow money to pay and discharge maturing obligations and debts of the corporation, and to make and deliver, for that purpose, its promissory notes.

Note Payable to Officer -- Presumption of Invalidity Rebutted.

2. A promissory note of a corporation, made by an officer thereof to himself as payee, is presumptively invalid, but such presumption may be rebutted by proof that the note was in fact made in the business and for the use and benefit of the corporation. It is held in this case that such presumption of invalidity is overcome and rebutted.

Assignments of Error.

3. Various assignments of error examined, and held to present no reversible error.

Fryberger & Johanson, for appellant.

Baldwin & Baldwin, for respondent.

OPINION

BROWN, J.

This action is one to recover upon defendant's promissory note. The plaintiff had a verdict below by order of the court, and defendant appeals from an order denying a new trial.

The record discloses the following facts: Defendant is a corporation engaged in publishing a newspaper in the city of Duluth. During the time stated in the complaint one Thoits was its president, and as such had and exercised the general control and management of its affairs. In May, 1897, he entered into a contract with the corporation by which he purported to lease its property, and thereafter, and until subsequent to the time of the transaction in question, continued to manage and conduct its business, publishing the newspaper, and transacting all business of the company. It is practically agreed by both parties that the contract or lease was a mere cover to protect the corporation from libel suits, and the evidence shows beyond any doubt that Thoits was conducting the business of the company, not under the lease in reality, but as its president and employee. Prior to the date when Thoits assumed charge, the corporation had contracted an indebtedness to the Mergenthaler Linotype Company in the sum of $8,000, which was represented and evidence by eight promissory notes of the corporation, of $1,000 each. Thoits conducted the affairs of the company in the name of the corporation, deposited all money received by him in the course of the business in a bank in the name of "Duluth News Tribune, A. T. Thoits, Publisher," and his private funds in the same bank in his individual right. He had exclusive charge of the bank account of the company, and drew all checks in payment of debts contracted and incurred in the course of the business.

On May 21, 1898, he paid one of the $1,000 Mergenthaler notes out of the money by him deposited in the bank in the name of the corporation, and, to make good the amount so paid, borrowed of plaintiff $1,000, and made and delivered to him the promissory note in suit. The money so borrowed was deposited in the bank in the corporation account, and used The promissory note so made and delivered to plaintiff is in the words and figures following, to wit:

"$1,000.

Duluth, Minn., May 21st, 1898.

"On demand, after date, we promise to pay to the order of A. T. Thoits one thousand dollars, at American Exchange Bank, value received, with interest before and after maturity at the rate of six per cent. per annum until paid. Principal and interest payable in U.S. gold coin.

"Duluth News Tribune Co.,

"By A. T. Thoits, Prest.

"Attest: Edward Hazen."

Indorsed: "Pay to W. G. Africa. A. T. Thoits."

The defense to the action is that Thoits had no authority to make the note, and that it is void on its face, having been made by the president of the corporation to himself, and for his personal use and benefit. The evidence does not sustain the defense. The record does not show that Thoits had express authority from the corporation to execute the note; but that is not important, as authority to do so must be implied from the nature and extent of his powers and duties as president and general manager of the company. As president and manager of the corporation, he had general...