Craft v. South Boston R. Co.
| Decision Date | 29 November 1889 |
| Citation | 22 N.E. 920,150 Mass. 207 |
| Parties | CRAFT v. SOUTH BOSTON R. CO. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
S. Lincoln and A.D. McClellan, for plaintiff.
J.G Abbott, J.S. Dean, and C.T. Gallagher, for defendant.
William Reed was treasurer of the defendant, and also a broker. As broker he sold bonds for the plaintiff, and sent to her his personal check for the proceeds amounting to $2,575, and at the same time wrote to her as follows: "If you wish to loan this on call, can lend it to South Boston Railroad Company at five per cent. interest, and you can have it at any time, at one day's notice." The plaintiff thereupon called up on Reed, and said that she would lend $2,500 to the defendant; and she gave back to him his check and two days later received by mail, from Reed, the note in suit. Interest was paid on the note at three different times for six months each, by Reed, by his individual check. The plaintiff believed that everything was right and honest on the part of Reed, and that he had authority to make the loan and give the note in question, as binding on the defendant. She was ignorant of any by-laws of the defendant, and made no inquiries about them. The note is for $2,500, on demand after date, payable to the order of the plaintiff, and is signed: It is not countersigned by the president of the company. The by-laws of the company provide that "the treasurer shall, in the name of the company, sign and indorse all promissory notes and drafts of the company as he may be required by the directors, and the same shall be countersigned by the president." The directors voted, December 18, 1884, "that the president and treasurer, with the approval of the finance committee, be authorized to borrow a sum not exceeding $40,000, for the uses of the company." No vote was ever passed authorizing the treasurer alone to borrow money for the company, or to sign a promissory note in behalf of the company. Reed, never, in fact, with the knowledge of the directors, borrowed money for the company, and gave its notes therefor. Reed's testimony was "that all loans before this one were made according to the provisions of the defendant's by-laws, except in a few instances, several years before this transaction, when he had borrowed money of a brother of a person who was then president of the defendant, and also of the then president, but who had ceased to hold that office some years before the note in suit was given, but that those loans were not entered on defendant's books, and were not communicated to any of the defendant's officers, except the then president." It is plain that Reed had not authority, in fact, to borrow this money for the company, and to give its promissory note. Whatever...
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