Davis v. Rockingham Inv. Co

• Decision Date: 06 July 1892
• Citation: 88 Va. 290,15 S.E. 547
• Parties: Davis v. Rockingham Investment Co.
• Court: Virginia Supreme Court

15 S.E. 547

88 Va. 290

Davis

v.Rockingham Investment Co.

Supreme Court of Appeals of Virginia.

July 6, 1892.

Corporation—Power of "General Manager"— Indorsement of Paper.

1. On the question whether the "general manager" of a land company was, by implication, authorized to indorse a note payable to the company, there being a president and vice president vested with that power by the by-laws, it appeared that he drew checks for the company, and had previously indorsed and negotiated two notes for the company aggregating less than $500, which transactions were entered on the books of the company, and that no objection was made thereto by the board, though their attention was not specially drawn to them, and it did not appear that they were informed thereof before the transaction in question. Held insufficient to show implied authority to indorse.

2. One who takes a note by indorsement from an officer of a corporation does so at his peril, and though he pays value for the note in good faith, without notice of want of authority in the officer, he acquires no title to the note as against the corporation.

Appeal from corporation court of Roanoke.

Bill by the Rockingham Investment Company against Davis. From a decree for plaintiff, defendant appeals. Affirmed.

Griffin X Glasgow, for appellant.

Phlegar, Burkeley & Johnson, for appellee.

Lewis, P. The single question to be determined is whether E. E. Cole, as secretary and treasurer of the Rockingham In vestment Company, had authority to indorse the note in the bill mentioned. The note was a negotiable note for $1,000, dated November 10, 1890, made by one George R. Cubben, and payable to the investment company, 12 months after date, at the office of the Traders' Loan, Trust & Deposit Company, in the city of Roanoke. On the 16th of September, 1891, the note was sold to the appellant, Davis, in Parkersburg, W. Va., by H. G. Cole, to whom it had been intrusted by E. E. Cole to be negotiated for the company, after having been indorsed by E. E. Cole as secretary and treasurer. The sale was effected through F. M. Durbin, then cashier of the First National Bank of Parkersburg, and the proceeds were placed to the credit of H. G. Cole in that bank. A few days afterwards, upon his return to Roanoke, the latter gave to his brother E. E. Cole a draft for the proceeds of the note; but when presented, at the hank the draft was not paid, because the drawer's balance had, in the mean time, been checked out. It is admitted that H. G. Cole is insolvent. In this state of things the company filed its bill in the court below, alleging that the note was indorsed and negotiated without its authority or consent, and praying for an injunction, and that the note be delivered' up to the complainant, and for general relief. Depositions were taken, and when the cause came on to be heard the prayer of the bill was granted by the decree complained of. The appellant concedes that there was no express authority on the part of the secretary and treasurer of the company to indorse the note in question, but contends that he had such authority by implication. The contention, in other words, is that Cole acted as the general manager and fiscal agent of the company, and was held out to the public as having the general authority implied from such position; that by the silence and acquiescence of the company he was suffered to draw drafts and checks, and to indorse notes payable to the company; and that the company is consequently bound by his acts, within the scope of such implied authority. The company was chartered for the purpose, principally, of buying and selling real estate; and has besides a secretary and treasurer, a president, a vice president, and a board of directors. One of the bylaws provides that the president, or, in his absence, the...