Dorris v. Farmers' & Merch.S' Bank Of Cumming

CourtUnited States Court of Appeals (Georgia)
Citation22 Ga.App. 514,96 S.E. 450
Docket Number(No. 9313.)
Decision Date12 July 1918

(Syllabus by the Court.)

Error from Superior Court, Milton County; J. T. Pendleton, Judge.

Action between J. L. Dorris and others and Farmers' & Merchants' Bank of Cumming. Judgment for the latter and the former bring error. Affirmed.

G. B. Walker, of Alpharetta, and Geo. F. Gober and W. I. Heyward, both of Atlanta, for plaintiffs in error.

C. L. Harris and H. L. Patterson, both of Cumming, for defendant in error.

BLOODWORTH, J. After the decision of the Supreme Court in this case, as reported in 144 Ga. 233, 86 S. E. 1093, the plaintiffamended his petition by alleging that the note sued on was indorsed "Roswell Construction Company, by J. L. Murphy, Treas., " and by further alleging that:

"Said note was indorsed! to petitioner by the Roswell Construction Company, and before petitioner purchased the same it was indorsed by the Roswell Construction Company as follows: 'Roswell Construction Company, by J. L. Murphy, Treas.' "

Defendants amended their plea as follows: "These defendants charge and allege that the indorsement and transfer on said note sued on by J. L. Murphy, treasurer of the Roswell Construction Company, to plaintiff, was unauthorized, and that said J. L. Murphy did not have the power or authority under the by-laws or the charter of said company to transfer said paper by indorsing the same in the manner and form as set forth on said note. Defendants deny the title of plaintiff to said note, and deny both the genuineness and legality of the indorsement of the Roswell Construction Company on the back thereof, and deny that the said indorsement was authorized by said company, and deny that the title to said note has ever passed out of said company, and that the indorsement [was] the indorsement of the Roswell Construction Company. Defendants say that J. L. Murphy had no power or authority to indorse the note of the Roswell Construction Company, for the reason that the Roswell Construction Company was never legally organized; that the 10 per cent. of the capital stock was not paid in; therefore they had no right or authority to transact any business whatever. Defendants, for further plea, say that, the Roswell Construction Company never having been legally organized, there could be no board of directors who would have power or authority to elect a board of directors or secretary or treasurer who under the law would or could have power or authority to make any contracts in the name of the Roswell Construction Company, or to sell or to transfer any note or contract made payable to the Roswell Construction Company. For further plea these defendants deny that the note sued on, payable to the Roswell Construction Company, was ever legally sold and the title thereto transferred to the Farmers' & Merchants' Bank, and that the said plaintiffs have no right or title to the note sued upon."

The evidence showed that Dorris and Reese executed an ordinary promissory note payable, to the order of Roswell Construction Company; that the treasurer of the payee was endeavoring to discount the note to the plaintiff, and J. P. Brooke, one of the defendants, who at that time had no connection with the note, told the cashier of the bank that the makers were "good men and that their note was absolutely gilt-edge, " whereupon the cashier said, "You don't mind indorsing it then?" and Brooke said, "No, " and thereupon signed an agreement as follows:

"For value received I hereby guarantee the payment of the within note and any renewal of the same, said note being for the principal sum of $1,000.00, bearing interest at 8% and payable to the Roswell Construction Co., or order, on Nov. 1, 1911, signed by J. E. Dorris and J. C. Reece. in force and effect as a joint maker primarily liable thereon. This the 1st day of April, 1911."

The bank then traded for the note, issued a certificate of deposit payable to the Roswell Construction Company, and delivered this certificate to the treasurer of the company, and "the Roswell Construction Company got the money." Upon failure to pay the note, suit was brought, and, after the evidence was all in, the judge directed a verdict for the plaintiff. The defendant excepted.

1. The court committed no error in its rulings complained of in the first ground of the amendment to the motion for new trial. Although the by-laws of the company were not introduced to show the authority of the treasurer to transfer the note sued on, yet, without objection, it was shown that the company received the money from the discount of the note, that the money was turned into the treasury and used for the purposes of the company, and that the treasurer "transacted business for the company of that kind." Under these circumstances, the company itself could not receive and retain the proceeds of the note, and then repudiate the act of its treasurer.

"Aggregate corporations at this day usually contract through the intervention of agents duly authorized for this purpose. [Hayden v. Middlesex Turnpike Corporation] 10 Mass. 397 ; 1 N. & M. 231; [Savings Bank of New Haven v. Davis & Center] 8 Conn. 191. A contract or promise, by a corporation, need not always be made or proved by express vote, but may be implied from corporate acts. [Abbot v. Inhabitants of Third School District in Hermon] 7 Greenleaf, 118. A contract or promise of a corporation is implied by law from the authorized acts of their agents. [Baptist Church v. Mulford] 3 Halstead, 182; [Smith v. First Congregational Meetinghouse] 8 Pick, 178. If a person, assuming to act as agent, but without legal authority, make a contract, and the corporation receive the benefit of it, such acts will ratify the contract and render the corporation liable thereon. [Episcopal Charitable Society v. Episcopal Church] 1 Pick. 372; [Randall v. Van Vechten] 19 Johns. 60 . The foregoing are now assumed as axiomatic propositions, and are conclusive upon this view of the subject." Butts v. Cuth-bertson, 6 Ga. 171.

If, under the circumstances stated above, the corporation was bound and could not complain that the transfer was illegal and unauthorized, it follows that under the facts of...

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