Grant County State Bank v. Northwestern Land Co.

• Decision Date: 04 January 1915
• Docket Number: 1905
• Court: North Dakota Supreme Court

150 N.W. 736

28 N.D. 479

GRANT COUNTY STATE BANK, a Corporation, v. NORTHWESTERN LAND COMPANY, a Corporation

No. 1905

Supreme Court of North Dakota

January 4, 1915

On petition for rehearing January 4, 1915.

From a judgment of the District Court of Grand Forks County Templeton, J., plaintiff appeals.

Reversed and a new trial granted.

Case reversed. New trial ordered.

Purcell & Divet, for appellant.

Agency to execute negotiable paper may be established in the same way as agency to do any other act. This is fixed and settled by our negotiable instrument law. The issuance of commercial paper is within the implied powers of the defendant corporation. Rev. Codes, 1905, § 6321; 10 Cyc. 1111 1113, P 2, 1114, P 3, 1115, P c, 1118, subdiv. b; Martin v. Webb, 110 U.S. 7, 28 L.Ed. 49, 3 S.Ct. 428; Ford v. Hill, 92 Wis. 188, 53 Am. St. Rep. 902, 66 N.W. 115; Swedish American Nat. Bank v. Koebernick, 136 Wis. 473, 128 Am. St. Rep. 1090, 117 N.W. 1020.

Apparent authority in officer or agent is sufficient; as to the things the corporation can do, it will be bound by the acts of its representations with apparent authority. Louisville, N A. & C. R. Co. v. Louisville Trust Co. 174 U.S. 552 570, 571, 574, 43 L.Ed. 1081, 1089, 1090, 1091, 19 S.Ct. 817; Merchants' Nat. Bank v. State Nat. Bank, 10 Wall. 604, 19 L.Ed. 1008; Ford v. Hill, 92 Wis. 188 53 Am. St. Rep. 905, 66 N.W. 115; G. V. B. Min. Co. v. First Nat. Bank, 36 C. C. A. 633, 95 F. 33; Martin v. Webb, 110 U.S. 7, 28 L.Ed. 49, 3 S.Ct. 428; Mahoning Min. Co. v. Anglo-Californian Bank, 104 U.S. 192, 26 L.Ed. 707; Leroy & C. Valley Air-Line R. Co. v. Sidell, 13 C. C. A. 308, 26 U.S. App. 656, 66 F. 31; Egbert v. Sun Co. 126 F. 570; Armstrong v. Chemical Nat. Bank, 27 C. C. A. 601, 54 U.S. App. 462, 83 F. 569; Davenport v. Stone, 104 Mich. 521, 53 Am. St. Rep. 467, 62 N.W. 722; St. Clair v. Rutledge, 115 Wis. 583, 95 Am. St. Rep. 972, 92 N.W. 234; Kocher v. Supreme Council, C. B. L. 65 N.J.L. 649, 52 L.R.A. 861, 86 Am. St. Rep. 690, 48 A. 544; Jones v. Williams, 139 Mo. 1, 37 L.R.A. 682, 61 Am. St. Rep. 446, 39 S.W. 486, 40 S.W. 353; Hanover Nat. Bank v. First Nat. Bank, 48 C. C. A. 482, 109 F. 423; Olcott v. Tioga R. Co. 27 N.Y. 546, 84 Am. Dec. 301; Bank of United States v. Dandridge, 12 Wheat. 64, 6 L.Ed. 552; St. Louis Gunning Advertising Co. v. Wannamaker & Brown, 115 Mo.App. 270, 90 S.W. 737; Florida Midland & G. R. Co. v. Varnedoe, 81 Ga. 175, 7 S.E. 129.

Where, as in this case, a corporation has the inherent power to issue negotiable instruments, and any of its officers or agents assume to issue such paper, the presumption is conclusive in favor of an innocent holder, that such officer had authority. Louisville, N. A. & C. R. Co. v. Louisville Trust Co. 174 U.S. 573, 43 L.Ed. 1091, 19 S.Ct. 817; Merchants' Nat. Bank v. State Nat. Bank, 10 Wall. 604, 19 L.Ed. 1008; Milwaukee Trust Co. v. Van Valkenburgh, 132 Wis. 638, 112 N.W. 1083; St. Clair v. Rutledge, 115 Wis. 583, 95 Am. St. Rep. 972, 92 N.W. 234; Gelpcke v. Dubuque, 1 Wall. 203, 17 L.Ed. 524; Monument Nat. Bank v. Globe Works, 101 Mass. 57, 3 Am. Rep. 322; Bissell v. Michigan S. & N. I. R. Cos. 22 N.Y. 290; Northern Hudson Mut. Bldg. & Loan Asso. v. First Nat. Bank, 11 L.R.A. 846, note.

Especially is this true as to an officer or agent in charge of the corporate officer. Kissam v. Anderson, 145 U.S. 435, 442, 36 L.Ed. 765, 767, 12 S.Ct. 960.

A corporation cannot ignore the negligence of all its officers and profit by their omission of duty. St. Clair v. Rutledge, 115 Wis. 583, 95 Am. St. Rep. 972, 92 N.W. 234; Armstrong v. Chemical Nat. Bank, 27 C. C. A. 601, 54 U.S. App. 462, 83 F. 571; Martin v. Webb, 110 U.S. 14, 28 L.Ed. 52, 3 S.Ct. 428; Cook, Stock & Stockholders, 2d ed. §§ 620, 713; Thorington v. Gould, 59 Ala. 461; Hennessy Bros. & E. Co. v. Memphis Nat. Bank, 64 C. C. A. 125, 129 F. 557; Kissam v. Anderson, supra; Aldrich v. Chemical Nat. Bank, 176 U.S. 618, 44 L.Ed. 611, 20 S.Ct. 498; Atlantic Cotton Mills v. Indian Orchard Mills, 147 Mass. 268, 9 Am. St. Rep. 698, 17 N.E. 496; Dana v. National Bank, 132 Mass. 156; Whitaker v. Kilroy, 70 Mich. 635, 38 N.W. 606.

The agent's authority must be direct and specific, or the facts and circumstances must be of such a nature that the right to act may be fairly inferred. Corey v. Hunter, 10 N.D. 12, 84 N.W. 570.

Corporations are only capable of speaking through their officers and agents, and parties dealing with them have the right to rely upon their statements and the appearances existing. Thomp. Corp. § 4889, quoted in Helena Nat. Bank v. Rocky Mountain Teleg. Co. 20 Mont. 379, 63 Am. St. Rep. 635, 51 P. 829; Herman, Estoppel & Res Judicata; Quirk v. Thomas, 6 Mich. 119; Steinke v. Yetzer, 108 Iowa 512, 79 N.W. 286; Cadillac State Bank v. Cadillac Stave & Heading Co. 129 Mich. 15, 88 N.W. 67.

Parties so dealing do not need to go elsewhere for information. Tunison v. Detroit & L. S. Copper Co. 73 Mich. 452, 41 N.W. 502; Leroy & C. Valley Air-Line R. Co. v. Sidell, 13 C. C. A. 308, 26 U.S. App. 656, 66 F. 31; Pittsburgh, C. & St. L. R. Co. v. Keokuk & H. Bridge Co. 131 U.S. 371, 33 L.Ed. 157, 9 S.Ct. 770; Page v. Fall River, W. & P. R. Co. 31 F. 257; 10 Cyc. 111 et seq.

The evidence shows that it was contemplated by the corporation that it would be necessary in their business to give notes. The by-laws provide for this also. 10 Cyc. 904, P B., notes 74-76; Glidden & J. Varnish Co. v. Interstate Nat. Bank, 16 C. C. A. 534, 32 U.S. App. 654, 69 F. 912; Africa v. Duluth News Tribune Co. 82 Minn. 283, 83 Am. St. Rep. 424, 84 N.W. 1019; Richmond, F. & P. R. Co. v. Snead, 19 Gratt. 354, 100 Am. Dec. 677; Jones v. Williams, 139 Mo. 1, 37 L.R.A. 682, 61 Am. St. Rep. 436, 39 S.W. 486, 40 S.W. 353; Helena Nat. Bank v. Rocky Mountain Teleg. Co. 20 Mont. 379, 63 Am. St. Rep. 628, 51 P. 829; Dexter Sav. Bank v. Friend, 90 F. 703; Louisville, N. A. & C. R. Co. v. Louisville Trust Co. 174 U.S. 573, 43 L.Ed. 1091, 19 S.Ct. 817; Merchants' Nat. Bank v. State Nat. Bank, 10 Wall. 604, 19 L.Ed. 1008; St. Clair v. Rutledge, 115 Wis. 583, 95 Am. St. Rep. 964, 92 N.W. 234; Claflin v. Lenheim, 66 N.Y. 305; Bennett v. Curry, 21 N.Y.S. 47.

Holding out an ostensible agency and ratification of unauthorized acts are all akin to estoppel, and exist as elements of estoppel. Thomp. Corp. § 4889.

One ought to safely rely upon the word and representations of the treasurer of a corporation. When he speaks with reference to a subject over which the corporation has authority, it is the corporation speaking. Whitaker v. Kilroy, 70 Mich. 635, 38 N.W. 606; Hirschmann v. Iron Range & H. B. R. Co. 97 Mich. 384, 56 N.W. 842; Beattie v. Delware, L. & W. R. Co. 90 N.Y. 643; St. Clair v. Rutledge, 115 Wis. 583, 95 Am. St. Rep. 964, 92 N.W. 234; Hennessy Bros. & E. Co. v. Memphis Nat. Bank, 64 C. C. A. 125, 129 F. 560.

Unless waived, findings of fact must be made by the trial court. Garr, S. & Co. v. Spaulding, 2 N.D. 414, 51 N.W. 867; Rev. Codes, 1905, § 7041; 38 Cyc. 1974, note 24, 1962, Subdiv. B. Rev. Stat. § 649; Anglo-American Land, Mortg. & Agency Co. v. Lombard, 68 C. C. A. 89, 132 F. 721, and cases cited; Briere v. Taylor, 126 Wis. 347, 105 N.W. 817; Wood v. La Rue, 9 Mich. 160; Adams v. Champion, 31 Mich. 233; Hudson v. Roos, 72 Mich. 363, 40 N.W. 467; Bates v. Wilbur, 10 Wis. 416; Humpfner v. D. M. Osborne & Co. 2 S.D. 310, 50 N.W. 90; Barton v. Northern Assur. Co. 10 S.D. 132, 72 N.W. 86; Hardin v. Branner, 25 Iowa 368; Chesapeake Ins. Co. v. Stark, 6 Cranch, 268, 3 L.Ed. 220; Prentice v. Zane, 8 How. 470, 12 L.Ed. 1160; Pint v. Bauer, 31 Minn. 4, 16 N.W. 425; Hodge v. Ludlum, 45 Minn. 290, 47 N.W. 805; People v. Fuqua, 61 Cal. 378; Noblesville Gas & Improv. Co. v. Loehr, 124 Ind. 79, 24 N.E. 579; Evansville & R. R. Co. v. Maddux, 134 Ind. 571, 33 N.E. 345, 34 N.E. 511; Wells, Railroad Corp. pp. 34 et seq.; Rev. Codes 1905, § 7229.

Bangs, Netcher, & Hamilton for respondents.

There is no difference in principle or precedent between the powers, duties, and liabilities of the agents of corporations and those of natural persons, unless expressly made so by the act of the corporation, or by the by-laws. New York, P. & B. R. Co. v. Dixon, 114 N.Y. 80, 21 N.E. 110; Jones v. Williams, 139 Mo. 1, 37 L.R.A. 682, 61 Am. St. Rep. 436, 39 S.W. 486, 40 S.W. 353; Ford v. Hill, 92 Wis. 188, 53 Am. St. Rep. 902, 66 N.W. 115; Rev. Codes 1905, §§ 5770, 5784; Story, Agency, 126; Corey v. Hunter, 10 N.D. 12, 84 N.W. 570; Busch v. Wilcox, 82 Mich. 336, 21 Am. St. Rep. 563, 47 N.W. 328; Trull v. Hammond, 71 Minn. 172, 73 N.W. 642; Ermentrout v. Girard F. & M. Ins. Co. 63 Minn. 305, 30 L.R.A. 346, 56 Am. St. Rep. 481, 65 N.W. 635.

One dealing with a supposed agent is bound to ascertain the scope of his authority, otherwise he assumes the risk and must suffer the consequences. Cornish v. Woolverton, 32 Mont. 456, 108 Am. St. Rep. 613, 81 P. 4; Dodge v Birkenfeld, 20 Mont. 115, 49 P. 590; Cleveland v. Pearl, 63 Vt. 127, 25 Am. St. Rep. 748, 21 A. 261; Franklin F. Ins. Co. v. Bradford, 88 Am. St. Rep. 780, note 1; Chaffe v. Stubbs, 37 La.Ann. 656; Siebold v. Davis, 67 Iowa 560, 25 N.W. 778; Bohart v. Oberne, 36 Kan. 284, 13 P. 388; White v. Langdon, 30 Vt. 599; Adams v. Herald Pub. Co. 82 Conn. 448, 74 A. 755; Baker v. Seaweard, 63 Ore. 350, 127 P. 961; Brown v. Johnson, 12 Smedes & M. 398, 51 Am. Dec. 118; Strawn Farmers' Elevator Co. v. James E. Bennett & Co. 168 Ill.App. 428; United States Bedding Co. v. Andre, 105 Ark. 111, 41 L.R.A.(N.S.) 1019, 150 S.W. 413, Ann. Cas. 1914D 800; Vanada v. Hopkins, 1 J. J. Marsh. 285, 19 Am. Dec. 92; Tidrich v. Rice, 13 Iowa 214; Kraniger v. People's Bldg. Asso. 60 Minn. 94, 61 N.W. 904; Farmers' & M. Bank v. Butcher's & D. Bank, 16 N.Y. 125, 69 Am. Dec. 678; Pearce v. Madison & I. R. Co. 21...