Helena Nat. Bank v. Rocky Mountain Tel. Co.
| Decision Date | 17 January 1898 |
| Citation | 51 P. 829,20 Mont. 379 |
| Parties | HELENA NAT. BANK v. ROCKY MOUNTAIN TEL. CO. (two cases). |
| Court | Montana Supreme Court |
Appeal from district court, Lewis and Clarke county; Henry N. Blake Judge.
Two separate actions by the Helena National Bank against the Rocky Mountain Telegraph Company. Verdict for plaintiff in each action. Defendant appeals from orders denying a new trial. One order reversed, and the other affirmed.
These actions were tried together in the court below, and will be determined by this court in one opinion. By action No. 877 the plaintiff sought to recover from the defendant (a corporation organized under the statutes of Montana) the sum of $350.70, the amount of an alleged overdraft of the defendant at the Second National Bank of Helena, Mont., the claim for which was assigned by said bank to plaintiff. The answer was treated and considered by the parties and the court below as sufficient to present the issues whether the general manager of the defendant was authorized expressly or by implication to create an overdraft, and whether there was a ratification by the defendant of the acts of its general manager in that behalf. By what the defendant calls a "separate defense" to the complaint, it alleges that on or about the 7th day of November, 1892, the plaintiff advanced to one C. W. Ridgway a certain sum of money, which at the request of Ridgway, plaintiff charged to the defendant, and that Ridgway never had authority to borrow the money on behalf of the defendant; that the money so advanced to Ridgway was used by said Ridgway for his own benefit, and was never paid to or received by the defendant. By the complaint in action No. 878, plaintiff sought to recover from defendant the amount of a negotiable promissory note for $200, alleged to have been made by the defendant on October 27, 1892, to the Second National Bank of Helena, and by the payee assigned to the plaintiff, which note contained a promise to pay interest at the rate of 1 per centum per month from its date, and reasonable attorney's fees. The note was subscribed, "Rocky Mountain Telegraph Company, by C W. Ridgway, G. M." The answer denies that the defendant executed the note, and, by a so-called "separate defense," denies that Ridgway, who, as general manager, subscribed defendant's name to the note, was authorized so to do, and that the money obtained by him was not received by defendant, but was appropriated by him to his own use. The replication consists of a denial that the money obtained on the note was appropriated by Ridgway to his own use, and was not paid to or received by the defendant. At the trial, the defendant moved in each case for judgment on the pleadings, which motions were denied. The issues were tried by jury. When plaintiff rested, the defendant moved for nonsuits, upon the ground that the evidence did not tend to prove any authority on the part of Ridgway to execute the note in the name of the defendant, or to create the overdraft in its behalf. The court overruled each motion. The defendant offered no testimony in either case. The jury returned a verdict for the plaintiff. From the orders denying defendant's motions for new trials, these appeals were taken.
Defendant was organized in 1886. Of the three trustees named in the certificate, one died in 1887 or 1888. The evidence failed to disclose whether or not the shareholders or directors ever held a meeting after the formation of the corporation. It was both proved and admitted that from April, 1891, to November 30, 1892, Ridgway was the general manager of defendant corporation, and that he executed and delivered the note and created the overdraft in the name of the defendant. It was also shown by the evidence that in 1891, when Ridgway first took charge of the business of the company, its bank account was kept in Butte, and was overdrawn in the sum of $554.54, all of which the defendant knew. Competent evidence was adduced establishing the fact that Ridgway conducted and transacted all the ordinary business affairs of defendant, and disclosing that the defendant, during the time that Ridgway was its general manager, necessarily had full knowledge, or ought to have known, that the receipts of its business were not equal to its outlay, and that Ridgway, as its general manager, was in the habit of making monthly reports to one W. A. Clark and to one Marcus Daly, or to Clark and the Standard Publishing Company, of Anaconda, which reports disclosed the difference between the receipts of the defendant and its outlay for each month, the deficit being sometimes as great as $1,000; that these reports to Clark and Daly did not show the condition of defendant's bank account, nor contain any information as to the note in suit, but did show the aggregate local receipts and expenses; that, when Clark and Daly received such reports, each would send his check to Ridgway for one-half of the monthly deficit, it being understood that the checks were to pay the debts incurred by reason of the deficit; and that Ridgway, as general manager, received his instructions as to the conduct of the business from Clark and Daly, who, as the evidence would indicate, were in control of the corporation. It appeared in evidence that some, at least, of these reports, were filed with defendant's auditor. Over objection and exception of the defendant, the court admitted evidence to the following effect: That when Ridgway, on March 18, 1892, opened the account for defendant with the Second National Bank of Helena, he exhibited to the cashier of the bank a paper purporting to be an authority from said Daly and Clark, authorizing him, as general manager of the defendant, to transact its business in Helena; and that afterwards, about May 26th, Ridgway showed to the cashier a document executed by Clark and the Standard Publishing Company, of Anaconda, of which the following is a copy: Evidence was also admitted to show that the first overdraft was on April 22, 1892, and that the original note, of which the note in suit is a renewal, was made February 12, 1892. Against the objection of the defendant, evidence was admitted showing that Ridgway, on October 27, 1892, succeeded in discounting at the American National Bank of Helena a note for $150, made by him in the name of the defendant company, indorsed by one Hawk, who afterwards succeeded Ridgway as manager, and upon maturity of which note the bank mailed a notice to the defendant at Helena; and that on April 15, 1893, the note was paid by Hawk, who was then the general manager. Proof was made from the books of the defendant that the bank credited Hawk, as general manager, with the amount so paid by him, and also with the amount of a note made by Ridgway, in the name of the defendant, to the Merchants' National Bank, which note Hawk had paid also, and that the defendant, after Ridgway left its employ, charged the several amounts of these notes against Ridgway's personal account; that on March 17, 1892, Ridgway gave to the First National Bank of Helena a note, executed by him in the name of the defendant, for $150, which note was paid June 9, 1892; and again, in the following July, gave a like note in defendant's name, which, after several renewals, resulted in his making a note in the name of the company for $50.55, which at the time of the trial remained unpaid, but on which were indorsed several small credits, ranging from 31 cents to $1.25, the items representing certain bills for telegraph service rendered by defendant to the First National Bank, and which it was agreed should be indorsed as partial payments upon the note. When Ridgway left the service of the defendant, on November 30, 1892, its books disclosed an indebtendness by defendant to Ridgway of $282.27. This amount was consumed by charging it to Ridgway on account of the payment of the notes mentioned, made by him in the name of the company to the Merchants' and American National Banks. It was established by evidence, which went in without objection, that Ridgway, as general manager, was in the habit of reporting to Clark and Daly, who were evidently acting with the consent of and for the defendant, the incurring of debts for necessary running expenses and outlay each month, and that it was only after being notified as to the amount of the deficit that the defendant through Clark and Daly, or Clark and Daly themselves, remitted funds to cover the excess of outlay over receipts.
Corbett & Wellcome, for appellant.
Toole & Wallace, for respondent.
PIGOTT J. (after stating the facts).
1. Appellant (defendant) contends that its motion for judgment on the pleadings in action No. 878 should have been sustained, upon the ground that the replication did not deny the averment in the answer of want of authority...
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