Karns v. State Bank & Trust Co.

• Decision Date: 03 May 1909
• Docket Number: 1,769.
• Citation: 101 P. 564,31 Nev. 170
• Parties: KARNS v. STATE BANK & TRUST CO.
• Court: Nevada Supreme Court

101 P. 564

31 Nev. 170

KARNS v. STATE BANK & TRUST CO.

No. 1,769.

Supreme Court of Nevada

May 3, 1909

Appeal from District Court, Esmeralda County.

Action by Mrs. H. O. Karns against the State Bank & Trust Company. From an order vacating a default judgment, plaintiff appeals. Affirmed.

James Donovan, for appellant.

Mack & Green and Pyne, Douglass & Tilden, for respondent.

TALBOT J.

This is an appeal from an order vacating a judgment entered by default, which order was based upon the conclusion of the district court that the service of the complaint and summons upon C. H. Wise, assistant cashier of the defendant, which is a domestic corporation, was insufficient under the practice act, which provides that service upon a corporation organized under the laws of this state shall be upon the "president or other head of the corporation, secretary cashier or managing agent thereof." St. 1869, p. 200, c 112, § 29 (Gen. St. 1885, § 3051). The return of the sheriff states that he personally served the summons "on the State Bank & Trust Company, a corporation, by delivering to and leaving with C. H. Wise, the assistant cashier and managing agent of said State Bank & Trust Company, a corporation, the president, secretary, and cashier being absent from and nonresidents of Esmeralda county." It was alleged in the motion to vacate: "That on the 1st day of February, 1908, a copy of summons and complaint was served by the sheriff of Esmeralda county upon C. H. Wise assistant cashier of the State Bank & Trust Company defendant; that the said C. H. Wise is not secretary, cashier, or managing agent of the State Bank & Trust Company, a corporation, and never has held any of the said offices; and that C. H. Wise is not one of the persons designated by the statute upon whom service of summons can be made for the said corporation, and has no power or authority from the said corporation to accept service of the said summons for the said corporation, and is in no way authorized to bind the said defendant corporation by the acceptance of any service of summons." It appears from the affidavits and testimony introduced on the hearing of the motion to vacate that Wise, under appointment by the defendant, held the designated title and position of assistant cashier in charge of the Goldfield Branch, and that no officer of the bank above him resided there. He testified without contradiction that he was the assistant cashier of that branch under the supervision of the cashier at Carson City; that he had power to sign drafts and correspondence; that his authority did not extend to any of the other branches; that he had nothing to do with the policy, control, or management of the defendant as a corporation; and that he considered the president the managing agent. As far as anything definite regarding his powers is indicated, he was only authorized to sign correspondence and drafts on other banks-powers which could be delegated to any assistant cashier without making him the managing or other officer of the corporation. It is not shown that he was authorized to make or call in loans, institute or defend suits, receive or accept service of writs, or otherwise manage the affairs of the bank or the Goldfield Branch, or that these powers were not exercised exclusively by the officers of the corporation at Carson City or on their trips to Goldfield. It does not appear that he exercised such functions as would make him the managing agent of the corporation or even of the Goldfield Branch, although he was the foremost one in authority who lived there. If he could be considered the manager of that branch because it is shown that he was authorized to sign drafts and correspondence, and because there was no higher officer of the bank residing there, it might still be doubted whether this would make him the managing agent of the corporation.

For appellant it is claimed, not only that Wise was the managing agent, but that service upon him as assistant cashier was sufficient. In support of these propositions, we are referred to the following cases: Pond v. National M. & D. Company, 6 Kan. App. 718, 50 P. 973, in which the service of a summons upon the vice president at a time when the president was absent and could not be found by the sheriff was sustained. It was said that in the absence of the president it was the duty of the vice president to act as president, and that at such times he was the chief officer of the corporation. In Comet C. M. Co. v. Frost, 15 Colo. 310, 25 P. 506, service upon the vice president was deemed sufficient, although the return did not show that the president could not be found in the county. In Railway Co. v. Stone, 60 Kan. 57, 55 P. 347, the court stated that, when the secretary was a nonresident, it believed that service upon the assistant secretary who lived within the state was sufficient. In Colorado D. Co. v. Lombard Inv. Co., 66 Kan. 251, 71 P. 584, 97 Am. St. Rep. 373, the president of the defendant lived in New York and the secretary in Chicago. The statute authorized service on an inferior officer when the chief officer of the company could not be found in the county. It was recited in the return that the president and chief officer of the company were not found in the county. It was held that the service was sufficient upon the assistant secretary, an officer provided for by the by-laws of the corporation, with independent duties which included the management of the office of the company at Wichita, its only place of business within the state, and who was in effect the secretary of the corporation for Kansas, the state under whose laws it was created. The statute and the circumstances distinguish that case from the present. In Brun v. N.W. Realty Co., 52 Misc. 528, 102 N.Y.S. 473, the majority of the court sustained the service upon a party who had executed contracts, signed checks, and done other discretionary business for the corporation without consulting its officers, and whose acts had been approved by the company. In the dissenting opinion Justice MacLean said: "The argument that it would be a hardship to apply the statute of the state, instead of a judge-made law to fit the case, is seldom cogent."

There is good reason for holding that, in the absence of the president, he becomes superseded by the vice president, who in effect, becomes the president or head of the corporation, endowed with the functions of the president and subject to service as "the president or other head of the corporation," as this language is used in the statute. It is not so consistent to hold that service upon an assistant secretary is sufficient unless in the event of the nonresidence of the secretary or cashier the powers and duties of the assistant are broad enough to make him in effect secretary or cashier, for that would be judicially legislating words into the practice act not placed there by the Legislature. So far as we have examined, the weight of authority, as well as the decisions of this court, are adverse to or by reason of different circumstances and statutes are distinguishable from the few cases holding that service upon an assistant secretary or assistant cashier is sufficient. Nor do we find that the cases generally support the contention that Wise was the managing agent of the corporation, because, subject to the supervision of the cashier, he was in charge of a branch of the defendant's business under the title of assistant cashier, with authority to sign drafts and correspondence. It is not apparent that Wise, the secretary or the cashier with similar powers only, if working at the headquarters of the bank under the supervision of the cashier, president, or other officers, would be the managing agent. The regular and managing officers of the corporation upon whom valid service could have been made were within the state, precluding any necessity for service by publication or upon other officers or stockholders, as is allowable under the statutes of a few states. Judge Hawley, speaking for the United States Circuit Court in Doe v. Springfield B. & M. Co., 104 F. 687, 44 C. C. A. 130, cited several cases, and said: "To constitute a managing or business agent upon whom service of summons could be made, the agent must be one having in fact a representative capacity and derivative authority, and not one created by construction or implication, contrary to the intention of the parties." In Sterett v. D. & R. G. R. Co., 17 Hun (N. Y.) 316, service upon the assistant secretary of a railroad company was held insufficient. The court said: "The duties of a managing agent and of an assistant secretary are entirely distinct. *** Brewster v. Mich. Cen. R. R., 5 How. Prac. (N. Y.) 183; Doty v. Mich. Cen. R. R. Co., 8 Abb. Prac. (N. Y.) 427; Flynn v. Hud. R. R., 6 How. Prac. (N. Y.) 308." In Great West Min. Co. v. W. of A. M. Co., 12 Colo. 46, 20 P. 771, 13 Am. St. Rep. 204, it was said: "There is a wide distinction between a general and a special or particular agent-a distinction not unfounded or useless, and one which solves many cases. A special agency exists where there is a delegation of authority to do a single act, and a general agency exists where there is a delegation to do all acts connected with a particular trade, business, or employment. Story Ag. § 17. Numerous other authorities recognize this same distinction so clearly laid down by Mr. Story. Beals v. Allen, 18 Johns. (N. Y.) 363, 9 Am. Dec. 221; Martin v. Farnsworth, 49 N.Y. 555; Merserau v. Insurance Co., 66 N.Y. 274; Railroad v. Reisner, 18 Kan. 458; Cruzan v. Smith, 41 Ind. 288. *** To bind a corporation, the service of process must be upon the identical agent provided by the statute. Chambers v. Manufactory, 16 Kan. 270; Kennedy v. Society, 38 Cal. 151; Watertown v....