McCarty v. Love

• Decision Date: 03 January 1927
• Docket Number: 26064
• Citation: 110 So. 795,145 Miss. 330
• Court: Mississippi Supreme Court
• Parties: MCCARTY et al. v. LOVE, SUPERINTENDENT OF BANKS. [*]

110 So. 795

145 Miss. 330

MCCARTY et al. v. LOVE, SUPERINTENDENT OF BANKS. ^[*]

No. 26064

Supreme Court of Mississippi

January 3, 1927

Division B

. (Division B.)

1 INSURANCE. Insurance company's president held not personally liable on surety bond because company's act in signing bond was ultra vires.

President of insurance company held not personally liable on surety bond, signed in his capacity of president of company, because of fact that act of company, in signing bond, was ultra vires under its charter powers.

2 CORPORATIONS. Corporate agent is not personally liable on contract, entered into for principal, on ground execution of contract was ultra vires.

Agent of corporation, entering into contract for principal, cannot be held personally liable on contract on ground that act of principal, in executing contract, was ultra vires.

3. PRINCIPAL AND AGENT. Agent does not warrant principal's authority to contract.

In the execution of contract, an agent does not warrant the authority of principal to enter into contract.

4 EVIDENCE. Parties are presumed to be informed of powers in corporation with whom they contract.

Parties contracting with corporation are presumed to be informed as to powers of corporation.

5. EVIDENCE. Handwriting witness need not be an expert.

Handwriting witness need not be an expert, since unskilled may give opinion as to genuineness of signature, based on actual knowledge of person's handwriting.

6. PRINCIPAL AND SURETY. Evidence held to show signature on surety bond was forgery.

In suit on bond of bank cashier, preponderance of evidence held to show that purported signature on surety bond was a forgery.

7. APPEAL AND ERROR. Ordinarily, chancellor's finding of facts will be disturbed only when against great preponderance of evidence. Ordinarily, chancellor's finding of facts will not be disturbed, yet, where such finding is against great preponderance of evidence, supreme court has duty to substitute its judgment for that of the chancellor.

HON. E. N. THOMAS, Chancellor.

APPEAL from chancery court of Sunflower county, HON. E. N. THOMAS, Chancellor.

Suit by J. S. Love, Superintendent of Banks, on behalf of the State Banking Department against D. A. Carr, P. R. McCarty, J. E. Walker, and others. Decree for plaintiff, and last two defendants named appeal. Reversed and decree rendered.

Reversed.

Forrest G. Cooper, for appellants.

Is J. E. Walker personally liable? This is an interesting question of agency. The facts are not in dispute. J. E. Walker was the president of the Mississippi Beneficial Life Insurance Company. This insurance company had no power to execute a surety bond. Even if the board of directors had authorized the execution of this bond, the company would not have been liable. If the insurance company had that power, the acts of its president in signing the contract would have been binding. No one questions the right of a president to execute a surety bond on behalf of a surety company. This is not a case of an agent exceeding his own authority as president. It is a case where the agent attempted to do something which was above and beyond the scope of the authority of his principal.

We recognize the rule that an agent who oversteps the authority of his principal becomes liable if he willfully misrepresents the power of his principal to those with whom he deals or if he fraudulently conceals the lack of authority and is dealing with those who rely upon his representation that his principal has that authority.

But the rule, as we understand it, is that an agent who, making no representations, concealing nothing, signs a contract for his principal with those knowing the limitation of the powers of his principal, or constructively knowing it, or are put upon their guard in any way and having such warning merely take such signature for what it is worth, having no remedy against the agent personally.

The banking department is seeking to fix liability on Walker personally merely from the fact that he exceeded the powers of his principal. We have found no authority to justify this position. On the contrary, there are many well-reasoned cases holding that such an agent is not personally liable in the absence of any misrepresentation or misconduct where he is dealing with those with access to the proper information. He who deals with an agent cannot presume either as to the powers of his agency or as to the powers of his principal. Thilmany v. Iowa Paper Bag Co., 75 A. S. R. 259; Knickerbocker v. Wilcox, 21 A. S. R. 595; Merchants & Planters, etc., v. Streuby, 91 Miss. 211, 44 So. 791, 124 A. S. R. 651.

There is another uncontradicted fact in this record which exonerates Walker from liability personally as well as his principal. When asked to sign the name of his company to the bond, Walker agreed to do it on condition that there be obtained as an additional surety P. R. McCarty who was solvent. This was a condition precedent to any liability on the part of either the agent or his principal. The bond accepted upon this condition. P. R. McCarty did not sign; therefore, no liability ever attached. State v. Allen, 32 Cyc. 45, 46, 47 and part of 49; 69 Miss. 508, 10 So. 473, 30 A. S. R. 563; Southern Cotton Oil Co. v. Bass (Ala), 28 So. 576; Sharp v. Allgood (Ala.), 14 So. 16; Lynn County v. Farish, 14 Am. Rep. 389.

The liability of P. R. McCarty. The matter was never broached to P. R. McCarty, but her name was forged to the bond. The first moment her attention was directed to the fact that her name was on the bond, she denied emphatically signing it, before she had even seen it. She never saw the bond, according to the record, until after this suit was filed and the writer borrowed it from opposing counsel and showed it to her.

Being of the firm conviction that the forgery is evident, she brings many original writings into court. The members of this court can examine and compare the handwriting. Not only do we give the court the benefit of this comparison of handwritings, but we introduce seven other witnesses on handwriting. All of these except S. A. Hamel, cashier, and A. C. Powell were personally familiar with her handwriting and told the court frankly that in their judgment her signature on the bond was not genuine.

Was there a valid acknowledgment or affidavit on the bond? This brings us to the only reliance of the banking department to support their case. There is appended to the bond a crudely drawn half-acknowledgment, half-affidavit, which is really neither. It is defective in that it does not show that any acknowledgment was taken within the town of Mound Bayou. The mayor could take acknowledgments only in the town. It was defective in that it contains no seal as is required by law of all authorities having a seal. The record shows he had a seal. It is further defective in that it contains no jurat.

As it stands it is a void effort to take an acknowledgment. It being a void acknowledgment, it has no probative value and certainly does not prove the execution of the bond. The proof is overwhelming that P. R. McCarty never appeared before or acknowledged the execution of the bond before B. H. Cresswell. We thoroughly appreciate the rule that acknowledgments will not be overturned on a suspicion and unless the proof is clear and manifest. But here we have a case where not only every witness testified that the acknowledgment was a fraud but the conduct of P. R. McCarty together with all the surrounding circumstances bears out the fact that either B. H. Cresswell never wrote and signed the acknowledgment or that P. R. McCarty never appeared before him.

There is no seal on the acknowledgment. Nobody testified that B. H. Cresswell signed his name to it. Without the seal and jurat his signature must be proved.

Is a non-expert witness competent to express his opinion as to the genuineness of handwriting when he states facts showing his familiarity with it? If non-experts are acquainted with the handwriting, either from correspondence with the party or otherwise, they need not have actually seen her write her name at any time, but may from this previous experience express their opinion.

Non-experts may testify even though they will not swear positively, just so they think the writing is genuine or false. Abbott's Brief on Facts (3 Ed.), pages 509-20, 3 Jones on Evidence, sections 546, 547, 548, 550, 553, 554 et seq.

Experts on handwriting. Any writing admitted to be genuine or proved to the satisfaction of the court may be used as a standard of comparison and the opinion of experts may be taken on the comparison. Abbott's Proof of Facts page 521; 3 Jones on Evidence, sections 546, 547, 548, 550 and 554.

The chancellor's findings. We appreciate fully the extent of the rule that the findings of a chancellor on the facts will not be disturbed unless they are manifestly wrong. We know that opposing counsel can cite a vast array of authorities to support this view but the rule is just as well established that where the record conclusively shows that there is insufficient evidence to justify the decree and the overwhelming weight of evidence is contrary to the chancellor's findings on appeal the supreme court will not hesitate to overturn the decree.

We say that the court erred here on these facts in finding Walker liable personally.

Shands, Elmore & Causey, for appellee.

I. The president of a life insurance company who signs the company's name by him as president as a surety on a bond is properly held personally liable when the charter of the company does not permit it to become a surety even though the charter be a matter of public record and there be no false representations made by the president. Medlin v. Ebernezer Methodist Church, 129...