Mcintire v. Preston

• Citation: 48 Am.Dec. 321,10 Ill. 48,5 Gilman 48,1848 WL 4116
• Parties: CHARLES MCINTIREv.JOHN PRESTON.
• Decision Date: 31 December 1848
• Court: Illinois Supreme Court

5 Gilman 48

10 Ill. 48

1848 WL 4116 (Ill.)

48 Am.Dec. 321

CHARLES MCINTIRE

v.JOHN PRESTON.

Supreme Court of Illinois.

December Term, 1848.

DEBT, in the Pike circuit court, brought by the plaintiff in error against the defendant in error, and heard before the Hon. Norman H. Purple, without the intervention of a jury, at the September term, 1848, when a judgment was rendered for the defendant for costs. The plaintiff entered a motion for a new trial, which was overruled.

M. HAY, for the plaintiff in error.

1. Notes payable on demand, so far as the rights of indorsees are concerned, have a reasonable time for payment. Chitty on Bills, 220; 3 Kent's Com. 78, 78, 90, 91.

2. An insurance company has the right, independent of its charter, to take promissory notes in the usual and legitimate course of business. Angell & Ames on Corp. 143-6; I Phillips on Insurance, 205, 206; N. Y. Fire. Ins. Co. v. Sturges, 2 Cowen, 664; Barker v. M. F. Ins. Co. of N. Y., 3 Wend. 94; Morse v. Oakley, 2 Hill's (N. Y.) R. 265; 2 Kent's Commentaries, sixth edition, 278, note; 3 Harr. 461; Russell v. De Grand, 5 Mass. 35; Mott v. Hicks, 1 Cowen, 542; N. Y. Firemen Ins. Co. v. Ely, 2 do. 700; Commonwealth Ins. Co. v. Whitney, 1 Metc. 21; Bedford Com. Ins. Co. v. Covell, 8 do. 442; New Eng. Marine Ins. Co. v. De Wolf, 8 Pick. 56; Hayward, adm'r, v. The Pilgrim Society, 21 do. 270.

3. The right of the Ocean Ins. Co. to take a note is expressly recognized by its charter. Laws of Mass. 1818; Statute of Anne, § 1, in Appendix to 2 Scam. 593.

4. This right being shown, it has the right to assign notes, until the contrary is shown. Barker v. Mec. Fire Ins. Co. 3 Wend. 94; N. Y. Firemen Ins. Co. v. Ely, 2 Cowen, 702; Same v. Sturges, ib. 664, 667, 668; McFarland v. State Bank, 4 Ark. 55, 522; Everett v. The United States, 6 Porter, 181; Holcomb v. Ills. & Mich. Canal, 2 Scam. 230?? Bank of Washtenaw v. Montgomery, ib. 426; Commercial Bank v. St. Croix Man. Co., 23 Maine, (10 Shepley,) 281.

5. A note may be indorsed by the payee or his agent. 3 Kent's Com. 88. The indorsement in this case is in proper form purporting to be by its proper agent or officer. A corporation need not contract under its corporate seal. Angell & Ames on Corp. 151; ib. 153-5, 158, 175; Story on Agency, §§ 52, 53; Garrison v. Combs, 7 J. J. Marsh. 84; Montgomery R. R. Co. v. Hurst, 9 Ala. 516; Conover v. The Mutual Ins. Co. 3 Denio, 255; New Eng. M. Ins. Co. v. De Wolf, 8 Pick, 58; Folger v. Chase, 18 do. 64.

6. Where an indorsement purports to be made by an agent, it can only be denied by plea under oath. Rev. Stat. 421, § 59; ib. 472, § 29; Delahay v. Clement, 2 Scam. 575; Deshler v. Guy, 5 Ala. 186; Williams v. Gilchrist, 11 New Hamp. 540.

7. The holder had the right to fill up the blank indorsement. Folger v. Chase, 18 Pick. 63; Gilham v. State Bank, 2 Scam. 245; Jackson v. Haskell, ib. 565; Northampton Bank v. Pepoon, 11 Mass. 288.

O. H. BROWNING and N. BUSHNELL, for the defendant in error.

I. It was necessary for the plaintiff under the plea of the general issue, to prove the existence of the corporation. This could only have been done by the production of their charter, and by proof of user under it. This the plaintiff has not done; no user is proved. Angell & Ames on Corporations, 377; Jackson v. Plumbe, 8 Johns. 378; Bill v. Turnpike Company, 14 do. 416; Bank of Auburn v. Weed, 19 do. 300; Bank of Utica v. Smalley, 2 Cowen, 780.

In the case of a foreign corporation, as in this case, it is always necessary for the plaintiff, on general issue pleaded, to prove the existence of the corporation. To this there seems to be no exception. School District v. Blaisdell, 6 New Hamp. 197; Henriques v. Dutch West India Co., 2 Lord Raym. 1535.

II. The plaintiff has not shown that the Ocean Insurance Company had power to take promissory notes. If the company could not take notes payable to itself, it is clear it could not by an indorsement on such note transfer any title to a third person. Berry v. Hamby, 1 Scam. 468. The power must be shown by the charter--by the construction of the various provisions of the whole charter. In this case the plaintiff has exhibited but a portion of the charter. The most the plaintiff can insist on in this case is, that the power may be implied from the parts of the charter given in evidence, but how far any such implied power may be restricted by the other parts of the charter, can not appear to the court. And this is the more important in this case. because the part of the charter given in evidence refers to the other parts of the charter not before the court, as in part defining and restricting the powers of the corporation.

A company incorporated for a specific purpose has no powers except such as are specifically granted, or which may be necessary to carry into effect the powers granted. To ascertain whether the company have power to make a particular contract, or to do a particular act, we must look into the charter--the whole charter--and determine the question by the construction of all of its provisions. The People v. The Utica Ins. Co., 15 Johns. 383-4; N. Y. Firemen Ins. Co. v. Ely, 2 Cowen, 678, 699-701, 709, 710; Betts v. Menard, Breese, App. 14-15; The Salem Mill Dam v. Ropes, 6 Pick. 23; Beatty v. Knowler, 4 Peters, 152; Gozzler v. Georgetown, 6 Wheat, 597.

III. Even admitting that enough appears to prove that the corporation had power to take promissory notes, the charter confers no authority to assign notes; the power is not expressly given by the charter, nor is it a necessary incident or means of conducting their specific business of insurance. On the contrary, the charter clearly contemplates that notes taken for premiums, shall remain in the hands of the company until paid, and the proceeds are in a a condition to be distributed as profits, by way of dividends among the stockholders.

A company incorporated for a specific purpose will be strictly confined to the precise business authorized by the charter. Bank of Augusta v. Earle, 13 Peters, 587; Broughton v. Manchester Water Works, 5 Eng. Com. Law R. 215; 2 Kent's Com. 299-300; Beatty v. Knowler, 4 Peters, 152.

The specific grant of a particular power excludes the idea that the corporation can exercise any other power. The grant of power to do a particular act, and in a particular way, without any negative words, excludes all power to do any other act, or to exercise the power granted, in a way different from what the charter prescribes. N. Y. Firemen Ins. Co. v. Ely, 2 Cowen, 678, 699-701, 709-10; North River Ins. Co. v. Lawrence, 3 Wend. 482; The Life & Fire Ins. Co. v. The Mechanic Ins. Co., 7 do. 31; Beach v. The Fulton Bank, 3 do. 573.

IV. The plaintiff had no authority to fill up the indorsement, and to add to the description of the name of Scott, in the manner he has done.

The name of Scott, on the back of the note, unconnected by proof of the insurance company, was that of a guarantor, and not of an indorser; not being shown to be the agent of the company, he had no authority to transfer the legal title to the note. Camden v. McCoy, 3 Scam. 437; Angell & Ames on Corp. 144, 158, 175.

In all the cases relied on by the plaintiff, it appeared affirmatively by the plaintiff's testimony, that the person undertaking to assign a note as the agent of the payee, was in fact such agent, or where the statute was relied on as dispensing with proof of the assignment, unless a plea was put in denying the assignment under oath, there was produced by the plaintiff an assignment complete and full, and in which the agent in terms described himself fully as the agent of the principal, and as doing the act in his name. Chitty on Bills, 197; Story on Agency, §§ 52, 53; Angell & Ames on Corp. 158; Delahay v. Clement, 2 Scam. 575; Garrison v. Combs, 7 J. J. Marsh. 85-6; Williams v. Gilchrist, 11 New Hamp. 540; 18 Pick. 63; Gillham v. State Bank, 2 Scam. 245; Long v. Colburn, 11 Mass. 98.

Our statute does not affect this case. It does not dispense with the production of an indorsement in fact, and which when produced, must be perfect in form, and on its face purporting to be made by competent authority. Rev. Stat. 421, § 59.

R. S. BLACKWELL, for the plaintiff in error, in conclusion.

The points upon which the counsel of the defendant in error rely for an affirmance of the judgment rendered by the court below, are 1st, that the corporate capacity of the Ocean Insurance Co. has not been shown by the plaintiff, because the whole of their charter is not set out in the record, and because there is no proof of a user of their franchises; 2nd, that the company had no power to take a note; 3rd, that they had no power to transfer their interest to the plaintiff by indorsement; 4th, that the authority of the secretary of the company to indorse the note should have been affirmatively shown; 5th, that the indorsement as originally made was not legal in point of form; and 6th, that plaintiff had no authority to fill up the indorsement upon the trial in order to perfect it and clothe the plaintiff with a legal title. To which we reply:

I. As to the corporate character of the company.

1. In an action brought by a corporation, if the defendant wishes to deny their corporate character, he must plead nul tiel corporation; by pleading the general issue, as in this case, he admits the capacity of the plaintiff to sue as a corporation. The Society for the Propagation, etc. v. The Town of Pawlet, etc., 4 Peters, 480; Prince v. The Commercial Bank of Columbus, 1 Ala. 241; Methodist Episcopal Church, etc. v. Wood, 5 Ohio, 174; Phœnix Bank v. Curtis, 14 Conn. 437.

2. If the contrary shall be held by this court, then we insist that we have complied with the technical rule. The first section of the charter offered in evidence declares the company to be a body politic and corporate, prescribes their general powers, and confers upon them a corporate name by which they may sue and be sued. This is ...