National Bank of Commerce of Seattle v. Puget Sound Biscuit Co.

• Decision Date: 12 December 1910
• Citation: 112 P. 265,61 Wash. 192
• Parties: NATIONAL BANK OF COMMERCE OF SEATTLE v. PUGET SOUND BISCUIT CO. et al.
• Court: Washington Supreme Court

112 P. 265

61 Wash. 192

NATIONAL BANK OF COMMERCE OF SEATTLE v. PUGET SOUND BISCUIT CO. et al.

Supreme Court of Washington

December 12, 1910

Department 2. Appeal from Superior Court, Pierce County; W. O. Chapman Judge.

Action by the National Bank of Commerce of Seattle against the Puget Sound Biscuit Company and others. Judgment for plaintiff, and defendants appeal. Affirmed.

J. W A. Nichols, for appellants.

Williamson & Williamson, Geo. G. Williamson, H. F. Norris, Kerr &amp McCord, and E. F. Freeman, for respondent.

CROW J.

Action by the National Bank of Commerce against the Puget Sound Biscuit Company, a corporation, and its receiver, on six promissory notes alleged to have been executed and delivered by the defendant corporation, to Gawley Foundry & Machine Works, a corporation, and assigned to plaintiff. From a judgment in plaintiff's favor, the defendants have appealed.

The notes for $1,000 each are signed 'Puget Sound Biscuit Company, by J. E. Davis, Sec'y.' Appellants contend that no authority for their execution by Davis has been shown, and that the corporation business was conducted by two trustees who did not direct the execution and delivery of the notes. The trial court found that on July 24, 1909, the defendant corporation executed the notes, which maturing at different dates from September 24, 1909, to July 24, 1910, were payable to the order of Gawley Foundry &amp Machine Works; that on July 29, 1909, the payee, for a valuable consideration, indorsed and delivered them to the respondent; that F. Charles Maurmann was president, J. E. Davis was secretary, and F. Charles Maurmann, and J. E. Davis were trustees of the Puget Sound Biscuit Company; that J. E. Davis signed the notes with authority of F. Charles Maurmann and himself, the sole trustees; that within a day thereafter the trustees ratified the action of Davis; that respondent had no notice or knowledge of any want of authority in the secretary, or any alleged invalidity of the notes; that Joseph Gawley was an authorized manager of the Puget Sound Biscuit Company, and that the notes were delivered to him to be negotiated. Appellants contend these findings are not supported by the evidence, but we hold they are, and that they must be approved. Although the business of the appellant corporation was generally conducted in an irregular and informal manner, without keeping complete records, and only one or two meetings of the board were held, it appears from the evidence that Davis as secretary executed these notes with the knowledge and consent of F. Charles Maurmann, the president, and only other trustee, for the express purpose of raising funds with which to finance the corporation, purchase machinery, complete its equipment, and enable it to transact its contemplated business. The respondent does not contend that Davis was necessarily authorized to execute the notes by reason of the simple fact that he was secretary, but does contend that, being secretary, he could be, and in fact was, vested with the ministerial duty of signing the name of the corporation to the notes, which thereupon became valid evidence of its indebtedness. Although it must be conceded that no meeting of the trustees was held, that no formal resolution was adopted requiring Davis as secretary to execute the notes,...