Simon v. Calfee

• Decision Date: 03 July 1906
• Citation: 95 S.W. 1011,80 Ark. 65
• Parties: SIMON v. CALFEE
• Court: Arkansas Supreme Court

95 S.W. 1011

80 Ark. 65

SIMON v. CALFEE

Supreme Court of Arkansas

July 3, 1906

Appeal from Pulaski Circuit Court; Edward W. Winfield, Judge affirmed.

Judgment Affirmed.

Fulk Fulk & Fulk, for appellant.

1. The judgment as against the Arkansas Stables can not stand because there was no evidence to show that it is such a corporation as can bind itself by indorsement on a note. 10 Cyc. 1109, 7a; Ib. 1113, 2, 1115, 4. It is the duty of every person dealing with a corporation to inform themselves as to the extent of its powers. 10 Cyc. 1148e, (1) (11); 62 Ark 33; 12 Cent. Dig. col. 1902. A plea of the general issue in an action by a corporation does not admit the power of the plaintiff to make the contract declared on; and proof of that fact is still necessary to enable the plaintiff to recover. 14 Conn. 437; 4 N.Y. 714; 49 Ill.App. 180; 95 U.S. 557.

2. The assignment of the contract was in violation of the law, and notes executed in fulfilling the same were without legal consideration to support a promise to pay for an interest in the contract. 2 U. S. Comp. St. § § 3963-4; 66 Ga. 664; 30 Ia. 223.

Marshall & Coffman, for appellee.

1. Want of power in a corporation, or of authority of its officers to bind it, is a matter of special defense, which, to be available, must be pleaded by the defendant. Thompson on Corp. § § 7617, 7619; 77 Cal. 418; 11 Tex. 585; 19 S.W. 910.

2. Appellants can not be permitted to occupy the inconsistent positions of pleading below that the notes were void because obtained through false representations that the contract was void, and claiming in this court that the contract was illegal.

OPINION

HILL, C. J.

1. Calfee sued Chas. M. Simon, Julia Simon and Arkansas Stables on two promissory notes for $ 125 each in favor of J. P. Allen & Company, signed by Chas. M. Simon and assigned to Calfee, a member of Allen & Company, and indorsed by Julia Simon and Arkansas Stables. Julia Simon went out of the case on a plea of coverture. The complaint alleged the indorsement of the notes by Arkansas Stables, a corporation organized under the laws of Arkansas.

The answer did not deny this allegation as to the corporate existence of Arkansas Stables.

The first point made is that there was no evidence introduced to show that the Arkansas Stables was a corporation which could bind itself by indorsement. There was no necessity of any evidence of the corporate existence of the Arkansas Stables, as the apt allegation of it in the complaint was not denied.

Where the power of the officers of a corporation to bind it is challenged in an answer, the authority should be shown in evidence, and not presumed. City Electric St. Ry. Co. v. First Nat. Exchange Bank, 62 Ark. 33, 34 S.W. 89. But a corporation can not avail itself of a want of power or lack of authority of its officers to bind it unless the defense is made on such grounds. Thompson on Corp. §§ 7617-7619.

2. The defense to the notes was that Allen & Company and Simon entered into a contract to bid on some Government mail contracts, that they secured two such contracts, that Allen & Company knew the contracts were illegal, that the notes were executed in pursuance of the alleged contract; and further alleged that, after the bids were accepted,...