Smith v. Courant Company
| Decision Date | 14 May 1912 |
| Citation | 136 N.W. 781,23 N.D. 297 |
| Court | North Dakota Supreme Court |
Appeal by defendant Courant Company from a judgment of the District Court for Bottineau County; Crawford, Special Judge, in plaintiff's favor and from an order denying a new trial in an action on certain checks.
Reversed.
Judgment of the District Court reversed and a new trial granted.
Noble Blood, & Adamson, for appellant.
The business manager of a corporation does not have authority to bind the corporation as maker of commercial paper, unless authority has been specifically conferred upon him. Topeka Capital Co. v. Remington Paper Co. 61 Kan. 1 57 P. 504; Edwards v. Carson Water Co. 21 Nev. 469 34 P. 381; Oak Grove & S. N. Cattle Co. v. Foster, 7 N. M. 650, 41 P. 522; Craft v. South Boston R. Co. 150 Mass. 207, 5 L.R.A. 641, 22 N.E. 920; Sanford Cattle Co. v. Williams, 18 Colo.App. 378, 71 P. 889; Bank of Commerce v. Baird Min. Co. 13 N. M. 424, 85 P. 970; Baines v. Coos Bay Nav. Co. 45 Ore. 307, 77 P. 400; Elwell v. Puget Sound & C. R. Co. (Wash.) 35 P. 376; Herman v. Martineau, 1 Wis. 151, 60 Am. Dec. 368.
Weeks, Murphy, & Moum, for respondent.
Evidence is ample to establish the authority of Ed. A. Smith to issue checks for the Courant Company. Leekins v. Nordyke, 66 Iowa 471, 24 N.W. 1; Story, Agency, 9th ed. §§ 97, 1060.
A principal is generally bound by the contracts made for him by his agent, and acts of the agent in connection therewith, while acting in the course of his employment and within the scope of his actual or apparent authority. 31 Cyc. 1566; Phillips v. Mercantile Nat. Bank, 140 N.Y. 556, 23 L.R.A. 584, 37 Am. St. Rep. 601, 35 N.E. 932; Pochin v. Knoebel, 63 Neb. 768, 89 N.W. 264; Merchants' Nat. Bank v. State Nat. Bank, 10 Wall. 604, 19 L.Ed. 1008; 31 Cyc. 1585; Whitaker v. Kilroy, 70 Mich. 635, 38 N.W. 606.
Defendant cannot repudiate these checks after having voluntarily accepted the benefits from the transaction in which they were issued. Morris v. Ewing, 8 N.D. 99, 76 N.W. 1047; Nichols, S. & Co. v. Shaffer, 63 Mich. 599, 30 N.W. 383; Eikenberry v. Edwards, 67 Iowa 14, 24 N.W. 570; Gardner v. Warren, 52 Mich. 309, 17 N.W. 853; Vaughn v. Sheridan, 50 Mich. 155, 15 N.W. 62; Miles v. Ogden, 54 Wis. 573, 12 N.W. 81; Strasser v. Conklin, 54 Wis. 102, 11 N.W. 254; Wright v. Vineyard Methodist Episcopal Church, 72 Minn. 78, 74 N.W. 1015; Oberne v. Burke, 50 Neb. 764, 70 N.W. 387; 1 Am. & Eng. Enc. Law, 2d ed. 1195; Hoosac Min. & Mill. Co. v. Donat, 10 Colo. 529, 16 P. 157.
A corporation, like a natural person, may ratify, affirm, and validate any contract made or act done in its behalf which it was capable of making or doing in the first instance. 10 Cyc. 1069, 1076; Bank of Columbia v. Patterson, 7 Cranch, 299, 3 L.Ed. 351; Saline County v. Gage County, 66 Neb. 846, 92 N.W. 1050, 97 N.W. 583; Bishop v. Fuller, 78 Neb. 259, 110 N.W. 715; Moody & M. Co. v. Leek, 99 Wis. 49, 74 N.W. 572; German Nat. Bank v. First Nat. Bank, 59 Neb. 7, 80 N.W. 48; Holmes Booth & Haydens v. Willard, 125 N.Y. 75, 11 L.R.A. 170, 25 N.E. 1083; Pittsburgh, C. & St. L. R. Co. v. Keokuk & H. Bridge Co. 131 U.S. 371, 33 L.Ed. 157, 9 S.Ct. 770.
This appeal is from an order denying a new trial and from a judgment in favor of the plaintiff, rendered by the district court of Bottineau county. The complaint sets out thirty-three causes of action, each upon a check drawn in the name of the Courant Company, a corporation, by Ed. A. Smith, Manager. The complaint simply alleges the incorporation of the defendant, and that the defendant issued each of the several checks on the Bottineau County Bank to the parties therein named, and for the respective amounts; their indorsement by the payees, and that they came into hands of the plaintiff for value in the ordinary course of business; their presentation to the bank for payment, and refusal for lack of funds in the account of the defendant to meet them and each of them, and their presentation to the defendant for payment, and refusal.
To this complaint defendant answered, admitting its incorporation and denying each and every other allegation of the complaint. At the conclusion of the plaintiff's case, defendant moved for a directed verdict. This motion was denied, whereupon defendant asked leave to file an amended answer which, in addition to the denials contained in the original answer, stated that the checks were drawn in the name of the defendant, by one Smith; that he had no authority from the defendant to sign his name to said checks. This answer contained another allegation, but in view of our conclusion regarding certain of the checks in suit we need not determine whether the court erred in denying defendant's request to amend its answer. Aside from the last proposition, it was nothing more than an amplified statement of the defense contained in the first answer.
In view, also of our conclusion, we need not pass specifically upon the denial of the motion for a directed verdict. Most questions are answered by our general conclusions. Most of the checks in suit were given to pay employees engaged in the work incident to a printing office and the publication of a newspaper which said Smith was engaged in publishing and managing on behalf of defendant. The remainder of these checks were made payable to Smith himself. All were indorsed by the payees, respectively, to the respondent, Katie M. Smith. Ed. A. Smith, her husband, had in his possession a sum of money belonging to her. From this money he paid these checks. At the time of their issuance there was no money to the credit of defendant in the bank.
After all the evidence was submitted, each party moved for a directed verdict. The court discharged the jury and made findings of fact and entered judgment for the plaintiff for the full amount. The record discloses 109 assignments of error, but nearly all of them may be classed as relating to the general subjects which we shall determine, and they need not be treated separately.
In June, 1906, Ed. A. Smith, the husband of plaintiff, was engaged by the defendant corporation to work upon its newspaper, the Bottineau Courant. The evidence tends to show that the corporate records were in Minneapolis, Minnesota, at the time of the trial, but, be that as it may, they were not produced by the defendant to show the terms of the employment of Smith. He testified that, by a resolution of the board, he was employed as manager of the printing plant. Some of the directors testified that he was employed as editor of the newspaper, but that they supposed he would hire the help, buy the stock, and pay the bills. No limitations upon his authority, in the premises, were expressly proven, if any were agreed upon. He continued in their employ until the following January. At the time of his engagement he demanded $ 30 per week for his services; the directors or officials thought $ 100 per month adequate. They failed to agree on his compensation, but decided to leave it for future determination. There is evidence tending to show that he was to receive no compensation except from profits. He drew checks payable to himself, from time to time, at the rate of $ 30 per week, and they were paid out of plaintiff's money. All this was done without the knowledge of defendant.
On Smith leaving defendant's employment he turned over to some of the officials of the corporation papers and accounts; among them a statement of his account with the corporation, including these checks. No action was ever taken on these statements, so far as disclosed, but the treasurer told him that he thought they would be all right, and one other officer gave him some similar intimation, a short time before defendant refused payment.
We think the court may have reasonably concluded that in the conduct of a business of this nature, employing more or less labor, making purchases from time to time, and all that, that the man who was conducting the business would, from necessity and for convenience, keep a bank account and draw checks on it, and that this principal must have known or contemplated this. If he were not to do so he would not be conducting business in the manner in which it is usually conducted. Smith testified that when he first assumed the management of the plant he indorsed and deposited a check in the bank on which these checks were drawn, the indorsement being made in the name of the Courant Company, by Smith as manager; that while making such deposit the banker showed the indorsement to and inquired of one of the directors of the defendant, who was present, if that was all right, and was informed that it was. This is denied by the director. On a conflict the court may have been justified in finding that it occurred. Smith also testified that another director was in the printing plant when he was printing the checks with the signature, "The Courant Company," printed thereon,...
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