The Black Walnuts v. First Nat. Bank Of Atlanta

• Decision Date: 30 April 1936
• Docket Number: No. 25245.,25245.
• Citation: 185 S.E. 726,53 Ga.App. 316
• Parties: THE BLACK WALNUTS. v. FIRST NAT. BANK OF ATLANTA.
• Court: Georgia Court of Appeals

53 Ga.App. 316

185 S.E. 726

THE BLACK WALNUTS.

v.FIRST NAT. BANK OF ATLANTA.

No. 25245.

Court of Appeals of Georgia,

Division No. 1.

April 30, 1936.

Syllabus by the Court.

1. A note signed by a corporation under seal by and through its president, where it is shown that such president was at the time in active charge of its affairs, is prima facie admissible in evidence in a case where a plea of non est factum is made.

2. "Under the rule adopted in this state, the president of a corporation is presumed to be its alter ego. That is to say, while not ipso facto clothed with autocratic powers as to the making of contracts, he is nevertheless its chief executive officer and agent, and, without any special delegation of authority, is presumed to have power to act for it in matters within the scope of its ordinary business." While a president of a corporation has no general authority by reason of his office alone to borrow money and bind the corporation by a note evidencing the loan, signed by him in the name of the corporation, yet where the proceeds of such note go to the credit of the corporation and are checked out by its duly empowered officers, such conduct amounts to a ratification of such act whether authorized or not.

Error from Superior Court, Habersham County; B. P. Gaillard, Jr., Judge.

Suit by the First National Bank of Atlanta against The Black Walnuts. Judgment for plaintiff, defendant's motion for a new trial was overruled, and defendant brings error.

Affirmed.

Bynum & Frankum, of Clarkesville, for plaintiff in error.

Brandon, Hynds & Tindall, of Atlanta, and Hamilton Kimzey, of Cornelia, for defendant in error.

GUERRY, Judge.

The First National Bank of Atlanta brought suit against The Black Walnuts, a corporation and Oscar Dooly, on a promissory note executed as follows: "Given under the hand and seal of each party. The Black Walnuts [Seal], Oscar E. Dooly Pt. [Seal]." The note was indorsed on the back as follows: "Oscar E. Dooly." In the petition it is alleged that the note was signed, "The Black Walnut [Seal] by Oscar E. Dooly, Pres." The defendant corporation filed a plea of non est factum, that the note was not signed by any one authorized so to sign, and that it received no part of the consideration of the note. The evidence disclosed that The Black Walnuts was a corporation, and that Oscar Dooly and his wife owned its entire stock; that Oscar Dooly was president and his wife vice president and a director; that the note sued on was a renewal of other obligations of a like kind given to the bank; and that each note given was signed the same way as the note in this case and that all of them were given for borrowed money. The money was deposited in the bank to the credit of The Black Walnuts and drawn out by checks signed by The Black Walnuts, most of the checks being signed by Oscar E. Dooly. The bank had written authority, signed by Oscar Dooly and his wife, authorizing either Oscar E. Dooly or Mrs. M. P. Dooly to sign checks on the bank for The Black Walnuts incorporated. Dooly testified that the entire transaction was his individual obligation and that the corporation as a corporation never did authorize any one else to borrow money for it. The "Black Walnuts never engaged in any type or class of business. Every item was in payment of some personal account of mine or some account of Mrs. Dooly's that I was responsible for." "The Black Walnuts is merely a name for a piece of property we live on." At the time of the making of the loans, The Black Walnuts furnished a statement to the bank of its liabilities and assets.

Where the signature of a corporation is attached to a note along with its corporate seal and the name of its president is immediately under that of the corporation, and the president indorses the same individually on the back of the note, such signature imports that of the corporation by...