The Evansville Public Hall Co. v. The Bank of Commerce

• Decision Date: 19 February 1896
• Docket Number: 17,670
• Parties: The Evansville Public Hall Company v. The Bank of Commerce
• Court: Indiana Supreme Court

42 N.E. 1097

144 Ind. 34

The Evansville Public Hall Company v. The Bank of Commerce

No. 17,670

Supreme Court of Indiana

February 19, 1896

From the Vanderburgh Superior Court.

The judgment is affirmed.

UNKNOWN Note.--The powers of a president and vice-president of a corporation are the subject of a note to Wait v. Nashua Armory Asso. (N. H.), 14 L.R.A. 356).

Garvin & Cunningham, for appellant.

J. E Williamson and Gilchrist & DeBruler, for appellee.

OPINION

Howard, J.

--The Bank of Commerce, the appellee here, sued the Evansville Public Hall Company, the appellant, to recover on a promissory note for $ 3,700. In a second paragraph of complaint, subsequently filed, the bank sought to recover $ 3,600 for money expended for the use of the company.

In the third paragraph of its answer, the company averred that the note described in the complaint was executed by David J Mackey, president of the company, and that he had no authority either to incur the indebtedness or to execute the note in suit.

In a fourth paragraph of answer, it was averred that the company was organized for the purpose of buying, holding and improving real estate; that the amount of the capital stock was fixed at $ 35,000; that at or about the time the articles of incorporation were prepared, and before they were signed, a meeting was held for the purpose of effecting such organization; that for the purpose of inducing other stockholders to subscribe to the capital stock the said Mackey proposed and agreed that if they would subscribe for the stock he would undertake the erection of the building, would put in the real estate and take stock therefor, and that the entire cost of the real estate and the improvements should not exceed the capital stock of the company; that he then and there agreed that if he did not succeed in getting other persons to subscribe for the remainder of the stock he would himself take whatever additional stock was necessary to complete the building; that at the date of said meeting, and continuously thereafter until the completion of the building, the said Mackey was largely interested in and was a director of said bank; that he was also president of said company, and occupied said positions in the bank and in the company until after the completion of the building; that shortly after said meeting, one E. P. Huston, president of the bank, became secretary and treasurer of the company; that during the whole of said time a majority of the directors of the company were directors of the bank; that in pursuance of said agreement Mackey did proceed to secure bids and have the building erected, the said Huston having full knowledge of all the facts; that on the completion of the building Mackey addressed a communication to the stockholders of the company, stating that the building was completed and paid for, whereupon the other stockholders paid their subscriptions in full; that at no time during the progress of the erection of said building did the stockholders have any knowledge of any indebtedness thereon; and at no time did the directors of the company authorize Mackey to incur any such indebtedness, or to execute the note sued on.

The reply to the third and fourth paragraphs of the answer alleged that the company borrowed of the bank $ 4,800, which money was used by the company in the erection of said building; and being so indebted the president of the company executed the note set out in the complaint; and thereafter the company, by its board of directors, at a legally constituted meeting, ratified and confirmed the action of the president in borrowing said money. To this reply a demurrer was overruled.

The cause was submitted to the court for trial, and there was a finding and judgment in favor of the bank for the amount claimed on the note.

It is assigned as error that the court overruled the demurrer to the reply, and also...