Tripp Cnty. State Bank of Colome v. Colome
| Decision Date | 15 November 1926 |
| Docket Number | No. 5842.,5842. |
| Citation | 210 N.W. 674,50 S.D. 461 |
| Parties | TRIPP COUNTY STATE BANK OF COLOME v. FARMERS' CO-OP. UNION OF COLOME et al. |
| Court | South Dakota Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Circuit Court, Tripp County; N. D. Burch, Judge.
Action by the Tripp County State Bank of Colome against the Farmers' Co-Operative Union of Colome, A. W. Carlon, J. B. Painter, C. M. Barton, and another. Judgment denying relief against the named individual defendants, and plaintiff appeals. Affirmed.E. O. Patterson, of Washington, D. C., and W. J. Hooper, of Gregory, for appellant.
P. A. Hosford, of Winner, for respondents.
The defendant co-operative association, organized under Rev. Code 1919, §§ 8839-8853, executed its two promissory notes to plaintiff in the sum of $6,000. Omitting the name of Swaffer who did not appear in this action, the notes were signed “Farmers' Co-Operative Union of Colome, A. W. Carlon, Pres., J. B. Painter, Sec., C. M. Barton, Director.” Personal judgment was sought against the individual defendants. The court denied such relief. Plaintiff appeals from the judgment.
The sole question before the court is whether the judgment is sustained by the findings of fact. It is the theory of appellant that because section 8789, Rev. Code 1919, prohibits the directors of a corporation from creating debts beyond the amount of the subscribed capital stock and because section 20, Neg. Inst. Law (Rev. Code 1919, § 1724), provides that, where a person adds to his signature words indicating that he signs in a representative capacity, he is not liable on the instrument if he was “duly authorized,” the individual defendants are liable because there could be no authorization for a debt in excess of the subscribed capital stock. The above question is interesting, but we do not think it is fairly raised by the record. Even if said section 8789 applies to co-operative associations organized under Rev. Code 1919, §§ 8839-8853, and even if that section should be read in connection with said section 1724 in determining whether those persons who signed the notes in a representative capacity were “duly authorized” (upon which questions we express no opinion), yet it is apparent from the findings that no new debt was created by such notes. They were executed for a pre-existing debt of the association.
This point came before the Supreme Court of West Virginia in a case arising under said section 20 of the Neg. Inst. Law, wherein the court in First Nat. Bank...
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