Tyler Estate v. Hoffman

• Decision Date: 04 January 1910
• Citation: 146 Mo. App. 510,124 S.W. 535
• Parties: TYLER ESTATE v. HOFFMAN.
• Court: Missouri Court of Appeals

124 S.W. 535

146 Mo. App. 510

TYLER ESTATE v. HOFFMAN.

St. Louis Court of Appeals. Missouri.

January 4, 1910.

Rehearing Denied January 18, 1910.

1. CORPORATIONS (§ 415) — CORPORATE OFFICERS — AUTHORITY — BY-LAWS.

A corporate by-law giving the president authority to check on the funds of the company in the bank, and saying "notes, drafts, acceptances and other pecuniary obligations in connection with the business of the company may be executed by the president," did not of itself give express authority to create liens on its property by mortgage or pledge.

2. CORPORATIONS (§ 399) — PRESIDENT — ACTUAL AUTHORITY — HOW CREATED.

Actual authority of a corporate president or general manager to do acts of a particular kind or make a certain class of contracts in its behalf, and among others to create a lien on its property, by pledging or mortgaging it, may be established, not only by a resolution of the board of directors but by fair inference that it had been conferred on him, drawn from the continued exercise of the authority, with the knowledge of the directors, and without objection from them, and especially is this true if the officer has been allowed unhampered management of the affairs for a considerable period with knowledge of the directors.

3. CORPORATIONS (§ 400) — APPARENT AUTHORITY OF CORPORATE OFFICERS — RESTRICTIONS.

A particular course of business by a corporation through its president may create apparent authority to do acts which in point of fact the officer has been inhibited from doing by the directors; and persons in reliance on the appearance might make contracts with the official which would be binding if they had no notice of the limitation of his authority.

4. CORPORATIONS (§ 425) — AUTHORITY OF CORPORATE OFFICERS — ESTOPPEL.

The estoppel mode of validating the acts of a corporate officer, as distinguished from the inference of actual authority, from a certain course of dealing, more often comes into operation when the officer is invested with certain duties, which, according to common usage carry with them the right to do some particular act or make contracts.

5. PRINCIPAL AND AGENT (§ 99) — IMPLIED AUTHORITY OF AGENTS.

If a principal permit the agent to exercise certain powers continually, it is reasonable to imply authority to exercise them, as

principals usually protest against such conduct if opposed to their wish.

6. CORPORATIONS (§ 399) — AUTHORITY OF CORPORATE OFFICER — CHATTEL MORTGAGE.

Under the principle that if a corporation permits a corporate officer to do certain acts without objection, he will be invested with actual authority so to do, where by long course of dealing a corporation permits its president to handle all the funds, make contracts, borrow money, give pledges, etc., actual authority to make a chattel mortgage will also be inferred though the president had not theretofore made such a contract.

7. CORPORATIONS (§ 432) — AUTHORITY OF OFFICER — CHATTEL MORTGAGES — ADMISSIBILITY OF EVIDENCE.

On an issue as to the authority of a corporate president to make a pledge of its property and give a chattel mortgage, evidence that he had exercised complete control of the business of the company, handled its funds, borrowed in its name, when he wished, and had assigned contracts, under which money would come due to persons from which he had borrowed, with the tacit, if not express, approval of the board of directors, was admissible to show that he had actual power to give a chattel mortgage and pledge its property.

Appeal from St. Louis Circuit Court, Virgil Rule, Judge.

Action by the Tyler Estate (a corporation) against the Brooks Publishing Company; T. G. Hoffman, interpleader. From a judgment for plaintiff, Hoffman appeals. Reversed and remanded.

Defendant, the Brooks Publishing Company, was heretofore a corporation doing business in the city of St. Louis, to wit, publishing "syndicate matter for magazines," and its customers were the publishers of magazines. J. W. Brooks was the promoter of the company and its president. The evidence tends to show he really had full control of the business of the company, and managed it without interference by other officers or the directors. One director said: "He practically was the whole company himself; that really is the whole thing in a nutshell." In fact, prior to the transactions in controversy, there had been no meeting of the board of directors for about seven months — or later than March 12, 1907. The company's offices were in the building in St. Louis known as the "Granite Building" and belonging to the Tyler Estate, the plaintiff corporation. On the 4th or 5th of October, 1907, the interpleader T. G. Hoffman, whose office was in the same building, lent the Brooks Publishing Company $170 or $175, the amount being in dispute. The money was borrowed by Mr. Brooks as president of the company, but the testimony goes to show in the name of the company and for its benefit, and the money was used to discharge the company's obligations. The note given for the loan was dated October 5, 1907, fell due 15 days after date, and contained a promise to pay the interpleader $175, for value received, at 8 per cent. per annum from date; compounded if not paid annually. The note was signed by the Brooks Publishing Company, by J. W. Brooks, President. On the same day, October 5, 1907, the Brooks Publishing Company, by J. W. Brooks, president, executed and delivered to Hoffman, a chattel mortgage on certain personal property, to wit, a filing case, three desks, two graphophones, one shaving machine, one library table, two flat top desks, six office chairs, and two typewriters. This mortgage recited the execution of the note and purported to be given to secure it. The mortgage was duly filed in the record's office, so as to impart notice of a lien on the property described in it. Circumstances are in evidence from which respondent claims the conclusion may be drawn that the amount advanced by Hoffman on the loan was only $170, the note being made for $175 to cover interest or a bonus, and, therefore, the note was usurious, and the mortgage given to secure it invalid against an attaching creditor. Rev. St. 1899, § 3710; Marx v. Hart, 166 Mo. 503, 523, 66 S. W. 260, 89 Am. St. Rep. 715. On the contrary, the testimony of Brooks and Hoffman went to prove $175 was advanced by Hoffman, $5 being handed to Brooks to pay an urgent creditor on October 4th, and a check for the balance the next day. About a week after this loan, Brooks borrowed $50 more of Hoffman, for which he gave no note, but handed Hoffman a check of the Brooks Publishing Company for $52.50. The evidence would support different inferences as to whether this money was borrowed personally by Brooks, or in behalf of the publishing company; and also would support different inferences as to whether usurious interest was charged. No mortgage was given to secure it, but in a few days after it was made, Brooks fell into difficulty about the rent of the offices occupied by the publishing company, and Hoffman's second loan having matured, Brooks carried to Hoffman's office two graphophones, the shaving machine and an Oliver typewriter, leaving them there in pledge for said loan. A little later the Tyler Estate brought suit for rent, and attached the Brooks Publishing Company's office furniture, including the property covered by the mortgage and the pledge to Hoffman, and said property having been seized under the writ of attachment, Hoffman filed an interplea claiming title to it under the mortgage and pledge. His claim was resisted by the Tyler Estate on two grounds: as regards his mortgage, to wit, that the loan secured was tainted with...