where he represented that another had in store a certain quantity of rice, and thereby induced an advance of money upon a receipt by which the corporation acknowledged that the rice was in store, which receipt was signed by such general superintendent, the corporation was liable.1 § 212. Of the treasurer. The rule is well settled that if a corporation permit the treasurer to act as its general fiscal agent, and hold him out to the public as having the general authority implied from his official name and character, and by its silence and acquiescence suffer him to draw and accept drafts, and to indorse notes payable to the corporation, it is bound by his acts within the scope of such implied authority. Accordingly, drafts accepted by the treasurer are presumed to be properly accepted by the corporation; and in an action by the holder on such acceptance, the burden of proof is on the defendant to show that the plaintiff is not the bona fide holder. The acceptance even of accommodation paper by the treasurer, will bind the corporation, as against persons having no notice of its character. Under a treasurer's power to make contracts for the payment of money he may compromise a disputed claim." But a person acting as secretary and 1 Planters' Rice Mill Co. v. Olmstead, (Ga. 1887) 3 S. E. Rep. 647. 2 Lester v. Webb, 1 Allen, 34. In Page v. Fall River W. & P. R. Co., (1887) 31 Fed. Rep. 257, the treasurer of a railroad corporation for several years had been in the habit of borrowing money, although without authority, on the notes of the corporation signed by himself as treas urer. Most of these notes were indorsed by one of the directors; some, by himself individually. In an action against the corporation, on an agreement signed in its behalf by the treasurer, whereby a loan obtained from a banking house took the form of a purchase of exchange on London, it appeared that railroad corporations were not in the habit of borrowing money in this mode, while on the other hand it was shown that banking houses like the plaintiff were in the habit of lending it in this manner; and it was held that the directors, by their course of conduct, had held out their treasurer to the public as the fiscal agent of the corporation, and as having authority to make and endorse notes for it; and that there was nothing in the transaction so unusual as to have put plaintiff on inquiry. 3 Credit Co., Limited, v. Howe Machine Co., (1887) 54 Conn. 357; s. c. 1 Am. St. Rep. 123. 4 Credit Co., Limited, v. Howe Machine Co., (1887) 54 Conn. 357; s. c. 1 Am. St. Rep. 123. 2 Gafford v. American Mortgage & Invest. Co., (Iowa, 1889) 42 N. W. Rep. 550. treasurer has no implied authority to release, without consideration, one of several makers of a note owned by the corporation from his liability thereon.' And so it is no defense, in an action by a corporation on a note given in renewal of an other note, to show that it was given by defendant under agreement with the secretary and treasurer of the corporation that defendant would not be called upon to pay it, without proof of power in the secretary and treasurer to make such agreement.2 § 213. The treasurer's authority to borrow and give security.— The treasurer of a savings bank is not, virtute officii, invested with the power of borrowing money for the institution, and giving its notes therefor. 1 Moshannan Land & L. Co. v. Sloan, (Pa. 1887) 7 Atlan. Rep. 102. ? Moshannan Land & Lumber Co. v. Sloan, (Pa. 1887) 7 Atlan. Rep. 102. One who was book-keeper, cashier, and corresponding clerk of a lumber company called upon a customer to collect a bill for lumber, and was refused; the customer claiming damages for failure to ship lumber in fulfillment of a previous order. He then offered to ship a car-load, which, if satisfactory, was to be the basis of an order, and, if unsatisfactory, he agreed to make no charge therefor, and cancel the former bill. Under these circumstances, and the charter and by-laws of the company not defining the duties of a cashier, and no evidence of usage being given, the agreement was unauthorized, and did not bind the company. Delta Lumber Co. v. Williams, (1889) 68 Mich. 261. 3 Fifth Ward Sav. Bank v. First Nat. Bank, (1887) 48 N. J. 513. Here, a treasurer of a savings bank, without authority, signed two notes of his bank as treasurer, and discounted them at another bank, and also, without authority, pledged certain Neither has the treasurer coupon bonds payable to bearer, belonging to his bank as collateral security for the money advanced, which was not received by the bank, but applied by the treasurer to his personal uses. It was decided in an action of trover for the bonds by the savings bank, that the bank discounting the notes, in dealing with the treasurer of the savings bank, dealt with one whose authority was defined by the charter of the bank of which he was an officer, and by common usage, and assumed the risk, should the pledge prove unauthorized. Fifth Ward Sav. Bank v. First Nat. Bank, (1887) 48 N. J. 513. In a suit against a treasurer of a company for misappropriating funds, where it appears that he had made an official report of moneys in his hands, which was largely in excess of the amounts sued for, evidence that, about the time of the report, he was endeavoring to borrow money, to pay benefits in the association, is inadmissible to contradict the report, as the act of borrowing the money was not in the course of his official duty. Screwmen's Ben. Assoc. v. Smith, (1888) 70 Tex. 168. of a company engaged in the business of operating waterworks, by virtue of his office, any implied authority to borrow money. Upon the same principle a corporation will not be bound upon such notes, especially when tainted with fraud. Nor has the superintendent and treasurer of a corporation any authority to mortgage its property or to confess judgmentagainst it from the fact that he is in the habit of borrowing money for the use of the corporation. § 214. Liability of the company and of the treasurer for his fraudulent acts.-The treasurer may make the corpora 1 The corporation provided for all its obligations by the issue of bonds. Parties, among whom was its treasurer, became possessed of these bonds by agreeing to pay the debts of the company. To discharge the personal liability thus incurred the treasurer discounted notes of the company made by him without its authority or knowledge, or that of its officers. It was held that this did not warrant a finding that the proceeds of the notes went to the benefit of the company, so as to create a liability on its part for the acts of its treasurer in subsequently issuing its notes for his own benefit. First Nat. Bank v. Council Bluffs City Water Works Co., (1890) 9 N. Y. Supl. 859. 2 A negotiable note indorsed in the name of a manufacturing corporation by the treasurer, for the accommodation of the maker, cannot be enforced against the corporation where the note did not concern any business of the corporation, and there was no by-law or resolution authorizing the treasurer to indorse negotiable paper, or any proof of a recognized course of business by which the treasurer was held out as possessing such power, or any evidence that the corporation ratified the act, or derived any benefit from it, though the note is in the hand of a bona fide holder. Wahlig v. Standard Pump Manuf'g Co., (1890) 9 N. Y. Supl. 739. And in an action against a corporation on a promissory note, it appeared that the note had been given by its treasurer for money borrowed, ostensibly for the corporation, and was signed, in the corporate name, by him, as such treasurer. The bylaws of the defendant provided that all notes should be signed by the treasurer and countersigned by the president; but of this plaintiff was ignorant. The treasurer had never been authorized to borrow money for the defendant, nor to sign any notes in its behalf, nor had the defendant ever represented that he had such authority. Plaintiff could not recover on the note although it appears that money borrowed from plaintiff by the treasurer of a corporation on a note given by him without authority was used to pay the debts of the corporation, but that the treasurer, being a defaulter, had borrowed the money to cover up his shortage; nor could he recover the amount thus borrowed under a count for money had and received. Craft v. South Boston R. Co., (Mass. 1890) 22 N. E. Rep. 920. 3 Stokes v. New Jersey Pottery Co., 46 N. J. 237. tion liable for a deposit which he receives and appropriates.' The treasurer of a corporation is responsible to the company for the amount he receives where he fraudulently issued stock in excess of the amount authorized to be issued, and converted the proceeds from the sale thereof to his own use, the stock, in the course of time, having become so intermingled with the lawful stock of the corporation as to be indistinguishable from it, and the corporation being obliged to accept it as legal stock. When the treasurer of a savings bank who had been authorized by a vote of the trustees to discharge and release mortgages, fraudulently interpolated in the record of the vote the word "assign" between the words "discharge and "release," it was held, that as between the bank and one who, misled by the record, took an assignment of a mortgage for value in good faith, the bank must bear the loss. The bond of the treasurer of a private corporation is not forfeited. by his exposing property of the corporation to be attached, or by his refusal to assist a collector by furnishing bills and papers, or by seeking with others a dissolution of the corporation.' § 215. Of the secretary.-The secretary is not ordinarily a fiscal agent of the corporation nor empowered to bind it in transactions of a financial character. Thus a secretary of a corporation can not, in the absence of special authority, bind the corporation by a "due bill" given a stockholder in consideration of his surrender of his stock. And though a corporation furnishes its secretary with money to pay its employees, and an employee monthly delivers to the secretary receipts for the month's salary, and leaves the money with the secretary, the corporation is not liable for the default of the secretary in failing, afterwards, to pay over the amounts. So where the constitution of a building association required the payment of dues at regular stated meetings, it was held, that the association was not bound by payments made at other times to the secretary and embezzled by him.2 Upon the same principle an assignment of an account for goods manufactured and sold by a corporation, made in its name by its secretary, who has general charge of its letters and orders for goods, is invalid, in the absence of other proof of his authority to make it. But where the by-laws of a savings society required its secretary to keep on hand all the moneys, securities, or property received by him on account of the society until they were disposed of by direction of the board of directors, and that he should not use, lend, exchange, or otherwise dispose of them, these provisions were considered to have entered into the contract of the sureties, and they were held liable for all moneys received by him on account of the society, and not merely for such as he was required as secretary to collect.1 The secretary may, however, bind the company by declarations as to facts properly within his knowledge as custodian of the company's book. Thus, where the secretary of a corporation, having told a purchaser of some land on which the corporation held a mortgage what amount was required to release his land, having directed him to pay that amount to the corporation's solicitor, the payment of that amount to the solicitor was held to extinguish the mortgage as to the land." When the statute requires the officer having 1 Gardner v. Omnibus R. Co., (1883) solute owner of the certificate, or 63 Cal. 326. 2 Morrow v. James, 4 Mackey, (D. C.) 59. In a recent case an information charged defendant, the secretary of a corporation, with embezzling a certificate of stock issued to him, which he had deposited with the corporation as security for such stock, and of which, as secretary, he had possession. It appeared that defendant had deposited the certificate with a bank as security for his individual note, but there was no evidence that he claimed to be the ab tried to pledge the corporation's interest therein. Upon this state of facts the court refused to entertain the presumption that he attempted to pledge more than his own interest, and it was held that a conviction could not be sustained. State v. Williamson, (1889) 74 Wis. 263. Read v. Buffum, (1889) 79 Cal. 77. Humboldt Sav. & Loan Soc. v. Wennerhold, (Cal. 1890), 22 Pacif. Rep. 920. 5 Kilpatrick v. Home Building & Loan Assoc., (1888) 119 Pa. St. 30. |