§ 737. Admissibility of parol evidence.-Parol evidence to prove the intention to bind the principal and not an agent, is admitted or rejected according to the general rules of evidence as applied to the particular case.1 Of course where the contract clearly expresses an intention to bind the agent personally and no principal is referred to, the admission of parol evidence showing a different intention would be subject to the objection of being offered for the purpose of contradicting or varying the terms of a written contract.2

Held, in a suit in equity, that the lessor could not treat the company as its lessee, or charge it on the covenants of the lease, on the ground that it was a beneficial lessee, or otherwise. Haley v. Boston Belting Co., 140 Mass. 732 N. E. 785.

Where one executes a note, and affixes the word "Pres." to his signature, he is prima facie personally liable thereon, the word "Pres." being taken as sedcriptio persona merely, in the absence of evidence to the contrary. And in an action against an individual on such note, in order to overcome his prima facie personal liability, he must not only show that he executed the notes on behalf of the corporation of which he is president, and that plaintiff knew this, but also that the debt evidenced by them was one that the corporation had authority to contract, and that it authorized him to contract it. Brunswick-Balke-Collender

Co. v. Boutell (Minn.), 47 N. W. 261. It was held in one case that a money obligation purporting and intended to be the obligation of a corporation, signed by the chief officer only, but with the knowledge and assent of the other officers, is in forma properly executed. Louisville & N. R. Co. v. Literary Society of St. Rose (Ky.), 15 S. W. 1065.

1 Davis v. Gemmell, 70 Md. 356. Upon an issue as to whether the execution of a mortgage by the president and secretary of a corporation was authorized by its board of directors, in whom the control and management of its affairs was vested, parol evidence is admissible to prove the action of the board, when the record of the meeting falls to state it. Allis v. Jones, 45 F. 148; Skeen v.. Allis, Id.

Parol evidence is not admissible to charge a corporation on a negotiable note, signed by its president in his own name, with nothing on the face of the note to indicate the capacity in which he signed. Sparks v. Despatch Transfer Co. (Mo.), 15 S. W. 417.

2 Abbey v. Chase, 6 Cush. 54. When the action was against the president of the corporation on a note which said: "We promise to pay," etc., signed "San Pedro Mining & Milling Company, F. Kraus, President," the court below had ruled out parol evidence offered to prove that the intention of Kraus was to bind himself and that such was the understanding at the time; but the supreme court held that upon the authorities the construction of notes drawn and signed in that way was well settled to the effect that it bound the corporation alone and that such evidence was not admissible. Leibscher v. Kraus, 5 L. R. An.

§ 738. Liability of banks for collections through correspondents. Whether the correspondent of a bank to which it sends commercial paper deposited for collection holds the relation of agent to the owner, or the bank to which it is delivered in the first instance does, and whether in case of such agent's default, the loss must fall upon the owner or the bank, is a question upon which the authorities are in great conflict. There seems to be a numerical preponderance of authority in favor of the rule that the liability of the first depositary of such paper extends only to the exercise of ordinary care and prudence in the selection of its correspondent, for the collection of the draft with proper instructions to collect and remit.1

(Wis.) 496; Castle v. Belfast Foundry Co., 72 Me. 167; Draper v. Mass. Steam Heating Co., 5 Allen, 338; Gillett v. New Market Sav. B'k, 7 Ill. App. 499; s. c. 100 Ill. 254; Scanlan v. Keith, 102 Ill. 634; Falk v. Moebs, 127 U. S. 597; Latham v. Houston Flour Mills, 68 Tex. 127; 3 S. W. 462; Dennison v. Austin, 15 Wis. 334; Houghton v. First Nat. B'k, 26 Wis. 663. Contra, Hoffner v. Brownell, 70 Ia. 591; 31 N. W. 947; Chase v. Pattburg, 12 Daly, 171. In Bean v. Pioneer Min. Co., 66 Cal. 451, 6 P. 86, it was held that a similar note bound the company alone, but that parol evidence was proper to explain it. When the operation of a contract is clearly settled by general principle of law, it is taken to be the true sense of the contracting parties. Foster v. Clifford, 44 Wis. 569. A signature by a bank officer placed under the word "witness" where the instrument clearly shows it is the act of the corporation and not of the officer signing will bind the corporation. Dayer v. Rathbone, 5 N. Y. Snpp. 505; 52 Hun, 615.

2 Checks and drafts sent from one bank to another were indorsed "for col

lection," and credited " subject to payment," according to the dealings between the banks. Part of them were paid to the receiver of the latter bank after its failure, and the balance were credited to it by the payors. It was held that the amount paid the receiver should be accounted for as a trust fund, but the balance as a general debt. First Nat. B'k v. Armstrong, 42 F. 193. A person directed his bank to pay certain debts, which would mature during his absence, and gave a check to cover the amount. The bank paid one creditor with a sight draft on its own correspondent, and failed before the draft was paid. A receiver was appointed, and plaintiff, holder of the draft, filed a bill to have the receiver declared a trustee of the assets for its benefit. It was held that a trust was not created by the mere revocable direction of the debtor, to which plaintiff was not a party. Louisville Bkg. Co. v. Paine, 67 Miss. 678; 7 So. 462; Meachem Ag. Sec., 514 and cases cited.

The reason often assigned for this view is, that it is necessary and customary and in the usual course of business for banks to collect through correspondents of which necessity, custom and course of business the owners and holders of paper have full notice and knowledge.

But there are many usages and customary methods which enter into employments of banking and other corporations without relieving the latter from liability for the negligence or malfeasance of their agents, and this would seem on every principle of reason and justice, to constitute no exception to the general rule that no usage established for the mere convenience and benefit of one of the parties to a contract may alter or modify his liability, or relieve him from duties imposed by a positive rule of law, unless expressly referred to and made a part of such contract.1 When a bank receives a draft or note for collection, it enters into a contract by implication to perform such duties as are necessary for the effective performance of such contract and for the protection of its customer. The real agreement is, that the depositary shall make the collection, and there is no contract whatever nor necessarily any contemplation that the services of another in whose selection the owner of the paper has no voice or part shall be procured to make the collection. There is no good reason why banking companies or bankers should be excepted from the operation of the cardinal and well-established principle, that every person is liable for the acts of such agents as may be appointed or designated by him to transact such business as he has undertaken to perform for others.2

Dickinson v. Gay, 83 Am. Dec. 656 n., 664; E. Tenn., etc., Ry Co. v. Johnson, 75 Ala. 596; East Birmingham L. Co. v. Dennis, 85 Ala. 565; 26 Am. & Eng. Corp. Cas. 35.

2 Streissguth v. Nat. Ger. Am. B'k, 43 Minn. 50; 7 Lawy. Rep. Ann. 363. See

§ 739. Authority presumed from use of seal by officer authorized to affix it. It is a familiar principle that corporations cannot dispute the authenticity of instruments to which the corporate seal has been affixed by an officer who has custody of it, and whose usual duty it is to attest and seal written documents, evidencing corporate acts. A person claiming under such an instrument would, in most cases, have a right to presume authority for its execution from the corporation.1

§ 740. Proof of agent's appointment.—In the absence of evidence showing such knowledge, acquiescence or recognition by the managing officers as operates to estop the corporation from denying the agent's authority, the agency must be proved otherwise than by the mere acts of the agent.2

also Pittsburg Exch. Nat. B'k v. N. Y. Third Nat. B'k, 112 U. S. 276; Allen ▼. Mer. B'k, 22 Wend. 215; Ayrault v. Pac. B'k, 47 N. Y. 570; Simpson v. Waldby, 63 Mich. 439; 30 N. W. 199; Titus v. Mech. Nat. B'k, 35 N. J. L. 588; Reeves v. State B'k, 8 Ohio St. 465; Tyson v. State B'k, 6 Blatchf. 225; Am. Expr. Co. v. Haine, 21 Ind. 4; Mackensey v. Ramsays, 9 Clark & F. 818; Van Wart v. Wooley, Barn. & C. 439. In most of the other states cases may be found in which the bank receiving the paper for collection was held not liable to the owner. Where a president of a corporation appears as the active agent in the execution of any work, parties employed by him have a right to assume that he is acting for the corporation, and that his acts in that respect are its acts, and binding upon it. Solomon R. Co. v. Jones, 30, Kan. 601; 2 P. 657.

1 Com. Ex. B'k v. Cumberland Coal Co., 1 Bosw. 436; § 195. Where a mortgage is given by a corporation to secure a bona fide debt, and in a proceeding by an unsecured creditor to set it aside its execution is admitted, and its validity asserted by the company and all the stockholders and officers thereof, the mere omission to attach the corporate seal will not have the effect to invalidate it. Allis v. Jones, 45 F. 148; Skeen v. Allis, Id.

2 Talladega Ins. Co. v. Peacock, 67 Ala. 253. In an action upon the time checks of a corporation signed by its agent, the plaintiff must produce some evidence of the agent's authority unless that is admitted by the pleadings. Rio Grande, etc., Co. v. Coby, 7 Colo. 299; 3 R. 481. Where a division superintendent employs a physician to attend upon passengers injured in a derailment of the train, and the company denies his authority, and contests its liability under the employment, it is error for the court to instruct the jury that the division superintendent will be presumed to have such authority until the contrary appears. Union Pac. R. Co. v. Beatty, 35 Kan. 265; 10 P. 845. In the absence of proof

The general rules of evidence governing the proof of acts of corporate bodies, aggregate or select, naturally suggest themselves in this connection, so that but little need be said on this topic. The records of the corporation are, of course, the most satisfactory and sometimes the only admissible evidence of an agent's appointment.1 But if the corporation has permitted a party to act as its agent, evidence of that fact is admissible as original evidence on an equal footing with written authority or formal appointment.2

Acts done by a corporation, which presuppose the existence of other acts to make them legally operative, are presumptive proof of the latter.3

Corporate assent and corporate acts not reduced to writing may be inferred from other facts and circumstances, without violation of any known rule of evidence.4

that the keeping or conducting of a hospital appertains in any manner to the corporate purposes of the defendant, or that it had ever engaged in any such undertaking, such defendant is not responsible for the debts of an individual who occupies its building and represents herself to be the matron" of its institution. Woman's Christian Temperance Union v. Taylor, 8 Colo. 75; 5 P. 826.

1 In an action against the corporation to recover money expended by the plaintiff while in the employment of the corporation, he having, as it was alleged, authority by a vote of the trustees to make the expenditure, it was held that the entries made at the time in the books of the corporation being the best evidence they should be produced; that an officer could not be permitted to testify what the votes were, or the authority conferred by them; and that the plaintiff should first have notified the corporation to produce the books and if not produced, he might then give parol evidence of the votes of the trustees. Haven v. N. H. Asylum, 13 N. H. 532. See Owings v. Speed, 5 Wheat. 714. The corporation's records are the only admissible evidence to establish a resulting trust in its favor, of real estate, purchased by a committee of the corporation. Epis. Ch. v. Herrick. 25 Me. 354.

Meth.

2 Exchange B'k v. Monteath, 17 Barb. 171; Christian Univ. v. Jordon, 29 Mo. 250; Williams v. Christian Female College, Ibid. 250; Hotchin v. Kent, 3 Mich. 526.

* Burgess v. Pue, 2 Gill. 254.

' Union B'k v. Ridgley, 1 Han. & Gill. 426; State B'k v. Cornegys, 12 Ala.