Barnsdall Nat. Bank v. Dykes

1928 OK 464, 277 P. 219, 136 Okla. 226, 1928 Okla. LEXIS 932
CourtSupreme Court of Oklahoma
DecidedJuly 17, 1928
Docket17619
StatusPublished
Cited by8 cases

This text of 1928 OK 464 (Barnsdall Nat. Bank v. Dykes) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Barnsdall Nat. Bank v. Dykes, 1928 OK 464, 277 P. 219, 136 Okla. 226, 1928 Okla. LEXIS 932 (Okla. 1928).

Opinion

FOSTER, C.

This action is based upon a contract made and entered into on the 12th day of November, 1923, between the Barns-dall National Bank, signed by its president, G R. Little, and cashier, H. R. Little, as parties of the first part; the First National Bank of -Barnsdall, by L. A. O’Brien, president, and L. D. Gray, vice president, as parties of the second part; and G. R. Little, H. R. Little, John Javine, Jr., and G. E. Gibson, on their own behalf, designated as parties of the third part.

The contract provided, in substance, that the First National Bank should take over all of the assets and assume all of the liabilities of the Barnsdall National iBank, including a lot designated as lot 9, block 17, of the original town of Barnsdall; that the Barnsdall National Bank was in a failing condition, and was insolvent, and that its vice president and managing officer had misappropriated its funds, and that it was unable to longer continue as a banking institution. All of the assets of the bank are listed in the contract.

There is also a list of securities in the form of notes and bonds in the sum of $27,-833.98, which is designated as “bad assets,” together with a list of securities in the sum of about $7,100, which is designated as “doubtful' or objectionable assets,” and a third list in the sum of over $82,000, which is designated as “good assets.”

The Barnsdall National Bank and the parties of the third part guarantee all those assets listed as “bad assets,” in that if'the same are not collected within 60 days after the execution of the contract, they will pay the' First National Bank for the same and have the said assets assigned to these parties.

The contract further provides that the First National Bank shall use reasonable diligence in attempting to collect or liquidate the said bad assets, and in doing, so, will not extend any of the notes without the consent of the parties of the third part.

It further provides that so far as the real estate above mentioned is concerned, they will take over said real estate and assume all the indebtedness against it, and will pay to the parties of the third part the sum of $7,700 in cash.

The petition in this case alleges a default in the performance of the terms of the contract, in that the 00 days have expired', and the defendants have failed and refused to pay for the bad assets above referred to, and that the same have not been collected.

As a defense to this action on the contract, the Barnsdall National Bank, G. R. Little, and H. R. Little filed their answer, in which they first deny all the allegations of plaintiffs’ petition, and deny the execution of the contract; and as further defense state that the contract was entered into under fraud and duress, practiced on these defendants at the time and before the execution of the contract; that said duress, threats, intimidations, and false and fraudulent representations consist of statements made by tlie bank examiner for the United States in the presence of the officers of the First National Bank at the time of the execution of said contract. They further deny in their answer that the contract is binding because there was no authority given to either of the officers of the two banks to make an'd execute the contract: and, further, that the plaintiff, First National Bank, has never performed its part of the contract, and has failed, neglected, and .refused to endeavor to collect the notes mentioned in said contract and listed as bad assets.

To this answer the First National Bank flies its reply in the form of a general denial, and upon a trial of the case, before a jury, a judgment was rendered in favor of the plaintiff, from which the defendants Barnsdall National Bank, H. R. Little, and G. R. Little appeal. The parties will be referred to as they appeared in the trial court.

Six assignments of error are set up by the defendants, as follows: (1) That the defendants’ demurrer to the evidence and the motion for an instructed verdict should have been sustained. (2) That it was error for the court to permit the question of waiver to enter said ease by means of evidence, instruction, and argument of counsel, as the *228 same was not within the issues. (3) Thai the court erred in giving certain instructions over the objections of the defendants and refusing certain requested instructions. (4) That it was error for the court to direct a verdict against the defendant Barnsdall National Bank for the reason that the plaintiff failed to make a case against any of the defendants. (5) That the judgment rendered by the said court is erroneous. (6) That defendants’ motion for a new trial should have been sustained.

In defendants’ brief, they argue the first proposition under two heading's — that the demurrer should have been sustained, and the instructed verdict should have been given: First, for the reason that the contract was not sufficiently identified and no proper authority was shown for its execution ; and second, that there was no evidence that the cash consideration of $7,700, as provided in the contract, had been paid by the plaintiff.

.As to the first proposition- under this assignment of error, the evidence shows that the president and cashier of the two banks executed this contract, and that they were the officers of the bank at the time they executed it, and that the signatures on the contract were genuine. There is some evidence that they were authorized by a majority of the board, and that a resolution was passed giving such authority to the officers. So far as the defendant bank was concerned, there was no resolution introduced, but a purported copy of such a resolution was introduced, and some of the witnesses testified that they were present when the resolution was passed, it being-contended, however, that since the bank was selling all of its assets, the authority must come from the stockholders, and there seems to be no testimony indicating a meeting of the stockholders for the purpose of authorizing the sale.

In support of this proposition, the defendants cite numerous cases, holding, as a general rule, that the managing officers of a corporation have no power, without authority from the board of directors, to pledge or sell corporate property. Quaker Oil & Gas Co. v. Jane Oil & Gas Co., 63 Okla. 234, 164 Pac. 671; First Nat. Bank of Clifton v. Clifton Armory Co. (Ariz.) 128 Pac. 810; Citizens Security Co. v. Hammel (Cal.) 112 Pac. 731; De La Verge Refrigeration Machine Co. v. German Savings Instruction, 175 U. S. 40, 44 L. Ed. 65, and several other eases.

However, it appears that the defendant bank accepted, the contract by delivering over its assets to the plaintiff bank, and by permitting the plaintiff to assume its liabilities. A corporation cannot permit the performance of a contract, receive its benefits, and then escape liability on the grounds that the contract was ultra vires and unauthorized. Ardmore Hotel Co. v. Klein Iron & Foundry Co., 104 Okla. 125, 230 Pac. 734.

Where a corporation permits work to be done under a contract with its officers, it cannot accept services and then avoid' the contract on the grounds that the officers had no authority to enter into the contract. Rainbow Oil & Gas Co. v. Barton, 70 Okla. 271, 173 Pac. 1135.

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Bluebook (online)
1928 OK 464, 277 P. 219, 136 Okla. 226, 1928 Okla. LEXIS 932, Counsel Stack Legal Research, https://law.counselstack.com/opinion/barnsdall-nat-bank-v-dykes-okla-1928.