Bullen v. Milwaukee Trading Co.

85 N.W. 115, 109 Wis. 41, 1901 Wisc. LEXIS 261

• Court: Wisconsin Supreme Court
• Decided: February 1, 1901
• Status: Published

Opinion

Maeshall, J.

Several questions are discussed in the brief of counsel for appellant, the solution of which is not necessary to a determination of this appeal, because if the one submitted to the jury was properly answered, the fact found is conclusive.

It is said that all the material issues were not submitted to the jury. There is no reversible error in that if all the issues of fact on the pleadings, that were controverted on the evidence, were so submitted. Weisel v. Spence, 59 Wis. 301; Stringham v. Cook, 75 Wis. 589; Baxter v. C. & N. W. R. Co. 104 Wis. 307, 312. The issue that counsel suggests ■was improperly omitted from the submission, to the jury, is that in regard .to the authority of the officers of appellant to execute the note in its behalf. On that subject the evidence was all one way. Had a question been submitted it would reasonably have admitted of but one answer. The evidence shows, without room for reasonable controversy, that prior to the making of the note the business of the corporation was customarily conducted by the persons who pretended to act in its behalf in the instance in question, and that such business included the making of instruments of the kind in suit; that all the affairs of the corporation, in fact, so far as the public was concerned, were intrusted to those persons who composed the firm of Win. J. Morgan & Co., and that whatever they did, pretending to act for the corporation, was always recognized as binding upon it. Under such circumstances a corporation is bound by. the acts of those whom it holds out as its agents precisely the same as is a private person. The idea that every time a person deals with an officer of a corporation, or person assuming to act in its behalf, he must under all circumstances take his chances on whether such officer or person has been specially authorized in regard to the matter, has no place in the law in our day. Proof of apparent authority of a corporate officer to contract in its behalf prima faeie establishes actual authority so to do, and evidence of want of such authority will not relieve the corporation from the burden of a contract made with reasonable reliance upon such apparent authority, if such corporation is responsible for such appearance. Ford v. Hill, 92 Wis. 188; McElroy v. Minn. P. H. Co. 96 Wis. 317.

There is no evidence to rebut the proof of apparent authority to execute the note. All the indications from the evidence are that such authority was relied upon, and without negligence, by all the persons who became interested in the note. Again, the fact that the note was executed under. seal carried with it jprima facie appearance of authority, and mad q prima facie proof thereof, which is not weakened by any circumstance or evidence that appears in the record. Thompson, Corp. §§ 4623, 4624; McElroy v. Minn. P. H. Co., supra.

There is a further conclusive answer to the complaint that the court failed to submit the question of the authority of the officers of the corporation to make the note. The request made to the court to submit the single issue as regards whether the corporation received consideration for the note waived the submission of any other question of fact.

But it is said the n,ote was issued without consideration and came to the possession of plaintiff affected with that infirmity. On this branch of the case it seems to be conceded that if the finding of the jury is right the judgment must stand, because if the corporation received consideration for the paper it cannot be heard to deny liability thereon even though its officers had no authority to make it and the corporation no legal authority to empower them to do it. The doctrine of ultra vires cannot be invoked by a corporation for the purpose of escaping a burden resulting from a contract so far executed that the corporation has received the benefit thereof. That most wholesome doctrine is well established. John V. Farwell Co. v. Wolf, 96 Vis. 10; Zinc Carbonate Co. v. First Nat. Bank, 103 Vis. 125. Such doctrine, with that other to which we have adverted,— that corporations, like individuals, are bound by the apparent authority of their agents for which they are* responsible,— is reasonable and necessary to modern methods of. doing-business. Vithout those certain safeguards it would be impossible to transact business without intolerable embarrassments. If a corporation offends against the law of its creation by a transaction so far consummated that it has become possessed of the fruits thereof, it cannot shield itself from the consequences by the doctrine of ultra vires.' It may be punished by the state against whom the offense was committed, but is powerless to add to the wrong by invoking the doctrine of ultra vires to perpetrate a fraud upon an innocent member of society. Again, if a corporation has power to contract as to a particular matter, and is responsible for the appearance of authority of a person who assumes to act in its behalf in that field, another acting in good faith may safely rely on such appearance; and if it is not supported by authority in fact the corporation must look to its guilty agent for redress, the same as an individual under like circumstances, rather than that the innocent person shall be made to suffer the consequences of the wrong. It follows that the finding of the jury, if right, renders all other questions immaterial.

. It is argued that the verdict is contrary to the evidence because it appears conclusively that the proceeds of the note were absorbed by Win. J. Morgan & Co. on the pretense of crediting the same to the corporation; that there was no indebtedness of the latter upon which such proceeds could have been legitimately applied. Looking at the record as favorably as we can for appellant, there is credible evidence both ways on that subject, and also evidence tending to show that the credit to the corporation actually entered into a settlement between it and the firm, in which the corporation received the full benefit of the note. In that view, it cannot be said but that the verdict is supported by the evidence. But let that be as it may, the evidence shows without reasonable controversy that the corporation received the proceeds of the note before the same came to the hands of Win. J. Morgan & Co. True, it is said there is reasonable ground for the belief that the check claimed to have been received for the note was used in a transaction that had no connection with the paper, but we cannot understand the evidence that way. It was dated September 21, 1896, was made by Haskins, respondent’s indorser, and was for $1,992.70. The difference between the amount of the check and the face of the note is fully accounted for. Win. J. Morgan testified positively, and his evidence does not seem to be weakened by any other, that the check represented the proceeds of the note. It was made payable to the corporation and delivered to its secretary and treasurer, and was by him realized on as such secretary and treasurer, the money being then credited by him in the account between the corporation and Win. J. Morgan & Co. In that situation it must be said that the proceeds of the note came first to the possession of the corporation and that its status thereby became fixed. If the corporate officers thereafter embezzled the money of the corporation or converted it in any way to their own use, that did not change the relation of the corporation to the holder of the note. As to him it received a full consideration for the instrument. The loss to the corporation, if there was such loss, left it bound to pay the note just the same. In that aspect of the case,— and in our judgment it is the true one, — respondent was entitled to a judgment upon the evidence as a matter of law, and the motion to that effect should have been granted at the close of the evidence.

By the Court.— The judgment is affirmed.