Coston-Riles Lumber Co. v. Alabama MacHinery & Supply Co.

95 So. 577, 209 Ala. 151, 1923 Ala. LEXIS 341

• Court: Supreme Court of Alabama
• Decided: February 8, 1923
• Docket: 3 Div. 582.
• Status: Published

Opinions

SOMERVILLE, J.

As shown by the státement of facts above, the defendant corporation, domiciled and doing business in Jefferson county, and not doing business in Montgomery county, authorized its secretary-treasurer, by a resolution duly shown by its minutes, to execute to the plaintiff corporation “the company’s note for four months for the amount we owe them.”

Under that authority, thus expressed, defendant’s secretary-treasurer closed up defendant’s indebtedness to plaintiff by executing four several promissory notes, reciting that they were given for the purchase money for certain machinery, the title to which was reserved in the vendor-payee until the notes were paid, with the right to take possession thereof in case of default in payment; and each note contained this provision:

“All suits for the collection for said goods or of notes given, or for the recovery of said goods, or for damages growing out of this contract or the seizure of said goods, shall be prosecuted in Montgomery county, state of Alabama, and not elsewhere.”

The printed forms used for these notes were furnished by the payee, and the presence of this venue clause in the notes was not known to the defendant corporation, and was not observed by its officer who executed the notes nor known to him until this suit was filed.

The question, therefore, is whether the express authority given to defendant’s secretary-treasurer to execute notes for its indebtedness to plaintiff included or implied an authority to waive defendant’s statutory right to be sued on the notes only in Jefferson county, and to stipulate that such ’ suit should be brought only in Montgomery county — a venue not otherwise available to-plaintiff.

[1] We think that an application of the settled principles of the law of agency to this case requires a negative answer. “As a general rule of law every grant of power implies and carries with it, as an incident, authority to do whatever acts, or use whatever means are reasonably necessary and proper to the accomplishment of the purpose for which the agency was created. * * * Such incidental authority includes all acts and things which are connected with and essential to the business in hand; it is measured by the nature and necessities of the purpose to be accomplished, and is prima facie coextensive with the business intrusted to the agent’s care. The means adopted, however, should be such as are most usual, such means indeed as are ordinarily used by prudent persons in doing similar business.” 2 Corp. Jur. 578, § 220; Hall, etc., Co. v. Harwell, 88 Ala. 441, 6 South. 750; Scales v. Mount, 93 Ala. 82, 9 South. 513.

“As a general rule, the authority of an agent will not be extended beyond that which is given in terms, or is necessary and proper to carry the authority given- into full effect.” Scales v. Mount, 93 Ala. 82, 83, 9 South. 513.

[2] Authority to execute a promissory note to secure existing indebtedness necessarily implies the power to make and deliver a note' containing everything necessary to create a valid and effective obligation to pay; and, perhaps, such an authority would ordinarily permit the inclusion in the note of such other stipulations, designed to strengthen the obligation and facilitate its enforcement, as, by general custom and common use, are incorporated with the promise to pay.

[3] Very clearly, the venue provision here asserted was not necessary to the full exercise of the authority granted, and its inclusion in. promissory notes is neither usual nor to be expected. In accord with this view, we have recently held that a note containing this very provision was, as a matter of law, not an ordinary promissory note. Stewart v. Capital Fert. Co., 207 Ala. 596, 93 South. 641. And in City Bank of Wheeling v. Bryan, 72 W. Va. 29, 78 S. E. 400, 404, the Supreme Court of West Virginia held that an agent’s authority to execute promissory notes for the principal’s debt did not include an implied authority to stipulate in the notes that any attorney could appear for the maker in a court of record, and waive process and confess judgment in favor of the payee; and that such a stipulation was therefore utterly void.

We think and hold that the venue provision here in question was in excess of the agent’s authority to execute the notes, and that it is not binding on his principal, this defendant.

It results that the plea in abatement should have been sustained instead of denied, and the judgment of the circuit court was grounded in error.

Let the judgment be reversed and the cause remanded for another trial in accordance herewith.

Reversed and remanded.

All the Justices concur, except THOMAS, J., who dissents. SAYRE, GARDNER, and MILLER, JJ., concur in the opinion. ANDERSON, C. J„ and McCLELLAN, J., concur on the ground that the stipulation in question was ultra vires of the defendant corporation.