Pelton v. Spider Lake Sawmill & Lumber Co.

112 N.W. 29, 132 Wis. 219, 1907 Wisc. LEXIS 117
CourtWisconsin Supreme Court
DecidedMay 21, 1907
StatusPublished
Cited by19 cases

This text of 112 N.W. 29 (Pelton v. Spider Lake Sawmill & Lumber Co.) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pelton v. Spider Lake Sawmill & Lumber Co., 112 N.W. 29, 132 Wis. 219, 1907 Wisc. LEXIS 117 (Wis. 1907).

Opinion

MaRshaxu, J.

This case having been here on appeal from a former judgment (see Pelton v. Spider Lake S. & L. Co. 117 Wis. 569, 94 N. W. 293), when many of the questions in relation to respondent’s liability on the notes were settled, it is not deemed advisable to discuss any but the new questions raised, at least to any considerable length.

Counsel for appellants assign thirty-one errors, but many of them are of such a character as to require but a brief mention because of the former decision or the state of the record, •and some none at all because they are not discussed, suggesting the reasons supposed to exist why the rulings involved were prejudicial. The latter will be passed over without mention, and the others will be discussed in the order which seems most logical under the circumstances, and without referring to them in all their details, such reference not being deemed necessary to a decision of the case.

The court was justified in changing the answer to the first question from “Tes” to “No” because the evidence is all one way; that while the corporation owned the blanks with the signature'of Humphrey &-Holdridge affixed thereto, it had no concern in filling them or with the paper in its completed form. At best for the plaintiff the corporation merely consented to the use of the blanks by Hathway so far as the vice-president had any authority in the matter and that, even, as indicated in the statement, was controverted. The mere [227]*227ownership' of the blanks did not constitute ownership of the notes as legal obligations on its part to pay.

The court was warranted in changing the answer to the second question as there was no evidence that the corporation specially authorized Hathway to use its credit, and it was ruled on the former appeal that without such special authority the corporation was not bound by his act to any person charged with notice of such want of authority. The mere consent of one of the officers of a corporation that another officer may do an act requiring special corporate authority, manifestly, does not constitute any legitimate basis for the doing of such act.

Willoughby & Hathway being factors and guarantors of payment for the lumber sold and liable to remit at the end of each month for that sold during such month they became indebted to appellants as fast as lumber was disposed of for the sale price thereof less their commissions. They recognized that relation when the first note was sent to appellants. The consideration therefor as regards the latter was a mere extension of the time of payment of so much of the Willoughby & Hathway indebtedness as was covered by the note. By the finding of the jury and the evidence it is a' verity in the case that when the note was given it was solely on account of such indebtedness, and, therefore, as regards the maker of the note it was at best purely accommodation paper.

It is suggested that as the acceptance of the paper involved an extension of the time of payment, as before indicated, it was supported by sufficient consideration under sec. 1675 — 51, ch. 356, Laws of 1899, to bind Humphrey & Holdridge notwithstanding it was given for the pre-existing debt of Wil-loughby & Hathway, and to bind the corporation to which Humphrey & Holdridge had intrusted the signed blanks, and, therefore, when the second note was given to take up the first it canceled the latter liability, creating a new one of the same nature of the corporation to Humphrey & Holdridge, which [228]*228was likewise canceled, a new one of like nature being created when the notes in suit were given, and so the corporation in fact received a consideration for the latter notes. That argument is ingenious hut we are unable to see sufficient merit in it to warrant any extended discussion thereof. The authorities cited by the learned counsel do not seem to hear out their contention. It is regarded as a sufficient answer to such contention that the corporation did not mate the in-dorsement on the second note or those on the last notes, or turn out the paper in either case upon its own or any other liability. If it, recognizing a liability, had discharged the same in the manner suggested the case might be different. As it stands, the giving of the paper with the corporate in-dorsement in form thereon was wholly unauthorized. The wrongful use of the paper, falsely purporting to represent a corporate liability, as' to one having knowledge of the facts or who was reasonably put on guard in respect thereto, manifestly, would not bind the corporation. So the verdict is fully sustained that the corporation received no consideration for the notes in suit, they being merely the last of a series of renewals. They go back to and depend upon the first note, which was given, as we have seen, solely for the indebtedness of Willoughby & Hathway or, more correctly speaking, as collateral thereto.

On the former appeal it was supposed that the first note was indorsed by respondent but not in the chain of title from the makers to appellants, and so it was held that such an in-dorsement was notice, of itself, that the paper might be, as regards respondent, for accommodation only, putting the appellants on inquiry in respect thereto. It seems logical to hold all the more, appellants were put on inquiry as to the real character of the notes in suit, since they knew that the person who assumed to indorse them in the name of the cor.poration was its treasurer and that the use made thereof was solely for his advantage and that of his partner. A treasurer [229]*229of a corporation has no authority ear officio to give corporate notes or to obligate the corporation on commercial paper, though true, if the usage of the corporation is to the contrary and it receives the proceeds it will he hound. 1 Rand. Comm. Paper (2d ed.) § 371. But that does not help in this ease, as the corporation did not receive any benefit from the notes indorsed in its name. According to the verdict of the jury and the evidence, as we have seen, the notes have no' other basis than the liability of Willoughby & Hathway, and as they were taken by appellants with knowledge that Hathway was the treasurer of the corporation and that he assumed to use its name and credit in his private affairs they were put upon inqrriry in respect to his authority so to do, and, therefore, cannot he held to have come by the paper bona, fide so as to bind the corporation. It could only he hound under the circumstances, as held on the former appeal, by showing special authority for Hathway to make the paper as he did, or that the corporation received the consideration for the notes, both of which matters are negatived by the verdict. This is deemed to he amply supported by the authorities cited by counsel for respondent. Germania S. V. & T. Co. v. Boynton, 71 Fed. 797, 19 C. C. A. 118; Farmers’ L. & T. Co. v. Fidelity T. Co. 86 Fed. 541, 30 C. C. A. 247; Park Hotel Co. v. Fourth Nat. Bank, 86 Fed. 742, 30 C. C. A. 409; McLellan v. Detroit F. Works, 56 Mich. 579, 23 N. W. 321; Merchants’ Nat. Bank v. Detroit K. & C. Works, 68 Mich. 620, 36 N. W. 696; West St. Louis Sav. Bank v. Shawnee Co. Bank, 95 U. S. 557.

Appellants’ counsel refer to Hiawatha I. Co. v. John Strange P. Co. 106 Wis. 111, 81 N. W. 1034, as limiting the foregoing rule to a situation where the paper, under the circumstances, irresistibly, suggests want of authority to utter it.

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Bluebook (online)
112 N.W. 29, 132 Wis. 219, 1907 Wisc. LEXIS 117, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pelton-v-spider-lake-sawmill-lumber-co-wis-1907.