Union Gold Mining Co. v. Rocky Mountain National Bank

2 Colo. 565
CourtSupreme Court of Colorado
DecidedFebruary 15, 1875
StatusPublished
Cited by24 cases

This text of 2 Colo. 565 (Union Gold Mining Co. v. Rocky Mountain National Bank) is published on Counsel Stack Legal Research, covering Supreme Court of Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Union Gold Mining Co. v. Rocky Mountain National Bank, 2 Colo. 565 (Colo. 1875).

Opinion

Hallett, C. J.

Three trials, resulting in the same verdict, have been had in this cause, and the facts, so often determined upon substantially the same evidence, may now be accepted as well established. We have also considered the rules of law which should govern the action, and have now to ascertain whether those rules were correctly applied at the last trial. Certain questions, considered and determined at former hearings, may be laid out of view, as they are not now, in any manner, open to investigation in this court. Such is the corporate existence of appellee, and its right to maintain an action for money loaned, exceeding, in amount, ten per cent of its capital stock. Such, also, is the alleged misappropriation of the funds of the bank by its officers, which, it was supposed, would render the transactions between the parties fraudulent, and thus defeat the action. The authority of appellant to borrow money, not [570]*570being expressed in its charter, was also denied, but we were of the opinion that, as debts might .be created in prosecuting its enterprises, which the corporation would be legally bound to pay, money might be borrowed for the same purpose, if the corporation was not expressly prohibited from doing so. We further declared that the fact of Sabin’s agency was material to be shown, in order that it might appear whether he had authority to borrow money, and, if he had no such authority, then as affecting the ratification of his acts by appellant. Objections to the evidence offered to prove the fact, now again earnestly urged, were then discussed, and our.conclusion was that, in the absence of better evidence to prove an agency, resort may be had to facts which tend to show recognition, by the principal, of the alleged agent’s authority. That an agency may be proved by the habit and course of dealing between the parties, is clear upon principle and authority. Franklin v. The Globe Insurance Company, 52 Mo. 461.

The circumstance that Sabin was in possession of appellant’s mine, carrying on business in its name, and was in communication with its president, most certainly tends to prove the agency. In addition to this, he testified that he was agent to appellant, and, if his declarations during the continuance of the agency were drawn out, it was not for the purpose of establishing that fact, but to explain his dealings with the bank. It is not contended that an agency may be proved by the declarations of the alleged agent, but the fact being otherwise established, his declarations, made during the continuance of the agency, may be given in evidence to prove other facts. Rowell v. Kline, 44 Ind. 291. The theory advanced in the opinions heretofore pronounced, that appellant must be liable upon its ratification of Sabin’s acts, if at all, was adopted upon the trial below.

It has never been claimed that, in virtue of his authority ' as superintendent of the mine, Sabin could borrow money in appellant’s name, or that the promise of its president to pay the money obtained by Sabin would be binding upon [571]*571appellant. But it was supposed that appellant, being advised of what had been done by its agent, in its name, and failing to disavow his authority within a reasonable time thereafter, might thereby manifest its assent to the transaction. It was not, however, contended that appellant would be estopped to deny its liability upon any equitable principle, but, merely, that its failure to respond to appellee’s importunate demand would be evidence of assent for the consideration of the jury. To repeat the arguments and again refer to the authorities upon which this conclusion was founded, would serve no useful purpose. But it is said that the law was not thus stated to the jury, inasmuch as they were told that, if the defendant did disavow the acts of Sabin in borrowing the money from the plaintiff, it was incumbent on the defendant to notify the plaintiff of suGh disavowal, and to prove the giving of such notice. This part of the charge should be read in connection with another, in which the jury were advised to find as matter of fact, whether, by its failure to disavow the agency, appellant assented to the act of borrowing the money. So read, it means only, that to maké its disavowal effectual, and prevent the inference which the jury were at liberty to draw from its silence, appellant must not only deny the authority of the agent, within a reasonable time, but notify appellee of the fact. It was not said that appellant would be concluded by omitting to disavow Sabin’s agency, within a reasonable time after notice, or to give notice of its disavowal, but that such omission was evidence of acquiescence and assent, upon which the jury might determine the fact. The authorities cited in our former opinion abundantly support this as the correct principle, and,in addition thereto,reference may be made to Kelsey v. The National Bank of Crawford County, 69 Penn. St. 426. That was a case in which the cashier of a bank, with the knowledge and approval of the directors, but without express authority for that purpose, had offered a large reward for the detection of thieves, who had stolen money from the bank. The plaintiff, having acted upon the proclamation of the cashier, sought [572]*572to recover the reward, and was resisted upon the ground that the cashier had no authority from the bank to make the offer. But it was held, that, if the bank had notice of the offer, and did not dissent from it, ratification and assent must be presumed. It was also held, that it was not necessary to give notice to the directors, when sitting in their official capacity. If they were personally cognizant of the offer made by the cashier, it was their duty to call a meeting of the board, and disavow the act if they were unwilling that the bank should be bound by it. It is true that the plaintiff had acted upon the proclamation of the cashier, and,therefore, the bank could not deny his authority without injustice. But the rule laid down is quite as applicable to the case in which the silenc.e of the principal is regarded as evidence of his assent to the act of the agent, which the jury may or may not accept as sufficient to prove the fact as to that in which the principal is estopped to deny the authority of the agent, upon the ground that, in so doing, he would perpetrate a fraud upon him, or upon a third party. In both cases, the principal must disavow the unauthorized act of his agent, within a reasonable time, but the consequence of his not doing so is not the same in each. In one case the conduct of the principal may be interpreted by the jury as evidence of his assent to what has been done in his name, and, in the other, he is estopped to deny the authority of the agent. In either case his conduct affords evidence of an intention to ratify, but it differs in degree and in the principle of law by which it is tested. If, therefore, in the case cited, it was necessary that the bank should disavow the act of its cashier, in order to avoid liability, in the case at bar it was equally necessary that appellant should repudiate the debt created by its agent in order to avoid the inference which might be drawn from its silence. Notice, to appellee, of the disavowal was a necessary part of the act itself. In no other way could appellant break the silence which the law regards as affording evidence of an intention to ratify. No error appears in this part of the charge, and other portions of it appear to be in harmony with the principles [573]*573heretofore announced as governing the action.

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Bluebook (online)
2 Colo. 565, Counsel Stack Legal Research, https://law.counselstack.com/opinion/union-gold-mining-co-v-rocky-mountain-national-bank-colo-1875.