ACQUIESCENCE BY CORPORATION IN UNAUTHORIZED ACTS BY ONE OF ITS OFFICERS.

Court of Appeals for Athens County.

#### Harry H. Jackson v. The Nelsonville Foundry & Machine Company et al.

Decided, June 7, 1916.

*Corporations—Knowledge of Corporate Officer Imputed to the Corporation—Acquiescence of Corporation in Warrants of Attorney to Confess Judgment—Incorporated in Notes Without Authority—Surrender by Directors of Power to Executive Officer—Corporation B.ound Thereby Where Permitted by Stockholders—Acts of General Manager After Board of Directors Has Become Defunct—Evidence-Allegations With Reference to Purpose .of Partnership.*

1. In a suit on a judgment oral evidence is admissible to show that the plaintiff in the record of the judgment is identical with the plaintiff in such suit.

2. Where, from the oral evidence, it appears that in the record of the judgment the plaintiff therein was by mistake described as a corporation, when in fact the plaintiff was the partnership, seeking to recover on the judgment, such evidence should not be excluded.

3. The knowledge acquired by an officer of a corporation, when'acting in his official capacity and in regard to a matter with which he is especially charged by the board of directors, is the knowledge of the corporation for any and all judicial purposes.

4. The secretary-treasurer of a corporation, together with its president, having been authorized by the board of directors to make notes to banks to cover overdrafts, and having without authority executed notes with warrants of attorney containing power to confess judgment against the company and in favor of the obligee therein named, the knowledge of the secretary-treasurer thereby obtained that the notes contained such warrants is the knowledge of the corporation.

5. When knowledge is obtained by a corporation of an unauthorized act of its officer it may ratify .the same by acquiescence, continued for a number of yéars, without any formal action of its board of v. directors; ' ;..■•.■■■' . - : ' . : '

6.. When; a corporate officer signs, note.s authorized by the board of; directors containing unauthorized, warrants, of attorney for the entry *82of judgment by confession, and the notes remain unpaid, save the payment of the annual interest thereon, for more than thirteen years, such acquiescence on the part of the corporation is a ratification of the unauthorized acts of its officer.

7. If the stockholders of a corporation permit the directors to surrender their powers and functions to an executive officer of the corporation as a continuous and permanent arrangement, the board of directors being entirely inactive and the officer discharging all its duties, the acts of such officer under such circumstances are binding upon the corporation.

8. So, where the general manager of a corporation whose board of directors as such has become defunct with the knowledge and consent of the stockholders, and the general manager with their consent directs and controls all its business affairs, a note signed by the president of the corporation and by such general manager as secretary, containing warrants of attorney for the confession of judgment, is binding upon the corporation and it can not avoid a judgment obtained by confession in a suit on such note on the ground that the execution of the note by the general manager was unauthorized and void.

9. In an action by a partnership on notes containing warrants of attorney for the entry of judgment by confession failure to aver in the petition that the partnership was formed for the.purpose of carrying on a trade or business in Ohio does not render the judgment void.

March 23, 1914, plaintiff filed a petition in the Court of Common Pleas of Athens County, in which he stated that the defendant was a corporation and indebted to him in the sum of $7,950, evidenced by three promissory notes due and unpaid; that it was engaged in manufacturing, was indebted to various persons in a sum exceeding $40,000, was insolvent and wholly unable to pay its debts; that it was not able to carry on its business, and prayed, among other things, the appointment of a receiver.

Subsequently W. S. Weitzell was appointed receiver, and on May 29, 1914, filed in the case an application to sell property, in which it was stated that it was necessary to sell the real estate of the corporation to pay its debts. It was recited in the application that Emery Lattaner, as Superintendent of Banks of the State of Ohio, claimed some interest in such real estate, and there was a prayer that he as such superintendent might be *83made a party to the action. Lattaner, as Superintendent of Banks, answered, as also did his successor.

The cause was tried in the court of common pleas and after-wards appealed.

January 19, 1916, Charles L. Baird, trustee, filed his answer and cross-petition in this court, which reads in part as follows:

“Now comes Charles L. Baird, as trustee of John 0. Baird, Eugene J. Cable and Charles L. Baird, in the liquidation and settlement of the affairs of the Merchants & Miners Bank, a partnership, having been made a party defendant herein and given leave to file this his answer and cross-petition, and says:

“That on or about the 12th day of March, 1914, Emery Lattaner, then Superintendent of Banks of the State of Ohio, took charge of the affairs and all of the assets of the Merchants & Miners Bank of Nelsonville, Ohio, a partnership, then comprised of Charles A. Cable, Eugene J. Cable, Charles L. Baird and John C. Baird, and thereafter proceeded with the liquidation of the said bank and the administration of its affairs until he was succeeded in said office by Harry T. Hall; that the said Harry T. Hall continued in charge of the liquidation of the said bank and the administration of its affairs until the 14th day of January, 1916; that on said last named date the said Harry T. Hall, as Superintendent of Banks of the State of Ohio, with the approval and authority of the Court of Common Pleas of Athens County, Ohio, in a certain proceeding therein pending,

. entitled *In the Matter of the Liquidation of the Merchants & Miners*Bank, and numbered 10940 on the docket of the said court, assigned and transferred to this answering defendant all and singular the assets, choses in action and claims due said Merchants & Miners Bank, including therein the judgment and claim against the Nelsonville Foundry & Machine Company hereinafter set forth,

“This answering defendant further says that at all times hereinafter mentioned prior to the 17th day of February, 1914, one Charles A. Cable, together with Eugene J. Cable and C. Robbins were partners carrying on a banking business at Nelsonville, Ohio, in the firm name and style of the Merchants & Miners Bank; that on said 17th day of February, 1914, said C. Robbins assigned and transferred his interest in the said partnership to Charles L. Baird and John C. Baird, and thereafter until the 12th day of March, 1914, the said Charles A. Cable, Eugene J. Cable, Charles L. Baird and John C. Baird, as partners as aforesaid, carried on the said banking business in the said name and style.

*84: '“The defendant, the Nelsonville Foundry & Machine Company, a corporation duly organized and existing under and by virtue of the laws of the State of Ohio, in consideration of money procured by' it from said Merchants & Miners Bank, executed and delivered to the said Merchants & Miners Bank its several promissory notés as follows, to-wit: * * *

‘ "' That said Merchants & Miners Bank continued to hold and own said notes from the time of the execution and delivery of each of them as aforesaid until the 18th day of January, 1911, when the said notes were merged in the judgment hereinafter set forth.

' ' “That on said 18th day of January, 1911, said Merchants & Miners Bank, in a certain action pending in the Court of Common Pleas of Madison County, Ohio, entitled *Merchants & Miners Bank*v. *The Nelsonville Foundry & Machine Company,*and numbered 11306 on the docket of the said court, by the consideration of the said court recovered a judgment on the said promissory notes against the said the Nelsonville Foundry & Machine Company in the sum of $18,440.33, with interest ¿rom January 18, 1911' at the rate of seven per cent, per annum, and costs of suit taxed at $-. Said judgment is unreversed and unsatisfied and no part -thereof has been paid, except the interest thereon to January 1, 1914.

“Pursuant to the said warrants of attorney said the Nelson-ville Foundry & Machine Company entered its appearance in said cause, confessed said judgment and waived and released all errors therein. * * *

“This ¿nswering defendant further says that in the petition filed in the said action in the Court of Common Pleas of Madison County wherein the said Merchants & Miners Bank was plaintiff and the Nelsonville Foundry & Machine Company was defendant, numbered 11306 on the docket of the said court, it wak'alleged that the plaintiff,' said Merchants & Miners Bank, was a corporation organized and existing under the laws of the state of'Ohio and doing business in Athens county, in said state; that the said allegation of the corporate capacity of said plaintiff was 'made and inserted in the said petition through inadvertance and mistake by the then attorney of the said Merchants *&*Miners Bank; that there never was any such corporation organized and existing under the laws of the state of Ohio and doing business in’ Athens county, *Ohio;*that the plaintiff in the said action whose corporate capacity was erroneously' alleged in the manner aforesaid was the partnership then comprised of the said’-Charles-A. Cable, Eugene'J. Cable and C. Robbins.’’ *

*85There was a prayer that the Madison county judgment be declared the first and best lien.

The name of the plaintiff stated in the caption in the Madison county case was: the Merchants & Miners Bank. There are five causes of action in the petition in that case, each of which sets up a promissory note executed by the Nelsonville Foundry & Machine Company and payable to Merchants & Miners Bank, Each cause of action contains the averment that, “plaintiff is a corporation organized and existing under the laws of the state of Ohio and doing business in Athens county, in said state. ’ ’

The first note was for $1,000, dated August 25, 1892, due one day after date. The second was for a like sum, dated August 26, 1892, due one day after date. The third was for $3,700, dated February 6, 1897, due ninety days after date. The fourth was for $2,676.07, dated October 16, 1897, due ninety days after date. The fifth was for $10,000, dated December 31, 1910, due one day after date. The interest on the several notes, except the last, was paid annually.

The note dated August 25, 1892, contained the following:

“And we hereby waive protest and notice thereof, and authorize and empower any attorney at law, in the state of Ohio, or elsewhere, in our names and behalf, or in the name and behalf of any or either of us, to appear before any court of record in said state of Ohio, or elsewhere, at any time after this obligation becomes due, and waive process and service thereof, and without notice, confess judgment against us, or any or either of us, in favor of the said payee for the amount that may appear to be due thereon, for the principal and interest, damages and costs of suit, releasing all errors in the judgment so confessed and waiving all right and benefit of appeal, and any and all proceedings to set aside, vacate, open, suspend or reverse such judgment.” * * *

Each of the other notes contained language in effect the same as the language quoted.

The two notes for $1,000, one dated August 25 and the other August 26, 1892, were executed on the authority of the board of directors of the Nelsonville Foundry & Machine Company, which *86authority was expressed in the following words: “That the president and secretary be authorized to make a loan of $5,000 to meet overdraft in bank and for future requirements.” The note for $3,700, was executed on the authority of the directors expressed in the following language: ‘ ‘ By motion the secretary was authorized to make notes to the banks to cover overdrafts. ’ ’ The note for $2,676.07 was executed on the authority of the directors that “the president and secretary be authorized to give notes for same.” The board of directors gave no authority for the execution of the $10,000 note.

Since prior to August 25, 1892, Charles A. Cable, Eugene J. Cable and C. Robbins were partners carrying on a banking business at Nelsonville, Ohio, in the firm name and style of Merchants & Miners Bank, the payee in the above named notes. The notes were given for money loaned the Nelsonville Foundry & Machine Company. At the date of the first and second notes, August 25 and 26, 1892, the directors of the Nelsonville Foundry & Machine Company were Charles A. Cable (the same person who was one of the firm doing business as Merchants & Miners Bank), J. W. Jackson, R. Barneeut, Charles Robbins and C. E. Poston. These notes were signed: “The Nelsonville Foundry & Machine Co., by Chas. A. Cable, President, and C. E. Poston, Secretary-Treasurer. ’ ’ In 1897, when the second and 'third notes above referred to were given Charles A. Cable, C. Robbins, C. E. Poston, J. W. Jackson and R. H. Jackson were the directors, and the note of February 6, 1897, was signed. ‘! The Nelsonville Foundry & Machine Co., by J. W. Jackson, President, and C. E. Poston, Secretary-Treasurer.” The note of October 16, 1897, was signed: “The Nelsonville Foundry & Machine Co., by C. E. Poston, Secretary-Treasurer.” The minutes of the Nelson-ville Foundry &• Machine Company recite that on April 29, 1909, there was held the annual meeting of its stockholders and “that the majority of the stock being present the meeting was called to order. * * * Stockholders present: C. A. Cable C. Robbins, H. H. Jackson (plaintiff) and R. H. Jackson.” Directors elected were: C. A. Cable, C. Robbins ,Fred Weymueller, H. H. Jackson and R. H. Jackson. At a meeting of the di*87rectors held the same day C. A. Cable was elected president, and R. H. J aekson secretary-treasurer. The same record recites that there was a stockholders meeting on August 22, 1912, at which time C. A. Cable, C. Robbins, H. H. Jackson and R. H. Jackson were elected directors and some one elected in the place of Weymueller. Neither the stockholders nor directors .of the Nelson-ville Foundry & Machine Company have ever met since April 29, 1909, except on the one occasion, August 22, 1912, when the stockholders re-elected the old board of directors with one exception. Mr. R. H. Jackson has been secretary-treasurer of the Nelsonville Foundry & Machine Company since 1901, and general manager since prior to 1909, and during all that time has been the one salaried official of the company and its control has been in his hands.

Oral evidence was received at the trial in this court, over the objection of the Nelsonville Foundry & Machine Company, to show that Merchants & Miners Bank, described as a corporation in the Madison county suit, was the partnership composed of Charles A. Cable, C. Robbins and Eugene J. Cable doing a banking business in Nelsonville, and whose assignee is Charles L. Baird, trustee. Oral evidence was also received, over the objection of such defendant, to show that there is no Ohio corporation by the name of the Merchants & Miners Bank. The Madison county judgment was taken January 18, 1911. 'The petition in that ease did not contain an averment that the plaintiff was a partnership formed for the purpose of carrying on a trade or business in Ohio.

*Ch'osvenor, Jones & Worstell*and *L. G. Addison,*for W. S. Weitzell,- receiver.

*Foster & Wells*and *Webber, McCoy & Jones,*for Charles L. Baird, trustee.

Sayre, J.

The judgment record introduced in evidence shows that the plaintiff was described in the Madison county ease as a corporation. The introduction of the judgment record is objected to *88because it does not show that the plaintiff therein is identical with Merchants & Miners Bank, a partnership.

Oral evidence, introduced on the trial, shows that Merchants & Miners Bank, a partnership, employed a lawyer to take judgment for it on the cognovit notes in Madison county against the Nelsonville Foundry & Machine Company, and that he by mistake, described the plaintiff in that case as a corporation, and further that there is no Ohio corporation by the name of the Merchants & Miners Bank.

Should this evidence be excluded? The averments in' the petition in the Madison county case that the plaintiff was a corporation were immaterial ones *(Brady*v. *National Supply Co.,*64 O. S., 367). These are merely descriptive of the plaintiff and of no more consequence than if the plaintiff’s name in the caption read: The Merchants & Miners Bank, a corporation.

The precise question for this court then is: In a suit on a domestic judgment, where it appears that the ' name of the party plaintiff in the judgment sued on is not identical with the name of the party claiming to have secured the judgment, can parol evidence be received to show that the parties are, in fact, identical? A ease can readily be imagined where the admission of such evidence would be absolutely necessary. If the name of the plaintiff in a suit for recovery on a judgment was exactly the same as the name of the plaintiff in the transcript of the judgment sued on and there was an answer to the effect that they were not the same parties, parol evidence would be imperative. "While the authorities are not in accord on the subject the great weight of authority sustains the rule that parol evidence is admissible to prove that the parties are identical. A list of them follows: *State, ex rel Prescott, Jr., et al*v. *Hanousek,*19 C. C., 303; *Missouri Glass Co.*v. *Gregg*(Tex.), 16 S. W., 174; *U. S. Nat. Bank of N. Y.*v. *Venner,*192 Mass., 449; 52 N. E. 543; *Fisher, Brown & Co.*v. *William I. Fielding,*67 Conn., 91; 32 L. R. A., 236; *Samuel Boy den, Jr.,*v. *Hastings,*17 Pick., 200; *Morris*v. *The State, ex rel Brown,*101 Ind., 560; *Hollenbeck*v. *Stanberry & Son,*38 Iowa, 325; *Mobile & Montgomery Railway Co.*v. *Yeates,*67 Ala., 164; *James H. Barry & Co.*v. *John**89*H. Carothers*(6 Rich. Law, 331), 6 S. C., 331; *Stevens*v. *Elizee,*3 Campbell, 256; *Thomas Farrar*v. *Hiram Fairbanks,*53 M. E., 143; *Stevelie*v. *Reed, 2*Wash. C. C., 274.

The rule is well established that where the record of a former action, pleaded as a bar or estoppel, does not show that the parties to such action were the same with the parties to the action in which it is so pleaded, this fact may be established by parol evidence (23 Cyc., 1542).

Counsel for the receiver say that a suit to recover on a judgment presents an entirely different situation from one in which a former recovery is pleaded, but they do not point out any difference or cite any case as authority for the position that there should be a difference. It seems to us there is no difference. Both cases fall within or without the general rule that parol evidence will not be received to explain, contradict of interpret a judgment. In one case the judgment record is admitted to prove the existence of a cause of action; in the other it is admitted to prove the non-existence of a cause of action. The same record may be introduced to prove the one or the other. Since the same record can be introduced for either purpose it follows naturally and logically that if parol evidence can be introduced • to show identity of parties in one case it may in the other. Suppose Merchants *&*Miners Bank, a partnership, had brought another suit on the cognovit notes sued on in Madison county and had served process upon the Nelsonville Foundry & Machine Company, and the latter had answered and pleaded *res adjudieata*and offered in evidence a transcript of the judgment of the first suit and it was objected to for the same reason that it is objected to in this suit, what difference would there be in the assumed ease and the one under consideration? If it be admitted that the transcript of the judgment was admissible in the assumed case and that the identity of the parties could be proven by parol evidence, what reason can be assigned for excluding such evidence in the case under consideration? We are wholly at a loss to discover any reason, and conclude that the authorities which support the position that parol evidence may be received to identify the parties in *90a case where a former recovery is pleaded are precisely in point in an action where it is sought to identify parties in a suit on a domestic judgment. The judgment record and the oral evir dence were properly admitted.

It is contended that the Nelsonville Foundry & Machine Company did not authorize the warrants of attorney contained in the several promissory notes, and that therefore the Court of Common Pleas of Madison County did not have jurisdiction of the person of such company. It is true that the only authority extended by the directors was to make notes to cover overdrafts, except in the case of the note for $10,000 where no authority whatever was given by any positive act of the directors acting as such. However, the two notes for $1,000 each, dated August, 1892, had been existing contracts between Merchants & Miners Bank and the. Nelsonville Foundry & Machine Company for eighteen years before they were reduced to judgment. The note dated February 6, 1897, and the one dated October 16, .1897, had been existing contracts between the same parties for thirteen years before they were reduced to judgment. During that entire time the company had paid interest on the notes. The notes executed in August, 1892, were signed by Charles A. Cable, president, and C. E. Poston, secretary-treasurer.' ’The note dated February 6, 1897, was signed by J. W. Jackson, president, and C. E. Poston, secretary-treasurer. The note of October 16, 1897, was signed by C. E. Poston, secretary-treasurer. While the knowledge acquired by Charles A. Cable, as he was one of the partnership composing Merchants & Miners Bank, as to the contents of the notes might not have been the knowledge of the company, yet C. E. Poston, who signed all four notes and had no interest in such partnership, was secretary-treasurer and his knowledge of the contents of the notes was the knowledge of the company. Poston was one of the officers authorized by the board of directors of the corporation to execute notes, and that matter was his especial business and within the scope of his authority. Knowledge of the officers and agents of a corporation within the scope of their- official capacity and agency is the knowledge of the corporation. *Thompson on Cor**91*porations*(2d Ed.), Section 1646; *The F. N. B. of New Bremen*v. *Burns et al,*88 O. S., 434. In the case of *Dickinson*v. *Zubiate Mining Co.*(Col.), 106 Pac., 123, it is held that:

‘ ‘ Through the president and secretary who executed a written agreement in a corporation’s behalf, it must be deemed to have had notice thereof, when it was made.”

“The most comprehensive rule with reference to this subject which can be stated is that notice communicated to, or knowledge acquired by, the officers or agents of corporations when acting in their official capacity or within the scope of their agency becomes notice to or knowledge of the corporation for all judicial purposes.” 10 Cyc., 1054.

Another rule equally well established is that:

“A corporation may ratify by passive acquiescence, as well as by affirmative action, the unauthorized acts of its agents, and the acquiescence with knowledge, if continued for a considerable time, operates as a ratification.” *Knowles et al*v. *Northern Texas Traction Co.*(Tex.), 121 S. W., 232; *Thompson Corporations,*Section 1407.

All four of the notes could have been taken up long ago and renewals given without the warrants of attorney if the corporation had any desire to set right the unauthorized acts of its officers, but its acquiescence for so long a time without any objection whatever deprives the corporation of the right to now say that the warrants of attorney are without its authority. To say that the terms and stipulations contained in notes which have been owed by a corporation for more than thirteen years, and on which the interest has been paid, were unknown to the board of directors as a- board, especially when the president and secretary of the corporation, both of whom were directors, signed the notes, is a proposition so much at variance with the ordinary knowledge and duties of corporate officers that it ought not to receive any serious consideration. The further argument that ratification by individual directors is not a ratification by the board is a proposition which would at once *92destroy the doctrine of ratification by acquiescence, which is well established. Ratification by acquiescence means, ordinarily, ratification without formal action. It means knowledge of the fact without any act of any kind 'for a considerable period of time.

It is further contended that the Madison county court had no jurisdiction of the machine company because a warrant of attorney must be strictly construed, and as Merchants & Miners Bank was in fact a partnership the attorney at law who confessed the judgment in Madison county had no authority to confess a judgment in favor of the Merchants & Miners Bank, a corporation, citing *Spence*v. *Emerine,*46 O. S., 403; *Bank*v. *Post,*22 C. C., 644, and other eases of like import. It will be noticed that the payee in the notes referred to is Merchants *&*Miners Bank. If attention is directed solely to the record in the Madison county case the notes were strictly construed when judgment was entered for Merchants & Miners Bank because it was the payee and obligee named in the notes. Whether it was a corporation or not can not be determined by .the notes because they are silent as to that matter, and as Merchants & Miners Bank must necessarily have been either a corporation or partnership, an individual or individuals doing business in that name, there is nothing in the record in that ease to show that in giving judgment for Merchants & Miners Bank, a corporation, the judgment was not given in strict accord with the terms of the notes. It is only when we go outside the record of the Madison county case that any reason can be found for saying that the notes were not strictly construed and judgment given for a party who was not entitled to it. It is only when the record in the instant case comes into view that the authority of the attorney at law who confessed the judgment can be questioned. So the whole matter is reduced finally to whether oral evidence can be received to show that the plaintiff in the Madison county judgment was identical with Merchants & Miners Bank, a partnership. If it can, as we have decided, then it at once appears that the judgment was confessed in favor of Merchants & Miners Bank, a partnership, for it was in fact the plaintiff in that suit.

*93The note for $10,000 was given within a month before it was reduced to judgment and was signed: The Nelsonville Foundry & Machine Company, C. A. Cable, president, R. H. Jackson, secretary. The board of directors was not in session a single time in a period of almost five years prior to the appointment of a receiver for the machine company, the last meeting being April 29, 1909, and the records further show that outside of the annual meeting, at which times they elected officers, the board of directors did not perform a single act relating to the business of the corporation after some time in 1904. R. H. Jackson since prior to 1909 has been secretary-treasurer and general manager of the corporation and made the following statement at the trial in the court of common pleas:

“Would you mind if I would tell you that the directors, and the stockholders in their yearly meeting would say they would turn over a new leaf every year, ‘now, we will get together and we will have meetings, regular meetings, and will look after business a little bit closer and will help you out,’ and that is the last I would hoar of them until the next meeting. *’ ’ .*

But the next meeting after April 29, 1909, never came. So that for a period of almost five years prior to the appointment of the receiver on March 24, 1914, the board of directors never met. They ceased to direct the corporation and as directors became dormant. R. IT. Jackson was the only officer connected with the corporation who was compensated. The business was being conducted at a loss. The directors were not interested. They, by their acquiescence, allowed the business to be conducted by Mr. Jacks on, and he had entire charge of the same during the period of five years. The stockholders present at the annual meeting in 1906 were C% A. Cable, Fred Weymueller representing stock of I. O. O. F., H. H. Jackson and R. H. Jackson. Those present at the annual meeting in 1907 were the same persons and C. Robbins. Those present at the annual meeting in 1908 were Cable, Robbins, Weymueller and R. H. Jackson. Those present at the annual meeting in 1909 were Cable, Robbins, H. H. and R. H. Jackson. Those present at the annual meeting of August 22, 1912, were Cable, Robbins, H. H. *94and R. H. Jackson, and two persons representing stock of the I. O. 0. F. So since 1906 the stockholders who attended the annual meetings were Cable and Robbins, both interested in Merchants & Miners Bank, the two Jacksons, and representatives of the stock of I. O. 0. F., and of these, Cable and the two Jacksons, owned five-sixths of the stock.

Now the stockholders never held a meeting during that five year period either, except on the one occasion, August 22, .1912, when they elected the old board of directors, being the same persons (with one exception) who had not met during the five year period. So the stockholders acquiesced in the action of the directors in allowing Mr. R. H. Jackson to manage and control the business of the company.

At the time of the execution of the $10,000 note oh December 21, 1910, the directors had not met for one year and seven months, and the stockholders were allowing the general manager, Mr. R. H. Jackson, to assume and exercise the powers of the board of directors. Their attitude in the matter is clearly seen by the re-election'of the same directors in 1912 with the single exception. This shows that they, the stockholders, were willing that the single officer should assume the duties of the board of directors, for they knew the board of directors was such only, in name.

*Thompson on Corporations,*Section 1409 (2d Ed.), says:

“Generally where the stockholders, by their direction or acquiescence, invest the executive officers of the company with the power and functions of the board of directors, as a continuous and permanent arrangement, the board being entirely inactive, and the officer discharging all its duties, a transaction consummated in behalf of the corporation by such officer will be valid though not specifically authorized by any vote of the stockholders or directors.”

In the case of *The Smead Foundry Co.*v. *Abram M. Chesbrough,*18 C.. C., 783, cited so frequently by counsel for the machine company, the fourth paragraph of the syllabus reads in part as follows:

*95“The president of a corporation has no power, by virtue of his office, to execute a bond and warrant of attorney for the entry of judgment by confession against a corporation. Such power is vested in the board of directors only. But the president’s authority may be enlarged beyond the powers inherent in his office *by the consent and acquiescence*of the directors in permitting him to take control of the business of the corporation. ’ ’

The evidence shows beyond dispute that the stockholders permitted the directors to surrender their offices to the general manager for a period of five years. The note of December 31, 1910, was executed nineteen months after the board of directors ceased to meet and as a board became defunct. The act of R. H. Jackson in signing the $10,000 note was the act of the corporation. R. II. Jackson had succeeded to the power of the board of directors. They could have executed a judgment note to the bank on December 31, 1910. Hence, under the circumstances, he could. The note of December 31, 1910, was beneficial to the machine company, and it can not now say, under the circumstances as appear beyond dispute in the evidence, that the warrant of attorney contained in that note was without the authority of the company.

Does the failure to aver in the Madison county petition that the plaintiff was a partnership formed for the purpose of carrying on a trade or business in Ohio render the judgment void ?

In *Beers & Co.*v. *Gurney,*14 O. C. C., 82, the court held that where the defendant fails to take advantage of such failure by proper pleading the objection is waived. The case under consideration, however, is different from that one, in that the judgment here in controversy was taken on confession and the defendant’ had no opportunity to make any objection. However, the Madison county court of common pleas had jurisdiction of the parties and of the subject-matter, and the petition therein was such an one as could have been amended and the proper averment made, as the record (outside the judgment record) shows that Merchants & Miners Bank was a partnership formed for the purpose of doing business in Ohio.

As said in *Spoors*v. *Coen,*44 O. S., 497:

*96“If the case presented invoked the jurisdiction of the court, and could have been perfected by amendment, the judgment of the court then could not be treated as a nullity.”

An amendment could have been made showing the plaintiff had legal capacity to sue in the Madison county case. Besides, the waiver of errors in the warrants of attorney would seem to be sufficient to waive just such an error as this. We have no doubt that had the defendant joined issue on some other averment in the Madison county case without raising objection to the failure to aver that the plaintiff was a partnership formed for the purpose of carrying on business in Ohio, and the plaintiff had recovered a judgment, that judgment would.be valid. If this is true and the error could be waived under such circumstances, it was waived by the language of the cognovit notes.

The decree will be in accordance with this opinion.

Decree accordingly.

Walters, J., and Merriman, J., concur.