Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1914-09-09
land COMPANY
RESPONSIBLE
Supreme Court Reverses Decision
Of Lower Court in Promi-
nent Rugby Case.

SSSAS ~ =
labus, granted a new trial in the case
Of the Grant County State Bank VS..
the Northwestern Land Co., OF Rug
by, holding that the findings in the
previous trial did not fully cover the
ISIS ues presented.
The judgment is from the district
court of Grand Forks county, Judge
Templeton presiding. Purcell & Div
ct CT Wahpeton acted as attorneys
for the plaintiff in the trial, and
Bangs, Netcher & Hamilton for the
defendant.
A. H. Jones, who served a term in
the federal ~penitentiary at Leaven-
worth for misuse of the funds of the
First National I:ank Of Rugby, was
cashier of the bank, and treasurer Of
the Northwestern Land Co., later be-
coming vice. president of the latter
concern. The defendant company
and the bank occupied the same Of
fees in Rugby.
Jones', as cashier of the First Ma
tional Bank. of Rugby, sold to the
plaintiff, through Mr.. Wells, cashier
of the Grant County State bank, some
negotiable paper, amcng the instru-
ments being a note purporting to be
that of the defendant, to the First
National bank, as payee, for $500.
The purported signature to the. note
was Northwestern Land Co., by A.
H. Jones, Treasurer. The note was
sold in October, 1907, and was due in
October, 1908. @''
Tomas roc nc q o,o4for 20 20 NJ
treasurer Of the company from 1902
to January, 1907, but at the time OF
the making of the note he was not
treasurer, but had been made vice
president. The bylaws Of the com
pany provided that no promissory
note should be valid unless signed by
the president and treasurer, Jointly.
1t appears that neither Of these men
knew anything Of the note, as they
were non-residents of Rugby, and
that the company did not receive any
of the proceeds of the note, though
plaintiffs paid full face value for it.
When Wells inquired as to the Off
Gals Of the land company, Jones is
said to have told him that he himself
was treasurer then, and when the
note was signed, shortly prior there
to-.
1t is held in the syllabus that the
evidence showed the company "a
fully aware of Jones' assumption Of
authority in various ways, after he
became. vice president, and that he
signed many instruments, as treasur-
er, with their knowledge and consent,
when he was no longer treasurer.
When the note mentioned came due,
Wells presented it to Jones as defend
ants treasurer, and jones renewed it
by a duplicate of the first, due one
year later, Endorsed and guaranteed
by the bank, and delivered it to
Wells, paying him the accrued inter-
est, approximately 5000, on the orig
inal note thus taken up. It appeared
in the evidence that this 5000 did not
come from the funds Of the company,
and that the other officers had no
kno Wedge of the transaction.
Before the maturity of the renewal
of the note, the First National Bank
of Rugby became insolvent, and when
other. officials of the land company
1871 ucu4 NJ Cll1S .llCCO atACy 1CpuuldLSu
it, claiming that Jones, according to
their bylaws. could not issue a valid
note, and holding that valid corporate
negotiable paper cannot be issued i'm
der mere ostensible authority.
The. trial resulted in a verdict for
the defendant on all questions Of u
the court finding that Jones
had neither actual nor ostensi5le au-
to issue the note.
Jones made his statements to Wells
as to the financial status Of the COM
pany, and stated that he was its
he made these statements
as an official authorized to speak in
behalf Of the company, and therefore
these statements bound the company
and estopped it from denying the
truth CT such statements as here ma
terial. The note is to be regarded
having been delivered to the plain
tiff by the %ostensible treasurer of the
company, and it is held that such. os-
tepsible authority in the case in hand
is evident in the testimony.
The proof presenting an intentional
permitting Of Jones to. exercise ,Cs-
authority, as we'll as that Of
4 negligent allowance thereof, and it
appearing from the memorandum
filed that the question. of neg
only was considered, the find
ings are held to not fully cover the
issues presented. I'LL.
The opinion of the court is by
Judge Goss.