Court Opinion

ID: 5619542
Source: CourtListenerOpinion
Date Created: 2022-01-11 04:30:39.388039+00
Date Added: 2024-06-11T08:37:21.511084
License: Public Domain

ON MOTION ROB REHEARING.
Bell, J.
The motion for rehearing is aimed at the ruling in the first headnote and in the corresponding division of the opinion. It is apparent that counsel for movant, the plaintiff in error, *608have construed our decision as holding that the authority of Medlin as assistant manager, to indorse the instruments in behalf of the corporation, should be -inferred from the mere fact that he had drawn them in the first instance, the defendant by acceptance being committed to his authority to draw them. It is urged “that where an agent or officer of a corporation is authorized to draw a draft, this does not give such agent or officer authority, after the draft has been drawn, to indorse the same for the corporation,” and that in our decision as above rendered we have ruled to the contrary of this principle, overlooking certain English cases, as well as certain decisions by the Supreme Court of Georgia, to be mentioned hereinafter.
It was not in the mind of this court to rule that the authority of the agent to indorse the instruments should be presumed merely from the fact that he had drawn them and obtained their acceptance by the defendant. We thought, however, that the admitted authority of the agent to perform the latter function amounted to some evidence of authority to negotiate the paper by indorsement, and that this fact might be- considered in connection with the further fact that the person indorsing the paper held the office of assistant manager of the corporation, concluding that in these circumstances, and in the absence of anything to the contrary, it should be presumed that the agent had authority to indorse. But assuming now that authority to draw was absolutely no evidence of authority to indorse, we are still of the opinion that the defendant’s answer failed to make any issue as to the plaintiff’s title to the paper sued on. From the cases cited in our original opinion (and see further, in this connection, Raleigh & Gaston R. Co. v. Pullman Co., 122 Ga. 700 (7), 50 S. E. 1008), we think that where a person holds the office of assistant manager of an ordinary commercial corporation and in that capacity indorses and delivers to another person in behalf of his company negotiable paper belonging to it, it should, in the absence of anything to the contrary, be presumed that in so doing he was acting within the scope of his authority.
In the present ease it appears, both from the petition and the answer, that the plaintiff was in possession of the paper sued on, holding the same under the indorsement referred to above; and by section 16 of the negotiable instruments act it is provided that *609“where the instrument is no longer in possession of a party whose signature appears thereon, a valid and intentional delivery by him is presumed until the contrary is proved.” Ga. L. 1924, p. 130. Compare 3 R. C. L. 980, 981.
In a suit upon a negotiable instrument held by the plaintiff under an indorsement by an agent of the payee, it is not necessary that the agent’s authority should appear upon the note or that it should be alleged in the petition. Garrison v. Combs, 7 J. J. Marshall (Ky.), 84 (22 Am. D. 120); Bettis v. Bristol, 56 Iowa, 41; Northwestern Savings Bank v. International Bank, 90 Mo. App. 205. It would seem to follow that any lack of authority in the agent to indorse would be a matter of defense, and, not only this, but that where, as here, the person indorsing the paper did so in his official character as assistant manager of the payee corporation, the onus would also be upon the defendant to show the limitation upon the authority of such agent so to act in the premises, with knowledge of that fact by the person holding and claiming by virtue of such indorsement.
According to section 21 of the negotiable instruments act, a signature by procuration operates as a notice that the agent has but a limited authority to sign, and the principal is bound only in case the agent so signing acted within the actual limits of his authority. The question here, however, is in relation to the apparent authority of a particular officer of a corporation, and is not in reference to a signature by procuration. 3 Bouvier’s Law Dictionary, 2558, 2732; 6 Words & Phrases, 5662. With further reference to the applicability of this provision in a case of this sort, see Bennett v. Potashnick, 214 Mo. App. 507 (257 S. W. 836).
Coming now to the cases referred to in the motion for rehearing, we will notice first the case of Robinson v. Yarrow, 7 Taunt. (Eng.) 455. In that case, after the dissolution of the partnership of C. Staeben & Company, one of the former partners, A. Henry, drew a bill on the defendant, payable to the order of the partnership, and signed the same “P. pro C. Staeben and Co., A. Henry,” the phrase “p. pro” meaning per or by procuration. The paper was subsequently indorsed to the plaintiff in like manner, and, in the suit against the defendant who had accepted the bill, the question was as to the authority of the former partner to execute the indorsement. It was held that while the defendant in accepting the bill *610admitted the authority of the former partner to.-draw it, this, without more, did not establish his right to indorse-or-negotiate it. That case is clearly distinguishable from the one now und.er consideration, because there the person indorsing the -paper had no actual or implied authority to do so merely in virtue of his previous relationship as a partner. In the present case we have the continuing relationship of an assistant manager, from which office some power is to be implied.
In Beemer v. Duck, 11 M. & W. (Eng.) 251, the drawing and the indorsement were both forgeries. It was said, as an intimation or semble, “that where the name of a real partjq as the drawer, is forged, a party who- accepts the bill in ignorance of the forgery is estopped to deny the drawing only, but not the indorsement,, although in the same handwriting.” That case is unlike the present in that here neither the drawing nor the indorsement was a forgerjq but the question is in relation to the authority of a designated officer of the payee corporation.
Our decision in the instant case in no wise conflicts with the ruling of the Supreme Court in Exchange Bank v. Thrower, 118 Ga. 433 (45 S. E. 316). In that case the agent whose authority was in question was merely the cashier of a State manager of an insurance company, and it was held that the fact that he was authorized to indorse, for deposit, checks in behalf of the manager did not empower him to indorse checks and drafts in blank so as to collect the money thereon.
In Dobbins v. Etowah Mfg. Co., 75 Ga. 238, the action was between the original parties, and no question as 'to the right of the holder of negotiable paper by indorsement was involved. The notes were signed by one as general superintendent of the defendant corporation, and in doing so he was acting under specific authority known to the payee. In the opinion the Supreme Court said: “In this case, it will not avail the plaintiff that the company held out this party as an agent to bind it in this manner, for he knew, or is presumed to have known, its powers under the charter, and he swore that he had seen the paper under which this agent acted before he would advance money for the company. That he was mistaken as to the authority of the agent and the extent of his power to bind his principal, and that he parted with his money under the mistaken belief that he was dealing with the corporation, *611and that it would thereby and in that manner become bound to him as its creditor, may, perhaps, be probable, but this belief, without more, would not render it liable on these notes, especially where it was shown that it took no part in misleading him.”
In Union Savings Bank v. Ellis, 110 Ga. 495 (35 S. E. 780), it was contended by the defendants that the plaintiff, as holder by indorsement, got possession of the note sued on through one Nelligan as its officer, with full knowledge of the defenses asserted. The evidence tended to show knowledge of such defenses by Nelligan, and the question as raised in the Supreme Court .was, whether there was any evidence that Nelligan “was an official of the bank charged with the duty of discounting papers,” so that notice to him was notice tó the bank. The only evidence of his agency or official character was the testimony of one of the defendants that he was “the accountant and general manager of the Union Savings Bank.” The Supreme Court said that this office in relation to a bank was an anomalous one, and, in effect, held that “so uncommon a bank official” had no implied power, merely in virtue of his office, to discount paper in behalf of the bank. In the instant case the officer who negotiated the paper sued on was assistant manager of an ordinary business corporation, and this was no anomalous or uncommon office such as was dealt with in relation to a bank, in the Ellis case.
We are thus of the opinion that each of the cases cited in the motion for rehearing is to be distinguished from the case at bar, and our conclusion is that the motion for rehearing should be denied.

Rehearing denied.

Jenkms, P. J., and Stephens, J., concur.