Court Opinion

ID: 5468977
Source: CourtListenerOpinion
Date Created: 2022-01-09 20:17:50.595696+00
Date Added: 2024-06-11T08:33:13.740640
License: Public Domain

Clerke, Justice.
I do not think, that the defendants could have availed themselves of any of the alleged defects in the incorporation of the International Insurance Company, in an action commenced by the company. It would have been sufficient for them to prove the charter and the uses under it, and if the plaintiff in this action was a bona fide holder, he would have been entitled to recover, notwithstanding such defects. But I have as little doubt that he is not a bona fide holder, or rather he is not legally a holder at all, of this and other notes. Gillett agt. Phillips, (3 Kernan, 113,) settles the question. Marsh, the plaintiff in this action, was the president and a director of the company, and took notes, of which this was one, in the whole exceeding $1,000, sufficient to satisfy his claim against the company, $1,700 or $1,800 for money therefor advanced to them.
This was clearly in violation of the statute, (1 R. S. §§ 8, 9.) It was “ a transfer not authorized by a previous resolution of the board of directors,” and it does not fall within the exceptional clause of the section, for the notes were not transferred to “ a purchaser without notice.” A president or director is presumed to be cognizant of the absence of such authority, and this will be presumed in an action brought by him against a party to the note, as well as in an action commenced against him for the recovery of the note by a receiver. Judge Gar-diner, in delivering the opinion of the court in Gillett agt. Phillips, says, that the contract in “ that case was not only unauthorized but illegal. Ho action could have been sustained by Phillips against the bank for the price paid by him for the note, although he had sold the notes to redeem the circulating paper of the bank. A transfer of this kind is expressly prohibited by statute, and is therefore absolutely void, and no right to or property in the thing transferred, accrues to the offending party.”
Judgment for defendants with costs.