Court Opinion

ID: 3520346
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:32:04.410867+00
Date Added: 2024-06-11T13:26:38.586035
License: Public Domain

* Corpus Juris-Cyc. References: Agency, 2CJ, p. 813, n. 93 New; Appeal and Error, 4CJ, p. 900, n. 96; p. 902, n. 4; Corporations, 14aCJ, p. 174, n. 63; Evidence, 22CJ, p. 104, n. 80 New; p. 625, n. 20, 21; Insurance, 32CJ, p. 1011, n. 85 New; Principal and Surety, 32Cyc, p. 138, n. 54 New.
Appellee, J.S. Love, on behalf of the state banking department, filed the bill in this case in the chancery court of Sunflower county against D.A. Carr, appellants, and others, said Carr's sureties on his bond as cashier of the Mound Bayou State Bank. Appellants were the only defendants who made defense to the suit. There was a trial on bill, answer, and proofs, resulting in a decree on the bond in appellee's favor for two thousand five hundred dollars, with interest and costs, from which decree appellants prosecute this appeal.
We will consider, first, the case against appellant J.E. Walker. D.A. Carr was cashier of the Mound Bayou State Bank at the time the bond involved was given. He was required by the directors of the bank to execute a bond for the faithful performance of his duties as such cashier. He executed the bond sued on in this cause, and among the sureties appearing thereon was the Mississippi Beneficial Life Insurance Company, a negro life insurance company, organized under the laws of this state, with its home office at Indianola, in this state. Appellant J.E. Walker was president of this life insurance company, and signed the bond for his company, as surety, as follows:
"Mississippi Beneficial Life Insurance Company, by J.E. Walker, President."
Appellee recognized that, under the charter powers of the life insurance company, it had no right to become surety on the bond, and that its action in attempting to do so was therefore ultravires. The bill sought to hold J.E. Walker liable personally on the bond on the theory *Page 339 
that, in signing the bond for his company, he warranted both his authority to sign for his company, and also the authority, under the law, of his company to become surety on the band. He signed the bond by authority of the life insurance company. He practiced no deceit or fraud whatever, in executing the bond for his company. It was assumed by appellant Walker and all other parties in interest that the life insurance company had the right, under the law, to become surety on a bond. It was a Mississippi corporation, doing its principal business in the Delta section of the state, where the Mound Bayou State Bank was located. All persons dealing with the insurance company were affected with notice of its authority and powers. Under these facts, it is claimed that appellant Walker, by signing the name of the life insurance company to the bond as surety, in his capacity as president of the company, became personally liable on the bond because the act of the company in signing the bond was ultravires.
The great weight of authority and, we think, the better reasoned cases answer this question in the negative. Greenberg
v. Lumber Co., 90 Wis. 225, 63 N.W. 93, 28 L.R.A. 439, 48 Am. St. Rep. 911, and note on pages 915, 916; Thilmany v. IowaPaper Bag Co., 108 Iowa, 357, 79 N.W. 261, 75 Am. St. Rep. 259;Merchants'  Planters' Packet Co. v. Streuby, 91 Miss. 211, 44 So. 791, 124 Am. St. Rep. 651.
An agent of a corporation entering into a contract for his principal cannot be held personally liable on the contract upon the ground that the act of the principal in executing the contract was ultra vires. In the execution of a contract, an agent does not warrant the authority of his principal to enter into the contract. The agent can be held personally liable only upon the ground that he practiced fraud upon the other party to the contract by representing that his principal had authority to enter into the contract. Parties contracting with a corporation are presumed to be informed as to the powers of the corporation. *Page 340 
An agent, in order to be held personally liable on the contract, must have been guilty of bad faith; he must have practiced deceit; he must have misled the other party to the contract in accepting the act of his principal.
The case of Merchants  Planters' Packet Co. v. Streuby,supra, it is true, is not a parallel case to this case on its facts, but the same principle was involved. Streuby signed the name of his corporation to a contract to subscribe for shares of stock in another corporation. Under the law of this state, at the time the contract was made and the case was decided, such a contract was void. It was sought to hold Streuby personally liable on the contract of subscription. Judge CALHOUN, delivering the opinion of the court, said:
"This action is to hold Streuby liable personally as a subscriber on his signature to the capital stock of a corporation. His signature is in these words: `F. Streuby, for Levy Bros., Oil Mills, Ltd.' This oil mill was a corporation, and so it was powerless, in this state, to subscribe for stock of another corporation. This was equally known to him and appellant corporation, and no fraud or fraudulent representation appears. We have, therefore, not a case where the principal was or could have been bound by the subscription in any event; it being ultravires. We hold that the signature did not bind Streuby personally, and adopt the reasoning of Judge BREWER in the two cases of Holt v. Winfield Bank (C.C.), 25 F. 814, andAbeles v. Cochran, 22 Kan. 410, 31 Am. Rep. 194."
We are of opinion that appellee failed to make a case of personal liability on the part of appellant Walker.
Appellant McCarty defended on the ground that her signature to the bond was forged, that she did not sign the bond herself, nor authorize any person to sign it for her. The execution of the bond by the sureties, including appellant McCarthy, appears to have been acknowledged by all the sureties before the mayor of Mound *Page 341 
Bayou. Appellant McCarthy introduced several witnesses who testified that they knew her handwriting, and that, in their opinion, the name "P.R. McCarty" on the bond was not in her handwriting. The trial court, over appellant's objection, ruled out this testimony. That was error. A handwriting witness need not be an expert. The unskilled may give an opinion as to the genuineness of a signature, based on actual knowledge of the handwriting of the person whose signature is in question. There were also introduced in her behalf numerous checks written and signed by her, and some letters written by her, during the year 1917, the year in which the bond was given. The originals of these checks and letters were sent up with the record in this cause and are before this court for inspection. There is great dissimilarity between the writing of appellant's name as it appears on the bond and on the checks and letters. The difference is apparent at almost a glance of the eye. These checks and letters were shown to be in her handwriting. On the other hand, the evidence tending to show that she signed the bond was weak and unsatisfactory. Appellee argues that her purported acknowledgment to the execution of the bond was evidence that she signed it. Without passing on the question whether such acknowledgment — an acknowledgment of an instrument not required to be recorded for the purpose of constructive notice — has any probative value, we are of opinion that giving it the probative value contended by appellee, still the overwhelming weight of the evidence shows that appellant McCarty's name on the bond was a forgery, and that therefore her purported acknowledgment of the execution of the bond was false. It is true this was an issue of fact before the chancellor, and it is furthermore true that the chancellor's finding of facts will not ordinarily be disturbed. Nevertheless, where such a finding is against the great preponderance of the evidence, it is the duty of this court to substitute its judgment for that of *Page 342 
the chancellor. We think, as to the appellant P.R. McCarty, this is that kind of case.
Reversed and judgment here for appellants.
Reversed.