Court Opinion

ID: 8853288
Source: CourtListenerOpinion
Date Created: 2022-11-26 17:21:36.238078+00
Date Added: 2024-06-11T17:05:34.609723
License: Public Domain

SANBORN, Circuit Judge
(concurring). I. concur in the result in this case on the ground that the course of business at Kansas City shown in this record, the reports made by Dudley to the plaintiff in error of the existence of bills payable he had made as its agent, and the testimony of its president that, if Dudley needed money to pay a coal bill, he thought he was expected to and would go to the bank, and have the money advanced to pay it, constituted sufficient evidence to warrant a jury in drawing the inference that the corporation knew that Dudley was making promissory notes on its behalf, and impliedly authorized him to do so. But I cannot concur in the view, which I understand to be expressed in the opinion of the court, that the general manager of the business, or of a local branch of the business, of a manufacturing and trading corporation, who is authorized to buy and sell goods, to carry on the manufacturing business, and to take and discount promissory notes for his principal, is thereby vested with the implied power to borrow money on its behalf, and to execute its notes therefor. I do not understand the rule of law to be that such a general agent is presumed to have the same authority to borrow money on and to execute notes in behalf of his principal that a reasonably prudent merchant or manufacturer has to make notes and borrow money for himself. I think the true rule is laid down in section 398 of Mechem on Agency, in these words:
“An agent having general authority to manage his principal’s business has, by virtue of his employment, no implied authority to bind his principal by making,_ accepting, or indorsing negotiable paper.”
Tiedeman, in his work on Commercial Paper, at section 77, says that the presumption of law is more strongly opposed to an implied authority to execute and negotiate commercial paper than to do anything else, and that even where there is a general authority “to transact all-business,” or “to do all lawful acts concerning all the principal’s business, of what nature or kind soever,” it is very generally held that the power to execute bills and notes is not included.
In New York Iron Mine v. First Nat. Bank, 39 Mich. 644, 651,—a case in which the stock of the mining corporation was held by Samuel J. Tilden and W. L. Wetmore, and the latter had had the entire management and control of the mining business which was carried on by the company in the state of Michigan, had expended more than three million dollars, and had lawfully discounted the bills receivable of the corporation,—the supreme court of Michigan held that all of this *923was insufficient to warrant the inference that Wetmore had implied power to borrow money and to issue the promissory notes of the corporation. Judge Cooley, in delivering the opinion of the court, said: ■
“The issuing of promissory notes is not a power necessarily incident to the conduct of the business of mining, and it is so susceptible of abuse, to_ the injury, and, indeed, to tlio utter destruction, of a corporation, that it is wisely left by tlio law to be conferred, or not, as the prudence of the board of directors may determine.”
In my opinion the same rule, and for the same reason, governs the agencies of commercial and trading corporations. McCullough v. Moss, 5 Denio, 567; Murray v. East India Co., 5 Barn. & Ald. 204; Benedict v. Lansing, 5 Denio, 283; The Floyd Acceptances, 7 Wall. 666; Perkins v. Boothby, 71 Me. 91.