Court Opinion

ID: 6615999
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:22:44.428644+00
Date Added: 2024-06-11T15:58:31.962330
License: Public Domain

Ellison, J.
on rehearing.
It may be conceded that by using the money, borrowed of plaintiff, in payment of its hands, the corporation became liable to plaintiff in an action by him for the amount of the loan, notwithstanding the act of the president in borrowing was unauthorized. But that does not reach the question before us; that question is whether the unauthorized assignment of the assets of the corporation to secure the loan has been ratified ? In order to have been ratified it must have been known to the corporation. Knowledge of payments, made to the hands with borrowed money, is knowledge that in borrowing that money, the agent has made an unauthorized transfer of assets to secure it. If the ratification by the corporation, of the unauthorized contract of its agent, consists in its having received the consideration of the *373contract, it must be proved that the corporation, through its proper officer or officers, knew of the terms of the contract, and on what account the money was by them received. Angell & Ames Corp., sec. 304; Twelfth St. Market Co. v. Jackson, 102 Pa. St. 269; 8 Gill & J. 248, 323, 324; Bell v. Cunningham, 3 Peters, 69; First Nat. Bank v. Kimberland, 16 West Ya. 555, 579-583.
In this case, of the seven directors, from whom the officers were selected, none knew of the transfer, but the president who did it, or the treasurer who received it. The latter’s knowledge in acting for himself could not, of course, be chargeable to the company. Johnson v. Shortridge, 93 Mo. 227. An agent cannot, at the same time, serve two masters whose interests are antagonistic. DeSteiger v. Hollington, 17 Mo. App. 382, 388.
The knowledge of the president, who did the unauthorized act, and who has not been shown to have communicated it, or attended any meeting of directors before whom it was brought up, cannot be imputed to the corporation, from the fact that if the knowledge, that an agent has of his own unauthorized act, can be imputed to the corporation, there need never arise any question of ratification. All that would be required would be to show that he did the act and that he has never repudiated it. Twelvth St. Market Co. v. Jackson, 102 Pa. St. 269; First Nat. Bank v. Kimberland, supra; Blen v. Bear River & A. W. & N. Co., 20 Cal. 602.
The judgment is reversed and the cause remanded.
Smith, P. J., concurs; GIill, J., not sitting.