vote of the directors of a corporation, that the president have full power and control of its business, authorizes him to purchase the materials to be used in its operations, and to borrow money for the corporation, and give its note for the money borrowed. Where also the president of a corporation is permitted for several years to act and to represent himself as the general manager and director of its business, the corporation. can not set up its by-laws as countervailing his authority to represent that a certain person is the authorized agent of the corporation for the sale of its goods, and to take, indorse, and procure the discount of notes for goods sold. The president may bind the corporation to one who pays its notes at his instance, or to one who advances money to the corporation through him, which is spent for the benefit of the corporation and recognized by it as a debt. His personal signature as president binds the company following whose name it is placed. But a claim that defendant had received the

3

trustees did not know of the loan, was also immaterial. Kraft v. Freeman Printing &c. Assoc., (1881) 87 N. Y. 628.

pay," and signed "San Pedro Mining and Milling Company, F. Kraus, President,” shows no ambiguity on its face, as it is in law the note of

1 Castle v. Belfast Foundry Co., the company, and parol evidence is (1881) 72 Me. 167.

2 Marine Bank v. Butler Colliery Co., (1889) 5 N. Y. Supl. 291.

3 Seeley v. San Jose Independent Mill &c. Co., (1882) 59 Cal. 22, in which case plaintiff, at the request of the president and superintendent of a corporation, and to save the corporation from a threatened lawsuit, paid certain notes of the corporation; and it was held, that the corporation could not be heard to deny the authority of its president, and that the original consideration for the notes could not be inquired into.

Poole v. West Point Butter & Cheese Assoc., 30 Fed. Rep., 513.

'Liebscher v. Kraus, (1889) 74 Wis. 387; s. c. 6 Ry. & Corp. L. J. 455, deciding that a promissory note containing the words "we promise to

inadmissible to show that Kraus
signed it in his individual capacity.
But, to the contrary, a promissory
note, signed "Independence Mfg.
Co., B. I. Brownell, Pres.," purport-
ing to bind both signers, and having
nothing on its face to indicate that the
last signer was president of the cor-
poration, or had signed the note for
it or on its behalf, binds the last
signer personally; and the letters
"Pres." must be regarded simply as
descriptive of the person to whose
signature they are appended.
ner v. Brownell, 78 Iowa, 648; s. c.
31 N. W. Rep. 947, annotated. In this
case a warehouse corporation was
authorized to make advances on
property stored with it. Its presi-
dent assumed to bind it by indors-
ing a note for one per cent., which
amount the corporation received.

Heff

proceeds of a note indorsed in its name by its president is not sustained by the testimony of an officer of a corporation to which it was transferred that it was delivered in part payment of a running account in favor of his company against defendant for goods sold, where he does not state what goods were sold to defendant, and the books of neither company are produced to show the account, and the existence of any dealings between the two companies is denied by defendant.' In the case, however, of one who receives from the president of a corporation, and pays full value therefor, a negotiable note thereof payable to itself and indorsed by the president, as such and individually, with notice that the proceeds are to be applied to the discharge of a personal debt, he is put upon inquiry as to the authority by which it was issued and negotiated; but he is nevertheless a bona fide holder when, if he

The indorsement was based on tobacco on storage. A bank discounted the note for the maker, to whose order it was drawn, and who presented it indorsed as aforesaid. The corporation had recognized similar transactions as valid, and the president had been given by the corporation general power to manage its business; and it was held, that the corporation could not dispute its liability on the indorsement. Park Bank v. German American Mut. Warehousing &c. Co., (1885) 53 N. Y. Super. Ct. 367. But in an action to enforce defendant company's liability on a note indorsed in the name of the company by its president, there was no proof that the president had direct authority to indorse the note in suit, and the only evidence from which authority could be in ferred consisted of numerous former indorsements of the company's name by the president, in which cases the paper had been transferred, and the apparent obligation of the company as indorser satisfied, but plaintiff knew nothing of these indorsements at the time it discounted the note.

If the payments in such cases were in fact made from the funds of the company, it did not appear that there were any book-entries disclosing them, but rather that the president conducted all the transactions personally. And it was decided that the evidence was insufficient to establish his authority. Fifth Nat. Bank v. Navassa Phosphate Co., 6 N. Y. Supl. 1. In a subsequent action, however, against the same company, evidence that that officer had indorsed three or four hundred similar notes, and had them discounted; that entries were made in the books of the company of the proceeds of such notes; and that like notes had been discounted by plaintiff, and subsequently paid, was thought to justify the submission to the jury of the question of estoppel on defendant's part to dispute its president's authority, and the mere ignorance of the trustees would not relieve it of liability. National Bank v. Navassa Phosphate Co., (1890) 8 N. Y. Supl. 929.

1 National Bank v. Navassa Phosphate Co., (1890) 8 N. Y. Supl. 929.

had inquired, he would have discovered the record of an apparently legal vote of the directors authorizing the issue to pay a debt recited to be due their president.'

206. Bank presidents.- A bank president has power to transact the usual business of the bank in the usual way. He is its general fiscal agent, and whatever he does within the apparent scope of his authority binds the bank. But as between the corporation and himself, a president of a bank ordinarily has no authority to sell the property of the corporation unless he have authority under the charter, the direction of the board of directors, the managing committee, or by usage; and where the property of a bank is sold by a president without authority, and the bank suffers loss thereby, he may be held to respond in damages to the extent of the loss. In the absence of special authority from the directors of a bank, the president cannot authorize the cashier to pay the checks of a person who holds a claim against the president, but has no deposit in the bank. And where checks are so paid the amount of the checks cashed can be recovered by the bank from the drawer of the checks, in an action for money paid out.6

§ 207. Railway presidents. The powers of the president of a railroad company are generally of more limited scope than those of banks or manufacturing companies. He has no authority, by mere virtue of his office, to let a contract for

I Wilson v. Metropolitan Ry. Co., no general agency to employ an at(N. Y.) 24 N. E. Rep. 384.

221 Cent. L. J. 144, citing Minor v. Bank of Alexandria, 1 Pet. 46; Neiffer v. Bank of Knoxville, 1 Head, 162; Wyman v. Hallowell & Augusta Bank, 14 Mass. 58; Salem Bank v. Gloucester Bank, 17 Mass. 1; Foster v. Essex Bank, 17 Mass. 479; Austin v. Daniels, 4 Denio, 299.

Cake v. Pottsville Bank, (1887) 116 Pa. St. 264; s. c. 2 Am. St. Rep. 601. But a bank with whom a draft is deposited for collection has

torney to sue thereon, or compromise the claim; and in absence of special authority is not liable for the president's representations therein unless benefited by his acts. Ryan v. Manufacturers' & Merchants' Bank, (1881) 9 Daly, 308.

4 First Nat. Bank of Central City v. Lucas, (1887) 21 Neb. 280. 5 Dowd v. Stephenson, (1890) 10 S. E. Rep. 1101.

6 Dowd v. Stephenson, (N. C. 1890) 10 S. E. Rep. 1101.

7 Beach on Railways, SS 482, 483.

the construction of the railway. A statement by the president of a corporation, upon a certain price being named, that if that was the lowest figure he would see that the company paid it, is not an agreement by the company to pay that sum.2 He can not sell its bonds; nor authorize a director to sell them. Neither can he appoint an agent to sell its lands." But it is held that he has the right to indorse and assign notes and mortgages given to it to aid in the construction of the railway, and that the indorsee before maturity takes the notes free from any equities between the maker and the company. A contract executed and sealed in the name of the corporation by its president and secretary, though without the express

consent of the directors, is binding on the corporation when it has received benefits under the contract, and conducted its business in compliance there with in such a manner that the directors must have known of it.1

§ 208. Compensation of the president. To entitle a president or director of a corporation to recover for services rendered his corporation he must prove an express contract of employment, if the services for which he claims compensation are within the line and scope of his duties as president or director. The rule which excludes compensation to directors applies to the president chosen by the directors from their own number, and also to a treasurer when a director. Probably the general rule is that where a president has served while no fixed salary has been fixed for his services or attached to the position, the directors can not afterwards vote him pay for such services. But when the charter of a corporation provides that certain officers may be elected, and their salary fixed, by a board of directors, and a president is thus elected, but without a salary being named, the law raises an assumpsit on the part of the corporation to pay a reasonable

1 Jourdan v. Long Island R. Co., no by-law or resolution authorizing (1889) 115 N. Y. 380.

2 Santa Clara Mining Assoc. v. Meredith, (1878) 49 Md. 400; s. c. 33 Am. Rep. 264; Citizens' National Bank v. Elliott, 55 Iowa, 104; s. c. 39 Am. Rep. 167; Kilpatrick v. Penrose &c. Co., 49 Pa. St. 118; s. c. 88 Am. Dec. 497; Merrick v. Pene Coal Co., 61 Ill. 472; Sawyer v. Pawners' Bank, 6 Allen, 207; Holland v. Lewiston Falls Bank, 52 Me. 564; Gridley v. Lafayette &c. Ry. Co., 71 Ill. 200; Emporium Real Estate Co. v. Emrie, 54 Ill. 345; Taylor on Corporations, $ 647.

3 Note to Cook v. Sherman, 20 Fed. Rep. 183, citing Loan Association v. Steinmetz, 29 Pa. St. 118.

An appropriation by the directors of a corporation of its funds as compensation to its president for services rendered at a time when there was

payment for the services is unauthorized, and the corporation, by its receiver, may recover the funds so appropriated. Ellis v. Ward, (Ill. 1889) 20 N. E. Rep. 671. And in this case where it appears that the president had parted with all his interests in the company before the action was taken by its directors; that he had never demanded payment for his services, and had no actual knowledge of the resolution of the directors; that he accepted checks drawn on the company's funds for an amount due him under an agreement by the directors purchasing his stock, but refused to receipt for the checks as salary, it does not sufficiently appear that he was a party to the misappropriation, so as to render him liable to the company for the amount of the checks.