Stevens v. Selma Fruit Co., Inc.

Commercial Corporation—Power op Oppicer to Execute Note—^Record Authority not Conferred—Implication—Power to Transact Business.—Although no record proof appears that any particular officer of the defendant, as a commercial corporation, was specifically authorized by its board of directors to execute notes on its behalf, yet, upon the question of implied authority, it is to be considered that the very nature of commercial corporations requires that the authority to transact their ordinary business affairs shall be vested in one or more persons; and its president or general manager, or whoever may be given immediate direction or control of its affairs, is its agent, empowered, unless expressly restricted to certain specified acts, to do anything which naturally and ordinarily has to be done to carry out its paramount purposes.

Id.—Inference from General Authority.—Where authority to do some particular act, which is included within the ordinary affairs of a commercial corporation, is not specifically given to any particular officer, and the performance of which is not specifically inhibited to the person authorized to manage its affairs generally, the intention of the board of directors to confer authority upon the person or officer in whom is vested the immediate direction or control or management of the affairs of such corporation to perform such particular act will be inferred from the general authority so given.

Id.—Officer Held Out by Corporation as Having General Authority —Ostensible Authority—Estoppel.—Where an officer of a corporation is held out by the corporation to be possessed of power to perform all acts involved in its ordinary or usual business, the law will not permit third parties to suffer from such acts of the officer by the plea of the corporation that the ostensible authority of such officer was not in fact conferred upon him.

Id.—Action op Secretary and Manager in Executing Notes Under Seal—Presumed Knowledge op Directors—Sanction.—In an action upon a note of the defendant corporation executed by its secretary and manager, under the corporate seal, representing the proceeds of fruit shipped by the corporation, the money for which was collected and held by it, where such secretary and manager testified that he had as such officer executed other notes for the corporation under its seal, as acts of the corporation, and that his authority to do so was never questioned by the board of directors or by its president, the board must be presumed to have had knowledge of such acts, and to have authorized the same,, as the course of the corporate business may require.

Id.—Reasonable Construction of Resolution of Directors—Implied Power of Manager to Execute Notes.—It is held that under a reasonable construction of a resolution of the board of directors of the defendant corporation, its manager had implied power to execute notes in the conduct of its business in favor of parties to whom it became indebted, where by its terms he was authorized “to purchase the necessary supplies and to buy and sell the goods and products in which the corporation intends to deal,” and was given “the immediate direction, of said operations,” and it was provided “that the authority of its president shall be exercised over and through its manager, so long as he shall properly conduct said business and operations.”