Union Trust Co. v. Ensign-Baker Refining Co.

California Court of Appeal Feb 10, 1916 No. Civ. No. 1472.Published

Before: Chipman

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Holding. The court held that a complaint alleging a corporation executed a promissory note for value received is sufficient to state a cause of action without explicitly pleading that the signing officers were authorized by resolution. Furthermore, the court affirmed that a corporation that has received the consideration for a note cannot challenge the validity of the instrument based on a lack of authorization.

Issues

Whether a complaint must explicitly allege that corporate officers were authorized by resolution to execute a promissory note.
Whether a corporation can challenge the validity of a note after admitting it received the consideration for the instrument.
Whether the defense of a pending action in another court can be considered on appeal when not established in the record.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The complaint shows that the promissory note purports to be the corporate act of defendant, and it was not necessary to allege that the president and secretary were authorized by resolution of the directors to execute the instrument.”

“It will be presumed that they had such authority, since it is admitted that the corporation, for which they assumed to act, executed and delivered the note and received the consideration.”

“The defendant, having received the money, could not question the validity of the note on that ground.”

Synopsis

Action on Promissory Note—Appeal from Judgment—Judgment-roll—Defense of Action Pending not Review able.—Upon an appeal taken upon the judgment-roll alone in an action upon a promissory note, the defense that the same cause of action was pending in another action at the time such judgment was entered cannot be considered, for there is nothing in the record to show that such defense was established.

H, A-Pleading—Use of Money for Benefit of Defendant Corporation—Sufficiency of Complaint.—Where it appears from the allegations of the complaint that the transaction was between two corporations in their corporate capacity, and that the plaintiff advanced the money to the defendant, which was the “value received” by the latter for executing the note, the complaint is not subject to demur-. rer on the ground that it does not state that any money received in exchange for the note was used for the benefit of the defendant corporation.

Id.—Authority to Execute Corporation Note — Presumption. — The complaint is not subject to demurrer for failure to allege that the president and secretary of the corporation maker were duly authorized to execute the note, as such authority will be presumed.

Id.—Designation op Corporate Capacity—Abbreviations.—The use of the abbreviations “Pres.” and “Secy.,” in designating the official capacities in which the president and secretary of the corporation maker signed the note, is sufficient to show official capacity.

CHIPMAN, P. J.

This is an action upon a promissory note. Plaintiff had judgment for twelve thousand five hundred dollars, principal, and four hundred and seventy dollars and eighty-three cents, simple interest, computed at the rate of six per cent per annum. Defendant appeals from the judgment. It is alleged in the complaint that both plaintiff and defendant are corporations organized under the laws of California. The third paragraph of the complaint reads as follows:

“On or about December 15, 1910, at the city and county of San Francisco, state of California, the defendant for value received, to-wit, the sum of twenty thousand (20,000) dollars then and there loaned and advanced by the plaintiff to the defendant, made, executed and delivered to the plaintiff its promissory note, of which the following is a copy:

“ ‘$20000.00 San Francisco, Cal., December 15, 1911).

“ ‘One day after date, without grace, for value received, Ensign-Baker Refining Company (a corporation) promises to pay to the order of the Union Trust Company of San Fran

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cisco (a corporation) at its office in this city, the sum of Twenty Thousand Dollars, in United States Gold Coin, of the present standard of weight and fineness, with interest thereon in like Gold Coin, from date until paid, at the rate of six per cent per annum, payable monthly, and if not so paid, to compound and become a part of the principal, and bear interest thereafter at the same rate.

“ ‘Ensign-Baker Refining Co.

“ ‘By E. J. Ensign, Pres.

“ ‘By L. E. Ensign, Secy.’ ”

It is further alleged that the sum of seven thousand five hundred dollars and no more has been paid on account of the principal of said promissory note and interest to and including June 30, 1913, and no more, leaving a balance unpaid upon the principal of twelve thousand five hundred dollars and interest thereon from June 30, 1913, “at the rate of six per cent per annum, payable monthly and compounded,” no part of which said principal sum of twelve thousand five hundred dollars and no part of any interest accruing since said June 30, 1913, has been paid. The complaint is verified.

Union Trust Co. v. Ensign-Baker Refining Co.

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Synopsis

CHIPMAN, P. J.

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