Rideout v. National Homestead Assn.

Corporations — Promotion of Arizona Corporation — Debt of Promoters not Sanctioned or Ratified by Board of Directors.— Where the promoters of a corporation organized under the laws of Arizona, prior to its organization, authorized plaintiff to incur an indebtedness, which he incurred by an expenditure of money advanced after the articles of incorporation were filed naming its officers, but before any meeting of its board of directors, which neither sanctioned nor ratified the indebtedness, such indebtedness was that of the promoters, for which the corporation is not liable.

Id.—Articles of Incorporation Naming Officers—Laws of Arizona! not Proved—Presumption—Disregard of Names.—In the absence of proof of the laws of Arizona, it will be presumed that they were similar to our own. In this state, the selection of corporate officers is not a matter within the power of the organizers, but is a duty devolving upon the board of directors; and the evidence in the record that the Arizona articles of incorporation named its officers may be disregarded.

Id.—Ratification from Benefits — Estoppel — Proof of Actual Knowledge of Contract Essential.—It is incumbent upon a party claiming the ratification of a debt of the promoters by the corporation or an estoppel to deny its authorization, from benefits received to show its actual ratification, or some affirmative act from which it may be inferred. Ratification thereof will not be presumed, even when the corporation has received benefits, unless actual knowledge of the specific contract out of which the benefits arose is made to appear; and the same knowledge is essential in considering the question of estoppel.

Id.—Knowledge by Interested Directors Insufficient to Charge Corporation.—The knowledge of the contract of the promoters for a debt to be incurred, by two of the directors directly interested in the contract, is insufficient to charge the corporation with ratification of the debt or estoppel to deny its authorization.

Id.—Finding Against Evidence—Debt of Promoters—Request of Corporation.—It is held that a finding that the money expended under the authority of the promoters was laid out and expended at the request of the corporation is against the evidence, which affirmatively shows that the same was the debt of the promoters only, and not of the corporation.

Id.—Remaining Indebtedness Incurred by Corporation—Authority of President as Managing Agent.—It is held that there is ample evidence to support the finding as to other indebtedness incurred through the president of the corporation, as managing agent, having general authority from the board of directors extending to all matters relating to the usual and ordinary conduct of its business, which included such indebtedness, the authority to contract which could properly be delegated by the board to its president.

Id.—Contract for Weekly Salary and Commissions on Sales of Corporate Stock—Conveyance of Land as Bonus.—Where the plaintiff was employed by the corporation for a weekly salary and commission on sales of corporate stock, upon the sale of which the corporation was to convey certain land as a bonus, the contract was not one for the sale of land, within the purview of subdivision 6 of section 1624 of the Civil Code, which only relates to contracts authorizing or employing an agent or broker to purchase or sell real estate for a compensation or commission.