San Joaquin Valley Bank v. Gate City Oil Co.

SHAW, J.

This was an action to recover six thousand dollars upon a promissory note alleged to have been executed by the defendants to the plaintiff. The defendants answered denying the execution of the note. The court made findings' and gave judgment in favor of the plaintiff against all the defendants. The Gate City Oil Company and J. F. Lynch appealed from the judgment within sixty days after its entry. They claim, in support of their appeal, that they did not execute the note set out in the complaint and that there is a variance between the allegations and the proof concerning the note. The merits of these objections can best be shown by a chronological statement of the case.

In 1907 the Gate City Oil Company was in need of the sum of six thousand dollars. Its directors passed a resolution authorizing its officers to negotiate a loan for that amount. Upon this authority certain of its officers, including Lynch, appeared at the plaintiff’s banking house and it was there agreed between them and the plaintiff that the plaintiff would loan six thousand dollars upon the joint note of the Gate City Oil Company and the three defendants, Smith, Lynch, and Giottonini. A printed form of note was handed to these officers for execution. They presently returned with the note. Its opening clause was as follows: “Stockton, Cal., Sept. 20th, 1907. One day after date, for value received, we or each of us promise to pay to .the San Joaquin Valley Bank, or order,” etc. The closing sentence and the signatures were as follows: “All payments which become due by virtue hereof are to be paid in United States gold coin.

J. W. Mosher, Pres.

Ira E. Smith, Secy.

J. Jerome Smith,

J. F. Lynch,

F. F. Giottonini.”

The genuineness of these signatures is conceded. This note, thus executed, was offered to the plaintiff, in pursuance of the previous negotiations, as the note of the Gate City Oil

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Company and the three other defendants, it was accepted as such and the six thousand dollars was delivered to that company. There was nothing in the body of the note to show that the Gate City Oil Company was one of the makers thereof. Some three years later it was discovered that the name of the corporation was not subscribed as one of the makers, and that the corporate seal was not attached. Thereupon, at the request of the plaintiff, the corporate seal, which showed an imprint of its name, was placed upon the note at the proper place. The directors of the Gate City Oil Company, thereupon, passed a resolution, which was entered on its minutes, declaring that the act of giving the said note by the Gate City Oil Company was approved and ratified as the act of the corporation. A meeting of the stockholders was also duly called and was attended by members holding more than four-fifths of the shares. At this meeting a resolution was unanimously adopted ratifying and approving the act of the corporation in giving the note in question as the note of the corporation. The Gate City Oil Company paid interest on the note quarterly until March 20, 1912, which was some six months after this action was begun. The complaint, as first filed, set forth the note in full. The signatures were given as follows: “Gate City Oil Co. (Seal)