Bank of Yolo v. Weaver

FOOTE, C. This action was brought to recover of certain stockholders of a corporation designated as the Woodland Woolen Manufacturing Company their proportionate shares of certain moneys alleged to have been borrowed from the plaintiff, the Bank of Yolo, by the first-mentioned corporation. Judgment was given in favor of the plaintiff, from-which, and from an order refusing a new trial, this appeal is taken. The facts surrounding the transaction seem in brief to be that the Woodland Woolen Manufacturing Company was in need of money to get into operation, and by written resolution of its board of directors, spread upon its minute-book, ordered that its president and secretary give a note to the Bank of Yolo for $15,000, as “security for overdrafts.” At the time this action was instituted the manufacturing corporation owed the Bank of Yolo about $19,214.97, for moneys drawn from bank, a portion of the same in pursuance of the written resolution authorizing the note, and the balance of borrowed money by the vote or resolve of the board of directors, which vote or resolve was not spread in writing upon the minutes in the corporation’s book. But the evidence is sufficient, as we think, to show that all of this money was borrowed from the bank by the authority of the board of directors of the manufacturing corporation, and was used by it for its exclusive benefit. Therefore, the objection made by the defendants to the introduction in evidence of a resolution of the board of directors, and entered in the minutes after suit brought, ratifying the acts of the treasurer in borrowing and using for the purposes of the corporation all of the money [571]sued for in this action in excess of what the written resolution called for authorizing the note, is untenable. The right of recovery here did not depend upon this alleged ratification; it depended primarily upon the authorization of the board in writing as to $15,000, and, as to the balance, upon the vote or resolve of the directors not reduced to writing, and upon the fact that this money was borrowed and applied to the uses of the corporation. Such a corporation cannot receive the benefits and uses of an executed contract, and then deny its obligation: Main v. Casserly, 67 Cal. 129, 7 Pac. 426; Bradley v. Ballard, 55 Ill. 413; Pixley v. Railroad Co., 33 Cal. 198, 91 Am. Dec. 623; Foulke v. Railroad Co., 51 Cal. 365. Therefore, whether the resolution of ratification made after suit brought was improperly admitted or not, which we do not decide, is immaterial, as the cause was tried by the court, and the evidence was ample without it to fix the liability of the defendants, and it does not appear that the court rested its decision upon that resolution: Mitchell v. Beckman, 64 Cal. 123, 28 Pac. 110.