Kneeland v. Braintree Street Railway Co. , 167 Mass. 161 ( 1896 )

Allen, J.

The defendant by common law had the power to incur debts, to contract for the payment of them, and to give promissory notes. Commonwealth v. Smith, 10 Allen, 448, 455. Richards v. Merrimack & Connecticut River Railroad, 44 N. H. 127, 135. There is no statute which annulled or limited this power. To give such notes was not ultra vires. Monument National Bank v. Globe Works, 101 Mass. 57.

By Pub. Sts. c. 113, § 9, the immediate government and direc, tian of the affairs of the defendant company were vested in the board of directors. The board of directors, therefore, was tho proper body to authorize the giving of promissory notes in the name of the corporation. Sargent v. Webster, 13 Met. 497,503 Williams v. Cheney, 3 Gray, 215. Lester v. Webb, 1 Allen, 34, Hendee v. Pinkerton, 14 Allen, 381, 387. Sherman v. Fitch, 98 Mass. 59, 64. Saltmarsh v. Spaulding, 147 Mass. 224, 228. Cook, Stock & Stockholders, § 712.

In the present case, the action of the board of directors may have been an abuse of authority, and as against the payee the defendant may have had a defence. This it is unnecessary to determine. The jury found that the plaintiff became the owner of the note before maturity, for value, and without notice of what it was given for or how it was given. It was given in pursuance of a vote of the board of directors. It was therefore the note of the corporation, not ultra vires, made negotiable by its terms, and the plaintiff as indorsee may recover upon it. Monument National Bank v. Grlobe Works, 101 Mass. 57. Merchants' National Bank v. Citizens' Gras Light Co. 159 Mass. 505. Genesee County Savings Bank v. Michigan Barge Co. 52 Mich. 438. Wilson v. Metropolitan Elevated Railway, 120 N. Y. 145.

Judgment on the verdict.