Bateman v. Sarbach

Citations

• 89 Kan. 488
• 132 P. 169

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. Promissory Note — Executed by Grand Lodge Treasurer without Authority■ — Grand Lodge Not Liable. The treasurer of the grand lodge of Masons of Kansas, claiming to have authority to borrow money for the grand lodge, procured a loan from the plaintiff and executed a promissory note therefor, signed by him as such treasurer. He had no authority to borrow the money or to execute the note. He was a defaulter and used the proceeds of the note to conceal his defalcation. Held, that the grand lodge was not liable in an action upon the note even if it were shown that part of the proceeds of the loan was applied in payment of its obligations, for the reason that it had no knowledge or notice of the unauthorized acts at the time the proceeds were received.</p> <p>2. Estoppel — Conduct of Principal Not Sufficient to Constitute Ratification of Unauthorized Acts of Agent. The grand lodge, without knowledge or notice of the loan or the execution of the .note, commenced an action against the bank where the treasurer had kept his account, to recover a sum of money which it claimed belonged in his account as treasurer and which the bank had applied in payment of his individual debt due the bank. Shortly afterwards a surety company which had bonded the treasurer paid the grand lodge the full amount of the defalcation and took an assignment of its claim and cause of action against the bank. In an action against the grand lodge upon the note executed to plaintiff the court charged the jury that if after discovering the facts respecting the execution of the note the officers of the grand lodge aided or assisted the surety company in the further prosecution of the action against the bank such conduct on their part would constitute a ratification of the unauthorized acts of the treasurer and render the grand lodge liable upon the note. Held, error, for the reason that upon payment of the loss by the surety company it became subrogated to the right of the