Blood v. La Serena Land & Water Co.

Citations

• 113 Cal. 221
• 45 P. 252
• 1896 Cal. LEXIS 768

Syllabus

<p>Corporations—Unauthorized Note and Mortgage—Resolution of . Stockholders.—Where the only authority upon which the president and secretary of a corporation acted in executing a note and mortgage in its name was a resolution passed at the preliminary meeting of stockholders before organization of the board of directors, such authorization is insufficient to support a finding of due and regular execution of the note and mortgage.</p> <p>Id.—Adoption of Corporate Seal by Use—Prima Facie Proof of Authority—Counter-proof.—Where it is shown that the seal attached to a note and mortgage executed by the president and secretary of a corporation in its name, though not regularly adopted, was employed as the seal of the corporation in all transactions requiring the impress of a seal, a finding is warranted that it became the seal of the corporation by use; and the affixing of such seal to the note and mortgage makes a prima facie showing of authority to execute them; but such prima facie proof is overcome by proof that no resolution authorizing such execution was ever adopted by the board of directors of the corporation.</p> <p>Id.—Mode of Ratification.—Under the Civil Code a ratification can only be made in the manner required in order to confer original authority for the act ratified; and a note and mortgage which could only be authorized by resolution of the board of directors can only be ratified by such resolution.</p> <p>Id.—Estoppel in Pais Distinguished from Ratification.—An estoppel in pais addresses itself to equity, and is to be distinguished from ratification, which is a question of legal cognizance; and it is only where the acts fall short of a legal ratification that the necessity exists of invoking the doctrine of estoppel.</p> <p>Id.—Pleading—Equitable Rebuttal.—An estoppel in pais may be shown, without pleading, by way of equitable rebuttal to defendant’s proof of want of authority to execute the note and mortgage sued upon, after plaintiff has established a