Hartzell v. Ebbvale Mining Co.

Citations

• 239 Pa. 602
• 86 A. 1093
• 1913 Pa. LEXIS 614

Syllabus

<p>Corporations — Promissory notes — By-laws—Course of dealing— Waiver — Estoppel—Evidence.</p> <p>1. Where promissory notes are executed solely by the treasurer of a corporation, whose by-laws provide that such notes must bear the signature of both president and treasurer, and shall have the corporation seal affixed, which was not done, the defense of irregularity of issue is, as a general proposition, good.</p> <p>2. Where, however, the corporation has received the benefit of the proceeds of such notes, although irregularly issued, or where there has been a course of dealing of the same irregular character between the same parties over a course of years, or where -the entire management and control of the corporation has been allowed to pass into the hands of the officer who executed the notes in its name, it may be estopped from denying liability, and a verdict for the amount of the notes based upon evidence to show these facts would be upheld.</p> <p>3. Where in such case the proceeds of two promissory notes so issued by defendant corporation had been received and used by it in its business, it was properly held liable for the amount thereof. Where, however, the defendant corporation was sought to be charged with liability upon another promissory note so issued, where it did not appear that the proceeds thereof had been used in its business, it was error for the court to allow evidence to be introduced to show a course of dealing between the holder of the notes and the former owner of the business of the defendant corporation, it not appearing that.there was any connection between the defendant corporation and such former owner so as to bind defendant on account of any action of his.</p>