Scott v. Bankers' Union of the World

Citations

• 73 Kan. 575
• 85 P. 604
• 1906 Kan. LEXIS 291

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. Corporations — Fraternal-insurance Association — Power to Issue Notes. An incorporated fraternal-insurance association, organized under a charter which does not expressly confer the power to issue promissory notes, has no implied power to do so, when such authority is unnecessary to enable the association to exercise the powers expressly given or to accomplish the purpose of its creation.</p> <p>2. -Dealings with a Corporation — Notice of its Powers. Every person dealing with a corporation or with its obligations is bound to take notice of the power possessed by such corporation and of the purpose for which it was created.</p> <p>3. -Bona Fide Purchaser of Ultra Vires Corporate Note. The purchaser of a promissory note executed by a corporation not having the legal power to issue such an obligation cannot recover thereon from such maker, even when the note is taken in good faith and for value.</p> <p>4. -Incapacity of Corporation Does Not Release the Other Joint Maker. A person who is the joint maker of a promissory note with a corporation which does not have the power to issue such an obligation may be liable thereon to an innocent holder thereof, even though no recovery can be had against the corporation.</p>