Opinion
No. 205.
August 11, 1944.
Appeal from the Municipal Court for the District of Columbia, Civil Division.
Raymond M. Hudson, of Washington, D.C., for appellant.
Joseph C. Turco, of Washington, D.C. (Arthur C. Katims, of Washington, D.C., on the brief), for appellee.
Before RICHARDSON, Chief Judge, and CAYTON and HOOD, Associate Judges.
This was a suit to recover for loans of money and for services rendered by plaintiff's assignor, Warde, to defendant, Arts, Incorporated. The trial judge disallowed plaintiff's claim for services but found in his favor for the item of money loaned. Defendant appeals claiming that no money had been loaned to the corporation, and that one Hekimian, the corporate officer through whom the advances were claimed to have been made, had no authority to borrow in behalf of the corporation.
The important parts of the testimony supporting appellee's claim, as given in part by Warde and in part by a former officer of the corporation, indicate that at the times involved the corporation was in financial difficulty; that Warde loaned money in varying amounts to the corporation through Hekimian over a two month period; that the corporation used the money to buy various materials and supplies and to pay a telephone bill which was greatly in arrears; that Warde's money carried the corporation for two months; that Hekimian assured Warde that the corporation would repay the loans, and that a part was, in fact, repaid.
Testifying for the defendant, Hekimian admitted that at the times in question the corporation was destitute and that to keep it going he had borrowed money from other persons, but never from Warde; that he, Hekimian, had made two loans to Warde and that Warde had loaned him money; he denied that he had ever promised Warde that the corporation would repay any loans. Testimony touching on other phases of the dispute between the parties, but not germane to this appeal, will not be detailed here.
From the conflicting evidence the trial judge was justified in finding that Hekimian as president, treasurer and general manager had in behalf of the corporation sought and received loans of money from Warde which the corporation was bound to repay.
Defendant argues that under the corporate by-laws the money could not have been lawfully borrowed without express authority of the directors. The answer is that Warde knew nothing of the by-laws and on the apparent authority of Hekimian had advanced the money which kept the corporation alive for two months. That being so, plaintiff was entitled to prevail. When there is apparent authority it is not necessary to prove formal proceedings by the directors of a corporation to give an officer authority to borrow money to keep the company in business. Our ruling is supported by the following authorities: La Normandie Hotel Co. v. Security Trust Co., 38 App.D.C. 187; Sachs v. Ewing, 77 U.S.App.D.C. 166, 133 F.2d 403; Union Indemnity Co. v. Home Trust Co., 8 Cir., 64 F.2d 906; Laundry Supply Co. v. Colgate, etc., Co., 7 Cir., 108 F.2d 1000; In re McLean-Bowman Co., D.C.M.D.Pa., 138 F. 181; Marvin v. First Nat. Bank, D.C.N.D.Ill., 10 F. Supp. 275.
Affirmed.