Torrey v. Dustin Monument Ass'n

There was no authority vested in the treasurer to bind the company by a negotiable promissory note. His power was expressly limited to the payment of such bills as should be duly approved by the directors; that is, he was only authorized to discharge them by payment in cash out of the corporate funds in his hands as treasurer. He was a special agent, clothed only with a specific and well defined authority. As such, it is well settled that he could not bind his principals by giving in their name negotiable paper. Taber v. Cannon, 8 Met. 456. Paige v. Stone, 10 Met. 160. Webber v. Williams College, 23 Pick. 302.

One of the reasons on which this rule is said to be founded is, that in an action between original parties there may be counter claims of set-off and other matters of defence, growing out of their mutual dealings, which could not avail the principal in a suit against him by an indorsee of a negotiable note. *330Webber v. Williams College, ubi supra. And it might be sug* gested that the rule is not applicable to promissory notes on demand under our statute, which provides that any matter shall be deemed a legal defence to such a note in the hands of an indorsee which would have been in an action brought by the promisee. Gen. Sts. c. 53, § 10. It is true that this provision takes away one of the reasons in support of the rule, but it does not change the rule itself. We cannot infer from such an enactment an intention of the legislature to repeal an express and well established rule of law, especially when it is apparent that the provision was passed diverso intuitu. We should not be warranted in making such an application of the doctrine of repeal by implication. Exceptions overruled.