While Chen as general manager of Kong Li Po had implied authority to bind corp

While chen as general manager of kong li po had

This preview shows page 38 - 39 out of 137 pages.

While Chen as general manager of Kong Li Po, had implied authority to bind corp by a reasonable and usual contract of employment with Yu Chuck such contract here cannot be so considered. The term of employment is unusually long and conditions are so onerous that possibility of corp being thrown into insolvency is expressly contemplated in contract. This fact should have put Yu Chuck upon inquiry as to extent of business manager's authority. 2. Evidence does not support contention that contract was impliedly ratified by corp. It is merely based on fact that Kim Hua, president of corp for 1920, admitted on stand that he saw Yu Chuck work as printers in the office but he denied any knowledge of existence of contract and said it was never presented to him nor the Board. Before a contract may be ratified, knowledge of its existence must be brought to parties who have authority to ratify it. No such knowledge shown here. A ratification by Pres would have been no avail either because in order to validate a contract, ratification by the board of directors was necessary. Fact that pres was required by by-laws to sign docs evidencing contracts of the corp, does not mean he had power to make the contracts. 3. Notice given by a Chen Yu Man posted in the newspaper making null and void all contracts not signed by TC Chen did not lead Yu Chuck to think Chen had authority to make contract. Notice was published a month after contract was entered into. Evidence also shows that Chen Yu Man and Chen is one and the same person. The notice confers no special powers, but is only an assertion by Chen that he would recognize no contracts not duly signed by him. NO evidence to show that notice ever brought to attention of officers of corp. Tropical Homes v. Villaluz (TOFF) Insular Drug v. PNB (REG) J. Malcolm 1933 FACTS: U.E. Foerster, a salesman and collector of Insular Drug for the Islands of Panay and Negros. was instructed to take the checks for the drug company to the Iloilo branch of the Chartered Bank of India, Australia and China and deposit the amounts to the credit of the drug company. Instead, Foerster deposited the checks, including those of four people, with the Iloilo branch of the PNB, in his personal account. The amount of the checks were subsequently withdrawn by U. E., Foerster and Carmen E. de Foerster (the former’s wife). The drug company investigated the transactions of Foerster. Upon the discovery of anomalies, Foerster committed suicide. The bank argued that the fraud was not proved, and that Foerster had implied authority to indorse all checks made out in the name of the Insular Drug Co. ISSUE: WON PNB is liable. YES. RULING: As to the first argument, no such special defense was relied upon by the bank in the trial court.
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