An important question which often arises is that relative to the power of the officers of a private corporation, to bind such corporation by signing or endorsing negotiable paper. This question was discussed by the Supreme Court of Michigan in the case of L. M. Gould vs. W. J. Gould & Co.,11 as follows:

"The general rule is that the president of a corporation has no implied power to bind the corporation by his signature to commercial paper, and that this power is not presumptively greater in the president and secretary. 21 Am. & Eng. Ency. of Law (2nd Ed.) 859. See also 3 Clark & M. Corp., Sec. 701; 2 Cook, Corp., (4th ed.,) Sec. 716. It is 'true that the authority to transact business of this character may be implied where it is shown either that the president has been held out as having charge of the business, and as authorized to perform such an act on behalf of the corporation as that in question, or where the corporation is shown to have received and retained the benefits of the transaction. See 4 Thomp. Corp., Sec. 4623. So, where the instrument is under the seal of the corporation, a presumption arises that it was executed by authority. Id. It is also true that, where there is evidence showing that the president of a corporation is engaged in managing the business, such powers will be ascribed to him as are requisite in the conduct of the business of the character involved. See Ceeder, vs. H. M. Loud, etc., Lumber Co., 86 Mich., 541; 49 N. W. Rep., 575; 24 Am. St. Rep., 134; Hirschmann vs. Iron Range, etc., R. Co., 97 Mich., 384; 56 N. W. Rep., 842. But the ruling of the circuit judge in the present case apparently rests upon the idea that the president and secretary are presumed to have authority to execute commercial paper, and that proof that commercial paper was signed by them shifts the burden of proof upon the defendant. We think this holding cannot be sustained upon authority. The only Michigan case tending to support this ruling is Eureka Iron, etc., Works vs. Bresnahan, 60 Mich., 332, 27 N. W., 524. But in that case it appeared that not only was the mortgage in question signed by the secretary and treasurer and president but that the mortgage was agreed upon and assented to by all the directors and stock holders of the company assembled together, and the mortgage was drafted and executed in their presence. The case, therefore, did not rest upon any presumption of authority."

10 Wood on Modern Business Corporations, pages 102 and 103. This book is recommended as the best practical and complete work on this subject. 11 134 Mich., 515.

On the question of the personal liability of officers of a corporation who sign negotiable paper purporting to be the paper of the corporation, the cases are hopelessly in conflict.12