J. G. Brill Co. v. Norton & Taunton Street Railway Co.

[After the foregoing statement of the case.] It is settled by Usher v. Raymond Skate Co. 163 Mass. 1, and the cases there cited, that a corporation is not liable on an accommodation indorsement in the hands of one who takes with knowledge of that fact. Such an indorsement is ultra vires. That means that the corporation would not be liable on it even if it had been authorized by all the directors and the majority of the stockholders. Nevertheless, when a person takes a negotiable note before maturity signed by a corporation in due course of business from one who apparently has received it for…