Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/110

 § 119.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VII. . tion, by which everybody interested in the corporate enterprise A11 is bound, and with knowledge of which every one All persons J may look is affected. 1 Therefore, the acts of the body corpo- to the cor-. . . tj1. . . . r. pomte con- rate done in accordance with this constitution, and s i u ion. j.j ie ac j. g Q j! directors anc i other corporate agents^ within the scope of their authority are valid 2 and binding 3 on all persons. The management of the corporate enterprise in pursu- ance of tRe "constitution of the corporation is thefvroper man- agement by which every one is bound and to which no one can object. 4 § 119. The purpose of the present chapter is to give a view „ . of the legal relations which acts done by or on behalf Purpose of ° J this chap- of a corporation occasion between the corporatio (including all its shareholders and existing creditors) and the person dealing with it or its representative. 1 See § 195. 2 An act is valid when it occasions the apparently intended legal rela- tions. s To say that the act of one person is binding on another, means that it occasions the legal relations 'which would have been occasioned had such other person done the act him- self. It may occasion legal rela- 90 tions affecting the person doing it aa well. 4 The propriety of acts may often depend on the condition of the corpo- rate affairs. What would have been a lawful and proper use of the corpo- rate funds when the corporation was solvent, may be both "improper and unlawful when the corporation be- comes insolvent. W