Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/181

 PART II.] ACTS WITHIN THE CORPORATE POWERS. [§ 188. § 188. Before entering on the discussion of what acts of the various classes of corporate officers are binding on the corporation it will be convenient to notice how the actTof* the validity of an act is affected by the circumstance ^ act0 that the person acting on behalf of the corporation as a corporate agent or officer is not in point of strict law the officer he purports to be — is an officer de facto, and not an offi- cer de jure. 1 "An officer de facto" says Lord Ellenborough, " is one who has the reputation of being the officer he assumes to be, and yet is not a good officer in point of law." 2 It is consistent with this definition, and has been so held, that by color of election a person, though clearly ineligible, may be such an officer. 3 Moreover, " persons acting publicly as officers of the corporation are presumed to be rightly in office. ... If officers of the corporation openly exercise a power which presupposes a dele- gated authority for the purpose, and other corporate acts show that the corporation must have contemplated the legal existence of such authority, the acts of such officers will be deemed right- ful, and the delegated authority will be presumed. If a person acts notoriously as cashier of a bank, and is recognized by the directors or by the corporation as an existing officer, a regular appointment will be presumed ; and his acts, as cashier, will 8 Wyo. 58. One corporation is not liable for the debts of another cor- poration merely because the same persons hold the stock in both cor- porations. Waycross R. Co. v. Offer- man R. Co., 109 Ga. 827. A promise by a stockholder to pay the debt of the corporation is a prom- ise to pay the debt of another, and so within the Statute of Frauds. Home Nat. Bank v. Waterman, 134 111. 4G1. Shareholders, though they own all tlie stock, cannot set off their individual claims against a creditor of the corporation, in an action brought by him against the corpo- ration. Gallagher v. Brewing Co., 53 Minn. 214. But a shareholder has an insurable interest in the property 11 of the corporation, and may protect it by an insurance of specific prop- erty of the corporation. Riggs v. Commercial Mutual Insurance Co., 125 N. Y. 7. 1 In regard to setting aside the ap- pointment or election of de facto offi- cers, see §§ 577-581. 2 King ». Bedford Level, 6 East, 356, 368 ; see Parker v. Kett, 1 Lord Raymond, 658, 660. This definition is followed in Mechanics' Nat. Bank v. Burnett Mfg. Co., 32 N. J. Eq. 236. Compare Norton v. Shelby County, 118 U. S. 425. 3 Kuight v. Corporation de Wells Lutw., 508, 519. See, also, O' Brian v. Knivan, Cro. Jac. 552. 161