Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/182

 § 189.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VII. Principles on which rests the validity of the acts of de facto officers. bind the corporation, although no written proof is or can be adduced for his appointment." ! Mere general reputation, however, is not evidence as against the corporation, to prove that certain persons were its officers (directors), the ordinary rules of evidence being applicable. 2 § 189. The general rule regarding the legal effect of the acts of de facto officers is stated in Angell and Ames on Corporations, as follows : " The act of an officer de facto is good, wherever it concerns a third person, who had a previous right to the act, or has paid a valuable consideration for it." 3 It is submitted that this statement of the rule does not give sufficient prominence to the principle of estoppel on which the rule depends ; a principle which, in its application to the re- sponsibility of corporations for the acts of de facto officers, may be stated thus : If a body of men acting as a corporation permit certain persons to act openly as corporate officers — or if it is permitted by the directors, assuming them to have had the power to appoint the officer in question — the corporation will not, to the detriment of persons who in good faith have acted on the assumption that the persons acting as officers were the officers they assumed to be, be permitted to impeach the validity of their acts and contracts on the ground that such persons were not legally corporate officers ; 4 and, on the other hand, persons 1 Story, J., in Bank of U. S. v. Dandridge, 12 Wheat. 64, 70. In ac- cord with his remarks are Hall v. Carey, 5 6a. 239 ; Despatch Line v. Bellany Jlfg. Co., 12 N. H. 205. 2 Litchfield Iron Co. u. Bennett, 7 Cow. 234. 3 §287. See Riddle v. Bedford County, 7 S. & R. 386, 392; Zear- foss v. Farmers' Institute, 154 Pa. St. 449; Greene v. Sprague M'f'g Co., 52 Conn. 330. Of course, an out- sider, having no standing in court to do so, cannot impeach the validity of the acts of a de facto officer. See Simpson v. Garland, 76 Me. 203. Baird v. Bk. of Washington, 11 S. & R. 162 411; Heath v. Silverthorn L. M. Co., 39 Wis. 147; Mec. Nat. Bk. v. Burnet Mfg. Co., 32 N. J. Eq. 236; Hacken- sack Water Co. v. De Kay, 36 N. J. Eq. 548; Sau Jose Savings Bank v. Sierra Lumher Co., 63 Cal. 179. In re County Life Assurance Co., L. R. 5 Ch. 288; see Stratton v. Lyons, 53 Vt. 130; Newton M'f'g Co. v. White, 42 Ga. 148; Barrell v. Lake View Land Co., 122 Cal. 129; Heinze v. South Green Bay, L. & D. Co., 109 Wis. 99. A familiar application of this ride is to the case where legally elected officers hold over after the expira- tion of their terms of office. The acts of such officers bind the corporation
 * Kuser v. Wright, 52 N. J. Eq. 825;