Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/184

 § 193.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VII. § 191. There are certain rules of general application regard- ing the responsibility of corporations for the acts of their agents, which it will be well to consider before discussing in detail General the authority of the different classes of corporate rules regu- agents. lating the ,. respousi- § 192. lhe acts of directors and other corporate corpora- agents are valid as to the corporation and all persons thTacteof i nteres ted in the corporate enterprise, when the direct- their ors or other agents act in pursuance of powers origi- nally conferred on them by the charter, or enabling statute and articles of association; or conferred on them through an exercise of power vested in the body corporate or — in the case of agents other than the board of directors — in the board of directors. And where competent authority is ex- pressly conferred on an agent for a certain purpose, he will have incidental authority to do whatever acts are necessary and proper to carry out the purpose of his appointment. 1 § 193. If directors or other corporate agents do an act which is not beyond the scope of the corporate powers, the ttaiaw'of question whether the act is binding on the corpora- agency ap- ^j on an(: l a ll persons interested in the corporate en- phcable. l J Acts within terprise may be usually solved by the ordinary rules nary scope of agency. 2 If the act was within the ordinary agent's au- scope of the agent's authority, and the other party valid* 7 acted in good faith, having no notice that the agent had in fact no authority to do the act in question, the corporation will be bound by the act, unless the powers of the agent are contained in some instrument (e. g., the charter), with knowledge of the contents of which the other party was affected; for a person dealing with a corporate agent is justified in assuming that the agent has authority to do any act or make any contract within the scope of his employment and incidental thereto. 3 As Justice Story said, giving the opinion of the court 1 A general power conferred on the president of a railroad company to borrow money for it, and purchase rails, locomotives, etc., and, in or- der to do so, to make and deliver obligations, bills of exchange, and contracts of the company, includes leuder or a vendor. Hatch v. Cod- dington, 95 U. S. 48. See Rathbun v. Snow, 12:1 X. Y. 343. 2 New York, P., etc., R. R. Co. v. Dixon, 114 N. Y. 80. 8 See, e. g., Fletcher v. New York Life Ins. Co., 14 Fed. Rep. 846; authority to give securities to a | Adams Exp. Co. v. Schlesinger, 75 161