Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/193

 Validity of agent's act when not affected by- extrinsic facts. PART II.] ACTS WITHIN THE CORPORATE POWERS. [§ 203. has the treasurer of a savings bank ; x though it has been de- cided to be within the powers of a president of a mill company, who was also its superintendent and general agent, to execute for the company its promissory notes, for money paid by one of its directors to satisfy a debt due from the corporation to a creditor who was threatening suit. 2 § 203. A corporate agent sometimes makes a contract which is apparently within his authority, yet which, taken in connection either with the existence or non-exist- ence of some fact extrinsic to the contract, or with the intention of the agent, is beyond his authority, and perhaps ultra vires the corporation. If the im- propriety of the contract consists in the unexpressed intention of the corporate representative, and the other contracting party acts in good faith, having no cause to suspect any such improper intention, the contract will be binding on the corporation. 3 As far as concerns the other contracting party, the contract is within the agent's authority ; and if the agent intends some- thing further and unauthorized, that intention, if carried out, is a violation of duty towards a principal with which the other contracting party is not connected, for a person dealing in good faith with an agent, who is apparently acting within the scope of his authority, is not responsible for any breach of trust the agent may intend or perpetrate in regard to his own principal. As between the other contracting party and the corporation, conviction of persons injuring prop- erty of the railroad. Central R. R. etc., Co. ». Cheatham, 85 Ala. 292. 1 Fifth Ward Savings Bank i First Nat, Bank, 48 N. J. L. 513. 2 Seely v. San Jose Mill Co., 59 Cal. 22. As in this case, the act of the president was ratified both by the directors and at a shareholders 1 meeting, the court need not have de- cided it to have been within the power of the president. The powers of directors, presidents, and cashiers are particularly discussed below. 3 Even though the contract viewed in connection with the purposes of the agent was ultra vires the corpo- ration; thus, if a contract to guar- anty the bonds of another railroad company is on its face such as a cer- tain railroad company has power to " make, the fact that the guaranty was made for an unauthorized pur- pose, e. g., the accommodation of the other road, will not affect the right of a bona fide holder of the bonds without notice, to recover on the guaranty. Madison and Indian- apolis R. R. Co. v. Norwich SVgs Society, 24 Ind. 457. See, also, Farmers and Mechanics 1 Bk. r. * Butchers and Drovers 1 Bk., 16 N. Y. 125. See §§ 284-286. 173