Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/204

 § 214.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VII. settle a judgment debt which the corporation had no other means of paying. The value of the property conveyed did not exceed the amount of the judgment, and all the shareholders had notice of the conveyance about the time when it was made. The court held, that after the lapse of four years no action would lie either by the corporation or its shareholders to set aside the conveyance. 1 § 214. An implied ratification may also arise if the corpo- ration accepts the benefit of the unauthorized act. 2 Ratification T ^. . through Uut a corporation will not be held to have ratified benefited an a °t impliedly by accepting the benefit of it, un- i/ni't't 01 " ^ ess knowledge of the act was actually possessed by Knowledge some corporate agent who would have had authority or implied ... . notice es- to act for the corporation m the matter, 3 or whose function it was to report it to the proper authorities ; or unless knowledge of the act would have been possessed by some such agent had there not been neglect of duty on his part, the consequences of which are to be borne by the corporation, rather than by the party from whose performance it has been benefited. 4 Springs Co. v. De Bautte, 50 La. Ann. 1281. Compare Miller v. Rutland, etc., R. R. Co., 36 Vt. 452. 1 Sheldon Hat Blocking Co. v. Eickmeyer Hat Blocking Machine Co., 90 N. Y. 607. See, also, Stokes v. Detrick, 75 Md. 256: Underbill v. Santa Barbara Land Co., 93 Cal. 312. 2 Railway Companies v. Keokuk Bridge Co., 131 IT. S. 371; Taylor v. Agricultural, etc., Ass'n, 68 Ala. 229; Bezan r. Pike, 23 La. Ann. 788; Medoniak Bank v. Curtis, 24 Me. 36; Grape Sugar MTg Co. v. Small, 40 Md. 395; Wood Hydraulic MTg Co. v. King, 45 Ga. 34. a Gilman, etc., R. R. Co. v. Kelly, 77 111. 426; Murray v. Nelson Lum- ber Co., 143 Mass. 250. Thus, where the president of a cor- poration executed an unauthorized lease of mining property, and the corporation accepted the rent, but as 184 " money for ores sold," not knowing of the lease, it was held that there was no ratification. Yellow Jacket Silver M'g Co. v. Stevenson, 5 Nev. 224. See § 212, note. 4 Where a railroad company re- ceives railroad material bought with- out authority by the president on its credit and for its use, and the mate- rial is used for corporate purposes with the assent of the directors, that is an adoption and ratification of the president's act; and the directors using the purchased material were bound to inquire and were presumed to know whether it was paid for or not; it is not essential to the adop- tion of the acts of an officer that the directors should know the terms of his contracts. Scott v. Middletown, etc., R. R. Co., 80 N. Y. 200. See Blen v. Bear River, etc., Water Co., 20 Cal. 602; Hazelhurst v. Savannah,