Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/207

 PART II.] ACTS WITHIN THE CORPORATE POWERS. [§ 220. cally the authority of certain prominent classes of corporate agents. And first of all as to the authority of the board of directors. § 219. As a usual thing, the entire management of the busi- ness of a corporation is by its constitution vested in the board of directors ; so that from the beginning the board the shareholders have little to do with the corporate oL ireCt " management, their main function being to elect the directors. It may be, however, that according to the original organization of the company the corporate powers are left to a large extent in the hands of the shareholders, to be exercised by themselves if they see fit. Under such circumstances the share- holders by resolution or by-law may delegate authority to the directors ; and may at will revoke it, provided thereby no vested rights are affected. This latter style of organization is infrequent, and usually the powers of the directors emanate directly from the constitution of the corporation. Accordingly, whether or not any given act is within the scope of their au- thority is, in most instances, to be ascertained by a construction of the charter, or enabling acts and articles of association, in- cluding any statutes that may be applicable. The common phrase is something like this : " The business of the corporation shall be managed by the board of directors ; " or " The powers of the corporation shall be exercised by the board of directors." In consequence, the directors for ordinary purposes have full authority to act for the corporation and rep- resent it in all matters pertinent to the corporate enterprise. 1 § 220. The first and most general rule as to the extent of the power conferred by "authority to manage the busi- ness of the corporation," is that such power extends of general to the doing of any ordinary act conducive to the 1 See Hoyt ». Thompson's Ex'r, 19 N. Y. 207, 216; Burrill v. Nahant Bank, 2 Mete. (Mass.) 163, 166; Wood o. Whelen, 93 111. 153; Sims v. Street Railroad Co., 37 Ohio St. 556; Maynard v. Firemen's Fund Ins. Co., 34 Cal. 48; Wright v. Oro- ville M'g Co., 40 Cal. 20; Dana v. Bank of U. S., 5 W. & S. 246; Bank of U. S. u. Danbridge, 12 Wheat. 113 (per Marshall, C. J.); Tripp v. Swanzey Paper Co., 13 Pick. 291; Leavitt v. Oxford, etc., M. Co., 3 Utah, 265. When the directors and shareholders of a corporation are not identical, it is incompetent for the directors to bind the corporation by an agree- ment with a certain person that he shall be a director. Seymour v. De- troit Rolling Mills, 56 Mich. 117. 187