Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/245

 PART II. j ACTS WITHIN THE CORPORATE POWERS. [§ 263. They are not competent to establish a right in the corporation against an outsider. 1 And as to outsiders, a corporation is not bound by interpolations fraudulently inserted in its records, when such outsiders have not seen, acted on, or known of the existence of such interpolations. 2 But if outsiders have acted on the faith of the records, the corporation will be estopped from alleging the falsity of interpolations fraudulently made in its books by its own secretary. 3 Said Chief Judge Earl, giv- ing the opinion of the New York Court of Appeals, in Rudd v. Robinson : " The books of corporations for many purposes are evidence, not only as between the corporation and its members, and between members, but also as between the corporation or its members and strangers. They are received in evidence gen- erally to prove corporate acts of a corporation, such as its in- corporation, its list of stockholders, its by-laws, the formal pro- ceedings of its board of directors, and its financial condition when its solvency comes in question." 4 1 Jones v. Trustees Florence Univ., 46 Ala. 626 ; Dolan v. Wilkerson, 57 Kan. 758. 2 Holden v. Hoyt, 134 Mass. 181. See Parker v. Nickerson, 137 Mass. 487. The reports of officers of the corporation to the shareholders or to the board of directors, in which cer- tain claims for which the corporation is not bound are enumerated among its liabilities, will not bind the cor- poration to pay such claims, or pre- vent it from changing its purpose with regard to them. Hall v. Mobile, etc., Ry. Co., 58 Ala. 10. 15 3 Commonwealth v. Reading Sav- ings Bank, 137 Mass, 431. 4 126 N. Y. 113, 117. This case held, however, that the books were not evidence of themselves to estab- lish a claim against a director or shareholder, in an action brought on behalf of the corporation. It is held in Rhode Island that parol proof of the declaration of a dividend is in- competent. The remedy of a stock- holder claiming that a dividend has been declared, where the books do not show it, is mandamus to compel the correction of the records. Dennis v. Joslin Mfg. Co., 19 R. I. 666. 225