Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/332

 § 336.J THE LAW OF PRIVATE CORPORATIONS. [CHAP. Vll. and train hands committed while they are employed in curry- ing out the contract between the passenger and the company. 1 §336. An underlying principle here is this : if the corpora- tion, acting within the scope of its corporate author- An under-. , l. , lying prin- ity, employs agents or servants in such a manner as plication of to put it within their power to cause a violation of a trinesof duty owed by the corporation, the corporation will ultra vires. no i De sustained in the defence that the violation complained of was not authorized by it. And thus it is, if the tort was committed in the course of an employment, or in con- nection with transactions which the corporation had compe- tently authorized or acquiesced in, and any duty owed by the corporation is violated by the tort, it will be no valid defence to the corporation that the tort itself was not only unauthor- ized, but was even ultra vires the corporation. To the tort it- self, under such circumstances, the doctrines of ultra vires have no application; but they do apply where the employment in the course of which, or the transaction in connection with which, the tort was committed, was ultra vires the corpora- tion. Ordinarily, to render a corporation liable for the torts of its officers, agents, or employes, it must appear that the tort was in some way connected with the business which the corpora- tion was incorporated to carry on ; 2 and a corporation will not be liable for a tort committed in the course of a transaction clearly ultra vires; 3 unless on principles of acquiescence and ratification heretofore discussed. 4 1 Stewart v. Brooklyn and Cross- town K. R. Co., 90 N. Y. 588; Dwindle v. N. Y. C, etc., R. R. Co., 120 N. Y. 117 ; Central of Ga. Ry. Co. v. Brown, 113 Ga. 414. Accord- ingly, that the tortious act of the employe" was done in direct violation of orders will not exonerate the cor- poration. Phila. and Reading R. R. Co. v. Derby, 14 How. 408. See §347. 2 Miller v. Burlington, etc., R. R. Co., 8 Neb. 219. Compare Helfrich v. Williams, 84 Ind. 5.33. 3 Central R. R., etc., Co. v. Smith, 312 70 Ala. 572. Compare Hern v. Agri- cultural Soc, 91 Iowa, 97. A na- tional bank is not authorized to en- gage in the business of selling rail- road bonds on commission; and con- sequently is not liable in an action for deceit for the false statements of its teller made while selling sucl) bonds. Weckler v. First Nat. Bank. 42 Md. 581. However, if a corpora- tion reaps and retains the benefits of a false representation, it cannot set up the plea of ultra vires. Amer. Nat. B'k v. Hammond, 25 Colo. 367. 4 See § 269. For instance, a cor-