Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/338

 § 342.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VII. or the whole transaction in regard to which the tort was com- mitted, is evidently ultra vires. Illustrations will now be given of the three general rules. § 342. If the corporation or the corporate management, act- ing within the scope of its powers, authorized or ratified the tort, or if the tort was fairly within the scope of the agent's authority to act for the corpora- tion, the latter will be responsible. 1 This rule is applicable to the torts of officers and agents, rather than to those of the corporation's servants and employes. A corporation is liable for any fraud 2 committed by an agent in the course of a transaction in regard to which he actually has authority to act for the corporation, or where authority to act for it may be inferred from the course and scope of his position and employment. 3 An action for deceit will lie First rule. Liability resting on agent's authority. 1 See Washington Gas Light Co. v. Lansden, 172 U. S. 534. A corpora- tion is liahle for an overpayment made by mistake to its general man- ager, he acting at the time in the course of his employment and au- thority. Kansas Lumber Co. v. Cen- tral Bank, 34 Kan. 635. 2 A corporation may be in a legal sense guilty of a fraud, and in such case ordinary rules permitting re- scission of contracts induced by fraud, and reclamation of property ■when the owner is induced to part with it through fraud, apply in favor of persons dealing with the corpora- tion. Cragie v. Hadley, 99 N. Y. 131. See Dorsey M. Co. v. McCaffrey, 139 Ind. 545. 3 Butler v. Watkins, 13 Wall. 456; Lamm. v. Port Deposit Homestead Ass'n, 49 Md. 233; Scofield Rolling Mill Co. v. Georgia, 54 Ga. 635; Bank of Greensboro v. Clapp, 76 N. C. 482; Mackay v. Commercial Bank, L. R. 5 P. C. 394; Hunter v. Hudson River Iron Co., 20 Barb. 507; New York and N. H. R. R. Co. v. Schuyler, 34 N. Y. 30; Erie City Iron Works v. Barber, 106 Pa. St. 125 ; Western 318 Maryland R. R. Co. v. Franklin Bank, 60 Md. 36; Shaw v. Port Philip, etc., Mg. Co., 132 B. Div. 603; Binghamp- ton Trust Co. v. Auten, 68 Ark. 299. "It is urged that a corporation will not be affected by any represen- tation made by an agent, unless the agent was directly authorized to make the particular statement. The principal is liable for the false rep- resentations of the agent made in and about the matter for which he was appointed agent, not on the ground of express authority given to the agent to make the statement, but on the ground that as to the par- ticular matter for which the agent is appointed he stands in the place of the principal, and whatever he does or says in or about that matter is the act or declaration of the princi- pal, for which the principal is just as liable as if he had personally done the act or made the declaration." Sharp v. Mayor, etc., of New York, 40 Barb. 256, 273. A bank cannot set up the fraud of its own officers to a demand by a de- positor for repayment. Steckel v. First Nat. Bk., 93 Pa. St. 376 ; Ziegler