Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/339

 PART IV.] LIABILITY FOR TOUTS OF AGENTS. [§ 342. against a corporation, 1 or an action of trover for conversion. 2 So a corporation will be liable in damages for the publication of a libel by its agents, 3 unless the libel and the matter to which v. Same, ib. 393 ; Citizens' Savings Bank v. Blakesley, 42 O. St. 645. Compare First Nat. Bank v. Williams, 100 Pa. St. 123 ; Lewis v. Meier, 4 McCrary, 286 ; Commonwealth v. Beading Savings Bank, 137 Mass. 431. Defendaut borrowed six thousand dollars from a bank and deposited collaterals, which the president of the bank converted to his own use. The bank trustees appeared to have been negligent in inspecting its secu- rities, and the president had charge of the collaterals. Held, that the receiver of the bank could not re- cover without allowing defendant the value of his collaterals. Cutting v. Marlor, 17 Hun, 573 ; see Williamson v. Mason, 12 Hun, 97. Compare Barksdale v. Finney, 14 Gratt. (Va.) 338 ; Commonwealth v. Reading Sav- ings Bk., 133 Mass. 16. If a treas- urer be a defaulter, and take money from a third person, and place it with the funds of the corporation in order to conceal and make good his defalcation, and the corporation use the money, no other officer knowing of the facts, the plaintiff from whom the money is obtained may recover from the corporation, although the plaintiff be another corporation of which the defaulting treasurer was also treasurer, and the money was drawn by him from plaintiff corpora- tion and transferred to defendant. Atlantic Mills v. Indian Orchard Mills, 147 Mass. 268. But officers cannot render the cor- poration liable for fraudulent mis- representations regarding matters not connected with the corporation. Thus, where one company becomes a shareholder in another, the officers of the former have no authority to make representations as to the pe- cuniary condition of the latter, so as to render the former company liable, although the representations be fraudulent and untrue. Langan v. Iowa, etc., Construction Co., 49 Iowa, 317. 1 Peebles v. Patapsco Guano Co., 77 N. C. 233. But compare Western Bank of Scotland v. Addie, L. K. 1 H. L. Sc. 145, 157. The fraudulent representations of the corporate agent may also give the other party the right to annul the contract. McClellau v. Scott, 24 Wis. 81 ; Derrick v. Lamar Ins. Co., 74 111. 404 ; Henderson v. Railroad Co., 17 Tex. 560 ; Wickham v. Grant, 28 Kan. 517. As to the avoidance of a contract to take shares on account of the fraud of the corporate agent, see §§ 523-526. 2 Beach v. Fulton Bank, 7 Cow. (N. Y.)485. 3 Philadelphia, etc., R. R. Co. v. Quigley, 21 How. 202 ; Washington Gas Light Co. v. Lansden, 172 U. S. 534 ; Vance v. Erie R. Co., 3 Vroom (N. J.), 334 ; McDermott v. Evening Journal, 43 N. J. L. 488 ; S. C, 44 N". J. L. 430 ; Maynard v. Firemen's Fund Ins. Co., 34 Cal. 48 ; S. C, 47 Cal. 207 ; Vinas v. Merchants' Mut. Ins. Co., 27 La. Ann. 367 ; Howe Machine Co. v. Souder, 58 Ga. 64 ; Fenton v. Wilson Sewing Machine Co., 9 Phila. 189 ; Bacon v. Michigan Central R. R. Co., 55 Mich. 224 ; Boogher v. Life Association, 75 Mo. 319 (overruling Gillett v. Missouri Valley R. R. Co., 55 Mo. 315, and semhle Childs v. Bank of Missouri, 17 Mo. 213) ; Johnson v. St. Louis Dis- 319