Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/646

 § 624.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. X. directors for the acts of other corporate agents. powers of the corporation, but possibly beyond the powers of the directors, directors may act in safety by procuring before- hand the consent of a majority of shareholders in a corporate meeting; and that as to acts which are ultra vires, it may be unwise to permit directors in a great corporation to shield themselves from responsibility behind even the most "un- purchasable opinions" of counsel. The maxim Ignorantia leyis neminem excusat is one of the pillars of corporation law. 1 § 624. As appears from Charitable Corporation v. Sutton, 2 Liability of if the directors improperly surrender duties, Avhich they ought themselves to perform, into the hands of one or more of their number, or into the hands of other agents of the corporation, they may render themselves liable for damages arising to the corporation from such frauds and wrongful acts as the persons, into whose hands they have improperly surrendered their duties, commit in the performance of them. It is even conceivable that directors, by improperly intrusting to any person discretionary powers confided to them to be exercised only by themselves, might make themselves liable for errors of discretion committed in good faith by that person ; even for such errors as the directors would not have been liable for had they themselves committed them in the discharge of their duties. Moreover, if it is the duty of directors to watch over the conduct of each other, and of other agents and clerks of the corporation, and they grossly neglect this duty, they will be liable for the damages arising from wrongful acts which, had it not been for their neglect, 1 The English courts have re- cently expressed themselves as to these points as follows: Directors are not to be held liable on the strict rules applied to trustees in the English Court of Chancery; for they are not in the position of trustees iu whose name property stands, and who deal with it as principal and owner, subject only to account to some cestui que trust. If directors apply funds of the cor- 626 poration to clearly ultra vires pur- poses, they are liable; otherwise a strong and clear case of misfeasance must be made out. Faure Electric Accumulator Co., In re, 40 Ch. D. 141; see Liverpool Household Stores Ass'n, In re, 59 L. J. Ch. 616; Cul- lerne v. London, etc., B'Id'g Soc, 25 Q. B. D. 485; Masonic, etc., Life Ass'n Co. v. Sharpe [1892], 1 Ch. 154. 2 § 619.