Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/647

 CHAP. X.] CORPORATION AND OFFICERS. [§ 626. the other directors and agents would have been unable to commit. 1 § 625. On the other hand, if directors have been guilty of no neglect of duty, the} 7 are not responsible for the wrongful acts or omissions of other directors or officers of the corpora- tion ; nor for the acts of inferior agents appointed by them- selves ; provided, in the selection of the last, the} 7 have used due care. Directors and other officers are responsible for the performance of their own duties, and cannot be held liable for wrongs which others have committed, unless the commission of such wrongs is in some way due to an omission of duty on their own part. 2 § 626. The following admirable statement of the liability of directors for the acts of persons other than themselves is taken from Baron Lindley's work on Partnership. 3 " The most diffi- cult question which arises with reference to the liability of directors is the extent to which each is liable for the acts of the other. The following appear to be the principles applicable to this subject : — " 1. All those directors who are actually implicated in a breach of trust by misapplying the company's money (even although they only sign checks prepared by others) are jointly and sev- erally liable for the losses arising therefrom. 4 " 2. Directors who know of and sanction such a breach of trust are implicated in it within the meaning of this rule, al- though they do not actively take part in it. 3 " 3. So are directors who know of the breach of trust, but take no steps to prevent it, beyond writing a letter of disap- proval. 6 ingly aids the cashier in abstracting money from the bank, is liable there- for to the bank, though he gets none of the money himself. Hobart v. Dovell, 38 N. J. Eq. 553.
 * ! 2 Lindley on Part., 595, 596.

4 Citing, Joint Stock Discount Co. v. Brown, L. R. 8 Eq. 381; Laud Credit Co. v. Fermoy, L. R. 5 Ch. 703. 5 Citing, "Land Credit Co. v. Fer- moy. supra. 1 Horn Silver M'g Co. o. Ryan, 42 Minn. 196. 2 Batchelor o. Planters' Nat. Bk., 78 Ky. 435, 446; Williams v. Hal- liard, 38 N. J. Eq. 373. In re Den- ham & Co., 25 Ch. D. 752. See Lewis v. Montgomery, 145 111. 30; Savings Bank v. Caperton, 87 Ky. 306; Wallace o. Lincoln S'v'gs Bk., 89 Tcnu. 630. Unless their liability is extended by statute; see, e. g., Cons'n of California, 1879, art. xii. § :'.. A receiving teller, who know- 1 G Citing, Joint Stock Discount Co. 627