Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/648

 § 626.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. X. "4. Where the liability is to account for profits improperly received by them, they are only severally liable for their own receipts, and are not jointly and severally liable for each other's receipts. 1 But it is submitted that their liability is joint and several if there has been a joint receipt by them all, and then a division amongst themselves of what they have all received ; or if they have all been implicated in some joint breach of trust resulting in profit to them all. " 5. It has been decided that a director who is not cognizant of a breach of trust committed by his co-directors and who takes no part in it is not liable for it. 2 This point, however, involves the question whether a director is not bound to make himself acquainted with what his co-directors are doing, and to take such steps as may be in his power to prevent them from doing wrong. On this question opinions differ, and it can scarcely be considered as settled. If, indeed (as often hap- pens), the constitution of the company is such as to justify a director in leaving certain matters to his co-directors, or some of them, he is justified in trusting them with such matters, and is not responsible for breaches of trust committed by them and concealed from him. But in other cases his irresponsibility is by no means so clear. " 6. Nor, it seems, is a director liable for breaches of trust committed by his co-directors before he became a director, but afterwards discovered by him. In this case the new director's liability, if any, can only be for the loss sustained by the com- pany by reason of his omission to make kuown what he has v. Brown, supra. The statute of limitations runs against any liability of directors for the wrongful acts of other directors and officers, from the time of the commission of the wrongful acts. Spering's Appeal, 71 Pa. St. 11, 25; Williams v. Hal- liard, 38 N. J. Eq. 373. See Link v. McLeod, 194 Pa. St. 566, holding that where directors are charged with having made an unlawful payment pursuant to an unlawful resolution the statute runs from the date of the resolution. See § 012, note. 1 Citing, Parker v. McKenna, L. R. 628 10Ch. 96; General Exchange Bank v. Horner, L. R. 9 Eq. 480. If one or more directors improperly dis- pose of corporate funds, they are re- sponsible individually; but to affect them with joint responsibility, it must appear that the act complained of was done by the board or a majority thereof. Franklin Ins. Co. v. Jenkins, 3 Wend. 130. 2 Citing, Ashhurst v. Mason, L. R. 20 Eq. 225. Accord, Re Montrotier Asphalte Co., Perry's Case, 34 L. T. N. S. 716.