Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/770

 § 754. J THE LAW OF PRIVATE CORPORATIONS. [CHAP. XIV. law with knowledge of which persons dealing with it are affected. 1 Accordingly, the correct rule seems as follows : if officers contract as such with a person who acts in good faith, believing them to be authorized to make the contract in ques- tion, such contracting party cannot hold the officers personally liable if, in order to make out his case, it is necessary for him to base his claim against them on such honest though mis- taken misrepresentation of the powers of the corporation as arises by implication from their having executed the contract in its behalf. 2 And even if the representations by the officers of the powers of the corporation were express, nevertheless such representations would be only as to matters of law pre- sumably as much within the knowledge of the other contract- ing party as of the officers of the company, and so if they were honestly made and did not amount to a warranty, there would still seem to be no sufficient reason for holding the officers personally liable. Still, it is to be borne in mind that prob- ably the contracting parties do not stand on equal footing in regard to actual knowledge of the corporate powers; for the person contracting with the officers as a matter of fact is very likely ignorant of the scope of the corporate powers; with which the officers are just as likely conversant. So it would require but slight evidence in such cases to show fraud on the part of the latter; and, indeed, the rule ignorcmtia legis nemi- nem excusat has been relaxed as between persons who actually 1 Ellis v. Colmau, 25 Beav. 662; Rashdall v. Ford, L. R. 2 Eq. 750; Beattie v. Ebury, L. R. 7 Ch. 777. Contra, Wilson v. Goodman, 4 Hare, 54; Richardson v. Williamson, L. H. 6 Q. B. 276; Weeks v. Propert, L. R. 8 C. P. 427. In the three last cases the person contracting with the officers had executed his side of the contract, and would have been reme- diless had the decision been the other way. Still they seem to the writer to be wrong in principle, and to afford illustrations of hard cases making bad law. See cases in next note. 2 Abeles v. Cochrane, 22 Kans. 750 405; Humphrey v. Jones, 71 Mo. 62. " If the defect of authority arises from a want of legal capacity, and if the parties act under a mutual mistake of the law, and are both equally well informed in regard to the facts, so that the lender is not misled by any word or act of the agent, he would have no legal rem- edy against the agent; not in as- sumpsit, for it was not his contract; not in tort, for he is chargeable with no deceit." Jefts v. York, 10 Cush. 392, 395, per Shaw, C. J. Compare, however, AVeare v. Gove, 44 N. H. 196.