Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/771

 CHAP. XIV.] OFFICERS AND CREDITORS. [§ 755. are very unequal in tbeir knowledge of the law. 1 Very likely, moreover, if the contract were in such a form that an intention on the part of the officers to bind themselves personally could in any way be inferred, the fact that the contract was not with- in the powers of the corporation might strengthen the presump- tion that they intended to make themselves personally liable ; since otherwise the contract would be invalid, a result which cannot be presumed to have been intended by the parties. 2 § 755. An agent is not liable to third persons for the frauds or other tortious acts or omissions of inferior agents, -.,_ ° ' Officers' although they may have been appointed by him. If liability to the superior agent fails to use due care in selecting for the sub-agents or servants, he will be liable to his prin- other° cipal for damages resulting from their dishonesty or a s ents - inefficienc} 7 ; but, should parties dealing with such sub-agents or servants suffer injury, the maxim respondeat superior would fix the liability therefor on the common principal and not on the superior agent. 3 A similar rule applies to directors and other corporate officers. Ordinarily, they would not be liable to outsiders for the wrongful acts of agents of the corporation other than themselves, unless they authorized the wrong, or in some way participated in it, or knowingly derived benefit from it. 4 Accordingly, the New York Court of Appeals has held that the facts that the name of a person was published as a trustee of a corporation and a certificate of stock issued to him, were not sufficient to warrant a verdict against him for a fraud perpetrated by other trustees and agents of the corporation. 5 But should a director lend his name or influence in any man- !See Wheeler v. Smith, 9 How. 55; Carrugi W.Atlantic Fire Ins. Co., 40 Ga. 135. 2 See Weare v. Gove, 44 N. H. 196. 3 Stone v. Cartwright, 6 Term Rep. 411; Bath v. Caton, 37 Mich. 199. 4 Scott v. Depeyster, 1 Edw. Ch. (N. Y.) 513; Weir v. Barnett, 3 Excli. Div. 32; Lewis v. Montgom- ery, 145 111. 30; Davenport v. New- ton, 71 Vt. 11. But where a person acts as the president of a spurious bank, which never had any legal organization, he may be personally liable for deposits lost through the mismanagement and fraud of his associates. Hauser v. Tate, 85 N. C. 81. A superior officer directing a servant of the cor- poration to commit a tort is liable to the injured person. Peck v. Cooper, 112 111. 192. 5 Arthur v. Griswold, 55 N. Y. 400; Wakeman v. Dalley, 51 N. Y. 27; See Hume v. Commercial Bank, 9 Lea (Tenn.), 728. 751