2

suable in assumpsit. These cases are to be carefully distinguished from Taft v. Brewster et al.' and Tippets v. Walker et al.; for it was a matter of evidence, that the committee were duly authorized to contract on behalf of the corporation, and that credit was given to it; whereas in Taft v. Brewster et al., which came up on demurrer to the declaration, no evidence could be given upon these points, and the court held, as they well might, that the words "trustees, &c.," appended by the obligors to their names in the contract, was mere descriptio personarum; and in Tippets v. Walker et al., it expressly appeared in evidence that the committee were not authorized to make the contract in question, and of course, like the agents of natural persons, under such circumstances, were personally liable upon it.3

With regard, therefore, to the form in which the agents of corporations must execute contracts, whether special or simple, in order to avoid personal liability, and to bind their constituents, the general principle will be found the same as with the agents of natural persons; that in general, if from the contract itself, or from this, coupled with the conduct of the parties thereto, it appears that credit was given not to the agent, but to the corporation, and that it was the intent of the parties that the corporation should be bound, whatever may be the particular form of the contract, the corporation is alone liable upon it.

$9. 1. Corporations, like natural persons, are bound only by the acts and contracts of their agents done and made within the scope of their authority. This was the doctrine of the

1 9 Johns. R. 334; and see Skinner v. White, 13 Johns. R. 307.

See Mann v. Chandler, 9 Mass. R. 336; Randall v. Van Vechten, 9 Johns. (N. Y.) R. 64, per Platt, J.; Mott v. Hicks, 1 Cowen (N. Y.) R. 531, per Woodworth, J.; McDonough v. Templeman, 1 Har. & Johns. (Md.) R. 156; Clark v. Benton Woollen Manufacturing Co. 15 Wend. (N. Y.) R. 256.

Essex Turnpike Corporation v. Collins, 8 Mass. R. 299; Mechanics

Roman law; and Wood, who cites the Digest, says that corporations may borrow money by their syndick; but if he borrows more than he had authority for, the community is not answerable for it, unless the money came to their use.' A manufacturing corporation was adjudged not liable for money borrowed by one of its clerks, without authority in the name of the corporation, and applied to his own use; though it was in evidence that he had, in two or three instances previous, borrowed money of other persons in the name of the corporation, of which the plaintiff had no knowledge, which was repaid by another clerk, the money in those cases having been applied to the use of the company. But where the treasurer of a corporation was authorized by vote to hire money, on such terms and conditions as he might think most conducive to the interests of the company, for the purpose of meeting certain acceptances of the defendant, a director, of drafts of the company on him, the vote was held to authorize the treasurer to raise money by indorsing, on behalf of the company, drafts drawn by himself for that purpose; and that the acceptance of such drafts by the defendant, who was present at the meeting at which such vote was passed, and who was benefitted thereby, precluded him from disputing the authority of the corporation to pass the vote. The trustees of a society established for the purpose of erecting a monument and suita

2

Bank v. Bank of Columbia, 5 Wheat. R. 337, per Johnson, J.; Clark v. Corporation of Washington, 12 Wheat. R. 40; Bank of U. S. v. Dandridge, 12 Wheat. R. 83, per Story, J.; Hartford Bank v. Hart, 3 Day (Conn.) R. 493; National Bank v. Norton, 1 Hill (N. Y.) R. 572; State Bank of Indiana v. State, 1 Blackf. (Ind.) R. 273; Underhill et al. v. Gibson et al. 2 New Hamp. R. 352; Lee v. Flemingsbourgh, 7 Dana (Ky.) R. 28; Washington Bank v. Lewis, 22 Pick. (Mass.) R. 24; Hayward v. Pilgrim Society, 21 Pick. (Mass.) R. 270; Stewart v. Huntington Bank, 11 Serg. & Rawle (Penn.) R. 267, 269.

1 Wood's Civil Law, B. 1, ch. 2, p. 135; Dig. 12, 1, 27.

Martin v. The Great Falls Manufacturing Company, 9 New Hamp. R. 51.

3 Belknap v. Davis, 19 Maine R. 455.

ble buildings for their meetings, were authorized by vote to appropriate the funds of the society to the erection of a suitable edifice, and were required by the by-laws to manage the finances and property of the society, and the trustees thereupon entered into a contract for the building, and having exhausted the funds of the society, and there remaining a debt for which they were personally responsible, voted that the treasurer should give a note to one of their number who had paid the debt, without limiting in the vote the time within which the note was to be given; it was held, that, by virtue of their authority to manage the finances, they had power to authorize the note, creating one debt to pay another, and that under their vote the treasurer might make the note several years afterwards, the claim not being then barred by lapse of time.' And where the directors of a manufacturing corporation authorized its agent, under the Massachusetts statute of 1808, ch. 65, to raise money for his own use on the credit of the corporation, and to give therefor "the company note; the words of the vote were held to authorize a bill of exchange drawn by the agent in the name of the company, the dishonor of which would not subject them to damages. If a restricted authority is given to a special agent, a contract made by him without its limits will impose no obligation on his constituent. In accordance with this, where one was appointed the agent of a turnpike corporation to contract for the making of a certain portion of the road, with the restriction that one third of the payment on such contracts was to be made in shares in the road, it was considered that a contract made by him without this stipulation, would not charge the corporation. If the officers, whose appropriate business it is to make loans for a corporation, make unlawful loans, the corporation is not bound by their acts. As, however, the appointment of

4

Hayward v. Pilgrim Society, 21 Pick. (Mass.) R. 270.

Tripp v. Swanzey Paper Company, 13 Pick. (Mass.) R. 291.

Hayden et al. v. Middlesex Turnpike Corporation, 10 Mass. R. 403.

Life & Fire Insurance Company v. Mechanics Fire Insurance Company, 7 Wend. (N. Y.) R. 31.

an agent may be implied from the recognition of his acts, or the permission of his services, so may the extent of his authority from the powers usually given to one in his station. Upon this principle it was held, that the general agent of a commission company, who was in the habit of accepting bills which were afterwards paid by the company, had power to accept bills on an expected delivery of goods, though the by-laws of the corporation conferred no such power in express terms upon him.' Implied authority, in such cases, is, however, clearly limited to business of the company connected with or relating to the object or design for which the company was created."

The agent of a manufacturing corporation was empowered by its by-laws to manage the affairs of the corporation committed to his care, and to exercise the power entrusted to him according to his best ability and discretion, and promptly to collect all assessments and other sums that should become due to the corporation, and to disburse them according to the order of the board of directors, who were made a board of control over him; it was held, that, if the board of directors did not interpose to control his proceedings, the agent had authority to employ workmen to carry on the business of the corporation, and to pay them with its funds, or, not being in funds, to give the notes of the corporation in payment.3 And where a company which had existed as a voluntary association was afterwards incorporated, it was decided that their general agent, who was authorized to sign notes on behalf of the corporation for debts due from the voluntary company for stock or money lent them, had no power to sign notes for the corporation given for the purchase money of a farm, the title of which was in the voluntary association ; there being members of the former who were not members of

1 Munn v. Commission Co. 15 Johns. (N. Y.) R. 44.

The Pennsylvania, &c. Co. v. Dandridge, 8 Gill & Johns. (Md.) R. 248.

Bates v. Keith Iron Co. 7 Metcalf (Mass.) R. 224.

the latter body.' And, generally, the president of a corporation is not, by virtue of his office, authorized to draw checks for the moneys of the corporation deposited in a bank, unless, by the established usage of the place where the operations of the company are carried on, the presidents of such corporations are in the practice of drawing such checks, without any special authority for that purpose. The general agent of a manufacturing corporation is not authorized to sell or convey the real estate, or to mortgage or pledge as security for a loan the machinery of the company, without specific authority; though it may be incidental to his power, as agent, to borrow money, give promissory notes, and do many other acts in the ordinary course of the business of the company. The vice-president of a manufacturing corporation, after it had become insolvent, gave a note to his clerk, under the seal of the corporation, for an alleged debt due from the corporation to himself, for the purpose of charging the stockholders of the company personally for the payment of the note. This note was not deemed evidence of a debt due from the company to the vice-president, the officer who had affixed the seal of the corporation thereto; and the person to whom he had assigned the note could not recover the amount thereof after the dissolution of the corporation, without proving that it was given for a debt actually due.* But though a payment be made irregularly by the president of a corporation, yet, if it be justly due, and there be no reason for withholding it, it cannot be recovered back on the ground that he had verbal directions merely from the directors to pay it. If the president of a corporation authorizes an attorney or solicitor to appear for the corporation, the corporation will be bound by his acts, as their attorney or solicitor; and if the

'White v. Wesport Cotton Manufacturing Co. 1 Pick. (Mass.) R. 215. Fulton Bank v. N. Y. and Sharon Canal Co. 4 Paige (N. Y.) Ch. R.

127.

* Stow v. Wyse, 7 Conn. R. 219; Despatch Line of Packets v. The Bellamy Manufacturing Co. & Trustees, 12 New Hamp. R. 205.

• Bonaffe v. Fowler, 7 Paige (N. Y.) Ch. R. 576.

"New Orleans Building Company v. Lawson, 11 Louisiana R. 34.