followed in executing a deed of the corporate property, and where no mode of conveyance is prescribed by the charter, the deed must be made in the corporate name; and a deed executed in the name of an officer of the corporation and under his seal will be invalid,' although an agent may execute valid deeds of corporate property when authorized to do so by the stockholders of the corporation; and even though he was not authorized by the stockholders to execute such a deed, if the deed was executed through mistake and was meant to be a deed of the corporation, it would probably be reformed by a court of equity, but a general agent of the corporation has no authority, as such, to transfer by deed, the real estate of the corporation.3

1 Carey v. Philadelphia Pet. Co., 33 Cal. 694; Pekin M. Co. v. Kennedy, 81 Cal. 356.

2 Boone on Cor., Sec. 54.

3 Ante, idem. "The individuals who are the trustees of a corporation, in their official character as trustees, when not acting as a board have no authority independent of that conferred by the corporation, to execute a deed of the corporate property." Gashwiler v. Willis, 33 Cal. 11; M. M. D. 55. "Where a corporation is engaged in the business of conveying water through ditches for sale to miners, a purchase of additional ditch property, with a view of extending the operations of the company, is not a matter within the ordinary course of business of such corporation, and its president, as such, has no authority to bind the corporation by a contract for such purchase." Blen v. Bear River & A. W. & M. Co., 20 Cal. 602; M. M. D. 50. "Where a corporation, incorporated for the purpose of manufacturing iron in all its branches, in pursuance of a resolution of its stockholders, made a lease of its iron works and all its property to its president, who owned the majority of its stock, for a period of two years and a half, and the business of the corporation was carried on by the lessee in the same manner as before the lease was given, without notice to persons dealing with it of any change, until the failure of the lessee and his assignment of the property for the benefit of creditors: Held, that the lease was void for two reasons: 1. Because it was the act of the stockholders and not of its directors, by whom alone the corporation could act; 2. Because the effect of such lease was to suspend the ordinary business of the corpo

A corporation

§ 313. Corporate officers and agents. can generally only act through its agents or officers who are appointed or elected by authority of the stockholders to transact the business of the corporation.1 The agents of a corporation stand generally upon the same footing as the agents of a private individual and except as regards the power of the agent to bind the corporation to contracts made by an agent of the corporation, which the corporation itself, under its charter, would not have had the power to make,' the agent, when acting within the general scope of his authority, can bind his principal the same as though he were the agent of a natural person. And while a corporation is not, generally, liable for the acts of an agent, committed beyond the general scope of his authority,1 if the corporation should subsequently ratify the unauthorized act of its agent, or if the agent, though acting under his general authority, should use his powers for an unauthorized purpose, dealing with some innocent person, the corporation would be liable for the acts of its agent, to the same extent as though it had given him authority to act in the first instance. The officers and directors of a corporation occupy the relation of trus

ration for the period of more than one year, and thus amounted to a surrender of its rights, privileges and franchises, within 2 R. S. 463.'' Conro v. Port Henry Iron Co., 12 Barb. 27; M. M. D. 50.

1 Union M. Co. v. Bank, 2 Colo. 565; Wright v. Oroville M. Co., 40

Cal. 20; Hillyer v Overman Sil. Min. Co., 6 Nev. 61.

2 Blen v. Bear River &c. M. Co., 20 Cal. 602; Crump v. U. S. M. Co., 7 Gratt. (Va.) 352.

3 Wood Hy. H. M. Co. v. King, 45 Ga. 34; Moss v. McCulloh, 7 Barb. 279.

4 Cher. Iron Co. v. Jones, 52 Ga. 276; Copper M. of E. v. Fox. 16 Q. B. 227.

5 Union M. Co. v. Bank, 2 Colo. 248, 565. But see, contra, McCullough v. Moss, 5 Denio, 566.

tees to the shareholders of the corporation, and by reason of their fiduciary relation are prevented from acquiring interests in their official capacity that would result injuriously to the interests of the stockholders of the corporation. So it has been held that a director or other officer of a mining corporation cannot accept and carry out a contract for the corporation or acquire any pecuniary interest from a contract between the corporation and a third person. But it is not deemed inconsistent with the fiduciary relation which the officers of a corporation bear to the stockholders of such corporation, for the officer, in his private capacity, to make a loan to the corporation, for in such a case the corporation receives the benefit of the loan and if the loan is made in good faith and the transaction is open, the officer making the loan could afterwards sue for and recover the amount loaned the corporation.3

1 Stern Coal Co. v. Cumberland Coal &c. Co., 16 Md. 456; Wright v. Oroville M. Co., 40 Cal. 20.

2 Cumberland Coal Co. v. Sherman, 30 Barb. 553; Rice's App., Ahl's App., 79 Pa. St. 168; Watts' App., 78 Pa. St. 370; Simons v. Vulcan Oil Co., 61 Pa. St. 202; Sherman v. Clark, 4 Nev. 140; Robinson v. Smith, 2 Paige Ch. 222; Conro v. P. H. Iron Co., 12 Barb. 27; 16 Md. 456.

3 Twin Lick Oil Co. v. Nurburg, 1 Otto (91 U. S.), 587; Merrick v. Penn. Coal Co., 68 Ill. 472. But directors of a corporation being trustees of its property (Gashwiler v. Willis, 33 Cal. 11), their acts will be closely scrutinized by the courts when they are benefited personally as a result of their dealings, and the transaction must be free from all fraud or oppression. Horts v. Brown, 77 Ill. 226. "Where the directors of a mining company employed the funds of the company in the purchase and sale of various stocks: Held, a palpable violation of duty which rendered them personally liable to make good the loss." Robinson v. Smith, 2 Paige Ch. 222; M. M. D. 26. "A director in a corporation at the time a sale of part of its property was contemplated and made, and who actively participated in all the measures tending to its completion, and had full knowledge of all the circumstances attending its progress, is not competent to become a purchaser of such property, and the sale to him cannot be upheld if resisted by the corporation." Hoffman S. C. Co. v. Cumberland C. & I. Co., 16 Md. 456; M.

§ 314. Same Promoters distinguished from agents. Before a mining corporation is formed the allottees of shares in such a company are not, as such, liable for the acts of the managers. Associations for forming companies, whether in a partnership or corporation, are not liable for the obligations of the association, as such, until the same has an existence, and in order to hold a person engaged with others in forming such a company, liable for the acts of his associates, he must have instructed them to perform such acts as his agent, or subsequently have ratified such acts.2 Unless the person contracting the obligation has been definitely constituted the agent of the different members, the members cannot be held for the acts of the promoters of the company. It is incumbent on those who assert that such a liability exists, to prove to the satisfaction of the court or jury, the existence of an authority emanating

M. D. 56. "Are not permitted to make profit out of it in buying lands or dealing with it." Rice's Appeal; Ahl's Appeal, 79 Pa. St. 168; M. M. D. 56. "A fraud against a corporation by any or all of the directors may be redressed by an action in the name of the corporation." Id.; Simons v. Vulcan Oil Co., 61 Pa. St. 202. "Directors and managers of corporations and other companies, are within the rule which governs the dealings of trustee and cestui que trust, and agent and principal; such directors and managers are in fact trustees and agents of the bodies represented by them." Cumberland C. & I. Co. v. Parish, 42 Md. 598; M. M. D. 50.

1 Alger on Pro. of Cor., Secs. 18, 19.

2 Merrick v. Peru C. Co., 61 Ill. 472; Peru C. Co. v. Merrick, 79 Ill. 112.

3 Paxton v. Bacon Min. Co., 2 Nev. 257. In Ladywell Mining Co. v. Brooks (35 Ch. D. 400), five persons bought a mine for 5,000 pounds, with a view to sell it to a company to be formed. They paid for it themselves and two months later sold it to the corporation for 18,000 pounds, without disclosing the purchase price. On a suit for an accounting for the profit made it was held the corporation could not recover the profit, as they were not promoters when the purchase was made. See also Alger on Pro. of Cor., pp. 18 and 19.

from the member in question, and conferred upon the others to bind them by such acts.1 But it is not essential to hold individual members liable that a special authority for each separate act should be shown to have been conferred upon the agent, and a general authority such as that conferred by one member of a committee upon his cocommitteemen, which would be sufficient to make their acts his own, would be all that is necessary to constitute such an agency, and it has been held that such authority could be properly inferred from public announcements, prospectuses and advertisements; 3 but no such general authority could be assumed, from the mere announcement that the party sought to be charged was acting conjointly with others and endeavoring to form a company.*

§ 315. Corporate liability for promoters' contracts. Promoters and parties who deal with a corporation, as such, are estopped to deny its corporate existence; but the corporation, as such, is not estopped to deny the authority of its promoters to bind it by their acts, and the weight of authority seems to be that before it can be held on such contracts it must obligate itself to pay therefor after commencement of its corporate life, or accept bene

1 Before the existence of the corporate body it can have no agents, and the persons promoting it but represent themselves. Alger on Pro. of Cor., Sec. 194, p. 199; Carey v. Des Moines Coal & Min. Co., 81 Iowa, 674.

2 Alger on Pro. of Cor., Secs. 261-265.

8 Ante, idem, Secs. 235, 236.

4 Dole v. Wooldredge, 135 Mass. 140; Alger. Pro. Cor., p. 240, Sec.

235.

Tuckoseegee Min. Co. v. Goodhue, 118 N. C. 98; Pittsburg Min. Co. v. Spooner, 74 Wis. 307.

6 Queen City Co. v. Crawford, 127 Mo. 356; Weatherford &c. Co. v. Grouger, 86 Tex. 350; Alger Pro. of Cor., Sec. 199, p. 202.