Page:Federal Reporter, 1st Series, Volume 8.djvu/27

WAYNE8VILLK KAT. BAKK ». IBONS. 18 �possessed the information, but actied on behalf of the corporation to be oharged. The same may be said of Fultori Bank v. Benedict, 1 Hall, (N. T.) 480, cited in section 676. The decision in the principal case is opposed to such a distinction, as are also the cases of Barnes v. Trenton Qas-Liyht Co. 27 N. J. Eq. (12 G. E. Green) 33 ; and Winchester v. Baltimore, etc., R. Co. 4 Md. 231, in which the presidents sold real property to their respective corpora- tions, and it was held that the corporations were not chargeable with notice of defects or equities of which the presidents had knowledge. See, also, Miller V. m. Cent. R. Co. 24 Barb. (N. Y.) 312; Porter v. Bank of Rutlœnd, 19 Vt. 410. �The language of Chancellor Walworth, in Fulton Bank v. N. T. e Sharon Canal Co. 4 Paige, Ch. 127, goes to the extent that when an executive offloer, not acting adversely to his corporation, is informed that it contemplates action which, if it were notifled of the facts of which he is acqaainted, would make it liable, that it becomes his duty to communicate his knowledge to it, and if he does not the corporation is chargeable. In that case Cheeseborough was president of the bank, and a director and member of the finance commit- tee of the canal company; Brown was president and also a member of the finance committee of the canal company, and a director of the bank. At a meeting of the finance committee, at which Cheeseborough and Brown were present, it was ordered that the f unds of the canal company be deposited in the bank to its account, under the control of its finance committee; which was done. Brown, as president of the canal company, left his signature at the bank as the person upon whose check the money was to be drawn, and afterwards drew the money and appropriated it to his own use. Chancellor Walwerth held the mere knowledge of Cheeseborough of the purpose for which the money was deposited was not notice to the bank, but that he must also have known that Brown intended to commit the fraud upon the canal company; that the knowledge of such purpose on Brown's part would have made it Cheeseborougb's duty to inform the disbursing offlcers of the bank, and a failure to have done so would have made the bank liable. But see this case commented on in First Nat. Bank v. Christopher, 40 N. J. L. 435, 438-9. �The writer believes that there is a difference between a director and an executive offlcer when notice is given to an ofiicer to be communioated to the corporation; as, for instance, the service of summons, giving notice of pro- test, proofs of loss, etc. In all such cases the question is, not whether he bas communicated such notice to the corporation, but whether he was the offlcer designated by law, or by the corporation, to receive such notice. Having been designated to receive such notice, and it having been given to him as notice to tiie company, he has thereby acted in the transaction on hehalf of the corporation. The authority and duty of a director and of an executive offlcer, in reference to such matters, is very different. As to whether notice to a mere director, when it is given for the purpose of being communicated to the corporation, is notice to it, see National Bank v. Norton, 1 Hill, 572. �The principal case is important on the point as to tohat constitutes a parti- cipation in the transaction on the part of the director or other offlcer. It is believed that in all the decided cases, where the corporation has been held responsible for the knowledge of a director, he has taken part in determining ��� �