Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/240

§ 259.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VII. Excep- tions. executed on behalf of the corporation by all the directors act- ing separately, which they never authorized while acting as a board, is invalid. 1 And the parol declarations of individual di- rectors are not competent evidence of an agreement to appro- priate for a specific purpose a certain fund of money, which in a contract made by the directors as a board had been reserved to the use of the corporation. 2 § 259. But this rule does not invalidate a contract made with a person acting in good faith in ignorance that the directors had taken no action as a board, if the cir- cumstances entitled him to assume that the directors had acted in the proper manner. 3 Nor does the rule apply when the contract relied on by the person claiming to have ac- quired a right against the corporation was actually made, not by the directors, but by an officer deriving his authority from them. In such a case, if the assent of the majority of directors be shown to have been given in any way to the execution of the contract by the officer, or if the directors subsequently acquiesce, the corporation will not be heard to plead that the directors had never taken action as a board in the matter. 4 And even where the contract relied on was executed separately New Boston F. I. Co. v. Upton, 67 N. H. 469; Hamlin v. Union Brass Co., 68 N. H. 292; Morrison v. Wilder Gas Co., 91 Me. 492; Pierce v. Morse- Oliver Co., 94 Me. 406; Sias v. Con- sol. Lighting Co., 73 Vt. 35. Contra, In re Bonelli's Electric Telegraph Co., 40 L. J. Eq. 507. A director cannot vote by proxy at a directors' meeting. Perry v. Tuscaloosa Co., 93 Ala. 364, 371. For analogous rules regarding the manner in which the managing boards of municipal and religious corporations should act, see Cam- meyer v. United German Churches, 2 Sandf. Ch. 186; Dey r. Jersey City, 19 X. J. Eq. 412; Schumm v. Sey- mour, 24 N. J. Eq. 153; Shortz v. Unangst, 3 W. & S. 45; German Evangelical Congregation v. Pressler, 14 La. Ann. 811. 220 1 Baldwin v. Canfield, 26 Minn. 43. 2 Grayville and Mattoon R. R. Co. v. Burns, 92 111. 302. See East Line, etc., R. R. Co. v. Garrett, 52 Tex. 133. Compare Benton v. Springfield Y. M. C. A., 170 Mass. 534. 8 See §§251, 203. None of the cases cited in the last two notes are authority for the application of the rule under such circumstances; and see Tenney ». East Warren Lumber Co., -j:; X. H. 343. 4 Bank of Middlebury v. Rutland, etc., R. R. Co., 30 Vt. 159; St. James Parish v. Newburyport Horse R. R., 141 Mass. 500; Wheeler v. Land Co., 14 Wash. 630. See, also, Longmont Ditch Co. v. Coffman, 11 Col. 551; Eureka Iron Works v. Bresuahan, 60 Mich. 332. See § 212. I