this field third parties who have knowledge of his appointment, and no actual or constructive notice of his restrictions, are not put upon inquiry as to his authority, but are protected in dealing with him upon the assumption that he has power to carry on the work placed in his charge by his principals.

Where a corporation has local branches in charge of local agents, such agents have implied power to transact such business as falls within the scope of their apparent authority. Within these bounds the public is protected in dealing with such agents without inquiry. No officer or agent of a corporation has implied power to bind the corporation by extraordinary contracts imposing upon the corporation obligations unusual in terms, amount or duration. Such a contract can be sustained

only by proof of express authority or clear ratification2. As a modification of the proposition that an officer has no implied power to make extraordinary contracts, it may be safely stated, that he may make binding contracts, both ordinary and extraordinary, where the entire control and management of the corporation has been expressly, or by long established usage, delegated to him. This situation sometimes arises when the stockholders and directors hold no meetings, exercise no control, and, to all intents and purposes, abandon the business to the management of a single officer who acts. Under such circumstances, the acting officer has become, in effect, the managing board. By long acquiescence in his absolute control, the presumption arises that such control is exercised by unanimous assent. Having clothed such officer with apparent power to represent the corporation in all things, the officers and memhers by whose assent he has acted will not be heard to deny the validity of his acts. Extraordinary powers are implied from these extraordinary conditions83. The authority which an officer

82.

Laird v. Mich. Lubricator Co., 153 Mich. 52; Nephew v. Mich. Cent. R. R., 128 Mich. 599; Maxson v. Mich. Cent. R. R., 117 Mich. 218; Eakins V. White Bronze Co., 75 Mich. 568571. The chief engineer of a railroad corporation has 110 implied power to select the locations and let the contracts for construction of a large number of depots to be built along the line. Such extraordinary obligations cannot be imposed upon the company, except by clear authority. Bond v. Pontiac, Oxford & P. A. R. Co., 62 Mich. 643-649. In the absence of express authority, the chief surgeon of a corporation has no power to bind the company by the employment of an assistant. Burke v. Chicago & West Mich. Ry. Co., 114 Mich. 685-687. But one who has the entire charge and supervision of a corporation may make it liable upon a contract with a physician for the services of the physician and a nurse, rendered to an injured employee. Hodges V. Detroit etc.. Power Co., 109 Mich. 547-551. So also it has been held that a railway superintendent has implied authority to employ a physician, and that express authority need not be shown.

Marquette etc., R. Co. v. Taft, 28 Mich. 289. In Knickerbocker v. Wilcox, 83 Mich. 200, assumpsit was brought against defendant Wilcox in his individual capacity, upon the following undertaking:

"Three River National Bank, "Three Rivers, Mich., Oct. 11, 1886. "W. H. Knickerbocker, Cashier,

"Elkhart, Indiana.

"Dear Sir: A replevin suit has been commenced in your county by Bellman & Handy, of this place, against Haomi Warner, of your place. They (B. & H.), being nonresidents, are required to give bonds. They are good customers of ours. and if you will sign said bond we will stand between you and all harm.

"L. T. Wilcox, Cashier." National banks having no authority to enter into such agreements, it was held that the cashier, although signing officially, made himself individually liable.

83. In Conely V. Collins, 119 Mich. 519-520, it appeared that no meetings had been held, and that one, Hathaway, had been left in full control of the corporate business. It was held that a conveyance in trust. executed by him, covering all of the

or agent is customarily permitted to exercise may be shown for the purpose of proving the scope of his recognized powers. Within the lines of these powers-powers exercised for a considerable length of time, with the knowledge and without the protest of the directorate-he binds the corporation84.

$69. Ratification.

What a corporation might have authorized, it may ratify. It is a familiar principle that, when a corporation receives and retains benefits conferred by an unauthorized act, such retention ratifies the act. The corporation is estopped to repudiate the burdens of an act while retaining its benefits. Ratification of the act of an officer or agent can not be extended to matters not embraced within the scope of the act ratified. But when a contract is ratified, it is ratified as a whole. The corporation can not adopt that which is beneficial and reject that which is burdensomes. An unauthorized act, performed ostensibly for the corporation by its agent, may be effectively ratified by another agent of the same corporation, provided the ratifying agent himself had authority to perform the act ratified. A corporate agent may ratify the unauthorized acts of a stranger, provided the agent has general power to appoint agents for the performance of like acts". But where the power to appoint such

property of the corporation was not void for want of authority to execute it, although it was held void for another reason, namely, that it amounted to a common law assignment creating preferences. In Preston National Bank v. Purifier Co.. 84 Mich. 364, Smith had been left in complete control of the affairs of the company for a long period of time. Without express authority, he assigned accounts to a bank as collateral to indebtedness. The assignment was sustained. See also Whit ney v. Foster, 117 Mich. 643. Davenport v. Stone, 104 Mich. 521; Michigan Slate Co. v. Iron Range etc.. R Co., 101 Mich. 14.

84. Wing V. Commercial, etc.. Bank, 103 Mich. 565; Chamberlain v. Detroit Stove Works, 103 Mich. 124. It is a general rule that the agent of a corporation has ro implied authority to make notes in the corporate name. By usage, acqui

esced in by the corporation with full knowledge, and relied upon by third parties, the corporation may be estopped to deny the agent's authority. But the fact that such usage had existed, would avail nothing to one who had no knowledge of it, and who, therefore, could not have relied upon the fact. New York Iron Mine v. Negaunee Bank, 39 Mich.

644-651.

85. McLaughlin v. Detroit & Milwaukee R. Co.. 8 Mich. 99-103.

86. Clement Bane & Co. v. Clothing Co., 110 Mich. 458-465; Taymouth v. Koehler, 35 Mich. 21-25. 87. Gordon V. Constantine Hydraulic Co., 117 Mich. 620-626,

88. Peninsular Bank v. Hammer, 14 Mich. 207-214.

89. Cascarella v. National Grocer Co., 151 Mich. 15-19.

90. Ironwood Store Co. v. Harrison. 75 Mich. 197-203.

agents is absent, the power to ratify the acts of a stranger does not exist91.

$70. Agents in Adverse Interests.

Like other agents, corporate representatives are held to a high order of good faith. They may not gain secret profit for themselves at the expense of the corporation2. A corporate officer or agent can not act when his private interest conflicts with his duty to his principal93. A corporate agent can not, in the absence of ratification hold the company upon a contract made by himself, as agent, for his own interest as an individual. If he does this, however, the corporation is the only party injured, and hence is the only one who can complain95. An agent may lawfully represent two different companies adversely interested in the same transaction, provided his conduct is open, fair and honest96

§71. Fraud or Torts of Agents.

Like a natural person, a corporation is liable, and may be held to respond in damages, for the fraud of its officers and agents, perpetrated in the course of their employment and within the scope of their apparent authority97. Upon the same principle, corporations are held liable for the torts of their agents98, even in instances where malice is an essential element of the wrongful act99. But a mere stockholder is not in any sense

91. Ironwood Store Co. v. Harrison, (Id.)

92. Where a director bought land in his own name with corporate funds, it was held that he acquired the property as a trustee for the corporation. Michigan Air Line Ry. v. Mellen, 44 Mich. 321-323.

93. Gallery v. National Exchange Bank, 41 Mich. 169-172; Stevenson v. Bay City, 26 Mich. 46.

94. "Fidelity in the agent is what is aimed at, and as a means of securing it, the law will not permit the agent to place himself in a situ ation in which he may be tempted by his private interest to disregard that of his principal."-Justice Manning in People v. Township, 11 Mich. 225 cited in Flint & P. M. Ry. Co. v. Dewey, 14 Mich. 477-487. But rat

ification cures the defect.-Richardson v. Welch, 47 Mich. 309-311.

95. Richardson v. Welch, 47 Mich. 309-312.

96. In Aldine Mfg. Co. v. Phillips, 129 Mich. 240-243, one person was an officer and agent of two companies, and as selling agent for the one and purchasing agent for the other, sold for one and bought for the other the same goods. He acted openly and with the knowledge of the directors of both companies. The transaction was sustained. See also Adams Mining Co. v. Senter, 26 Mich. 76.

97. Lasier v. Appleton Land & Iron Co., 130 Mich. 588-590.

98. Bath v. Caton, 37 Mich. 199. 99. Bacon v. Michigan Central R. Co., 55 Mich. 224.

an agent of the corporation, and the malice of a stockholder can not be imputed to the corporation, except where it is shown that the corporation acted upon the stockholder's suggestion and for the purpose of assisting him in carrying out his malicious design100.

§72. Statements of Officers and Agents.

The statements, representations and admissions of officers and agents, made within the scope of their authority, and with reference to the business which they are employed to transact are deemed to be the statements, representations and admissions of the corporation itself, and may be given in evidence against it101. The corporation is not bound, however, by the admissions of an officer or agent made outside the scope of his authority and having no connection with his duties102. An agent's expression of private opinion can in no way bind the corporation1o

§73. Knowledge of Officers and Agents.

103

The corporation is charged with notice of facts brought to the attention of its officers and agents within the scope of, and pertaining to, the duties of their employment104. But the mere fact that a corporate officer or agent gains information in which the corporation has an interest, but in which he has no interest

100. Randall V. Evening News Ass'n, 97 Mich. 136.

101. Allington & Curtis Co. v. Reduction Co., 133 Mich. 427-435; Kimball & Austin Mfg. Co. v. Vroman, 35 Mich. 310.

102. Peek V. Detroit Novelty Works, 29 Mich. 313; Allington & Curtis Co. v. Reduction Co., 133 Mich. 427-435; Beunk v. Valley City Desk Co., 128 Mich. 562-567; Ward's C. & P. L. Co. v. Elkins, 34 Mich. 439-442. In the case last cited, the statements of a steamboat clerk, not shown to have been made in relation to matters within the scope of his duty, were held inadmissible. In Beunk v. Valley City Desk Co. (Id.), the manager of a corporation made statements in a casual conversation, unconnected with any of his official duties. Held, error to introduce these statements in evidence..

103. Michigan Central R. Co. v.

Edwards, 33 Mich. 16.

104. Zeigler v. Valley Coal Co., 150 Mich. 82-85. In this case the principle was carried to the extent of holding a resulting corporation bound by the knowledge of one who, acting in behalf of the incorporators, and prior to incorporation, took defective title to property which was afterwards transferred to the company. See also Humphrey v. Eddy Transportation Co., 115 Mich. 420424; Columbus Sewer Pipe Co. v. Ganser. 58 Mich. 385; Simmons Creek Coal Co. v. Doran, 142 U. S. 417; 35 L. ed. 1063. Where a corporation has knowledge of the existence of a condition that implies a pre-existing agreement, it is held to have constructive notice of the terms of the agreement.-Michigan Central R. Co. v. Chicago K. & S. Ry. Co., 132 Mi h. 324-330.