tract was ultra vires.-Main v. Casserly, 67 Cal. 127, 7 Pac. 426. [e] A corporation, after engaging in the hotel business and assuming the liability of an innkeeper, cannot repudiate its liability on the ground that its acts were ultra vires.Magee v. Pacific Imp. Co., 98 Cal. 678, 35 Am. St. Rep. 199, 33 Pac. 772. [f] Where a national bank holds stock in a savings bank, and receives dividends thereon, it is estopped, in an action against it to enforce its liability as such stockholder to a depositor in the savings bank, from claiming that it is ultra vires for it to hold such stock, in the absence of a statute expressly prohibiting it.-Kennedy V. California Sav. Bank, 101 Cal. 495, 40 Am. St. Rep. 69, 35 Pac. 1039. [g] The entering into a contract by a corporation, within the apparent scope of its business, is a determination on its part, conclusive against it, that the contract was "essential" within Civil Code, section 354, empowering a corporation to enter into contracts essential to the transaction of its ordinary affairs.-Bates v. Coronado Beach Co., 109 Cal. 160, 41 Pac. 855. [h] In the absence of an issue for that purpose, a corporation cannot show that its records, on the faith of which parties have contracted with it, and which it has not attempted to correct, are false.-Barrell Lake View Land Co., 122 Cal. 129, 54 Pac. 594. V. [i] It seems that the reception and retention by a corporation of the benefit of a pledge precludes question as to the power of the corporation to make the pledge.Lawrence v. Johnson, 131 Cal. 175, 63 Pac. 176. [j] In a suit for attorney's services rendered to a corporation under an executed contract of employment, the corporation held not entitled to claim that it had no power to make the contract of employment.-Kelly v. Ning Yung Benev. Assn. (Cal. App.) 84 Pac. 321. tract.-Grangers' Business Assn. v. Clark, 67 Cal. 634, 8 Pac. 445. [b] When the purchaser of land covered by a building and loan mortgage secured a release of the mortgage by giving his note for the amount due thereon, secured by a mortgage on other land, in a suit to foreclose the second mortgage he was estopped from claiming that the building and loan company's act in accepting his note and mortgage was ultra vires.-Bay City Building etc. Assn. V. Broad, 136 Cal. 525, 69 Pac. 225. [c] In an action by one bank against another for money loaned, and on a note representing the balance due, the loan and balimmaterial ance being established, it is whether the note was authorized by the directors.-First Nat. Bank v. California Nat. Bank, 35 Pac. 639. B. REPRESENTATION OF CORPORA TION BY OFFICERS AND AGENTS. APPLICATION OF PRINCIPLES OF AGENCYASSIMILATION ΤΟ LAW RESPECTING NATURAL PERSONS, § 335. WHO MAY REPRESENT CORPORATION, § DIRECTORS AS MIND AND SOUL OF COR- REPRESENTATION OF DIFFERENT CORPORA- PLIED THEREFROM, § 339. USE OF CORPORATE SEAL, § 340. ASSIGNMENT OF ACCOUNTS AND CLAIMS, § § 338. Representation of Different Corporations by Same Directors. [a] Directors who are common to both incorporations are not within the rule that he who acts in a fiduciary capacity cannot deal with himself in his individual capacity, but they owe the same fidelity to both corporations, and there is no presumption that they will deal unfairly with either of them.-San Diego v. Pacific Beach R. R. Co., 112 Cal. 53, 44 Pac. 333. [b] Mere fact that two contracting corporations have common directors does not render the contract between the corporations invalid, or incapable of ratification, where there is no actual fraud alleged or found, and where the contract is within the chartered powers of both corporations.-San Diego v. Pacific Beach R. R. Co., 112 Cal. 53, 44 Pac. 333. [c] A purchase by a corporation of all the property of another corporation is not void merely because the boards of directors of both corporations were the same.-Smith v. Ferries etc. Ry. Co., 51 Pac. 710. FOR AUTHORITIES FROM OTHER STATES: 33 L. R. A. 788, note. See, also, 10 Cyc. 818-820; 12 Cent. Dig., cols. 1344-1349, §§ 1363, 1364. § 339. Express Authority, and Authority Implied Therefrom. [a] A resolution by the board of directors of a corporation, conferring on its president full power to act for it with reference to municipal street work, authorizes the president to contract with the city on behalf of the corporation for the improvement of a street. Oakland Pav. Co. v. Rier, 52 Cal. 270. to [b] Corporation president authorized buy is authorized to buy on credit and give corporate note.-Siebe v. Joshua Hendy M. Wks., 86 Cal. 392, 25 Pac. 14. [c] Where the directors of a corporation, by resolution, authorizes its vice-president to sign all legal documents relating to its business, he is empowered to retain an attorney for the corporation, and to pay him for his services.-Streeten v. Robinson, 102 Cal. 542, 36 Pac. 946. V. [e] A resolution authorizing the president of a corporation "to make arrangements for paying off a debt by giving a mortgage, or any other means, was sufficient in form to authorize the execution of a mortgage.Boggs v. Lakeport Agricultural Park Assn., 111 Cal. 354, 43 Pac. 1106. [f] The executive committee of the board of directors of a corporation, authorized by the board to make arrangements with a person for securing the transfer" of patent rights belonging to him to the corporation, have authority to execute a contract for the transfer.-Andres v. Fry, 113 Cal. 124, 45 Pac. 534. § 340. Use of Corporate Seal. Necessity for seal. See post, § 379. [a] Cashier of a bank may affix corporate seal without vote of directors, and perhaps any managing agent clothed with general power may do so.-Bliss v. Kaweah etc. Co., 65 Cal. 504, 4 Pac. 507. [b] The secretary of a corporation is the proper party to affix the corporate seal, and it devolves upon the party denying the execution of the instrument to prove that he had no authority to affix it. The seal itself is prima facie evidence that it was affixed by proper authority.-Underhill v. Santa Barbara etc. Co., 93 Cal. 300, 28 Pac. 1049. [c] Secretary and manager of a corporation held to have authority to issue warehouse re ceipts to himself.-Riley V. Loma Vista Ranch Co. (Cal. App.), 82 Pac. 686. FOR AUTHORITIES FROM OTHER STATES: 10 Cyc. 944, 1004-1022, 1037-1043; 12 Cent. Dig., col. 1709, § 1676. § 341. Control of Corporate Property. [a] Board of trustees may control corporate property within the limit which the law has assigned to the exercise of corporate authority.-Wright v. Oroville M. Co., 40 Cal. 20. FOR AUTHORITIES FROM OTHER STATES: Withdrawal of assets of corporation: 57 Am. St. Rep. 63, note. See, also, 10 Cyc. 764, 768, 927-951; 12 Cent. Dig., cols. 1677-1685, §§ 1626-1639; cols. 1700-1705, §§ 1664-1669; cols. 17101713, §§ 1677, 1678. § 342. Contracts in General. [a] The president has no authority to contract beyond matters incident to the management of the corporate business.-(Cal. 1862) Blen v. Bear River etc. Min. Co., 20 Cal. 602, 81 Am. Dec. 132. [b] Under act of May 12, 1853, section 19, providing that the directors shall have only such powers as the by-laws give them, contracts made by the corporation through its directors are not void merely because the bylaws are not filed with the county recorder, since the statute only makes contracts invalid which are not in accordance with the articles as filed.-Forbes v. San Rafael Turnpike Co., 50 Cal. 340. [c] One claiming under a contract of a corporation, executed without its corporate seal by its president and secretary, must show that they were clothed with general or special authority to make it, or had powers from which such authority might be inferred, or that their act was ratified by the board of directors.Fontana v. Pacific Can Co., 129 Cal. 51, 61 Pac. 580. FOR AUTHORITIES FROM OTHER STATES: 10 Cyc. 927, 950-1000, 1001; 12 Cent. Dig., cols. 1658, 1659, § 1606; cols. 1664-1669, §§ 1611-1614. § 343. Contract of Employment. ren [a] Where the president of a bank employed attorneys in a contest between stockholders for its control in which it had no real interest, and whose services were dered for his private benefit alone, the fees of such attorneys cannot properly be paid from the funds of the bank, and if so paid an action by stockholders will lie to compel him to account to the bank therefor.Wickersham v. Crittenden, 106 Cal. 329, 39 Pac. 603. [b] In a suit against a corporation for attorney's services, it was not necessary that plaintiff should show that the corporation's secretary was authorized to make the contract of employment by by-law or a formal resolution of the corporation's board of di rectors.-Kelly v. Ning Yung Benev. Assn. (Cal. App.), 84 Pac. 321. FOR AUTHORITIES FROM OTHER STATES: 10 Cyc. 767, 926-929, 931, 933, 949; 12 Cent. Dig., cols. 1669-1674, §§ 1615-1619. § 344. Assignment of Accounts and Claims. [a] A general agent of a corporation, to whom has been intrusted the management of its affairs, has power to assign its choses in action to its creditors either in payment of or as security for their claims, without express authority from the board of directors. McKiernan v. Lenzen, 56 Cal. 61. [b] An assignment of an account for goods sold by a corporation, made by its secretary, who only had general charge of orders for goods, is invalid, unless it is shown that he had authority to make it.-Read v. Buffum, 79 Cal. 77, 12 Am. St. Rep. 131, 21 Pac. 555. [c] An assignment of a claim by a corporation is not invalid because no authority, either in the by-laws or by resolution of the board of directors, is shown in the manager of the corporation and president, who executed the assignment, where it was made in the regular course of business, with the knowledge and consent of the board of directors. Greig v. Riordan, 99 Cal. 316, 33 Pac. 913. § 345. Purchases and Sales. [a] Where a corporation is engaged in the business of conveying water through ditches for sale to miners, a purchase of additional ditch property to extend the operations of the company is not within the power of the president of the corporation, so as to bind the corporation therefor.-Blen v. Bear River etc. Min. Co., 20 Cal. 602, 81 Am. Dec. 132. [b] The president of a corporation has no power to sell or purchase real property, either by statute or by implication.-Bliss Kaweah Canal etc. Co., 65 Cal. 502, 4 Pac. 507. V. [c] The secretary and general manager of a corporation may assign accounts under a general authorization, the adoption of a special resolution authorizing it being unnecessary.— Tuller v. Arnold, 98 Cal. 522, 33 Pac. 445. [d] Civil Code, section 2310, provides that where the act of an agent has been ratified by accepting and retaining the benefits of the act, with notice thereof, oral authorization of the act is sufficient. Held that, where fruit sold by plaintiff to H. was delivered to and shipped by the defendant corporation, its general manager had power to bind defendant by an oral agreement to pay the proceeds of the fruit to plaintiff instead of H. Tevis v. Savage, 130 Cal. 411, 62 Pac. 611. [e] President and general manager of saloon company have authority to sell fixtures, goodwill and license.-Freyberg v. Los Angeles Brewing Company (Cal. App.), 88 Pac. 378. FOR AUTHORITIES FROM OTHER STATES: 10 Cyc. 374, 764, 927; 12 Cent. Dig., cols. 1679-1681, §§ 1629-1632. § 346. Loans. [a] The fact that a resolution of the board of directors, authorizing the secretary to make a loan on behalf of the corporation, was not reduced to writing, does not prevent a recovery for the loan.-Bank of Yolo v. Weaver, 31 Pac. 160. FOR AUTHORITIES FROM OTHER STATES: 10 Cyc. 766, 949, 1104, 1198-1203; 12 Cent. Dig., cols. 1691-1693, §§ 16471649. § 347. Negotiable Instruments. [a] The officers of a corporation have no power to authorize the execution of a note for a debt of a third party to the payee, having no relation to the corporate business, and in which the corporation has no interest, and the holder of such a note cannot recover on it.-Hall v. Auburn Turnpike Co., 27 Cal. 255, 87 Am. Dec. 75. [b] The secretary of a mining company has no implied authority, as incident to his office, to make an assignment of promissory notes belonging to the company. To sustain an assignment made by a secretary in the name of his company, either an express authority or ratification must be shown.-Blood v. Marcuse, 38 Cal. 590, 99 Am. Dec. 435. [e] A note signed by the president and secretary in their official capacity is the note of the corporation.-Farmers' etc. Bank V. Colby, 64 Cal. 352, 28 Pac. 118. [d] Note showing on its face that it is executed by president of corporation to himself charges assignee with notice of want of authority. Smith v. Los Angeles etc. Assn., 78 Cal. 293, 12 Am. St. Rep. 53, 20 Pac. 677. [e] Under a resolution by the directors of a corporation conferring on the president, as the chief executive of the board, the power to incur indebtedness, negotiate loans, to contract, and otherwise act as the agent of the corporation, the president had authority to execute a note which would bind the corporation. McCormick v. Stockton etc. R. Co., 130 Cal. 100, 62 Pac. 267. [f] Under a resolution of the directors of a corporation that the president should have power, as the agent and chief executive of the company, to incur debts, negotiate loans, and contract for the corporation, a note signed, "R., President S. & T. Co. R. R. Co., R., Personally,''-was binding on the corporation.-McCormick v. Stockton etc. R. Co., 130 Cal. 100, 62 Pac. 267. [g] Where the directors of a corporation authorized the president by resolution to incur debts, negotiate loans, and contract for the company, the fact that a by-law of the corporation provided that notes signed by the president and secretary should be binding on the company did not prevent a note signed by the president, without the signature of the secretary, from binding the corporation.McCormick v. Stockton etc. R. Co., 130 Cal. 100, 62 Pac. 267. [h] Corporation held not liable as indorser on certain instruments, regardless of whether such instruments were negotiable promissory notes or not.-Wickersham Banking Co. v. Nicholas (Cal. App.), 82 Pac. 1124. FOR AUTHORITIES FROM OTHER STATES: 10 Cyc. 767, 929-931, 949, 950, 1023, 10431048, 1118; 12 Cent. Dig., cols. 16851691, §§ 1640-1646. § 348. Bonds and Mortgages. [a] Under Civil Code, section 2309, providing that authority to execute an instrument required by law to be in writing can only be conferred by writing, a mortgage of real property of a corporation, executed by an agent whose authority is verbal, is void.Alta Silver Min. Co. v. Alta Placer Min. Co., 78 Cal. 629, 21 Pac. 373. [b] Civil Code, section 305, provides that the powers of a corporation must be exercised, and its property controlled, by its board of directors; and section 308 declares that the decision of a majority of the directors, "when duly assembled,'' constitutes a valid corporate act. Held, that a mortgage executed by the president or secretary of a corporation without a resolution of the board of directors was void, though subsequently ratified by the holders of two-thirds of the stock. Alta Silver Min. Co. v. Alta Placer Min. Co., 78 Cal. 629, 21 Pac. 373. [c] The president has no ex officio authority to mortgage corporate property.-Alta Silver Min. Co. v. Alta Placer Min. Co., 78 Cal. 629, 21 Pac. 373. [d] The secretary has not by virtue of his office power to execute a mortgage.-Alta Silver Min. Co. v. Alta Placer Min. Co., 78 Cal. 629, 21 Pac. 373. § 350. Legal Proceedings. [a] The directors of a corporation have authority to make a bona fide settlement of a pending action which will be binding on the stockholders.-Donohoe v. Mariposa Land etc. Co., 66 Cal. 317, 5 Pac. 495. [b] The president and general manager of a corporation, who, in the latter capacity, is authorized by the by-laws to supervise the affairs of the company, may sign a protest against a street improvement for the corporation.-Los Angeles Lighting Co. v. City of Los Angeles, 106 Cal. 156, 39 Pac. 535. § 351. Representations and Admissions. [a] A corporation is not bound by the declarations or acts of individual members thereof made or done at a time when they were not acting as agents of such corporation. Shay v. Tuolumne Water Co., 6 Cal. 73. [b] A statement of the real property owned by a railroad company, furnished by its superintendent to an assessor, is binding on the corporation, and justifies the assessor in adopting it as a correct statement of the property belonging to the company.-People v. Stockton etc. R. Co., 49 Cal. 414. [c] Corporation is bound by statements of its secretary in charge of entire corporate business.-Abbott v. Land and Water Co., 87 Cal. 328, 25 Pac. 693. [d] It is within the power of the president of a corporation to furnish the lessor of premises leased by him for corporate purposes with evidence that the corporation has ratified the lease by what purports to be a certified copy of a resolution of the board of directors, and his act in doing so is binding on the corporation, which cannot repudiate it on the ground that such resolution had ever been, in fact, passed.-Hawley v. Gray Bros. Artificial Stone Pav. Co., 106 Cal. 337, 39 Pac. 609. [e] Where a corporation ratifies a contract made by its president without authority, it is bound by any declarations he may have made during the negotiation determining the meaning of an ambiguity, since it is presumed to have notice of all the facts relating to the negotiation.-Balfour v. Fresno Canal etc. Co., 123 Cal. 395, 55 Pac. 1062. [f] Where a note before maturity was indorsed to an insurance company for value and without notice of a want of consideration or fraud, the statement of the company's managing agent, made to the maker, that the maker would not be troubled about the note, and that the payee would be looked to for a settlement, was not binding on the company; the agent having no authority to make such a promise.-Muller v. Swanton, 140 Cal. 249, 73 Pac. 994. [g] The president and managing agent of a corporation have authority to make admissions in regard to the fulfillment of contracts which will be evidence against the corporation.-Bullock v. Consumers' Lumber Co., 31 Pac. 367. FOR AUTHORITIES FROM OTHER STATES: 10 Cyc. 373, 374, 915, 947-949; 12 Cent. Dig., cols. 1717-1723, §§ 1685-1691. § 352. Wrongful Acts. [a] Corporation is liable for acts done by its agents in delicto as well as ex contractu, in the course of its business and their employment; and the corporation is responsible therefor as an individual is responsible under similar circumstances.-Maynard V. Firemen's Fund Ins. Co., 34 Cal. 48, 91 Am. Dec. 672. [b] If a corporation furnishes its secretary with money to pay its employees, and an em ployee monthly delivers to the secretary receipts for the month's salary, and leaves the money with the secretary, the corporation is not liable for the default of the secretary in failing, afterwards, to pay over the amounts.-Gardner v. Omnibus R. Co., 63 Cal. 326. FOR AUTHORITIES FROM OTHER STATES: 41 L. R. A. 650, notes. See, also, 12 Cent. Dig., cols. 1723, 1724, §§ 1692-1695. § 353. Who May Question Authority and Estoppel to Question. [a] Corporate act is not essential in all cases to fasten a liability, and, if it were necessary, the law would sometimes presume, in order to uphold fair dealing and prevent gross injustice, the existence of such act, and estop the corporation from denying it. San Francisco Gas Co. v. San Francisco, 9 Cal. 453. [b] Where a corporation agrees to pay a sum of money, and places the amount in the hands of its treasurer for the purpose of meeting the obligation, and such treasurer expends the money for the benefit of the obligee, and the corporation by resolution assents to such expenditure, it cannot afterward hold the treasurer liable for such money.-Bay View Homestead Assn. v. Williams, 50 Cal. 353. [c] Where a corporation attempts to empower its president to contract with a city for the improvement of a street, and the power was defective, but the contract was made, the work done by the corporation, the assessments issued therefor in its favor, and suit was brought by the corporation to recover the same, both the city and the lot owners when sued for the assessment are estopped to deny that the contract was legally executed by the corporation.-Oakland Paving Co. v. Rier, 52 Cal. 270. [d] A corporation is not estopped to deny the validity of an unauthorized act of an agent when it has not availed itself of any benefit from his act.-Bliss v. Kaweah etc. Co., 65 Cal. 502, 4 Pac. 507. [e] The shareholders of a corporation cannot avoid responsibility for the unauthorized acts of the directors by abstaining from inquiry into the affairs of the company, or by absenting themselves from the company's meetings, and at the same time reap the benefit of their acts in case of success.-Underhill v. Santa Barbara etc. Co., 93 Cal. 300, 28 Pac. 1049. [f] Where the president of a corporation authorized to execute a mortgage included in the note and mortgage terms and conditions which the corporation had power to authorize but did not authorize him to insert, and the corporation by its representations and declarations and acts through its directors intentionally led the mortgagees to believe that the president was authorized to insert such terms and conditions, and received the consideration from the mortgagee, and applied the money to its own use, including the payment of a |