1

§ 2210. Estoppel of officers, agents or stockholders. An officer of a corporation may himself be estopped, as well as the corporation, by his acts or conduct.29 He may be estopped to deny his own authority,30 as where he executes a deed of corporate property.31 So one who joins in a deed of trust in favor of enumerated creditors, as an officer of one of the creditors, is estopped to attack the validity of the deed.32 But officers legally appointed or elected are not estopped to deny the unlawful acts of persons not even de facto officers.33

Likewise, stockholders, in acting for the corporation, may be estopped. For instance, a stockholder may be estopped to urge that a contract to which he had consented was not made by an authorized officer.34 Moreover, in equity the stockholders are in substance the corporation, and what will estop the stockholders will ordinarily estop the corporation.35 Failure of corporate officers to state the proper ground for the refusal to deliver corporate stock does not estop the corporation from relying upon the proper ground where it is sued to recover the stock.3 36

XXIII. NOTICE TO OR KNOWLEDGE OF OFFICERS OR AGENTS AS CHARGEABLE

TO CORPORATION

§ 2211. General considerations-Scope of subdivision. This subdivision treats of the effect of notice to or knowledge of officers or agents of a corporation, on the corporation itself. In other words, whether the knowledge of a corporate officer or agent, obtained either by expressly notifying him of a certain fact or facts as a representative of the corporation or indirectly in connection with the exercise of the powers and duties of his office or agency, is to be imputed to the corporation itself so that it cannot say it had no notice. or knowledge merely because the facts were not communicated to the stockholders as a body or to the board of directors, notwithstanding one or more of its officers or agents had knowledge of the facts.

29 Pendleton v. Harris-Emery Co., 124 Iowa 361, 100 N. W. 117.

30 Manchester St. Ry. v. Williams, 71 N. H. 312, 52 Atl. 461.

31 Aransas Pass Harbor Co. v. Manning, 94 Tex. 558, 63 S. W. 627.

32 Forbes v. Bowman, 87 S. C. 495, 70 S. E. 165.

33 Exline-Reimers Co. v. Lone Star Life Ins. Co., Tex. Civ. App. —, 171 S. W. 1060.

§ 2212. Applicability of rules governing where principal not a corporation. As has already been observed in case of ratification of acts of corporate officers and agents, that the law in regard thereto is almost wholly an application of the rules governing agents in general without regard to whether the principal is a corporation, or a firm or an individual,37 so it is with the law as to the effect of notice to, or knowledge of, a corporate officer or agent, as imputable to the corporation. The governing principles, with the conflict in the decisions in some respects, as applied to agents in general, have been admirably stated and discussed at length in Professor Mechem's work on Agency 38 as well as in other well known treatises on the law of agency.39 It is therefore beyond the scope of this work to consider at any great length the basic rules governing the question; and only the application thereof to corporations and corporate officers and agents will be noticed.

"A corporation cannot see or know anything except by the eyes or intelligence of its officers;" 40 and it has been said that "there are peculiar and urgent reasons for a more stringent enforcement of the rule against corporations than against individual principals, from the fact that the only way of communicating actual notice to a corporation is through its agents.'

41

§ 2213.- Rules applicable in tort actions as well as in actions on contracts. The rule applies where the corporation is sued for damages from a tort as well as in actions on contracts.42

§2214. Rules governing without regard to whether principal is a corporation. For a clear understanding of the general rules governing the following statement is made.

1. General rule. Notice to, or knowledge of, an agent while acting within the scope of his authority and in reference to a matter over which his authority extends, is notice to, or knowledge of, the principal. Note, however, that the knowledge must be acquired while

37 See § 2177, supra.

382 Mechem, Agency (2nd Ed.), §§ 1802-1854.

39 See 1 Clark & Skyles, Agency, §§ 474-490.

40 Factors' & Traders' Ins. Co. v. Marine Dry Dock & Shipyard Co., 31 La. Ann. 149.

41 Orme v. Baker, 74 Ohio St. 337,

113 Am. St. Rep. 968, 78 N. E. 439.

42 See Denver v. Sherret, 88 Fed. 226; Houston Biscuit Co. v. Dial, 135 Ala. 168, 33 So. 268; Neal v. Cincinnati Union Stock Yards Co., 25 Ohio Cir. Ct. 299.

43 Rule applied to corporate principals, see 2215, infra.

acting (a) within the scope of his authority and (b) in reference to a matter over which his authority extends.

2. Subrule. Generally the notice to, or knowledge of, the agent must have been acquired during the period the agency existed, subject to certain exceptions.4

3. Exceptions to general rule as classified by Professor Mechem: a. Where notice or knowledge is such as it is the agent's duty not to disclose; 45 b. Where the agent's relations to the subject-matter are so adverse as to practically destroy the relation of agency.46 c. Where the person claiming the benefit of the notice, or those whom he represents, colluded with the agent to cheat or defraud the principal.47

4. Exception to exception. The exception already noted as to adverse interest (3b) does not apply, it is generally held, where the agent, although he acts for himself or for a third person, is the sole representative of the principal, to whom notice is sought to be imputed, in the transaction in question.48

§ 2215. General statement of rule as applied to corporations. Subject to certain qualifications and exceptions hereinafter noted in this subdivision, it is well settled that if an officer or agent of a corporation acquires or possesses knowledge of facts, in the course of his employment, and as to matters which are within the scope of his authority, his knowledge is imputable to the corporation.40 This

44 See §§ 2222-2225, infra. 45 See § 2219, infra.

46 Rule applied to corporations, see §§ 2243-2253, infra.

47 2 Mechem, Agency (2nd Ed.), § 1813 et seq., and see § 2228, infra. 48 Rule applied to corporations, see § 2251, infra.

49 United States. Simmons Creek Coal Co. v. Doran, 142 U. S. 417, 35 L. Ed. 1063; Duncan v. Jaudon, 15 Wall. 165, 21 L. Ed. 142; Issaquah Coal Co. v. United States Fidelity & Guaranty Co., 126 Fed. 89; Zeiss v. Potter, 105 Fed. 671; Denver v. Sherret, 88 Fed. 226; Niblack v. Cosler, 80 Fed. 596, aff 'g 74 Fed. 1000; Golden Reward Min. Co. v. Buxton Min. Co., 79 Fed. 868; Ditty v. Dominion Nat. Bank, 75 Fed. 769; Louisville Trust Co. v. Louisville, N. A. & C. Ry. Co., 75 Fed. 433; Howison v. Alabama

Coal & Iron Co., 70 Fed. 683; Waynes-
ville Nat. Bank v. Irons, 8 Fed. 1;
New England Car-Spring Co. v. Union
India Rubber Co., 4 Blatchf. 1, Fed.
Cas. No. 10,153.

Alabama. Lea v. Iron Belt Mercantile Co., 147 Ala. 421, 8 L. R. A. (N. S.) 279, 119 Am. St. Rep. 93, 42 So. 415; Harris v. American Building & Loan Ass'n, 122 Ala. 545, 25 So. 200; Birmingham Trust & Savings Co. v. Louisiana Nat. Bank, 99 Ala. 379, 20 L. R. A. 600, 13 So. 112; Saint v. Wheeler & Wilson Mfg. Co., 95 Ala. 362, 36 Am. St. Rep. 210, 10 So. 539. Arkansas. Baker v. Brown Shoe Co., 78 Ark. 501, 95 S. W. 808.

California. Montecito Valley Water Co. v. Santa Barbara, 144 Cal. 578, 77 Pac. 1113; Blood v. La Serena Land & Water Co., 134 Cal. 361, 66 Pac. 317; Christie v. Sherwood, 113 Cal.

rule is generally based either upon the fiction of identity of principal and agent, or else upon the presumption that the agent has done his duty and communicated his knowledge to the corporation, the prin

cipal. "The rule that notice to the agent is constructive notice to the principal," said the California court, "is based on the presumption that the agent has communicated to the principal the facts connected with the subject-matter of his agency which came to his