tained by an agent of a corporation, the corporation is not charged with notice from the mere fact of its agent's knowledge; but, if the corporation acts through such agent in a matter where the information possessed by him is pertinent, the knowledge of the agent will be imputed to the principal."4

§ 2222. Time of obtaining knowledge or receiving notice-General rules. The decisions are in conflict as to whether information obtained before a person became an officer or agent is imputable to the company after he has become such officer or agent, and this conflict extends to other like cases. There are several sets of facts in this connection, all of which are governed by the same rules of law. First, the fact may be that knowledge was acquired or notice given by or to one who was not a corporate agent at the time but who afterwards became such and acted in a matter where such information was material. Second, the fact may be that the information was obtained while the agent was acting for himself or outside the scope of his duties; but afterwards it becomes material in a transaction wherein the agent acts within the scope of his powers. Third, the fact may be that the information was obtained while acting, within the scope of his powers, but in a different transaction from the one to which the information relates, but afterwards the agent acts in connection with the transaction to which the information relates.7 Generally, except as hereinafter stated, notice to, or knowledge of, corporate officers or agents, in order to be imputable to the corporation, must have been received or acquired during the existence of the agency and while acting in the particular transaction to which the notice or knowledge relates. However, according to the better rule and the decided weight of authority, knowledge "possessed" by an agent while he occupies that relation and is executing the authority conferred upon him, as to matters within the scope of his authority, is notice to his principal, although such knowledge was acquired (1) before the agency was created,10 or (2) while acting in a transaction not related to or connected with the subjectmatter of the information,11 or (3) while acting outside the scope. of his duties or personally for himself, or merely when not acting for

the corporation, as when off duty.12 In all of these cases, however, the majority rule is subject to the following qualifications: Knowledge acquired is not notice unless it is shown, or appears that the knowledge was present in the mind of the agent at the time he acted for the principal; but if the agent acquired the knowledge so recently, and the fact was of such a nature as to make it incredible that he should have forgotten it, the principal will be bound, at least unless it is affirmatively shown that the agent had forgotten it.13

§ 2223. Necessity that knowledge be obtained while acting in particular transaction. It is sometimes said that the knowledge of an agent, in order to be imputable to the principal, must be received during the course of the particular transaction.14 This rule seems to have been assumed as unquestioned law by Lord Chancellor Hardwicke in 1745,15 but in 1838, in England, it was said that notice received by the agent in another transaction should not affect the principal unless the agent actually had the knowledge at the time of the second transaction.16 In this country, the Supreme Court of the United States adopted this modification in a case decided in 1870.17 In Pennsylvania, however, the rule still is that knowledge of the president acquired outside the particular transaction which it affects and to which his authority extends, is not imputable to the corporation.18 This old rule is, however, seldom strictly applied, and is generally rejected.19 Thus, in a Missouri case, it was unsuccessfully con

12 See § 2218, supra.

132 Mechem, Agency (2nd Ed.), §§ 1808-1810; 1 Clark & Skyles, Agency, 482a.

14 Congar v. Chicago & N. W. Ry. Co., 24 Wis. 157, 1 Am. Rep. 164.

15 Warrick v. Warrick, 3 Atk. 291, 294.

16 Nixon v. Hamilton, 2 Dr. & Wal. 364.

17 The Distilled Spirits, 11 Wall. (U. S.) 356, 20 L. Ed. 167.

18 Bangor & P. Ry. Co. v. American Bangor Slate Co., 203 Pa. 6, 52 Atl. 40, reviewing question at length.

19"It is generally accepted doctrine that the private individual knowledge of the officer of a corporation, acquired in the transaction of his own business, while dealing as if he had no official relation to the cor

poration, will not operate as notice to the corporation. Bruce v. Citizens' National Bank, 185 Ala. 221, 64 South. 82. As president and director, West was an active officer and agent of the appellant bank; not as active perhaps as he might or should have been, but an officer and agent who had duties to perform in respect to the business of the bank and in part at least performed them, and through him notice was chargeable to the bank. The communications between Lamar, West, and Mann on the subject of Mann's indebtedness to the bank at Pensacola, of which Lamar was at the time president, and his pledge of his Florala bank stock to secure the same, concerned a matter in which the Bank of Florala was interested, viz. the ownership of its stock, and was prima

tended that notice to an agent of an insurance company could not operate as notice to the company unless received while he was actually engaged in the transaction of the very business to which the notice related or unless it was shown that it was communicated by the agent to the company.20 In New York, the Court of Appeals held in 1878 that "where the agency is continuous, and concerned with a business made up of a long series of transactions of a like nature, of the same general character, it will be held that knowledge acquired as agent in that business in any one or more of the transactions, making up from time to time the whole business of the principal, is notice to the agent and to the principal, which will affect the latter in any other of those transactions in which that agent is engaged, in which that knowledge is material." 21 In a later New York Court of Appeals decision, Justice Andrews said that "the general rule is well established that notice to an agent of a bank, or other corporation intrusted with the management of its business, or of a particular branch of its business, is notice to the corporation, in transactions conducted by such agent, acting for the corporation, within the scope of his authority, whether the knowledge of such agent was acquired in the course of the particular dealing, or on some prior occasion." 22 It is to be noted, however, that the rule as thus stated is limited by its language to notice to the general or branch manager of a corporation.

§ 2224. Knowledge acquired before creation of agency. some of the cases it has been held that notice to or knowledge acquired by an officer or agent of a corporation before he becomes such

facie within the scope and line of West's duty and authority at the time to know. Notwithstanding it is the general rule, applicable alike to individuals and to corporations, that the knowledge acquired, or the notice received by an agent, which will affect and bind the principal, must have been acquired or received by the agent acting within the line and scope of his duty and authority, Judge Thompson has well observed in his work on Corporations, § 1647, that: 'There is no rule of law requiring the person communicating the notice to wait until he can catch the agent acting about the particular business to which the notice relates, in order to

is not notice to the corporation after he becomes such, or, in other words, that he must acquire the knowledge while the relation exists.23 This is the rule in Pennsylvania where it is said that "notice" to an agent "twenty-four hours before the relation commenced is no more notice than twenty-four hours after it has ceased would be." 24 This is also the rule in Alabama subject to the exception that "if the jury find that the knowledge was present in the agent's mind during the execution of the agency, then they must find as matter of law that the principal was duly informed, unless they are reasonably satisfied to the contrary from other evidence before them;" 25 but even in that state the rule does not apply where the agent is the sole manager and practically the sole stockholder, and was jointly interested in the transaction.26

This, however, is contrary to the weight of authority. According to the better opinion and the decided weight of authority, any knowledge "possessed" by an officer of a corporation as to matters within the scope of his authority, while he occupies such relation, is notice to the corporation, whensoever it may have been acquired.27 "The existence of knowledge in an agent, when acting for his principal, is

23 Houseman v. Girard Mut. Building & Loan Ass'n, 81 Pa. St. 256. See also The Admiral, 18 Law Rep. 91, Fed. Cas. No. 84; John T. Moore Planting Co. v. Morgan's Louisiana & T. R. & S. S. Co., 126 La. 840, 53 So. 22.

See, generally, 2 Mechem, Agency (2nd Ed.), § 1808; 1 Clark & Skyles, Agency, § 480.

Knowledge of a stockholder or ⚫director prior to the time a corporation is organized will not ordinarily be deemed knowledge of the corporation. Reed v. Munn, 148 Fed. 737. Notice given before the organization of a corporation to one afterwards becoming an officer or agent or stockholder of the company is not notice to the corporation. Brennan v. Emery-Bird-Thayer Dry-Goods Co., 99 Fed. 971.

24 Houseman v. Girard Mut. Building & Loan Ass'n, 81 Pa. St. 256. 25 Hall & Brown Woodworking Mach. Co. v. Haley Furniture & Man

ufacturing Co., 174 Ala. 190, 56 So. 726, overruling on this point Lea v. Iron Belt Mercantile Co., 147 Ala. 421, 8 L. R. A. (N. S.) 279, 119 Am. St. Rep. 93, 42 So. 415.

26 Lea v. Iron Belt Mercantile Co., 147 Ala. 421, 8 L. R. A. (N. S.) 279, 119 Am. St. Rep. 93, 42 So. 415.

Where an officer is to all practical intents and purposes the alter ego of the corporation, and has absolute control over the corporate affairs, knowledge possessed by him prior to the existence of his agency may be imputed to the corporation. Lea v. Iron Belt Mercantile Co. (Ala.), 42 So. 415.

27 Connecticut. Bridgeport Bank v. New York & N. H. R. Co., 30 Conn. 231.

Illinois. Snyder v. Partridge, 138 Ill. 173, 32 Am. St. Rep. 130, 29 N. E. 851, rev'g 38 Ill. App. 228.

notice to the principal, however that knowledge may have been acquired." 28 This does not apply, of course, where an express or formal notice is necessary to charge the corporation. Furthermore, a corporation is not chargeable with notice because of knowledge acquired by an officer or agent before he became such, unless the knowledge is shown to have been present in his mind at the time of his acting for the corporation, or unless the circumstances, including the time which had elapsed since he acquired the knowledge, are such that this can be presumed.29

§ 2225. Knowledge acquired after termination of agency. It is elementary that a principal is not charged with information received by an agent after the termination of his agency; and this rule applies equally well to information obtained by a corporate officer or agent after he has ceased to be such officer or agent.

§2226. Effect of subsequent termination of office or agency of person having knowledge. "The rule is that a bank or other corporation, being once charged with notice of the character of a transaction, continues to be affected by such notice whatever changes may occur in the personnel of its working force." 30 In other words, if notice to or knowledge of a corporate officer is such as to be imputable to the corporation, the subsequent death, discharge, removal,

New Jersey. Willard v. Denise, 50 N. J. Eq. 482, 35 Am. St. Rep. 788, 26 Atl. 29.

New York. Cragie v. Hadley, 99 N. Y. 131, 52 Am. Rep. 9, 1 N. E. 537.

Tennessee. Tagg v. Tennessee Nat. Bank, 9 Heisk. 479; Union Bank v. Campbell, 4 Humph. 394.

Vermont. Hart v. Farmers' & Mechanics' Bank, 33 Vt. 252.

"The safer and better rule" is that "the knowledge of an agent, obtained prior to his employment as agent, will be an implied or imputed notice to the principal, under certain limitations and conditions, which are these: The knowledge must be present to the mind of the agent when acting for the principal, so fully in his mind that it could not have been at the time forgotten by him; the knowledge or notice must be of a matter so material to the transaction as to make it the

agent's duty to communicate the fact to his principal; and the agent must himself have no personal interest in the matter which would lead him to conceal his knowledge from his principal, but must be at liberty to communicate it." Fairfield Sav. Bank v. Chase, 72 Me. 226, 39 Am. Rep. 319.

28 Union Bank V. Campbell, 4 Humph. (Tenn.) 394.

29 Red River Valley Land & Investment Co. v. Smith, 7 N. D. 236, 74 N. W. 194. And see Dorr v. Life Ins. Clearing Co., 71 Minn. 38, 70 Am. St. Rep. 309, 73 N. W. 635.

For consideration of this phase of the question as applied to agents in general, see 2 Mechem, Agency (2nd Ed.), $$ 1809-1811; 1 Clark & Skyles, Agency, $$ 481-483.

30 United States Nat. Bank v. Forstedt, 64 Neb. 855, 90 N. W. 919.