poration has an interest, or whether the cause of action is one in favor of creditors in general and which may be availed by "any" one creditor either suing alone (as it is sometimes held he may) or as a representative of all the creditors.28 In the one case the only liability is to the particular person injured, who may or may not be a creditor of the corporation, as in case of an action for deceit,29 while in the other case the liability is to all creditors of the corporation without regard to any personal dealings between such officers and such creditors. If there is a special damage to the creditor suing, not common to other creditors, i. e., an injury to the individual creditor which is not an injury to the corporation, he may sue at law ex delicto for the tort.

§ 2535. Statement of general rule. It is thoroughly well settled that a man is personally liable for all torts committed by him, consisting in misfeasance-as fraud, conversion, acts done negligently, etc.-notwithstanding he may have acted as the agent or under directions of another. And this is true to the full extent as to torts committed by the officers or agents of a corporation in the management of its affairs. The fact that the circumstances are such as to render the corporation liable is altogether immaterial. The person injured may hold either liable, and generally he may hold both as joint tort feasors. Corporate officers are liable for their torts, although committed when acting officially.30 They are liable

28 Liability of corporate officers to creditors is to be looked at from two different standpoints. In the one case the wrongful act or omission of such officers may be a single act or omission operating directly on a particular creditor so as to make such officers liable jointly with the corporation as tort feasors. This class of cases is illustrated by those cases where officers have made false representations which were relied upon and induced a third person to extend credit to the corporation. On the other hand, the liability to creditors, independent of statute, may be a general liability extending to all creditors by reason of some wrongful act causing loss to creditors of the corporation as a class. Cameron v. First Nat. Bank, Tex.

Civ. App. -, 194 S. W. 469.

A wrong done by corporate officers which affects the credit of the company and the creditors generally is not a wrong to them as individuals, and they cannot maintain an action as for a tort. Priest v. White, 89 Mo. 609, 1 S. W. 361.

29 See Killen v. Barnes, 106 Wis. 546, 82 N. W. 536.

30 California. Vujacich v. Southern Commercial Co., 21 Cal. App. 439, 132 Pac. 80.

Indiana. Hartzler v. Goshen Churn & Ladder Co., 55 Ind. App. 455, 104 N. E. 34.

Michigan. Weber v. Weber, 47 Mich. 569, 11 N. W. 389.

New Jersey. Cowley v. Smyth, 46 N. J. L. 380, 50 Am. Rep. 432.

for their torts regardless of whether the corporation is liable; 31 but it has been held that there can be no recovery ex delicto where the injured person has waived the right to hold the corporation ex delicto for the same act, by treating a conversion of property as a sale.32

The rules governing liability of agents in general, to third persons, for their torts, as laid down in textbooks on the law of Agency, are almost invariably applicable to the liability of corporate officers to third persons for their torts, where a wrong against the third person rather than the corporation; and hence reference should be made, in connection with what is said herein, to standard works on the law of Agency.3

It is no defense to such an action that the corporation is in the hands of a receiver and that hence the receiver should sue, since the cause of action is not one which passes to a receiver.34

It has been held that a shareholder cannot sue the president personally for refusal to countersign a certificate of stock, on the theory that the refusal is considered an act of nonfeasance rather than misfeasance; but it is submitted that there is no good authority for this holding.35

§ 2536. Participation in tort as essential to liability. Generally there is no question as to liability of corporate officers for torts, provided the officer was so connected with the tort as to bring

New York. Chenango Bridge Co. v. Paige, 83 N. Y. 178, 38 Am. Rep. 407; Morgan v. Skiddy, 62 N. Y. 319.

Tennessee. Nunnelly v. Southern Iron Co., 94 Tenn. 397, 28 L. R. A. 421, 29 S. W. 361.

In a federal case, the court, speaking with reference to corporate officers, said: "The general rule that agents are not excused from liability for their wrongs or torts because while performing the wrongful acts they are acting for and in the service of another cannot be gainsaid." Glucose Sugar Refining Co. v. St. Louis Syrup & Preserving Co., 135 Fed. 540.

It is no defense that the corporation also is liable. Peck v. Cooper, 112

him within the rule. If the tort is committed by the officer sought to be held liable, then of course no question arises. So if he is one of several officers or agents, all of whom actively participate in the tort, there is no question as to his liability. The question often arises, however, where a tort is committed by a corporation and it is sought to hold liable an officer who was not the main wrongdoer or who did not actively participate at all in the wrongdoing. In such a case, it seems impossible to lay down any governing rule further than that the test seems to be whether the officer ordered, or participated in, the alleged wrongful act, i. e., whether he would be individually liable if there was no corporation and he was acting merely as agent for a private person.36 The mere fact that a person is a director or other officer in a corporation does not necessarily render him liable for the torts of the corporation or its agents.37 Officers of a corporation "are not held liable for the negligence of the corporation merely because of their official relation to it, but because of some wrongful or negligent act by such officer amounting to a breach of duty which resulted in an injury. To make an officer of a corporation liable for the negligence of the corporation there must have been upon his part such a breach of duty as contributed to, or helped to bring about, the injury; that is to say, he must be a participant in the wrongful act." 38 Some knowledge and participation, actual or implied, must be brought home to him.39 Thus, a president who gives orders may be liable for injuries resulting from their execution, but if he merely transmits an order

36 Mayer V. Thompson-Hutchison

Bldg. Co., 104 Ala. 611, 28 L. R. A. 433, 53 Am. St. Rep. 88, 16 So. 620.

37 Peck v. Cooper, 8 Ill. App. 408, aff'd 112 Ill. 192, 54 Am. Rep. 231; Stockbridge Iron Co. v. Cone Iron Works, 102 Mass. 80.

With respect to the corporate president it has been said: "He is not personally liable because of his offi'cial capacity, any more than are the directors or stockholders, for torts committed by the corporation, in the absence of personal participation in the tortious act. As an agent, he is not liable for the acts of misfeasance or nonfeasance of his subordinate agents or employees." Folwell

v.

Miller, 145 Fed. 495, 10 L. R. A. (N.
S.) 332, 7 Ann. Cas. 426.

To escape liability for a tort on the ground that the party charged was acting for a corporation, he must show the existence of at least a de facto corporation. Von Lengerke v. New York, 150 N. Y. App. Div. 98, 134 N. Y. Supp. 832.

38 Aubrey's Adm'r v. Stimson, 160 Ky. 563, L. R. A. 1915 C 874, 169 S. W. 991.

39 See Elizabeth v. American Nicholson Pavement Co., 97 U. S. 126, 24 L. Ed. 1000; Fanning v. Osborne, 102 N. Y. 441. 7 N. E. 307; Arthur v. "Griswold, 55 N. Y. 400.

of the corporation to a servant he is not liable for injuries resulting therefrom.40

So if the managing agent of a company neglects to instruct his workmen as to boundaries, and they trespass, he is not liable for trespass, although he may be liable for negligence.41 It also follows that where the plant of a company was under the charge of its general manager whose duty it was to inspect the boiler causing the injury, and the president had no notice of the condition of the boiler nor was it his duty to inspect it, the latter is not liable for injuries resulting from an explosion of the boiler,42 although if the president had also been the general manager then he would have been liable, where the injury resulted from failure to inspect.

43

The superior or managing officer of a corporation cannot be held liable for the misconduct of a subordinate servant or employee unless the act is done with his consent or under his order or direction.44 And it has been said that "it may be stated as a rule of universal application that a director of a corporation is not liable for any tort of other subordinate agents in which he did not participate." 45 If a director, manager, or other agent of a corporation, although in the name of the corporation, himself commands the commission of a tort by a subordinate agent of the corporation, the former is personally liable.46 Negligence in not obtaining knowledge of the acts of executive officers or agents may render directors liable, it has been held, although mere nonfeasance in this respect is held, in some jurisdictions, not to warrant a recovery.48

47

A director cannot escape liability for acts done pursuant to his vote in the board of directors by claiming that the acts were authorized by the board and not by him personally.49 So, also, it has been

40 Hewett v. Swift, 3 Allen (Mass.)

420.

41 Bath v. Caton, 37 Mich. 199. 42 Aubrey's Adm'r v. Stimson, 160 Ky. 563, L. R. A. 1915 C 874, 169 S. W. 991.

43 Murray v. Cowherd, 148 Ky. 591, 40 L. R. A. (N. S.) 617, 147 S. W. 6. 44 Kansas City v. Dickey, 76 Mo. App. 437.

45 Pelton v. Gold Hill Canal Co., 72 Ore. 353, 142 Pac. 769, holding direc

tors not liable for conversion by general manager of wheat stored with company.

46 National Cash-Register Co. v. Leland, 94 Fed. 502, 508, which dis- ' cusses the question at length.

47 United Society v. Underwood, 9 Bush (Ky.) 609, 15 Am. Rep. 731. 48 See $2558, infra.

49 National Cash Register Co. v. Leland, 94 Fed. 502, 509.

held, generally, that executive officers of a corporation who induce it to enter upon a wrongful course of action become subject to personal liability.50

In a recent Michigan case, an employee was burned while using an inflammable stove polish manufactured by her employer. She sued both the corporation and the manager thereof. He claimed that he was not liable because he had not participated in the tort. Conceding that to be the general rule, the following instruction was approved: "You can only find against Mr. Crosby if it appears and you find it is a fact that he had knowledge of the dangerous character of this compound, and that he was actively promoting the manufacture and sale of this compound, as an officer with authority in the corporation."' 51

And in a Montana case it was held that the directors of a corporation are personally responsible for a death or other injury caused by an explosion of gunpowder unlawfully stored by the corporation, although they may have had no knowledge thereof, if they could have had such knowledge by the exercise of ordinary care and diligence.52 So a director and president of an omnibus company, who issues an order to drivers to exclude all colored persons, is personally liable for the ejection and personal injury of a colored person in executing the order.53 The president of a corporation, knowing the facts, who asks skilful lawyers to prepare a trust mortgage conveying the legal rights of his corporation, is not personally liable for the resulting damage because the words describing the property erroneously include the surface of the land which the com

50 Saxlehner v. Eisner, 140 Fed.

938.

51 Wines v. Crosby & Co., 169 Mich. 210, 39 L. R. A. (N. S.) 901, Ann. Cas. 1913 D 1055, 135 N. W. 96.

52 Cameron v. Kenyon-Connell Commercial Co., 22 Mont. 312, 44 L. R. A, 508, 74 Am. St. Rep. 602, 56 Pac. 358. See also Nunnelly v. Southern Iron Co., 94 Tenn. 397, 28 L. R. A. 421, 29 S. W. 361.

In this case, the directors dealing in the sale of explosives in a mining country, intrusted the management to one of their number, and a nuisance was created by storing a large amount

of explosives in city limits near other buildings. It was held that the directors were all liable for the death of a person killed by an explosion of the powder, although some of the directors had no knowledge of the negligent acts, where they did not exercise reasonable diligence in the control and supervision of the corporate business. Cameron v. Kenyon-Connell Commercial Co., 22 Mont. 312, 44 L. R. A. 508, 74 Am. St. Rep. 602, 56 Pac. 358.

53 Peck v. Cooper, 112 Ill. 192, 54 Am. Rep. 231.