while acting for themselves and not for the corporation, will not be imputed to the corporation. Johnston v. Shortridge, 93 Mo. 227.

An officer of a banking corporation has a perfect right to transact his own business at the bank of which he is an officer, and in such a transaction his interest is adverse to the bank, and he represents himself and not the bank. The law is well settled that, when an officer of a corporation is dealing with it in his individual interest, the corporation, is not chargeable with his uncommunicated knowledge of facts derogatory to his title to the property which is the subject of the transaction. Taylor on Corporations (2d ed.), § 210; 1 Waterman on Corporations, § 135: Frenkel v. Hudson, 82 Ala. 158; Wickersham v. Zinc Co., 18 Kan. 481; Barnes v. Gas Light Čo., 27 N. J. Eq. 33; Innerarity v. Bank, 139 Mass. 332.

In the case last cited, the court, after speaking of the general rule that knowledge of the agent will be imputed to the principal, says: "But this principle can have no application where the director of the bank is the party himself contracting with it. In such case the position he assumes conflicts entirely with the idea that he represents the interest of the bank. A director offering a note, of which he is the owner, for discount, or proposing for a loan of money on collateral security alleged to be his own property, stands as a stranger to it."

Now, the facts set up to defeat a recovery here are the facts constituting the transaction between Dickinson and the defendant, in which Dickinson did not represent or profess to represent the bank, and with which the bank had nothing whatever to do. Again, Dickinson in offering the note to the bank for discount represented his own personal interest, and Clark, the president, represented the bank. In this particular transaction Dickinson occupied the position of any other customer, and not that of an officer or agent of the bank, and it must follow from the principles of law before stated that the bank is not chargeable with his knowledge of uncommunicated facts affecting his title to the note. But it is said Dickinson fixed and figured out the discount, and hence he did in point of fact represent the bank. The note bore interest at the rate of 8 per cent. per annum from date, and it appears Dickinson calculated interest at that rate from the 11th of July, the date of the transaction, to the 27th of that month, the date of the note, and deducted as discount $10.30, but it does not appear who designated the amount of discount to be paid. The broad fact remains that the president of the bank agreed to take the note, and that the bank accepted the discount as figured up by Dickinson, and the fact, if such it was, that he may have designated the rate of discount in the first instance is wholly immaterial. He nevertheless represented his own interest in the entire transaction. The judgment is affirmed. All concur.

Note. The general rule is that knowledge casually obtained, or obtained by or given to an officer who is at the time engaged in a private transaction, is not notice to the corporation. 1891, Koehler v. Dodge, 31 Neb. 328, 28 Am. St. Rep. 518; 1891, Lyndon Mill Co. v. Lyndon, etc., Inst., 63 Vt. 581, 25 Am. St. Rep. 783; 1892, Gemmell v. Davis, 75 Md. 546, 32 Am. St. Rep.

412; 1893, Willard v. Denise, 50 N. 'J. Eq. 482, 35 Am. St. Rep. 788; 1893, Casco Nat'l Bank v. Clark, 139 N. Y. 307, 36 Am. St. Rep. 705; 1893, Merchants' Nat'l Bank v. Clark, 139 N. Y. 314, 36 Am. St. Rep. 710; 1895, Kearney Bank v. Froman, 129 Mo. 427, 50 Am. St. Rep. 456; 1896, Franklin Min. Co. v. O'Brien, 22 Colo. 129, 55 Am. St. Rep. 118; 1898, Seaverns v. Presbyterian Hospital, 173 Ill. 414, 64 Am. St. Rep. 125; 1898, Dorr v. Life Ins. Co., 71 Minn. 38, 70 Am. St. Rep. 309, note 312; 1898, Surety Co. v. Pauly, 170 U. S. 133; 1898, Hart Pioneer Nurseries v. Coryell, 8 Kan. App. 496, 55 Pac. Rep. 514; 1898, Wells, Fargo & Co. Express v. Walker, 9 N. M. 170, 456, 54 Pac. Rep. 875; 1898, Red River Valley L. & I. Co. v. Smith, 7 N. Dak. 236; 1900, Brennan v. Emery-Bird-Thayer Dry Goods Co., 99 Fed. Rep. 971.

If the proper officer knows stock is pledged, this is the knowledge of the corporation. 1895, Guarantee Co. v. East R. T. Co., 96 Ga. 511, 51 Am. St. Rep. 150.

Sec. 604. Same. (3) Notice to a servant.

CITY OF DENVER ET AL v. SHERRET.1

1898. IN THE United States CIRCUIT COURT OF APPEALS, COLORADO. 88 Fed. Rep. 226–237.

[Action by Sherret against the City of Denver and the Denver Consolidated Electric Company to recover damages for injury caused by the falling of an electric light pole, alleged to be due to the negligence of both defendants; judgment was rendered for the plaintiff, and errors were assigned relating, among other things, to the charge to the jury as to what constituted notice of the condition of the pole to the electric company.]

SHIRAS, DISTRICT JUDGE.

It is also assigned as error that the court charged the jury that if Blake, who was an employe of the company, made an examination of the pole and discovered its rotten and unsafe condition, this would be notice to the company, whether he communicated this knowledge to any officer of the company or not. Blake was called as a witness for the defendant in error, and he testified that he was in the employ of the electric company as a lamp trimmer, it being his duty to trim the lamps, report the “outs,” put in carbons, and to report anything that looked bad-to report any trouble. He further testified that, some ten or fifteen days before the pole fell which injured Miss Sherret, he examined the pole with a screwdriver and found." that the screwdriver went in pretty easy, and showed that it (the pole) was pretty rotten," and that he was led to make this examination from seeing the pole "wriggling." He further testified that he notified Mr. Sheridan, a storekeeper of the company, of the fact he had discovered. Mr. Sheridan, being called as a witness, denied receiving such report or notice from Blake. Mr. McSparrin, the line foreman of the electric company, and Mr. Barker, the superintendent, both testified that it was Blake's duty to report any defects he discovered either to the foreman or the superintendent, and 1 Statement abridged. Only the part of the opinion relating to notice is given. 2 WIL. CAS.-38

both witnesses denied receiving any report of the defect in the pole from him. The court instructed the jury that if they found from the evidence that Blake did in fact examine the pole and discover the unsafe condition thereof at the time he stated in his testimony, this would be notice to the company, regardless of the question whether he made a report thereof to any other employe or officer of the company, and this ruling is assigned as error.

In Thompson on the Law of Corporations (volume 4, § 5195) the rule is stated to be to the effect that, in order to bind the principal, the notice must be communicated to one whose duty it is "to act for the principal upon the subject of the notice, or whose duty it is to communicate the information either to the principal or to the agent whose duty it was to act for him with regard to it." Counsel for the electric company, in the brief submitted, state their views of the rule in the following terms: "The general rule with reference to the question of notice is that notice to the agent is notice to the principal, if the agent comes to a knowledge of the facts while he is acting for the principal; but this rule is limited by the further rules that notice to the agent, to bind the principal, must be within the scope of the employment,' "-and cite in support thereof the cases of The Distilled Spirits, Wall. 356, and Rogers v. Palmer, 102 U. S. 263. In the former case it was said that "the general rule that a principal is bound by the knowledge of his agent is based on the principle of law that it is the agent's duty to communicate the knowledge which he has respecting the subject-matter of negotiation, and the presumption that he will perform that duty"; and in the latter case it was held that knowledge obtained by an attorney when conducting a case for a client was imputable to the latter.

As already stated, Blake testified that it was his duty to report anything wrong or any trouble he discovered about the poles or wires of the company; and none of the witnesses for the electric company deny this fact, but, on the contrary, McSparrin and Barker, the line foreman and superintendent, both testify that it was Blake's duty to report to them any defects he might discover; and thus it was made plain that it was Blake's duty to take notice of defects in the plant coming under his observation, and to report the same when discovered; and therefore, within the doctrine of the authorities cited, the court was justified in instructing the jury that knowledge acquired by Blake of the defective condition of the pole, when he was going his rounds as employe of the company, would be imputable to the company, because it was proven beyond dispute that it was his duty to take notice of defects, and, noticing them, to make report thereof. Reversed on other grounds.

Note. See note to preceding case. 1901, Wheeler v. Grand Trunk Ry. Co., — N. H., 50 Atl. 103.

DIVISION II. INDIVIDUAL RELATIONS.

TITLE I. INTERNAL RELATIONS.

CHAPTER 18.

RELATION OF PROMOTERS, SHAREHOLDERS, OFFICERS, ETC., AMONG THEMSELVES, TO ONE ANOTHER,

AND TO OTHER PARTIES.

SUBDIVISION I. PROMOTErs.

Sec. 605. I.

Relation to the state.

See Walker v. Devereaux, 4 Paige Ch. 229, supra, p. 385, note, supra, p. 390.

Sec. 606.

2. Relation to the corporation, the shareholders, and to third parties.

See, supra, §§ 506-511, 607.

Sec. 607. 3. Relations among themselves.

ROBERTS MANUFACTURING COMPANY v. FRANK SCHLICK, JR.'

1895. IN THE SUPREME COURT OF MINNESOTA. 62 Minn. Rep. 332-334.

START, C. J. Briefly stated, the facts in this case are that certain individuals, named in the second subdivision of the findings of the trial court, on February 28, 1893, associated themselves together for the purpose of forming a corporation, securing a bank charter, and engaging in a general banking business as the Metropolitan National Bank of St. Paul, Minnesota, under the provisions of the national bank act. They executed articles of association, elected directors and other necessary officers. The defendant was not one of the original associates or promoters, but on April 15, 1893, he was chosen a director to fill a vacancy caused by a resignation, accepted the position, and thereafter acted as a director of the association. The board of directors, through its authorized committee, entered into certain contracts, for the association, and in its proposed corporate name, for the lease of a banking office, and for a safe and the necessary office furniture and fixtures. The contract for the latter was made with the 'Arguments and part of the opinion omitted.

plaintiff on April 19, 1893, by a committee appointed by the board of directors before the defendant became a member. After the performance of this contract by the plaintiff on its part, the promoters voluntarily abandoned their purpose of becoming a corporation and engaging in the banking business, and are not, and never were, a corporation. All the promoters except the defendant and one other have paid their proportionate share of the amount due to the plaintiff on its contract, and have been released by it from further liability therefor. This action was brought to recover from the defendant the balance of his proportionate share of such amount. The trial court found substantially the foregoing facts, and other evidential facts, and ordered judgment for the plaintiff for the amount claimed, and from an order denying his motion for a new trial the defendant appealed.

1. The plaintiff claims that the defendant is liable as a partner, but we neither discuss nor decide this question, for we are of the opinion that the defendant, in any view of the case, is liable upon the general principles of contract and agency. Where individuals associate themselves for the purpose of promoting and organizing a corporation for the pecuniary gain of its members, and act as an association by electing directors and other officers, through whom contracts are made for and in the name of the proposed corporation, and they afterwards abandon their purpose to form a corporation, their relation, one to the other, as to persons dealing with the association, if not that of partners, is that of agent and principal, and each will be individually liable upon any contracts of the association which he directly or indirectly authorized or ratified.

The defendant vigorously challenges the sufficiency of the evidence to bring him within this rule, and insists that there is no evidence in the case that he ever authorized or ratified the contract in question. Where, as in this case, it is shown that the defendant was one of several promoters, and that all acted as a body by a board of directors, and that he was a member thereof, only slight additional evidence is required to establish prima facie his authorization or ratification of contracts made in the name of the association, whether they were made before or after he became a director. We are of the opinion that the evidence in this case is ample to sustain the material findings of fact and conclusion of law of the trial court to the effect that the defendant is liable on the contract in question. The evidence shows that the promoters organized by electing a board of directors, president, cashier, and other officers, and that business was done by the board, which kept a correct record of all its acts and proceedings. At its first meeting, March 2, 1893, a committee on location and fixtures for the bank, consisting of three directors, one of whom was the cashier, was appointed. This committee reported at the second meeting held on March 15, the terms upon which a lease of an office could be secured, and the board accepted the terms, and authorized the committee to take the lease. The defendant, at the third meeting, April 15, was elected a director, and at this meeting the committee reported in favor of accepting the bid of the plaintiff for office