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involved in the foregoing case is exceedingly important. It is a matter of common business experience that the same person is frequently a director and prominent executive officer in several corporations at the same time. W. is president of the A. and B. Cos. As president of the former, or as a member of a firm, or individually, he becomes informed of certain facts; he never communicates them to the officers of the B. Co., and takes no part in a transaction between the two corporations, or between the B. Co. and the firm of which he is a member; or, in such transactions, or in one between himself and the B. Co., acts adversely to the B. Co. In any of these cases, is the B. Co. to be charged with constructive notice of the facts known to W.? To hold the corporation charged with notice, under such circumstances, would unsettle and endanger every business transaction between corporations and persons so situated.

It is submitted that the learned judge, in the foregoing opinion, has stated the true rule governing the question of notice in such cases. In order to charge the corporation with notice of facts of which a director or other officer had knowledge, he must have acted in the transaction on behalf of the corporation.

A couple of leading cases will well illustrate the rule. In First Nat. Bank of Hightstown v. Christopher, 40 N. J. L. 435, decided by the supreme court of New Jersey in 1878, the facts were as follows: P. was a member of the firm of M. & J. S. P., and also a director of the bank of H. He obtained at the bank the discount of a note belonging to the firm, which had been got of the maker by fraud. He had notice as a member of the firm of the fraud before the note was offered for discount, but did not communicate his knowledge to any of the officers of the bank. The court held that the knowledge of P. was not constructively notice to the bank. The syllabus is: "A bank discounting a note before its maturity is not chargeable with the knowledge of illegality or want of consideration acquired by one of its directors in other than his official capacity, such director not having acted with the board in making the discount. A director offering a note, of which he is owner, to the bank of which he is a director, for discount, is regarded in the transaction as a stranger, and the bank is not chargeable with the knowledge of such director of an infirmity or defect in the consideration of the note." The court discusses and negatives the idea that the corporation can be charged in all cases when it is the director's duty to communicate his knowledge to the corporation; and considers in that connection the case of Fulton Bank v. N. Y. & Sharon Canal Co. 4 Paige, 127.

In the case of the Bank of U. S. v. Davis, 2 Hill, (N. Y.) 451, a bill of exchange was sent to one of the directors of the bank to be discounted for the benefit of the drawer, but the former, who was a member of the board which ordered the discount to be made, and who took part in its decision thereon, presented it for discount for his own benefit, and received the avails; and the court held that the bank was chargeable with knowledge of the fraud, and could not recover upon the bill. Nelson, C. J.: "I agree that notice to a director, or knowledge derived by him, while not engaged officially in the business of the bank, cannot and should not operate to the prejudice of the latter. But in this case, as has already been observed, Williams

(the director) was a member of the board, participating at the time in discounting of bills and notes as one of the directors of the bank." Page 463. The decision in Myers v. Ross, 3 Head, (Tenn.) 59, proceeded on that ground. See page 62. In Alabama the courts have not been willing to go as far, and in a case similar to Bank of U. S. v. Davis, supra,-Terrill v. Branch Bank at Mobile, 12 Ala. (N. S.) 502,—held that the bank was entitled to recover. But it seems that the corporation has generally been held chargeable with notice when a director, who had knowledge of defects, acted for the corporation in the transaction; in each case though, where the corporation has been held responsible for the knowledge of the director, this element has been present. National Security Bank v. Cushman, 122 Mass. 490; Bank of New Milford v. Town of New Milford, 36 Conn. 93; 1 Hall, (N. Y.) 480; Clerks' Savings Bank v. Thomas, 2 Mo. App. 367; Smith v. South Royalton Bank, 32 Vt. 341. The mere fact that one who has knowledge of certain facts is a director of the corporation, if he does not communicate it to the board of directors or other proper officers, or does not act in the transaction, will not charge the corporation with notice of such facts. Farrell Foundry Co. v. Dart, 26 Conn. 376; General Ins. Co. v. U. S. Ins. Co. 10 Md. 517; U. S. Ins. Co. v. Shriver, 3 Md. Ch. Dec. 381; Fulton Bank v. N. Y. & Sharon Canal Co. 4 Paige, Ch. 127; Powles v. Page, 3 C. B. 16, 10 Jur. 526; Farmers', etc., Bank v. Payne, 25 Conn, 444; National Bank v. Norton, 1 Hill, 572; 2 Hill, 451; Wade on Notice, § 683.

And if the director or other officer of the corporation did not act for it in the transaction, but was an adversary to it, and especially if perpetrating a fraud upon it, the corporation will not be bound by knowledge which he possessed. Commercial Bank v. Cunningham, 24 Pick. (Mass.) 270; Washington Bank v. Lewis, 22 Pick. (Mass.) 24; City Bank of N. Y. v. Barnard, 1 Hall, (N. Y.) 70; Stratton v. Allen, 1 C. E. Green, (N. J. Eq.) 229; Stevenson v. Bay City, 26 Mich. 44; Thompson v. Cartwright, 33 Beavan, 189.

Thus, where the president or other officer of the corporation sold real estate to it, any knowledge of equities or defects which he may have had, unless he communicated such knowledge to the corporation, will not bind it. Winchester v. Baltimore, etc., R. Co. 4 Md. 231; Wickersham v. Chicago Zinc Co. 18 Kan. 481; Barnes v. Trenton Gas-Light Co. 27 N. J. Eq. 33; La Farge, etc., Ins. Co. v. Bell, 22 Barb. 54. In Hoffman, etc., Co. v. Cumberland, etc., Co. 16 Md. 456, the corporation was held affected with notice, but its formation, acquiring of title, and the circumstances impairing its title, all arose out of one entire plan.

A distinction has been attempted to be made between a mere director and "the president, cashier, or other executive officer" of the corporation. It is submitted that when the information comes to a director or other officer otherwise than as an officer of the company, (i. e., casually or by reason of his connection with other matters,) the question of the liability of the corporation therefor is to be determined by the same rules, whether the person be merely a director or whether he be an executive officer. If Mr. Wade, in his work on Notice, (§ 675,) intends to maintain (as it seems he does) that there is a difference, his citations do not sustain the proposition. In the case of Bank of New Milford v. Town of New Milford, 36 Conn. 93, the officer not only

possessed the information, but acted on behalf of the corporation to be charged. The same may be said of Fulton Bank v. Benedict, 1 Hall, (N. Y.) 480, cited in section 676. The decision in the principal case is opposed to such a distinction, as are also the cases of Barnes v. Trenton Gas-Light Co. 27 N. J. Eq. (12 C. E. Green) 33; and Winchester v. Baltimore, etc., R. Co. 4 Md. 231, in which the presidents sold real property to their respective corporations, and it was held that the corporations were not chargeable with notice of defects or equities of which the presidents had knowledge. See, also, Miller v. Ill. Cent. R. Co. 24 Barb. (N. Y.) 312; Porter v. Bank of Rutland, 19 Vt.

410.

The language of Chancellor Walworth, in Fulton Bank v. N. Y. & Sharon Canal Co. 4 Paige, Ch. 127, goes to the extent that when an executive officer, not acting adversely to his corporation, is informed that it contemplates action which, if it were notified of the facts of which he is acquainted, would make it liable, that it becomes his duty to communicate his knowledge to it, and if he does not the corporation is chargeable. In that case Cheeseborough was president of the bank, and a director and member of the finance committee of the canal company; Brown was president and also a member of the finance committee of the canal company, and a director of the bank. At a meeting of the finance committee, at which Cheeseborough and Brown were present, it was ordered that the funds of the canal company be deposited in the bank to its account, under the control of its finance committee; which was done. Brown, as president of the canal company, left his signature at the bank as the person upon whose check the money was to be drawn, and afterwards drew the money and appropriated it to his own use. Chancellor Walworth held the mere knowledge of Cheeseborough of the purpose for which the money was deposited was not notice to the bank, but that he must also have known that Brown intended to commit the fraud upon the canal company; that the knowledge of such purpose on Brown's part would have made it Cheeseborough's duty to inform the disbursing officers of the bank, and a failure to have done so would have made the bank liable. But see this case commented on in First Nat. Bank v. Christopher, 40 N. J. L. 435, 438-9. The writer believes that there is a difference between a director and an executive officer when notice is given to an officer to be communicated to the corporation; as, for instance, the service of summons, giving notice of protest, proofs of loss, etc. In all such cases the question is, not whether he has communicated such notice to the corporation, but whether he was the officer designated by law, or by the corporation, to receive such notice. Having been designated to receive such notice, and it having been given to him as notice to the company, he has thereby acted in the transaction on behalf of the corporation. The authority and duty of a director and of an executive officer, in reference to such matters, is very different. As to whether notice to a mere director, when it is given for the purpose of being communicated to the corporation, is notice to it, see National Bank v. Norton, 1 Hill, 572.

The principal case is important on the point as to what constitutes a participation in the transaction on the part of the director or other officer. It is believed that in all the decided cases, where the corporation has been held responsible for the knowledge of a director, he has taken part in determining

the question on behalf of the corporation. See Bank of U. S. v. Davis, 2 Hill, (N. Y.) 451; National Security Bank v. Cushman, 122 Mass. 490; Bank of New Milford v. Town of New Milford, 36 Conn. 93.

As a matter of presumption, the knowledge of a director or other officer may be of much importance. Thus, where the cashier of a bank, with knowledge that a stockholder had pledged his stock to secure a debt, was ex officio a member of the discount committee, and a note of the same stockholder was discounted by the bank, it was held that the cashier was presumed, in the absence of evidence to the contrary, to have been present when the note was discounted, and his knowledge that the stock had been pledged was a sufficient notice to the bank. Bank of N. Am. v. McNeil, 10 Bush, (Ky.) 54; and see National Security Bank v. Cushman, 122 Mass. 490; Commercial Bank v. Wood, 7 Watts & S. 89.

Notice to the board of directors of a corporation is notice to the corporation. Mechanics' Bank of Alexandria v. Seton, 1 Pet. (U. S.) 299; Bank of Pittsburgh v. Whitehead, 10 Watts, 397; Olcott v. Tioga R. Co. 27 N. Y. 546; Toll Bridge Co. v. Betsworth, 30 Conn. 380. And no subsequent change in the persons composing the board will prevent the corporation from being affected by such notice. Mechanics' Bank of Alexandria v. Seton, supra; Fulton Bank v. N. Y. & Sharon Canal Co. 4 Paige, Ch. 127. And if a body, consisting of several persons,— —as a board of directors,—is engaged in the transaction of the business of the corporation, notice to any member of such body, while engaged in said business, is notice to the corporation. Bank of U. S. v. Davis, 2 Hill, (N. Y.) 451; Wade, Notice, § 682. Notice to the cashier, in matters relating to the ordinary business of the institution, is notice to the bank. New Hope, etc., Bridge Co. v. Phenix Bank, 3 Comst. (N. Y.) 156; Trenton Banking Co. v. Woodruff, 1 Green, Ch. 117; and see Branch Bank, etc., v. Steele, 10 Ala. (N. S.) 915. The treasurer is the proper officer to whom, when payment is made, notice of the purpose to which it is to be applied should be given. New England, etc., Co. v. Union, etc., Co. 4 Blatchf. 1. And, generally, notice to the officer in charge or having control of a department or branch of the business, concerning matters pertaining to such department or branch, is sufficient. Quincy Coal Co. v. Hood, 77 Ill. 68; New England, etc., Co. v. Union, etc., Co. 4 Blatchf. 1; Smith v. Water Com'rs, 38 Conn. 208; Mechanics' Bank v. Schaumburg, 38 Mo. 228; Danville Bridge Co. v. Pomroy, 15 Pa. St. 151. See Black v. Camden, etc., R. Co. 45 Barb. 40; Nashville, etc., R. Co. v. Elliott, 1 Coldw. 611. Knowledge of facts by, or notice to, a mere stockholder is not notice to the corporation of the existence of those facts. Housatonic Bank v. Martin, 1 Metc. (Mass.) 294; Bank of Pittsburgh v. Whitehead, 10 Watts, 397; Union Can. Co. v. Loyd, 4 Watts & S. 393; The Admiral, 8 Law Rep. (N. S.) 91. Nor to a corporator, unless he is constituted an organ of communication by charter or by-laws. Custer v. Thompkins Co. Bank, 9 Pa. St. 27.

Cincinnati. July, 1881.

J. C. HARPER,

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(Circuit Court, S. D. Ohio, E. D. July 23, 1881.)

1. ACTION FOR DECEIT—ATTACHMENT—(1) JURISDICTION-Defendant SUMMONED IN ANOTHER COUNTY-SECTIONS 5031, 5038, OHIO REV. ST.-(2) ORDER OF ATTACHMENT-ALLOWANCE BY JUDGE-SECTION 5565, OHIO REV. ST.—(3) ATTACHING GOODS ALREADY IN SHERIFF'S HANDS UNDER EXECUTION-(4) DisMISSING ATTACHMENT UPON EX PARTE TESTIMONY WHEN GROUND OF ATTACHMENT ALSO BASIS OF THE ACTION-PRACTICE.

Plaintiffs filed a petition in the common pleas court of Fairfield county, Ohio, alleging that upon the faith of certain false and fraudulent misrepresentations, made by defendants to them, they gave defendant P. a line of credit for a large stock of goods which they sold him; that, subsequently, defendant S. obtained a judgment by confession against P., upon certain notes which P. had given to S. as a part of the fraud, and levied executions upon P.'s stock of goods in Lancaster, Fairfield county, Ohio, for about the full value thereof; that about the time said executions were levied they discovered the fraud, and immediately notified P. of the rescission of the contract of sale and credit, and offered to return the notes, etc., given therefor, and demanded a return of their goods, which was refused; and claiming damages for such deceit. Plaintiffs also filed an affidavit for an attachment, charging that the debt was fraudulently contracted; that the defendants are about to dispose of, and that P. had disposed of a part of, his property in fraud of his crediiors. Summonses and orders of attachments were issued against both defendants; against P. to the sheriff of Fairfield county, and against S. to the sheriff of Montgomery county. Both summonses were returned served, and P.'s stock of goods was attached under the former, and property of S. under the latter, order. Afterwards, upon petition of plaintiffs, the cause was removed to this court. Upon motions to dismiss the attachments

Held, (1) that under sections 5031 and 5038, Ohio Rev. St., the action was properly brought in Fairfield county, and S. was rightly summoned in Montgomery county.

(2) That the order of attachment did not require the allowance of a judge, as required by section 5565, Ohio Rev. St., when the action is brought before the claim is due.

(3) That the sheriff could levy the order of attachment upon the goods already in his hands, by virtue of a levy under a prior execution.

Locke v. Butler, 19 Ohio St. 587, distinguished.

(4) That upon a motion to dismiss an attachment, upon ex parte testimony, the court will not decide whether the evidence preponderates for or against the truth of the charges upon which the attachment is founded, where those charges constitute the very matter upon which the action is based,-the sole issue between the parties, and which the plaintiffs are entitled ultimately to have submitted to a jury. But the court will consider such testimony, to ascer*Reported by J. C. Harper, Esq., of the Cincinnati bar.

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