The principles which control the power of an agent or officer of a corporation to bind the corporation, are in general those which are applicable to other forms of agency. The chief peculiarities of this branch of the subject are as follows:
1. A corporation, being an artificial person, can act only through its agents. Accordingly, every contract entered into by a corporation must present in some form the question of agency. If the contract is within the scope of the agent's authority the corporation is bound thereby.1 If the contract is within the scope of the agent's authority and the adversary party acts in good faith, the fact that the agent misappropriates the proceeds does not prevent the contract from being binding on the corporation.2 On the other hand, if the contract is beyond the powers of the agent of the corporation and no considerations of estoppel exist, no recovery can be had against the corporation.8
2. All who deal with a corporation are, as is said elsewhere,4 bound to take notice of its charter. This may include the general laws concerning corporations. If the power of certain classes of agents of corporations is specified in the charter, persons dealing with the corporation are bound to take notice of such powers.5 If the power of the agent depends on the construction of the articles of incorporation the question of his authority is one of law, for the court.6 Strangers are not charged with presumptive knowledge of the by-laws of a corporation, either of a foreign7 or of a domestic corporation.8 Accordingly by-laws of a corporation, not in fact known to a person dealing with such corporation cannot limit the apparent authority of an agent of such corporation.9 A member of a corporation, such as a beneficial organization,10 is charged with knowledge of the by-laws. Thus a member of a benevolent association is bound to know that the secretary cannot waive a constitutional requirement and excuse such member from paying assessments on a benefit certificate issued in favor of such member on her husband's life, while she does not know whether such husband, being absent, is alive or dead.11 Secret limitations on the apparent authority of an agent cannot affect a contract entered into by a stranger with the corporation in reliance on the apparent authority of such agent.12
1 Bank v. Griffin, 66 111. App. 577; Nichols v. R. R., 24 Utah 83; 91 Am. St. Rep. 778; 66 Pac. 768.
2 Reagan v. Bank, 157 Ind. 623; 62 X. E. 701; 61 N. E. 575; Havens v. Bank, 132 N. C. 214; 95 Am. St. Rep. 627; 43 S. E. 639.
3 Sullivan v. Ry., 128 Ala. 77; 30 So. 528; Savannah, etc., Ry. v. Humphreys. 114 Ga. 681; 40 S. E. 711; Bristol Savings Bank v. Judd, 116 Ia. 26; 89 N. W. 93.
4 See Sec. 1065 et seq.
3. The general business of most corporations is managed in about the same general way. Accordingly, custom and usage have annexed incidents to particular forms of corporate agency. These customs and usages have in some cases become so well established as to be recognized by the law. In such cases the incidental powers of certain classes of agents are defined with greater accuracy as matters of law than they are in ordinary classes of agents,
5 Relfe v. Rundle, 103 U. S. 222; Groeltz v. Real Estate Co., 115 Ia. 602; 89 N. W. 21; Bocock v. Iron Co., 82 Va. 913; 3 Am. St. Rep. 128; 1 S. E. 325.
6 Groeltz v. Real Estate Co., 115 Ia. 602; 89 N. W. 21.
7 Union Mutual Life Ins. Co. v. White, 106 111. 67.
8 Ashley Wire Co. v. Steel Co., 164 111. 149; 56 Am. St. Rep. 187; 45 N. E. 410; Smith v. Smith. 62 111. 493.
9 Domestic Building Association v. Guadiano, 195 111. 222; 63 N. E. 98; Groeltz v. Armstrong, - Ia.
-; 99 N. W. 128; Rathbun v. Snow, 123 N. Y. 343; 10 L. R. A. 355; 25 N. E. 379; Moyer v. Terminal Co., 41 S. C. 300; 44 Am. St. Rep. 709; 25 L. R. A. 48; 19 S. E. 651.
10 Kocher v. Benevolent Legion. 65 N. J. L. 649; 86 Am. St. Rep. 687; 52 L. R. A. 861; 48 Atl. 544.
11 Kocher v. Benevolent Legion, 65 N. J. L. 649; 86 Am. St. Rep. 687; 52 L. R. A. 861; 48 Atl. 544.
12 Domestic Building Association v. Guadiano. 195 111. 222; 63 N. E. 98; Heinze v. Dock Co., 109 Wis. 99; 85 N. W. 145.