§ 233.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VII. parent scope of their authority, commit or intend a tioifto^tT breach of trust, the rights of an innocent person dealing with them will not be affected thereby. 1 Thus, if directors borrow money for their corporation, having authority to do so, the lender is not bound at his peril to see that the money is not applied to purposes ultra vires the cor- poration, 2 nor embezzled by the directors. And if a person sells to directors for their corporation such property as it is au- thorized to buy, he need not ascertain whether it requires his particular property 7 . 3 In this last case, Eastern Counties Rail- way Co. v. Hawkes, Lord St. Leonards said that the English decisions 4 did "not authorize directors to bind their companies by contracts foreign to the purposes for which they were es- tablished, but they do hold companies bound by contracts duly entered into by their directors for purposes which they have treated as within the objects of their Acts, and which cannot clearly be shown not to fall within them ; and they further hold companies to be bound by a continual course of dealing by their directors with third persons in relation to their shares, although that mode of dealing is contrary to the regulations of their deed of management." 5 § 233. As to what portion of their authority directors may delegate to some of their own number or to other o/amhor- 11 officers of the corporation it is difficult to state any rectors' 11 " rme °* general application more specific than this: Directors may not delegate authority which it was intended that the board should exercise. From some cases it might indeed be inferred that it was ordinarily competent for them to delegate authority to perform mere ministerial acts, but not authority to do acts involving discretion. 6 Thus, it has been held that the power of directors to lease property of the corpo- jgLJ j & / o 1 See §§ 203 et seq. *+ 6*^ Gst 'Drew, 2 Macq. 103; Bargate ». Short- 2 In re Marseilles Extension Rail- way and Land Co., 20 W. R. 254; North Hudson B'ld'g Ass'n v. Bank, 79 Wis. 31. 3 Eastern Counties R'y Co. v. Hawkes, 5 H. L. Cas. 831. 4 7. e., National Exchange Co. v. 196 ridge, 5 H. L. Cas. 29G. 5 5 H. L. Cas. 381. 6 Silver Hook Road v. Greene, 12 R. I. 164; Farmers' Mutual Ins. Co. ». Chase, 56 N. H. 341; Temple v. Dodge, 89 Tex. 68. Compare Sheri- dan Elec. L. Co. v. Nat. Bank, 127 N. Y. 517.
