Court Opinion

ID: 3994387
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:53:14.656938+00
Date Added: 2024-06-11T07:44:26.973000
License: Public Domain

I concur in the result reached by Chief Justice Tolman in the foregoing opinion, although I cannot concur entirely in his reasoning *Page 168 
or the grounds upon which the conclusion is rested. Want of time prevents me from setting out my views at length, but I may say briefly that, in my opinion, the modern relation of corporations to the business world requires a departure from the old rules governing the liabilities of persons dealing with them. The legislature of this state has made the organization of a corporation a simple matter. It has provided that they may be organized for the transaction of practically every sort of business. While it has provided that the corporate powers of the corporation shall be vested in a board of trustees, it has further provided that this board may appoint such officers, agents and servants as the business of the corporation may require, and vest in these officers, or any one of them, the entire management of its business affairs. One of the results has been and is that corporations are managed much as a like business of a private individual or of a partnership is managed. A further result is that almost every business enterprise in the state is conducted through the instrumentality of a corporation. Privately conducted business enterprises, or business enterprises conducted by means of a partnership, are now the exception rather than the rule. There is a reason for this apart from the ease with which corporations may be formed, and apart from the simplicity with which their businesses may be managed. It arises from our community property laws. These laws, as every lawyer knows, add a hazard to a privately conducted business which did not obtain under the common law rules relating to the ownership of property. A corporation relieves the business from this hazard.
It is my opinion, therefore, that when a corporation trusts the conduct of its business to a manager, it alone should be responsible for the acts of that manager. If he violates his trust, the losses caused thereby should *Page 169 
be visited upon the corporation, not upon those who deal with the corporation in the usual course of business and with the person who is held out to represent the corporation, even if so to do violates some of the ancient rules laid down for their management. To hold otherwise, under the present conditions, is to make the innocent rather than the guilty the guarantor of the faithfulness of the corporation's officers. As I view the present transaction, it shows no liability on the part of those whom it is sought to charge. I conclude that the judgment is rightfully affirmed.