40 BULLETIN 110 6, TJ. S. DEPARTMENT OF AGRICULTURE 
If no minutes are made of action of the board of directors, oral 
testimony is admissible to show the action taken in the event a ques- 
tion with respect thereto should arise in the course of a lawsuit. 20 
The action taken by directors of an association at a meeting of the 
board of directors should be recorded in the minutes of the board. 
The action taken by members of an association in the meetings thereof 
should be recorded in the minutes of the association. The board 
of directors of an association possess all the corporate powers of 
the association. The directors of an association should direct and 
manage its affairs within the scope of the powers conferred by the 
charter of the association subject to any restrictions contained in its 
by-laws or marketing contracts. The execution of the orders or the 
carrying out of the policies fixed by the board of directors is done 
by the officers and employees thereof. Officers of an association by 
reason of their offices, or employees by reason of their employment, 
regardless of their rank, have no authority to bind the association 
unless such authority has been conferred upon them otherwise than 
by their election to office or by their employment. 
Authority for the action of the officers of an association or its 
employees should be found in action of the board of directors. In this 
lies the chief importance of minutes of boards of directors. If no 
minutes are kept of meetings of a board of directors, oral testimony 
is admissible to show action taken; on the other hand, if minutes 
are kept, such minutes are regarded as the best evidence of action 
taken by the board of directors in the absence of evidence of fraud 
impeaching the minutes. 21 
All courts, in the absence of fraud impeaching the minutes, regard 
the minutes at least as prima facie evidence of the action taken by 
the board of directors. 22 
Before loaning money to an association, banks frequently, if not 
generally, inquire if the officers have been authorized by the board 
of directors to borrow money. Frequently a copy of the minutes of 
the board of directors covering the matter is requested. This is done 
to see if the board of directors has authorized the proposed action 
or has imposed any restrictions with reference thereto, for it will 
be constantly remembered that an association may act only through 
agents and that persons dealing with an agent act at their peril. If 
it should turn out that the agent, whether he be president, secretary, 
or manager, was not authorized to enter into the contract in question 
on behalf of the association or to engage in any other transaction as 
its representative, the association is not bound in the absence of 
estoppel or ratification. 23 On the other hand, if the minutes of a 
meeting of the board of directors show that the officer was authorized 
to enter into a certain transaction, such minutes are virtually con- 
clusive on the subject in the absence of fraud, and protect the officer 
representing the association in the transaction as well as the other 
20 Robson v. C. E. Fenniman Co.. 83 N. J. Law 453, 85 A. 356 ; Whitlock v. Alexander, 
160 N. C. 465, 76 S. E. 538 ; Hughes Mfg. & Lumber Co. v. Wilcox, 13 Cal. App. 22, 108 
P. 871; Iowa Drug Co. v. Souers, 139 Iowa 72, 117 N. W. 300, 19 L. R. A. (N. S.) 115; 
Traxler v. Minneapolis Cedar & Lumber Co., 128 Minn. 295. 150 N. W. 914. 
21 German Ins. Co. of Freeport, 111., v. Independent School District of Milford, Dickin- 
son County, Iowa, 80 F. 366 ; Hawkshaw v. Supreme Lodge of Knights of Honor, 29 
F. 770. 
23 14 C J. 376, 377. 
23 David Stott Flour Mills, Inc., v. Saginaw County Farm Bureau, 237 Mich. 657, 213 
N. W. 147. 
