Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/634

 § 612.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. X. CHAPTER X. LEGAL RELATIONS BETWEEN THE CORPORATION AND ITS OFFICERS. Fiduciary position of corporate offi- cers, §§ 612, 613. Liability to pay for qualification shares, § 614. Directors' duties enforceable by the corporation or its receiver. Join- der, § 615. Liability of directors for fraud, neglect of duty, and acts in viola- tion of by-laws, § 616. Ordinary care required, §§ 617- 619. Directors not liable for errors of judgment, §§ 620, 621. Liability for ultra vires acts. §§ 622, 623. Liability of directors for the acts of other corporate agents, §§ 624-626. Corporate officers should not place their interests in opposition to those of the corporation, § 627. They cannot contract with them- selves, § 628. Secret profits, § 629. Transactions fraudulent as a matter of law, § 630. Remedies of the corporation, § 631. Loans by directors to the corpora- tion, §§ 632-634. Invalidity of transactions in which officers are interested, §§ 635-637. Railroad construction companies, §§ 638, 639. Transactions in which officers act for two adversely interested cor- porations, §§ 640-643. Common boards of directors, § 644. Directors' authority; their right to indemnification, § 645. Compensation of directors and other agents, §§ 646-648. Removal of officers, §§ 649, 650. § 612. Directors and other corporate officers and agents Fiduciary occupy towards the corporation which they repre- corporate* sent Potions of trust and confidence, and owe to it officers. the duties which persons occupying such positions ordinarily owe to their cestuis que trustent. 1 And the duties 1 See Wardell v. Railroad Co., 103 U. S. 651 ; Wickersham v. Crittenden, 93 Cal. 17; Lagarde v. Anniston L. & S. Co., 126 Ala. 496; Morgan v. King, 27 Colo. 539. This can hardly apply when the directors are the only shareholders. See e. g. Higgins v. Lansingh, 154 111. 332; Manufac- turing Co. v. Peabody, 21 N. Y. App. 247. Thus directors issued the en- tire stock of a corporation to them- 614 selves in payment for property trans- ferred to the corporation, and then sold the stock to innocent outsiders. The issue of the stock was such as was authorized by statute, and the directors at the time of the issue were the only shareholders. It was held that the proceeding could give no cause of action to the corporation. Foster v. Seymour, 23 Blatchf. 107. See, also, Schilling v. Schneider, 110