Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/650

 § ti'28.] THE LAW OF PRIVATE CORPORATIONS. [('HAP. . another instance, where on an execution sale against a corpora- tion, a person who was both its treasurer and a shareholder bought in land held by its trustees, it was held that his title enured to the benelit of the corporation. 1 " The affairs of a corporation are generally intrusted to the exclusive management and control of the board of directors ; and there is an inherent obligation, implied in the acceptance of such trust, not only that they will use their best efforts to promote the interest of the shareholders, but that they will in no manner use their positions to advance their own individual interest, as distinguished from that of the corporation, or ac- quire interests that may conflict with the fair and proper dis- charge of their duty." - § 628. A director or other corporate officer can on behalf of his corporation make with himself no contract that will bind the corporation ; ! nor any contract in which he is personally in- and this, whether there beany fraud in fact or not. Flint and P. M. R y Co. v. Dewey, 14 Mich. 477. 1 McAllen v. Woodcock, 60 Mo. 174; see Brewster o. Stratman, t Mo. App. 41. But claims against a corporation do not necessarily become extin- guished on being purchased by its agent. The corporation may there- upon become indebted to him for money expended in their purchase, provided the purchase was not made in violation of his duties or instruc- tions. Sullivan r. Triunfo Mining Co., 39 Cal. 459; Seeley v. San Jose" Mill Co., 59 Cal. 22; Merrick r. Peru Coal Co., 61 111. 472; Kitchen v. St. Louis, etc., R'y Co., 69 Mo. 224. See Pacific Railroad o. Ketchum, 101 U. S. 289; also § 033. Compare Sandy River R. R. Co. o. Stubbs, 77 Me. 594. 2 Cumberland C'l, etc., Co. v. Par- ish, 42 Md. 598, 605; see Sellers v. Phoenix Iron Co., 13 Fed. Rep. 20; Wickersham v. Crittenden, 93 Cal. 630 17; Shepaug Voting Trust Cases, 60 Conn. 553; Higgins t Lansingh, 154 111. 301; Cusick d. Bartlett, 91 Me. 153; Fort Payne Rolling Mill v. Hill. 174 Mass. 224; Center Crefk I. Co. r. Lindsay, 21 Utah, 192. a Guild v. Parker, 43 N. J. L. 430; Port v. Russell, 36 Ind. 60; Coleman o. Second Avenue R. R. Co., 3^ N. Y. jni; First National Bank v. Gifford, 47 Iowa, 575; First National Bank v. Drake, 29 Kansas, 311; Ex parte Hill, 32 L. J. Eq. 154; see Butts v. Wood, 37 N. Y. 317; Abbot v. Ameri- can Hard Rubber Co., 33 Barb. 578; Murray v. Vanderbilt, 39 Barb. 140; Munson v. Syracuse, etc., Ry. Co., 29 Hun, 76; Winchester v. Baltimore, etc., R. R. Co., 4 Md. 231. Compare Palmer v. Nassau Bank, 78 Illinois, 380. But a single director can deal with the rest of the board, when they, and not he, represent the cor- poration. Gamble v. Water Co., 122 N. Y. 91; Crymble v. Mulvaney, 21 Col. 203 ; cf. Warren v. Rubber Co., 166 Mass. 97.