Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/651

 CHAP. X.] CORPORATION AND OFFICERS. [§ 629. terested. 1 Accordingly, a resolution of the board of trustees of a corporation carried by the casting vote of the ^ 1 J ° They can- president ratifying an unauthorized act of his, in notcon- which he was personally interested, is invalid. 2 And them- a board of directors who have bartered away the se ves- assets of the corporation for personal gain, cannot, by an act purporting to be an acceptance for the company of an equiva- lent for such assets, conclude the shareholders or a receiver from showing that no equivalent was actually received. 3 § 629. Corporate officers may not buy from or sell to their corporation and retain any profits from such trans- actions, unless the profits are known and the trans- Sec ™t 1 _ profits. actions acquiesced in by all who could claim any interest in the profits. 4 For all secret profits derived by them from any dealings in regard to the corporate enterprise they must account to the corporation, 5 even though the transaction may have benefited it. 6 1 European, etc., Railroad Co. v. Poor, 59 Maine, 277; Blair Town Lot Co. v. Walker, 50 Iowa, 376; Wicker- sham v. Crittenden, 93 Cal. 17; Cur- tin v. Salmon River, etc., Co., 130 Cal. 345; Smith v. Los Angeles Im. Association, 78 Cal. 289. 2 Chamberlain v. Pac. Wool-Grow- ing Co., 54 Cal. 103. See Davis v. Rock Cr. L. F. & M. Co., 55 Cal. 359; Bennett v. St. Louis Car Roofing Co., 19 Mo. App. 349; Ward v. Davidson, 89 Mo. 445. 3 Guild v. Parker, 43 N. J. L. 430. See Rhodes v. Webb, 24 Minn. 292. Resolutions passed by directors mak- ing allowances in their favor and auditing their own claims are void- able by the corporation. Graves v. Mono Lake Mfg. Co., 81 Cal. 303. See Munson v. Magee, 161 N. Y. 182. The presumption that directors are acquainted with the affairs of their bank, and that they have notice of all the entries on its books, can- not be relied on by a cashier seeking to show a ratification of his wrong- ful appropriation of the moneys of the bank. First Nat. Bk. v. Drake, 29 Kan. 311. 4 See Imperial Mercantile Cred. Ass'n v. Coleman, L. R. 6 H. L. 189. Compare Barr v. Glass Co., 17 U. S. App. 124. 5 European, etc., Ry. Co. v. Poor, 59 Me. 277; Parker v. Nickerson, 112 Mass. 195; McClure v. Law, 161 N. Y. 78; Bent v. Priest, 86 Mo. 475; Ward v. Davidson, 89 Mo. 445; Perry r. Tuscaloosa Co., 93 Ala. 364; San Francisco Water Co. v. Pattee, 86 Cal. 623; Keokuk Packet Co. v. Davidson, 95 Mo. 467; Hutchinson v. Bidwell, 24 Oreg. 219; Electric Co. v. Bates, 68 Vt. 579; Spaulding v. North Milwaukee T. S. Co., 106 Wis. 481. Compare Hazard v. Durant, 14 R. I. 25. * 6 Bird Coal Co. v. Humes, 157 Pa. St. 278; Bent v. Priest, 10 Mo. App. 543. An officer of a corporation may act as trustee for bondholders under a mortgage made by it. Ellis v. Boston, etc., R. R. Co., 107 Mass. 1. 631