Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/653

 CHAP. X.] CORPORATION AND OFFICERS. [§ 630. § 630. Transactions like the foregoing are fraudulent as a matter of law, and no fraud or unfair dealing need „, ' ... Transac- be proved as matter of fact by the corporation in tions order to set them aside, or compel the officers impli- a s a matter cated to account for the profits they have made. 1 It of Iaw- has been held that an express contract between directors and the corporation is voidable at the option of the latter, acting within a reasonable time ; and that no consideration of the fairness of the contract will induce a court of law or equity to enforce it against the resisting cestui que trust, though as to others it may be valid. 2 But such contracts may be ratified by the corporation either expressly, or by acquiescence for a long period and the acceptance of the benefits of the trans- actions : 3 provided the ratification or acquiescence on the part of a corporation is free and voluntary, and not that of a man whose hands are tied. case in Iowa, trustees holding lands in trust for a railroad company con- veyed some of the lands, under au- thority of the board of directors, to be reconveyed to themselves in pay- ment for their services. It was held that a person claiming such lands under a title adverse to that of the railroad company could not dispute the validity of this conveyance. Miller v. Iowa Land Co., 50 Iowa, 374. 1 Stanley v. Luse, 36 Or. 25; Green- field Savings Bank v. Simons, 133 Mass. 415; Bent v. Priest, 10 Mo. A.pp. 543; Stewart v. Lehigh Valley R. R. Co., 38 N. J. L. 505; Cook v. Berlin Woollen Mill Co., 43 Wis. 433; Duncomb ». New York, H. & N. R. R. Co., 84 N. Y. 190; Pearson v. Concord R. R. Co., 62 N. H. 537; Brewing Co. v. Planner, 44 La. Ann. 22; compare Davoue v. Fanning, 2 Johns. Ch. 252. Although there be no actual fraud or unfairness, a cor- poration may repudiate a contract entered into by its board of directors, when one of them is interested on the other side, and the corporation need not show that the influence of such director determined the action of the board. Munson v. Syracuse, etc., R. R. Co., 103 N. Y. 58. See Aberdeen Ry. Co. v. Blakie, 2 (H. L.) Eq. 1281. 2 Stewart v. Lehigh Valley R. R. Co., 38 N. J. L. 505. See, also, Little Rock and Fort Smith R'y Co. v. Page, 35 Ark. 304; Morgan v. King, 27 Colo. 539. A station agent bar- gained with his company for an ex- cursion train, not letting it be known that he wanted it for himself. Held, the company on discovering this could disaffirm the contract. Pegram v. Charlotte, etc., R. R. Co., 84 N. C. 696. 3 Kelley v. Newbury' pt Horse R. R., 141 Mass. 496; Twin-Lick Oil Co. v. Marbury, 91 U. S. 587; Louisville, etc., Railway Co. v. Carson, 151 111. 444, § 632; Town of Searcy v. Yar- nell, 47 Ark. 269; Welch v. Import- ers' Bank, 122 N. Y. 177; Battelle v. Pavement Co., 37 Minn. 89. 633