Mather v. Eureka Mower Co.

It is well settled that a director of a corporation is not entitled to compensation for services performed by him, as such, without the aid of a pre-existing provision expressly giving the fight to it. They are the trustees for the stockholders and, as such, have the management of the corporate affairs. And to permit them to assert claims for services performed and then support them by resolution, would enable the directors to unduly appropriate the fruits of corporate enterprise. It would clearly be contrary to sound policy. The same reason may not exist for the application of the rule to a stockholder, not a director, who has become an officer of the corporation. But he has a pecuniary interest in its management and business. And when he assumes the duties of the office and performs them without some agreement or provision for compensation, the presumption, in view of his relation and interest, may properly arise that he performs the official services gratuitously. This proposition cannot be made dependent upon the proportionate amount of the stock held by him. If the officer expects to have compensation and the corporation intends to pay him for his official services, it may easily be provided for by resolution or agreement before he enters upon his services. This is at all events a salutary rule, as applied to an officer who is a stockholder of the corporation. Loan Assn. v. Stonemetz, 29 Pa. St., 534 ; Kilpatrick v. Penrose Ferry Bridge Co., 49 id., 118; Smith v. Putnam, 61 N. H., 632 ; Gill v. N. Y. Cab Co., 48 Hun, 524 ; 16 N. Y. State Rep., 236; Barril v. Calendar I. & W. Co., 50 Hun, 257 ; 19 N. Y. State Rep., 877. In such case there may be presumed to exist a reason in the fact of such relation and interest, to induce him to assume and exercise the duties of the trust, not dependent upon compensation for services when nothing appears to the contrary. The plaintiff had the relation of stockholder, and in addition to his interest as such in the corporation he had a further interest as banker in having the benefit, such as it might be, of doing the banking business which the company might furnish.

In view of those considerations and the further fact that he accepted the office and performed its duties without any express understanding that he should have compensation, the referee was permitted to conclude, as he did, that the plaintiff accepted the office of treasurer without any view to compensation, and performed the services gratuitously. The conflict of evidence bearing upon that subject was disposed of in the court below, and can-have no consideration on this review.

In Smith v. Long Island R. R. Co., the plaintiff, who performed the duties of secretary of the defendant, was neither a stockholder or director of the defendant, and, as the court there remarked, stood in no relation to the company which made it his interest to serve it without compensation.

In the present case several exceptions were taken to the reception of evidence. After the defendant had declined to furnish the books and papers called for by the notice of the plaintiff to produce them, the defendant could not properly be permitted to introduce them as evidence in its own behalf to meet the secondary-evidence of the plaintiff, as to their contents, or to give oral evi

clence to that effect for such purpose. Bogart v. Brown, 5 Pick., 18 ; Tyng v. U. S., etc., Co., 1 Hun, 161 . The evidence given by the defendant having relation to what appeared in the books and papers embraced in the notice to produce, did not tend to contradict evidence on the part of the plaintiff in any material respect, and no harm could have in any manner resulted from it to the plaintiff. All the exceptions have been carefully examined, and none of them seem to point to any error prejudicial to the plaintiff.

The judgment should be affirmed. *

All concur; Yann, J., in result; except Follett, Oh. J., not sitting.