Webb, 24 Minn. 292; Davis v. Rock Creek etc. Co. 55 Cal. 359; 36 Am. Rep. 4. C Palmer v. Nassau Bank, 78 Ill. 380.

2 European etc. R. R. Co. v. Poor, 59 Me. 277; Blair Town Lot Co. v. Walker, 50 Iowa, 376; Taylor on Corporations (2d ed. 1889), § 619.

3 Curtis v. Leavitt, 15 N. Y. 10, 44; Little Rock etc. R'y Co. v. Page, 35 Ark. 304, Stewart v. Lehigh Valley R. R. Co. 33 N. J. 505; Ryan v. Leavenworth etc. R. R. Co. 21 Kan. 365; High on Receivers, §§ 3:6, 615.

4 Buffalo etc. R. R. Co. v. Lampson, 47 Barb. 533; Greenfield Savings Barks v. Simors, 133 Mass. 415; Parker v. Nickerson, 112 Mass. 195; Parker v. McKenna, Law R. 10 Ch. 96; Madrid Bank v. Pelly, Law R. 7 Eq 442; Gaskill v. Chambers, 26 Beav. 360; York etc. R'y Co. v. Hudson, 16 Dev. 485.

5 Flagan v. Great Western R'y Co. 7 Eq. 116. See Aberdeen R'y Co. 1. lae, 1 Macq. 431; Browne & Theobald's Railway Law, 102.

6 Great Luxembourg R'y Co. v. Magnay, 25 Beav. 586; Taylor on Corporations (d ed. 189), § 631.

7 Tin Lick Oil Co. v. Marbury, 91 U. S. 587; Stewart v. Lehigh Valley R. R. Co. 38 N. J. 525.

§ 481. Directors to be restored to their original positions when the transaction is set aside. Transactions between a corporation and its directors which are attacked upon the ground of fraud on the part of the directors, actual or constructive, cannot be set aside unless the directors be restored to their original position. Thus it is held, in a recent case, that a transaction by which a trustee acquires the trust property is not void, but merely voidable upon reimbursement of the sum paid by him; and that hence the execution creditors of a railway company, which has suspended operations, cannot avoid a purchase of port of the construction material by the directors, and under execution against the company deprive them of their possession.1 So also, a fraudulent purchase of corporate property by a director at a foreclo-ure sale, can be set aside only upon repayment of the purchase price.2 In another late case, where directors, by oral agreement with their corporation, had advanced money to redeem corporate property from execution, and taken the assignment

of the certificate and marshal's deed in their own names to secure their advances as a preferred debt of the corporation, and had thereafter taken possession and worked the property, it was decided that the advances should be regarded as a debt due the directors, and the marshal's deed as a mortgage imposing a constructive trust on the directors, who should, however, be allowed the value of such of the improvements made by them as had increased the value of the property, in add tion to the actual working expenses incurred.”

1 Corne'l v. Clark, 104 N. Y. 451.

2 Saltmarsh v. Spaulding, 147 Mass. 224; 4 R'y & Corp. Law J. 151. 3 Wasatch etc. Co. v. Jennings (Utah, 1888), 16 Pac. Rep. 339.

§ 482. Of the president.—In New York, the presidents of railway companies are elected by the directors from their own number. In the absence of anything in the act of incorporation bestowing special power on the president, he has from his mere official station no more control over the corporate property and funds than any other director." The president has by virtue of his office but little authority to bind the corporation except upon such contracts as come plainly within its ordinary routine business.3 He has no authority merely by virtue of his office to let a contract for the construction of the road.* He cannot authorize a director to sell the bonds of the company;5 nor appoint an agent to sell its lands; nor can he himself purchase or sell lands in behalf of the company." Although of course, under authority from the directors, the president may convey the property of the company. He cannot, without express authority, mort

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gage the property of the company. Not even where a person owns nearly all the stock of a company, and is its president, superintendent and general manager, can he in that capacity mo. tgage the corporate property.1

10

1 N. Y. Laws of 1850, ch. 140, § 6.

2 Titus v. Cairo etc. R. R. Co. 37 N. J. 98, 102; Walworth County Bank v. Farmers' Loan & Trust Co. 14 Wis. 325. Contra, Smith v. Smith, t2 Ill. 43, 496.

3 Taylor on Corporations, § 235; Risley v. Indianapolis etc. R. R. Co. 1 Hun, 202; Hodges v. Rutland etc. R. R. Co. 29 Vt. 220.

4 Griffith v. Chicago etc. R. R. Co. 74 Iowa, 85.

9 Leese v. Isthmus Transit R'y Co. 6 Or. 125; 25 Am. Rep. 506.

10 Stow v. Wise, 1 Conn. 214; 18 Am. Dec. 99; Chicago & N. W. R. R. Co. v. Jones, 24 Wis. 388.

§ 483. The same subject, continued.—The authority of the president may, however, be enlarged by custom,' and without express authority he may do any acts necessarily incident to others which he has been authorized to perform." Under authority to contract for the corporation and to buy and sell material, it has been held that the president and superintendent may release a purchaser who has become unable to meet his payments, and may substitute in place of him a third party. The president of a large corporation likely to be involved in law-suits, may defend prosecutions against it, may petition for a writ of error, and may engage or discharge counsel, in the absence of any restraining acts on the part of the directors, and when his duties are not defined by the constitution and by-laws of the corporation.* But it is not within the power of a president of a

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corporation ex officio to execute a bond and warrant of attorney for the entering of a judgment against the corporation. There is nothing to prevent the president of a corporation from acting as its secretary also at a meeting of its board of trustees. When the president dies, his place may be taken by the vice-president, although the office of vice-president was created by the directors merely under a general provision in the by-laws empowering them to create other officers."

1 Western R. R. Co. v. Bayne, 11 Hun, 166; Northern Central R'y Co. v. Bastian, 15 Md. 494.

2 Northern Central R'y Co. v. Bastian, 15 Md. 494.

3 Indianapolis Rolling Mill Co. v. St. Louis etc. R. R. Co. 26 Fed. Rep. 140.

4 Coleman v. West Virginia Oil etc. Co. 25 W. Va. 148,

5 Stokes v. New Jersey Pottery Co. 46 N. J. 237.

6 Budd v. Walla Walla etc. Co. 2 Wash. 317.

7 Coleman v. West Virginia Oil etc. Co. 25 W. Va. 148.

§ 484. Of the compensation of directors and the president.—Directors are not ordinarily entitled to compensation for their services either by way of salary or a quantum meruit, unless by special provision in the charter or by-laws adopted before the rendition of the services. A subsequent vote to pay therefor would be without consideration; and, of course, the board of directors cannot legally vote to pay themselves anything by way of compensation. Neither can a president of a company recover for his services except under the same circumstances and conditions as an ordinary director. But a president or the directors of a company may recover a quantum meruit for services rendered the corporation outside of the regular line of their employment; although, in a late case in New

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York, it was held that a director, who receives a salary as vice-president, cannot, in the absence of a special agreement, recover compensation for serv ices outside of his duties as director and vice-pres. ident 5 In another recent case in New York, where the president of a company had served for years, without salary, and had also advanced the company considerable sums of money, which had not been repaid him, it was held to be within the power of the directors to issue to him the shares of the company by way of payment for his services and in repayment of the advances."

1 Loan Assoc. v. Stonemetz, 29 Pa. St. 534; Maux Ferry etc. Co. v. Branegan, 40 Ind 361; Illinois Linen Co. v. Hough, 91 Ill. 63; American Central R'y Co. v. Miles, 52 Ill. 174; Lafayette etc. R'y Co. v. Cheeney, 87 Ill. 446; S. C. 68 Ill. 570; Citizens' National Bank v. Elliott, 55 Iowa, 104. See Carr v. Chartiers Coal Co. 25 Pa. St. 337. Cf. cases cited infra, n, 2, and Barstow v. City R. R. Co. 42 Cal. 465,

2 Butts v. Wood, 37 N. Y. 317; Blatchford v. Rose, 54 Barb. 42; Gardner v. Butler, 30 N. J. Eq. 702, 721; Maux Ferry etc. Co. v. Branegan, 40 Ind. 361; State v. People's etc. Assoc. 42 Ohio St. 579. Cf. Kelsey v. Sargent, 40 Hun, 150, where it was held that corporate officers have no authority to determine upon their own salaries.

3 Santa Clara Manuf. Assoc. v. Meredith, 49 Md. 389; 33 Am. Rep. 264; Sawyer v. Pawners' Bank, 6 Allen, 207; Holland v. Lewiston Falls Bank, 52 Me. 564; Kilpatrick v. Penrose etc. Co. 49 Pa. St. 118; 88 Am. Dec. 497: Merrick v. Peru Coal Co. 61 Ill. 472; Gridley v. Lafayette etc. R'y Co. 71 Ill. 200; Emporium Real Estate Co. v. Emrie, 54 Ill. 345; Citizens' National Bank v. Elliott, 55 Iowa, 104; 39 Am. Rep. 167; Taylor on Corporations, § 647.

4 Jackson v. New York Central R. R. Co. 2 Thomp. & C. 653; Shackelford v. New Orleans etc. R. R. Co. 37 Miss. 202; New Orleans etc. Packet Co. v. Brown, 36 La. An. 138; 51 Am. Rep. 5; Santa Clara Manuf. Assoc. v. Meredith, 49 Md. 389; 33 Am Rep. 264; Gardner v. Butler, 30 N. J. Eq. 702. 721; Cheeney v. Lafayette etc. R. R. Co. 68 Ill. 570; 18 Am. Rep. 584; S. C. 87 Ill. 446; Rockford etc. R. R. Co. v. Sage, 65 III 328; 16 Am. Rep. 587; Citizens' National Bank v. Elliott, 55 Iowa, 104; 39 Am. Rep. 167; Rogers v. Hastings etc. R'y Co. 22 Minn. 25; Missouri River R. R. Co. v. Richards, 8 Kan. 101. Contra, Levisee v. Shreveport City R. R. Co. 27 La. An. 641; Pew v. Gloucester National Bank, 130 Mass. 331.

5 Gill v. New York Cab Co. (1888), 1 N. Y. 202.

6 Reed v. Hayt (N. Y. 1888), 4 R'y. & Corp. Law J. 135, affirming 8. C. 51 N. Y. Super. Ct. 121.

§ 485. Of the compensation of other officers and agonts.-Officers and agents of a corporation,