DeBardeleben v. Bessemer Land & Improvement Co.

SHARPE, J. Inasmuch as the motion to dissolve the injunction is based solely on an assumed Avant of equity in the cross-bill, the averments of the cross-bill are to be taken as true. From those averments it appears among other things that for some time before taking the leases in question DeBardeleben vvas the president of the defendant corporation and had in its behalf and with its laborers, been prospecting for and developing coal lands including those afterAvards described in the leases; that in developing this coal and in making trips to New York and other places to secure leases on these particular lands for the sole benefit of the corporation, much money was expended, all of Avhich was paid by the corporation under the direction of its president, DeBardeleben; that when doing this work and making this expenditure he obtained the approval of individual members of the corporation’s directory, and stated to them he was arranging to acquire the lands by lease for the benefit of the defendant corporation and never suggested to them that he wanted to acquire any interest in the lands for himself. In this connection the [632] cross bill avers “that complainant fraudulently inserted his name in these leases without the consent or knowledge of this defendant.” Under the facts and circumstances so disclosed, in the cross bill, whatever benefit was obtained from the work done and money expended in ascertaining the character and resources of the land and the negotiations had for its acquisition, accrued to and belonged to the corporation. Though that benefit did not prior to the agreement for leasing, amount to an enforceable interest in the lands, it did exist in the form of an expectancy, practical of realization, and attended with an advantage valuable in some degree proportionate to the cost of obtaining the same. This valuable expectancy was so far a propertv right as to pass under and become subject to the trust attaching to DeBardeleben as an officer and agent of the corporation, and that trust disqualified him to acquire any interest in the lands to the detriment of that which had been acquired by the corporation in the manner stated. A decision, which, though based on somewhat different facts, tends to support this conclusion, was made by this court in Lagarde v. Anniston, etc. Co., 126 Ala. 496. See, also, Cook on Corporations, § 660; 3 Thompson on Corporations, § 4073; Robinson v. Jewett, 116 N. Y. 40. A principle which of itself would authorize relief on the case made by the cross bill, is stated in Lagarde v. Anniston, etc. Co., as follows: “Directors and other govern ins members of a corporation are so far agents of the corporation that in their dealings respecting corporate interests, they are subject to the rules which apply generally to persons standing in fiduciary relations and which forbid such persons to secure an advantage for themselves which fidelity to the trust reposed in them would carry to others whose interests they ought to represent. It is a breach of their fiduciary obligations which equity will not tolerate for such officers in antagonism to the corporate interest to oust the corporation from beneficial property rights which ought to be preserved to it by acquiring the property for themselves. Derelictions of this kind are treated as a fraud on the [633] corporation out of which equity will raise a constructive trust in its favor.” In application of this principle a trust may be established in the absence of any agreement therefor, in writing or parol. What we have said will suffice to show the decree overruling the motion to dissolve was not erroneous and it is not, for the purpose of this appeal, necessary to consider that phase of the bill which seeks relief upon the theory of estoppel. The decree overruling the demurrer to the cross"bill not having been appealed from is not before us for review, and, therefore, the assignment of error purporting to be based thereon is not considered. Affirmed.