R. T. Davis Mill Co. v. Bennett

Ellison, J. This action is to recover from defendant eight hundred and thirty dollars, charged to have, been illegally taken from plaintiff and converted to his own use. The facts are substantially as follows: Defendant was plaintiff’s secretary from 1885 till August, 1887. That he was originally employed at a salary of one hundred and twenty-five dollars per month. That in October, 1886, he was also elected to the position of director and treasurer of the corporation. That at the meeting of the directors in this month, the question of salaries was laid over till next meeting which was held February 7, 1887. At this meeting the question of salaries coming up, the following proceedings were had: Defendant’s salary was fixed at twenty-five hundred dollars, three directors voting; two for the salary and one against it. Those voting for it were Fred Hax and the defendant himself; R. T. Davis voting no. The president John P. Hax did not vote, according to the record, that is, his name does not appear at all, either as voting or not voting. It thus appears that the proposition was carried by defendant’s vote. His vote for his own salary was manifestly illegal and did not have the effect of adopting the resolution. Being an officer of the corporation and owing to it the duty of protecting its interests, he could not act for himself, while occupying that relation to the corporation. His duty to the corporation and his self interest were two masters whom he could not serve at the same time. Ward v. Davidson, 89 Mo. 454. But the trial court permitted defendant to offer testimony tending to show that while the record only [464] shows -that three voted on the proposition, that in point of fact John P. Hax voted on the resolution and was not recorded. We think this ought not to have been allowed. It is true that it is in general terms held that the acts of a corporation may be shown like the acts of an individual, but this holding is, generally at least, where there is no record made'or one made which bears its incompleteness on its face or where there is fraud, Oversight, omission or mistake shown. None of these things appear here and we think the general rule as to the record of the proceedings of bodies of this sort should prevail. See Hawkshaw v. Supreme Lodge, 24 Cent. Law J. 129. In this connection, it is well to bear in mind that the record of the vote in one sense shows that John P. Hax did not vote. It purports to give the vote in detail as it occurred, and he does not appear as voting. This record was made up by the defendant as secretary. Nor do we see anything in the cause which can be rightfully held as a ratification of the proceedings had concerning the secretary on February 7, 1887. The approval of the minutes of that meeting at the succeeding meeting was simply an assertion that the secretary had properly recorded them; among other things, that he had properly omitted John P. Hax from those voting. It could not well be held that the endorsement of the minutes of a previous meeting, as being correct, legalized the invalid acts of such meeting. We do not consider that the fact that the outgoing president knew the defendant drew the check payable to himself for the sum sued for had the effect of a ratification nor does it work an estoppel. Our opinion is that, on the case presented plaintiff should have had a verdict and judgment for the sum received by defendant, in excess of his salary, at the rate of fifteen hundred dollars, the sum he was receiving prior to the attempted increase. The judgment will be reversed and the cause remanded. All concur.