Hoffman v. Reichert

Hr. Justice Craig delivered the opinion of the Court; We think it is a plain proposition, and one, too, which will ■not be controverted, that if Hoffman was in the bona fide, .peaceable possession of the coal mine in his own right, and while so in possession the defendant approached the employes ■of Hoffman and induced them to surrender possession to him, and defendant thus entered into the possession of the mitie, the defendant’s possession would be unlawful and could not be maintained. The case, however, made by the record, stands .upon a different basis, and does not fall within the rule indicated. As we understand the record, the possession of the mine never passed out of the Freeburg Coal Company. At the time the mine took fire, in 1884, it had been in the possession and occupancy of the coal company for several years, and that possession was never abandoned or surrendered to any person. It is true that the mine had been closed, but this was done for the purpose of extinguishing the fire, and for no other purpose. In April, 1887, Hoffman, and Reichert, president of the coal company, took possession and commenced making arrangements to remove the water which had accumulated in the mine. At that time Hoffman was still a director and'treasurer of the coal company, and whatever he and the president of the company Aid in resuming the possession of the property, in the absence of any act or declaration to the contrary, it will be presumed they did for and on behalf of the company, and that the possession thus acquired was the possession of the coal company. It is true that the leasehold interest of the company had been sold on execution and purchased by Hoffman; but the time of redemption had not expired, and he had no title to the property, and had no more right to take possession of the property in his own right than a stranger had.. Whatever Hoffman did in repairing the mine and placing it in condition so that it could be successfully operated, must be regarded as having been done for and on behalf of the coal company, and in an appropriate action he would be entitled to recover for all moneys and outlays expended in placing the mine in proper condition for operation. If Hoffman, before taking possession of the property, had resigned as director and treasurer, and notified the company that he would no longer act for it, a different question would be presented. But such was not the case. In speaking in regard to the duties of directors of a corporation, Morawetz on Private Corporations, (vol. 1, sec. 511,) says: “The directors or trustees of a corporation, in accepting their appointment to office, impliedly undertake to give the company the benefit of their best care and judgment, and to use the powers conferred upon them solely in the interest of the corporation. They have no right, under ariy circumstances, to use their official positions for their own benefit or the benefit of any one except the corporation itself. It is for this reason that the directors have no authority to represent the corporation in any transaction in which they are personally interested, in obtaining an advantage at the expense of' the company. The corporation would not have the benefit of their disinterested judgment under these circumstances, as self-interest would prompt them to prefer their own advantage to that of the company.” The same rule is announced in Gilman, Clinton and Springfield Railroad Co. v. Kelly, 77 Ill. 434. If the coal company was indebted to Hoffman and refused to pay him, he, no doubt, had the right to resort to the courts- and obtain a judgment, and after obtaining judgment he was-at liberty to levy on the property of the corporation and sell the same, in like manner as other creditors. But he had no right to avail of his position as an officer in the corporation-to obtain possession of the corporate property, and then use-the advantage thus gained for his own private interest. There was a trust relation existing between him and the corporation» He was a trustee, and the possession he acquired was that of the cestui que trust. The possession of the mine, therefore, held by Hoffman, was the possession of the corporation, which it might resume at any time it saw proper. What has been said disposes of the questions raised on the instructions. The judgment of the Appellate Court will be affirmed. Judgment affirmed. Mr. Justice Phillips, having heard this cause in the Appellate Court, took no part in the decision'here.