1. In an action by an attorney against a railroad company of which he was a director, to recover for professional services, the defense that by reason of plaintiff's position, and his representations to an investment company, which is the real owner of the road, he is estopped to assert his claim because it would injuriously affect the investment company, cannot be set up; the latter company not being a party.

2. Resolutions of a meeting of directors of a private corporation may be shown by the record of the proceedings, if one is kept, otherwise parol evidence is admissible to show what was resolved, and by what vote.

3. A director of a railroad company who at its request renders services as attorney, and in procuring aid notes, right of way, and in enlisting capitalists in the enterprise, is entitled to recover the reasonable value of such services, on an implied

contract.

Error to circuit court, Oakland county; J. B. MOORE, Judge.

Assumpsit by Junius Ten Eyck against the Pontiac, Oxford & Port Austin Railroad Company. Verdict and judgment for plaintiff, and defendant brings error.

Aug. C. Baldwin, for appellant. Griffin, Warner, Hunt & Berry, for appellee.

The

the construction of the road. These services were successfully performed, and a contract was entered into between defendant and an investment company, bearing date November 12, 1881. On the 20th day of December, 1881, the following resolution was passed by the board of directors: "At a meeting of the board of directors held at Oxford, county of Oakland, state of Michigan, on the 20th of December, A. D. 1881, pursuant to call of the president, the following proceedings were had, a full quorum being present: On motion, J. Ten Eyck was duly appointed to attend to the obtaining of the right of way along the whole line, and to collect in the notes given along the line in aid of the railroad. meeting then adjourned. JUNIUS TEN EYCK, Secretary." The plaintiff's counsel was permitted to prove, by oral testimony of the directors, that all of the eight directors were present at the meeting, and voted for the motion, excepting himself. Plaintiff also offered in evidence from the records kept by the corporation the following resolution, passed at a meeting of the board of directors on the 29th of May, 1882, viz.: "Resolved that the sum of $5,000 per year be paid J. Ten Eyck for his services as attorney and solicitor of this company for and during the two years last passed. The record shows a quorum present. The plaintiff was also permitted to show by parol that all of the directors were present at the meeting, and each, excepting himself, voted for the resolution. The claims for expenses paid out in the services of defendant were not seriously disputed or resisted at the trial. Testimony was given showing that nearly the entire time of plaintiff was consumed in the service of the company, and his practice as a lawyer was almost entirely given up, clients turned away, and that his services for the company were worth $5,000 annually. The jury returned a verdict for the plaintiff. The errors complained of may all be summarized under three heads: (1) The court erred in excluding from the jury all testimony relative to the investment company, and the rights acquired and now held by them from the railroad compa

CHAMPLIN, J. The plaintiff is, and for many years past has been, an attorney at law residing in the city of Pontiac, and he brought this action against defendant to recover for expenses paid, and services performed, as agent and attorney of the defendant company in securing the right of way for its road, and for obtaining aid notes, raising money, securing loans, and making contracts for the construction of its road, covering a period from September, 1881, to November, 1883. The project originally was to construct a railroad from Oxford to Port Austin, | a distance of 84 miles, and a corporation was formed for that purpose on the 23d of July, 1879, with a capital of $672,000, and seven directors. Each director subscribed to 120 shares of $100 each, and plaintiff was one of the directors. Nothing was done under this organization. Two days later the stockhold-ny. (2) In permitting parol evidence to be ers signed amended articles of association, given of the action of the board of directors by which they extended the southern termin- in the absence of any record of such action, us from Oxford to the city of Pontiac, and and in adding to what was shown by the recchanged the name of the corporation to ord as to what number of directors were at the "Pontiac, Oxford & Port Austin Rail- the meeting of the board, and that they all road Company." The capital stock was in- voted for the motion and resolution, except creased to $800,000, and the number of di-Ten Eyck, who did not vote. (3) That, berectors to eight. The articles were again ing a director of the company, he could not amended, on the 24th of September, 1881, be employed and paid for performing servby increasing the capital stock to $1,500,000, and changing the termini so as to extend it from Pontiac to Caseville. The plaintiff continued a stockholder and director in the corporation until 1884. On December 5, 1881, plaintiff was re-elected attorney for defendant company. Previous to this, and in the same year, he was employed by the board of directors to go to New York to negotiate a loan and obtain a contract for

ices for the company as attorney or otherwise, and especially would such action be illegal when applied to services already performed.

As to the first point, the error is based upon the fact, which defendant desired to show, that the investment company that built the road are the owners in fact of all the stock, property, and franchises of the Pontiac, Oxford & Port Austin Railroad Com

ter into a contract to sell a right of way to the corporation? Suppose a director is possessed of superior knowledge, skill, or ability to serve the corporation in matters not strictly within the line of his duty as a director, may it not contract with him for his services?

pany, and the corporation exists only in take part in its deliberations. The general name, for the purpose of maintaining the rule is that a majority of the members of the franchises of a corporation for the invest-board constitute a quorum for the transaction ment company's benefit, and that the claim of business, and a majority of the quorum set up is unjust and inequitable as to such have power to bind the corporation by their investment company, and, if established, vote. It does not necessarily follow that there would seriously affect their rights and prop- is impropriety in a member of the board enerty. We think the court did not err in ex- tering into contract relations with the corcluding this testimony. The investment com- poration represented by the other members of pany is not a party to this suit, and the is- the board. There may be cases where there sues sought to be raised cannot be properly may be manifest propriety in doing so. Suptried in this action. If plaintiff's position as pose the line of a railroad is laid across land a director, and what he has done and repre-owned by one of the directors may be not ensented to the investment company, estops him from asserting any claim against the corporation, such estoppel cannot be set up as a defense in an action at law against the corporation by it or the investment company. No notice is taken in the brief of the plaintiff of the second point, and merely a passing It is true that contracts entered into benotice in the brief of defendant, and no au- tween agents of the corporation occupying thority is cited in support of the proposition. positions of trust and confidence and a corWhat is resolved upon at a meeting of a board poration will always be scrutinized with jealof directors of a private corporation may be ous care by courts, to see that no advantage proven by the record of the proceedings of is taken of the corporation or the rights and the board, if one is kept and the proceedings interests of its stockholders jeopardized, but it entered, but if a record is not kept, or the cannot be said that contracts fairly entered proceedings are not recorded, parol evidence into, and honestly executed, where no one is is admissible to show what was resolved defrauded or overreached, are invalid. In upon, and by what vote it was carried. Novel- this case the circumstances are free from susty Works v. Macalister, 40 Mich. 84. The picion. The corporation contracted with him rule is different with respect to municipal | for his services as attorney, and also in procorporations, when the law requires records curing aid notes, rights of way, and working of their official action to be kept. Stevenson up an interest in the construction of the road v. Bay City, 26 Mich. 44; Hall v. People, 21

Mich. 456.

in the communities through which it was projected, in order to secure aid in its conThe third point relied upon is one upon struction by donations and subscriptions, and which there is an apparent conflict of author- also in enlisting capitalists in the enterprise. ity. The directors of a corporation are its These were services which were not embraced agents. The entire management of corporate in the ordinary duties of a director of the affairs is committed to their charge, upon the company. They were valuable to the cortrust and confidence that they shall be cared poration, and were such as to which they for and managed within the limits of the had a right to agree upon the compensation powers conferred by law upon the corpora- to be paid; and if his services were engaged tion, and for the common benefit of the stock- for the above purposes, and they were perholders. They are required to act in the ut- formed, there arose an implied agreement that most good faith, and in accepting the office they should pay what such services were reathey impliedly undertake to give to the enter-sonably worth, and this the plaintiff proved prise the benefit of their best care and judg- upon the trial. The principle laid down in ment, and exercise the powers conferred sole- the line of authorities cited by the learned ly in the interest of the corporation. They counsel for defendant has not been followed have no right to represent the corporation, in any transaction in which they are personally interested, in obtaining an advantage at the expense of the company they represent. 1 Mor. Priv. Corp. §517. But the rule is not an arbitrary one. It is founded on reason, and should not be applied without regard to the circumstances of the case. Although it has been held by some courts that a director cannot enter into a valid contract with the corporation of which he is agent, although the corporation is represented in the transaction by a majority of the board, yet the decided weight of authority and of reason supports the doctrine that such a contract would be valid. Id. § 527, and cases cited in note 3. It is not necessary to the binding action of a board of directors that each member should

in this state; but the contrary doctrine was asserted in Niles v. Muzzy, 33 Mich. 61, which is in consonance with the views above expressed. Had the board of directors engaged any other person to perform the services rendered by the plaintiff, no question could have been made about their liability to pay therefor. The services were performed by the plaintiff at the request of the board of directors, and the law implies a promise to pay what they are reasonably worth, so far as they have not been fixed by the resolution of the board. Detroit v. Redfield, 19 Mich. 383. The plaintiff introduced testimony tending to show that his services were reasonably worth at the rate of $5,000 a year for the entire time claimed by him. There is another consideration which leads to the same

not be referred to, as the same is not material to the determination of the questions before us. The circuit judge found that Hoffman filed his claim in the probate court August 26, 1887. He had never presented any claim in that court, nor taken any proceedings before it, prior to that time. April 25, 1887, Churchill petitioned the court that his own claims, and that of other persons, against the estate, might be passed upon, and a time and place fixed for the hear

conclusion in this case. During the time for | osition of one James F. Cross, which need which the plaintiff claims pay for services, the members of the board of directors were the only stockholders in the corporation. The resolution and motion above referred to as appearing in the records of the corporation had not only the sanction of the board of directors, but of each individual stockholder of the corporation. They could not be heard to complain as stockholders of their own action as directors, and none of them have complained. We are all of opinion that there is no error in the record, and that the judg-ing of the same. The probate judge therement should be affirmed.

upon made an order granting such petition, and that all creditors should be allowed six

SHERWOOD, C. J., did not sit. The other months from and after April 26, 1887, in justices concurred.

HOFFMAN v. CHURCHILL.

(Supreme Court of Michigan. Feb. 15, 1889.)

APPEAL LIMITATION OF ACTIONS.

1. Where, on trial, it is stipulated that either party may read in evidence the testimony of any witnesses he pleases, as such testimony is printed for use on appeal in another designated case, but the record on appeal does not show what portion, if any, of such testimony was read, objections that the findings of the trial court are not supported by

the evidence cannot be considered.

2. Where a claim against a decedent's estate is allowed in the probate court, and the administrator appeals to the circuit court, assigning as a reason for such appeal that the claim is on a note on which the claimant had previously obtained judgment against the decedent, the issue is made suffciently clear; no formal pleadings being necessary

in such a case.

3. The statute of limitations of Michigan does not run on a promissory note during the time the maker resides out of the state, where he does so

of his own accord.

Error to circuit court, Berrien county; O'HARA, Judge.

Action by Charles Hoffman against Owen Churchill, administrator of the estate of Chauncey G. Pope, deceased. Judgment for plaintiff, and defendant brings error.

Edward Bacon, for appellant. O. W. Coolidge and A. A. Worthington, for appellee.

which to present their claims. The court found that Hoffman loaned this money to Pope in good faith, and that Pope was "neither an imbecile nor a non compos when he executed the note," and that he received the money from Hoffman. That Pope left the state October 20, 1880, and did not return until August 1, 1882; and that while age and reverses had made an inroad upon his mental faculties, his removal from the state was not the act of one without reason. He knew what he was doing, and why it was done, and deliberately left the state, and took up

his abode elsewhere. October 18, 1880, Hoffman filed a declaration upon this note in the circuit court for Berrien county. No service was had upon Pope of this declaration, and the common-rule book of the circuit court shows that no entry of default was ever made, but a judgment was entered in the suit against Pope, April 20, 1881, for $607.33 damages. In the judgment record, immediately preceding the usual recital of assessment of damages, are the following words: "In this cause, the defendant having, after notice of trial given, and during the present term of this court, withdrawn his plea by him heretofore pleaded." Then follows the assessment of damages, and usual completion of judgment record. The court finds that no plea was ever entered by Pore, or in his behalf. The conclusions of law were MORSE, J. June 15, 1878, Hoffman loaned that-First. There was no valid judgment to Chauncey G. Pope the sum of $500, and in Hoffman v. Pope. Second. The claimant received his promissory note therefor, due in had until March, 1888, before the statutes of two years, with interest at 8 per cent. per limitations would become a bar, and his annum. The interest for the first year was claim was filed in time. Third. The allowpaid. Pope died on the 20th day of October, ance of the probate court must be changed. 1884. Owen Churchill was appointed his ad- That on the 7th of April, 1888, (the date of ministrator. Pope executed a will in Octo- allowance by probate court,) there was due ber, 1880, which the judge of probate of Ber-claimant the sum of $852.41, instead of rien county refused to admit to probate. Hoffman, as appears from the record of the probate court, filed a claim against Pope's estate, which was heard on the 7th day of April, 1888, and allowed at the sum of $945.49. Churchill, as administrator, appealed from this allowance to the circuit court. The matter was tried in that court before the judge thereof, without a jury, who made findings of fact and law, and allowed the claim at the sum of $873.61. The only oral evidence set forth in the record is the dep

$945.49, and that there was then due the claimant the sum of $873.61, and the same was ordered to be certified to the probate court. It was stipulated upon the trial that either party might "read in evidence the testimony of any witnesses he pleased to select, as the same is printed for use in the supreme court of Michigan in the chancery suit wherein Chauncey G. Pope, by said Owen Churchill, his guardian, was originally compiainant, and Stephen Scott, George R. Scott, and Nancy Yaw were defendants.”

There is, however, no showing in the record | what portion of the testimony contained in this record, if any, was read, submitted to, or considered by the circuit judge in this case. We therefore cannot consider any of the objections that the testimony in the case does not support the findings of the circuit judge as to matters of fact.

PER CURIAM. Freeman Pierce, a lad about 11 years old, was convicted by a justice of the peace in the county of Clare of the larceny of a mouth organ, valued at 25 cents, and was sentenced to the reform school at Lansing until he should arrive at the age of 17 years. This sentence, it appears, received the sanction of the agent of the board of corThe conclusions of law upon the facts as rections and charities. The judge of probate found by the circuit judge cannot be disputed. of the county of Clare also indorsed upon the Pope received the money upon a loan, and commitment papers, as appears by the return gave his note for it, which did not become to the writ, the following statement: "I, due until June 15, 1880. He was of sound William W. Green, judge of probate in and mind when he gave the note, and the con- for Clare county, do hereby approve of the sideration for it was a valid one. He was proceedings taken and had before Samuel F. absent and resided out of this state of his Fine, a justice of the peace of Grant townown free will and accord, as the circuit judge ship, in said county, in the cases of the Peofinds, from October 20, 1880, to August 1, ple vs. William Stephens, Willie Hursch, 1882. The statute of limitations did not run and Freeman Pierce, commitments hereto during this time. When Pope left the state, attached. Dated, Harrison, December 19th, the statute had run a period of four months 1888. WILLIAM W. GREEN, Judge of Proand five days. Pope died on the 20th day of bate." Held this certificate is insufficient October, 1884. The statute had then run to warrant the incarceration of the respondonly four years, four months, and five days. ent. In these cases it should appear upon Taking out of this the time Pope was resid- the papers directing the reception of the reing out of the state, the note would not out-spondent at the reform school that the eslaw until March 25, 1888. The claim was sential requirements of the statute for his therefore presented to the probate court in admission have been complied with. This time. does not appear by the return in the case of this boy. It does not appear that the judge of probate was present at the trial of respondent, or that the testimony, if any was taken, ever came under the examination of the judge, or, in the language of the statute, that he reviewed "the proceedings and testimony taken or had on the trial." This must appear in his certificate. It is of the utmost importance, both to the people and the respondent, that all of the testimony and the circumstances surrounding each of these cases should be laid before the judge, whose duty it is to review the case, and see to it that no boy, whose case presents doubtful criminality or turpitude not reaching beyond the irregularities and sports of youth, shail be subjected to the restraints imposed in the reform school. How. St. § 9817. The return of respondent shows the commitment defective in the particulars pointed out, and the

It is claimed that there was not a sufficient declaration in the circuit court. We think the issue, by the return of the probate judge on appeal, and the specific reasons filed by the administrator for such appeal, was made sufficiently clear in the circuit court, where no formal pleadings are necessary. White v. Allen, 18 Mich. 194; Comstock v. Smith, 26 Mich. 322. It appears from the reasons assigned for the appeal, and also by the request of the defense for findings, that the claim of Hoffman was founded on the note, which had been the basis for the erroneous judgment against Pope in the circuit court. The judgment is affirmed with costs. The other justices concurred.

In re PIERCE.

(Supreme Court of Michigan. Feb. 15, 1889.) boy must be discharged.

REFORMATORIES-COMMITMENT.

The judge of probate indorsed upon papers committing respondent to the reform school the following statement: "I, William W Green, judge of probate in and for Clare county, do hereby approve of the proceedings taken and had before Samuel F. Fine, a justice of the peace of Grant township, in said county, in the cases of the People vs. William Stephens, Willie Hursch, and Freeman Pierce, commitments hereto attached." Held, that this certificate was insufficient to warrant the

incarceration of the respondent, it not appearing that the probate judge was present at the trial of respondent, or that the testimony, if any was taken, ever came under the examination of the judge; How. St. Mich. § 9817, requiring the pro. bate judge in such cases to review "the proceedings and testimony taken or had on the trial. "

Application on behalf of Freeman Pierce for a writ of habeas corpus.

C. W. Perry, for petitioner. S. V. R. Trowbridge, for respondent.

PEOPLE v. Soule.

(Supreme Court of Michigan. Feb. 20, 1889.) INTOXICATING LIQUORS-LICENSE TAX-INDICT

MENT.

1. Act No. 313, Pub. Acts Mich. 1887, § 2, provides that retail dealers include all persons who sell liquors by the drink, and in quantities of three gallons or less, or one dozen quart bottles or less, at any one time, to any person or persons. Held, that a club which distributes liquors among its members, receiving pay for them as they are distributed by the glass, the proceeds going into the treasury of the club, to be used in purchasing other liquors or in paying expenses, is taxable as a retail dealer.

said act, providing that all persons violating the 2. One who is liable as agent under section 24 of act, whether as owner, or as clerk, agent, or serv

W. J. Stuart, Pros. Atty., (Stuart, Knappen & Van Arman, of counsel,) for the Peo-club, they paying for it as they receive it, is ple. Eggleston & McBride, for defendant.