Haas v. Universal Phonograph & Record Co.

Appellate Terms of the Supreme Court of New York

Haas v. Universal Phonograph & Record Co.

75 Misc. 119, 132 N.Y.S. 767

CourtAppellate Terms of the Supreme Court of New York

DecidedJanuary 15, 1912

StatusPublished

This text of 75 Misc. 119 (Haas v. Universal Phonograph & Record Co.) is published on Counsel Stack Legal Research, covering Appellate Terms of the Supreme Court of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Haas v. Universal Phonograph & Record Co., 75 Misc. 119, 132 N.Y.S. 767 (N.Y. Ct. App. 1912).

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Opinion

Lehman, J.

The plaintiff has recovered a judgment against the defendant corporation for salary voted to him by the directors of the corporation. It appears that the plaintiff was vice-president of the defendant 'corporation. It appears that, on the first day of May, the three directors of the cor[120]*120poration met and unanimously voted thpmselves a salary of fifty dollars a month, each, “ for services actually to he rendered to this company.” It seems to me that a mere statement of thése facts shows that the resolution created no enforceable contract with the defendant. “ The relation of an officer of a corporation to it is fiduciary, and he must at all times act in good faith and unselfishly towards the corporation. The relation is such that an officer of a corporation cannot malee an agreement with himself acting o.n the one part individually and for his own benefit, and on the other part in his fiduciary capacity as an officer of the corporation. Jacobson v. Brooklyn Lumber Co., 184 N. Y. 152, 162.

The plaintiff relies for authority upon the cases of Keans v. New York & College Point Ferry Co., 17 Misc. Rep. 272, and Bagley v. Carthage, W. & S. H. R. Co., 25 App. Div. 475; affd., 165 N. Y. 179. I fail to see, however, how these cases support the view that the plaintiff has any cause of action. In the case of Bagley v. Carthage, W. & S. H. R. Co., the president of the corporation had rendered services to the corporation outside of the duties of his office; in this respect and in no other respect does that case resemble the one now under consideration. These services were rendered under an understanding with the directors, not reduced to a vote, that the president was to receive reasonable compensation. The president did not make the implied agreenient with himself; but he represented himself only, and the other directors represented the company. There was no fraud in the proceedings, and the directors who made the implied contract had no personal interest in the contract and honestly represented the interests of the corporation. The corporation, through its directors, having accepted the services of the officer outside of his official duties and impliedly agreed to pay their reasonable value, was held liable in that action.

Here, however, the plaintiff sues upon an express promise, made solely by officers who attempted to contract with themselves; there is no proof of the value of the services, and they were apparently accepted by the corporation acting only through the same officers. The plaintiff cannot, therefore, recover either under an express or implied contract. " In the [121]*121case of Keans v. New York & College Point Ferry Co., 17 Misc. Rep. 272, a director claimed under a resolution on which he had voted. The court held that, since the plaintiff’s vote was unnecessary for the passage of the resolution, the resolution constituted an enforceable contract until the corporation pleaded and proved fraud. In the case before us, however, the corporation has both pleaded and proved that the contract was void; and the judgment must be reversed and a new trial ordered, with cosits to' appellant to abide the event.

Seabuby and Page, JJ., concur.

Judgment reversed and new trial ordered, with costs to appellant to abide event.

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Lehman, J.

The plaintiff has recovered a judgment against the defendant corporation for salary voted to him by the directors of the corporation. It appears that the plaintiff was vice-president of the defendant 'corporation. It appears that, on the first day of May, the three directors of the cor[120]*120poration met and unanimously voted thpmselves a salary of fifty dollars a month, each, “ for services actually to he rendered to this company.” It seems to me that a mere statement of thése facts shows that the resolution created no enforceable contract with the defendant. “ The relation of an officer of a corporation to it is fiduciary, and he must at all times act in good faith and unselfishly towards the corporation. The relation is such that an officer of a corporation cannot malee an agreement with himself acting o.n the one part individually and for his own benefit, and on the other part in his fiduciary capacity as an officer of the corporation. Jacobson v. Brooklyn Lumber Co., 184 N. Y. 152, 162.

The plaintiff relies for authority upon the cases of Keans v. New York & College Point Ferry Co., 17 Misc. Rep. 272, and Bagley v. Carthage, W. & S. H. R. Co., 25 App. Div. 475; affd., 165 N. Y. 179. I fail to see, however, how these cases support the view that the plaintiff has any cause of action. In the case of Bagley v. Carthage, W. & S. H. R. Co., the president of the corporation had rendered services to the corporation outside of the duties of his office; in this respect and in no other respect does that case resemble the one now under consideration. These services were rendered under an understanding with the directors, not reduced to a vote, that the president was to receive reasonable compensation. The president did not make the implied agreenient with himself; but he represented himself only, and the other directors represented the company. There was no fraud in the proceedings, and the directors who made the implied contract had no personal interest in the contract and honestly represented the interests of the corporation. The corporation, through its directors, having accepted the services of the officer outside of his official duties and impliedly agreed to pay their reasonable value, was held liable in that action.

Here, however, the plaintiff sues upon an express promise, made solely by officers who attempted to contract with themselves; there is no proof of the value of the services, and they were apparently accepted by the corporation acting only through the same officers. The plaintiff cannot, therefore, recover either under an express or implied contract. " In the [121]*121case of Keans v. New York & College Point Ferry Co., 17 Misc. Rep. 272, a director claimed under a resolution on which he had voted. The court held that, since the plaintiff’s vote was unnecessary for the passage of the resolution, the resolution constituted an enforceable contract until the corporation pleaded and proved fraud. In the case before us, however, the corporation has both pleaded and proved that the contract was void; and the judgment must be reversed and a new trial ordered, with cosits to' appellant to abide the event.

Seabuby and Page, JJ., concur.

Judgment reversed and new trial ordered, with costs to appellant to abide event.

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75 Misc. 119, 132 N.Y.S. 767, Counsel Stack Legal Research, https://law.counselstack.com/opinion/haas-v-universal-phonograph-record-co-nyappterm-1912.

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