Action for services by a director of a corporation in procuring a patent, and in negotiating loans in various cities. The opinion states the case sufficiently. The plaintiff had judgment below.

FIELDER C. SLINGLUFF, for appellant.

GEORGE G. HOOPER and WM. PINKNEY WHITE, for appellee. GRASON, J.

At the trial of this case in the Baltimore City Court the plaintiff offered three prayers, the two first of which were granted and the third was refused; the defendant offered seven, all of which were rejected except the sixth, which was granted, and the judgment being in favor of the plaintiff, the defendant appealed.

The question presented by the prayers for our determination is whether an officer of a corporation can recover for services rendered the corporation without an express contract of employment.

We have carefully examined the authorities referred to by the counsel of the respective parties, and, without in this opinion entering upon a review of them in detail, we deem it sufficient merely to state the principles of law which they establish. To entitle a president or director of a corporation to recover for services rendered his corporation, he must prove an express contract of employment if the services for which he claims compensation are within the line and scope of his duties as president or director. To this effect are nearly all the cases cited in the briefs, and this general principle is admitted by the counsel of the appellee to be correct. But if a president or director of a corporation renders services to his corporation which are not within the scope of, and are not required of him by his duties as president or director, but are such as are properly to be performed by an agent, broker or attorney, he may recover compensation for such services upon an implied promise: See Angell & Ames on Corp. § 317; Chandley v. Monmouth Bank, 1 Green, 260; Henry v. Rutland & Burlington R. R. Co., 27 Vt. 455; Hall v. Vermont & Mass. R. R. Co., 28 Id. 408; New York

& New Haven R. R. Co. v. Ketchum, 27 Conn. 181; Evans v. City of Trenton, 4 Zabr. 769.

Agency for a corporation is not required to be shown by a resolution of the board of directors or other written evidence, but it may be inferred from facts and circumstances: Union Bank v. Ridgely, 1 H. & G. 326; 1 Md. Ch. Dec. 398; Elysville Man. Co. v. Okisko Co., 5 Md. 159; N. C. Railway Co. v. Bastian, 15 Id. 501; Bank of the United States v. Dandridge, 12 Wheat. 69, 70, 83.

All the prayers of the appellant asked instructions that the plaintiff was not entitled to recover unless the jury should find an express contract of employment of the plaintiff by the defendant. We have shown that his employment as agent of the defendant may be inferred from facts and circumstances, and the appellant's prayers were therefore properly rejected. There were facts and circumstances in evidence, from which the jury were at liberty to infer that the appellee was employed by the appellant in respect of obtaining a patent for the lands in California in obtaining the loan in London, and in procuring the surrender and cancellation of the first mortgage bonds of the company, the accomplishment of the latter being indispensable to the obtention of the loan. There is evidence in the record tending to prove that these services were either authorized by the corporation previously to their rendition or were ratified by it after they were performed, and that they were such services as were not required of the appellee in the discharge of his duties as a director. All these matters were left to the finding of the jury by the instructions granted in the appellee's first and second prayers, and if found in his favor he was entitled to recover a reasonable compensation for his loss of time and for services rendered. These two prayers were therefore properly granted.

The verdict was for an amount in solido, and whether in view of the refusal of the court to grant the appellee's third prayer and in the granting the appellant's sixth, it was for a larger sum than it ought to have been, this court can not inquire. Finding no error in the rulings of the court below the judgment appealed from will be affirmed.

Judgment affirmed.

KENT V. THE QUICKSILVER MINING CO., DREW ET AL. KENT V. THE QUICKSILVER MINING CO., KING, JR., ET AL.

HOYT V. THE QUICKSILVER MINING CO., KENT ET AL. (78 New York, 159. Court of Appeals, 1879.)

Preferred stock, when illegal. By a special charter the Q. M. Co. was granted authority to issue certificates of stock representing the value of its property, in such form and subject to such regulations as it might by its by-laws prescribe. Pursuant to this authority, the company adopted the following by-law: "Certificates of stock amounting to $10,000,000 shall represent the value of the property of the corporation, and the capital stock shall be divided into 100,000 shares of $100 each." After the stock had been issued, and at an annual meeting of the stockholders, by vote of the majority of the stock, the above by-law was amended by adding the words: "Certificates of stock upon which five dollars shall be paid, shall be distinguished as preferred stock," and by other by-laws and resolutions it was provided that preferred stock should be entitled to seven per cent. out of the net earnings each year, and any surplus of earnings should be divided pro rata among the holders of preferred and common stock, and that the preferred stock should be issued to all holders of common stock who surrendered the same, share for share, upon the payment of five dollars per share. 42,913 shares were so surrendered and preferred stock issued in lieu thereof, and for four years both preferred and common stock were quoted in the public prints and sold at the stock exchange, the former bringing the highest price. At the expiration of this period actions were brought to have a judicial declaration that the creation of the preferred stock was unauthorized. Held, that the by-law quoted, when adopted, was as much the law of the corporation as if it had been a provision of the charter, and it entered into the compact between the corporation and every taker of a share, so that a division of the stock into the two classes could not be made without the consent or acquiescence of the owners, but that in this case, the owners were chargeable with notice of the issuance of the preferred stock, and having acquiesced therein, they were bound by it, at least as against purchasers of stock in the open market; and as it was impracticable to cancel a portion of such shares without canceling all, none of it would be so treated.

Stockholders, how affected by acts ultra vires. Acts of a corporation which are not malum in se but which are ultra vires, affecting, however, only the interests of the stockholders, may be made good by the assent of the stockholders, so that strangers to them dealing in good faith with the corporation will be protected in a reliance on such acts. Estoppel. To work an equitable estoppel upon the stockholders, it was

not necessary that they should expressly assent to the issuance of the preferred stock; it was sufficient that they neglected actively to condemn the unauthorized act and to seek judicial relief until third parties would be injured by the granting of it. Unconscionable arrangement enforced. An unconscionable arrangement will not be disturbed when there has been a ratification of it with knowledge of all its bearings, after time has been had for consideration.

These are appeals from judgments of the General Term of the Supreme Court, First Judicial Department, affirming judgments at Special Term.

The judgment in the first entitled action restrained the defendant, The Quicksilver Mining Company, from converting or agreeing to convert the shares of its stock known as common stock into preferred stock, and from issuing any further preferred stock, and the individual defendants from converting any of the common stock into preferred stock. (Reported below, 12 Hun, 53.)

The second action was brought for an accounting by said company, and for a distribution of the net earnings as follows: To pay first to the preferred stockholders seven per cent. per annum upon the amount of their stock, the residue to be divided pro rata among the holders of the common and preferred stock.

The third action was brought to restrain said company from paying, and the individual defendants, holders of preferred stock, from receiving any sums as interest or as dividends in excess of dividends paid on the common stock; to restrain said company from issuing any further preferred stock; to have the preferred stock already issued declared illegal, and for an accounting and distribution of the net earnings equally among the stockholders. The judgment dismissed plaintiff's complaint, adjudged the preferred stock to be legal and valid, and its holders entitled to the preference it purported to give, and directed the said company to account and to distribute its net earnings accordingly. (The last two cases reported in 17 Hun, 169.)

The material facts found were substantially as follows: The Quicksilver Mining Company is a corporation created by a special act of the legislature of the State of New York, passed April 10, 1866 (Chap. 470, Laws 1866, p. 1021), "for the purpose of holding and improving lands in California, or else

where, and obtaining therefrom minerals and other valuable substances, and disposing of the products of such lands, mines and works."

Section two of the charter is as follows:

"Section 2. The said company shall have power to make such by-laws as they may deem proper, to enable them to carry out the objects of the corporation, and the same to alter, amend, add to, or repeal at their pleasure, provided that such by-laws shall not be contrary to the Constitution of this State, or the provisions of this act, and to adopt a common seal, and the same to alter at pleasure, and to issue certificates of stock, representing the value of their property, in such form, and subject to such regulations as they may, from time to time, by their by-laws prescribe, and to regulate and prescribe in what manner and form their contracts and obligations shall be executed."

The charter contains no further provision in respect to the capital stock. The company adopted the following by-laws, among others:

"Four. Certificates of stock, amounting to $10,000,000, shall represent the value of the property of the corporation, and the capital stock shall be divided into 100,000 shares of $100 each. "Five. The said certificate shall be in such form as shall be prescribed by the board of directors.

"Six. All certificates shall be registered on the books of the company when issued. No certificate shall be transferable, except on the books of the company, or of an agent appointed by the board of directors for that purpose. Every share of stock shall entitle the holder thereof to one vote at all meetings. of the corporation, and may be voted on by proxy in the usual form.

"Seven. The contracts and obligations of the company shall be made and executed in such manner and form as the directors may determine.

"Eleven. No dividend shall be made except from actual surplus profits, and these profits (except a reasonable reserve fund) shall be divided as often as once in six months. All dividends shall be payable at the office of the company in New York.

"Fourteen. The directors may, from time to time, on the