at a stockholders' meeting is not binding on a minority stockholder who may obtain a review of the fairness of the salaries in a court of equity, and if it deems them exorbitant, it may determine the value of the services rendered and restrain the corporation from paying in excess thereof; but, unless in an exceptional case, the court cannot fix compensation for services to be rendered in the future nor enjoin the company from paying designated persons more than a certain sum per year for such future services.76

If the action is by stockholders on behalf of the corporation, the terms of the decree depend of course largely upon the facts of the particular case.77 It should order payment to the corporation itself rather than a pro rata payment to the complaining stockholder,78 and the decree should not direct that the money paid to the corporation be distributed among the stockholders, since in effect requiring a dividend.79 If directors are sued for an accounting, an accounting may be ordered for six years back where that is the period for which recovery might be had in an action at law.80 So if the suit is one for an accounting, the decree may fix the periods for which each director shall be held responsible for the sales made during his term of office, where the directors are chargeable for different periods for sales of corporate property to directors.81 The amount of damages recoverable depends of course largely upon the

76 Sotter V. Coatesville Boiler Works, Pa. -, 101 Atl. 744.

77 See Luther v. C. J. Luther Co., 118 Wis. 112, 99 Am. St. Rep. 977, 94 N. W. 69.

A preliminary injunction may be granted. Moneuse v. Riley, 40 N. Y. Misc. 110, 81 N. Y. Supp. 325; Glover v. Manila Gold Mining & Milling Co., 19 S. D. 559, 104 N. W. 261.

78 Chicago Macaroni Mfg. Co. v. Boggiano, 202 Ill. 312, 67 N. E. 17.

The decree in a stockholder's suit, in a suit for an accounting, should not require the offending officers to pay the stockholder filing the bill his pro rata share of corporate assets which the officers diverted. Voorhees v. Mason, 245 Ill. 256, 91 N. E. 1056, rev'g on other grounds 148 Ill. App. 647.

If stockholders sue in behalf of all

the stockholders, they cannot recover a separate judgment for the damages sustained by them individually, but the money must be ordered paid to the corporation for the benefit of all the creditors and stockholders, just as if the suit had been brought by the corporation. Hayden v. Perfection Cooler Co., Mass. - 116 N. E. 871.

The only decree which can be entered is one requiring payment to the corporation rather than to one or more plaintiffs. Rafferty v. Donnelly, 197 Pa. 423, 47 Atl. 202.

79 Miller v. Crown Perfumery Co., 125 N. Y. App. Div. 881, 110 N. Y. Supp. 806.

80 Barry v. Moeller, 68 N. J. Eq. 483, 59 Atl. 97.

81 Barry v. Moeller, 68 N. J. Eq. 483, 59 Atl. 97.

circumstances of the particular case.82 Remote and speculative damages cannot be recovered.83 The measure of damages where the acts of officers wreck the company, there being a conspiracy, is the value of the property and franchises before the acts of the conspirators which caused the insolvency, less the amount for which the property sold at foreclosure sale.84 Counsel fees should be ordered paid out of the fund recovered; 85 and if plaintiff obtains only part of the relief sought, he is entitled to recover a reasonable amount for counsel fees but not the whole of such fees and disbursements.86 An execution against the corporation, and its return unsatisfied, is sometimes, by statute, made a prerequisite to a sale of the property of a corporate officer for any debt of the corporation.

The measure of damages where an officer acts ultra vires depends upon the circumstances of the particular case.87

§ 2723. Recovery over against corporation by officer held liable. It is often provided by statute that the officer held liable may recover over against the corporation, but that he can enforce the claim only against the corporate property and not against the property of any stockholder.

XXXIII. CRIMINAL LIABILITY AND PENALTIES

§ 2724. General rules. Corporate officers may be criminally liable for their own acts although performed in their official capacity as such officers.88 An officer of a corporation, through whose act the corporation commits an offense against the laws of the state or municipality, is himself also guilty of the same offense.89 If the officers of a corporation join in a criminal act, as a corporate act, they are jointly liable with the corporation, if it is an act for which

82 McCourt v. Singers-Bigger, 145 Fed. 103, 7 Ann. Cas. 287.

83 Bourdette v. Sieward, 107 La. 258, 31 So. 630.

84 Niles v. New York Cent. & H. River R. Co., 176 N. Y. 119, 68 N. E. 142, aff'g 69 N. Y. App. Div. 144, 74 N. Y. Supp. 617.

85 Hechelman v. Geyer, 252 Pa. 123, 97 Atl. 193.

86 Lillard v. Oil, Paint & Drug Co., 70 N. J. Eq. 197, 58 Atl. 188, 56 Atl. 254.

87 See Fergus Falls Woolen Mills

Co. v. Boyum, 136 Minn. 411, 162 N.
W. 516.

88 Overland Cotton Mill Co. v. People, 32 Colo. 263, 105 Am. St. Rep. 74, 75 Pac. 924; Moore v. State, 48 Miss. 147, 12 Am. Rep. 367, writ of error dismissed 21 Wall. (U. S.) 636, 22 L. Ed. 653; Milbrath v. State, 138 Wis. 354, 131 Am. St. Rep. 1012, 120 N. W. 252.

Criminal responsibility of agents in general, see 2 Clark & Skyles, Agency, $ 607.

89 Overland Cotton Mill Co. v. Peo

the corporation may be prosecuted; and, if it is a felony, the directors and officers are individually liable.90 The rule that all parties active in promoting a misdemeanor, whether agents or not, are principals, applies to corporate officers and agents.91

§ 2725. Necessity for assent to or active participation of officer. A corporate officer is criminally liable where he is the actual, present and efficient actor behind the corporation.92 On the other hand, the officer is generally held not liable unless he participates in the unlawful act either directly or as an aider, abettor or accessory, and this is so even though the offense is the violation of a

statute which imposes imprisonment as a penalty.

A corporate

officer, without regard to his position, is ordinarily not criminally liable for corporate acts performed by other officers or agents of the corporation.95 But it has been held that it is not necessary to the conviction of an officer for nuisance that he should have been actually engaged in work upon the premises.9

96

In a Colorado case, a statute provided that any person employing a child under fourteen in a mill or factory should be guilty of a misdemeanor. It did not appear by whom the hiring was done in the case being prosecuted, but both the general superintendent and the assistant superintendent had authority to hire employees. Referring to the liability of the assistant, the court said that it appeared that "by reason of his relationship to the company, and the performance of his duties, he either knew, or, by the exercise of due diligence upon his part, should have known, that a minor under the prohibited age was in the employ of the company. For this reason he must be held as having violated the statute, for it was within his power, by virtue of the relationship he bore to the company, to have prevented the employment." This case goes to the extreme limit, to say the least.

97

§ 2726. Embezzlement. A corporate officer, where he conspires with other officers to convert corporate funds to their own use, is guilty of embezzlement although they called the moneys so taken "salary," merely as a cover for their defalcations.98 So officers of corporations are criminally liable for embezzling state funds in their hands as such officers, independently of any statute expressly mentioning such officers.99 However, the president of a corporation cannot be held for embezzlement by a clerk where he had no knowledge thereof and derived no personal benefit therefrom.1 Special statutes sometimes fix the liability of corporate officers.2

general manager of a corporation, who knows that agents of the company are peddling its goods without a license, may himself be convicted of peddling without a license. Crall v. Com., 103 Va. 862, 49 S. E. 1038.

94 Rex v. Hays, 14 Ont. L. Rep. 201, 8 Ann. Cas. 380.

95 State v. Carmean, 126 Iowa 291, 106 Am. St. Rep. 352, 102 N. W. 97.

96 People v. Detroit White Lead Works, 82 Mich. 471, 9 L. R. A. 722, 46 N. W. 735.

97 Overland Cotton Mill Co. v. People, 32 Colo. 263, 105 Am. St. Rep. 74, 75 Pac. 924.

98 People v. Lay, 193 Mich. 476, 160 N. W. 467.

99 State v. Ross, 55 Ore. 450, 42 L. R. A. (N. S.) 601, 613, 106 Pac. 1022, 104 Pac. 596.

1 State v. Carmean, 126 Iowa 291, 106 Am. St. Rep. 352, 102 N. W. 97. 2 See Com. v. Cain, 77 Ky. 525; Coats v. People, 22 N. Y. 245.

82727. Engaging in business without a license. A corporate agent may be prosecuted for engaging as an agent in a business for which the corporation has not taken out a license. And it is held that the vice president, who is general manager, may be convicted of peddling without a license where servants of the company have peddled without a license.*

§ 2728. False pretenses. The president of a company who is also its largest stockholder may be convicted for obtaining credit by false pretenses, where the company gets goods on credit through false representations in a report made by him as president.5

§ 2729. Libel. Independently of statute, officers of a newspaper company, where not actively engaged in the management of the paper, cannot be held for criminal libel where no criminal intent is shown.6

§ 2730. Negligence. Criminal liability for mere neglect to act has been held not to exist, although the contrary has been held. Statutes in some states now make such officers liable for negligence.

§ 2731. Nuisance. It is held that the officers of a corporation are properly convicted for the maintenance of a nuisance-the business itself of a company mixing lead, oils and colors-on the theory that they are jointly responsible for the business."9

§ 2732. Liability as created by statutes applicable only to corporate officers. Statutes in most of the states enumerate at con