court may determine the compensation to be paid in the future.95 It has been held, however, that the court has no power to fix a gross sum to be divided as salaries among the directors and officers.96 The power of the courts to fix compensation of corporate officers is limited in the absence of fraud. It has been held that where a corporation was organized to conduct the business of a deceased person, the action of the court in fixing the salary of a business manager and ordering such salary paid was not only in violation of the common law, but was a violation of a statute declaring that the business of a corporation shall be managed by a president and board of directors.97 99 § 2747. Power of stockholders. In fixing salaries or other compensation of officers, the stockholders are bound by provisions in the by-laws limiting the amount, if any such exist,98 as well as by statutory provisions.9 In some states, statutory provisions have been enacted providing that there shall be no compensation for services rendered by a president or director, unless it be allowed by the stockholders. Such a statute has been held to be mandatory, and the payment of such compensation by virtue of a resolution of the directors to be illegal, unless authorized or ratified by the stockholders.1 Such a statute will also prevent the payment of compensation to a president for services rendered in closing the business of the corporation unless so allowed.2 The regulation of the salaries of officers of private corporations is a proper subject of the by-laws, and the stockholders may fix the salaries of directors by such provisions. They may also delegate such authority to the directors themselves, or to an executive committee of the board.5 Where an increase of salaries is effected at a stockholders' meet 95 Sotter v. Coatsville Boiler Works, Pa., 101 Atl. 744. 96 Fitchett v. Murphy, 46 N. Y. App. Div. 181, 61 N. Y. Supp. 182, rev'g 26 N. Y. Misc. 544, 56 N. Y. Supp. 322. 97 In re Goetz's Estate, 236 Pa. 630, 85 Atl. 65. 98 See § 2745, supra. 99 See 2756. 1 Shickel v. Berryville Land & Improvement Co., 99 Va. 88, 37 S. E. 813. 2 Triplett v. Fauver, 103 Va. 123, 48 S. E. 875. 3 Green v. Felton, 42 Ind. App. 675, 84 N. E. 166. See also § 2745, supra. 4 Green v. Felton, 42 Ind. App. 675, 84 N. E. 166. 5 Hayes v. Canada, Atlantic & Plant S. S. Co., 181 Fed. 289. A resolution of the board of di rectors, authorizing the executive committee to award to the president a participation in the net profits as compensation for services in addition to his regular salary, which was subsequently ratified by the stockholders, authorized such committee to provide ing and the same persons are both stockholders and directors, it is not necessary that a separate meeting be held by the directors to vote on the increase, even though it appears that the by-laws commit authority over salaries to the directors.7 § 2748. Power of directors-As to salaries of directors. The salaries or other compensation of the directors or trustees of a corporation must be fixed by the stockholders by vote, resolution or bylaws, unless there is some provision to the contrary in the by-laws or in the corporate charter. While the stockholders may delega te this power of fixing compensation, as has been noted in the previous subdivision of this section, it is well recognized that the directors cannot fix their own salaries or compensation unless expressly authorized by the charter or by the stockholders to do so. This re for the payment to the president of a definite percentage of such profits as additional compensation for future services, and did not merely empower it to make him gifts from time to time for past services performed for a stated salary. Young v. United States Mortgage & Trust Co., 108 N. E. 418, 214 N. Y. 279, rev'g 156 N. Y. App. Div. 515, 141 N. Y. Supp. 364, modifying 131 N. Y. Supp. 33. As to delegation to officers, see Powers v. Rutland R. Co., 88 Vt. 376, 92 Atl. 463. 7 Murray v. Smith, 166 N. Y. App. Div. 528, 152 N. Y. Supp. 102. 8 United States. Monmouth Inv. Co. v. Means, 151 Fed. 159. Indiana. Green v. Felton, 42 Ind. App. 675, 84 N. E. 166. Iowa. Schoening v. Schwenk, 112 Iowa 733, 84 N. W. 916. Kentucky. Louisville Bldg. Ass v. Hegan, 20 Ky. L. Rep. 1629, 49 S. W. 796. Maine. Pride v. Pride Lumber Co., 109 Me. 452, 84 Atl. 989; Chabot & Richard Co. v. Chabot, 109 Me. 403, 84 Atl. 892; Camden Land Co. Lewis, 101 Me. 78, 63 Atl. 523. Michigan. Miner v. Belle Isle Ice Co., 93 Mich. 97, 17 L. R. A. 412, 53 N. W. 218. See Eakins v. America White Bronze Co., 75 Mich. 568, 42 W. 982. Minnesota. Jones v. Morrison, 31 Minn. 140, 16 N. W. 854. Montana. Kleinschmidt v. Ameri can Min. Co., 49 Mont. 7, 139 Pac785; McConnell v. Combination Min ing & Milling Co., 30 Mont. 239, 104 Am. St. Rep. 703, 76 Pac. 194. New Jersey. Gardner v. Butler, 30 N. J. Eq. 702. Illinois. Vorhees v. Mason, 245 Ill. 256, 91 N. E. 1056; Holder v. Lafayette, B. & M. R. Co., 71 Ill. 106, 22 Am. Rep. 89. sults from the fiduciary relation which the directors sustain towards the corporation, preventing them from contracting with the corporation when the corporation's interest conflict with the private interests of the directors. And even when the power is delegated to the directors, they must act fairly and honestly in fixing the compensation.10 When a director knows of the existence of a by-law requiring salaries to be fixed by the board of directors, he cannot recover a salary which is neither fixed nor ratified by such board.11 § 2749. Compensation of directors filling other offices. The power of directors to fix their own compensation or to fix the com-. pensation of other officers who are directors is somewhat involved by the rules applicable as to the manner of fixing such compensation.12 It is usually held that directors have a right to serve as officers or employees of the corporation, and to receive compensation for such services, if legally employed by the company; 13 and it is Davids, 135 App. Div. 206, 120 N. Y. Supp. 350; Copeland v. Johnson Mfg. Co., 47 Hun 235; Kelsey v. Sargent, 40 Hun 150; Tilton v. Gans, 90 Misc. 84, 152 N. Y. Supp. 981; Miller v. Crown Perfumery Co., 57 Misc. 383, 109 N. Y. Supp. 760; Blatchford v. Ross, 37 How. Pr. 110. Pennsylvania. Russell v. Henry C. Patterson Co., 232 Pa. 113, 36 L. R. A. (N. S.) 199, 81 Atl. 136. Rhode Island. Eaton v. Robinson, 19 R. I. 146, 29 L. R. A. 100, 32 Atl. 339, 31 Atl. 1058. Tennessee. Harris V. LemmingHarris Agricultural Works (Tenn. Ch. App.), 43 S. W. 869. Washington. Burns v. Commencement Bay Light & Improvement Co., 4 Wash. 558, 30 Pac. 668, 709. West Virginia. Ravenswood, S. & G. Ry. Co. v. Woodyard, 46 W. Va. 558, 33 S. E. 285. England. In re George Newman & Co., [1895] 1 Ch. 674. Canada. Gardner v. Canadian Manufacturer Pub. Co., 31 Ont. 488. Compare, however, Hedges v. Paquett, 3 Ore. 77. 13 Sotter v. Coatsville Boiler Works, Directors may contract with agents A stockholder and director may deal with the corporation if his acts are open and fair and known to the other directors and stockholders. Reynick v. Allington & Curtis Mfg. Co., 179 Mich. 630, 146 N. W. 252. A director may enter into a binding contract with the corporation when fair and equitable and when the corporation is represented by a majority of its directors, each of whom is acting as a free agent and under no controlling influence or restraint. Crocker v. Cumberland Mining & Milling Co., 31 S. D. 137, 139 N. W. 783. 1 within the power of a board of directors to fix the salaries of officers employed by them, although from their own number, unless there is some provision in existence limiting or prohibiting the exercise of such power. In the same manner, a board of directors may fix the compensation to be paid for extra services which they engage or authorize.14 A director who occupies an official position, such as general manager, is bound to know the provisions in the by-laws declaring that the board of directors is to have authority to fix salaries.15 Such contracts are subject to close scrutiny and are voidable for fraud or overreaching.16 If a resolution fixing the salaries of such officers is regularly adopted in pursuance of the by-laws and is not for the purpose of disposing of the profits, the only question to be determined is whether the salary fixed was reasonable.17 a A statute requiring salaries of officers of a corporation to be fixed by the board of directors operates to recognize the right of an officer to contract with the corporation in his individual capacity. It has been held that such a statute is not broad enough to prevent director from receiving payment for services while a director, without the payment being authorized by the board of directors. The right to compensation of such a director, while acting as an officer, was held to depend upon the nature of the relation established by the undertaking.18 § 2750. Compensation of officers other than directors. It is well established that directors may appoint and fix the compensation of mere ministerial officers; 19 but officers have no power to fix thei 14 Hax v. R. T. Davis Mill Co., 39 Mo. App. 453; Outterson v. Fonda Lake Paper Co., 66 Hun (N. Y.) 629, 20 N. Y. Supp. 980; Bagaley v. Pittsburgh & L. S. Iron Co., 146 Pa. St. 478, 23 Atl. 837; Waite V. Windham County Min. Co., 37 Vt. 608. Compare Branch Bank v. Collins, 7 Ala. 95. The action of a board of directors in providing that the salary of the president, whom they had elected, shall be fixed by him and another director who owns nearly all of the stock, is such an exercise of the board's authority to fix salaries as to constitute a contract on which the president can recover. Bagaley v. Pittsburgh & L. S. Iron Co., 146 Pa. St. 478, 23 Atl. 837. 15 McKean v. Riter-Conley Mfg. Co-, 230 Pa. 319, 79 Atl. 561. 16 See § 2755, infra. 17 Tilton v. Gans, 90 N. Y. Misc. 84, 152 N. Y. Supp. 981. 18 Powers v. Rutland R. Co., 88 V376, 92 Atl. 463. 19 Godley v. Crandall & Godley Co-> 212 N. Y. 121, 105 N. E. 818; Tilton v. Gans, 90 N. Y. Misc. 84, 152 N. YSupp. 981. Under Massachusetts Pub. St. 1882. c. 106, 23, directors have the power to establish a reasonable salary for a treasurer, where no vote of the stockholders or by-law limiting their authority is shown. Fillebrown v. Hayward, 190 Mass. 472, 77 N. E. 45. own salaries in the absence of an authority to do so expressly conferred.20 If a corporation refuses to fix the amount of a manager's salary, the question being left to future determination, such officer has no power to fix his own salary and pay it.21 A statute requiring the salaries of officers to be fixed by the board of directors has been held to apply to officers who have the control and management of the corporation and its funds, and not to mere employees. 22 § 2751. Power of officers. Officers of a corporation other than the board of directors cannot bind the corporation by a promise to pay another officer a salary or other compensation unless they are expressly authorized to make such a promise.23 20 Wayne Pike Co. v. Hammons, 129 Ind. 368, 27 N. E. 487; Church v. Church Cementico Co., 75 Minn. 85, 77 N. W. 548; Kelsey v. Sargent, 40 Hun (N. Y.) 150. An officer of a corporation, either as president, treasurer, manager or director, has no authority to fix his own salary or increase it. Chabot & Richard Co. v. Chabot, 109 Me. 403, 84 Atl. 892. The testimony of a plaintiff to the effect that he had authority to raise his own salary as manager establishes his prima facie right to do so in the absence of any showing to the con- . trary. Waldorf v. Phillips, 42 Mont. 80, 111 Pac. 546. Where funds of a trustee and those of a corporation were commingled with the consent of all concerned, the manager of the trust, who was also manager of the corporation, had the right to pay himself salaries in both capacities out of the commingled fund. Rocky Mountain Oil Co. v. Phillips, 29 Colo. 268, 68 Pac. 269. 21 Smith v. Courant Co., 23 N. D. 297, 136 N. W. 781. 22 Powers v. Rutland R. Co., 88 Vt. 376, 92 Atl. 463. Where the duties and authority of a general counsel of a corporation are prescribed by a by-law, and include general control of legal matters, etc., and the by-law includes other employees such as the purchasing agent, superintendent of motive power and general freight agent, it must be held that such general counsel is not an officer within the meaning of a statute (Pub. St. 4262) requiring salaries to be fixed by the board of directors. Powers v. Rutland R. Co., 88 Vt. 376, 92 Atl. 463. Vermont Acts 1902, No. 187 amending the charter of a corporation, and authorizing the board of directors to appoint a clerk, treasurer and other needed officers, was intended to refer to officers in the corporate sense, and does not apply to a general counsel. Powers v. Rutland R. Co., 88 Vt. 376, 92 Atl. 463. 23 Louisville Bldg. Ass'n v. Hegan, 20 Ky. L. Rep. 1629, 49 S. W. 796; Henry Wood's Sons Co. v. Schaefer, 173 Mass. 443, 73 Am. St. Rep. 305, 53 N. E. 881; Bailey v. Buffalo Crosstown Ry. Co., 14 Hun (N. Y.) 483. A corporation is not bound by a promise made by its treasurer, who is also a director, to a third person that the latter should be president at a stated salary, where the promise was never communicated to the other di |