The directors have no power to vote compensation for the performance of acts in violation of the charter of the corporation or beyond the powers conferred on the corporation. It has also been held that the power to compensate officers does not include the power to give a bonus in addition to salary. By a bonus is meant a sum paid to an officer, in addition to a stated salary, for his acceptance of such office and the performance of acts outside of the duties of such office.76 The payment of such bonuses has been sustained in some cases, however, in connection with increases of salaries and as extra compensation.77 As will be noted in another section, the amount due under a contract is not always determined prior to the rendition of the services,78 and some interesting cases have arisen as to the amount due when the amount is not fixed at all but where the officer under his contract was entitled to compensation or where his predecessor was paid. It has been held that an officer whose salary is not otherwise fixed is entitled prima facie to the same salary that was paid to his predeces sor.79 This cannot be considered as an absolute rule however. There is a mere presumption that such was the intention, and it may be rebutted by evidence showing a contrary understanding and intention.80 In one case, where a treasurer and his brother owned a corporation, the treasurer, who had been receiving a salary of $12,000 yearly, retired from the business, and another person was appointed to fill his place without any action being taken with respect to the salary of the new incumbent. It was held that the incoming treas urer was entitled to receive only what his services were reasonably worth, as an agreement to pay more than that would have to be entered into by the corporation before it would be binding.81 a somewhat similar case, a secretary resigned after three years' service, and the successor who was appointed did not know of the amount of his predecessor's salary. There being no express contract fixing the compensation, it was held that the secretary could recover the reasonable value of his services.82 On the other hand, when the salary of the president of a corporation is fixed by the 76 McNulta v. Corn Belt Bank, 164 Ill. 427, 56 Am. St. Rep. 203, 45 N. E. 954. 77 See § 2764, infra. 78 See § 2753, infra. 79 South & N. A. R. Co. v. Falkner, 49 Ala. 115; Commonwealth Ins. Co. v. Crane, 6 Metc. (Mass.) 64; Starbuck v. Housatonic R. Co., 83 Hun (N. Y.) 534, 32 N. Y. Supp. 87, In only aff'd Crane, 80 Commonwealth Ins. Co. v. 6 Metc. (Mass.) 64. 81 Smith v. Bedell Bros., 84 N. J. Eq. 268, 509, 96 Atl. 898. 82 Carver V. San Joaquin Cigar Co., 16 Cal. App. 572, 118 Pac. 91. charter or by-laws, and a by-law provides that, in case of his death or inability, his duties shall devolve upon the vice president, the latter on succeeding to the duties of the president on his death or inability to act is entitled to the salary of the president.83 But in the absence of a provision to such effect, the vice president is not entitled to the salary of the president for performing his duties during temporary absence.84 The fact that no compensation was paid to an officer's predecessor does not bar the right of such officer to recover compensation.85 § 2757. Statutory provisions limiting compensation. In some states statutes have been enacted limiting the compensation of officers of corporations. The payment of grossly excessive salaries to officers of certain kinds of corporations where a large number of persons or stockholders are interested has given rise to this kind of legislation. The case of officers of life insurance companies is given as an illustration. The constitutionality of such a statute has been sustained.86 § 2758. Compensation of officers holding over. Where an employee hired at a fixed salary continues his employment after his contract expires, it is presumed that the compensation fixed by the contract continues, and in such case the terms of the original contract control and there can be no recovery on a quantum meruit. This general rule of law governing employees has been held to apply to corporate officers.87 So it has been held that where a secretary 83 Funsten v. Funsten Commission Co., 67 Mo. App. 559. 84 Brown v. Galveston Wharf Co., 92 Tex. 520, 50 S. W. 126, rev'g (Tex. Civ. App.), 48 S. W. 41. 85 See Gem Knitting Mills v. Thurman, 140 Ga. 15, 78 S. E. 408. 86 Under Missouri Laws 1907, p. 315, limiting the compensation of of ficers of life insurance companies, the license of a company disregarding the statute is not revoked, but the granting of a new license to such companies is prohibited. State v. Vandiver, 222 Mo. 206, 121 S. W. 45. Laws 1907, p. 315, "relating to the salaries and compensation of officers and agents of life insurance companies," does not violate Const. art. 4, § 28 as to the title of legislative enactments, and providing that no bill shall contain more than one subject. State v. Vandiver, 222 Mo. 206, 121 S. W. 45. 87 Perry v. J. Noonan Furniture Co., 8 Cal. App. 35, 95 Pac. 1128; Trimble v. Guardian Trust Co., 244 Mo. 228, 148 S. W. 934. While a hiring at so much per year, without more, is an indefinite hiring, the rule gives way when the circumstances show a different intention. Foltz & Fuller v. Fuller, 38 App. Cas. (D. C.) 139. No presumption of an agreement to pay for future services arises from the passage of a resolution providing for the payment of salary for past and treasurer was re-elected, without any provision being made as to his salary, he was entitled to a salary on the same basis as before.88 If there is a continuance of the employment and a change in the circumstances, the question of the amount of the salary may become one of fact. 89 But if there is an express understanding that the officer will not continue at the same rate of compensation and he is re-elected without any provision being made as to his salary, he may recover the reasonable value of his services.90 § 2759. Form of compensation. In some cases the compensation takes the form of things of value other than money. In one case, the officers of a small manufacturing concern were in the habit of getting their fuel from the corporation, with the knowledge of all concerned, the custom having been acquiesced in for some The fuel was accordingly regarded as additional compensation to the salary received.91 time. Where an officer is paid for his services in stock, subsequent increases in the value of the stock as well as accruing dividends belong to him.92 years. Bell v. Peper Tobacco Warehouse Co., 205 Mo. 475, 103 S. W. 1014. 88 Eicke v. Wittemann Co., 157 N. Y. App. Div. 412, 142 N. Y. Supp. 190. Where a secretary and treasurer was re-elected to his office for a year and nothing was said as to his salary, but he had been in the habit of receiving fifty dollars per month, and a resolution authorized the president to pay him $400 at the end of the year if the business warranted it, and such secretary was removed from office at the end of a little over three months, his recovery of salary would be limited to the $50 payable each month served. Eicke v. Witteman Co., 157 N. Y. App. Div. 412, 142 N. Y. Supp. 190. As to when officers may be desig nated as "hold-over" officers, see § 1808, supra. Where a secretary and treasurer held office until a certain date, when a newly-elected board of directors ap § 2760. Changes, increases or reductions of compensation. Charter provisions or by-laws governing the fixing of salaries usually apply also to the change of such salaries,83 and directors who occupy other positions are bound to know of the provisions of the by-laws governing the fixing of compensation.94 Where a charter contains a provision fixing the salaries of some of the officers, they cannot be changed by the by-laws, even though the charter also provides that the corporation may fix salaries, as such provision applies only to salaries not fixed by the charter.95 Nor can salaries fixed by the by-laws be changed by a mere resolution.96 In order to be entitled to an increase in salary, an officer must usually show an express contract with the corporation,97 but the passage of a resolution is not necessary. A mutual understanding may be sufficient.98 The board of directors cannot delegate its power to increase compensation to an individual member.99 Increases of salaries are subject to the same rules as those that govern with respect to fixing salaries, concerning the votes of interested directors.1 Thus an increase effected by interested directors will be held voidable,2 and, in case of fraud, the directors may be held liable for the increase received.3 The fact that an officer owns a majority of the stock of a corporation does not authorize him to increase, or effect an increase, of his compensation in disregard of the corporate regulations; but there is no objection to an increase of salary of an officer who is not a director.5 If the compensation of interested officers is increased and the act is not ratified by the stockholders, there is no room for the application of the doctrine of implied contracts, as in such case the suggestion of an implied promise to pay greater compensation for the performance of the same duties is negatived by the existence of the specific contract.6 Added prosperity of a corporation does not justify an increase of compensation, as the officers perform their services to produce such results; and the value of services is not to be determined by rules of proportion so as to absorb all the profits of a company. It has been held that officers cannot of themselves increase their compensation without a corresponding increase of duties. In some cases bonuses are given to induce an officer to retain his position. It has been held that a promise to pay an officer a certain percentage of profits in addition to his salary is supported by sufficient consideration, where the officer abrogates his privilege of annulling his contract of employment.10 Where a resolution reducing salaries is ambiguous in that it does not state when the resolution is to become effective, and the testimony as to the effect of the resolution is contradictory, a question of fact is presented as to what the agreement was and what occurred at the meeting when the resolution was passed.11 A reduction of salary may be implied.12 and apparent increase of service, by a private arrangement with another officer in disregard of the corporate regulations. McGowan v. Finola Mfg. Co., 120 Md. 335, 87 Atl. 694. 5 Carr v. Kimball, 153 N. Y. App. Div. 825, 139 N. Y. Supp. 253. 6 Kreitner v. Burgweger, 174 N. Y. App. Div. 48, 160 N. Y. Supp. 256. 7 Kreitner v. Burgweger, 174 N, Y. App. Div. 48, 160 N. Y. Supp. 256. 8 Jacobson v. Brooklyn Lumber Co., 184 N. Y. 152, 76 N. E. 1075. 9 Kreitner v. Burgweger, 174 N. Y. App. Div. 48, 160 N. Y. Supp. 256. 10 Fraker v. A. G. Hyde & Sons, 127 N. Y. App. Div. 620, 111 N. Y. Supp. 757. See 2756, supra. And see § 2762, infra. 11 Russell v. Henry C. Patterson Co., 48 Pa. Super. Ct. 571. 12 A corporation cannot avail itself of a mutual agreement among its of ficers to accept a reduced rate of sal ary, where the agreement was not communicated to or accepted by it and it was not in any way a party to it. Richard Thompson Co. v. Brook, 37 N. Y. St. Rep. 506, 14 N. Y. Supp. 370. In an action to recover for services as general manager under a written contract, held, under the evidence, that the court should have specifically called the attention of the jury to the conduct of the plaintiff and the undisputed dealings between the parties subsequent to a resolution employing the manager at a reduced |