An officer is not entitled to any salary after he has resigned and his resignation has been accepted, unless the charter, by-laws or a resolution of the stockholders gives him a right thereto, and it can make no difference that in resigning he gives notice that he claims. salary for a given time thereafter and asserts that the resolutions of the stockholders give him a right thereto.69 § 2768. Receivership, bankruptcy, dissolution, etc. The appointment of a receiver to take control of a corporation operates to terminate the right of officers and employees to compensation, whether the corporation is dissolved or not. In such case there is no breach of contract, as the court order operates to prevent the rendition of services by the officers.70 An officer may be named by the court, however, to perform services rendered necessary by the receivership, his compensation being limited to the amounts earned in such capacity, and as fixed by the court.71 The same rules apply in the pleasure of the board of directors, the board could not bind the corporation to pay a penalty of three months' salary when such officer was dismissed. Wright v. Warren Bros., 204 Fed. 231. 69 Savannah Cotton Mills v. Cunningham, 100 Ga. 468, 28 S. E. 435. 70 Sullivan Timber Co. v. Black, 159 Ala. 570, 48 So. 870; Lenoir v. Linville Improvement Co., 126 N. C. 922, 51 L. R. A. 146, 36 S. E. 185; Law v. Waldron, 230 Pa. 458, Ann. Cas. 1912 A 467, 79 Atl. 647. A contract with an insurance corporation whereby a person agrees to act as general agent of the company in a certain territory, which provides for 90 days' notice before it can be discontinued, is terminated when a receiver is appointed for the company, and in such case the provision as to notice does not apply. Law v. Waldron, 230 Pa. 458, Ann. Cas. 1912 A 467, 79 Atl. 647. An officer cannot participate in the distribution of assets of a corporation being administered through an insolvency proceeding by a receiver when his claim is for compensation for the unexpired term of office and a breach of contract of his employment under the election to the office. Williamson County Banking & Trust Co. V. Roberts-Buford Dry Goods Co., 118 Tenn. 340, 9 L. R. A. (N. S.) 644, 12 Ann. Cas. 579, 101 S. W. 421. See also Louchheim V. Clawson Printing & Weighing Co., 12 Pa. Super. Ct. 55, where the charter of a corporation was declared void for nonpayment of taxes, and a receiver appointed, and Eddy v. Co-operative Dress Ass'n, 3 Civ. Proc. R. (N. Y.) 442, where the receiver discharged the superintendent. 71 Thus an officer or stockholder of a corporation which has been placed in the hands of a receiver can be named by the court as auctioneer to make a sale of the property, and if so appointed and he makes a sale, he is entitled to his commissions in like manner as any other person rendering that service. Friedrichs v. Friedrichs, Young & Taney, 126 La. 689, 52 So. 996. Where a corporation was dissolved and the president was appointed receiver, he was not entitled to recover salary as president in addition to his compensation as receiver, as the re case of bankruptcy in determining the claim of an officer to salary.72 The right of an officer to salary may cease on a transfer of all the' property and business of the corporation to another corporation, particularly where he enters into the service of the new company or consents to the transfer.73 And where, with the consent and cooperation of an officer of a corporation, all its property and franchises are sold, so that he has no further duty to perform, any contract which he may have had with the company for salary will be deemed cancelled, although the corporation may not be dissolved.74 A statute providing that no compensation shall be allowed a president for services rendered unless allowed by the stockholders, will operate to prevent compensation for services rendered in closing the corporation's business, unless so allowed.75 But an allowceivership proceedings operated to terminate the office of the president. Sullivan Timber Co. v. Black, 159 Ala. 570, 48 So. 870. After the appointment of a receiver for an insolvent corporation to close up its business and an injunction against the continuance of business further than to elect officers and do such other acts as are necessary to continue the corporate existence and to lay assessments to pay liabilities, the president and other officers are not entitled to the salary fixed for their officers before, but only to reasonable compensation for the services performed after the appointment and injunction. Com. v. Eagle Fire Ins. Co., 14 Allen (Mass.) 344. Where a person was appointed receiver in an action and allowed and paid $500 a month, and among the assets transferred to him were threefifths of the stock of a corporation of which he was afterwards elected president, it was held that he was not entitled to recover from the corporation the salary fixed for his office by a resolution passed prior to his election, as the services performed by him were performed as receiver, and compensated for in the allowance made to him by the court. Thompson v. Willamette S. M. L. & Mfg. Co., 15 Ore. 604, 16 Pac. 647. Where the president of an insolvent mortgagor corporation in the discharge of his duty cared for the property pending foreclosure, a receiver having been refused, it was held that he was entitled to compensation from the proceeds of the foreclosure. Trust & Deposit Co. v. Spartanburg Water Works Co., 97 Fed. 409. 72 See In re Grubbs-Wiley Grocery Co., 96 Fed. 183. 73 Simonson v. New York City Ins. Co., 141 N. Y. 12, 35 N. E. 969. 74 Long Island Ferry Co. v. Terbell, 48 N. Y. 427; Rodney v. Southern R. Ass'n, 3 N. Y. St. Rep. 564, 14 Daly (N. Y.) 70. Where the president of a corporation conducted its business as general manager, and such business was sold to another corporation which assumed all the liabilities of the selling company, there was no liability on the part of the purchasing corporation to continue payment of the president's salary for the balance of his unexpired term, there being nothing to show that the purchasing company agreed to carry on the business purchased or to retain him in his employment. Busell Trimmer Co. v. Coburn, 188 Mass. 254, 69 L. R. A. 821, 74 N. E. 334. 75 See § 2747, supra. ance by the court to an officer at the same rate as his salary, for services in settling and winding up the affairs of a corporation is not invalid or unjust.7 76 An assignment by a corporation for the benefit of creditors does not defeat the right of its treasurer or other officers to recover salary for the time between the assignment and the reconveyance to the corporation, if they perform the duties of their office during such time.77 The fact that a corporation is without funds does not relieve it. from liability to its officers for their agreed salaries, so long as it permits them to remain in office and accepts their services.78 § 2769. Lien of officer for compensation. In some cases, an officer who is also a director and stockholder may perform services of such a nature as to entitle him to a lien protecting his claim to compensation. Thus it has been held that a general manager and superintendent who had charge of mining operations, requiring his personal skill and supervision, and who performed manual labor, was within a statute giving him a first and prior lien upon the property involved.79 § 2770. Effect of bankruptcy proceedings. The provisions of the Bankruptcy Act giving priority to the wages due workmen, clerks or "servants," has been held not to include a manager of a corporation who also rendered services as a salesman; 80 but a foreman. of a repair department of a firm selling and buying automobiles, who was also a superintendent, has been held within the statute and entitled to a preference in the payment of his wages. 81 Salaries of officers of corporations are usually held to be current expenses, therefore the act of a company in disposing of property. to procure money to pay the salary of its president is not a fraudulent preference of creditors constituting an act of bankruptcy. But if such salaries are allowed to accumulate and become an existing debt, their payment will constitute a preference of a creditor so as to be an act of bankruptcy.8 82 76 Lindemann v. Rusk, 125 Wis. 210, 104 N. W. 119. 77 Potts v. Rose Valley Mills, 167 Pa. St. 310, 31 Atl. 655. 78 Mobile, J. & K. C. R. Co. v. Owen, 121 Ala. 505, 25 So. 612. 79 Hahn v. Anaconda Gold Min. Co., 26 S. D. 218, 128 N. W. 128. 80 Section 64b (4) of the Bankruptcy Act of 1898 as amended in 1906 (Act 81 Blessing v. Blanchard, 223 Fed. 35, Ann. Cas. 1916 B 341. 82 Richmond Standard Steel Spike & Iron Co. v. Allen, 148 Fed. 657. Salaries fixed and paid by a board of directors are not presumed. wrongful or fraudulent, and a trustee in bankruptcy is not entitled. to recover such salaries on behalf of the company unless fraud or wrongdoing is shown.83 The payment of salary or compensation to an officer who performs no services may be sustained where the corporation is profitable, and the payment is duly authorized, but a different rule applies when the corporation becomes insolvent. In the latter case the money paid may be recovered by the trustee in bankruptcy.84 § 2771. Actions by officers to recover salaries or compensation--In general. A discussion of the procedure in actions by officers to recover compensation must necessarily be somewhat limited, in order to avoid a repetition of the principles of substantive law already stated in this chapter and also in order to avoid a statement of the principles usually applicable in contract actions. An endeavor has been made to call attention to only the most important questions and those which usually arise in actions by officers to recover compen sation. An officer who seeks the recovery of compensation under a contract providing that his salary is to be fixed by some person, must 83 Fillebrown V. Hayward, 190 Mass. 472, 77 N. E. 45. Where a treasurer of a company threatened to resign unless his salary was increased and the board of directors of the corporation voted to grant an increase which operated retrospectively and covered services performed several months prior to the time of the resolution fixing the salary and it appeared that there was no fraud in effecting such increase of salary, the company being then solvent and the services being worth the increased amount, creditors of the corporation could not object to the increase of salary some two years later when the company became bankrupt. In re Knox Automobile Co., 229 Fed. 241. Where a treasurer's salary was increased and stock was turned over to him in consideration of his future support and assistance, a contention that the corporation was coerced into granting the increase because of the Where a corporation was merely a convenience for carrying out the purposes of an individual in exploiting a patented device, the directors, officers and associates being merely instruments responsive to the will of the owner, an implied assumpsit to pay such owner for services rendered would not be allowed, as against creditors of the bankrupt corporation. In re McCarthy Portable Elevator Co., 196 Fed. 247, aff'd 201 Fed. 923. show an application to have such salary fixed and its refusal, before the action will lie.85 § 2772. - Limitation of actions. In an action by an officer to recover compensation for services, the defense of the statute of limitations is not available when it appears that there was an understanding that the compensation was not to be paid until the corporation was out of debt and the action is seasonably commenced after the happening of that event.86 § 2773. Pleadings. An action of quantum meruit to recover for services will be dismissed, even though there is some evidence of a contract to pay a salary, where there is no separate count based on the express contract involved.87 An admission in the pleadings that a resolution was duly adopted operates to preclude the corporation from contending that such resolution was invalid as being adopted by the vote of an interested director.88 A set-off claimed by a corporation on account of having furnished office room to a plaintiff when a public officer is not available when not pleaded.89 § 2774. Burden of proof and presumptions. An officer seeking a recovery for special services rendered has the burden of proof,90 and in an action for a manager's salary the officer has the burden. of overcoming a presumption that the resolution fixing the compensation was entered in the minutes.91 Similarly, an officer seeking to recover the reasonable value of services has the burden of proving their value.92 § 2775.- Evidence. A resolution fixing the salary of an officer at a certain amount operates as an admission of the directors that 85 McLean v. Hayden Creek Mining & Milling Co., 25 Idaho 416, 138 Pac. 331. 86 Montana Tonopah Min. Co. v. Dunlap, 196 Fed. 612, aff 'g 192 Fed. 714. 87 Home Mixture Guano Co. v. Tillman, 125 Ga. 172, 53 S. E. 1019. 88 Maune v. Unity Press, 143 N. Y. App. Div. 94, 127 N. Y. Supp. 1002. That which is "duly" done is in legal parlance done according to law, and this does not relate to form merely, but includes both form and substance. Maune v. Unity Press, 143 N. Y. App. Div. 94, 127 N. Y. Supp. 1002. 89 Bell v. Peper Tobacco Warehouse Co., 205 Mo. 475, 103 S. W. 1014. 90 Marcy v. Shelburne Falls & Colrain St. R. Co., 210 Mass. 197, 96 N. E. 130. See 2734, supra. 91 Graham v. Coos Bay, R. & E. R. & Nav. Co., 71 Ore. 393, 139 Pac. 337. 92 Greathouse v. Martin, 100 Tex. 99, 94 S. W. 322. As to presumptions as to implied contracts see § 2739, supra. |