Cheeney v. Lafayette, Bloomington and Mississippi Railroad Co.

all understood and expected that a reasonable compensation would be made for their services rendered in the discharge of their duties. The doctrine is stated in Redfield on Railways, 406, that, in England, to entitle directors, etc., to receive compensation, it must be provided for and fixed by the by-laws of the organization, and that the doctrine in this country requires such compensation to be thus fixed, or at least by a resolution of the directors spread on the minutes of their proceedings, and we apprehend that compensation, whether the one mode or the other be adopted, must be fixed before the services are rendered.

In the case of The Am. Cent. R. R. Co. v. Miles, 52 Ill. 174, it was held that a director could not recover compensation for services unless they were thus fixed by the directors, and the services of the president and other officers of the company fall fully within the principle of the rule. The president and directors of such a company are trustees for. the stockholders, and it is for that reason that the law does not imply a promise to pay them for discharging the duties imposed upon persons occupying that relation.

At the common law, a trustee was not entitled to compensation, and could not recover on a quantum meruit. And it was in the application of this rule that it was held, in The Loan Association v. Stonemetz, 39 Penn. 534, that a resolution passed by the corporation after services were rendered, that the officer be paid a sum of money for services as chairman of a committee, was without consideration, and imposed no obligation on the corporation that could be enforced. And the case of N. Y. and N. H. R. R. Co. v. Ketcham, 27 Conn. 170, illustrates the rule in holding that it does not matter that the services were rendered in the expectation and understanding that the officer should be paid. And in the case of Butts v. Wood, 37 N. Y. 317, it was held, notwithstanding the bill for services rendered by an officer where no by-law or resolution had fixed his pay, and the bill was allowed by the board, that "one holding a position of trust cannot use it to promote his individual interest in any manner in disposing of the trust property; that the circumstances under which the bill was allowed was a fraud on the shareholders, and to permit such a transaction to stand would be a reproach to the administration of justice."

In The N. Y. and N. H. R. R. Co. v. Ketcham, 27 Conn. 175, the court use this language: "It would be a sad spectacle to see the managers of any corporation assembling together and parceling out

Cheeney v. Lafayette, Bloomington and Mississippi Railroad Co. among themselves the obligations and other property of the corporation in payment for past services."

In the case of Dustin v. The Imperial Gas Co., 3 Barn. & Adol. 125, it was held that, whilst agents and employees might, perhaps, recover for services rendered for a corporation, a director could not, unless provision therefor had been made by resolution having the force of a by-law, or by such a by-law. And it was said that such officers differ materially from mere agents and employees; that directors are managers or governors, and not agents.

No person is under the slightest compulsion to accept the position, and if he is unwilling to do so without compensation, public policy requires that his compensation should be fixed and certain before he enters upon the discharge of the duties of his office. This rule must apply to services rendered by persons holding the office of directors, who have the control of the funds of the body. But a person not a director, and having no control over the funds and property of the corporation, rendering services, does not occupy the relation of trustee to the company, and does not fall within the rule, and may recover a reasonable compensation for services rendered The law has never conferred on trustees the authority to profit by the exercise of the powers and duties of their position.

This, then, disposes of the claim of appellant for services rendered as a director of the company. But the question arises, whether or not he rendered services for the company which do not pertain to his duty as director, and if so, whether he may recover a fair compensation for such service.

It is said by Lord COKE, in his Commentaries on Littleton, 66 b, that "a corporation aggregate of many cannot appear in person, for, albeit the bodies natural whereupon the body politic consist may be seen, yet the body politic or the corporation itself cannot be seen, nor do any act, but by attorney." And in Angell & Ames on Corp., p. 210, it is said that, "in general, the only mode in which a corporation aggregate can act or contract is through the intervention of agents, either specially designated by the act of incorporation or appointed and authorized by the corporation in pursuance of it." And it was held, in Waller v. Bank of Kentucky, 3 J. J. Marsh. 206, that the agents of a corporation, like the agents of natural persons, are entitled to recover compen sation according to what it is reasonably worth. In that case the law required the body to appoint a clerk, but neither the law nor

Cheeney v. Lafayette, Bloomington and Mississippi Railroad Co.

any by-law or resolution of the board of directors fixed his compensation, and he was permitted to recover in assumpsit. See Hall v. The Vermont and Massachusetts R. R. Co., 26 Vt. 401.

If, then, appellant was appointed to act as agent for the performance of duties outside of those devolving on him as director, it is but reasonable and just that he should be allowed to recover a fair compensation for such services. Shackelford v. N. O., J. and G.

N. R. R. Co., 37 Miss. 202.

Because he was a member of the board of directors, it does not follow that he was bound to perform any and all duties usually exercised by agents properly appointed, and when he performed such duties under an appointment by a resolution of the board, he should be allowed compensation therefor. Where an attorney is employed to attend to the general or special affairs of the company, he should be compensated. So of a secretary or clerk, and an agent to solicit subscriptions and to procure the right of way, etc.

It would, then, follow that, as appellant was appointed to solicit subscriptions of stock, and to procure the right of way for the road, he may recover, unless that duty was imposed on him as a director by the charter or the by-laws. In performing those duties, it is more than probable that he acted as an agent, and not as a director, and should be permitted to recover for such extra service, but if this duty was imposed by the charter or the by-laws of the company as a director, then a recovery could not be had therefor. The duties he performed as a member of the executive committee in making efforts to contract for the construction of the road, including time and travel, were a part of his duty as a director, and, from the authorities above referred to, he has no right to recover for them. Nor is it an answer to say, that the company could have intrusted the duties of the executive committee to others not directors or even stockholders, and paid them a fair compensation for their time and skill. They had the power to so act as directors, and they, as directors, or as a part of them, performed the services. The judgment of the Circuit Court must be reversed and the cause remanded.

Judgment reversed.

Butler v. Huestis.

BUTLER, appellant, v. HUESTIS.

(68 Ill. 594.)

Power-to appoint fee allows appointment of less than fee.

her body."

"Heirs of

Where a party has power to appoint a fee, if there are no words of positive restriction, a less estate may be appointed.

Certain real property was conveyed to a trustee for the benefit of B., the trus tee to convey the same to such person as B. by her last will should appoint, which person should take the same in fee, and in default of her appointment it should be conveyed to the children of B. B. by will gave the use of the property to H. during life," the reversion and fee thereof to the heirs" of her body at and after her decease." Held, that the words "heirs of her body" were to be taken as words of description and not of limitation, and a decree sustaining the devise was affirmed.

BILL

ILL in equity by William M. Butler against Altieri A. Huestis and others to have a trust executed by conveying to the children of complainant. The facts other than those stated in the opinion were these: Complainant, in 1861, conveyed certain real property to defendant, Seneca C. Bliss, in trust for the use of complainant's wife, Celia T. Butler, who subsequently died, leaving a will, which is passed upon in the following opinion. The court below decided adversely to complainant's claim, and he appealed.

Ayer & Kales, for appellant.

Hitchcock & Dupee, and Paddock & Ide, for appellee.

SCOTT, J. This bill is for relief, and is framed on the supposition there has been no nomination, by the donee, of any one in being to take the fee of the property, as provided in the deed of settlement.

The deed was made in 1861. The property was conveyed to a trustee, and the habendum clause provides he shall hold it "upon the special trusts, and for the uses and purposes, and subject to the powers and obligations," therein expressed, "and none others." The conveyance was made for the benefit of Celia T. Butler, wife of complainant, and the special trusts are declared in the third

Butler v. Huestis.

division, as follows: Upon the death of Celia T. Butler, the trustee shall convey the real estate, or so much thereof as shall remain undisposed of, to such person or persons as she, by her last will and testament, or by an instrument in the nature of a last will and testa ment, subscribed by her in the presence of two or more credible witnesses, shall have directed and appointed. It is expressly declared that, upon the decease of Mrs. Butler, the real estate shall belong, in fee simple absolute, to such person or persons as she shall have appointed by her will; but in default of such appointment, it shall be conveyed to her children, upon the youngest arriving at the age of twenty-one years, and in the event of her death without having made any last will and testament, and the death of all her children, then to reconvey so much of the premises as should remain undisposed of.

In 1865, Mrs. Butler died, after having published her last will and testament in due form. By the fourth paragraph, the testatrix gives and bequeaths to Altieri A. Huestis the property involved in this litigation, with the use, possession, rents and profits during her natural life," the reversion and fee thereof to the heirs of her body at and after her decease."

Whatever may have been the intention of the settler of the property, it is quite clear the donee of the power was fully authorized by will, or an instrument in the nature of a will, to indicate the person or persons to whom the trustee should convey the estate upon her death. The vital and controlling question is, has she done this? The power is general, and the declaration is, the estate, upon the death of the donee, shall thence belong to such persons as she shall direct and appoint, in fee simple absolute. No broader power could have been given, nor is there any obscurity in the terms used, but the objection taken is, there was no person in being appointed by the will to take the fee of the property at the decease of the testatrix, and hence it is insisted there was no execution of the power.

The law seems to be well settled by authority, where a party has the power to appoint a fee, if there are no words of positive restriction a less estate may be appointed. The appointment of a less estate than the donee might have created under the power, is not thereby rendered void. But where an appointment is to be made of a particular estate, or in a certain manner, and in no other way, the negative words must control, aud the donee is not permit