THE COLUMBUS COMPANY v. HURFORD.

authorized the president and secretary to give the note, but it appeared that at a meeting of the stockholders a resolution was passed purporting to confer the authority.

LOTT Senator, delivering the opinion of the court on this subject, says: "Where a charter vests a board with the power to manage the concerns of a corporation the power is exclusive in its character. The corporations have no right to interfere with it, and courts will not, even on a petition of a majority, compel the board to do an act contrary to its judgment (Angel and Ames on Corpo. p. 121, 151 to 164.) The stockholders as such, in their collective capacity, could do no corporate act. It is one of the fundamental conditions of the contract into which the corporators have entered, by becoming members of the corporation, that its concerns shall be managed in the manner prescribed by the act of incorporation, and from this no essential departure can be made."

But it is said that this is a technical objection to the form of the release, and in a Court of Equity, should not be permitted to prevail. I do not think it is such an objection as a Court of Equity could overrule. But even if it were, it must, in the circumstances of the case, have its full force, because the release was obtained fraudulently.

The meeting at which the committee was appointed, was called by or at the instance of Redick and Hurford, and its members were named by them. With a single exception, it was composed of persons who knew but little of the matter, or of the company's affairs. That exception was one Green. The bill charges that at that time he was interested with Redick and Hurford in the purchase. This they both positively deny in their depositions, and swear that he did not become interested with them until afterwards. But the release is produced by them. It was drawn by Redick at the time and is signed by the committee, and among its numerous recitals it is stated, that

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THE COLUMBUS COMPANY v. HURFORD.

Redick, Hurford, Hughes, and this very man, Green, had purchased this ferry. Their next step was to meet this committee of their own selection and make certain representations about the purchase from Mitchell. Hurford and Redick, as well as the complainant's witnesses swear, that they stated that the note formed a very small part of the consideration, and was worthless. We have already seen to what extent this representation was true. In fact Hurford's own account of the negotiations with Mitchell, shows that the note formed at least one quarter of the consideration. It is true Hurford swears that he made a full and truthful statement of precisely what was paid to Mitchell, and that the company could have investigated the matter fully for themselves, and could not have been misled. I do not attach very great value to such general statements. He should have informed us what he did say, and left us to judge whether it was a full, fair account of the matter. What he is shown to have disclosed, demonstrates that his statement was not a full and fair disclosure of all the facts. Besides, he might have told this committee exactly what was paid, and not concealed the real proportion which the note formed of the whole consideration.

And as to any opportunity of the committee to investigate the matter, they could do nothing but inquire of these parties as to the facts. They could not come down from Columbus, where the investigation, such as it was, was being made, and learn the facts from Mitchell, for Redick, Hurford, Hughes and Green, were then pressing the matter to an immediate conclusion. They did not propose to remain but one or two days. They were detained by a storm longer than they intended, but this gave the Company no opportu. nity to inquire elsewhere after the facts. Their own account shows that they gave the Company, only the alterna. tive either to lose all it had in the matter, or pay at once all that had been advanced. One of the committee swears

THE COLUMBUS COMPANY v. HURFORD.

that they were left to their choice between these two courses only. I am satisfied no sufficient opportunity was given to inquire elsewhere for the facts. But it is not material whether there was or not, considering the relations of the parties. Hurford and Redick both occupied confidential relations to this company. As early as 1858, they had undertaken a settlement with Mitchell for it, and had continued in one way and another to act in its behalf. Hurford was a director, and, as the complainant's witnesses say, a confidential adviser and friend, and Redick was counsel to the Company-at least had been and was then so considered by the Company. It was their duty to explain their transaction with Mitchell so fully that when the Company came to deal with them they would be on equal footing, or in other words, to communicate to the company every fact relating to the transaction within their knowledge. This duty grew out of the relation they sustained to the Company. For not doing so, they are liable to lose the entire advantage of the alleged settlement, and on this subject the cases are numerous. A case very recently decided in the English Chancery, is that of Tate v. Williamson, Law Reports, 1 Equity Cases, 528, 2 Ch. Ap. 58. It was first heard and decided by the then Vice-Chancellor Woods, now Lord High Chancellor, and his decree was affirmed by Chelmsford, L. C. It is especially interesting here because the fiduciary relation, out of which the liability grew, was rather indecisive, and there was not proper advice given to seek information in a quarter where it could be had. facts of the case were briefly these. Tate, a young man, aged twenty-three, was entitled to a moiety of a freehold, the entirety of which brought in about £440 per annum. He had been dissipated at college, and had contracted debts with tradesmen and money lenders, amounting to £1,000, which were pressing him. His father was estranged from him, and he had formerly applied to and received from his

The

THE COLUMBUS COMPANY U. HURFORD.

great uncle advice and assistance. He now made applica tion to him again for aid. The uncle deputed his nephew, one of the defendants, to meet young Tate at an appointed time and place, to discuss his embarrassments. At this interview the young man refused to allow any attempt to compromise his debts, and said he would sell his moiety of the estate. Upon which the defendant offered him £7,000, payable in installments. The next day Tate accepted the offer. Before the agreement had been signed, the defendant obtained a valuation by a surveyor, estimating the value of the mines under the entirety, at £20,000. The sale was completed without this valuation being communicated to Tate. He having died, his heir filed this bill, impeaching the sale. In his judgment, Sir W. Page Wood, V. C., says: "The broad principle upon which the court acts in cases of this description is, that whenever there exists such a confidence, of whatever character that confidence may be, as enables the person in whom confidence or trust is reposed, to exert influence over the person trusting him, the court will not allow any transaction between the parties to stand, unless there has been the fullest and fairest communication of every particular, resting in the breast of the one who seeks to establish a contract with the person so trusting him. This unfortunate young man being in difficulties of a serious character, or rather which were in his opinion serious, the defendant, Robert Williamson, as representing his uncle, H. H. Williamson, Tate's great uncle and trustee, took upon himself to advise the young man in reference to the arrangement of his difficulties. The young man, having then said that he was determined to dispose of his property, it was then absolutely impossible for Robert Williamson, filling as he did that position of confidential adviser, to enter into any treaty for the purchase of that estate, without communicating to him every particle of information that he himself possessed with respect to

THE COLUMBUS COMPANY v. HURFORD.

its value. One most important piece of information, Cope's report as to the value of the minerals, which he put for the whole estate, at £20,000, being in respect of a moiety £3,000 more than the defendants gave for it, minerals, surface and all included, was during the negotiations obtained by the defendant and kept back from the person with whom he was dealing. This circumstance renders it at once impossible that the contract can be maintained. It has been said: What could Robert Williamson have done?' To which I answer, Why did he not tell this young man to consult some mining surveyor, or Mr. Cope, whom he had himself consulted.' It is a fallacy

to contend that Robert Williamson's mission was limited to seeing if Tate's debts could be compromised, and that his agency ceased with the refusal of Tate to allow his debts to be compounded for." The Lord Chancellor, in his judgment, reviews the whole case, and states the principle in even more decisive and exact terms.

Nor do we think there was any ratification of the release in making of the deed by the mayor of Columbus to the purchasers, for that was the deed of a public officer who was bound to convey to a party occupying the premises, who appeared to have a right to the deed. It was not in any sense nor in any view the deed of the complainant.

The claim interposed for services rendered by the defendant Hurford to the complainant in securing the claim against Mitchell, and negotiating for the ferry, should be allowed the complainant to the extent of what the same was reasonably worth.

The defendant Hurford should be allowed the expense of the management and control of the ferry, the same to be deducted from the gross profits or income of said ferry. He should not be allowed for crossing the members of the Columbus Company free. The defendant Hurford, should