Where it appeared that a contract made with a corporation to do certain work, was fulfilled to the satisfaction of the board of directors managing the concerns of the corporation, and that such work was done on favorable terms, and was beneficial to the company, it was Held, that a court of equity would not, on the allegation of one of the corporators that there was a secret agreement between one of the directors and the contractor to divide the profits, enjoin the payment of the stipulated compensation.
MANLY, J.
Our reflections upon the questions presented by the pleadings in this case have conducted us to the conclusion that the injunction was properly dissolved in the Court below.
This conclusion has been induced, chiefly, by the purport of the answer from the president and directors of the company. This body express their entire satisfaction with the manner in which the work contracted for has been executed, and announce their willingness now to pay for the same according to the contract. It seems to us a single corporator of a joint stock company has not the power to repudiate a contract made by his authorized agents, the directors, in the face of such avowals. His redress, if he have any, is against the board of directors, and a writ restraining them from the fulfillment of the work assigned them ought not to be continued without an allegation, at any rate, of irreparable mischief. Should the directors participate in any fraud, or be guilty of gross negligence in office, to the prejudice of a stockholder, they might, we take it, be liable to him.
The two positions of defendant, Hoyt, that is, in the board of directors, and in copartnership with Merrill, are not consistent. The duties appertaining to them, respectively, may, and — probably will, be irreconcilable. Hence, they can not be occupied covertly, without subjecting the party to suspicion, and to a rigid accountability. But upon questions arising out of that condition of things, as between the company and director, we do not propose to enter, and have referred to the (118) matter only in order to obviate any misconstruction of our views.
The single question now before us, is, ought the injunction to be continued at the instance of a stockholder, when the answer of the directors of the company, confirming to that extent the answer of the defendant, Hoyt, declares that the contract was an advantageous one for the company, was at the lowest price offered, and has been faithfully executed; and when the company express their wish now to make the deferred payment, if not restrained by the Court.
There is no error in the interlocutory order appealed from.
PER CURIAM. Affirmed.