the appellants are those relating to the acquiescence by the plaintiffs in and their ratification of the ultra vires acts, and they ask that those findings be reversed, and that an interlocutory judgment be entered on the decision as thus modified, requiring respondents to account for the property and funds of the company thus misappropriated ultra vires by the board of directors. The material facts found by the trial court with respect to the ultra vires acts of the company may be summarized as follows:

That prior to the time any of the defendants became directors or officers of the company there had been incorporated in the year 1890, under the laws of Missouri, the Farmers' & Miners' Bank, with a capital of $12,000, consisting of 120 shares, of the par value of $100 each, at Bonne Terre, Mo., which was a small mining town, and this was the only bank there then, and was used by the company for the deposit of funds for the payment of its employés and by its employés as a bank of deposit; that in 1899 the bank became involved in financial difficulties and the company, through its officers, purchased 100 shares of its capital stock, and paid therefor $25,985.10, in order that it and its employés might continue to have the benefit of such a bank, and such purchase was ratified by the board of directors and by the stockholders on the 17th of May, 1900; that the decedent, Jones, became a director of the company May 17, 1900, and president November 1, 1904, and so continued until his death on December 7, 1913, and Camp became a director and the treasurer of the company in January, 1904, and has ever since so remained; that said stock was held by the company when Camp and Jones became directors thereof, but the defendant Crane did not become a director of the company until the 23d of November, 1911, and he became the assistant treasurer on October 1, 1912, and became president on the 10th of December, 1913, and he did not become aware of the purchase of the said bank stock until 1912; that the bank for a time became prosperous, and paid large dividends, to the benefit and advantage of the company, which sustained no loss by such investment in the stock of the bank; that while Camp and Jones were directors and officers of the company, and on the 26th of December, 1906, the company, without any participation therein by either of them, procured to be organized under the laws of Missouri, the Farmers' & Miners' Trust Company, with a capital of 1,000 shares of par value of $100 each, and the company subscribed for 825% shares thereof, which it paid for at par and took and held in the name of one Parsons, who some years later became a director of the company, and whose executors were named as defendants, but never served, and who became president of the trust company, and the company paid for 8 additional shares of stock in the trust company issued to individuals to qualify them as directors thereof; that the trust company took over and continued the business of said bank, and the company was fully reimbursed for the money paid by it for capital stock in the trust company from the sale of its bank stock. to the trust company; that the company ratified and confirmed this exchange; that neither Camp nor Jones participated in the purchase by the company of any of the shares of the capital stock of the trust

(182 N.Y.S.)

company, and did not become aware thereof until some time in the year 1912, and that Crane neither participated therein nor knew of the ownership by the company of the trust company stock until 1912; that such acquisition and holding by the company of stock in the trust company resulted in no loss to the company; that the board of directors of the company deemed it for its best interests to deposit the funds of the company with said trust company, and that the company carried large balances with said trust company, and at times upwards of $1,000,000, from the 28th of December, 1906, until the 15th of August, 1913, and received 2 per cent. per annum on its monthly balance; that the defendant Crane had no personal connection with such deposits, and that the depositories of the funds of the company were designated by a vote of the directors before he became a director, and that the company suffered no loss by reason of such deposits or through its continued holding of the stock of the trust company; that the Doe Run Lead Company, a Missouri corporation, owned lead mines adjacent to the property of the company in Missouri, and on the 16th of September, 1906, was indebted to the trust company more than $300,000, and on said day delivered to the trust company 3,000 shares of its capital stock of the par value of $300,000, and the trust company gave it credit on the indebtedness therefor and the stock was carried for the trust company in the names of Jones and Camp, who were president and treasurer, respectively, of the Doe Run Lead Company, as trustees; that none of the defendants participated in the acquiring of this stock by the trust company, nor was any of them at any time an officer or director of the trust company, and it was acquired in good faith and was authorized by the laws of Missouri, and was accepted at not more than its intrinsic value and its acquisition resulted in no loss to the trust company; that on the 16th of February, 1912, the Doe Run Lead Company sold to the trust company, 19,360 shares of the capital stock of the St. Joseph Lead Company, then owned by it, for $193,600, and it likewise took and carried that stock in the names of Jones and Camp as trustees, and that none of the defendants participated in the acquisition thereof, and it was acquired in good faith and lawfully, and at not more than its intrinsic value, and resulted in no loss to the company; that negotiations were instituted in December, 1912, for a consolidation of the company and the Doe Run Lead Company, and a reputable, experienced mining engineer appraised the value of the properties of the respective companies for a joint committee of the companies having the matter in charge and estimated the property of the company to be worth $13,500,000 and of the Doe Run Lead Company to be worth $6,750,000, and the consolidation was effected by the exchange of stock of the Doe Run Lead Company for stock of the company on the basis of said valuations, which were on the basis of par for the Doe Run Company stock and $13 per share for the company's stock, and a cash payment was made to the Doe Run Company stockholders for a balance; that by January, 1914, the company had acquired about 92 per cent. of the Doe Run Company stock, and later on about 98 per cent., and said Doe Run Company was duly dissolved on or about the 12th day of

182 N.Y.S.-18

June, 1917, and its remaining property and assets were purchased by the company at a valuation of $168 per share for the remaining 2 per cent. of the stock; that the stockholders of the company, including the plaintiffs, approved the recommendation of the joint committee of the company for the consolidation thereof.

[1, 2] These are the material facts relating to all the acts of which complaint is made, excepting those relating to the dissolution of the trust company. The court held that the acts of the company in acquiring stock in the bank were ultra vires, On no theory could the defendants be liable for the purchase of the stock which was made before they became connected with the company. There is no evidence or finding that any of them in any manner approved or ratified the purchase, or took any steps with respect thereto that a prudent officer or director should not have taken, or omitted to take any action which a prudent officer or director should have taken with respect thereto. Directors may be under a direct liability to stockholders for the depreciation of the value of their stock through ultra vires acts, when the stockholders have not assented thereto, even when they would not be liable to the corporation itself (Holmes et al. v. Willard, 125 N. Y. 75, 25 N. E. 1083, 11 L. R. A. 170; Vought v. Eastern Building & Loan Association, 172 N. Y. 508, 65 N. E. 496, 92 Am. St. Rep. 761; Eastern Building & Loan Association v. Williamson, 189 U. S. 123, 23 Sup. Ct. 527, 47 L. Ed. 735); but a director is only liable to a corporation or its stockholders for his own acts or omissions and to render him liable for ultra vires acts of the corporation it must be shown and found that he voted therefor, participated therein, connived thereat, or negligently omitted to perform his duty (In re Sands Allotment Co., L. R. [1894] 1 Ch. 816; Kavanaugh v. Commonwealth Trust Co., 223 N. Y. 103-116, 119 N. E. 237; Kavanaugh v. Gould, 147 App. Div. 281, 131 N. Y. Supp. 1059, Holmes v. St. Joseph Lead Co., 168 App. Div. 688, 154 N. Y. Supp. 513, affirmed 217 N. Y. 619, 111 N. E. 1088; Bloom v. National United Benefit Savings Co., 81 Hun, 120, 30 N. Y. Supp. 700, affirmed 152 N: Y. 114, 46 N. E. 166; Cassidy v. Uhlmann, 170 N. Y. 505, 63 N. E. 554; People ex rel. v. Eq. Life Assur. Soc., 124 App. Div. 714, 731, 109 N. Y. Supp. 453; Childs v. White, 158 App. Div. 1, 142 N. Y. Supp. 732; Briggs v. Spaulding, 141 U. S. 132, 11 Sup. Ct. 924, 35 L. Ed. 662; 8 Thompson on Corporations [2d Ed.] §§ 12731275), and aside from acts which are ultra vires, and for which their liability is as above stated, they are not liable for losses caused by a mere error of judgment, when they act without corrupt motive and in good faith (Thompson, supra, §§ 1265 and 1271; People ex rel. v. Equitable Life Assur. Soc., supra).

[3, 4] But a stockholder cannot have redress in equity when, with full knowledge of the material facts, he has assented, although under protest, to ultra vires acts, and has accepted the benefit thereof. Wormser v. Met. St. R. Co., 184 N. Y. 83, 76 N. E. 1036, 112 Am. St. Rep. 596, 6 Ann. Cas. 123. The findings, which are in accord with the evidence, under the authorities cited, exonerate the defendants from any liability on account of the organization of the trust com

(182 N.Y.S.)

pany, or the purchase or holding of its stock or using it as a bank of deposit. Regardless of who incorporated it, the acts of the company in using it as a bank of deposit would not be ultra vires.

There remains only the question with respect to liability arising out of the dissolution of the trust company. The court further found that the defendants were present and took part in the adoption of a resolution by the board of directors of the company held on the 20th of March, 1913, authorizing Jones and said Parsons, who was a director, to vote the company's trust company stock for the voluntary liquidation of the trust company, and giving them full authority to take any other necessary action; that the trust company never failed, and it was neither "insolvent nor threatened with insolvency, nor embarrassed," in the years 1912-1913; but on the 14th of July, 1913, all its stockholders authorized its liquidation and the distribution of its assets pro rata among its stockholders, and assigned their stock. to Edward A. Rozier and M. P. Cayce, to immediately liquidate the trust company and to receive from the St. Joseph Lead Company, its depositor, the funds necessary for that purpose, and permitted the St. Joseph Lead Company to participate in the distribution of the assets, provided that it advanced the money for the liquidation of the trust company, and consented thereto, and authorized the used of its funds on deposit with the trust company for that purpose, which, through Jones and Parsons, it did; that prior to October 1, 1913, the depositors of the trust company, whose deposits aggregated $516,000, received their share of the assets, and deposits aggregating approximately $123,000 were assigned to the company upon its delivering to the representatives of the trust company its promissory notes therefor, which it has since paid; that the remainder of the depositors of the trust company were paid in cash by moneys advanced by the company; that on or about the 1st of October, 1913, the company and the trust company and its stockholders and said Rozier and Cayce, to whom the funds of the trust company had been or were to be conveyed for distribution, entered into an agreement by which $14,877.70 of the cash funds of the trust company were to be set apart and held for the payment of that amount, which was the balance owing to its creditors, and reciting that the company had advanced to the trust company for the purposes of the liquidation $444,379.27, and that the trust company still had assets of the face value of $754,158.57, and by which it was further agreed that the company should participate in the assets to the extent of 60 per cent. thereof, and that the stockholders of the trust company should share therein to the extent of 40 per cent., and the remaining assets were assigned to said two individuals as trustees, to reduce the part thereof consisting of notes to cash, and to hold the balance after the payment to the stockholders of the trust company for the benefit of the company.

The court also found that at the time of the liquidation F. P. and J. B. Graves were indebted to the trust company on promissory notes aggregating $113,500, secured by 800 shares of Doe Run Lead Company stock, 2,500 shares of the St. Joseph Company stock, and 7,317 shares of the North Arkansas Mining & Investment Company stock,

and, being unable to pay, had offered to said liquidators, Rozier and Cayce, to surrender the collateral in payment, and the offer was accepted by the board of directors of the St. Joseph Lead Company, participated in by the defendants, and the collateral was accepted in full satisfaction of the indebtedness and the notes surrendered; that by the liquidation the trust company stockholders, other than the company, who owned 166% shares of its capital stock, of the par value of $16,666.66, received notes of solvent makers, held by the trust company of the par value of $48,660; that said liquidating trustees with the consent of the company, exchanged 3,818 shares of Doe Run Company stock, which they had received from the trust company and held for 29,033 shares of the stock of the St. Joseph Lead Company, with the result that on March 1, 1914, they held 50,893 shares of the St. Joseph Lead Company stock, which they delivered to it on March 2, 1914; that in the course of the liquidation they made cash payments to the company from the funds of the trust company aggregating $87,951.61; that at a meeting of the board of directors of the company on September 8, 1915, the liquidating trustees submitted a report of their accounts, which was ac cepted and approved; that the report showed that the company had been charged $601,228.05 for the 50,893 shares of its capital stock received from the liquidating trustees, or nearly $13 per share, although at that time its stock was selling in the open market at prices ranging from $6% to $71⁄44 per share, and the market value thereof was not in excess of $368,974.25; that on arriving at the amount the company was charged for the stock so received in exchange for the Doe Run stock, its shares were computed at the par value of the stock of the Doe Run Company's stock so exchanged, excepting those taken on the settlement of the Graves loan, which were computed at the face amount of the Graves indebtedness, and the other shares were computed at par; that the trust company was duly dissolved by a decree of the circuit court of Missouri on the 27th of May, 1914, and that the various steps in the liquidation of the trust company were taken in good faith and under the advice of counsel and with the approval of the bank commissioner of Missouri; that the settlement of the indebtedness of the trust company to the company, as stated, was made in the honest exercise of the judgment of the directors of the company, and for its best interest, and resulted in no loss to the company; that Crane had examined the report of the mining engineer, and believed that the stock of the company was intrinsically worth at least $13 a share, and that the stock of the Doe Run Company was worth at least $100 a share, and that he took no part in the proceedings for the dissolution of the trust company, and had no connection with the selection of the liquidating trustees, or in assigning the trust company's assets to them; that Jones merely carried out the instructions of the board of directors of the company, given without his control, and that there was no improper manipulation of the property of the trust company by him; that none of the defendants were ever stockholders, directors, or officers of the trust company or of its predecessor bank, or borrowed money from either of them, or de