tion according to their best judgment, and in so doing they cannot be controlled in the reasonable exercise and performance of such duty. As a general rule the stockholders cannot act in relation to the ordinary business of the corporation, nor can they control the directors in the exercise of the judgment vested in them by virtue of their office

The relation of the directors to the stockholders is essentially that of trustee and cestui que trust. The peculiar relation that they bear to the corporation and the owners of its stock grows out of the inability of the corporation to act except through such managing officers and agents. The corporation is the owner of the property, but the directors in the performance of their duty possess it, and act in every way as if they owned it.

This court, in Bosworth v. Allen (168 N. Y. 157), referring to directors, say: "While not technically trustees, for the title of the corporate property was in the corporation itself, they were charged with the duties and subject to the liabilities of trustees. Clothed with the power of controlling the property and managing the affairs of the corporation, without let or hindrance, as to third persons they were its agents, but as to the corporation, itself, equity holds them liable as trustees. (2 Pomeroy's Equity Jurisprudence, secs. 1061, 1063, 1088, 1097.)"

The relator occupied a position toward the corporation that was one of trust and responsibility. He was given power and authority to act not only substantially uncontrolled by the corporation, but he was not subject to discharge as an employee unless such_right_is vested in some court or body of persons by statute or in its articles of incorporation duly authorized by statute.

It would be somewhat startling to the business world if we definitely announced that the directors of a corporation were mere employees and that the stockholders of the corporation have the power to convene from time to time and remove at will any or all of the directors, although their respective terms of office have not expired.

It is and was prior to the amendment of said certificate of incorporation provided by statute that an action may be maintained against a director of a corporation to procure a judgment suspending him from exercising his office if it appear that he has abused his trust or to remove him from office upon proof or conviction of misconduct. (General Corporation law, sections 90 and 91; former sections 1781 and 1782 of the Code of Civil Procedure.) It is provided by section 307 of said General Corporation Law that a director shall not be suspended or removed from office by a court or judge otherwise than by the final judgment of a competent court in an action brought by the attorney-general as prescribed by said section 90 of that act.

The statute providing for an action in the name of the attorneygeneral to suspend or remove a director is not exclusive of such reasonable and lawful charter provision relating thereto as may be included in the articles of incorporation. Without some statute or provision of the charter authorizing his removal or suspension, a 29-PRIVATE CORP.

Statute

director cannot be removed or suspended from office until the end of his term, at least without cause. (Thompson on Corporations [2nd ed.] secs. 1084, 1085, 1086; Taylor on Corporations, sec. 649; Cook on Corporations, sec. 711; Morawetz on Private Corporations, secs. 541, 542.)

Upon the merits of the controversy presented by this appeal there are two important questions for consideration: I. Whether the amendment of the certificate of incorporation contemplates the removal of a person as a director without a reasonable notice of the alleged sufficient cause for his removal and a reasonable opportunity for him to be heard upon the question whether his removal is desirable and for the best interests of the corporation.

2. Whether the relator had a reasonable notice of the alleged sufficient causes for his removal and a reasonable opportunity to be heard before the board of directors in relation thereto.

We shall not further discuss the merits of the relator's claim because we are of the opinion that his remedy, if any, is not by mandamus. * * *

The action in the nature of a quo warranto affords a complete remedy to the relator if he is legally entitled to be reinstated and renders the proceeding by mandamus not only unnecessary but contrary to the recognized practice of the courts.

The special term and the appellate division were right, therefore, as a matter of law in refusing the writ, and the order should be affirmed, with costs.

CULLLEN, Ch. J., Haight, VANN, WILLARD BARTLETT, HISCOCK and COLLIN, JJ., concur.

Order affirmed.R

Section 2.-Rights.

A-COMPENSATION.

CHEENEY v. LAFAYETTE ETC. R. CO.

1873. 68 Ill. 570.

APPEAL from the Circuit Court of Livingston county; the HON. CHARLES H. WOOD, Judge, presiding.

This was an action of assumpsit, by Jonathan H. Cheeney against the Lafayette, Bloomington and Mississippi Railway Company, to recover for services, as stated in the opinion.

"In Gold Bluff &c. Corporation v. Whitlock (1903) 75 Conn. 669, 55 Atl. 175, held that the stockholders may amend the by-laws so as to increase the number of directors.

See Isle of Wight R. Co. v. Tahourdin (1884). L. R. 25 Ch. Div. 320, 332 ("I am of opinion that under sec. 91 a general meeting of shareholders has

MR. JUSTICE WALKER delivered the opinion of the court: The Lafayette, Bloomington and Mississippi Railroad Company was organized, and appellant was elected a director. In January, 1870, the company, through its board of directors, created an executive committee, consisting of five persons, who, with the chief engineer, were empowered to make contracts and provide funds for the construction and equipment of the road; and, in the month of January, 1870, appellant was appointed a member of the executive committee, and continued to act as such until the last of January, 1872. This service is claimed by appellant to have been worth $1,000.

He was, also, in September, 1869, appointed as agent of the company to procure the right of way through McLean county, and he rendered services in that capacity for which he claims $600. He was also appointed, in the autumn of 1872, an agent to solicit and procure subscriptions to aid in constructing the road, and he claims he devoted two months of his time to that service, and that it is worth $400; that whilst a member of the executive committee, he made frequent trips to Chicago and Lafayette on the business of the company; that in the spring of 1871, after the road-bed was graded and bridged, he was appointed as a member of a special committee to go. East to make, if possible, a contract for the completion of the road, and he went to Philadelphia and New York, and was absent two weeks, and afterwards conferred with other parties with a view of contracting for the completion of the road, and in doing so went to Chicago, Lafayette, Cleveland and New York, and was absent four weeks.

It appears that the claim for these services was presented to the company and audited by its executive committee on the 13th day of January, 1872, amounting to $4,000; that a warrant for that amount was drawn on the treasurer; that the board of directors, at a meeting on the 31st day of January, 1872, appropriated $25,000 to pay this and other claims, but appellant testifies that he has never received any part of his claim, and brought his action of assumpsit to recover for work and labor and for money paid out for the use of the company.

A warrant of attorney was given by the company to confess a judgment, which was entered. But subsequently a motion was made

power to remove directors"); Ward v. Davidson (1886) 89 Mo. 445, 463, 1 S. W. 846 (court may remove directors for misconduct).

As to qualifications of directors and de facto directors, see Matter of Ringler & Co. (1912) 204 N. Y. 30, 97 N. E. 593; cf. Waterman v. Chicago &c. R. Co. (1892) 139 Ill. 658, 29 N. E. 689, 15 L. R. A. 418, 32 Am. St. 228.

As to delegation of directors' powers, see Gillis v. Bailey (1850) 21 N. H. 149, 160-5. Cf. Hoyt v. Thompson's Exr. (1859) 19 N. Y. 207 (writ of error dismissed, 1 Black [U. S.] 518, 17 L. ed. 65); Sheridan Elec. Light Co. v. Chatham Nat. Bank (1891) 127 N. Y. 517, 28 N. É. 467 (directors may invest an executive committee "with power to transact the business of the company during the interval between the meetings of the board of trustees"). See also, Chicago Hansom Cab Co. v. Yerkes (1892) 141 Ill. 320, 30 N. E. 667, 33 Am. St. 315.-Eds.

to set aside this judgment, which was done, and the company let in to plead. After filing pleas, the case was submitted to the court for trial, without a jury, by consent of parties. The court found for the defendant, and entered a judgment in bar of the recovery, and for costs, and plaintiff brings the record to this court on appeal.

In adopting the by-laws of the company, no salary or provision for compensation of the officers was made, but it is claimed they 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 Pa. 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 rules 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. 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 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 Ky., 3 J. J. Marsh 206, that the agents of a corporation, like the agents of natural persons, are entitled to recover compensation according to what it is reasonably worth. In that case the law required the body to appoint a clerk, but neither the law nor 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 Vt. and Mass. 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. Shackleford 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

Our

case,