Wright v. Floyd

• Decision Date: 14 January 1909
• Docket Number: 6,242
• Citation: 86 N.E. 971,43 Ind.App. 546
• Parties: WRIGHT ET AL. v. FLOYD ET AL
• Court: Indiana Appellate Court

86 N.E. 971

43 Ind.App. 546

WRIGHT ET AL. v. FLOYD ET AL

No. 6,242

Court of Appeals of Indiana

January 14, 1909

Rehearing denied March 16, 1909.

Transfer denied April 22, 1909.

From Wabash Circuit Court; A. H. Plummer, Judge.

Suit by Milton Wright and others against Halleck W. Floyd and others. From a judgment for defendants, plaintiffs appeal.

Affirmed.

Spencer & Branyan and C. W. Watkins, for appellants.

S. M Sayler and Lesh & Lesh, for appellees.

OPINION

HADLEY, J.

Appellants sued appellees to set aside a judgment against the United Brethren Publishing Establishment, a corporation, and in favor of the Local Endowment Board for the Central Church of the United Brethren in Christ of Rohrersville, Maryland, which, it is averred, was based upon a fraudulent claim and a fraudulent confession of judgment, all to the knowledge of all of the parties interested. It is averred that appellants, together with appellees Floyd, Barnaby, Tharp and Montgomery, constitute the board of trustees of the appellee United Brethren Publishing Establishment, and have the management of its affairs; that said named appellees constitute the majority of the board of trustees of said corporation, and, over the protests of appellants, did and performed the acts complained of, and appellants bring said suit for the use and benefit of said publishing establishment. It is nowhere averred that appellants are members either of the corporation or of the church, for whose benefit the printing establishment was operated, or that they have any interest whatever in the controversy either as shareholder, stockholder, member or beneficiary. Moreover, it is apparent from the averments of the complaint that appellants seek to bring the suit as minority trustees and in their trust capacity for the benefit of the corporation.

The question we are called upon to decide is whether they thereby show sufficient interest to prosecute this suit. It cannot be said that the corporation is prosecuting the suit, since the corporation only acts by a majority of its board of trustees or at least a majority of a quorum present. Price v. Grand Rapids, etc., Co. (1859), 13 Ind. 58; 2 Cook, Corporations (5th ed.), § 712. And it is well settled that one or more members and less than such majority of a board cannot bind the corporation to any action. 2 Cook, Corporations, supra; Noblesville Gas, etc., Co. v. Loehr (1890), 124 Ind. 79, 24 N.E. 579; Allemong v. Simmons (1890), 124 Ind. 199, 23 N.E. 768. In 2 Cook, Corporations, supra, the learned author says: "All contracts of a corporation are to be made by or under the direction of its board of directors. The board of directors make corporate contracts by a regular vote of the board. * * * The board of directors have the widest of powers. All of the various acts and contracts which a corporation may enter into are entered into by and through the board of directors. The board of directors make or authorize the making of the notes, bills, mortgages, sales, deeds, liens, and contracts generally of the corporation. They appoint the agents, direct the business, and govern the policy and plans of the corporation. * * * They institute, prosecute, compromise, or appeal suits at law and in equity which the corporation brings or has brought against it. But there are limitations on their powers. If the board of directors attempt to do an act or make a contract which the corporate charter does not give the corporation the power to do or enter into, then any stockholder may enjoin that act or contract. Moreover, the directors can contract and act only as a board, duly notified and...