may recover a judgment which can be enforced like other judg ments against the city. The remedy of the plaintiff is not confined to proceedings by mandamus to compel the common council to agree to the amount estimated by the mayor for the purpose of the payment of his salary, or else to in good faith decide upon some other and reasonable sum. The mayor and the common council might perhaps differ as to what was a proper amount to fix upon for such purpose, and it would be difficult for the court. in such proceedings to name a sum which it should decide to be reasonable. It might also be very difficult to determine whether the sum fixed upon by the common council, if a very small one, were fixed upon in good faith or not, and if not, how to compel the exercise of good faith might be somewhat of a question. good faith existed and the sum fixed upon were still thought by the officer to be insufficient because unreasonably small, what appropriate proceeding to follow in such case might give rise to a good deal of deliberation.

If

It is quite clear that many objections and defenses might be urged by the common council to proceedings by mandamus, which would not involve the merits of the controversy, but would involve confusion and delay. About all that the writ of mandamus could accomplish with a common council opposed to an appropriation would be to require the board to meet and exercise the authority conferred upon it by law, and determine upon the appropriation of some sum which it might say was a reasonable compensation for the services performed. That sum might be much less than the officer would regard as a reasonable sum, and much less than the sum estimated by the mayor. The court would not have the power to command the common council to agree upon or to name a definite sum, and thus the writ might turn out to be a fruitless remedy for the plaintiff. These views are strengthened by an examination of the case of People v. Common Council of Buffalo, reported in 16 Abb. N. C., 96, and upon appeal in 38 Hun, 637. That was a proceeding by mandamus, and the order entered in that case shows the difficulties of the situation and the infinite chances for evasion of the commands of the writ.

The remedy by mandamus, even if proper, is by no means adequate.

Proceeding by indictment to punish individual members of a common council who might wilfully or maliciously persist in a refusal to appropriate a sum sufficient to pay these expenses for carrying out the civil service law, while it might be satisfactory for the purpose of vindicating the law, would not be of any immediate avail to the officer who was asking for the payment of his salary.

These remarks answer the claim that while an appropriation by the common council is a condition precedent to a recovery by the plaintiff, there are legal remedies enough available to one situated like the plaintiff, to cause such an appropriation to be made.

We think it apparent that if an appropriation by the common conncil were a condition precedent to liability on the part of

defendant, there are no adequate remedies to compel the appropriation of a proper and reasonable sum. What an alderman of a common council might in good faith think was a reasonable sum is altogether too vague a basis upon which to rest a right to be paid what in fact is a reasonable sum. The proper enforcement of this general law can not be made to depend upon the conduct of the common council or upon its consent to appropriate a sum sufficient to carry it into effect. The city may raise the proper amount if it choose to do so. It has the necessary machinery at hand for that purpose. If it choose otherwise, the law must still be executed, and as has been seen there is no other way so adequate or effectual for that purpose as to permit the institution of such an action as this and the recovery of a judgment with the inevitable costs and expenses which accompany such a proceeding. The result will probably be that members of a common council will in the end see that the laws of the state are certainly to be enforced, although they may run counter to the views and wishes of such members, and that the only effect of a persistent attempt on their part to obstruct or prevent their enforcement will be added expense to the municipality whose interests they misrepresent.

For these reasons we think the demurrer to the complaint was properly overruled, and the judgment entered upon the decision overruling the same should be affirmed, with costs, with leave to answer in twenty days upon payment of costs in all courts. All concur.

JAMES GAMBLE, Resp't, v. THE QUEENS COUNTY WATER Co. et al., App'lts.'

(Court of Appeals, Filed October 7, 1890.)

1. CORPORATIONS-DEALINGS OF STOCKHOLDER WITH CORPORATIONS.

One Mullins built and owned a line of water piping, etc., known as the Rockaway Beach extension. At a meeting of the defendant company the purchase of the Rockaway property at $110,000 by issuing stock and bonds of defendant to Mullins was directed by a vote of 467 shares against 30 shares in the negative belonging to plaintiff. Mullins was a stockholder in the defendant company. Held, that Mullins in voting upon his shares in favor of such resolution committed no legal wrong; that a shareholder has a legal right, at a meeting of shareholders, to vote upon a measure even though he has a personal interest therein separate from other shareholders.

2. SAME-INTERFERENCE OF COURT IN FAVOR OF MINORITY.

To warrant the interposition of the court in favor of the minority shareholders as against the contemplated action of the majority, where such action is within the corporate powers, a case must be made out which plainly shows that such action is so far opposed to the true interests of the corporation itself as to lead to the clear inference that no one thus acting could have been influenced by any honest desire to secure such interests, but that he must have acted with an intent to subserve some outside purpose, regardless of the consequences to the company and in a manner inconsistent with its interests.

3. SAME.

The actual expenditures for the work by Mullins was about $69,000. He figured in $8,000 for services of himself and Dubois, and $1,300 for I Reversing 23 N. Y. State Rep., 409.

interest. Held, that the fact that they were also officers of the corporation defendant did not forbid such charge for services, as they did not do the work for the company.

4. SAME-PROFIT BY STOCKHOLDER IN SALE TO COMPANY.

Mullins had the right to demand a profit on his work even though he held an official position in the company, and the inquiry should be what under all the circumstances is the fair value of the property to the company, considering its proposed use by it, and the general purpose for which the company was organized. A discrepancy as large as that between $80,000 and $110,000 is not necessarily a fraud.

5. SAME—ISSUE OF STOCK AT LESS THAN PAR-LAWS 1848, CHAP. 40, § 2. Under the manufacturing act the company cannot issue its stock as full paid at anything less than its par value. The amount of the nominal or par value must be put against the value of the property purchased.

APPEAL from judgment of the supreme court, general term, first department, affirming judgment in favor of plaintiff, enjoining defendants from carrying out a resolution for the issuing of stocks and bonds to purchase property proposed to be sold to defendants' corporation by one Robert F. Mullins, who was a trustee thereof. William B. Hornblower, for app'lts; James W. Perry, for resp't.

PECKHAM, J.—The defendant corporation was organized under the Laws of 1873, chap. 737, relating to the incorporation of water companies, as amended by chap. 213, of the Laws of 1881. The provisions of the general manufacturing act of 1848, and its amendments, as to payment for capital stock, were made applic able to corporations formed under the act of 1873.

The so-called Rockaway Beach extension was not built by defendant Mullins under any contract with the defendant corporation. The plaintiff requested the court to find that he did so build it, but the court refused the request, and in the opinion delivered by the learned judge at the trial term it is distinctly stated that there was no contract between the parties for the building of such extension. Upon its completion Mullins was the sole and absolute owner thereof, with power to operate it himself or to sell it to others, or in brief to exercise such acts of ownership over the property as any other owner might have exercised. This is not the case of a trustee entering into a contract with himself or purchasing from himself, where the contract is liable to be repudiated at the mere will, or even whim, of the cestui que trust. Having the rights of an absolute owner of this extension, Mullins was at liberty to make such contract in regard to its disposal as he should see fit, so long, of course, as he did not, while acting in his own interest on the one side, also act on the other in the capacity of trustee or representative, so that his interest and his duty might conflict.

In this case Mullins did not so act. He bases his right to the stock and bonds of the company defendant upon the vote of the majority of its shareholders, taken at a regularly convened meeting, to purchase the property at the price named in the resolution adopted at such meeting, the price being $60,000 in bonds and $50,000 in the stock of such company.

At this meeting four hundred and ninety-seven out of a total of N. Y. STATE REP., VOL. XXXIII.

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five hundred shares into which the capital stock of the company was divided were represented, and four hundred and sixty-seven shares were voted upon in favor of the adoption of such resolution, while the thirty of the plaintiff were voted upon by him in opposition thereto, and three shares were not voted upon. There were a majority of shareholders and a majority of shares voted upon, in favor of such resolution, without counting the defendant Mullins or his shares, although he voted upon them in favor of such resolution. In so doing he committed no legal wrong. A shareholder has a legal right, at a meeting of the shareholders, to vote upon a measure even though he has a personal interest therein separate from other shareholders. In such a meeting each shareholder represents himself and his own interests solely, and he in no sense acts as a trustee or representative of others. The law of self interest has at such time very great and proper sway. There can be little doubt, too, that at such meetings, those who do vote upon their own stock, vote upon it in the light of their own interest, or at least in what they conceive to be their own interest. Their action resulting from such votes must not be so detrimental to the interests of the corporation itself as to lead to the necessary inference that the interests of the majority of the shareholders lie wholly outside of and in opposition to the interests of the corporation and of the minority of the shareholders, and that their action is a wanton or a fraudulent destruction of the rights of such minority. In such cases it may be stated that the action of the majority of the shareholders may be subjected to the scrutiny of a court of equity at the suit of the minority shareholders. These views are exemplified in the comparatively recent English case of North West, etc., Co. v. Beatty, L. R., 12 App. Cas., 589, where one of the directors in a company contracted with his colleagues to sell to the company a vessel which he owned, for a price named. The contract was in fact a fair one, but it was admitted to be voidable, and it was held that the vendor director had a right at a meeting of the shareholders to vote in favor of ratifying such contract and concluding such purchase, and that his conduct was not to be regarded as oppressive towards the minority of shareholders because he individually owned a majority of the stock. It was said that a resolution of the majority of shareholders upon any question with which the company was competent to deal, was valid and binding upon the minority. A voidable contract, it was also said, might be ratified or affirmed by a majority of shareholders at a proper meeting; provided that such ratification was not brought about by improper means, and the contract itself was not fraudulent or oppressive towards the minority. Baggallay, L. J., said that great confusion would be introduced into the affairs of joint-stock companies if the circumstances of shareholders voting in that character in general meeting were to be examined, and their votes practically nullified if they also stood in some fiduciary relation to the company. I think that where the action of the majority is plainly a fraud upon, or in other words is really oppressive to the minority shareholders, and the directors or trustees have acted with and formed

part of the majority, an action may be sustained by one of the minority shareholders suing in his own behalf, and in that of all others coming in, etc., to enjoin the action contemplated, and in which action the corporation should be made a party defendant. It is not, however, every question of mere administration or of policy in which there is a difference of opinion among the shareholders that enables the minority to claim that the action of the majority is oppressive, and which justifies the minority in coming to a court of equity to obtain relief. Generally the rule must be that in such cases the will of the majority shall govern. The court would not be justified in interfering, even in doubtful cases, where the action of the majority might be susceptible of different constructions. To warrant the interposition of the court in favor of the minority shareholders in a corporation or joint-stock association, as against the contemplated action of the majority, where such action is within the corporate powers, a case must be made out which plainly shows that such action is so far opposed to the true interests of the corporation itself as to lead to the clear inference that no one thus acting could have been influenced by any honest desire to secure such interests, but that he must have acted with an intent to subserve some outside purpose, regardless of the consequences to the company, and in a manner inconsistent with its interests.

Otherwise the court might be called upon to balance probabilities of profitable results to arise from the carrying out of the one or the other of different plans proposed by, or on behalf of, different shareholders in a corporation, and to decree the adoption of that line of policy which seemed to it to promise the best results, or at least to enjoin the carrying out of the opposite policy. This is no business for any court to follow.

I do not understand that these views are substantially drawn in question in the courts below, but there are facts found in this case upon which they have thought the plaintiff was entitled to their interference in his favor to prevent the consummation of the action of the majority in providing for the issuing and delivering to Mullins of the stock and bonds mentioned in the resolution adopted by the shareholders. So far as fraud may be made the basis for an action like this, it is to be noted that there is no finding by the court that any fraud existed in fact, or that the individual defendants, or any of them, were actuated by any fraudulent intent in taking the action which they did. Therefore, if the action is to be sustained on the ground of fraud, its existence must be the necessary legal inference from facts which have been found. But the trial court made certain findings of fact from which the general term has inferred the existence of this fraudulent purpose, and to which findings an exception was taken by defendant Mullins, upon the ground that there is no evidence to support them. A question of law is thus raised which this court is called upon to decide. These findings and exceptions relate to the actual cost of the Rockaway Beach extension.

The court found that such actual cost was not more than the sum of $65,000, including about $8,000 paid to defendants Mul