because such information is irrelevant to the branch of corporate duties in which he is employed, does not charge the corporation with notice105. Knowledge of an agent concerning isolated and occasional transactions does not remain the knowledge of the corporation so as to make it chargeable with like knowledge in future transactions after the agent has been discharged 106. So the knowledge of an agent, gained in a transaction, and afterwards forgotten by him, should not be held to be the knowledge of the corporation in a subsequent, independent transaction, in the absence of a clearly defined duty to remember107. There is no reason why a corporation should be held to have a better memory than an individual, and want of recollection on its part will not be negligence when want of recollection by a natural person would not be. When the interest of an officer or agent is directly antagonistic to the interest of the corporation in a given transaction, the knowledge of such representative as to such transaction will not be deemed the knowledge of the corporation108. $74. Compensation. The services of directors are presumptively gratuitous109. Where a director performs either a general or a special service, he is presumed to be acting merely in the course of his duties as a director, and is entitled to no compensation in the absence of an agreement, express or clearly implied, that such services shall be compensated110. But when, under all of the circum 109. Eakins v. White Bronze Co., 75 Mich. 568-571; Cicotte v. St. Anne Church, 60 Mich. 552; St. Jude's Church v. Van Denberg, 31 Mich. 287; Ten Eyck v. Pontiac, Oxford & P. A. R. Co., 74 Mich. 226; 3 L. R. A. 378; Notley v. State Bank, 154 Mich. 676; Henry v. Michigan Sanitarium, 147 Mich. 142-146: Whittemore v. Scientific Inst.. 128 Mich. 518. In Cicotte v. St. Anne's Church, it was held, that the following requests to charge should have been given: "If the performance of the work was voluntary, and both sides supposed the service was given spontaneously, from a desire Το promote a cause the plaintiff had at heart, no agreement to pay can be implied. If the work was done under circumstances justifying the belief that no charge was intended, there is no liability to pay. If the relations of the parties, the nature of the service, and all the pertinent facts. show that the plaintiff was not working for money, and that the church did not understand that pay was to be exacted, none can be demanded." 110. Henry v. Michigan Sanitarium, 147 Mich. 142-146. But when a stances, the representatives of the corporation, as reasonable men, must have known, or should have known, that a director expected pay for his services, and that he was not rendering such services gratuitously, there is no presumption that the services are gratuitous, but, on the contrary, an agreement to pay for such service is implied. Neglect of the directors to fix salaries does not deprive an officer of his right to compensation for services rendered. If the services were performed with the understanding, express or implied, that they were to be remunerated. the officer may recover their reasonable worth112. A corporation is, of course, bound upon its contracts for services to the same extent as a natural person. It is to be remembered, however, that the trust relations incident to corporate management, subject all of the company's contracts for employment to the test of good faith. Thus, it has been held that, where one who controls a corporation causes directors of his own selection to vote him an unconscionable salary, a court of equity may, at the instance of a minority holder, compel him to disgorge the excess assets thus converted113. committee is appointed to perform a service that requires the employment of an assistant, implied power is conferred upon the committee to bind the corporation for the compensation of such assistant.-Star Line of Steamers v. Van Vliet, 43 Mich. 364-367. In Henry v. Michigan Sanitarium, Justice Montgomery said: "While the dealings of a director or trustee of a corporation with the board of which he is a member are closely scrutinized, there is no rule which, in the case of any ordinary corporation, precludes such trustee from contracting to perform outside service for which he is to be paid. But, even in cases where there is no restriction placed upon the right to compensation, it is a well-understood rule that a director or trustee who claims compensation for services must make it appear, not only that such services fall outside the scope of his regular duties, but also that they were performed under circumstances sufficient to show that it was understood by the corporate officers. as well as himself, that the services were to be paid for by the corporation." 111. Dodge v. Lansing etc. Traction Co., 152 Mich. 103; Ruttle V. What Cheer Mining Co., 153 Mich. 300. 112. Dodge v. Lansing etc. Traction Co., 152 Mich. 100-103; Rogers v. Railroad Co. 22 Minn. 25. 113. Mirer v. Belle Isle Ice Co.. 93 Mich. 97-117. Stock, as the term is here used, denotes the interest of the members of a business corporation in the property and control of the company. For convenience stock is divided into shares. of uniform face value, and these shares of stock are evidenced by certificates. Stock certificates are merely authenticated symbols of title and interest. The interest may exist as fully without them as with them. One may transfer his interest in a corporation without transferring his certificate, but this, of course, would be irregular, and might give rise to serious difficulties before recognition of the transfer could be obtained from the company1. The ownership of an interest in a corporation, even though no certificate of stock may have been issued, is a vested right which can not be defeated, except by voluntary act or by due process of law2. $76. Stocks are "Goods". Shares of stock in an incorporated company are "goods" within the meaning of the Michigan statute of frauds3. It fol 1. May v. McQuillan, 129 Mich. 392-396. 2. Kobogum v. Jackson Iron Co., 76 Mich. 498-505; People v. Minong Mining Co., 33 Mich. 2; Westcott v. Minn. Mining Co., 23 Mich. 144-163. 3. Sprague v. Hosie, 15 D. L. N. 847-849; White v. Taylor, 113 Mich. 543. lows, that where the price of the stock contracted to be sold exceeds $50, in the absence of delivery or payment, in whole or in part, the contract must be evidenced by "some note or memorandum in writing of the bargain made, signed by the party to be charged thereby, or by some person thereunto by him lawfully authorized." Otherwise it will be unenforcible. So, where a contract for the purchase of shares is not to be performed within one year, it is within the inhibition of the statute of frauds and is void, unless reduced to writing. The agreement being that one party contracts to sell and the other contracts to buy certain shares, it will be a nullity for want of mutuality unless signed by both parties. The policy of the law in this State being to regard shares of stock as chattels, rather than as mere choses in action", trover lies for conversion of shares of stock, as well as for conversion of the mere certificates evidencing the shares. §77. Certificates of Stock. Possession of a certificate of stock, regular upon its face, and issued in the name of the holder, is prima facie evidence of title. So a certificate, endorsed in full or in blank passes title to the transferee by delivery. Except as against liens created by statutes in favor of the corporation, stock certificates are prac 4. C. L. 1897, Sec. 9516. 5. C. L. 1897, Sec. 9515; McIlroy v. Richards, 148 Mich. 694. 574. as 7. In Sprague v. Hosie (ante), Justice Ostrander said: "It must be admitted that at the common law shares of an incorporated company occupy much the same position promissory notes and other mere choses in action. * * * Such shares have, however, come to be subject to common barter and sale, and are usually evidenced by certificates which, in the absence of statutory provisions, operate by assignment and delivery to transfer title to the shares as between the parties. They are, in this State, by statute, subject to levy and sale on execution. In many other respects they are treated as something more than mere choses in action." 8. In Daggett v. Davis, 53 Mich. 35-37, Chief Justice Cooley said: "We see no reason why, if the shares are converted by means of a wrongful use of the certificate, the owner, in suing, may not count upon the conversion of either. The shares are the property converted, but the certificate itself is also property; standing as it does as the representative of the shares, and as its conversion may take the shares from the owner, it seems to be as proper to count upon its conversion as upon the conversion of money or any chattel." See also Smith v. Thompson, 94 Mich. 381-385; McDonald v. McKinnon, 92 Mich. 254; Morton v. Preston, 18 Mich. 60. 9. Foster v. Row, 120 Mich. 1-16; McLean v. Medicine Co., 96 Mich 479; May v. Cleland, 117 Mich. 45 47. tically upon the basis of commercial paper. One who, without knowledge of defenses, takes apparently regular certificates by purchase or in pledge from the prima facia owner thereof, and gives value therefor, stands in the position of a bona fide holder. His rights are superior to outstanding equities". Recitals in stock certificates are binding as between the corporation and its stockholders', but not as between the original subscribers and the creditors of the corporation12. A bona fide holder of stock issued as "fully paid and non-assessable" is not liable for calls. either to the corporation or to its creditors. $78. Classes of Stock. All stock may be divided into two general classes-common stock and preferred stock. Common stock consists of such shares as enjoy no special contractual advantages as between their holder and the company. Preferred stock consists of such shares as enjoy such special advantages. The preference usually consists in the right to receive a certain fixed dividend out of the earnings of the company, before anything may be paid to the holders of the common stock. Preferred stock may be cumulative or non-cumulative. It is said to be cumulative when the contract between the corporation and the shareholder is, that passed dividends shall accumulate, and shall be eventually paid in priority to any dividend upon the general, or common, stock. When the arrangement is that a dividend once passed shall remain permanently passed, or, in other words, that unpaid dividends shall not accumulate, the stock is called "non-cumulative." The preference accorded to preferential shares, except when regulated by statute, is purely a matter of contract, and may be in forms as various as the needs of the company may require, or as the skill and ingenuity of counsel may suggest. Such shares are sometimes made "fully participating." That is to say, a certain fixed dividend must first be paid upon the preferred stock; then a like dividend may 10. Walker V. Detroit Transit Ry. Co., 47 Mich. 338-347. In this case Chief Justice Graves made the following statement: "If the right ful owner has invested another with the usual evidence of title, or an apparent authority to dispose of the stock, he will be estopped from making any claim against an innocent purchaser dealing upon the faith of such apparent ownership or right of disposal." 11. Upton v. Tribilcock, 91 U. S. 45, 23 L. ed. 203. 12. Young v. Erie Iron Co., 65 Mich. 111-126; Sanger v. Upton, 91 U. S. 56, 23 L. ed. 220-222. |