34 BULLETIN 1106, U. S. DEPARTMENT OF AGRICULTURE 
tors constituting a quorum must be qualified to act. If one of the 
directors whose presence is necessary to constitute a quorum, or 
whose vote is necessary to constitute a majority of a quorum, is dis- 
qualified by reason of his personal interest, any act done by the body 
is invalid," 76 or at least voidable. Some courts apparently hold that 
a director who is personally interested in a proposition may be 
counted in determining if a quorum was present at the time the 
proposition was voted upon, leaving its validity, after subjecting it 
to severe scrutiny, to depend upon its fairness toward, and effect 
upon, the corporation, with the burden of showing its fairness, on 
the director. 77 
CONFLICTING PERSONAL INTERESTS 
If a resolution is adopted on a vote of interested directors, the 
resolution generally is voidable at the option of the association, 
if timely action with respect thereto is taken, and at least in some 
jurisdictions the "rule is equally applicable where the interests of 
other persons, not directors, are affected by the resolution." 78 
In fact, in some jurisdictions, if a member of a board of directors 
votes upon a proposition which is adopted and in which he has a 
personal interest, the action of the board may be set aside by the 
corporation, although the resolution would have been adopted ap- 
parently without the vote of the interested directors, 79 and in some 
States, a resolution of the type in question may be set aside by 
nonconsenting members of the corporation. 80 
As illustrating matters that would disqualify directors of an asso- 
ciation from voting, if personally interested, or would at least bring 
the validity of the transaction into question, may be mentioned the 
sale of property of a director to the association, 81 the giving of a 
mortgage on association property to a director, 82 the execution of 
association notes to him, 83 or any transaction in which the personal 
interests of the director would be adverse to those of the associa- 
tion. 84 "In such cases, the court will not pause. to inquire whether 
a director or trustee has acted fairly or unfairly ; being interested in 
the subject matter, he may not as a trustee or director deal with 
himself and thus be subjected to the temptation to advance his own 
interest." 85 
In this connection, the Supreme Court of the United States has 
said : 
It is among the rudiments of the law that the same person can not act for 
himself and at the same time, with respect to the same matter, as the agent 
of another whose interests are conflicting. The law, therefore, will always con- 
demn the transactions of a party on his own behalf when, in respect to the 
matter concerned, he is the agent of others, and will relieve against them when- 
76 In re Webster Loose Leaf Filing Co., 240 F. 779 ; Smith v. Los Angeles I. & L. Co-op. 
Ass'n, 78 Cal. 289, 20 P. 677 ; Holcomb v. Forsyth, Ala. . 113 So. 516 ; Stanton 
v. Occidental Life Ins. Co., 81 Mont. 44, 261 P. 620. 
"Nicholson v. Kingery, Wyo. , 261 P. 122. 
78 Consumers' Ice & Coal Co. v. Security Bank & Trust Co.. 170 Ark. 530, 280 S. W. 677. 
"Tefft v. Schaefer, 136 Wash. 302, 239 P. 837, 1119. 
80 Tefft v. Schaefer, 136 Wash. 302, 239 P. 837, 1119. 
81 Dean v. Shingle. 198 Cal. 652, 246 P. 1049. 
« 2 In re Webster Loose Leaf Filing Co., 240 F. 779. 
83 Smith v. Los Anereles I. & L. Co-op. Ass'n, 78 Cal. 289, 20 P. 677. 
84 Warden v. Railroad Co., 103 TJ. S. 651. 
85 In re Webster Loose Leaf Filing Co., 240 F. 779 ; Shakespcar v. Smith, 77 Cal. 638, 
20 P. 294, 11 Am. St. Rep. 327, 
