LEGAL PHASES OF COOPERATIVE ASSOCIATIONS. 11 
ager and at the same time sold him 100 shares of stock. A director 
of the corporation entered into a contract with the manager under 
which the manager agreed, in case he left the employment of the 
corporation for any cause, to sell his stock to the director. The 
contract was held void on the ground that the private interests of 
the director were antagonistic to those he owed the corporation. 
The court said : 
The defendant as director had a voice in determining whether or not plain- 
tiff was to continue in the management of the corporate business, whether or 
not plaintiff's management was for the general interest of the corporation 
and its stockholders. Obviously his duties as director and his private interest, 
under the contract to repurchase plaintiff's stock upon the conditions stated 
were antagonistic and his private interests might oblige him to act contrary 
to his duties toward the other stockholders. Under such circumstances, such 
contracts are held void on the ground of public policy, unless all of the stock- 
holders assent thereto. 
In the absence of a provision in the statute, charter, or by-laws, 
a majority of the directors constitute a quorum and when regularly 
assembled may transact any business which the corporation has a 
right to transact under its charter. 30 
All of the directors constituting a quorum must be qualified to 
act. If one of the directors whose presence is necessary to consti- 
tute a quorum is disqualified because of his personal interest in 
the matter that is being considered, the action would not be binding 
on the corporation or stockholders if a timely effort to set it aside 
were made. For instance, if a director should offer to sell land 
to the corporation and as one of a quorum of the directors should 
vote in favor of its purchase, the transaction would not be binding 
on the corporation or the stockholders if they seasonably moved to 
set it aside. 31 
The officers and directors of a corporation are bound by the re- 
strictions imposed upon the corporation by its charter and by-laws, 
and if they transgress such restrictions are liable for all damages 
resulting to the corporation therefrom. In a Minnesota case 32 
the articles of incorporation limited the indebtedness which the 
corporation might incur to half the amount of the capital stock 
actually paid in. The manager, who was also a large stockholder, 
contracted debts in excess of this amount. It was claimed that the 
corporation suffered a loss by reason of the excess indebtedness, 
and it brought suit against the manager to recover the amount of 
the loss which it claimed it had sustained and recovered a judgment 
for $3,000 against him. 
30 In re Webster Loose Leaf Filing Co., 240 Fed. 779. 
31 In re Webster Loose Leaf Filing Co., 240 Fed. 779 ; Wardell r. Railroad Company, 
103 U. S. 651. 
32 Fergus Falls Woolen Mills Co. v. Boyum, 136 Minn. 411, 162 N. W. 516. 
