Open main menu

Page:Harvard Law Review Volume 2.djvu/177

This page needs to be proofread.


LA W OF BUSINESS CORPORATIONS.

159

these are breaches of trust. For it is by no means just in a judge, after bad consequences have arisen from such executions of their power, to say that they foresaw at the time what must necessarily happen, and therefore were guilty of a breach of trust.

Next as to malfeasance and nonfeasance.

" To instance in non-attendance ; if some persons are guilty of gross non-attendance, and leave the management entirely to others they may be guilty by this means of the breaches of trust that are committed by others.

" By accepting of a trust of this sort, a person is obliged to execute it with fidelity and reasonable diligence, and it is no excuse to say that they had no benefit from it, but that it was merely honorary ; and therefore they are within the case of common trustees.^

"Another objection has been made that the court can make no decree upon these persons which will be just, for it is said that every man's non-attendance or omission of duty is his own default, and that each particular person must bear such a proportion as is suitable to the loss arising from his particular neglect which makes it a case out of the power of this court. Now, if this doctrine should prevail, it is indeed laying the axe to the root of the tree. But if, upon inquiry before the master, there should appear to be a supine negligence in all of them, by which a gross complicated loss happens, I will never determine that they are not all liable.

" Nor will I ever determine that a court of equity cannot lay hold of every breach of trust, let the person be guilty of it either in a private or public capacity.'*

The members of any corporation were entitled to inspect the books of the corporation. The only difference between business and other corporations as to the right of inspection was this : The books of municipal corporations and guilds might be inspected by non-members under certain circumstances, because the regula- tions of such bodies were not binding on members alone, and consequently outsiders might be vitally interested in the corporate proceedings.^ Business corporations, on the other hand, were private, and the right of inspection belonged solely to members.^

The most important right of shareholders, the right to divi-

  • Citing Coggs v, Bernard, I Salk. 26.

2 See Grant on Corp. 311-313.

  • Charitable Corp. v. Woodcraft, Cas. temp. Hard. 150.