15 Haw. 151 | Haw. | 1903
'This is a bill in. equity praying for an injunction restraining the respondent O. H. Bellina, the manager and a director of the respondent corporation, from paying to himself and to the respondents W. E. Bellina and H. H. Perry, as assistant managers, they being also directors, certain salaries _ alleged to be exorbitant and excessive and for an order requiring those three respondents to repay to the corporation all moneys received by them as salary from September 10, 1901, over and above the .amount of a reasonable compensation for the services rendered by them. The court below, upon motion of respondents, dismissed the bill at the close of the complainants’ case “for insufficiency of proof and lack of equity.” It is from that ruling that ■the present appeal was taken. Complainants Isenberg and Sullivan have, however, subsequently withdrawn their appeals.
Undisputed evidence shows that the respondent C. II. Bellina was appointed manager of the corporation by the directors at a meeting held on September 9, 1901; that in the end of that month he fixed the salaries of W. E. Bellina and II. II. Perry as foremen or assistant managers at $200 each per month and that in addition to such salaries the foremen had the use, free -of charge, of a cottage belonging to the corporation theretofore rented at the rate of $20 per month; that at a meeting of the directors held November 14, 1901, the directors present being Bolte, Perry and the two Bellinas, the salary of the manager was fixed at $300 per month to date from September 10, 1901, Bolte voting against the motion on the ground that such salary would be excessive; that no formal complaint was made against the salaries until August 5, 1902; that on the last named date, at a meeting of the directors at which were present Bolte, Isenberg, Perry and the two Bellinas, Bolte moved, seconded by Isenberg, that the three salaries in question be reduced $100 per -month each, but the motion was lost, the three other directors voting against it; that no further action was taken or complaint
Directors stand towards the corporation which they represent and actTor in the relation of trustees to a cestui que trust. Some of the authorities go to the extent of holding that they may not, lawfully, vote to themselves compensation for services and that any such attempted vote would be illegal, but it is unnecessary
The fact that the manager’s salary was first fixed, in November, 1901, without the aid of his vote, and that the salaries of the foremen were first fixed by the manager acting as such and not by the directors, does not take this ease out of the rule, at least so far as the salaries paid subsequent to August 5, 1902, are concerned. See Mallory v. Mallory Wheeler Co., supra. At the meeting held on that day, all three salaries would have been reduced but for the votes of the three respondents and they were continued at the excessive figures by virtue only of those votes. Again in December, 1902, it was the respondents C. IT. Bellina and W. E. Bellina aided by one other director, who voted to continue the salaries at the old rate and to refuse to institute proceedings on behalf of the corporation.
As to the defense of laches we need only say, at this time, that upon the evidence thus far adduced that defense is not sustained as against either of the complainants in so far as the
In our opinion, the motion to dismiss should have been denied and the respondents should have been required to present their defense. The decree appealed from is reversed and the case remanded to the Circuit Judge for such further proceedings as may be proper.