'BILL v. wmsrmnuvuiou run. co. 15 ;
ories hinge upon the circumstance that the majority of the board of
directors of the lessor were directors of the lessee at the time the *·
lease was made, and upon the further circumstance that the lessee
owned nearly two-Efths of the stock of the lessor at the time.
It is insisted for the complainant that the statutory authority to
lease has not been pursued, because the three-fifths vote of the board
of directors was cast by directors who were incompetent to vote, they
being at the time directors of the lessee, and also because the req- ‘
uisite majority of consenting stockholders has not been obtained
if the vote or consent of the lessee is excluded. Concededly, in the 3
absence of statutory authority, the lessor corporation could not legally
enter into such an agreement as is here assailed. Such a surrender
of its franchises and abdication of its functions would be ultra virea.
A majority of the stockholders could not sanction it, and a board. of `
directors could not confer color of validity upon the transaction. It
is fundamental that the majority have no"power to represent the
whole body in any matter which is outside the legitimate purposes
for which the corporation is organized.
If the directors of the lessor were not competent to vote because _
they were at the time directors of the lessee, the lease is void. lt can- ~
not be supposed that the requisite quorum has been obtained, or that
theistatute contemplates or is satisfied by a vote of directors who are.
incompetent to vote. But the theory thatthe directors were incorri- v
petent to vote confounds the distinction between want of power and R
abuse of power; between a disqualification to vote which renders the o
vote nngatory, and the exercise of=a power which has been conferred, i -
but which ought not to be exerted., A director is not incompetent to
vote because a sense of propriety may demand that he should not vote
upon a particular occasion, nor is an agent incompetent to make a
contract because the contract he has made was unfair or evenfraudu-»
lent towards his principal. If the directors were incompetent to vote
the lease would be absolutely void, and no action of the stockholders
could validate it. If, however, the act of the directors was culpable v
or obnoxious to equity under the circumstances, while the corporation
might repudiate their conduct, it might also ratify it, audi would rat-.
ify it by accepting the tbeneiits of the transaction, with knowledge of
the facts. V. · { i · “
The contention that the vote of the lessee must be excluded in asa
certaining whether the quorum of stockholders have consented, does
not seem reasonable. A stockholder may always vote in his own in-'
terest. i   · `