48 ` FEDERAL REPORTER.
This bill does not set forth that the complainants were sharehold-
ers at the time of the transactions of which they complain; It does
not set forth any efforts which have been made by complainants to
obtain redress from the corporation; it is, therefore, in these partie-
ulars insufficient. It is not enough to say that it appears from the
bill that the corporation would probably refuse relief. The rule is
imperative that efforts shall be made to obtain relief in that direction
before such a suit as this shall be commenced in the courts.
On this ground the deniurrer to the bjll, will be sustained.
 
MEEKER and others v. XVINTHROP IRON CO. and others}
V (Circuit Oourt, W. D. Michigan, N. D. June, 1883.) .
1. Orrrcmts or A CORPORATION DEALING wrrrr TIIEMSELVES—CONTRACT Vom-
.1131.12:.
Utiieers of a corporation are but agents, and cannot, as such officers, while
acting t`or the corpoiation, deal with themselves, to the detriment of the cor-
poration for whom they are acting. All such contracts, if not void, are void-
able at the option of the corporation.
2. SAME—EF‘FECT on Srocrruonuia s’ l\Iim·rrN0.
Nor can the holders of a ma_iorit.y of the capital stock of a corporation, by
their votes in a stoekh.>lders’ meeting, lawfully authorize its oiiicers to lease its
property to themselves, or to another corporation formed for the purpose and
exclusively owned bytl1em,unle+s such lease is made in good faith, and is sup-
ported by an adequate consideration; and in a suit, properly prosecuted, to set
aside such a contract, the burden of proof, showing fairness and adequacy, is
upon the party or parties claiming thereunder. All doubts will be solved in
favor of the corporat.on for whom such stockholders assumed to act.
3. Ssitm-Pownu or- l\lA.rom*rr.
The holders of a. majority of the stock of a corporation may legally control
the company’s business, prescribe its general policy, make themselves its
agents, and take reasonable compensation for their services. But, in thus as-
suming the control, they also take upon themselves the correlntive ditty of dil-
igence and good faith. They cannot lawfully manipulate the company’s bus-
iness in their own interests, to the injury of other stockholders.
4. Cos*rs—-Coorssm. Fuss.
An owner of capital stock in a corporation, who sues for himself and all other
shareholders, and successfully prosecutes the action, for a wrong done to the
‘ 7 corporation, is entitled to be reimbursed his actual and necessary expenditures,
including a.ttorney’s fees, out of the corporate funds.
6. S.urE—U· ·s S·r.a·ri·;n-—l{m.rm=· Giaurnn.
The four brothers S. leased the mine of the \V. Iron Co. for five years, at a
royalty of 5U eeuts per ton of ore mined, they to furnish the requisite machin-
ery, which was to be purchased by the lessor upon the expiration of the lease.
They incorporated the W. llematite Co. to operate the mine, they being the sole
owners of its stock. Shortly before the expiration of their lease, being unable
to obtain a renewal of it, they purchased a majority ofthe stock of the W. iron
Co., and called a mcetingof its stockholders, but at which no other stockholder
attended. That meeting ordered an expenditure of $50,000 of the company’s
capital in sinkinga shalt in the mine to facilitate its operation; directeda lease
for 18 years of the mine, mach nery, and all of the company’s other property to
the W. Hematite Co. at a royalty of 25 cents per ton of ore mined, with certain
1 Reported by J. C. Harper, Esq., of the Cincinnati bar.