planted the partnership in the store and the shop. The necessities of business require that the public, dealing with their officers in good faith on the strength of apparent power, should be protected against such claims as are here made. The courts of this state have always protected third parties dealing in good faith with corporations within the general scope of their powers. In Smith v. Smith, supra, it was held that third parties dealing with a corporation are not bound by rules adopted for its government or required to know the provisions of its by-laws, which are private and only accessible to the officers of the corporation, and that a deed not countersigned by the secretary was valid although the bylaws required it to be so countersigned. In Union Mutual Life Ins. Co. v. White, 106 Ill. 67, although the corporation in that case was a foreign one, the rule was declared generally that rules and by-laws are not open to inspection by the public, and that persons not connected with the corporation are not presumed to know what they contain. We do not think that complainant was bound to know what provisions or regulations had been made by the Ashley Wire Co. for convening the meeting of its agents or governing body, but had a right to assume that they had been complied with.

"However, an examination of the objections shows them to be without merit. It certainly made no difference to anybody who held the rubber stamp, and if the secretary did not know when it was done, he attended the meeting, acted as secretary, recorded its proceedings and treated it as regularly called and its directions as binding on him. He ratified the call, and it affected nobody, in any view of the question.

"It was not necessary that the notice should state the business to be transacted, both because the meeting of July 13th was adjourned to meet at the call of the president, when the committee appointed about this business was to report, and the business to be transacted was ordinary business of which no statement was required. It should certainly not be regarded as extraordinary business for a corporation to pay or secure the payment of an account contracted in the ordinary business of the corporation.

"The evidence that notice of the meeting was deposited in the postoffice, properly stamped and addressed to Hager at Bay View, Mich., on July 15th, was prima facie proof that he received it. Meyer v. Krohn, 114 Ill. 574; Young v. Clapp, 147 id. 176. This was met by testimony of Hager that he had no recollection of receiving the notice; that he had tried to rack his brains so as to be positive about it, but was not able to be positive, and that he did not think that he received it. The presumption that the letter was received.

is founded upon the regularity and certainty with which the mail is carried and delivered. When letters are properly stamped and addressed, the uniformity with which they are received is such that the failure to receive such letter is a very unusual circumstance, and we do not think that the presumption was overcome by mere failure of Hager to recollect, or his impressions on the subject. The by-law was silent as to the manner in which written notice of a special meeting of the board should be served. If it had provided for notice by mail, it would be immaterial whether Hager ever received the notice which was properly sent in due time by that method. It would be unnecessary to inquire whether it was received or not. But if the notice was received by Hager it is equally immaterial by what means it was conveyed to him. We think that the Circuit Court was right in finding, from the evidence, that he did receive it, and therefore the method employed was of no consequence.

66

The by-laws required that regular meetings of the board of directors should be held at the office of the corporation in Joliet." The business done at this meeting was an exercise of a power of the board, as agents of the corporation, that might, in the absence of any prohibition, be performed at any place. Reichwald v. Commercial Hotel Co., 106 Ill. 493. In enacting the by-law the restriction as to place was not applied to meetings generally, but was limited to the regular meetings, and special meetings could be held at any place that would otherwise be lawful. The board had several times met in Chicago without question or objection. * * *

The decree will be affirmed.

(d.) Directors and Officers.

J. ALDER ELLIS et al. v. SAMUEL D. WARD, et al.

137 Illinois Reports 509 (1890).

APPEAL from the Appellate Court for the first district; heard in that court on appeal from the Circuit Court of Cook county; Bagby, J., presiding.

SHOPE, J., delivered the opinion of the court.

*

*

It appears that on May 25, 1877, the Auditor of Public Accounts under statutory authority, began proceedings in the Circuit Court of Cook county to enjoin the Republic Life Insurance

1

Co., a corporation of this State, from further proceeding with its corporate business, in which cause Samuel D. Ward was appointed and duly qualified as receiver of the estate of such company. After the receiver took possession of the assets of the company it was developed that the company was insolvent, its liabilities greatly exceeding its assets. Such proceedings were had in the cause that on June 22, 1881, the company was perpetually enjoined and restrained from further prosecuting its corporate business, and the appointment of the receiver was confirmed.

On the 24th of May, 1882, the receiver exhibited his bill in chancery in the Circuit Court of Cook county against John V. Farwell, J. Alder Ellis, Emerson W. Peet, Samuel M. Nickerson, George C. Clark, and John M. Butler, seeking discovery and praying a decree for $23,208.33. The facts upon which the alleged liability of the defendants was predicated were substantially these: The Republic Life Insurance Co. was organized in 1869, under a special charter. Defendant Farwell became the president of the company in April, 1870, and so continued until June 14, 1876. During this time he held and owned a large number of the shares of the capital stock of the company, and served the company as president, without salary. He did not, it appears, at any time demand compensation from the company for his services as president nor did the corporation make any provision for paying or allowing him any salary or compensation for such services. The Republic Life Insurance Co. appears to have acquired and owned the capital stock of another corporation, the National Life Insurance Co., of which corporation defendant Farwell was also president, and this stock was held by Farwell as trustee for the Republic Life Insurance Co. Farwell neither demanded nor was paid a salary or other compensation for services as president of the National nor did the company prior to June 14, 1876, undertake to make him any payment or allowance therefor.

On March 2, 1876, the defendant Farwell owned and held 1,420 shares of the capital stock of the Republic. Prior thereto the defendants Ellis, Peet, and Nickerson had sought to purchase the same of Farwell for the obvious purpose, as it would seem (other stock in the corporation having been acquired by them), of thereby securing the controlling interest in that corporation. Respecting the antecedent negotiations the statements of the parties. are conflicting. On behalf of Ellis and his associates it is said that Farwell refused to sell his stock in the Republic unless he was paid a salary for his past services as president of the two corporations, and that he did agree to sell his stock in the Republic

to Ellis, Peet, and Nickerson at twenty-six and one-half cents on the dollar under the further agreement that when they, Elns, Peet, and Nickerson, should get control of the Republic (and so of the National) those companies should vote him a salary — the Republic of $4,500 a year for the time he had acted as president of that company and $5,000 a year for the time he had acted as president of both companies, to be divided between the two companies and aggregating some $30,000-and that this arrangement was substantially carried out by Ellis, Peet, and Nickerson and those associated with them in the directory of the two companies, and the money paid to and received by Farwell. Farwell, on the other hand, denies this agreement, and while admitting that he had negotiations with Ellis and Peet for the purchase of his stock in the Republic, and knew that they were buying up the stock of that company for the purpose of acquiring its control, and so the control of the National, insists that such negotiations with him directly were broken off, and that Peet had a conference in Washington City with Charles B. Farwell, a brother of defendant Farwell, and associated with him in business, which resulted in Charles B. Farwell coming to Chicago, and there, as the representative of defendant Farwell, entered into negotiations with Ellis and Peet, which finally culminated in a written agreement, dated March 2, 1876. * * *

It further appears that on the 11th day of April, 1876, John V. Farwell entered into a written agreement with Ellis Peet, and Nickerson, by the terms of which (after reciting that C. B. Farwell had on March 2, 1876, made an agreement with Ellis, Peet, and Nickerson, relating to the stock of the Republic company standing in the name of John V. Farwell, and that to complete that agreement J. V. Farwell was about to resign his trusts of and concerning 9,760 shares of the capital stock of the National company held by him as trustee) it was mutually agreed that such stock should remain and be held upon such trusts as then lawfully existed in regard thereto, until changed by competent parties, and that Ellis, Peet, and Nickerson should faithfully apply the assets and property of said companies to pay for and discharge the policies and other liabilities of such companies.

* * *

The annual meeting of stockholders was held June 14, 1876, and John V. Farwell, (and others) were elected directors of the Republic company, and on the same day the new board of directors met and elected J. Alder Ellis president, John M. Butler vice-president and treasurer, and Emerson W. Peet secretary, and at the same meeting the following directors were appointed

a finance committee. * The fact appears to be unquestioned that after the stockholders' and directors' meetings so held, the result of which was the practical carrying out of the agreement of March 2, 1876, as respects the directory of this corporation, John V. Farwell and C. B. Farwell delivered to Ellis, Peet, and Nickerson their resignations as directors.

It further appears that later in the day, spoken of by some of the witnesses as in the evening of June 14, 1876, the finance committee so appointed held a meeting, attended by all the members of that committee, when a resolution was passed authorizing the officers of the Republic company to pay John V. Farwell $23.208.33 as full compensation for his services as president of that corporation, and that he be paid $5,208.33 as full compensation for his services as president of the National company. But there is no pretense that Farwell was present at such committee meeting or had any personal knowledge of the committee's action. It is said, however, by Ellis and Peet that the action of the committee was in accordance with the verbal arrangement entered into between John V. Farwell and Ellis, Peet, and Nickerson before the making of the written agreement of March 2, 1876, and to that extent formed the consideration for the sale and transfer of Farwell's stock to Ellis, Peet, and Nickerson, and it appears from the testimony of Ellis that he consulted Charles Hitchcock, a prominent member of the bar, since deceased, and was advised that such payments could lawfully be made. But that any such verbal arrangement existed or was ever entered into is explicitly denied by John V. Farwell, he insisting that he never at any time agreed to sell his stock for less than the sum expressed in the agreement of March 2, 1876 ($66,000), and that he never demanded or received any sum whatever as salary or compensation for services rendered as president of either corporation.

As affecting the liability of the appellants Ellis, Peet, and Nickerson, this contention is unimportant. If the funds of the company were by them applied to the discharge of their individual indebtedness to Farwell, under the contract of March 2, 1876, there could be no question of their liability to the company or its representative, the receiver, for the amount thus misappropriated by them. So, also, if after obtaining control of the corporation they wrongfully and illegally paid out the funds of the company to Farwell for past services in violation of their duty, they would be likewise liable.

The doctrine is well settled in this court that the law will not imply a promise on the part of a private corporation to pay its