Court Opinion

ID: 6632926
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:38:28.219594+00
Date Added: 2024-06-11T15:58:59.644389
License: Public Domain

Campbell J.:
While I concur in holding that this is not, upon the facts presented, a proper case for a mandamus, I do not agree with my brethren in their view of the invalidity of *229the contract. The Harbor Committee entrusted with the work consisted of twenty-eight members — seven from each township — and was a separate corporate body, acting by vote. The law required the contract for the harbor improvements to be given to the lowest responsible bidder; and those members of the committee who were with other persons successful bidders for the contract, were a minority, whose vote was not essential, and could not have changed the result, which was one of figures and computation.
The opinion of my brethren is based upon the rule, which prevents certain persons occupying fiduciary relations, from dealing, for their own benefit, with the funds under their care. It it a well settled principle that the same person cannot be vendor and purchaser, because his contract lacks the necessary element of two parties; neither can a trustee become interested to the detriment of his cestui que trust, or an agent to the detriment of his principal. Even these contracts, however, are not universally void. They are usually voidable at the option of the party defrauded or affected, but they are not absolutely void, except where, by reason of the identity of vendor and vendee, a contract is in the eye of the law impossible* And, where the injured party elects to avoid them, he must in general, make such compensation as will place the trustee in static quo. — See the cases collected in 1 Lead. Cas. in Eq. 157, 167, 168.
So far as I have been able to ascertain from the autho rities, this doctrine is confined to cases of the purchase of property; and has been maintained on the principle that by such a purchase a trust is made to attach, which in equity creates a beneficial interest in favor of the cestui que trust. And although it is doubtless true that contracts between parties in a fiduciary relation will be closely criticised, I find no rule of nullity affecting them merely as contracts.
On the contrary, in all cases of corporations, public and *230private (for no distinction is made in the books, and none exists in reason between them), it is a familiar principle that they may contract as freely with one individual as with another; and that there is no legal, identity between the corporate body and its individual members or officers, iu their private capacity. The only exception seems to be the one already referred to, where the corporation cannot act at all without the action of some particular person, who is thereby disqualified from dealing with himself, and who, of course, cannot contract with himself.— 1 Kyd on Corp. 180, 181; A. & A. on Corp. § 233. In other cases, and where the contract may be made on behalf of the corporation, without the assistance of a particular member or officer, a contract with him is as valid as if he were a stranger. — Stoddert v. Vestry of Port Tobacco, 2 Gill & J. 227; Geer v. School District No. One in Richmond, 6 Vt. 76; Sawyer v. Methodist Ep. Society in Royalton, 18 Vt. 405; Rogers v. Danby Universalist Society, 19 Vt. 187; Albright v. Chester, 9 Rich. Law, 399; Proprietors of Canal Bridge v. Gordon, 1 Pick. 297. This last case is a somewhat singular exemplification of the rule, for there the same persons were officers of the different corporations, and the corporations contracted with each other by their action. It is also in point, upon some of the questions on the contract before us, inasmuch as acquiescence in a certain course of things was held to imply assent.
It is not suggested anywhere, that public agents labor under more disqualifications than private agents. The whole doctrine, so far as it has been carried at all, originated in private trusts and agencies. The cases cited embrace all kinds of corporations, public as well as private. So far as private corporations are concerned, transactions with their own officers are of every day occurrence. The laws sometimes, as in the charters of many banks, limit the extent of such bargains, but never, or rarely, forbid them. In municipal corporations we frequently find statu*231tory provisions, forbidding tbe letting .of contracts to officers of the municipality. Such statutes would be needless, if the general rules of law forbade it. And, in small and new townships, forbidding such contracts would be equivalent to shutting the best men out from office. Works of enterprise, in such localities, cannot usually find many bidders. The evils have not been found very serious, and the Legislature can easily provide for them when they are supposed .to need redress. I think it safe to leave' the [subject for such action, instead of adopting- a rule, which, if carried to its legitimate consequences, would cripple many of the largest enterprises in the country. By providing that contracts shall be let to the lowest bidder, the law has adopted as effectual means of protection as the other rule is likely, in such cases, as the present, to ensure to the townships interested. I see nothing in this case to invalidate the contract.
I think, however, that the controversy should be adjusted by an action at law or suit in equity. There are several questions in controversy, and among others the inquiry arises whether the work has been done as agreed. There has been no acceptance shown beyond dispute, and there is nothing before us to bind any parties to the payment of a liquidated amount not subject to reduction. The action of the board of Holland is not, as the case stands before us, conclusive upon the rest. The whole matter is in such a shape that it cannot lawfully, as I think, be taken from the cognizance of the ordinary tribunals. For this reason I concur in refusing a mandamus.
Mandamus refused.
Martin Ch. J. did not sit in this case.