Court Opinion

ID: 5410707
Source: CourtListenerOpinion
Date Created: 2022-01-08 16:08:39.282882+00
Date Added: 2024-06-11T08:30:47.206797
License: Public Domain

O’Gorman, J.
The averments of the complaint are sustained by the evidence. It is established that the defendant while acting as secretary of the United Garment Workers of America and intrusted with the purchase of certain supplies procured the same from a firm of which he was a member. It also appears that his connection with the firm was concealed from the corporation. Under the circumstances the defendant must account to the plaintiff for the profits he derived from the transactions in question. The. defendant held a position of trust and confidence and will not be permitted to use his office for personal gain. Officers of a corporation are bound to exercise the utmost good faith toward the corporate interests and cannot lawfully take secret profits in contracts which they are empowered to make. When an officer or any agent is authorized to sell he cannot lawfully become the purchaser, and when directed to buy he cannot become the seller. Where in disregard of his duty an officer makes purchases *115or enters into contracts whereby he acquires a personal advantage, the profits thus obtained belong not to him but to the corporation. Koster v. Pain, 41 App. Div. 444; Smith v. Seattle, L. S. & E. R. Co., 72 Hun, 202; Barnes v. Brown, 80 N. Y. 535.
Judgment for plaintiff.