Court Opinion

ID: 8168342
Source: CourtListenerOpinion
Date Created: 2022-09-09 21:05:54.21224+00
Date Added: 2024-06-11T16:39:42.344123
License: Public Domain

TUCKETT, Justice
(dissenting) :
I dissent. I am unable to agree with that portion of the main opinion which affirms the ruling of the lower court to the effect that the quitclaim deed and contract which were signed by the president and secretary of the corporation were ratified by the board of directors of the plaintiff. It seems to me that the record is quite clear that the members of the board of directors of the plaintiff corporation had no knowledge whatsoever of the existence of the deed and contract or that the instruments had been executed and it cannot be said that the board ratified purported corporate acts of which they were unaware. For a period of approximately ten years prior to execution of the conveyance and contract here in question negotiations and conversations were had between officers and directors of the plaintiff corporation and the defendants pertaining to the operation and maintenance of the plaintiff’s irrigation system and storage facilities which were adjacent to and traversed the defendants’ grazing land. The record is silent as to any statement or negotiations pertaining to the conveyance to the defendants of any rights to the use of water or to fishing rights.
It is quite clear that the contract which was prepared by the defendants did in fact grant to the defendants the right to the use of certain waters under the control of the *227'plaintiff, vides: Paragraph 5 of the contract pro-
Party of the First Part [plaintiff] agrees to permit the Parties of the Second Part [defendants], their heirs, successors and assigns, to draw sufficient water from the Deer Valley Reservoir to reach the Mills Reservoir and to conduct the same by ditch to the Mills Reservoir during the high water period in the spring and in the autumn from September Sth on for the rest of the autumn of each year.
The powers of a corporation under the laws of this State can only be exercised by its board of directors. While it is true as stated in the main opinion that an act of an officer of a corporation might be ratified by subsequent action or acts of the board of directors, still I am unable to agree that a director might by his acts ratify an act of an officer of the corporation without having some knowledge of that act. The acts of the directors referred to in the main opinion might well be construed as performance or part performance of the oral promises made during the negotiations by the parties as above mentioned. It is interesting to note that a prior decision1 of this court dealing with the subject of ratification of an act of a corporate officer approved the following statement:
Thus, if the corporation can only authorize the particular act or contract by a power under seal, or by formal vote, ratification of such an act or contract must be under seal or by a formal vote, as the case may be.
Defendants in this case did not at the outset rely upon a ratification of acts of the president and secretary. The defendants, acting through their attorney, rather, requested the president of the plaintiff corporation to obtain a resolution of the board of directors authorizing the execution of the instruments above mentioned. It is also noted that the defendants did not fully perform their obligations under the contract but rather tendered performance after this action had been instituted.
It seems to me that the main opinion fails to adequately protect the shareholder of a corporation such as this and in fact opens the door to a dissipation of corporate assets in a manner contrary to the statutes of this State. I would reverse insofar as the trial court’s conclusion that the contract and conveyance had been ratified.
HENRIOD, J., concurs in the dissenting opinion' of TUCKETT, J.

. Lochwitz v. Pine Tree Mining & Milling Co., 37 Utah 349, 357, 108 P. 1128. See also: Jackson v. Bonneville Irr. Dist, 66 Utah 404, 243 P. 107; Anderson v. Grantsville North Willow Irr. Co., 51 Utah 137, 169 P. 168; Aggeller & Musser Seed Co. v. Blood, 73 Utah 120, 272 P. 933; Copper King Mining Co. v. Hansen, 52 Utah 605, 176 P. 623.