Summary

Portrait of Melville Fuller Melville Fuller Fitzgerald Mallory Construction Company v…

Bank, 130 Mass. 391, 395: 'A bank or other corporation may be bound by an implied contract in the same manner as an individual may. But, in any case, the mere fact that valuable services are rendered for the benefit of a party does not make him liable upon an implied promise to pay for them. It often happens that persons render services for others which all parties understand to be gratuitous. Thus, directors of banks and of many other corporations usually receive no compensation.
Source: Wikisource

Portrait of Melville Fuller Melville Fuller Fitzgerald Mallory Construction Company v…

The company was liable upon the original indebtedness, and its change of form in order to relieve the pressure of the creditors was by the direction, with the participation, and at the request, of the president. We perceive no want of power, and no omission of essential formalities, in what was done; and the mere fact that Fitzgerald was a stockholder in, and a promoter and director of, the company, and, with the president, the manager of the work in the prosecution of which the indebtedness arose, would not change the binding character of the obligation.
Source: Wikisource

Portrait of Melville Fuller Melville Fuller Fitzgerald Mallory Construction Company v…

If the moneys were used to pay off indebtedness of the company, arising in the construction of the road, and for work done under proper authority, the transactions were in pursuance of the authorized purposes of the corporation, and occurred in its legitimate business. The execution of the paper could not be held to be in excess of the powers given, and it was clearly the duty of the directors to give contrary instructions if they wished to withdraw the general management from the president, and to disaffirm the action of their agents promptly and at once if they objected to it.
Source: Wikisource

Get perspective with Kwize: daily news enlightened by great literature