belonged, by their votes as stockholders, authorized and directed themselves, as the officers and agents of the company, to make and execute a lease of said premises to another and distinct corporation, wholly owned by them and for their exclusive benefit, at one-half the royalty contracted for in the first lease, provided a sufficient quantity of ore could be found accessible without an unreasonable outlay of money. It seems that a reduction of one-half the royalty agreed to be paid under the first lease ought to have been accepted as a sufficient concession. But it did not satisfy the defendants. They demanded more, and being, as they supposed, in full possession of the requisite power, they dealt in a most generous spirit with themselves. The second lease, conforming to the requirements of the resolution passed by their votes, included, in addition to the mine, from $30,000 to $40,000 worth of machinery, (which the lessor company was, under the terms of the first lease, bound to purchase,) and the $50,000 of money appropri ated for the purpose of sinking and equipping a shaft to put the mine in a more workable condition to facilitate their operations. Interest on these two sums, ordinary deterioration of the machinery, the $3,000 salary allowed to one of the defendants for acting as president of a corporation stripped of its property and left without any active business or responsibility, will about absorb all the rent payable under said second lease. Its effect, therefore, is to transfer the beneficial interest of all the company's property to defendants for 18 years. But if, perchance, it does not do this, another stockholders' meeting, to be called and controlled by defendants, can easily find some pretext for appropriating any surplus that may remain. lease thus attained, and capable of being perverted to such injustice, ought not to be sustained. It is inequitable, and a fraud upon the rights of the other stockholders. A decree will, therefore, be entered declaring it fraudulent, and ordering its rescission, and appointing a receiver to take charge of and superintend the company's business, until the accounts hereinafter ordered and the rights of the parties involved herein are ascertained and finally adjusted. The defendants St. Clair will also be required to account with the Winthrop Iron Company, pursuant to the terms of the first lease, until December 1, 1882, the date of its expiration, and from and after that time for the actual profits realized by them from said mine, or for a reasonable royalty, at complainants' election. Said defendants will also be decreed to pay the costs heretofore accrued. And as the com A plainants have prosecuted this case for the common benefit of all the parties interested, to protect and preserve a trust fund, they are entitled to be reimbursed therefrom for all proper expenditures made or liabilities necessarily incurred in and about the prosecution of the A master will, therefore, be appointed to hear proof, and take and report in reference to the accounts hereinbefore ordered, and to ascertain what will be a proper allowance to complainants for their same. counsel fees and other necessary expenditures made or to be made by them in and about the prosecution of this suit. All other questions will be reserved until the coming in of the master's report. The main position in the case above given rests on the rule that a principal may, at his election, avoid a contract made by his agent when such contract reserves emoluments or benefits to the agent which should have been given to the principal. The profit that an agent is permitted to make out of his agency is limited to salary and commissions fixed by law or by agreement of the parties. Hence, any contracts by an agent for the purchase of the principal's property, or the investment of the principal's assets, inures to the principal's benefit; or, if it be the result of a speculation by the agent for his private gain, it may be repudiated by the principal, so far as concerns the agent and parties with notice, unless it should appear that the speculation was made with the principal's approval, on a full knowledge of the facts. (a) The reasons for vacating such contracts increase in strength when the agent, from his peculiar position, is enabled to exercise peculiar influence over the principal, as is the case when a director or officer of a company makes a contract on behalf of the company for his own emolument;(b) or a trustee, relied on implicitly by the cestui que trust, makes an unfair profit out of the latter's estate. (c) Nor is this all. An agreement by an officer of a railroad company to use his influence to have the road take a particular course, is not only voidable as against the company, but void generally, as against public policy.(d) "All arrangements by directors of a railroad company to secure an undue advantage to themselves, at its expense, * * * are so many unlawful devices to secure an undue advantage to enrich themselves to the detriment of the stockholders and creditors of the company, and will be condemned whenever properly brought before the courts for consideration."(e) And in a later case, still unreported, (f) it was held that an agreement, for a consideration, of a stockholder in a business corporation to vote for a particular person as manager, and to vote to increase the salaries of the officers, including that of the manager, is void, as against public policy, if not cured by the assent of all the stockholders.(g) (a) Lees v. Nuttall, 2 Myl. & K. 819; Lowther v. Lowther, 13 Ves. 95; Dunne v. English, L. R. 16 Eq. 521; Marsh v. Whitmore, 21 Wall. 178; Baker v. Humphreys, 101 U. S. 494; Mott v. Harrington, 12 Vt. 199; Smith v. Townsend, 109 Mass. 500; Fulton v. Whitney, 66 N. Y. 548; Lorillard v. Clyde, 6 N. Y. 384; Everhart v. Searle, 71 Pa. St. 256. (b) Imperial Merc. Co. v. Coleman, L. R. 6 H. L. 189; Flanagan v. Railroad, L. R. 7 Eq. 116; New Sombrero Phosphate Co. v. Erlanger, L. R. 5 C. D. 73. (c) Coles v. Trecothick. 9 Ves. 234; Ellis v. FRANCIS WHARTON. Barker, L. R. 7 Ch. 104; Thompson v. Eastwood, (d) Berryman v. Railroad, 14 Bush, 755. (e) FIELD, J., Wardell v. Railroad, 13 U.S.659; citing Great Luxembourg R R. v. Magney, 25 Beav. 586; Benson v. Hathaway, 17 S. C. 326; Flint R. R. v. Dewey, 14 Mich. 477. 1883. Woodruff v. Wentworth, Sup. Ct. U. S. (g) See Guernsey v. Cook, 120 Mass. 501. HUTHSING V. BOSQUET and others. (Circuit Court, D. Iowa. February, 1882.) PUBLIC OFFICER-CONTRACT WITH NON-RESIDENT-KNOWLEDGE OF LAW PRE SUMED. Where a party in one state makes a contract with direct reference to the law of another state, he must be held to know the law of that state. Huthsing v. Bousquet, 7 FED. REP. 833, reaffirmed. This case was submitted on the following agreed statement of facts, after the filing of the opinion, reported in 7 FED. REP. 833: "It is hereby stipulated and agreed, by and between the parties to the aboveentitled action, that said cause be submitted for determination and judgment to the court, and that in the determination of said cause the following agreed statement of facts shall be taken and considered as true, without further proof thereof, but subject to any legal objection that may be urged in argument by either party on the ground of incompetency, irrelevancy, or immateriality. "1. That the plaintiff and said Lawler are now, and have continuously been, citizens and residents of the state of Missouri, since prior to the year A. D. 1876, and that the defendants are, and for many years have been, residents and citizens of the state of Iowa. "2. That in the year A. D. 1876 the board of supervisors of Marion county, in the state of Iowa, was composed of three members only, and that the defendants, Herman F. Bosquet, A. A. Welsher, and one H. D. Lucas, being the chairman of said board. That the term of office of said Lucas expired on the thirty-first day of December, 1876, and he was succeeded by the defendant, John B. Ely, who served as such supervisor for three years next succeeding thereafter. "3. That on the tenth day of October, 1876, the office of the treasurer of said Marion county was robbed of about ten thousand and five hundred dollars ($10,500) of money, belonging to said county, by two men, who entered the said office and by threats compelled the treasurer of said county to open the safe and deliver said money to them, and that John R. Barcus and Harry Williams are the persons who committed said robbery. "4. That on the morning of the eleventh day of October, 1876, said Bosquet, Welsher, and Lucas met at Knoxville, the county seat of said county, without notice or request therefor having been given, and without any of the steps having been taken as provided in section 301 of the Code of Iowa for the holding of special meetings of boards of supervisors, but having convened, with other citizens, solely on account of said robbery, for the purpose of taking such action in relation thereto as might be deemed best, they, the said Bosquet, Welsher, and Lucas, then and there, while thus convened, issued and caused to be published and circulated the offer of reward referred to and set out in the original and substituted petition herein, and sent a copy thereof to the chief of police of the city of St. Louis, Missouri, which was seen and read by the plaintiff and by said Patrick Lawler on or before the sixteenth day of November, 1876. It is agreed that the said Bosquet, Welsher, and Lucas, at the time they issued the said circular, did not meet or organize as a board, nor pass any resolution in any formal or informal manner adopting said offer of reward, nor make any record of their proceedings, but were individually present in the treasurer's office, and merely consulted together as to the propriety of making said offer, and agreed thereto, whereupon the said offer was written out and signed by said H. D. Lucas, chairman, in the presence of the defendants Bosquet and Welsher, and the said offer was, by the direction of the said Bosquet, Welsher, and Lucas, printed and circulated. "5. That in making and circulating said offer of reward said Bosquet, Welsher, and Lucas acted in good faith, believing they had the right and power to make the same on behalf of said county in the manner as herein stated, and that if the terms of said offer were complied with it would entitle the party who might perform such service to the reward therein offered from said county, but did not intend to make such offer as a personal offer by said board or its individual members in their individual capacity. Nor did said supervisors intend that said circular should be understood to be a personal offer by them, but intended to make the same in their official capacity only, as the board of supervisors of said Marion county. "6. That after the plaintiff and the said Lawler had seen and read said circular, and with a view to obtain said reward,-to-wit, on or about the sixteenth day of November, 1876, they recovered about the sum of ($3,071) three thousand and seventy-one dollars of the said stolen funds of said county in the city of St. Louis, Missouri, and placed the same in the hands of the chief of police of said city, subject to the order of said county; and also, on or about the twentieth day of November, 1876, arrested the said John R. Barcus at Atchison, in the state of Kansas, and in a few days thereafter delivered him over into the hands of the sheriff of said Marion county. That said Barcus was duly convicted of said robbery in January, 1877, and is now serving out his sentence in the penitentiary. "7. That when said printed circular came to the notice of plaintiff and said Lawler, and when they performed the services herein mentioned and referred to, they and each of them understood and relied on such circular and the offer of reward therein contained as being made solely on behalf of said Marion county, and not on behalf of the supervisors who issued and published the same. That they and each of them expected the compensation promised in said circular to be paid by said county, and not by said supervisors personally, nor by any of them. That neither plaintiff nor said Lawler knew the name of any member of the board of supervisors of said county, except said H. D. Lucas, until after they had performed all the services for which compensation is claimed in this action, and had, at the time of said services, no actual knowledge, information, or belief that under the laws of Iowa supervisors were not legally authorized to issue said offer of reward, but had only such knowledge as imputed by law. "8. That about the month of January or February, 1877, plaintiff and said Lawler filed, with the auditor of said Marion county, an account (a copy of which is hereto annexed and marked A) against said county, duly verified, claiming of said county the reward sued for in this action, and also for expenses; and that afterwards said plaintiff and said Lawler sued said Marion county for the reward sued for herein, and also for the reward on the money recovered by them, and for their said expenses; and that, upon issues joined in said action in a court of competent jurisdiction, said plaintiff and said Lawler were adjudged to be entitled to recover of said Marion county about the sum of $1,000 as reward for the recovery of said $3,071, and about the 'sum of ($675) six hundred and seventy-five dollars for expenses in and about the recovery of the same, and in the apprehension and delivery of said Barcus. But the question of the liability of said county to pay the reward sued for herein, for the arrest of said Barcus, was not adjudicated in said action, and the claim herein is not barred by reason of any former adjudication thereon, but the same was withdrawn before judgment in said case. "9. That the acts of the supervisors, in issuing and publishing said offer of reward, were duly ratified by the said board in full and regular session, in 1877, and by repeated acts thereafter, as shown by the annexed resolutions, marked B and C and D and E, which are made a part hereof, and which, it is agreed, were regularly and duly adopted by said board and spread upon its record. "10. The court may take notice and give force to any statutes of the state of Missouri or decisions of the law court of said state, cited in argument by either party herein, the same as though offered in evidence, and subject to the same objections as are provided for in section 1 hereof. "11. That in case the plaintiff is entitled to recover herein for the arrest and conviction of said Lucas, it is agreed that he is to have judgment in the sum of $2,500, and interest from May 1, 1877, being one-half the reward offered, if the court shall hold that said reward is apportionable, and if that is material. "12. That so far as said petition herein relates to the claim for the apprehension and conviction of said Williams the same is to stand for trial separately, and subsequently hereto. "13. That said offer of reward was issued for circulation and information of the public, and to induce parties to act thereon, and that said Huthsing and Lawler performed the work and services set forth in the petition, resulting in the arrest of John R. Barcus, as further set forth in section 6 hereof." Whiting S. Clark, for plaintiff. Anderson & Kinkead, for defendants. MCCRARY, J. The plaintiff now seeks, by his new averments and the agreed statement, to put his case upon the ground of fraud. It is not pretended that there was any fraudulent intent on the part of the defendants. That they, in fact, acted in perfect good faith, intending to bind the county, and believing they had power to do so, is not questioned. How, then, does the plaintiff attempt to make a case of fraud? They say the defendants are conclusively presumed to have known the law of Iowa, and therefore must be held to have offered the reward knowing that the county would not be bound. They must, therefore, have intended to mislead and deceive the plaintiff. Now it is manifest that this reasoning is purely technical. It aims to charge the defendants upon a case of fraud in law when there was no fraud in fact. It would be a strange result in an action at law to make a defendant responsible upon a charge of fraud while admitting that he, in fact, acted in perfect good faith. It is, of course, necessary to this argument for the plaintiff to assume that he did not know the law of Iowa, because if he did know the law he was not deceived. But in my opinion this is untenable. When a party in one state makes a contract with direct reference to the law of another state, I think he must be held to know the law of that state. In all the county bond cases it was held by the supreme court that the non-resident holder for value without notice, of county bonds, must take notice of the law of the state conferring the power to execute them, and that if the law of the state conferred no power the innocent purchaser and holder could not recover. He was bound to know the law of the state under which the contract was made. He could not be innocent by reason of his ignorance in that regard. It never entered the mind of any one to say that, being a citizen of |