3; Cook, Stocks, $$ 614, 615. Although, as we have said, directors of a pecuniary corporation may not be "trustees in the technical sense of that term, they are under the same restraints, and labor under the same disabilities, which rest on trustees proper so far as questions raised by the present bill are concerned. When personal interest antagonizes the disinterestedness and impartiality which the law, as well as morality, exacts in the exercise of fiduciary trusts, this, is per se, a disqualification, not by reason of any abuse committed, but in fear that weak human nature will yield to temptation. Justice FIELD, speaking of the conflict between duty and interest, says: "Constituted as humanity is, in the majority of cases, duty would be overborne in the struggle. Marsh v. Whitmore, 21 Wall. (U. S.), 178: Nathan v. Tompkins, 82 Ala. 437, 19 Am. & Eng. Corp. Cas. 336; Great Luxemburg R. Co. v Magnay, 25 Beav. 586.

inflicted on

The averments of the bill in this case show great wrongs done to the Memphis & Charleston Company by reason of the control exercised in its management by the East Tennessee, Virginia & Georgia Company. It also Same-Wrong charges that it is the intention of the latter com- Memphis & pany to so vote its stock as to maintain its control Charleston. of the Memphis & Charleston Railroad. Whether the charges of past abuses be true or false, they bring prominently to the notice of the court the character and extent of wrong and oppression which one corporation may inflict on another, when circumstanced as these are. It is scarcely necessary that we should specify in what manner the oppression may be inflicted. The board of directors elected by and for the East Tennessee, Virginia & Georgia Company, we must suppose, owe their election to all the stockholders, representing all the stock in that company. The duties of fidelity and impartiality in administering the affairs of that company, implied in the relation they sustain to it, we have stated above. They require severe disinterestedness, as between the several shareholders, and unbiased fidelity to the prosperity and success of the corporation. Now, when the direc tors of the Memphis & Charleston Company, or a controlling majority of them, owe their election to the East Tennessee, Virginia & Georgia Company, and to that company alone, it is manifest that questions may and will arise on which there will be a conflict of interest between the two companies. It is but human nature that in such conflict directors thus chosen will give their votes and influence in favor of the company they represent in full, and in whose entire income and emoluments they participate, rather than to the company they represent only to the extent of a trifle above a moiety

of its stock.

An integer against a fraction. Both law and reason force the implication that, in the governing body of a corporation, duty and interest shall not point in opposite directions. We hold that it is equally against public policy, and against that sound rule which disables trustees, or quasi trustees, to act when their duty and interest conflict, that the East Tennessee, Virginia & Georgia Company should be allowed to vote its majority stock in matters pertaining to the management and control of the Memphis & Charleston Company. We confine our ruling, however, for the present, to cases like this one, where a conflict of interest may arise in the matter of expenditures and their apportionment, in the division of patronage or of earnings, and to rivalships between different companies, having substantially the same field of operation, or where the profits of one enterprise may be enhanced by the diminution of those of the other. There may be other cases to which the rule will apply, but we decline to consider them now.

This case has been very ably argued; and we are not unmindful of the grave consequences that may, and probably

Extent and nature of the decision.

will, ensue from our decision, not alone to the East Tennessee, Virginia & Georgia Company, but to many other corporations similarly circumstanced. We have not declared that the law does not authorize that company to acquire and hold stock, or shares of stock, in another railroad corporation. Its charters not being before us, we have no means of ascertaining what its corporate powers are, further than the implications which naturally arise from its name and its lines of business inform

us.

We have not declared that if the East Tennessee, Virginia & Georgia Company is without power to acquire and hold shares of stock in another railroad corporation, the complainants in this suit have shown any right to controvert the question of its rightful ownership. Hence we have not decided that the Knoxville & Ohio Railroad Company were not the rightful, lawful owners of the stock which the East Tennessee, Virginia & Georgia Company acquired from it, nor that the latter company did not acquire a good title by its purchase. We have not attempted to set aside, or to declare invalid, either of these sales. We do not controvert the general inherent right, resulting from the ownership of stock in a corporation, to exercise the elective power such ownership confers, and to exercise it wisely or unwisely, alone, or pursuant to an agreement with other stockholders; and that no one save the former owner can question the right to vote such stock, even when obtained by fraud, or other illegal means. Moses 7. Scott, 84 Ala. 608. This, we repeat,

is the general rule; and less than this, in an ordinary case, would be an unauthorized abridgement of the stockholder's property rights.

Limitations

of property.

Enjoyment and the right of disposition are general attributes of property ownership. Property rights, however, cannot be classed as absolutely independent of social and municipal regulation. "So use your own as on enjoyment not to invade the equal rights of others," is a max-" im as sound in law as it is in the conduct of social intercourse. Its observation and preservation are the end and aim of much wise legislation, of much judicial administration. But men must be dealt with, not as faultless, but as frail, and subject to temptation too strong for their powers of resistance. Civil liberty is but natural liberty shorn of its power to transgress the boundary which separates meum and tuum, in its comprehensive sense. Hence it is that the law, with inflexible purpose, has placed restraints on transactions in which duty and interest conflict. Hence it is that, when any relation of trust or confidence subsists, the law scrutinizes with earnest, if not severe, vigilance any pecuniary transaction that may be had between parties thus circumstanced. Hence it is that, when one man stands in a fiduciary relation to another, any contract or bargain and sale had with the beneficiary is invalid at the mere option of the latter, if seasonably expressed. The danger of abuse in such conditions dominates the power of disposition; and the power to make binding contracts, which we have classed as among the general attributes of property ownership, must submit to reasonable restraints. Thompson v. Lee, 31 Ala. 292; Moses. Micou, 79 Ala. 564; Huguenin v. Basely, 14 Ves. 273.

It is contended for appellants that if a majority of the capital stock of the Memphis & Charleston Company had belonged to an individual, or to a combination of individuals, instead of being the property of the Rule if stock East Tennessee, Virginia & Georgia Company, the by individual. same power of control could have been exerted as

were owned

is complained of in this case. It is possible that there might be an exceptional, extreme case, in which it would advance the interest of the owner or owners of a majority of the stock in a corporation to diminish its income, that the emoluments of another enterprise, in which he or they are more largely interested, may be thereby enhanced. Such case, however, is extremely improbable, and, if found to exist, might possibly present a case of wrong for which injunction could furnish no preventive relief. This is a question we need not decide. As a rule, stockholders, in voting, as in other acts which they

are called to perform, attempt to promote the welfare of the corporation; for on its success depend their profits. Whether they act wisely or not, no one can be heard to complain of their conduct; for the success of the enterprise and their individual interests are presumed to be identical. In ordinary elections by stockholders, the presumption is that men will act as their interests prompt them to act, and that their aim is to benefit the corporation in which they are stockholders. Should a case arise in which there is bad faith in the management, and consequent loss to the stockholders. there would seem to be no doubt that redress could be obtained from the faithless governing body.

The case in which the votes are cast by individual stockholders, and the one in hand, are, presumptively at least, essentially different. In that, duty and interest are in complete accord. In this, if the averments of the bill be true, they are in palpable antagonism. In the one, the presumption is that the vote will be cast solely in the interest of the corporation holding the election. In the other, that the greater opposing interest will prevail over the lesser, as it is so apt to do in all human conduct. We think it is no answer to the relief prayed in this case that in another possibly supposable case a wrong very like the one here complained of might be inflicted, and yet the same measure of redress could not be accorded.

Effect of -decision on

erally.

It is contended that if relief be granted in this case it will greatly embarrass railroad corporations in the matter of maintaining continuous, connecting lines, so conducive to public convenience and to economy in It cannot be denied that steam railroads gen. transportation. has, in many respects, revolutionized the world, and that railroads are among the more potent instrumentalities which have effected that revolution. The nations of the earth have been brought into closer neighborhood and better acquaintance, while Christian civilization has been much more speedily and widely diffused. So, commerce and the industrial enterprises have received a new impetus and expansion, theretofore unknown in the world's history. An instrumentality possessing such vast capabilities should be cherished and protected in the enjoyment and exercise of all its rights and privileges. The groveling or agrarian spirit which would hinder or embarrass this mighty agency in the full enjoyment of its rightful powers should receive no encouragement or countenance from right thinking people. On the other hand, the tremendous power that may be wielded by aggregated or incorporated wealth should be kept within due bounds and restricted to legitimate methods.

The pernicious ends to which concentrated wealth may be perverted need not be mentioned here. The virtuous and patriotic utterances of many of the courts of supreme jurisdiction, re-echoed from the highest officials in the federal government, show all too plainly that the public is awakened to the wrongs inflicted through the instrumentality of combined capital. Let us accord to corporations all their rights, and restrain them in the abuse of their powers, should such be attempted.

The principle we have declared in a former part of this opinion will apply with equal force to all employes, agents, and all other persons or corporations who Employes and may be acting in the interest or for the benefit of agents of dethe East Tennessee, Virginia & Georgia Company.

fendants.

Nothing less than an absolute sale of the stock to some person or persons authorized to vote it will relieve it of the infirmity of its present ownership, or authorize the present or any pretended owner to be heard in the government of the Memphis & Charleston Company.

The bill does not charge that the East Tennessee, Virginia & Georgia Company contemplates a sale, or pretended sale, of the stock, and does not charge that Injunction the company, by any indirect means, will attempt stock refused. to have its stock voted in its interest. The charge

against sale of

is that "if said East Tennessee, Virginia & Georgia Company is permitted to transfer said stock it will conceal its interest in the same under the name of some other party, and through such party reacquire the control it now has, with said stock standing in its own name." If such attempt be made without an actual sale of the stock, it will be a violation of the order made in this case, and can be punished as such. Moreover, an election of directors thus procured would be a fraud perpetrated in defiance of the order of the court; and such election would be annulled, on proper application. We hold, however, that in the present stage of this case, and under the averments of the bill, all of which that is pertinent we have copied, there is not enough shown to authorize an injunction against a sale of the stock. That question can be properly raised when an attempt is made, should it ever be made, to violate or evade the principles of the injunction granted in this cause. I Brick. Dig. p. 704, § 930; 3 Brick. Dig. p. 377, S$ 154, 155, 158.

The bill in this case avers that before filing the bill the complainants "requested the Memphis & Charleston Railroad Company, by a request addressed to its officers, to take appropriate legal proceedings to prevent the stock standing in the name of the East Tennessee, Virginia & Georgia Rail