tend that this was not a finding of fact, but a mere conclusion of law deduced from other facts. We think counsel are right in this contention, but cannot see what effect it would have upon the judgment whether the paragraph be treated as a finding of fact or as a conclusion of law. If the other facts found support the conclusion (and 3, 4 we think they do), it in legal effect makes no difference whether a conclusion of law is in one part or another of the findings and conclusions made by the court. Treating the finding as a mere conclusion of law, the question that arises is: Is the conclusion sound? Counsel for appellant insist that it is not. They contend that while in a particular sense, and for certain purposes, notice to the officers and directors of a corporation is notice to the corporation itself, that is so because the officers and directors are the agents of the corporation, but they insist that the converse of the proposition, namely, that notice to the corporation is also notice to the officer or director, is not true, because the corporation is not the agent of the officer or director. In view of the findings, it must be conclusively assumed that the parcel of land conveyed to the appellant corporation was by it accepted in trust to be sold for the "best price that could be obtained" therefor, but, in no event, for less than $300; that when sold so much of the proceeds as was necessary to discharge the debts of respondent's husband to said corporation was to be retained by it, and the balance was to be accounted for to respondent. The corporation, therefore, obtained the property for a special purpose. The purpose was twofold: (1) To secure the debt due from the respondent's husband to it; and (2) to sell the property for that purpose, but for the best price obtainable, and to hold respondent's share of the funds in trust for her, and to account to her for the same. The obligation of the corporation, therefore, was in the nature of a trust, and its relation to respondent and the fund was in the nature of a trustee, and we shall so treat it. The corporation in selling the property was bound to sell it for the "best price that could be obtained" therefor. If the property

5

was sold for a less price, the corporation would still be liable to respondent for the difference between what the property was actually sold for and what the corporation could have obtained for it. If the property in question, 6, 7 therefore, was sold for $500, as found by the court,

on the 26th day of July, 1906, then that amount was obtainable for it on that date. It is contended that the land. was sold by the corporation to Rockhill on the 21st day of July, 1906, for the sum of $300, and therefore the corporation is required to account for that sum only. For the reasons hereinafter stated, we cannot treat the transfer of the property to Rockhill as a sale, and hence we are of the opinion that the corporation is clearly liable under its trust agreement.

But is appellant Rockhill also liable to the respondent? The answer to this question depends upon two things, namely, Rockhill's relation to the corporation, and the character of the transaction by which it obtained title to the land in question. Rockhill's relation to the corporation was that of director and vice president. Whenever a corporation of this state exercises its powers, it must do so through the board of directors, since, under our statute (Comp. Laws 1907, section 324), all corporate powers are vested in and "shall be exercised by the board of directors." No doubt the majority of the board, when regularly convened, may exercise any of the corporate powers in the absence of the minority, and bind such minority if

the acts of the majority are not ultra vires or in 8, 9 violation of some positive statute, or of some general law, or are void or voidable as against public policy. The minority is not only bound by the acts of the majority, but the minority members are charged with knowledge of all the legal corporate acts that are exercised as aforesaid. If, therefore, the majority acquires any property in trust, every director is charged with knowledge of the trust relation, and, as against the claims of those for whom the corporation became trustee, such member has and can acquire no better right to the trust property than the corporation has. In

10

this regard, it can make no difference whether the majority of the board of directors directly exercise the corporate power or authorize some agent to do so. The act is still the exercise of a corporate power of which every director as against strangers to the corporation, is assumed to have notice. In 21 A. & E. Ency. L. (2d Ed.), 896, the law upon that subject is stated in the following language:

"As a general rule an officer or director of a corporation is chargeable with knowledge of all matters relating to the affairs of the corporation which he actually knows or which it is his duty to know. Thus, in actions by strangers against an officer or director, the defendant will generally be charged with knowledge of all facts relating to the condition and business of the company which he might have known by the exercise of due diligence, whether actually known to him or not."

This text is sustained by the authorities: Merchants' Bank v. Rudolf, 5 Neb. 527; Greenville Gas Co. v. Reis, 54 Ohio St. 549, 44 N. E. 271. The last case, in principle, is precisely like the case at bar. In that case the corporation obtained certain bonds in trust. One of the directors subsequently purchased the bonds from the corporation, and in an action against him set up the claim that he knew nothing about the trust agreement; that he purchased the property in good faith for value and without notice. The court, however, brushes this claim aside, and holds that, as a director of the corporation, he must be held as having had knowledge of the trust agreement, although he was absent from the board meeting, and had no actual knowledge that the board of directors entered into the agreement. Under the court's findings in this case, when viewed in the light of the law applicable to them, the transaction by which Rockhill obtained title to the land in question on the 21st day of July, 1906, amounted to no more than to constitute him a trustee for respondent. The property which was theretofore held in trust for respondent by the corporation was after the transfer held in trust for her by Rockhill. The transaction of that date between Rockhill and the corpora

11

tion of which he was a director, in so far as respondent was concerned, did not amount to a sale of the property for $300, nor did $300 represent the best price that could be obtained therefor. While respondent, no doubt, could have ratified that transaction as a sale and insisted upon receiving her share of the $300 as the price obtained therefor, yet she was not bound to do so and could do just what she did, namely, insist that the sale on the 26th day of July following for $500 represents the best price obtainable for the land. If the corporation had in fact sold the land on the 26th day of July for $500, we think no one would seriously contend that it did not represent the best price obtainable, and that respondent could insist that the corporation account to her upon that basis. As we have seen, Rockhill is in no better plight than the corporation, since he simply stands in its shoes, and, in so far as respondent's rights are concerned, is bound by the trust agreement the same as the corporation would be. The corporation could thus discharge its obligation only by complying with the trust agreement, and in doing so, would have to account to respondent for her proportion of the $500 which was the sale price for the property. Rockhill became a volunteer trustee, and has obtained and holds the fund derived from the sale of the land, and hence we can see no good reason for holding that he should not be required to account to respondent for the amount due her under the trust agree ment in accordance with its terms, all of which the law assumes that Rockhill knew.

What we have said also covers the other assignments argued by appellants, and they thus require no further consideration. In our opinion the judgment of the lower court is right, and it therefore is affirmed, with costs to respondent.

STRAUP, C. J., and MCCARTY, J., concur.

37 Utah-19

HAGUE v. JUAB COUNTY MILL & ELEVATOR COMPANY.

No. 2082. Decided February 11, 1910 (107 Pac. 249).

ADMISSIONS-CONCLUSIVENESS.

1. PLEADING In an action to enjoin the maintenance of a flume adjacent to plaintiff's property, which he claimed interfered with his easement in a public street, defendant was bound by the allegations of the answer admitting that plaintiff's land abutted upon a public street, and that the flume was in and along said street, and could not contend that the street was never dedicated or established. (Page 294.)

2. MUNICIPAL

CORPORATIONS-OBSTRUCTIONS OF STREETS-ACCESS OVER STREET OBSTRUCTION BY FLUME. Defendant maintained a mill flume, with banks at a certain height, for about forty years in a public street, abutting plaintiff's property; plaintiff being able to cross the street by means of bridges without undue inconvenience, until defendant removed the bridges and raised the banks of the flume so as to prevent him from crossing the street from his premises. Held, that while defendant was entitled to use the street for a flume, he could not change the height of the banks so as to interfere with plaintiff's rights in the street; and the fact that the street had been abandoned by the public was immaterial upon plaintiff's rights. (Page 295.)

3. MUNICIPAL CORPORATIONS-STREETS-ABANDONMENT BY PUBLIC— EFFECT ON RIGHTS OF PROPERTY OWNERS. While the public may abandon a street so far as its rights therein are concerned, such abandonment does not affect the rights of abutting owners to an easement therein for ingress and egress.1 (Page 296.)

4. ADVERSE POSSESSION-EXTENT OF RIGHT-ADVERSE POSSESSION OF STREET. Where defendant had merely an easement in a street for maintaining a flume for milling purposes, he could acquire no more than the perpetual right to maintain the flume for milling purposes, and could not claim, by adverse possession, the legal title of that part of the street so as to entitle him to maintain the flume banks at any height. (Page 296.)

5. MUNICIPAL CORPORATIONS-STREETS-OBSTRUCTIONS-INJUNCTION— DECREE-CERTAINTY. In a suit by an abutting owner to enjoin the maintainence of the banks of a flume beyond a certain height in an adjacent street, the decree enjoined defendant from maintaining the banks in front of plaintiff's premises at a height greater than 1 Sowadzki v. Salt Lake County, 36 Utah, 127, 104 Pac. 111.