alleged, Fritze was vice president and a director and officer of the society; that it was the duty of the president, among other things, to exercise general supervision over the affairs of the association, and it was the duty of the vice president, in the absence or disability of the president, to perform said duties and exercise said supervision over the affairs of the association; that, in and by the charter and by-laws of the society, the directors shall hold a meeting on the first Tuesday of each month at 7:30 o'clock p. m., at which times all the money in the treasury belonging to the loan fund shall be offered, and bids received therefor, and the stockholder that shall bid the highest premium for the preference or priority of the loan shall be entitled to receive the loan of $100 for each share of stock held by him; that it was also the duty of said directors to supervise the making of all loans and the taking of security therefor; that, under the provisions of the charter and by-laws, the board of directors shall execute all their corporate powers by a vote at properly constituted meetings, and all actions taken shall be duly recorded in the journal of their proceedings; that said duties of the president, or vice president in his stead, and directors of said corporation, are, in part, the same duties and services provided for in said contract, and which Fritze agreed to perform therein; that, by reason of the premises, it was his duty to render said services as vice president and as officer and director of the corporation without compensation; and that, therefore, it was beyond the power and authority of the society to make and execute the said contract, and the same is null and void.

The proposition of law given and held by the trial court for the present appellee, the defendant below, is as follows: "The court holds as the law of this case that the defendant is not estopped to set up in defense that it had no power to amend its charter and by-laws and make the contract in evidence, and this is the law, even though there has been performance on the part of the plaintiff, Fritze, of the alleged contract."

The first and second propositions of law submitted by the defendant below, and which were refused by the trial court, are as follows: "(1) The court holds as the law of this case that the defendant had no power or authority to amend its charter and bylaws by providing for its system of agencies and a manager thereof, as mentioned in the alleged amendment in section 6 in evidence, and that said section 6 is null and void. (2) The court holds as a matter of law that the defendant has no power or authority to amend its charter and by-laws granted in its original certificate of incorporation, and that such alleged amendments in evidence are null and void."

The appellee was organized in March, 1890, under said act of July 1, 1879. At its meeting to organize, it elected Fritze a di

rector for three years, and adopted a charter and by-laws, which were reported to the secretary of state, and a copy thereof was attached to the certificate of organization issued by that officer. The statement, made under section 1 of the act, declared the location of the society to be in Peoria. Section 1 of article 10 of the by-laws provided as follows: "These by-laws may be amended at any special or annual meeting of the stockholders by a majority vote of all the stock of the association subscribed duly represented, but no such amendment shall alter or affect any existing contract or certificate already made without the assent of the parties interested." By section 4 of article 9 of the by-laws, it is provided that "members present in person or by proxy, duly represented, owning a majority of the stock issued, shall constitute a quorum at any annual or special meeting of the association."

At an annual meeting of the stockholders on April 21, 1892, 6,213 shares were represented, and it was determined that 6,166 shares constituted a quorum. At that meeting Fritze offered an amendment to the bylaws, to wit, the section 6 of article 3 as above quoted, and the by-law was adopted at that meeting. Two days later, at the annual meeting of the directors, to wit, on April 23, 1892, Fritze was elected vice president for the ensuing year, and so acted for that year. One week later, to wit, on April 30, 1892, at a meeting of the directors, a motion was made that, by virtue of said new by-law, Fritze be appointed manager of agencies for one year from May 2, 1892, to May 2, 1893, and that his compensation for services for the year, etc., be as stated in the contract above set forth. This motion was carried, and Fritze, with the other four directors, voted for it. The contract of May 2, 1892, as above set forth, was then prepared and signed, designating Fritze as manager of agencies, etc. This contract was presented to the board of directors, and approved on May 14, 1892, and Fritze voted for its approval with the other directors. Fritze acted as the manager of agencies from May 1, 1892, to May 1, 1893. He terminated his connection with the society May 1, 1893, and was paid by it upon said contract for services during the year $3,129.06. The books of the society, as kept by those holding office at that time, say that there was still due to him, as manager of agencies, $1,660, and the present suit is brought to recover this balance.

Dan. R. Sheen and A. Kreisman, for appellant. Winslow Evans (John J. Crowder, of counsel), for appellee.

MAGRUDER, J. (after stating the facts). The first question presented by the record in this case relates to the validity of the amendment to the by-laws adopted on April 21, 1892, and quoted as section 6 of article 3 of the by-laws in the statement preceding this

opinion. If this by-law was invalid, then the office of manager of agencies did not lawfully exist, and the appointment of the appellant, Fritze, as such manager of agencies, and the contract made with him on May 2, 1892, were equally invalid.

Sec

Section 1 of the act of July 1, 1879, relating to building and loan associations, provides for the filing in the office of the secretary of state of a statement setting forth the name of the proposed corporation, its capital stock, its location, and its duration, and that the secretary of state shall thereupon issue to the persons making said statement a license as commissioners to open books for subscription to the capital stock of the corporation. tion 2 of the act provides that, as soon as 100 shares or more of the capital stock shall be subscribed, the commissioners, upon notice given as therein directed, shall convene a meeting of the subscribers "for the purpose of electing directors, adopting a charter and by-laws and the transaction of such other business as shall come before them." Section 3 of the act provides as follows: "The commissioners shall make a full report of their proceedings, including therein a copy of the notice provided for in the foregoing section, a copy of the subscription list, a copy of the charter and by-laws adopted by the association and the names of the directors elected and their respective terms of office, which report shall be sworn to by at least a majority of the commissioners, and shall be filed in the office of the secretary of state. The secretary of state shall thereupon issue a certificate of the complete organization of the corporation, making a part thereof a copy of all papers filed in his office in and about the organization of the corporation and duly authenticated under his hand and seal of state; and the same shall be recorded in the office of the recorder of deeds in the county in which the principal office of such company is located. Upon the recording of said copy, the corporation shall be deemed fully organized and may proceed to business," etc. 1 Starr & C. Ann. St. (1st Ed.) p. 630.

It will be noticed that the charter and bylaws of the corporation are required to be adopted at the meeting of subscribers provided for in section 2 of the act. A copy of the charter and by-laws, thus adopted by the association, is required to be included in the report of the proceedings to be sworn to and filed in the office of the secretary of state. The copy of the charter and by-laws thus required to be reported and filed is also required to be made a part of the certificate of organization of the corporation which is issued by the secretary of state. As the by-laws must thus be a part of the original certificate of organization, and must be recorded in the office of the recorder of deeds in the county in which the principal office is located, the company is necessarily without the power, under the act of July 1, 1879, to subsequently amend its by-laws. If all the by-laws were required to be a part of the original certificate

of organization, there could be no by-laws that were not a part of that certificate. The corporation was not to be deemed fully or ganized, and could not proceed to business, until a copy of the certificate of organization, containing the charter and by-laws, was recorded as directed by section 3 of the act. A subsequent amendment to the by-laws, passed after the certificate of organization had been issued and recorded, would be the adoption of a by-law not authorized or sanctioned by the act, because it could not be a part of the original certificate of organization.

The Equitable Building & Loan Society of Peoria was organized in March and April of 1890. Its original certificate of organization, with the charter and by-laws adopted by it at the meeting provided for in section 2 of the act, was issued by the secretary of state on April 5, 1890. This certificate of organization, with a copy of the charter and by-lawa attached, was filed with the recorder of deeds in Peoria county on April 7, 1890. By the documents on file in the office of the secretary of state. and on record in the office of the recorder of deeds of Peoria county, persons dealing with the corporation were notified that the by-laws were such as they were shown to be in the office of the secretary of state and in the office of the recorder of deeds of Peoria county. The amendment to the bylaws, known as section 6 of article 3, which provided for the appointment of a manager of agencies, was not passed until April 21, 1892. long after the corporation had been organized and had proceeded to business under the bylaws adopted in March and April, 1890. It follows that the by-law of April 21, 1892, giving the board of directors power to appoint a manager of agencies, such as is described in section 6, is invalid as being ultra vires and beyond and in excess of the charter powers of the corporation. The language of the act of July 1, 1879, excludes the idea that corporations organized thereunder could make amendments to their by-laws after their organization.

Nowhere in the act of 1879 is power given to associations organized thereunder to make amendments to their by-laws. No express power for that purpose is conferred by the act, nor can it be said that there is any implied power under the provisions of the act to make such amendments. The implication of any such implied power is negatived by the requirement that the by-laws must be made a part of the original certificate of organization, and filed and recorded in the manner prescribed by the act. The permission to pass such by-laws as are thus embodied in the certificate of organization, and thus filed and recorded, is a prohibition of the right to adopt any other by-laws by amendment or otherwise.

It is well settled that the powers of a corporation organized under a legislative char ter are only such as the statute confers, and "the enumeration of these powers implies the exclusion of all others." Thomas v. Rail

11 N. E. 331; Kadish v. Association, 151 Ill. 531, 38 N. E. 236; McNulta v. Bank, 164 Ill. 427, 45 N. E. 954. A new construction has recently been given to these decisions, which is materially variant from that heretofore put upon them (National Home Building & Loan Ass'n v. Home Sav. Bank, 181 Ill. 35, 54 N. E. 619), but which must be regarded as the construction now held by this court (Brewing Co. v. Klassen, 185 Ill. 37, 57 N. E. 20). The doctrine, however, that a corporation cannot avail itself of the defense of ultra vires when a contract has been in good faith performed by the other party, and the corporation has had the full benefit of its performance, was never held to have any application where such contract is immoral or illegal, or prohibited by statute, or where its enforcement would be against public policy. That this is so may be seen by reference to the authorities last above referred to. See, also, 2 Mor. Priv. Corp. §§ 689-691; 2 Beach, Priv. Corp. §§ 425, 426; 27 Am. & Eng. Enc. Law, p. 364; Arms Co. v. Barlow, 63 N. Y. 62. Where such a contract is against public policy, or the policy of the law, the unexecuted portion of it will not be enforced. Thomas v. Railroad Co., supra; McNulta v. Bank, supra.

Counsel apply the rule contended for to the facts of the present case by claiming that appellant performed services during the year from May 1, 1892, to May 1, 1893, as manager of agencies, for the appellee, and that, although appellee has paid him $3,129 on account of such services, yet the balance of $1,660, claimed to be due, should be paid by the appellee, whether it had power to make the contract or not, because the appellee, as it is alleged, has received the benefit of such services. We stop not to inquire whether the services were of benefit to appellee or not, but think that the contention of appellant cannot be sustained for the reason that the contract is not only an ultra vires contract for the reason above stated, but it is a contract prohibited by the statute, and whose enforcement would be against public policy. Section 5 of the act of July 1, 1879, provides that "the corporate powers shall be exercised by a board of directors: provided, the number of directors shall not be increased or diminished, nor their term of office changed, without the consent of the owners of twothirds of the shares of stock. The officers of the company shall consist of a president, vice-president, secretary and treasurer, to be elected at the annual meeting of the board of directors, as may be provided for in the charter and by-laws of the association: provided, that the secretary only shall be entitled to compensation, and in such amount as may be provided for in the charter of such association." 1 Starr & C. Ann. St. (1st Ed.) p. 630. Section 5 thus provides that of the officers of the company the secretary only shall be entitled to compensation, and the compensation of the secretary shall be in such amount as may be provided for in the

charter. By the statement that the secretary only shall be entitled to compensation, there is a plain prohibition against the payment of compensation to any of the other officers. The vice president of the company, by the terms of section 5, was not entitled to compensation. Such offices as are here mentioned are usually filled by the chief promoters of the corporation, and their interest in the stock or other incidental advantage is supposed to be the motive for executing the duties of their office without compensation. Kilpatrick v. Bridge Co., 49 Pa. St. 121.

In the case at bar the appellant was not only one of the original directors elected at the first meeting of the stockholders, but he was shortly thereafter elected vice president of the company. As vice president he was entitled to no compensation by the express terms of the statute. Notwithstanding the prohibition thus contained in the statute, he himself, while acting as director, and while holding the office of vice president, offered an amendment to the by-laws authorizing the board of directors to appoint a manager, who should appoint all the agents of the society, with compensation to be paid out of the expense fund. As such manager, he was to control and manage the agency system of the society. A few days after the amendment to the by-laws proposed by the appellant was adopted he was appointed manager of agencies, in pursuance of the terms of the amendment proposed by himself, at the salary and for the compensation named in the contract. As a member of the board of directors he voted for his own appointment, and also voted for the approval of a contract made with himself. He was one of the five directors of the society, and his term of office and compensation, as manager of agencies, were to be fixed by a written contract made by the board of directors, and such compensation was to be paid out of the expense fund, as shown by the terms of the amendment in question, being section 6 of article 3. As a member of the board of directors, therefore, appellant made a contract with himself, and voted to approve the contract with himself. He thus effected indirectly what the statute expressly prohibits. Although he was entitled to no compensation as vice president, he succeeded in obtaining compensation by creating a new office, and voting for his own appointment to it. It is against public policy to tolerate such conduct on the part of the officers of a corporation, and the rule that the defense of ultra vires cannot be set up because of benefits received by the corporation has no application here, for the reason, if there were no other reason, that the contract made by the plaintiff in error was prohibited by statute.

It is well settled that the directors of a corporation, who control its finances and property, are not entitled to compensation for the performance of their duties, unless such salary is fixed by the by-laws or by a resolution of the board before the services are

performed. It must appear that a by-law or resolution has been adopted, authorizing and fixing the allowance, before the services are rendered. Gridley v. Railway Co., 71 Ill. 200; Ellis v. Ward, 137 Ill. 509, 25 N. E. 530. Here the by-law was passed providing for the appointment of a manager of agencies before the services of appellant as such manager were rendered, but, as has already been stated, the by-law was invalid as being ultra vires and beyond the power of the corporation to pass it. The rule that, before compensation can be received for the usual services of a corporate officer, such compensation must be allowed by a by-law, passed before the performance of the services, refers to and contemplates a legal by-law, or a by-law having such force of law as to authorize action under it. Here there was no such bylaw before the performance of these services.

It is said, however, by the appellant that a director may deal fairly with a solvent corporation in which he is a director, and that, when a corporate officer performs services outside of his duties as such officer, he may recover compensation for said services. The claim here is that the services rendered by the appellant were outside of the usual duties of a vice president or director of the company. The third and fourth amended pleas aver that the duties of the appellant as vice president and director are the same as the duties and services provided for in the contract. The demurrers to these pleas admit the truth of this allegation. Nor can it be said that the pleas are bad as answering only a part of the declaration. The pleas do not say that a part of the services rendered in the contract were a part of appellant's duties as an officer of the corporation, but they say that the services required by the contract were a part of appellant's duties as an officer. The fourth amended plea says that he had a duty to perform in relation to the loan fund as well as the expense fund, but his duties, considered as a whole, included such duties as he was to perform under the contract. Appellant was a director of the company, and section 4 of article 1 of the by-laws provides that the directors shall cause the expense fund to be used in the vigorous and competent prosecution and extension of the business of the associaton, so far as practicable. The amendment embodied in section 6 of article 3 required the performance by the board of directors of the same duty specified in section 4 of article 1. Counsel for appellant say in their brief: "And the by-laws made it the duty of the directors to use the expense fund in extending the business of the corporation." The use of the expense fund was a duty of the board of directors, and therefore one of the duties which appellant was bound to perform without compensation. The amendment embodied in section 6 of article 3, in connection with the contract of May 2, 1892, virtually provided for paying compensation to appel

lant for performing the same duties in the use of the expense fund which he was under obligations to perform without compensation. Section 5 of the act of July 1, 1879, was amended in 1897 by providing that, "unless the compensation of the secretary and treasurer shall be provided for in the by-laws, the directors shall annually fix and determine the same." Hurd's St. 1897, p. 430. This amendment, however, was passed long after the present contract had expired.

We concur in the following views expressed by the appellate court in their decision of this case: "If Fritze collects the judgment rendered below, he will have received for his year's services (not including any traveling expenses) $4,789.06. If the board of directors can do this for the vice president, they can establish another office for the president, and still another for the treasurer, and pay each a fat salary. If the directors possess the power to thus evade the law at all, they will necessarily be tempted to evade it for the benefit of each other. The tendency will be to make the favors mutual. We think it self-evident that such a course will quickly absorb the contributions of the shareholders, and will ruin any building and loan association. We are of opinion that the contract made with Fritze was contrary to the spirit and purpose of the act, and not within the powers granted or implied to the association, and that it is contrary to public policy and good morals to permit the unexecuted part to be enforced. * Appellee argues that the book accounts of appellant which he put in evidence made a case for him under the common counts, regardless of the contract. We do not concur in this position. The ledger account in evidence showed all appellee's credits thereon were for salary and commissions. * Appellee could not

and did not submit his case upon the books alone, but put the contract in evidence. The contract was a necessary part of his case. Walker v. Brown, 28 Ill. 378. In our judgment that contract was illegal and void. Complete execution of such a contract upon one side does not give a right of action under the common counts. American Strawboard Co. v. Peoria Strawboard Co., 65 Ill. App. 502. When the contract in this case was offered in evidence, appellant objected that it was without authority of law and void. The objection was overruled, and appellant excepted. We hold the