Stewart v. Harris

Citations

• 69 Kan. 498
• 77 P. 277
• 66 L.R.A. 261
• 1904 Kan. LEXIS 282

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. Corporations—Trusteeship of Managing Officers. The managing officers of a corporation are not only trustees of the corporate entity and the corporate property, but they are to some extent, and in many respects, trustees for the corporate shareholders.</p> <p>2. Contracts—Fiduciary Relations of Vendor and Vendee—■' Presumption of Equity. When two parties occupy to each other a confidential or fiduciary relation, and a sale is made by one to the other, equity raises a presumption against the validity of the transaction. To sustain it the buyer must show affirmatively that the transaction was conducted in good faith, without pressure or influence on his part, and with express knowledge of the circumstances and entire freedom of action on the part of the seller.</p> <p>3. -Purchase of Stock by Manager ' of Corporation — Duty of Vendor. A director or managing officer of a corporation having knowledge of the condition of its affairs, because of the trust relation and the superior opportunities afforded for acquiring information must inform a stockholder not actively engaged in the management of the true condition of the corporation before he can rightfully purchase his stock.</p>