Case Digest on FOSTER V.

BOWEN An action was brought by minority stockholders against Bowen for recovery of alleged losses claimed to have been sustained by the company in consequence of Bowens breach of his fiduciary as its president and director. The losses being claimed are for the failure of Bowen to claim the benefits from the fidelity bonds against loss of money or other personal property through improper conduct of Cushing, the treasurer and manager of the company. Cushing, during his incumbency as treasurer and manager, had executed a lease of a roller skating rink owned by the corporation to him. The former president of the corporation knew the transaction. When Bowen took over as president, he informed the other directors that the transaction was illegal but it was only when the other directors became dissatisfied with Bowen that they pursued their claims on the illegal contracts. Bowen is not liable. His failure to claim proceeds from the fidelity bonds was based on the belief that Cushings act s were not fraudulent as it was sanctioned by the other directors and therefore, would not come under the protection of the bond for fraud. Bowen is also not liable for the sums received by Cushing on the leases from the time he discovered its existence. He did not profit personally through Cushings transactions. There is no absolute prohibition of dealings between a corporation and its officer, provided safeguards are observed to insure that those acting for the corporation are themselves disinterested and the utmost good faith is exercised.