(after stating the facts.) 1. Waiving the question of Walker’s eligibility as a director, and treating him as a de facto officer of the corporation, did the failure to notify him of'the meeting or to consult him about the execution of the mortgage invalidate its execution?
It is undisputed that Walker was a shareholder and director in name only.' Pie had no interest in the corporation, did not claim any, and did not assume to act as director. He testified that he took no part in the management of the affairs of the concern, and knew that they were looked after by Lake and the other parties interested.
It is well settled that corporate acts required to be done or authorized by the directors must be at a meeting at which all áre present or have an opportunity to be present. The separate, individual approval of the directors will not suffice. This court, in discussing the reasons of this requirement, said in Estes v. German National Bank, 62 Ark. 20: “The object of this rule is the benefit and protection of the shareholders of the corporation.' The duties of the board are imposed upon more than one member in order that they may be discharged with that wisdom derived from a conference discussion, and a comparing of views upon business affairs; and for this purpose they are required to meet and take counsel of each other. As all this is for the benefit of the shareholders, who constitute the corporation, they may waive the necessity of the meeting of the board for the transaction of the business within their corporate powers. They can do so by permitting the directors to establish a habit or usage of assenting separately to the making and performance of contracts by their agents. By permitting such usages or habits to be formed by a long course of business, they adopt and become bound by them, so long as they acquiesce. If this were not so, great injustice might be done to parties contracting with them in their usual way.”
In Texarkana & Ft. Smith Ry. Co. v. Bemis, 67 Ark. 542, it was held that where the president had been in the habit of executing promissory notes in the name of the corporation without express authority of the board of directors, of which custom the board was cognizant, the corporation would be bound by a note so signed, the same as though express power had been conferred. .The court there said: “The board of directors must be held, under the circumstances, to have acquiesced, and the corporation was bound for the same, as though the board of directors had, by formal action, conferred upon the president express authority to make the note.”
In G. V. B. Mining Co. v. First Nat. Bank, 95 Fed. 23, the Circuit Court of Appeals for the Ninth Circuit, said: “Where the president of a corporation is given full power and authority to conduct and manage the business, and deal with the property and affairs of the corporation in such a manner, and for such a length of time, as to justify others with whom he transacts business in believing that he had authority to do the acts in the manner and in the way performed by him, the people with whom he transacts business have the right to deal with him upon the assumption that he has such authority; and the corporation, having knowledge of the exercise of such acts, and of the manner in which the corporate business was transacted, can not thereafter, to the injury and prejudice of such parties, deny his authority or disaffirm or set aside his acts. See also Fifth Ward Bank v. First Nat. Bank, 48 N. J. L. 513; Topeka Primary Association, etc., v. Martin, 39 Kan. 750.
The case at bar lacks the element of long acquiescence by the corporation in the acts of the board of directors without consulting Walker, but the principle is the same where all the real parties in interest had knowledge of such acts and consented thereto. The only persons interested in the corporation were Take, Alphin and Smith and they were present at the meeting and authorized the execution of the notes and mortgage. Walker knew that the other three directors were managing the affairs of the corporation without consulting him, and he made no objection.
The rule requiring that all the directors should have an opportunity to participate in the transactions of the corporation, being for the benefit of the shareholders, there was no one else to complain, as Walker had no real interest to protect.
2. The superior lien of the press company must be upheld upon still another ground. The contract calls for a mortgage to secure payment of the notes, the corporation accepted and retained the benefits of the contract, and equity would, under the familiar maxim that “equity treats that as done which ought do have been done,” require performance of that part of the contract if the officers had not already executed the mortgage and notes. Lowe v. Walker, 77 Ark. 103; Block v. Smith, 61 Ark. 266.
The decree of the chancellor was right, and must be affirmed. It is so ordered.