CORPORATIONS - RATIFICATION OF UNAUTHORIZED WITHDRAWAL OF FUNDS BY AN OFFICER OF A CORPORATION

The president of a corporation withdrew funds from the corporation with which to purchase stock for his own personal benefit. He used this money so as to save the brokerage cost of his securities. A great deal of the money was repaid a few days after its withdrawal. The board of directors, discovering these activities, approved all past actions and present loans of the president.

Held, the attempted ratification by the board of directors did not relieve the president from his duty of accounting for the profits realized on the stock purchased with the funds, since there had not been approval by all the stockholders. Bailey v. Jacobs, 325 Pa. 187, 189 A. 320 (1937).