As such, they are charged with the duty to act for the corporation according to their best judgment, and in so doing they cannot be controlled in the reasonable exercise and performance of such duty. Directors may not agree to exercise their official duties for the benefit of any individual or interest other than the corporation itself (Jacobson v. Barnes, 176 Minn. 4, 222 N.W. 341), and an agreement by which individual directors, or the entire board, abdicate or bargain away in advance the judgment which the law contemplates they shall exercise over the affairs of the corporation is contrary to public policy and void. Seitz v. Michel, 148 Minn. 80, 181 N.W. 102, 12 A.L.R. 1060. They may not agree to abstain from discharging their fiduciary duty to participate actively and fully in the management of corporate affairs. The law does not permit the creation of a sterilized board of directors.
Bell's money, as well as his leadership in securing the adoption of new policies, including that of discouraging the improvident payment of dividends before debts had been paid, brought benefits to all stockholders without discrimination, as well as to the corporation. Jacobson v. Barnes, 176 Minn. 4, 222 N.W. 341, involving a stockholder's contract guaranteeing permanent employment to one of the parties as a corporate officer, and Seitz v. Michel, 148 Minn. 80, 181 N.W. 102, 12 A.L.R. 1060, involving a similar guarantee of employment as well as a direct misuse of the corporate charter, illustrate contracts tainted with illegality in contravention of public policy, in that their effect or intent was to accomplish a private gain at the expense of the corporation and the other stockholders. See, Lindgrove v. Schluter and Co., Inc. 256 N.Y. 439, 176 N.E. 832; 17 Minn. L.Rev. 89.
See also 1 Hornstein, Corporation Law and Practice § 176 n. 64 (1959). West v. Camden, 1890, 135 U.S. 507, 10 S.Ct. 838, 34 L.Ed. 254 (bank); Van Slyke v. Andrews, 1919, 146 Minn. 316, 178 N.W. 959 (bank); Jacobson v. Barnes, 1928, 176 Minn. 4, 222 N.W. 341 (insurance company); Gage v. Fisher, 1895, 5 N.D. 297, 65 N.W. 809, 31 L.R.A. 557 (bank). See also 1 Hornstein, Corporation Law and Practice § 179 n. 1 (1959).
The complaint is based on the theory that the officers and directors of the corporation have a duty to account to the club for the actions of the corporation and for its receipts and disbursements. Nothing can be more erroneous. It is illegal for any officer or director of a corporation to impair his duty of undivided loyalty to the corporation by exercising his official duties for the benefit of any individual or group other than the corporation itself, and any agreement whereby he makes himself accountable or responsible to such individual or group for the corporation's actions is contrary to public policy and void. Jacobson v. Barnes, 176 Minn. 4, 222 N.W. 341; Ray v. Homewood Hospital, Inc. 223 Minn. 440, 27 N.W.2d 409. 5. Defendant corporation's demurrer was also properly sustained.
Where the illegality of the contract on which suit is brought clearly appears, the court on its own motion will declare the contract unenforceable. In Jacobson v. Barnes, 176 Minn. 4, 8, 222 N.W. 341, 342, this court said: "Where such invalidity [illegality of the contract upon which suit is brought] appears it is the duty of the court itself to assert it and deny relief even though the parties themselves do not raise the question by pleading or otherwise."
So strong is the public policy preventing the enforcement of an illegal contract that where such is done the court can and has, on its own motion, declared the contract to be illegal and dismissed the action even though neither party pleaded the illegality. Oscanyan v. Arms Co. 103 U.S. 261, 26 L. ed. 539; Goodrich v. N.W. Tel. Exch. Co. 161 Minn. 106, 112, 201 N.W. 290; Jacobson v. Barnes, 176 Minn. 4, 8, 222 N.W. 341; Hackett v. Hammel, 185 Minn. 387, 389, 241 N.W. 68. The surrender in the instant case was void and contravened a statute behind which there is the strong public policy that does not permit one spouse to alienate any interest in the homestead without the consent of the other. So strong is this policy that, pleaded or not pleaded, shift of theories or no, where it clearly appears that a homestead has been aliened without the consent of the other spouse, this court will allow the defense in the same manner as though the action had been brought upon an illegal contract and the illegality had not been pleaded or there had been a shift to that ground on appeal.
We have held that illegality may be shown under the general issue. When illegality vitiates a contract, the court on its own motion and even in the absence of proper pleading may make it the basis of a decision for defendant. Goodrich v. N.W. Tel. Exch. Co. 161 Minn. 106, 201 N.W. 290; Jacobson v. Barnes, 176 Minn. 4, 8, 222 N.W. 341. Order affirmed.
Here, however, those contracts are illegal for failure to comply with the licensing law ( see B F Bldg. Corp. v Liebig, 76 NY2d 689) and thus the plaintiff has "forfeit[ed] the right to recover damages" for their breach ( Callos, Inc. v Julianelli, 300 AD2d 612, 613; see Price v Close, 302 AD2d 374, 375; Matter of Scaturro v M.C.S. Landscape, 212 AD2d 798, 799). "A claim which is void by reason of its illegality will not support an account stated" ( White v Turner-Hudnut Co., 322 Ill 133, 139, 152 NE 572, 574; see Finley Method Co. v Standard Asphalt Co. of Fla., 104 Fla 126, 139 So 795; Jacobson v Barnes, 176 Minn 4, 222 NW 341; Dunbar v Johnson, 108 Mass 519). The Supreme Court also properly dismissed the counterclaims based upon its conclusion that the testimony of both experts was of no probative value.