to it, the law will not permit him to seize the opportunity for himself * * *.' Lutherland, Inc., v. Dahlen, (1947) 357 Pa. 143, at page 151, 53 A.2d 143.' Howell v. McCloskey, supra, 375 Pa. at page 106, 99 A.2d at page 613; and see Weissman v. A. Weissman, Inc., 1955, 382 Pa. 189, at page 193, 114 A.2d 797, at page 799.
The offer by plaintiff to the 'inside group' in an effort to gain 'numerical control' at a price above the market -- offered ostensibly because of their position -- was an opportunity which if accepted would have placed them in a position of jeopardy of being held responsible to account for the excess to the other stockholders. See 'Transactions in Corporate Control', 104 U. of Pa.L.Rev. 725 at 731-732, 801-805, 809 et seq., 815-817, 839; Fraser Fund v. Fraser, 1944, 350 Pa. 553, at page 565, 40 A.2d 22, at page 27; see and cf. Pearlman v. Feldmann, 2 Cir., 1955, 219 F.2d 173, at page 178. Plaintiff having endeavored to bring about this situation could very well be charged with unclean hands. We do not, however, wish to stop there. Because the present action involves the rights of so many others we have decided to dispose of it on the merits.
Ordinarily the burden of proving fraud and a breach of duty would be upon the plaintiff. Hunt v. Aufderheide, supra, 330 Pa. at page 380, 199 A. at page 354; Malone v. Lancaster Gas Light Co., supra, 182 Pa. at page 321, 37 A. 932; Hirshhorn v. Mine Safety Appliances Co., D.C.W.D.Pa.1952, 106 F.Supp. 594, at page 600, affirmed 3 Cir., 1953, 203 F.2d 279; see and cf. Spering's Appeal, supra, 71 Pa. at page 21, '* * * when we ascertain and determine that they have not sought to make any profit not common to all the stockholders, we raise a strong presumption that they have brought to the administration their best judgment and skill.' As to the quantum of proof, see and cf. Wagner v. Somerset County Memorial Park, Inc., 1953, 372 Pa. 338, at page 341, 93 A.2d 440, at page 441.
We have, however, applied the more strict rule (see Hirshhorn v. Mine Safety Appliances Co., supra, 203 F.2d at page 283, and see Pearlman v. Feldmann, supra, 219 F.2d at page 177), and placed the burden upon defendant and indirectly its officers and directors of proving that the transaction was entered into in good faith; free of fraud; and consistent with their fiduciary obligation; inherently fair, and to the best interests of the corporation and its stockholders. See Pepper v. Litton, 1939, 308 U.S. 295, at page 306, 60 S. Ct. 238, at page 245, 84 L. Ed. 281; Geddes v. Anaconda Mining Co., 1921, 254 U.S. 590, at page 599, 41 S. Ct. 209, at page 212, 65 L. Ed. 425; Weisbecker v. Hosiery Patents, Inc., 1947, 356 Pa. 244, 51 A.2d 811; Bonini v. Family Theatre Corp., 1937, 327 Pa. 273, 194 A. 498.
'A director is not per se disqualified from voting upon matters in which he has a financial interest either direct or indirect. However, his participation in such a vote will be closely scrutinized, and if it appears that the director availed himself of his position to further his personal interests rather than the welfare of the company, action predicated upon that vote may be rescinded or restrained * * *' Bowman v. Gum, Inc., 1937, 327 Pa. 403, at page 410, 193 A. 271, at page 274.
'But this cannot go to the extent of holding all acts done in their own interests voidable at the election of the minority. The most that should be required of them is that they should not exercise the legal power, to which their larger interest entitles them, to secure an advantage to themselves over the minority. But their bona fide action for the best interests of all should not be set aside.' Weisbecker v. Hosiery Patents, Inc., supra, 356 Pa. at page 258, 51 A.2d at page 817; see and cf. Weissman v. A. Weissman, Inc., supra, 382 Pa. at pages 193, 194, 114 A.2d at page 799, where there was no collision between fiduciary duty and personal interest; and see Halpern v. Grabosky, supra, 296 Pa. at pages 112-113, 145 A. at page 835.
General propositions do not settle cases. Each case must be decided on its own facts. South Penn Collieries Co. v. Sproul, 3 Cir., 1931, 52 F.2d 557, 561, 562; Briggs v. Spaulding, 1891, 141 U.S. 132, at page 152, 11 S. Ct. 924, at page 931, 25 L. Ed. 662. 'The rule of law is too well settled to be questioned -- that there should not be substituted in corporate management the wisdom and judgment of a chancellor for the discretion and skill of the directors elected by the shareholders to manage the corporation.' Bowman v. Gum, Inc., supra, 327 Pa. at pages 409, 410, 193 A. at page 274; Provident Trust Co. of Philadelphia v. Crouse, supra, 40 Pa.Dist. & Co.R. at page 632; see Otis & Co. v. Pennsylvania R. Co., supra, 61 F.Supp. at page 911, "Courts have properly decided to give directors a wide latitude in the management of the affairs of the corporation provided always that judgment, and that means an honest, unbiased judgment, is reasonably exercised by them * * *. The directors are entrusted with the management of the affairs * * *. If in the course of management they arrive at a decision for which there is a reasonable basis, and they acted in good faith, as the result of their independent judgment, and uninfluenced by any consideration other than what they honestly believe to be for the best interests of the * * * (corporation), it is not the function of the court to say that it would have acted differently * * *.'
Upon an examination of the entire record, we find that the officers and directors of defendant corporation served none other than the common interests in entering into the contract in question. Surely they should not be required to dally until creeping paralysis destroyed the investment of all. They took a business risk, see Hunt v. Aufderheide, supra, 330 Pa. 362, 376, 377, 199 A. 345, to solve a difficult situation. It may well be that introduction of fibre grass, plastics and aluminum will meet their pressing need for diversification and that future steps will have to be taken and the articles amended. That will, of course, require stockholder approval. We, however, must view the situation as of the time of the directors' meeting. We find that the contract was legal and within the authority of the Board of Directors; that the stock was legally issued without additional stockholder approval; that title to the certificate passed; that the consideration was, in the best judgment of the directors, adequate; that the consequent 'dilution' in voting rights was consistent with law; and finally, there was no failure to comply with the Securities Act of 1933; no breach of the fiduciary duty.
In view of the foregoing, the plaintiff's prayer for relief will be denied and judgment entered for the defendant.