Martin H. Philip, Palmerton, F. Paul Laubner, Allentown, for appellant at No. 329 and for appellee at No. 116.
Frank S. Poswistilo, Easton, for appellants at No. 116 and for Appellees at No. 329.
Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Jones, former C. J., did not participate in the decision of this case.
This appeal*fn1 stems from a stockholders' derivative suit instituted by Irving J. Wolf as trustee for two minority stockholders*fn2 of Nazareth Fairgrounds and Farmers Market, Inc. against the corporation; two directors, Louis Como, president, and Lawrence Laupheimer, secretary; the general manager, Jerome Fried; and corporate counsel, Arnold Weinstein. Plaintiff asserts that directors Como and Laupheimer violated section 408 of the Business Corporation Law*fn3 by extinguishing a
valid debt which Fried owed to the corporation*fn4 through the guise of commissions and fees which were not supported by consideration.
Section 408 of the Business Corporation Law provides:
"Officers and directors shall be deemed to stand in a fiduciary relation to the corporation, and shall discharge the duties of their respective positions in good faith and with that diligence, care and skill which ordinarily prudent men would exercise under similar circumstances in their personal business affairs."*fn5
In Selheimer v. Manganese Corporation of America, 423 Pa. 563, 224 A.2d 634 (1966), this Court interpreted section 408. We held that even in the absence of fraud, self-dealing, or proof of personal profit or wanton acts of omission or commission, the directors of a corporation may be held personally liable where they have been imprudent, wasteful, careless and negligent and such actions have resulted in corporate losses. Although this Court noted that "'courts are reluctant to interfere in the internal management of a corporation,'" we recognized that the "personal affairs rule" standard of section 408 imposed a higher duty of care on corporate fiduciaries
than the common law. 423 Pa. at 573-74, 224 A.2d at 644. Whether the duty of care has been met is a question of fact to be determined by an examination of all the ...