This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
In the absence of statute the validity of a contract between a municipality or other public corporation and an officer thereof depends first on whether such officer is avowedly contracting in his own name, or is secretly receiving compensation to influence his official conduct. In the latter case the city is free to avoid the contract on the ground of such fraud, if it chooses,1 and the contract is invalid. If the officer acts openly and avowedly in his own interest, the validity of his contract depends on whether he is acting both for himself and the city, in inconsistent attitudes, in which case the contract is invalid,2 or whether he acts for himself alone, and other agents independent of himself represent the city, in which case such contract is valid.3 The courts do not agree on the validity of a contract made by a board, council or other aggregate body with one of its own members, some holding such contracts valid at common law,4 and others, void.5 In the absence of statute such contracts should, at most, be regarded as voidable, him, or by acta, words, or conduct induce a sale of the stock to him, except upon penalty of having the sale rescinded at the option of the stockholder; that, if he undertakes to speak or become active in inducing the Bale, he must speak fully, frankly and honestly, and conceal nothing to the disadvantage of the selling stockholder." Poole v. Camden, 79 W. Va. 310, L. R. A. 1917E, 988, 92 S. E. 454.
1 Findlay v. Pertz, 66 Fed. 427, 13 C. C. A. 559, 29 L. R. A. 188; see also Oconto Electric Co. v. People's Land and Mfg. Co. (State, ex rel., v. Oconto Electric Co.), 165 Wis. 467, 161 N. W. 789.
See also as to contracts with the United States, Michigan Steel Box Co. v. United States, 49 Ct. C1. 421; Crocker v. United States, 49 Ct. CI. 85.
2 Georgia. Macon v. Huff, 60 Ga. 221.
Indiana. Ft. Wayne v. Rosenthal, 75 Ind. 156, 39 Am. Rep. 127; Noble v. Davison, 177 Ind. 19, 96 N. E. 325.
Iowa. Weitz v. Independent District, 87 la. 81, 54 N. W. 70.
New Jersey. Stroud v. Water Co., 56 N. J. L. 422, 28 Atl. 578.
New York. Smith v. Albany, 61 N. Y. 444.
Ohio. Bellaire Goblet Co. v. Findlay, 5 Ohio C. C. 418; Daizell, etc., Co. v. Findlay, 5 Ohio C. C. 435; Cincinnati, etc., Ry. v. Morris, 10 Ohio C. C. 502.
Wisconsin. Pickett v. School District, 25 Wis. 551, 3 Am. Rep. 105.
3Tippecanoe County v. Mitchell, 131 Ind. 370, 15 L. R. A. 520, 30 N. E. 409; Detroit v. Redfield, 19 Mich. 376; Niles v. Muzzy, 33 Mich. 61, 20 Am. Rep. 670; McBride v. Grand Rapids, 47 Mich. 236, 10 N. W. 353; Edmunds v. Bullett, 59 N. J. L. 312, 36 Atl. 774; Boland v. Luzerne County, 186 Pa. St 68, 40 Atl. 156.
4 Willis v. Baker (Ky.), 29 S. W. 872; Sylvester v. Webb, 179 Mass. 236, 52 L. R. A. 518, 60 N. E. 495; Myers v. Adams, 9 Utah 8, 33 Pac. 222.
5Bay v. Davidson, 133 la. 688, 119 Am. St. Rep. 650, 9 L. R. A. (N.S.) 1014, 111 N. W. 25; Bellaire Goblet Co. v. Findlay, 5 Ohio C. C. 418; Daizell, etc., Co. v. Findlay, 5 Ohio C. C 435.