Page:Federal Reporter, 1st Series, Volume 8.djvu/84

 70 FEDEIUL BEPOETEB. �p. 124; Angel & Ames on Corp, § 492; Field on Corp. §§ 227, 228, 234; Grant on Corp. 156-7-8. �It is not necessary to determine whether the sale was fraudaient. The majority of the directors acted without authority. Their action operated unjustly upon the rights of complainant and other stock- holders, and the purchaser, Edwards, is not in the position of a bona Me purchaser, without notice of the actual posture of affairs at the time of the sale A brief statement -will show where the equities are, and why a court of equity should afford the relief prayed for against the action of a majority of the directors. �The land and works cost $75,000. The company operated until 1874, when it suspended, heayily indebted. September 20, 1875, a stockholders' meeting was held, and the directors were authorized to sell the entire property of the company whenever they could obtain a satisfactory price. Edwards was then a shareholder, but in 1876 sold his stock to complainant at a price which would make the entire stock worth $50,000. Subsequent to 1876 the directors sold 4,479 shares of stock owned by the company for $12,000, and paid the debts of the company. There was now less urgeney, if there was any necessity, to ebU the property. Prior to the time of selling the 4,479 shares of stock, the directors fixed the price for all the assets and property at $55,000. After selling the stock and paying the debts, they fixed the price of what remained at $44,000. Ail this was known to defendant Edwards. One of the directors, but a few months prior to the sale to Edwards, sold to complainant 5,101 shares of the stock for $13,770, a rate which would make the value of the entire stock oyer $26,000. That the director had made a sale, and for that price, defendant Edwards received information, and the directors were fully advised of the sale, price, and to whom made. They also knew that complainant, had he known of the proposed sale, would be opposed to it. In such a posture of affairs, on the morning of October 6, 1879, Edwards sent a written proposition of $10,000 to the directors for the property. A director, president of the board, was absent from the state. The other four directors met, accepted the proposition, and caused a conveyance to be executed the same day. Edwards was present at the meeting. He was bound to know that notice of a board meeting was necessary, and he knew that one of the directors was not present, and was absent. �The manifest purpose and effect was to circumvent complainant, the owner of a majority of the stock, and deprive him of his rights. The absent director was at once informed of the sale, and not only ��� �