Page:Harvard Law Review Volume 1.djvu/211

  that the shares of stock represented by them be transferred on the books of the company to the holders of the certificates, and a refusal by the trustees, and that the trustees intended to vote the stock so represented contrary to the wishes of the holders of the certificates, prayed that the trustees be restrained from voting said stock, and compelled to transfer to them on the books of the company the shares represented by certificates held by them.

The Court granted an order restraining the trustees from voting the stock represented by the certificates held by the plaintiff and these cross-petitioners. Another cross-petitioner, owner of stock not included in the “trust,” also asked an injunction restraining the trustees from voting any of the stock embraced in the trust, on the ground of the illegality of the trust agreement.—The Court held that he was not entitled to any relief; that the trust agreement was not unlawful, save in so far as it provided that the proxy given it should be irrevocable, and so long as a stockholder who had given a power of attorney was content to let his proxy vote for him, no one else could complain. This conclusion is believed to be correct, though at first blush it may seem to be inconsistent with the decision in Hafer’s case; it follows necessarily from the admitted lawfulness of proxies. If it be claimed that every stockholder has the right to the exercise of the personal judgment and opinion of every other in the voting at an election, the claim goes to the extent of denying the right to give a proxy at all for such purpose. The failure to annul the proxy is a continuous renewal of it, and approval of what may be done under it. It must be taken to be true that the constituent, so long as he does not object, confirms the acts of his attorney. The unlawful feature of the trust in the Griffith case was the provision that the power of attorney should be irrevocable; that, although the constituent might desire action of one kind, he was bound to suffer his proxy to take action perhaps of the very opposite kind. The decision is to the effect that though a stockholder may appoint an agent to vote his stock he cannot effectually bind himself not to revoke the agency; but so long as he is satisfied to have it continue no one else can complain. The Hafer case, while not denying this, decides that where a stockholder creates such an agency in consideration of a pecuniary benefit enuring to himself, in which the other stockholders do not share, thus creating in himself an interest hostile to theirs, the other stockholders may justly complain. In the Hafer case there was a clear agreement of sale of the right to vote the stock in consideration of a guaranty of a dividend on the stock embraced in the agreement, giving the holders of such stock a pecuniary advantage not enjoyed by the other stockholders. In the Griffith case there was no provision for any benefit to the members of the “pool” which would enure to them to the exclusion of other stockholders; there was simply an agreement among the holders of the majority of the stock to have their stock voted en bloc, so as to retain control of the corporation by themselves, and this was held to be not unlawful; but it was denied all executory force, inasmuch as it was held that any party to it might at any time refuse to be any longer bound by it.

Gustavus H. Wald.