Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/586

 § 559i.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. IX. § 559a. Frequently a majority of shareholders may be in accord as to a certain corporate policy which the Agreements. . . . n 1 • i among minority may disapprove, feuch is a not unusual holders as state of affairs. And it has been held that when a to control, corporation is to be formed according to statute and with lawful objects, there is no reason why parties starting the enterprise should not enter into an agreement as to its future management and control, provided the modes of corporate management outlined in the statute are not to be thereby con- travened. 1 On the other hand, the courts will not sustain agreements made by a majority of shareholders, who either are themselves directors, or control the board, that the corpo- rate enterprise shall be managed by certain persons. 2 § 5593. Undoubtedly it is the duty of directors to manage Right of the corporate enterprise for the benefit of the cor- hoiders to poration, and with equitable regard to the interests thefrown °^ a ^ ^ ie shareholders. 3 But as for shareholders, interests. it is neither to be expected nor required that they should not sometimes vote in corporate meetings according to individual interests of their own. 4 It has been held that a shareholder may vote in a corporate meeting, upon a measure as to which he has a personal interest, apart from the other shareholders ; 5 and that a shareholder in a domestic corporation cannot enjoin a foreign coporation from voting a majority of the domestic corporation's stock, when it does not clearly appear that the interests of the two corporations are antagonistic. 6 The question would seem to be whether the majority have fraudulently or inequitably disregarded the rights and interests of the rest. There is a border line of cases where directors have made contracts with themselves. Can the same persons by their votes as share- holders holding a majority of stock, ratify such contracts when R. R. Co., 150 N. Y. 410. See §§ 627 et seq. 1 King v. Barnes, 109 N. Y. 267. 2 Wilbur v. Stoepel, 82 Mich. 344. See West v. Camden, 135 U. S. 597 ; Fennersy v. Ross, 5 N. Y. A pp. Div. 342 ; Snow v. Church, 13 ib. 108 ; but see § 580. 566 8 See § 692. 6 Gamble v. Water Co., 123 N. Y. 91. Compare Chicago Hansom Cab Co. v. Yerkes, 141 111. 320. 6 American Refrigerating Co. v. Linn, 93 Ala. 610.
 * See Nye v. Storer, 168 Mass. 53.