Hyams v. Calumet & Hecla Mining Co.

Citations

• 221 F. 529
• 137 C.C.A. 239
• 1915 U.S. App. LEXIS 1353

Syllabus

<p>1. Corporations <©=>189—Duties of Majority Stockholder—Right of Minority Stockholder to Equitable Relief.</p> <p>Independently of statute, one in control of a majority of the stock and of the board of directors of a corporation occupies a fiduciary relation towards the minority stockholders, and is charged with the duty of exercising a high degree of good faith, care, and diligence for the protection of their interests, and every act in his own interest to the detriment of the holders oí minority stock is a breach of duty and of trust, which entitles a minority stockholder to plenary relief in equity.</p> <p>[Ed. Note.—For other cases, see Corporations, Cent. Dig. §§ 700-722; Dec. Dig. <©=>189.]</p> <p>2. Corporations <©=>180—Purchase of Controlling Interest in Other Corporations.</p> <p>In the absence of express statutory provision, a corporation has no power to purchase stock of other corporations for the purpose of controlling their management, and the fact that control is acquired under a statute giving such power does not change the fiduciary obligation which would otherwise exist on the part of a majority toward minority stockholders.</p> <p><*^>For other cases see same topic & KEY-NUMBER in ail Key-Numbered Digests & Indexes</p> <p>[Ed. Note.—For other cases, see Corporations, Cent. Dig. §§ 665-673; Dec. Dig. @=>180.]</p> <p>3. Corporations @=>189—Suit by Minority Stockholder—Conditions Precedent.</p> <p>In a bill in a federal court by a minority stockholder against the corporation and another corporation, which controls a majority of the stock of the first, and whose directors are also its directors, new equity rule 27 (198 Fed. xxv, 115 C. C. A. xxv) does not require an allegation that complainant made efforts to obtain action by the directors, where the relief sought would be detrimental to their interest as directors and stockholders of the controlling corporation.</p> <p>[Ed. Note.—For other cases, see Corporations, Cent. Dig. §§ 706-722; Dec. Dig. @=