Smith v. San Francisco & North Pacific Railway Co.

Citations

• 115 Cal. 584
• 47 P. 582
• 1897 Cal. LEXIS 479

Syllabus

<p>Corporations—Election of Directors—Persons Entitled to Vote— Construction of Code—Bona Fide Stockholders—Dummy Holders of Stock Disqualified.—Under section 312 of the Civil Code, only those who are bona fide stockholders having stock in their own name on the stock-books of the corporation, at least ten days prior to the election of directors, are entitled to vote at such election; and the holders of stock standing in their names, who do not hold it in a representative capacity, or as trustees of an express trust, or as pledgees, and who have no interest in the stock, and are only dummies for the real owners, the object of the registration being for the admitted purpose of enabling the real owners to avoid statutory liabilities, are not lona Jide stockholders within the meaning of that section, and can neither vote such stock nor give a lawful proxy therefor.</p> <p>Id.—Agreement to Combine Stock for Voting Purposes—Public Policy — Construction of Contract — Proxy — Consideration—Inevitable Power.—An agreement between three persons for the purchase, as an entirety, of railway stock ordered to be sold in the course of ad-, ministration of the estate of a deceased person, and that, in order to secure the control of the management and business policy of the railway company, they would combine the stock purchased so that it should be voted as a unit for the period of five years, the vote to be cast to be determined by ballot between them, is not void as against public policy, and is to be construed as implying that the majority of them shall determine how all the shares purchased are to be voted, and as giving to the majority the^authority to vote the stock of the other owner by proxy, I and such agreement having been made in consideration of the purchase of the stock, the proxy is in the nature of a power coupled with an in. ¡ terest which cannot be revoked at the pleasure of either of the parties.</p> <p>Id.—Restraint of Trade—Limitations upon Disposition of Propert