Synnott v. Cumberland Bldg. Loan Ass'n

Citations

• 117 F. 379
• 54 C.C.A. 553
• 1902 U.S. App. LEXIS 4442

Syllabus

<p>1. Building and Loan Associations—Rights op Shareholders— Change in Character op Stock.</p> <p>Complainants were holders of full-paid, or so-called “common,” stock of a building and loan association. By the by-laws the holders of full-paid stock were given the sole right to vote and to control the business of the association, but their capital was made subject to reduction to make good any losses sustained by the association in favor of installment stockholders. At a meeting called for the purpose in which both classes of stockholders participated, the laws of the association were amended so as to place both classes of stock on an equality in the respects stated; nearly all of the common stock, including that owned by complainants, who were represented by proxy, being voted in favor of the proposition. Held that, in the absence of any evidence of fraud or claim that the meeting was irregular or the proxy exceeded his authority, such action was valid and binding on complainants, and that they could not recover of the association as creditors the price paid for their stock either on the ground that its issuance with the privileges originally accorded to it over installment stock was ultra vires, or that the action taken was a repudiation by the corporation of the contract by which they became stockholders.</p> <p>2. Corporations—Special Stockholders’ Meetings—Transaction op Busi-</p> <p>ness not Stated in Notice.</p> <p>The requirement that the business transacted at a special meeting of stockholders shall be limited to that stated in the notice of such meeting is one for the benefit of the stockholders, which they may waive, and which is waived by their attendance and participation in the business done without objection.</p> <p>3. Same—Right to Repudiate Action op Proxy—Laches.</p> <p>A stockholder is bound by the action of his proxy at a stockholders’ meeting, unless he exerciser the inost active diligence in repudiating the same, and is chargeable with such know