Chapman v. Bates

• Citation: 47 A. 638,61 N.J.E. 658
• Parties: CHAPMAN v. BATES et al.
• Decision Date: 18 December 1900
• Court: United States State Supreme Court (New Jersey)

47 A. 638

61 N.J.E. 658

CHAPMAN

v. BATES et al.

Court of Errors and Appeals of New Jersey.

Dec. 18, 1900.

(Syllabus by the Court.)

Appeal from court of chancery.

Bill by Charles E. Chapman against Theodore C. Bates and William H. Lee. Prom a decree for defendants (46 Atl. 591), plaintiff appeals. Affirmed.

Charles L. Corbin, for appellant.

Charles D. Thompson, for respondents.

GARRETSON, J. The complainant, being the owner of 51 shares of stock of the Union Terminal Association, a corporation of this state, on the 6th day of July, 1899, executed a paper called a "proxy and power of attorney," appointing the defendants his proxies and attorneys in fact, and in pursuance thereof delivered to them the certificates for said shares of stock.

This proxy and power of attorney was therein declared to be in force for the period ending January 1, 1902, and to be and remain irrevocable during said period.

It is sought in the bill filed in this case to revoke this instrument, which in terms is declared to be irrevocable before the expiration of the period limited, upon the grounds that its provisions are in violation of the terms of the act concerning corporations, under which the Union Terminal Association was incorporated, and are in conflict with public policy, and with the laws of the state of New Jersey.

The case was heard on bill and answer, and a decree dismissing the bill.

The proxy and power of attorney executed by the complainant recites that certain owners and holders of shares of the capital stock of the Union Terminal Association deem it to be for their best interests, and as especially desirable, to aid in securing the speedy completion of the properties represented, to unite their stock, and all that is represented therein and thereby, by placing their certificates of stock in the possession and control of certain persons as proxies and attorneys in fact, to be held, managed, and used by them, in their discretion, for the equal pro rata benefit of all stockholders who may join in this proposed union of interests. It then appoints the defendants proxies and attorneys in fact, to have, use, and exercise any and all complainant's rights and powers in, to, and under any and all of his said stock of the said Union Terminal Association, and to receive, take, retain, hold, use, and employ any or all of his said stock to aid in the promotion of any and all purposes which his said proxies and attorneys in fact may deem best, and to join any and all his shares of stock of the said Union Terminal Association, and all his rights and powers thereunder, with any and all shares of stock of other stockholders who may deposit their certificates of stock with said defendants, and execute and deliver to them a proxy and power of attorney of the same tenor and effect, for any and all purposes which his said proxies and attorneys in fact shall deem to be for the best interest of all such stockholders, for the period ending January 1, 1902, this proxy to be and remain irrevocable during said period.

It authorizes the proxies and attorneys in fact, at their discretion, to vote and act upon any or all of the shares of the capital stock of the Union Terminal Association at any or all meetings of the shareholders of said corporation. All stock deposited under the proxies to constitute one holding in the attorneys. It authorizes the proxies and attorneys in fact to make any and all demands, and exercise any and all rights, which he might make or exercise as a holder or owner of said stock of said Union Terminal Association, and to recover and receive all moneys, and obtain payment of all indebtedness, due to such holder, and to represent him in any suit and at any sale of properties in which, as a stockholder of the Union Terminal Association, he might be interested, and to make bids and use the stock for bidding for and acquiring all such properties, and to take title and dispose of such properties, to procure the organization of a corporation, to exercise all the rights granted to the attorneys, to appoint an agent to hold title to such property as may be represented by his stock, and direct the management and disposal thereof.

It authorizes them to take all action necessary to form a corporation under the laws of Missouri; to make available all properties controlled by his stock of the Union Terminal Association, and to manage such new corporation, and sell the stock therein, and to exchange the stock of the Union Terminal Association for stock in the new corporation, and exercise all the powers granted over the new shares of stock in the new corporation; to hypothecate the shares of stock of the Union Terminal Association or of the new corporation; to sell the stock of the Union Termiual Association or of the new corporation at not less than $100 a share, accounting for the proceeds, after deducting the proportionate share of all costs, expenses, and compensation of the attorneys; no distribution need be made before, and the stockholder agrees not to sell or dispose of his stock prior to, the termination of the power of attorney; to receive all dividends and earnings on the stock of the Union Terminal Association, or of the new corporation, and disburse the same, or retain them until the termination of the power of attorney; to substitute new attorneys, with the same powers; to relinquish the powers granted, and return the stock; to receive from attorneys previously appointed certificates of stock in the Union Terminal Association.

It appears by the answer that the Union Termiual Association was organized on the 6th day of July, 1898; that by its certificate of incorporation it was authorized:

First, to acquire and dispose of the stock, bonds, etc., of the Kansas City & Atlantic Railroad Company of Missouri, the Terminal Improvement Association of Kansas City, Mo., and of the Missouri Agricultural & Fair-Grounds Association of Gallatin Township, Mo., corporations of Missouri, or of any other corporations of Missouri organized for similar purposes.

Second, to acquire and convey all properties and rights of the foregoing corporations.

Third, to buy, sell, and deal in real estate; to promote agriculture and the improvements of stock; to reclaim land; to promote, erect, and construct dykes, breakwaters, canals, and embankments for the reclaiming of land; to build, erect, and construct wharves, docks, and levees; to build, lease, erect, and construct warehouses, grain elevators, storage houses, and other buildings; to promote, lease, erect, and construct, maintain, and operate, toll bridges, railroad terminals, stations, and depots, for the reception and transmission of personal property; to convey and transport personal property, on land or by water, or across rivers and other waters, by any mode of conveyance whatsoever, and to charge and receive compensation therefor.

Fourth, to issue bonds and secure them by mortgage.

It further appears by the answer that the authorized capital stock of the Union Terminal Association is $5,000,000, of which $1,962,900 has been issued and is outstanding, and that the same is held by about 500 stockholders, and that the defendants are personally both large stockholders in said corporation, owning and holding several hundred shares of stock therein; that after said corporation was formed, and in order to carry out the purposes set forth in the certificate of...