Glengary Consol. Min. Co. v. Boehmer

• Citation: 62 P. 839,28 Colo. 1
• Parties: GLENGARY CONSOL. MIN. CO. et al. v. BOEHMER et al.
• Decision Date: 15 October 1900
• Court: Supreme Court of Colorado

62 P. 839

28 Colo. 1

GLENGARY CONSOL. MIN. CO. et al. v. BOEHMER et al.

Supreme Court of Colorado

October 15, 1900

Appeal from district court, Lake county.

Action by Max Boehmer and others against the Glengary Consolidated Mining Company and others. From a judgment for plaintiffs defendants appeal. Affirmed.

The following summary of the findings of fact and conclusions deduced therefrom by the trial court fully present the only questions necessary to consider on this appeal: The Ibex and Glengary Consolidated Mining Companies are corporations organized under the laws of this state, and own adjoining mining properties. The former procured, by purchase, a majority of the capital stock of the latter. The object of the Ibex Company in securing this stock was to enable it to select a directory of the Glengary Company which would be under its control, and which, in fact, it did succeed in accomplishing. Its purpose in so doing was to secure a bond and lease on the property of the Glengary Company. It obtained a contract of this character through the directory of this company elected at its instance, the proposition for which, as also its terms and conditions, came from the Ibex Company. To annul this transaction the appellees (stockholders of the Glengary Consolidated Mining Company) as plaintiffs, brought this action in the court below. From a judgment and decree in their favor, the defendants appeal.

Charles J. Hughes, Jr., and Charles Cavender, for appellants.

John A Ewing and John M. Maxwell, for appellees.

GABBERT, J. (after stating the facts).

The title to the property belonging to a corporation is vested in it. This it holds subject to its charter and by-laws, for the use and benefit of its stockholders, and it therefore falls within the strict definition of a trustee, i. e. 'one who holds the legal title for the use and benefit of others.' Miner v. Ice Co. (Mich.) 53 N.W. 218, 17 L.R.A. 412; Peabody v. Flint, 6 Allen, 52. Ordinarily, the majority of the stockholders of a corporation have the right to control its affairs, but this right is limited to the legitimate exercise of the corporate powers. Among these is the management of the affairs of the corporation through its proper representatives and officials in the interest of all shareholders. Meeker v Iron Co. (C. C.) 17 F. 48. No combination of stockholders of a corporation less than the whole will be permitted to manage or control its affairs in their interest alone. Minority stockholders cannot be deprived of their rights by such a combination under the guise of a policy of the corporation dictated by the majority. So far as the rights of the minority are concerned, the majority, in furtherance of their plan to reap a benefit to themselves through a transaction in which the minority do not participate, become the corporation itself, and assume the trust relation occupied by the corporation towards its...