Trefethen v. Amazeen

• Decision Date: 01 February 1944
• Citation: 36 A.2d 266
• Parties: TREFETHEN v. AMAZEEN et al.
• Court: New Hampshire Supreme Court

36 A.2d 266

TREFETHEN

v.AMAZEEN et al.

Supreme Court of New Hampshire.

Feb. 1, 1944.

Transferred from Superior Court, Rockingham County; Lorimer, Judge.

Bill in equity by E. T. Trefethen against Nancy Amazeen, trustee, and others, to enjoin defendants from voting stock. Facts found, and case transferred from the trial term.

Case discharged.

Bill in equity, for an injunction. April 7, 1933 the plaintiff and George B. Chadwick each owned 50 shares of the common stock of the defendant Atlantic Terminal Corporation, organized under the laws of this state. Stanley O. Holden owned 270 shares and other persons 26 shares. In order to secure additional funds for the corporation the three individuals named on the date stated agreed in writing among other things that in consideration of Chadwickand Trefethen each buying 52 shares of the preferred stock entitling them to 52 shares each of the common stock, Holden would not vote 92 shares of his common stock without their consent so long as either of them personally owned any stock, preferred or common, in said corporation. The result was that Holden even with the votes of the 26 shares held by others would have no greater voting power than Chadwick and Trefethen. The stock was purchased and the plaintiff Trefethen later acquired Chadwick's shares of common stock so that he now owns 204 shares of the common stock. Stanley O. Holden transferred his common stock to Thomas H. Simes in trust for two children of the former, subject to the said agreement. Still later Simes, trustee, conveyed this Holden stock to the defendant Nancy Amazeen, trustee, in accordance with the terms of the trust agreement and with full notice on her part of the agreement not to vote. The defendant trustee claims the right to vote all the Holden common stock now held by her (268 shares) regardless of the aforesaid agreement.

The Court (Lorimer, J.) found the facts as alleged in the bill and that the parties to the agreement did not intend or attempt any fraud upon any other stockholders or any creditor of the corporation or each other, and reserved without ruling the question of the validity of the agreement not to vote and the authority of the Court to enforce it by injunction. The defendant trustee asked for certain affirmative relief but the Court made no findings other than as stated above.

Charles M. Dale, of Portsmouth, for plaintiff.

William H. Sleeper, of Exeter, for defendant Nancy Amazeen, Tr.

Hughes & Burns and Walter A. Calderwood, all of Dover, for defendant Atlantic Terminal Corporation.

JOHNSTON, Justice.

The bill is wrongly entitled “Petition for Declaratory Judgment and Injunction” as the statutory remedy of petition for a declaratory judgment is not available when the rights of the parties can be determined by other proceedings. Webster v. Hurley, N.H., 32 A.2d 684.

The validity of a contract between stockholders is to be determined by the effects of its provisions. In Bowditch v. Jackson Company, 76 N.H. 351, 82 A. 1014, L.R.A.1917A, 1174, Ann.Cas.1913A, 366, this Court upheld a stockholders' agreement for a voting trust applying as a test the conclusions that there was no wrong to the corporation, no special benefit to the parties to the contract and no turning over of management to strangers. The Court did not leave out of consideration other stockholders individually and creditors. Briefly, the present stockholders' agreement was for the purpose of securing additional working capital for the corporation and provided that Mr. Holden would waive his right to vote certain shares so long as either of the other two contracting stockholders should own stock in the company, so that...