Case ID: ad_172/html/0140-01.html
Source: Caselaw Access Project
Author: {"author": "Dowling, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In the Matter of the Application of Hinds, Noble & Eldredge for Authorization to Change Its Corporate Name to Hinds, Hayden & Eldredge, Inc. Hinds, Noble & Eldredge, Appellant; G. Clifford Noble and George D. Gideon, Respondents.
    First Department,
    April 7, 1916.
    Corporation — change of name.
    The change of the name of a corporation, pursuant to sections 63 and 63 of the General Corporation Law, will not be interfered with by the courts in the absence of fraud or illegality. The court will respect the determination of those intrusted with the direction of the affairs of the corporation, even if it does not meet with the unanimous approval of stockholders.
    Thus, where the change of a corporate name has been duly authorized by a board of directors the court will not interfere, in the absence of fraud, etc., because holders of a large amount of stock object.
    The court will not interfere merely upon the ground that certain existing options'for the sale of stock will change the control of the corporation.
    Appeal by Hinds, Noble & Eldredge from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 27th day of January, 1916, denying its application to change its corporate name.
    
      Edward E. Clark [Roger Hinds of counsel, with him on the brief], for the appellant.
    
      Frederick T. Kelsey, for the respondents.
   Dowling, J.:

The petitioning corporation seeks an order of the court authorizing the change of its corporate name, pursuant to sections 62 and 63 of the General Corporation Law (Consol. Laws, chap. 23 [Laws of 1909, chap. 28], as amd. by Laws of 1910, chap. 296). The objections thereto are made by two stockholders, owning together $117,500 out of a total stock issue of $300,000. The proposed change was duly authorized by the board of directors of the petitioner for reasons which to them seemed sufficient, and which certainly were not without force and reason. The change of name of a corporation is one of those details of corporate and business management with which, in the absence of fraud or illegality, the courts will not interfere, but will respect the determination of those intrusted with the direction of the affairs of the corporation, even if it does not meet with the unanimous approval of the stockholders. (Thomas & Barton Co. v. Thomas, 165 Fed. Rep. 29; 10 Cyc. 210, 211.) The reluctance of the courts to interfere with the policy of the majority in interest of a corporation in relation to those matters which have to do solely with its internal management, leads them to decline to set aside action taken, or sought to be accomplished, thereunder, in the absence of fraud, illegality or the carrying out of a purpose clearly detrimental to the interest of the corporation itself. None of these elements is present here. Nor did the agreement of consolidation between the partnership of Hinds & Noble, the corporation of Eldredge & Bro. and Messrs. Eldredge and Gideon, operate to deprive the corporation about to be organized of its legal right to thereafter change the name under which it was to begin business. The pendency of the various actions by which it is sought to compel the performance of an alleged option for the sale of stock in the corporation, by which control is hoped to be passed to Gideon and Noble, is no reason for denying this application. Should they be successful in ultimately obtaining control of the corporation they can, if they desire, cause its name to be again changed.

The order appealed from is reversed, with ten dollars costs and disbursements, and the application for the authorization of a change of corporate name is granted.

Olarke, P. J., McLaughlin, Smith and Davis, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and motion granted.