Court Opinion

ID: 5509405
Source: CourtListenerOpinion
Date Created: 2022-01-10 03:30:51.10317+00
Date Added: 2024-06-11T08:34:07.733775
License: Public Domain

O’BRIEN, J.
(dissenting). The vice claimed to be inherent in the contract sued upon is the agreement by the plaintiff that the defendant should have the management of the three companies, and receive compensation for such management, and an equal representation in the board of directors of the three companies, a portion of the stock in which, the agreement provided, should be sold to the defendant; this action being brought to recover damages for defendant’s failure to pay the purchase price of such stock. If it had been made to appear that this was an attempt to barter away the interests of the corporation, by one of its stockholders or directors, for a money benefit to be derived by the plaintiff, then, undoubtedly, it would be against public policy, and the contract could not be enforced. In this case, however, I fail to see how any such inference can be drawn, or presumption indulged in. It has always been held that a stockholder had the right to sell his stock, and if in the sale it was coupled with an agreement by which the person buying was to take an active interest in the affairs of the corporation, I do not see why, in the absence of anything to show that this was done in bad faith, or contrary to the real interests of the corporation itself, it should not be upheld. The difference between my view and that presented in the prevailing opinion is in respect to the presumptions to be drawn from the contract, which is entirely silent upon the question as to whether the transaction would or would not inure to the benefit of the corporation. If, under such conditions, the presumption is to be indulged in, in the absence of any evidence to support it, or facts appearing to warrant it, that such an arrangement is inimical to the interests of the corporation, then the conclusion reached would be right. But, as presumption should favor good faith and honesty, rather than the reverse, I do not see why the contract is not susceptible of the view that it was made in good faith, without design to injure the company, but, on the contrary, to bring in as a stockholder, *871and as an equal representative in the workings of the companies, a new man, who was to take an active interest in its affairs, and who, for the work, was to receive a compensation agreed upon for the first year, and which was thereafter to be fixed. Upon the ground, therefore, that there is nothing to show that in the contract made the plaintiff was trading upon the interests of the corporation for his own private advantage, and for the further reason that the presumption that he was so trading seems to me to be entirely gratuitous, I dissent from the conclusion reached, and think that the judgment should be affirmed.