129 Abercrombie v. Davies | KB (Campos) ABERCROMBIE v. DAVIES DAVIES SUMMARY: !ai"#i$$ SUMMARY: !ai"#i$$ a"% %e$e"%a"# corpora#e s&are&o!%ers combi"e% # o $orm a" oi! compa"'. De$e"%a"#s co"#ro!!i" *+, o$ #&e vo#i" s#oc- e"#ere% i"#o a" areeme"# #o vo#e #&eir s#oc- as a b!oc-. &e areeme"# provi%e% #&a# (1) eac& o$ #&e corpora#e s&are&o!%ers /o0!% appoi"# ae"#s #o vo#e i#s s#oc- (2) #&e s#oc- cer#i$ica#es /o0!% be p!ace% i" escro/ () a" arbi#ra#or /o0!% be co"s0!#e% i$ seve" o$ #&e ei&# ae"#s co0!% "o# aree (+) #&e ae"#s co0!% be remove% a# a"' #ime b' #&e corpora#e pri"cipa!s /i#&o0# ca0se a"% (*) a"' seve" o$ #&e ei&# co0!% /i#&%ra/ #&e s#oc- $rom escro/ a"% p!ace i# i" a vo#i" #r0s#. !ai"#i$$s as mi"ori#' s#oc-&o!%ers bro0&# a" ac#io" $or a %ec!ara#or' 0%me"# #&a# #&e areeme"# o$ %e$e"%a"#s /as i"va!i%. &e C 0p&e!% # &e areeme"# i" par#. O" appea! #&e De!a/are Co0r# &e!% reverse%. &e areeme"# is a voting trust. Vo#i" trust. Vo#i" #r0s#s m0s# be se# 0p i" accor%a"ce /i#& #&e De!a/are vo#i" #r0s# s#a#0#e /&ic& re30ires i"#er a!ia #&a# #&e s#oc- #ra"s$er be "o#e% o" #&e boo-s o$ #&e corpora#io" a"% #&a# a cop' o$ #&e areeme"# be $i!e% a# #&e corpora#io"4s pri"cipa! o$$ice. Si"ce %e$e"%a"#s4 vo#i" #r0s# %i% "o# mee# #&ese re30ireme"#s i# is i" i"va!i%. 5E6D7 &e S0preme Co0r# i"va!i%a#e% i#. &e Co0r# %i% "o# p0rpor# #o i"va!i%a#e a!! vo#i" areeme"#s #&a# %i% "o# comp!' /i#& #&e vo#i" #r0s# s#a#0#e. I"%ee% #&e co0r# seeme% #o reco"i8e #&a# i$ #&e areeme"# /ere "o# a vo#i" #r0s# i" $orm or e$$ec# #&e s#a#0#e /o0!% "o# be app!icab!e. 5e"ce #&e $i"%i" o$ i"va!i%i#' i" #&is case res#e% 0po" #&e co0r#4s %e#ermi"a#io" #&a# #&e %e$e"%a"#s4 areeme"# /as a vo#i" #r0s#. B0# i# /as &e!% #o be i"va!i%. DOCTRINE: Ob v i o us l y , a sap o ol i n ga gr e eme n ti ns u b s t a n c ea n dp ur p os ea p pr o a c he smo r ea ndmo r en ea r l yt h es u b s t a nc e
a ndpu r p os eo ft h es t at ut e,t her ec ome sapo i ntatwhi c h,i ft hes t at u t ei sno tc o mp mp l i edwi t h ,t heagr eemen ti si l l eg al .A p oo l i ngagr ee me me ntma yno te sc ap et hes t a t u t or yc ont r ol sb ycal l i ngt h et r u st ee sag en t sandgi v i ngt ot hes t oc k hol der s r e cei p t si ns t ea dofv ot i ngt r us tc er t i fi c at es .I ft hi swer eno ts o ,s t o ck hol der sc oul d,t hr ought h ede vi c eofana gr e emen ts u ch a st h eo nebe f or eus ,a cc ep tf ort hems el v est hec hi e fben efi t soft h es t at ut e:un i fi edv ot i ngc on t r o lt hr oughfi duc i a r i e sf ora n a pp r e ci a bl ep er i o do ft i me ;a nde sc ap ei t sbu r d e ns :t h er e qu i r e me me nt sf o rma ki n ga no pe nr e co r doft h ema t t e r ,a ndt h e l i mi t at i onsi nr es pec to ft i me. FACTS: •
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America" I"%epe"%e"# Oi! Compa"' is a De!a/are corpora#io". o &e ora"i8ers /ere7 &e ora"i8ers s0bscribe% i" var'i" propor#io"s # o America"4s orii"a! iss0e o$ s#oc-. A%%i#io"a! s#oc- /as !a#er iss0e% a"% #&ere are "o/ 1* s&ares. o &e ora"i8a#io" areeme"# provi%e% #&a# #&e Boar% o$ Direc#ors o$ America" Oi! s&o0!% co"sis# o$ one director for each 5,000 shares held a"% #&a# #&e %irec#ors s&o0!% be e!ec#e% b' cumulative voting . o I" e$$ec# s#oc-&o!%er &as bee" permi##e% #o "ame #&e %irec#or or %irec#ors #o represe"# o" #&e boar% &is or i#s i"#eres#s. Davies represe"#s &is o/" i"#eres# a"% is presi%e"# o$ #&e corpora#io". A# a!! #imes #&e "0mber o$ %irec#ors &as bee" 1*. :o o"e s#oc-&o!%er &o!%s a maori#' o$ s#oc- a"% "o o"e s#oc-&o!%er is represe"#e% b' more #&a" + o %irec#ors. o Obvio0s!' smoo#& $0"c#io"i" o$ s0c& a boar% /as %epe"%e"# ei#&er 0po" s0bs#a"#ia! &armo"' amo" #&e i"#eres#s represe"#e% o" i# or 0po" a" e$$ec#ive coa!i#io" o$ #&e i"#eres#s o$ a maori#'. Marc& 19*7 ; o$ #&e s#oc-&o!%ers #oo- s#eps #o $orm s0c& a coa!i#io". o A" areeme"# /as e
Ae"#s? and #&e #&e ; s#oc-&o!%ers @ Davies As&!a"% !obe 6ario 5a"coc- a"% Si"a!. &ese s#oc-&o!%ers &o!% abo0# *+ , o$ #&e s&ares. &e' are represe"#e% o" #&e boar% b' 8 of the 15 o directors. directors. o The Agents named in the agreement were at the time the 8 directors reresenting these ! stoc"ho#ders$ &e obvio0s p0rpose o$ #&e areeme"# /as #o ac&ieve e$$ec#ive co"#ro! o$ #&e boar% a"% #&0s co"#ro! o$ corpora#e po!ic'. o &e mo#ive $or #&e areeme"# accor%i" #o #&e %e$e"%a"#s /as #o preve"# ac30isi#io" o$ co"#ro! b' &i!!ips /&ic& /as #&e !ares# si"!e s#oc-&o!%er &o!%i" abo0# o"e#&ir% o$ #&e s#oc-. &e Ae"#s Areeme"# is a" unusual a" unusual one. one. I" e$$ec# i# #ra"s$ers vo#i" co"#ro! o$ #&e s#oc- o$ #&e si< s#oc-&o!%ers #o #&e ei&# Ae"#s $or a perio% o$ #e" 'ears (s0bec# #o #ermi"a#io" b' seve" o$ #&e Ae"#s). o &e Ae"#s are #o be as $ar as possib!e i%e"#ica! /i#& #&e %irec#ors. o &e areeme"# o$ seve" o$ #&e ei&# is re30ire% #o vo#e #&e s#oc- a"% e!abora#e provisio"s are a%%e% $or #&e c&oice o$ a" arbi#ra#or #o reso!ve %isareeme"#s. Some/&a# simi!ar provisio"s a##emp# #o co"#ro! #&e ac#io" o$ #&e %irec#ors. o A more %e#ai!e% e
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%irec#ors #&e #/o 5a"coc- %irec#ors #&e %irec#or represe"#i" !obe a"% 6ario a"% #&e #/o As&!a"% %irec#ors. &e e$$ec#ive co"#ro! #&0s so0&# #o be ac&ieve% appare"#!' !as#e% 0"#i! December 9 19*+. o O" #&a# %a#e a mee#i" o$ #&e Boar% o$ Direc#ors /as &e!% i" C&icao. A reso!0#io" /as a%op#e% ca!!i" a specia! mee#i" o$ #&e boar% $or December 1; #o c o"si%er a"% #a-e o ac#io" 0po" cer#ai" ame"%me"#s #o #&e b'!a/s a"% o#&er ma##ers. &is reso!0#io" /as a%op#e% b' a vo#e o$ "i"e #o si<. &is maori#' co"sis#e% o$ Abercrombie #&e $ o0r &i!!ips %irec#ors #&e S0"ra' %irec#or #&e Deep Roc- %irec#or a"% #&e #/o As&!a"% %irec#ors. o &e mi"ori#' co"sis#e% o$ Davies a"% #&e !obe 6ario 5a"coc- a"% Si"a! %irec#ors. I" #&e mea"#ime #&e s0i# be!o/ /as $i!e% b' Abercromie &i!!ips a"% S0"ra' aai"s# #&e o#&er s&are&o!%ers a"% #&e ae"#s. ; o$ #&e Ae"#s appeare% a"% a"s/ere%. &e C&a"ce!!or ma%e #&e $o!!o/i" r0!es o$ !a/7 (1) Cer#ai" provisio"s o$ o$ #&e Ae"#s Areeme"# a##emp#i" a##emp#i" #o co"#ro! %irec#ora#e ac#io" are are i"va!i% o" o" #&eir $ace (2) The agre agreeme ement nt is not not a voti voting ng trust trust;; () &e provisio"s provisio"s respec#i" respec#i" s#oc-&o!%er s#oc-&o!%er ac#io" ac#io" are severab!e severab!e $rom #&e i!!ea! i!!ea! provisio"s provisio"s a"% co"s#i#0#e co"s#i#0#e a va!i% s#oc-&o!%ers poo!i" areeme"#.
THE AGENTS’ AGREEMENT: ar (1)7 Fpo" #&e si"i" o$ #&is Areeme"# or as soo" #&erea$#er as i# ma' be possib!e $or #&em #o %o so b' #&ose /&ose cer#i$ica#es ma' be p!e%e% or %eposi#e% as &erei"a$#er re$erre% #o the Shareholders will deliver to the Agents the certificate or certific ates representing all the shares of American Independent Oil Comp an now owned or controlled ! them, said certificates to !e endorsed in !lan" or attached to a stoc" power endorsed in !lan" . Sai% Ae"#s /i!! ive #o eac& %eposi#i" S&are&o!%er a proper receip# $or a!! cer#i$ica#es so %e!ivere%. o &e cer#i$ica#es a"% s#oc- po/ers are #o be %eposi#e% i" escro/ i" a ba"- or #r0s# compa"' s0bec# #o /i#&%ra/a! a# a"' #ime b' a"' seve" o$ #&e ae"#s. ar (2)7 Se#s $or#& a me#&o% o$ %ea!i" /i#& a possib!e i"crease i" #&e "0mber o$ Ae"#s (or i" case a Vo#i" r0s# r0s# s&a!! &ave bee" crea#e% #&e "0m ber o$ r0s#ees). ar ()7 >D0ri" #&e #erm o$ # &is Areeme"# #&e Ae"#s or #&eir s0ccessors s&a!! &ave #&e s o!e a"% e
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#he parties do here! constitute an one of said Agents their attorne in fact to e$ecute said voting trust agreement for them a"% them a"% i" #&eir "ames i" #&e eve"# a"' o$ #&em s&o0!% be 0"ab!e or s&o0!% $ai! or re$0se #o si" sai% vo#i" #r0s# areeme"# 0po" #&e /ri##e" re30es# o$ seve" o$ sai% Ae"#s.
!ai"#i$$4s asser#io"7 &e areeme"# is i"va!i% o" i#s $ace. I" s0bs#a"ce #&o0& "o #i" $orm i# is a vo#i" #r0s# b0# #&is vo#i" #r0s# is VOID beca0se i# %oes "o# comp!' /i#& #&e provisio"s o$ o0r vo#i" #r0s# s#a#0#e. • •
De$e"%a"#4s asser#io"7 I# is :O a"% /as "o# i"#e"%e% #o be a vo#i" #r0s# a"% is a mere pooling mere pooling agreement o$ o$ #&e -i"% reco"i8e% as !ea! i" De!a/are. •
ISSUE: HO: ISSUE: HO: #&ere /as a vo#i" #r0s#. (ES) Corollar !ssue: Has !ssue: Has i# !ea!J (:O) •
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H&e" /e app!' #&ese #es#s #o #&e Ae"#s Areeme"# /e $i"%7 (1) #&a# #&e vo#i" vo#i" ri&#s o$ #&e poo!e% poo!e% s#oc- &ave &ave bee" %ivorce% %ivorce% $rom #&e be"e$ic be"e$icia! ia! o/"ers&ip o/"ers&ip /&ic& /&ic& is re#ai"e% b' #&e s#oc-&o!%ers (2) #&a# #&e vo#i" vo#i" ri&#s &ave &ave bee" #ra"s$erre #ra"s$erre% % #o $i%0ciaries $i%0ciaries %e"omi"a#e% %e"omi"a#e% Ae"#s Ae"#s () #&a# #&e #ra"s$er #ra"s$er o$ s0c& ri&#s ri&#s is #&ro0& #&ro0& #&e me%i0m o$ irrevocab irrevocab!e !e pro
O: 5E A66EED :O:COM6IA:CE HI5 DE6AHARE 6AH 6AH Thepr o vi s i on so ft h es t at ut et hatwer eno tc ompl i e dwi t har et her e qui r ementt ha tt hesha r e sbet r an sf er r edont h e •
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b oo ksan dt h er eq ui r e me me ntt h atac op yo ft h ea gr e eme nts ha l l b efi l e di nt h ec or p or a t i on ' spr i n ci p al o ffic ffic ei n Del awar e. Theeff ec twa st ocr e at eas ec r e tv ot i ngt r u st . o Th epr o vi s i onr e s pec t i ngt h efi l i ngofacop yi nt hepr i nc i p al o ffic ffic ei nDel a war e“ t oope nt ot h ei n spe ct i o n sapr o v i s i onob v i ous l yf ort hebenefi tofal l ofan ys t oc k hol der***oran yb en efi c i a r yoft het r us t "i s t o ck hol de r sando fa l l be ne fic i ar i esoft het r u st ,whoar een t i t l edt ok no w wher ev o t i n gc ont r ol ofa c or por at i onr es i d es . Andt hepr o vi s i o nf o rt r a ns f ero ft h es t oc kont hecor por at ebo ok sne ce ss ar i l ys er v es ,t houghper hap s o onl yi nc i dent al l y ,as i mi l arp ur pos ewi t hr es pec tt ot heoffic er sanddi r ec t or s .I ft hev al i di t yofa s t oc k hol der s ' po ol i ngagr e emen to ft h ek i ndhe r epr e sen t edwer et obesu st ai n ed ,t hewa yi sc l earf o rt h e c r e at i onofs ec r e tv ot i ngt r us t s .T hes t at ut ec l ear l yf or bi dst hem. Thef ai l ur et ot r an sf ert hes t oc kont hebook si sno tas uffic i en tr eas oni nt hi sca sef orho l di ngt heAg en t s ' Agr eemen tn otav ot i ngt r us t . I ti sani ndi c at i ont hatt hepar t i esdi dnoti nt endt oc r e at eav ot i ngt r us t ;butt hats ubj ec t i v ei nt ent i oni s o uni mp or t ant .
Th es t o ckhe r ewa se nd or s edi nb l a nkan dd el i v e r e dt ot h ea ge nt sf o rd ep os i ti ne s cr o w wi t hi r r e v oc ab l e pr o xi es . o T r a ns f e ro ft hest oc kont hebook si snote ss ent i a lt oe ffe cta ni r r e v oc abl et r a ns f e ro fv o t i ngr i ght s t ofiduc i a r i e s,di v or c edf r om t heot he ra t t r i but e soft hes t oc k,i nor de rt os ec ur evot i ngc ont r ol ,a s t heAgent s'Agr eeme mentdemo monst r at es. o I ti ssuc hat r ans f e rt hati st h ec har a ct e r i st i cf e at ur eofavot i ngt r ust . Thef ac tt ha tt h eAg en t sar es ub j ec tt oc on t r ol b yt hei rr e spe ct i v epr i n ci p al sdoe sno tpr e ve ntt heag r e ementf r om c ons t i t ut i ngav ot i ngt r u st . Th es t o cki sv ot e db yt h eAg en t sasag r o u p.Noon es t o ck ho l d err e t a i n sc o mp mp l e t eco nt r o lo v ert h ev o t i n g o ofi t sst oc k.I tc annotv ot ei t sowns t oc kdi r ec t l y ;al l i tc andoi st odi r ec ti t sAgenthowt ov ot eona d ec i s i o nt ob ema deb yt h eAg en t sa sagr o up . o Th es t o ckofa nyco r p o r a t es t o ck ho l d erma ya ta n yt i meb ev o t e da ga i n sti t swi l l b yt h ev o t eo ft h es e v en o t he ra gent s . Th ec ont r o loft hea gen t sr es t sup ont h ep r o v i s i onst ha tt he yar ese v er a l l yc hos enbyt her e s pec t i v e o s t o c k ho l d er sa ndea c hma yb er e mo mo v e da ndr e pl a c edb yt h es t o c k ho l d erh er e pr e s en t s . Suc hapr o vi s i oni snoti nc ons i s t entwi t hav ot i ngt r us t . Andt heal l e ge dc ont i nu i ngc ont r o loft h eAge ntb yt hes t oc k ho l derc l e ar l ywou l dno te x i s ti nt hee v entof o t hede at h ,r e mo mo va lo rr e si g nat i onofDa vi e si nhi scap ac i t yofAgen t . I nt h atc as eh i ss uc c es s or ,wh et h erAg en to rT r u st e e,i sna me me db yama j o r i t yoft h er e ma ma i n i n g Ag en t sorT r u s t e es ,a st h ec a s ema ybe ,a ndh i ses t a t eh asnoc o nt r o lwh at e v e ro v e rt h eAg en t s onamed. De$e"%a"#s7 I# is mere!' a poo!i" areeme"#. A poo!i" areeme"# ma' ass0me an form /i#&o0# form /i#&o0# r0""i" a$o0! o$ #&e vo#i" #r0s# s#a#0#e. S0preme Co0r#7 %RON&$ I$ %RON&$ I$ /e 0"%ers#a"% %e$e"%a"#4s ar0me"# a poo!i" areeme"# ma' #&ro0& #&e me%i0m o$ $i%0ciaries /i#& e
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Fo rt h ef o r e g oi n gr ea so ns ,wear eco mp mp el l e dt odi s agr e ewi t ht h eh ol d i n go ft h eCh an ce l l o ru p ont h equ es t i o n di s c us s ed .Wea r eofo pi n i ont ha tt heAg en t s ' Agr ee me menti sv oi da sa ni l l eg al v ot i n gt r us t .
DI SPOSI TI ON: REMANDEDt oCour tofChancer yofNewCast l eCount y .
