Hayes vs. Canada Atlantic & Plant Steamship Co.

181 F. 289; 1910

FACTS:
Petitioner is one of the executive committee of respondent
company. In this case, the Executive Committee: (a) removed the
Treasurer and appointed a new one; (b) fixed the annual salary of the
members of the Executive Committee; (c) amended the by-laws by
giving the President the sole authority to call a stockholder's meeting
and a board of directors meeting; and (d) amended the composition of
the Executive Committee by limiting it to just 2 persons.
ISSUE:
Were these actions valid?
HELD:
No, because the Executive Committee usurped the powers vested
in the board and the stockholders. If their actions were valid, it would
put the corporation in a situation wherein only two men, acting in their
own pecuniary interests, would have absorbed the powers of the entire
corporation.