24 N.Y.S. 959 | N.Y. Sup. Ct. | 1893
This action is brought by the plaintiff, as a stockholder in the defendant the Mottville Paper Company, Limited, to set aside a deed from that company to the city of Syracuse dated February 23, 1891, upon the ground that, as against a stockholder who did not assent to it, it was void, for want of power in the board of directors to execute it, or authorize its execution. The paper company was organized in 1886, under the provisions of chapter 611 of the Laws of 1875, for the purpose of manufacturing paper at Mottville, N. Y. Prior to the organization the parties interested therein, and who afterwards became stockholders, contemplated the purchase of certain real estate, and buildings thereon, and water rights and privileges appurtenant thereto, situated on the outlet of Skaneateles lake. After the incorporation such property was purchased, and improvements were made thereon, and the business of manufacturing paper was there entered upon, and continued down to the time of the trial; the water of the outlet being used for the purpose of washing the material, and reducing the same to pulp, and in part for the propelling of machinery, the balance of the machinery being propelled by steam power. By chapter 291 of the Laws of 1889 the Syracuse Water Board was created, and power was conferred upon it to acquire, by purchase or condemnation, for and in the name of the city of Syracuse, any property necessary for the acquisition, construction, maintenance, control, and operation of the system of waterworks contemplated by the act. By section 18 of the act, as amended in 1890, it was authorized, under certain conditions, to take water from the Skaneateles lake. One of the provisions of this section is that, “before any water shall be taken from Skaneateles lake under the provisions of this act, the city of Syracuse shall acquire or extinguish all water-power rights upon the outlet of said lake to be affected by the proposed storage of water.” It was also provided that the powers granted to the water board to acquire property under the act, and to make payment therefor, shall be deemed to include full power and authority to do and perform all acts and things necessary or proper to enable the city to obtain water from the lake under the provisions of the
We fail to see that the plaintiff has any good ground for equitable relief. The city, and those acting in its behalf, had a right to believe that the president of the company and its board of directors had a right to act for it in agreeing upon the value, and in making a conveyance to carry out the agreement. Practically, at the stockholders’ meeting, the matter was placed by them in the hands of the board of directors. The city authorities were not called on to investigate whether all the stockholders were present. The plaintiff is presumed to have known of the meeting. He does not deny that he knew of it, but he chose to be absent. If, as was apparently the case under the statutes referred to, the city had a right to acquire the property in question whether the paper company was willing to sell or not, the question of power to sell became unimportant to the stockholders. The only open question was the one of price, and upon that subject, especially after the action of the annual meeting, the board of directors legally represented the corporation. It was their duty to obtain the highest price they could. In their judgment this was accomplished by agreement, rather than" by allowing proceedings for condemnation. We find no good reason for interfering with their agreement and consequent conveyance. It follows that the judgment should be affirmed.
Judgment affirmed, with one bill of costs to defendants. All concur.