the incorporating State.' But an injunction should not be granted in one State, to restrain officers of a corporation from voting upon proxies of the stockholders, at an approaching meeting of stockholders to be held in another State, upon an allegation that voting by proxy is only legal when expressly allowed by statute, and that there is no such statute in the latter State. For it is to be presumed that the officers of the corporation will proceed legally, and, if they do not, the plaintiff has another remedy. It has been questioned whether it be within the province of the by-laws to confer the right of voting by proxy, but it would seem that in the absence of any statute to the contrary, the right may be thus conferred. The inspectors of election should not reject proxies for trivial defects in matters of form; and it has even been held that an undated proxy should have been accepted where People v. Twaddell, 18 Hun, 427; 1 N. Y. Rev. Stats. (7th ed.) 1369, 1370; In re Election of St. Lawrence Steamboat Co., 44 N. J. 529; General Railroad Act of New York, Laws of 1850, ch. 140, § 5; Me. Rev. Stats. (1871) p. 304, § 5; Mich. Comp. Laws, (1871) p. 1148; Ind. Stats. (1870) p. 268; R. I. Pub. Stats. (1882) § 3; Del. Rev. Code, (1874) p. 376. See generally: Abbott v. American Hard Rubber Co., 33 Barb. 578; Harger v. McCullough, 2 Denio, 119, 122; Haywood &c. Plank Road Co. v. Bryan, 6 Jones, (N. C.) 82; Cumberland Coal Co. v. Sherinan, 30 Barb. 533. The General Incorporation Act of New York, Laws of 1890, ch. 564, § 54, provides that stockholders not in default in payment of their subscriptions, may vote by proxy upon shares in their possession or control; that proxies shall be revocable at pleasure, and shall expire eleven months after date, unless otherwise specified therein. No person shall be entitled to vote as a proxy unless the instrument appointing him have been transmitted to the secretary of the company for a period prescribed by the charter, or if no period be prescribed, then for not less than forty-eight hours before the time appointed for holding the meeting at which the proxy is to be used. 8 Vic. ch. 16, § 77. If any share. holder be a lunatic or idiot, he may vote by his committee; and if any shareholder be a minor, he may vote by his guardian or any one of his guardians; and every such vote may be given either in person or by proxy. The Companies Clauses Act of 1845, 8 Vic. ch. 16, § 79. 2 Woodruff v. Dubuque & S. C. R. Co., (1887) 30 Fed. Rep. 91. 3 Taylor v. Griswold, 14 N. J. 222; s. c. 27 Am. Dec. 33, annotated. 4 State v. Tudor, 5 Day, 329; s. c. 5 Am. Dec. 162; People v. Crossley, 69 Ill. 195; Philips v. Wickham, (1829) 1 Paige, 598; 2 Kent's Com. 294. the person presenting it offered to show a letter of instructions also from his principal in respect to his votes at the meeting about to be held.' A deposit of corporate stock, made by a shareholder with the directors or their agent, to enable the stock to be voted on and to be sold, is revocable before sale. One stockholder is not entitled to have the officers of the corporation enjoined from voting upon the shares of other stockholders deposited with them for that purpose upon a plea that a trust for the corporation is thereby created, unless corporate funds were used in securing the deposit of the shares.' § 304. "Voting trusts"- Combinations among shareholders. It is the general rule sanctioned by the policy of the law that those who have the largest interest in corporations may control them, since they have the greatest interest that the enterprise shall be well managed. The owners of shares may enter into agreements, as between themselves, to elect the officers of the company and to manage its affairs as they or a majority of them shall determine, and it is held that agreements of that character are not illegal nor void as against public policy; for, as was said by the court in a leading case, their interests are identical with the interests of the minority of shareholders. If they increase the value of their own stock by their prudent management of the corporate affairs, they also increase the value of all other stock. If they destroy the stock of others, they also by the same act destroy their own." The selection of candidates must precede an election, and it would often be difficult, if not impossible, to make the selection without comparison of views, combinations, concession and concerted action. There is nothing in these combinations which tends to defeat the rights of stockholders generally, or of the interests of the public at large as defined by statutes declaring that the directors "shall be chosen annually by the In re St. Lawrence Steamboat Co., (1882) 44 N. J. 529. 5 Faulds v. Yates, (1870) 57 Ill. 416; s. c. 11 Am. Rep. 24; Barnes v. 2 Woodruff v. Dubuque & S. R. Brown, (1880) 80 N. Y. 527, 537. Co.. (1887) 30 Fed. Rep. 91. 6 Havemeyer v. Havemeyer, (1878) 3 Woodruff v. Dubuque & S. C. R. 43 N. Y. Super. Ct. 506, 512; s. c. Co., (1887) 30 Fed. Rep. 91. affirmed without opinion, 86 N. Y. 4 Barnes v. Brown, (1880) 80 N. Y. 618. 527, 537. 1 majority of the votes of the stockholders voting at such elections." No formidable and effective opposition to an existing board, however obnoxious, could be organized without combination. The combining shareholders may legally transfer their stock to trustees with a power of attorney to vote thereon, accepting transferable trust certificates as convenient vouchers or receipts in lieu of their shares. Agreements of this character are clearly distinguishable from cases in which one of the parties stipulates to accord or secure to the other, for a consideration, some private or personal advantage not shared by the stockholders at large. But of course, where there is a preconceived scheme, combination or conspiracy to carry an election of directors, as for example by the use and abuse of injunctions to restrain other stockholders from voting, by efforts and contrivances to prevent a fair election of inspectors, the premature convening of the meeting and a preoccupation of the room by hired ruffians, the proceedings are undoubtedly void. § 305. The same subject continued. So long as all the parties to a voting trust comply with the terms of the agree 1 Havemeyer v. Havemeyer, (1878) 43 N. Y. Super. Ct. 506, 512. 2 Havemeyer v. Havemeyer, (1878) 43 N. Y. Super. Ct. 506, 512, 513. 3 Griffith v. Jewett, (Cin. Super. Ct. 1866) 15 Week. L. Bul. 419, where speaking of such an arrangement the court said: "The entire beneficial interest in the stock is severally vested in the certificate-holders, the voting power in the trustees, and the situation does not differ materially from what it would be if the stockholders retaining their shares had simply united in a proxy authorizing the trustees to cast the vote of all of them for directors." Hafer v. New York, L. E. & W. R. Co., (1885) 14 Week. L. Bul. 68, which appears to be contra and in which a similar agreement between shareholders was pronounced unlawful, turns upon the point that the object of the agree ment was to place the control of one railway company in the hands of the directors of another, who had no interest in the successful operation of the former. "It is the duty," said the court, "of each stockholder to vote for directors of the company with an eye singly to its best interests. . . Both on the ground that the power is denied to one corporation thus to acquire control of another, and that the stockholder can not barter away the right to vote upon his stock, we hold these contracts void." 4 Havemeyer v. Havemeyer, (1879) 43 N. Y. Super. Ct. 508, 513, 514, distinguishing Fremont v. Stone, 42 Barb. 170; Gurnsey v. Cook, 120 Mass. 501, and Card v. Hope, 2 B. & C. 661. 5 People v. Albany & Susquehanna R. Co., (1869) 55 Barb. 344, 381, 382. 2 ment, it can not be successfully attacked either by the State or by shareholders of the company not parties thereto.1 For, ordinarily, a court of equity will not interfere by injunction to restrain a portion of the stockholders from voting upon their shares even upon the ground that they are about to gain control of the company to the injury of the corporate enterprise; unless an illegal combination in the nature of a conspiracy to defraud the plaintiffs can be shown. The legal difficulties which arise grow out of stipulations in the agreement by which it is sought to restrain any recalcitrant member from transferring his shares to the opposition or from voting against the trust. For, ordinarily, any stockholder may withdraw from such a contract, although it be expressly agreed that it shall be irrevocable. Thus where certain stockholders for mutual protection and to prevent a sale of the company's property by the directors, who were and who represented a minority in interest, entered into a sealed agreement not to sell their stock nor to vote by proxy without the consent of all the parties to the agreement, it was held that the contract was void as in restraint of trade, against public policy, and because an agreement not to vote by proxy is a 1"We can perceive no reason why any number of shareholders, either by means of a proxy or by vesting the legal title in another, may not authorize him to vote upon their stock, and as such is the substance of this agreement, we consider it not illegal. So long as the parties to it, or their successors in interest, are satisfied with it, no other person may complain." Griffith v. Jewett, (Cin. Super. Ct. May, 1866) 15 Week. L. Bul. 419. But see Fisher v. Bush, 35 Hun, 641. 2 Camden &c. R. Co. v. Elkins, (1883) 37 N. J. Eq. 273. Cf. Hilles v. Parish, (1862) 14 N. J. Eq. 380; Ryder v. Alton &c. R. Co., 13 Ill. 516. Thus where steps had been taken by the officers of a corporation to obtain from the shareholders a deposit of their stock, together with powers of attorney, with themselves or their agents, in order that they might vote on them at a meeting of the shareholders, an injunction to restrain them from so doing, on the ground that a trust was created by the transaction in behalf of the company, was refused, as it did not appear that corporate funds had been employed. Woodruff v. Dubuque & S. C. R. Co., (1887) 30 Fed. Rep. 91. 3 Brown v. Pacific Mail Steamship Co., (1867) 5 Blatchf. 525; People v. Albany &c. R. Co., (1869) 55 Barb. 344; Webb v. Ridgely, 38 Md. 364; Hafer v. New York &c. R. Co., (1885) 14 Week. L. Bul. 68; Beach on Railways, § 451; Hoppin v. Buffum, (1870) 9 R. I. 513; s. c. 11 Am. Rep. 291; Griffith v. Jewett, (Cin. Super. Ct. 1886) 15 Week. L. Bul. 419. Cf. Reed v. Jones, 6 Wis. 680. 4 Griffith v. Jewett, (Cin. Super. Ct. 1886) 15 Week. L. Bul. 419. pernicious and unlawful provision. The agreement not to vote by proxy was said to be pernicious in that it tends to concentrate in the hands of a few shareholders the power of selecting the executive and managing officers of the corporation, and deprives the owner of shares of one of the attributes of ownership, that is, of selecting agents and attorneys to counsel and aid him in the prudent and intelligent management of his property. The right of alienation, it was said, is an incident of the property represented by shares of stock, and any restraint placed thereon by a contract which has no other consideration to uphold it than the mutual promise of the parties is contrary to public policy and can not be recognized by the courts.3 Mutual promises alone do not constitute a good and sufficient consideration in contracts in restraint of trade. And contracts of that character are not to be upheld, unless they are made upon a real and bona fide consideration," actual, adequate and not colorable. But contracts in partial restraint of trade are not obnoxious to the law. Accordingly, where the agreement does not place an absolute restraint upon alienation, but merely provides that the parties to it shall not sell their stock without having first offered it to their associates at the market price, there is nothing which can be said to be contrary to public policy or any wise open to objection.' 1 Fisher v. Bush, (1885) 35 Hun, 641, distinguishing Havemeyer v. Havemeyer, 45 N. Y. Super. Ct. 464. 2 Fisher v. Bush, (1885) 35 Hun, 641, 644. 6 fered to sell it to the rest of their associates, at a price not above the then current market value, and in case of their declining to take it, without next offering it to Brown 3 Fisher v. Bush, (1885) 35 Hun, Brothers & Co.; but any one of the 641, 642. parties is to be at liberty to withdraw 4 Fisher v. Bush, (1885) 35 Hun, on those terms at any time. The 641, 645. 5 Collins v. Locke, 4 App. Cas. 674. 6 Morris Run Coal Co. v. Barclay Coal Co., 68 Pa. St. 173; Fisher v. Bush, (1885) 35 Hun, 641, 646. 7 In Brown v. Pacific Mail S. S. Co., (1867) 5 Blatchf. 525, 527, Blatchford, J. said: "The provisions of the agreement substantially are, that the parties to it are not to sell their stock without having first of agreement also takes the shape of an irrevocable power of attorney to Brown Brothers & Co. to vote upon the stock; and all increase of such shares of stock, by dividends, until the 1st of December, 1868, is to come under the same agreement. In this respect, the agreement seems to differ very little from a mere power of attorney, or proxy, to Brown Brothers & Co., to vote upon these shares, with the addition that the |