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Home > Journals > Michigan Law Review > MLR > Volume 47 > Issue 4 (1949)

 

Abstract

The Supreme Court of Michigan recently decided the case of Ecclestone v. Indialantic, Inc., the important facts being as follows: in June, 1942, defendant Emmons, owner of 451 shares of the common stock of Indialantic, Inc., a Florida corporation, transferred his entire holding to the Detroit Orthopedic Clinic in payment of an antecedent debt, reserving to himself, however, the sole right to vote the stock until the assets of the corporation were substantially liquidated. In March, 1946, with notice of this reservation of the right to vote, the plaintiff purchased all of these shares from the Clinic and thereby acquired, when added to others previously purchased, ownership of a majority of the outstanding shares of the Indialantic corporation. Defendant Emmons having refused to cancel his right to vote and defendant Indialantic, Inc., having declined to transfer the stock without reservation of the voting power, plaintiff brought this suit in chancery for a declaration of his right to vote the stock in question. On appeal, the lower court's dismissal of the plaintiff's bill was affirmed on the following grounds: (1) that this separation of the voting power from stock ownership was justified by the presence of a property interest to be conserved and a definite policy of the corporation to be carried out; and (2) that the services rendered by defendant Emmons were so valuable and important to the welfare of the corporation, and their continuation so desirable, that the power to vote, being beneficial not only to Emmons but also to the corporation itself, was a power coupled with an interest which was not affected by the sale of the stock to the plaintiff.

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