Ringling Bros.-Barnum & Bailey Combined Shows v. Ringling

29 Del.Ch. 610, 53 A.2d 441 (1947)

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Nature of the Case

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Facts

The suit arose from the 1946 meeting when the stockholders attempted to elect the entire board of seven directors. The dispute was over an agreement and particularly the effect of this agreement with the relation to the exercise of voting rights by the agreed parties. At the time of the meeting, the corporation had outstanding 1000 shares of capital stock held as follows: 315 by petitioner Edith Conway Ringling, 315 by defendant Aubrey Ringling Haley, and 370 by defendant John Ringling North. The shares could be voted cumulatively. Mrs. Ringling asserts that by virtue of the operation of an agreement between her and D Haley, the latter was bound to vote her shares for the adjournment of the meeting, or for a certain slate of directors. The two entered into the agreement in 1941. Section two of the agreement states that the parties would consult and confer with each other and will act in accordance with any agreement they will reach after the consultation. At the meeting in 1943, and two subsequent meeting, both ladies voted in accordance with the agreement. During those years, they elected 5 out of 7 directors. Before the 1946 meeting and after consultation with their attorney (Loos) regarding the new directors, it was suggested that P should elect herself and her son and Haley should elect herself and her husband. However, the parties could not agree on the fifth director. Mr. Haley intended to make an adjournment motion to give the ladies more time to agree. However, on the morning of the meeting, he refused to consent to the adjournment. P made a request for Loos to act as an arbitrator according to the agreement. Loos determined that the ladies would vote in 6 days. P voted for that, but the third shareholder and Haley refused. The chairman ruled for the adjournment but the meeting went on. P voted 882 for herself, 882 for her son and 441 for one Dunn. Haley, despite Loos' decision, voted 1103 for Mrs. Haley and 1103 for him. North voted 864 for One Woods, 863 for One Griffin and 863 for himself. P and her son, both Haleys, Dunn, North and Woods were elected. Haley and North disputed this ruling, claiming the Griffin won instead of Dunn.