In re the Niagara Insurance

The Chancellor :—In this case, it appears that the original amount of capital stock was half a million of dollars, divided into 10,000 shares, of which something more than eleven hundred belonged to the company, and the rest to individual stockholders. A majority of the directors, *and the Owners of more than three-fourths of the stock, apply for a dissolution of the incorporation, on the ground that it is for the interest of the stockholders. The owners of about one-ninth of the stock remonstrate against the dissolution of the company, and some of them swear to their belief that the business of the company may be made profitable. The residue of the stockholders have neither applied for the dissolution, or made any objection thereto. In deciding upon the propriety of a dissolution, in the cases provided for in the act under which these proceedings have taken place, this court should exercise its discretionary power, and decree a dissolution, under the same circumstances which would induce the legislature to repeal the act of incorporation, on the application of the directors. The court is not bound to decree a dissolution merely because a majority of the directors and stockholders request it to be done. But when the owners of a very large proportion of the stock find it for their interest to vest their capital in something more productive, it is strong evidence that the interest of the stockholders generally will be promoted, by allowing them to withdraw their capital and discontinue the business of insurance. In such a case, the particular interest of the few must give way to the general interest of the many. The fact that insurance stock, where the capital is perfectly sound, is below par in the market, is of itself strong evidence that the capital of such companies may be employed more profitably, or at least more safely, in some other business. In this case, the wishes of this very small minority of stockholders must give way to the interest of such a large majority, and the corporation must be dissolved. There must be a reference to a master to report proper persons as trustees, and the amount of security to be given by them for the faithful execution of their trust.