Gilchrist v. Highfield

Dodge, J. The purchase of the 364 shares of stock by the-corporation from Brigham is claimed to be wholly void upon the ground asserted that a corporation has no power to buy its own capital stock. This contention seems to need little discussion. ."While the English authorities are to that effect, and while similar holdings have been made in some of the states, the great weight of authority is in favor of such power, when exercised with no illegitimate or fraudulent purpose- and when no rights of creditors suffer thereby. In the face of this conflict of decision this court long ago, upon support from the supreme court of the United States, adopted the 478 view that, generally speaking, corporations have such power, and has persisted therein so long that we have no doubt property rights of great magnitude have grown .up in. reliance thereon. Shoemaker v. Washburn L. Co. 97 Wis. 585, 73 N. W. 333; Calteaux v. Mueller, 102 Wis. 525, 78 N. W. 1082; Marvin v. Anderson, 111 Wis. 387, 87 N. W. 226; Pabst v. Goodrich, 133 Wis. 43, 113 N. W. 398; Atlanta & W. B. & C. Asso. v. Smith, 141 Wis. 377, 123 N. W. 106. The law in this state must be considered so settled. Another contention is that, conceding such power in the corporation, the defendants, acting on the board of directors and also voting their stock in ratification of the director's’ act, were actuated by a purpose to deprive the plaintiffs of their just rights in the corporation, especially,by reducing the amount of the voting stock so that defendants would hold a majority thereof — a purpose which was condemned in Luther v. C. J. Luther Co. 118 Wis. 112, 94 N. W. 69. Rut the trial court has found against the existence of any such motive, or any ulterior or illegitimate intent or purpose other than the promotion of the best interests of the corporation according to the honest judgment of the defendants. This finding, we think, is fully supported by a preponderance of the evidence and must preclude any interference by a court with acts in pursuance of the business policy adopted in good faith by the holders of a majority of the capital stock. Theis v. Durr, 125 Wis. 651, 659, 104 N. W. 985; Figge v. Bergenthal, 130 Wis. 594, 616, 109 N. W. 581, 110 N. W. 798.; Gamble v. Queens Co. W. Co. 123 N. Y. 91, 99, 25 N. E. 201. By the Court. — Judgment affirmed.