The Appellate Court erred in reversing the decree of the circuit court in part, and its judgment will be reversed, and the decree of the circuit court will be affirmed. Judgment reversed. BOWDITCH et al. v. JACKSON CO. et al. (Supreme Court of New Hampshire, 1912. 76 N. H. 351, 82 Atl. 1015, L. R. A. 1917A, 1174, Ann. Cas. 1913A, 366.) PEASLEE, J. * * * The legality of the votes passed at the meeting of the Jackson stockholders is questioned on account of the nature of the trust agreement under which the majority of the stock was then held, and because the trustees voted more than one-eighth of the entire stock. While the decisions upon the first question are not entirely in accord, yet substantially all of them recognize that an agreement to vote stock in a certain way may be valid. The rule is well stated in the case chiefly relied upon by the plaintiffs. "If the transfer of the legal title to the stock is made and accepted under an agreement of the stockholder which deprives him of all power to direct the trustee, and all opportunity to exercise his own judgment in respect to the management of the affairs of the corporation, then whether the transaction is open to the objection of other stockholders, as depriving them of the right they have to the aid of their costockholders, must be dependent upon the purposes for which the trust was created and the powers that were conferred. If stockholders, upon consideration, determine and adjudge that a certain plan for conducting and managing the affairs of the corporation is judicious and advisable, I have no doubt that they may by powers of attorney, or the creation of a trust, or the conveyance to a trustee of their stock, so combine or pool their stock as to provide for the carrying out of the plan so determined upon. But if stockholders combine by either mode to intrust and confide to others the formulation and execution of a plan for the management of the affairs of the corporation, and exclude themselves, by acts made and attempted to be made irrevocable for a fixed period, from the exercise of judgment thereon, or if they reserve to themselves any benefit to be derived from such a plan to the exclusion of other stockholders who do not come into the combination, then in my judgment such combination and the acts done to effectuate it are contrary to public policy, and other stockholders have a right to the interposition of a court of equity to prevent its being put into operation.' Kreissl v. Distilling Co., 61 N. J. Eq. 5, 14, 47 Atl. 471, 475. An examination of the cases generally will disclose that in nearly all of them where the agreement was held invalid there were stipulations or covenants which infringed this rule. The propositions that "it is as legitimate for a majority of stockholders to combine as for other people," and that the combination is unlawful only if "the gain was to be at the expense of the corporation, or in some way was to work a wrong to the other stockholders" (Brightman v. Bates, 175 Mass. 105, 110, 55 N. E. 809, 810), are generally recognized as sound law. * * Even the cases holding the particular agreements then under consideration to be invalid usually recognize the proposition that there may be a valid voting trust. Shepaug Voting Trust Cases, 60 Conn. 579, 24 Atl. 32. Judged by these standards, the agreement in the present case seems unobjectionable. The trust is to terminate at the end of a year in any event. It contemplates the winding up of the corporation within that time, and sets out in detail the plan of sale and dissolution for which the trustees were authorized to vote. It further provides that the trustees shall not vote so as to substantially change the company's business, except as specifically authorized. There is nothing here which seeks to work a wrong to the corporation, to confer a benefit upon those joining in the trust, or to turn the management of the stockholders' affairs over to strangers. Judged by the strictest rule of a stockholder's right to the free and honest judgment of his costockholders, the agreement here made by more than three-fourths of the stockholders is a legitimate arrangement for carrying out their purpose to close out the affairs of the company. * * * * The argument that each stockholder is entitled to the presence of his associates to the end that they shall reason and be reasoned with is not of weight here. The rule of the common law was that no member of a corporation could vote by proxy. But the charter of this company introduces a different doctrine. *It is not necessary to now consider the effect of the act of 1842, forbidding all proxy voting. *The act of 1842 was repealed four years later, and the principle of general proxy voting was adopted. * The limitation of the right, incorporated in the revision of 1867 was removed in 1901; so that now a proxy can represent more and one stockholder can be proxy for another. charter or the general law applies here, the rule is that one or many stockholders may be represented at the stockholders' meeting by an agent. * * * Case discharged. All concurred. * * than one stockholder, Whether the * * SECTION 7.-RIGHTS OF THE MINORITY BOWDITCH et al. v. JACKSON CO. et al. (Supreme Court of New Hampshire, 1912. 76 N. H. 351, 82 Atl. 1014, L. R. A. 1917A, 1174, Ann. Cas. 1913A, 366.) * * PEASLEE, J. The main question in this case is whether a going business corporation can be closed out and dissolved upon the motion of the majority of its stockholders and against the protest of the minority. The question is a new one in this state, although it has frequently been considered (both in cases where it was necessarily involved and those where it was not) by the courts in other states. The decisions and dicta are conflicting and are quite evenly divided. The only case in this state having a direct bearing upon the subject is Dow v. Railroad, 67 N. H. 1, 36 Atl. 510. In that case there was an attempt to change the business of the corporation; and while any expression of opinion on the question here involved was carefully avoided, yet the opinion of Chief Justice Doe contains an exhaustive and illuminating discussion of the nature of a corporation and the source of the power of the majority to act for it. The majority have the agency which in a partnership each partner possesses. Do they, in addition thereto, have the power each partner has to compel a dissolution? The corporation being an outgrowth of the law of partnership, it would be reasonable to expect that so important an incident to the joint undertaking as the right to terminate the enterprise would not be lost by the change in the form of the association. The fiction that the corporation is a being independent of those who are associated as its stockholders is not favored in this state. * * * Decisions based upon the idea that there is something sacred in the life of an ordinary business corporation, so that action looking to its extermination is in the nature of a fraud upon the state, * * * are not authority in a jurisdiction where a different view of the nature of the association is entertained. The question is not one of power granted by the state. It relates solely to the agreement of individuals with each other. Did the stockholders who united to form the Jackson Company in 1830 understand that the business must be continued perpetually, provided a profit could be made and some stockholder objected to closing it out, or did they understand that the enterprise could be brought to an end at such time as the majority believed to be for the best interest of all concerned? The latter seems the more reasonable and probable conclusion. Much has been said in the cases upholding the right of the minority to prevent a sale and dissolution, concerning the protection of their rights and saving their property from pillage by the majority. Just how the majority, which sells its own property at the same time and for the same price it sells that of the minority, gains an advantage over the latter is not readily apparent. Cases might be supposed, and undoubtedly occur, where the majority do obtain some undue advantage from the sale. No one contends that such a sale is valid. But because the power of the majority may be abused, it does not follow that it does not exist. If such a conclusion were to be drawn, minorities would always rule. The plain common sense of the matter is that this is a business venture, to be carried on as such so long as it appears to be good business judgment to do so. When the time comes that a majority in interest believe that their affairs should be wound up and the proceeds distributed, the rational rule is that this should be done. And since the question here is of a business nature, and the limitations of the power of the majority are fixed by the understanding of the business men who made the original compact, business considerations have more than ordinary weight in determining what the con tract was. * * * It is admitted on all sides that the majority may sell out if the corporation is insolvent. And when brought face to face with the question whether they must wait until the stockholders' investment is all lost before taking action, the conclusion has been that if insolvency is imminent action may be taken. And the same is true if it is imprudent to continue. One reason only is given why the power exists in these cases: It is reasonable to suppose that such authority was contemplated, because this is what sound business judgment dictates should be done. The difference between these cases and the present one is of degree only, not of kind. The majority are not obliged to wait until all possibility that the corporation can go on longer has been negatived. Some of the cases have stated that such is the rule; but the result of this would be to compel the majority to continue a losing business until their investment was entirely wiped out. To avoid so absurd a result, it has been said they could close out when insolvency seemed to be approaching. And so various forms of expression have been used to indicate the time when the majority could take action. All these are fairly summed up in the statement that the majority may close out the affairs of the company when it can no longer make a reasonable profit. It is believed no court would now hold that the rights of the minority were more extensive than this rule implies. If the majority may sell to prevent greater losses, why may they not also sell to make greater gains? * * * In a limited sense, the majority act as trustees for all the stockholders. When their acts are impugned by the minority, it is not the function of the court to set its judgment against theirs in settling the wisdom or policy of proposed action. By the contract of association, all questions of this nature were committed to the majority for final decision. * * * The whole difficulty is probably an outgrowth of the early idea that a corporation possessed peculiar attributes of longevity and sanctity. But as pointed out in Dow v. Railroad, 67 N. H. 1, 8, 26, 36 Atl. 510, no such theory prevails here. The business corporation is brought into being solely for the purpose of more conveniently carrying out the joint undertaking of the part owners. The line of distinction between this form of association and certain partnerships is but a shadowy one. It is not reasonable or natural to expect that when this boundary is passed great changes in the relation of the parties will result. A more radical change than that here claimed could not easily be imagined. In the partnership, one partner may compel a winding up from mere whim. In the absence of an agreement to go on for a fixed period of time, nothing short of a fraudulent purpose will prevent his taking valid action to close out the firm at will. * * * By the rule here contended for, the change of the association into a corporation has carried the rule to the opposite extreme. The authority to wind up is lost, and the owner of the smallest share may prevent such action, though it is desired by all his associates. The practical reasons against such a proposition are apparent. The probabilities are opposed to the idea that the associates intended to enter into such a compact. * * * The action taken by a majority of the stockholders of the Jackson Company whereby, as a part of the process of winding up the company, they voted to sell all its property to the Nashua Company, was within the power impliedly given to them when the company was formed. The charges that there was fraud in the sale and that it was for an inadequate price have been disproved. Case discharged. All concurred. CHICAGO HANSOM CAB CO. et. al. v. YERKES. (Supreme Court of Illinois, 1892. 141 m. 320, 30 N. E. 667, Bill by Charles T. Yerkes against the Chicago Hansom Cab Company, Warren Springer, Rose Abernethy, and others, to set aside a conveyance, and for an injunction and the appointment of a receiver. Complainant filed a supplemental bill to wind up the affairs of the cab company. Complainant obtained a decree, and Springer and Abernethy appeal. The secretary and one of the stockholders of a corporation whose business was unprofitable secretly agreed to purchase all the stock and the property of the corporation. Accordingly they purchased, in the names of third parties, all the stock, except that of complainant, who held a little more than one-third of the stock. A resolution was passed, against complainant's vote, authorizing the president and secretary to sell all the corporate property, which they accordingly sold to a nominal purchaser for the benefit of the secretary and said stockholder. SCHOLFIELD, J. * * From the foregoing statement it is clear that when Needham entered into the contract with Springer the former was a director in the Chicago Hansom Cab Company, and its secretary. As director, he owed the duty to the company to preserve its property and protect the company against loss, so far as that could be done by the exercise of ordinary care and diligence; and he could not himself become the purchaser of any property of the corporation which it was his duty to sell. * * * The contract between Needham and Springer requires the purchase of all the property of the cab company, and the subsequent transfer of the personal property to Needham. It is an entire and indivisible contract, and Needham is therefore directly interested in every part of the claimed contract of sale by the company to Springer. But it is claimed the authority to make this sale is derived from a vote of a majority of the stockhold ers. * * * The question is therefore presented whether, after it is determined to wind up a corporation and settle its business, it is competent for a holder of a majority of its shares of stock to make or ratify a sale. of all its property to himself, against the protest of a holder of a minority of its shares, and in disregard of his rights. That a holder of a majority of the shares of stock in a corporation may, where the law authorizes a vote of stockholders, so vote upon any matter of policy in the conduct of the corporation as to best subserve his own interests, and that this may relate to the ceasing to do corporate business, the winding up of its affairs, and the sale of its property, we do not question. But the authorities cited by counsel for appellant * * * concede that even in such cases the action resulting from such vote must not be so detrimental to the corporation itself as to lead to the necessary inference that the interests of the majority of the shareholders lie wholly outside of, and in opposition to, the interests of the corporation and of the minority of the shareholders, and that their action is a wanton or a fraudulent destruction of the rights of such minority. In the cases cited, and, so far as we are informed, in all other cases where the majority of the stockholders may by their votes lawfully affect the interests of the minority of the stockholders, the interests of the minority are, theoretically at least, protected, either by directors or trustees of the corporation, who it will not be presumed will betray their trust by acting in the interest of one stockholder to the prejudice of another, or by reason of the transaction being such as is presumed to be alike beneficial to all stockholders, as where the corporate property is in good faith appropriated to the payment of the corporate debts, or is sold at a fair sale; and no case cited or within our knowledge goes to the extent of holding that a majority of the |