Hoyt v. Thompson’s Executor
New York Court of Appeals
19 N.Y. 207 (1859)
- Written by Rose VanHofwegen, JD
Facts
The corporate charter of the Long Island Railroad Company (the company) required a board of 23 directors to exercise its powers and expressly allowed the board to enact bylaws. The bylaws said a quorum of five directors including the president could transact ordinary business. When the company owed the State of Michigan about $800,000, the president of the company negotiated a bond and mortgage agreement to satisfy the debt. The president and four other directors met and approved the agreement. The agreement bore the corporate seal, and the president signed it on behalf of the company as president and cashier. Ultimately, Abraham Thompson bought the security at auction. Hoyt (plaintiff) sued Thompson’s executor (defendant) challenging the validity of the security on the ground that the corporation had not authorized it. The trial court entered judgment for Hoyt. The appellate court reversed and ordered a new trial but stayed remand to allow Hoyt to request reargument. Before allowing reargument, the appellate court reviewed its decision.
Rule of Law
Issue
Holding and Reasoning (Comstock, J.)
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