Stokes v. Continental Trust Co. of City of New York
Court of Appeals of New York
78 N.E. 1090 (1906)
Continental Trust Co. of City of New York (Continental) (defendant) is a New York corporation, organized in 1890 with 5,000 shares with the par value of $100 each. Stokes (plaintiff) is an original shareholder, holding 221 shares of stock in the corporation. Blair & Co., a private banking firm, offered that if Continental doubled its capital stock from $500,000 to $1,000,000, consisting of 5,000 additional shares, Blair would then purchase the new stock at $450 per share. In January 1902 Continental’s stockholders, including Stokes, met and agreed to increase the stock. Stokes then demanded from Continental the right to subscribe and pay for another 221 shares of the new stock at par. His demand was refused. The majority of the stockholders also voted to sell the new stock to Blair & Co., which Stokes voted against. The trial court held that Stokes had the right to subscribe for a proportionate number of shares of the new stock as he held of the old stock, that the stockholders and directors could not deprive them of that right, and that Stokes was entitled to the difference between the market value of the shares as of January 1902, which was $550 per share, and their par value, for a total of $99,450. The court of appeals reversed, and Stokes appeals.
Rule of Law
Holding and Reasoning (Vann, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 175,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 14,000 briefs, keyed to 188 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.