Page:Harvard Law Review Volume 10.djvu/461

CORPORATE VOTING AND PUBLIC POLICY. 435 form irrevocable. ... If there were no precedents, upon principle we would hold that, in determining the validity of an agreement which provides for the vesting of the voting power in a person other than the stockholder, regard should be had to the condition of the parties, the purpose to be accomplished, the consideration of the undertaking, interests which have been surrendered, rights ac- quired, and the consequences to result. The law does not make contracts for parties, neither will it annul them, except to preserve its own majesty, and to serve the greater interests of the public." This case admirably suggests the features by which all the cases holding agreements of this character void or revocable are to be dis- tinguished. The test is, first, to determine if there is a sufficient consideration for the agreement, and, secondly, if the consideration itself is tainted with illegality. If there be no consideration at all, as is ordinarily the fact in cases of so-called naked or dry trusts, then it is like every other case of a promise without consideration, or of an offer not accepted. The agreement is not binding upon the promisor, and he may withdraw from it; not because it is against public policy, but because it is without consideration. So too, if the consideration be illegal, as it would be where holders of shares, representing in the aggregate a majority, agreed to control the elec- tion of directors, and through them the officers, for the purpose of parcelling out offices and salaries between themselves, or to enable one corporation to control another, or to obtain contracts from the corporation out of which the parties combining are to make a per- sonal profit. The agreement is illegal only because the considera- tion is illegal. Instances of the case of a dry trust are to be found in Griffith v. Jewett, supra, and Vanderbilt v. Bennett,^ and of corrupt consideration in Hafer v. N. Y. Co. and Gage v. Fisher, supra, Bostwick v. Chapman,^ and Cone v. Russell.^ In White v, Thomas Co.,* where it was contended that a con- tract for pooling shares and giving the minority shareholders the power to elect a majority of electors was contrary to public policy and void, the Court said that the weakness of that contention lay in the fact that the voting trust was a part of the original contract between the original parties, and "was made for a proper purpose, and for a good consideration." The consideration was the ad- vancement of cash by the promoters of the corporation, or^^anizcd to exploit a patent, and the substance of the agreement was that 1 2 Ry. & Cor. L. J. 409. » 48 N. J. Eq. 208. « 60 Conn. 553. * 38 Atl. Rep. 75 (N. J-).