Peck v. Horst

Supreme Court of Kansas

Peck v. Horst

272 P.2d 1061, 176 Kan. 581, 1954 Kan. LEXIS 401

CourtSupreme Court of Kansas

DecidedJuly 6, 1954

Docket39,258

StatusPublished

Cited by1 cases

This text of 272 P.2d 1061 (Peck v. Horst) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Peck v. Horst, 272 P.2d 1061, 176 Kan. 581, 1954 Kan. LEXIS 401 (kan 1954).

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Opinions

Thiele, J.

(dissenting); 'Although I did not dissent from the original opinion, the motion for a rehearing and the second oral argument have caused me to re-examine our original opinion and to reach the conclusion that even though the plaintiff’s demurrer to the defendants answer might not have been good, the disposition made in our original opinion and particularly as reflected in the first paragraph of the syllabus is too broad, leaves a wrong impression as to future proceedings in the action, and should be changed.

To call the contract a voting trust and management agreement is misleading in particulars. It is true that three persons were named as trustees with the right to vote the shares but the so-called trust goes far beyond that and provides for the conduct of the [582]*582business by those trustees and not by any board of directors and they are to be paid for services, not as directors but as managing trustees, each the sum of $100 per month or one-third of twenty per cent of the corporate net profits, whichever is greater, and to be reimbursed for their actual expenses.

In a true voting trust the trustee represents the trustor personally but the instant contract provides that if the trustor discharge his trustee, or if the trustee resign, the judge of the district court, not the trustor, appoints the successor. The statute providing for voting trusts authorizes no such an arrangement. See G. S. 1949, 17-3307.

Further the contract is indivisible and the provisions as to management by the trustees cannot be separated from the voting rights. The provisions as to management nullify the charter of the corporation and its bylaws and set aside all portions of the general corporation code for the conduct of the business of the corporation.

Further the provision that a trustee shall be paid corporate assets for his services, in the manner provided by the contract, and that under it he is in a position to say whether any dividends shall be declared payable to his trustor, are not only not recognized by our corporation code but seem to me contrary to good faith and against public policy. And whether so intended or not, the whole agreement is not a voting trust agreement but an abdication by the stockholders of their right and duty to have the corporation managed and controlled in the manner provided by statute. Other provisions of the contract of lesser importance, although subject to analysis and criticism, will not be reviewed.

Harvey, C. J., concurs in the foregoing dissenting opinion.

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Thiele, J.

(dissenting); 'Although I did not dissent from the original opinion, the motion for a rehearing and the second oral argument have caused me to re-examine our original opinion and to reach the conclusion that even though the plaintiff’s demurrer to the defendants answer might not have been good, the disposition made in our original opinion and particularly as reflected in the first paragraph of the syllabus is too broad, leaves a wrong impression as to future proceedings in the action, and should be changed.

To call the contract a voting trust and management agreement is misleading in particulars. It is true that three persons were named as trustees with the right to vote the shares but the so-called trust goes far beyond that and provides for the conduct of the [582]*582business by those trustees and not by any board of directors and they are to be paid for services, not as directors but as managing trustees, each the sum of $100 per month or one-third of twenty per cent of the corporate net profits, whichever is greater, and to be reimbursed for their actual expenses.

In a true voting trust the trustee represents the trustor personally but the instant contract provides that if the trustor discharge his trustee, or if the trustee resign, the judge of the district court, not the trustor, appoints the successor. The statute providing for voting trusts authorizes no such an arrangement. See G. S. 1949, 17-3307.

Further the contract is indivisible and the provisions as to management by the trustees cannot be separated from the voting rights. The provisions as to management nullify the charter of the corporation and its bylaws and set aside all portions of the general corporation code for the conduct of the business of the corporation.

Further the provision that a trustee shall be paid corporate assets for his services, in the manner provided by the contract, and that under it he is in a position to say whether any dividends shall be declared payable to his trustor, are not only not recognized by our corporation code but seem to me contrary to good faith and against public policy. And whether so intended or not, the whole agreement is not a voting trust agreement but an abdication by the stockholders of their right and duty to have the corporation managed and controlled in the manner provided by statute. Other provisions of the contract of lesser importance, although subject to analysis and criticism, will not be reviewed.

Harvey, C. J., concurs in the foregoing dissenting opinion.

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272 P.2d 1061, 176 Kan. 581, 1954 Kan. LEXIS 401, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peck-v-horst-kan-1954.

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