It seems to be settled that if an agreement be made between creditors of a corporation and the stockholders, whereby the creditors forbear to proceed against the corporation, or for the purposes of obtaining further credit that stock be placed in the hands of trustees for the purposes of voting, such a voting trust is good. Mobile & 0. R. Co. v. Nicholas, 98 Ala. 92, 12 South. 723; Greene v. Nash, 85 Me. 148, 26 Atl. 1114.
In Mobile & 0. R. Co. v. Nicholas, 98 Ala. 92, 12 South. 723, the court was of opinion that the cases in which voting trusts were I considered illegal were based rather upon the ground of the unlawful purpose for which they were created than upon their intrinsic illegality, and it reached substantially the same result as the Reading railroad case cited above.
A contract to place the stock in the hands, of one of the parties, to be voted as a is not void, where the purpose was to vest the control for a fixed period in the persons who originally promoted the company; Gray v. Ry., 120 Ill. App. 159 ; so of a voting trust vested in the directors for five years, In or der to continue the policy of the company; Boyer v. Nesbitt, 227 Pa. 398, 76 Atl. 103, 136 Am. St. Rep. 890; and of a voting trust for twenty-five years, the trustees to vote as a majority should direct; Carnegie Trust Co. v. Ins. Co., 111 Va. 1, 68 S. E. 412, 31 L. R. A. (N. S.) 1186, 21 Ann. Cas. 1287; and an agree ment among stockholders that their stock shall be voted in a block, the vote to be de termined by ballot among them; Smith v. Ry. Co., 115 Cal. 584, 47 Pac. 582, 35 L. R. A. 309, 56 Am. St. Rep. 119; and an agreement to pool stock for three years, to be voted by a committee of five; Brightman v. Bates, 175 Mass. 105, 55 N. E. 809; and a mere voting trust in which the stockholders holding par ticipating shares chose a managing commit tee with power to direct the trustees in the voting of the stock and management of the company, its object being the benefit of all the stockholders equally and not tending to eliminate competition; Veneer v. Ry. Co., 258 Ill. 523, 101 N. E. 949. Contra, an agree ment to take from the stockholders the right to vote for three years; Sheppard v. Power Co., 150 N. C. 776, 64 S. E. 894 ; and any agreement to separate the beneficial and legal title to stock ; id.; and an agreement be tween a majority of the stockholders of a national bank which gave to voting trustees uncontrolled power to manage the bank for fifteen years; Bridgers v. Bank, 152 N. C. 293, 67 S. E. 770, 31 L. R. A. (N. S.) 1199 ; is void.
There must be some further consideration than the mutual concurrent acts of the stock holders in depositing their stock ; 2 Railw. & Corp. L. J. 409 (Vanderbilt v. Bennett); if there be none, then the right to vote will be revocable ; Harvey v. Imp. Co., 118 N. C. 693, 24 S. E. 489, 32 L. R. A. 265, 54 Am. St. Rep. 749 ; Smith v. Ry. Co., 115 Cal. 584, 47 Pac. 582, 35 L. R. A. 309, 56 Am. St. Rep. 119.
There has been a distinction drawn be tween combinations to control the voting power permanently and those to control it for a fixed, definite and reasonable period ; Hey v. Dolphin, 92 Hun 230, 36 N. Y. Supp. 627 ;
Brown v. Britton, 41 App. Div. 57, 58 N. Y. Supp. 353 ; and between a voting trust form ed for the carrying out of a certain policy and one where the management is left to the trustee ; Kreissl v. Distilling Co., 61 N. J. Eq. 5, 47 Atl. 471; Ohio & M. R. Co. v. State, 49 Ohio St. 668, 32 N. E. 933 ; and between an agreement by which several agree that stock shall be voted as one may direct, and an agreement that it shall be voted as a stranger may direct ; Clowes v. Miller, 60 N. J. Eq, 179, 47 Atl. 345.
An agreement between stockholders that they will, for five years, vote their aggregate shares as one body, to be determined by bal lot between them, is a proxy to vote as a majority directs; Smith v. R. Co., 115 Cal. 584, 47 Pac. 582, 35 L. R. A. 309, 56 Am. St. Rep. 119.
It has been assumed that a voting trust is in the nature of a proxy, and as such revoca ble; Vanderbilt v. Bennett, 6 Pa. Co. Ct. R. 193; Sbepaug Voting Trust Cases, 60 Conn. 553, 24 Atl. 32. And statutes limiting the cre ation of proxies have been construed as ap plying to the creation of trusts; Shepaug Voting Trust Cases, 60 Conn. 553, 24 Atl. 32.
It has been held that the power to vote is inseparable from the ownership of each share ; Harvey v. Improvement Co., 118 N. C. 699, 24 S. E. 489, 32 L. R. A. 265, 54 Am. St. Rep.. 749 ; Shepaug Voting Trust Cases, 60 Conn. 553, 24 Atl. 32 ; Griffith v. Jewett, 15 L. Buil. (Ohio) 419 ; but in Boyer v. Nesbitt, 227 Pa. 398, 76 Atl. 103, 136 Am. St. Rep. 890, it was held that this might be jus tified where there was some proper interest to conserve.
The Pennsylvania act of May 26, 1893, disqualifies the holder of the bare legal title to stock from voting thereon, if challenged, and enables the beneficial owner, upon proper proof at the meeting, to vote his stock. A holder's right to vote such stock is revocable by the real owner ; Com. v. Roydhouse, 233 Pa. 234, 82 Atl. 74 ; but a voting trust has been upheld in Pennsylvania ; see cases cited herein.
If has been held that an attempt to dis solve a voting trust by one whose shares are not in the trust cannot be successful ; Zim mermann v. Jewett, 19 Abb. N. C. (N. Y.) 459.
One holding, a voting trust certificate in a corporation is a proper person to apply for a receiver, the statute authorizing "any cred itor or shareholder" to bring a bill ; U. P. Independent Tel. Co. v. O'Grady, 75 N. J. Eq. 301, 71 Atl. 1040.
See 44 Am. L. Reg. & Rev. 413, where a form of certificate is given and the cases are collected by Charles H. Burr, Jr., who finds a definite formulation of conclusions to -be im possible. See Smith v. Ry. Co., 115 Cal.-584, 47 Pac. 582, 35 L. R. A. 309, 56 Am. St. Rep. 119; Morel v. Hoge, 130 Ga. 625, 61 S. E. 487, 16 L. R. A. (N. S.) 1136, 14 Ann. Cas. 935; 42 Am. L. Rev. 133; STOCKHOLDER;