Rogers v. Hill case brief summary
289 U.S. 582
SYNOPSIS: Certiorari was granted to the Circuit Court of Appeals for the Second Circuit, in a case where plaintiff shareholder challenged the validity of bylaws authorizing payments of the specified percentages of profits to officers as compensation in addition to their salaries.
OVERVIEW:
Plaintiff stockholder brought suit against defendants company officers challenging the validity of a bylaw. Plaintiff alleged that the bylaw, which authorized payments of specified percentages of profits to officers as compensation in addition to their salaries, was invalid and that amounts paid were unreasonably large. The district court dismissed plaintiff's complaint and the court of appeals affirmed.
HOLDING:
The United States Supreme Court reversed the decree of the court of appeals, vacated the decree of the district court dismissing the complaint, and remanded the case to the district court to reinstate the decree granting an injunction pendente lite.
-The Court held that stockholders were authorized to adopt the bylaw.
ANALYSIS:
The Court also rejected plaintiff's argument that directors were required to apply all profits to acquisition of property and payment of dividends, holding that profits included sums to be paid to officers. The Court also held that although percentages were not per se unreasonable, the payments had become large enough to warrant investigation.
OUTCOME: The Court reversed the decree of the court of appeals, vacated the decree of the district court dismissing the complaint, and remanded the case to the district court to reinstate the decree granting an injunction pendente lite and for further proceedings; the court held that the bylaw was valid but that payments had become large enough to warrant investigation.
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289 U.S. 582
SYNOPSIS: Certiorari was granted to the Circuit Court of Appeals for the Second Circuit, in a case where plaintiff shareholder challenged the validity of bylaws authorizing payments of the specified percentages of profits to officers as compensation in addition to their salaries.
OVERVIEW:
Plaintiff stockholder brought suit against defendants company officers challenging the validity of a bylaw. Plaintiff alleged that the bylaw, which authorized payments of specified percentages of profits to officers as compensation in addition to their salaries, was invalid and that amounts paid were unreasonably large. The district court dismissed plaintiff's complaint and the court of appeals affirmed.
HOLDING:
The United States Supreme Court reversed the decree of the court of appeals, vacated the decree of the district court dismissing the complaint, and remanded the case to the district court to reinstate the decree granting an injunction pendente lite.
-The Court held that stockholders were authorized to adopt the bylaw.
ANALYSIS:
The Court also rejected plaintiff's argument that directors were required to apply all profits to acquisition of property and payment of dividends, holding that profits included sums to be paid to officers. The Court also held that although percentages were not per se unreasonable, the payments had become large enough to warrant investigation.
OUTCOME: The Court reversed the decree of the court of appeals, vacated the decree of the district court dismissing the complaint, and remanded the case to the district court to reinstate the decree granting an injunction pendente lite and for further proceedings; the court held that the bylaw was valid but that payments had become large enough to warrant investigation.
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Interested in learning how to get the top grades in your law school classes? Want to learn how to study smarter than your competition? Interested in transferring to a high ranked school?
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