Sunday, November 24, 2013

Blount v. Taft case brief

Blount v. Taft case brief summary
246 S.E.2d 763 (1978)


CASE SYNOPSIS
Plaintiff shareholders challenged the decision of the North Carolina Court of Appeals, which held that there was no evidence to support the conclusion of the trial court that a section of the shareholders' agreement contained within the bylaws could not be amended as provided in another section of the bylaws or the conclusion that said section was not validly amended three years later at the board of directors meeting.

CASE FACTS
A majority of the shareholders amended, pursuant to the amendment procedure stated in the bylaws, a bylaw that had created an executive committee on which each of the shareholder factions was to have equal representation and by which hiring decisions had to be unanimously approved.

DISCUSSION

  • The court held that the trial court's finding that all the shareholders of the corporation, by unanimous vote, had adopted the initial set of bylaws was supported by plenary competent evidence. 
  • The court held that the section of the bylaws at issue was a shareholders' agreement within the meaning of N.C. Gen. Stat. § 55-73(b). 
  • There being no internal provision in that bylaw section or elsewhere in the bylaws prohibiting the section's amendment except by unanimous consent of the shareholders, the court concluded that the parties intended that bylaw section to be subject to amendment by the directors or shareholders according to the procedures applicable to the other bylaws; in any event, that was the agreement they made. 
  • The court held that enforcement of the amendment procedures contained in the bylaws would not contravene any principle or equity or public policy.

CONCLUSION
The action of the court of appeals in reversing the judgment of the trial court was affirmed.

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