Sunday, November 24, 2013

Globe Woolen Co. v. Utica Gas & Electric Co. case brief

Globe Woolen Co. v. Utica Gas & Electric Co. case brief summary
121 N.E. 378 (1918)


CASE SYNOPSIS
Plaintiff company appealed from the judgment of the Appellate Division of the Supreme Court in the Third Judicial Department (New York) that affirmed a judgment of the trial court to annul contracts made with defendant electric company.

CASE FACTS
The company, which operated mills, brought this action against the electric company to compel the specific performance of contracts to supply electricity to the mills. The electric company argued that the contracts were made under the dominating influence of a common director and that their terms were unfair and oppressive. The trial court held in favor of the electric company and annulled the contracts, and the appellate court affirmed.

DISCUSSION

  • In affirming this judgment, the court held that the common director's refusal to vote on the contracts did not nullify the influence and predominance that he had exerted in arranging the contracts. 
  • The court found that as a result of the contracts, the electric company was losing large amounts of money and that such consequence was foreseeable to the common director who stood by and said nothing while the contracts were presented to the other directors of the electric company as a mere formality.

CONCLUSION
The court affirmed the judgment in favor of the electric company, which annulled contracts that it made with the company.

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