Ringling Bros.-Barnum & Bailey Combined Shows v. Ringling case brief

Ringling Bros.-Barnum & Bailey Combined Shows v. Ringling case brief summary
53 A.2d 441 (Del. Sup. Ct. 1947)

CASE SYNOPSIS

Appellants challenged a judgment of the Delaware Court of Chancery for New Castle County, which found in favor of appellee in her suit to enforce the terms of a shareholders' agreement purported to bind one appellant's voting rights.

CASE FACTS
Appellee and individual appellant entered into agreement regarding their voting rights and duties with regard to shares in corporate appellant. After a dispute at a corporate meeting over an election of directors, appellee sued, arguing the agreement had required individual appellant to either vote for an adjournment of the meeting or for a particular slate of directors. Individual appellant contended the agreement was invalid.

DISCUSSION

• The court first held that an arbitration provision within the agreement gave the appointed arbitrator no substantive powers to enforce his decision. 
• The court then followed the rule that a shareholder could enter into a binding agreement with respect to the voting rights of corporate shares. 
• Thus, the court held that the agreement was binding. 
• However, the court refused to declare the election invalid in order to respect the voting rights of appellant shareholder who was not a party to the agreement, instead vacating one director's position that had not received a majority vote.

CONCLUSION
The judgment was modified, as the agreement between the shareholding parties was binding; however, rights of a shareholder not party to the agreement precluded invalidating the election.


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