Blount v. Taft

Three families holding stock in a closely held corporation unanimously adopted bylaws in 1971 creating a family-representative executive committee with hiring-consent powers, while a separate bylaw provision allowed the board to amend or repeal any bylaw by simple majority vote. In 1974, the board, over the Blount family's objection, amended the executive-committee provision by a five-to-three vote. The Blounts sued, arguing the original 1971 bylaws formed a shareholders' agreement requiring unanimous consent to change; the trial court agreed and ordered specific performance, but the appellate court reversed, finding no shareholders' agreement existed, and the Blounts appealed.