Stokes v. Continental Trust Co. of City of New York

Stokes (plaintiff), an original shareholder holding 221 of Continental Trust's (defendant) 5,000 shares, voted along with other shareholders in 1902 to double the company's capital stock in order to sell the new shares to a banking firm, Blair & Co., at $450 per share; Stokes demanded, and was refused, the right to subscribe for a proportionate 221 new shares at par himself, though he had voted for the stock increase, he voted against selling the new stock to Blair & Co. The trial court found Stokes had a preemptive right to a proportionate share and awarded him the difference between the shares' market value and par value; the appellate court reversed, and Stokes appealed further.