Charlestown Boot and Shoe Co. v. Dunsmore

Supreme Court of NH

60 N.H. 85 (1880)



The shareholders of corporation P believed that Osgood needed to be hired to help with two board of directors:  Dunsmore and Willard.  The shareholders elected to Osgood to “close up its affairs.”  Dunsmore and Willard did not act in accordance with Osgood and continued to rack up debt for the corporation, because they did not want the business to close.


Whether P corporation via Osgood has control or Dunsmore and Willard.

Relevant Statute:

The business of every such corporation shall be managed by the directors thereof, subject to the by-laws and votes of the corporation, and under their direction by such officers and agents as shall be duly appointed by the directors or by the corporation.”


The board of directors, Dunsmore and Willard have control.  The statute clearly gives control to the directors, unless the bylaws proscribe otherwise.  “The statute does not authorize a corporation to join another officer with the directors, nor compel the directors to act with one who is not a director.”  The board of directors are to use “ordinary care” in running the corporation.

The court argued that it would be unreasonable to hold the board members responsible for managing the business, but then be compelled to act another person who suddenly has greater ability to control the acts of the shareholders.

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