William E. D. Stokes, Appellant v. Continental Trust Company of the City of New York, Respondent

Summary

The New York Court of Appeals held that a stockholder has an inherent pre‑emptive right to a proportionate share of newly issued stock when the increase is for money, and that the corporation must offer the stockholder the opportunity to purchase his share at the price fixed by the shareholders before selling to a third party. The plaintiff was entitled to damages measured as the difference between the fixed price of $450 per share and the market value of $550 per share, resulting in a reduced award of $22,100 with interest. The Court reversed the Appellate Division’s judgment and affirmed the modified trial judgment. Justice Haight, dissenting, argued that the plaintiff had waived his right by demanding purchase at par and therefore should not receive damages.