This is an action by shareholders: First, to get reinstated as such in the corporation, and, second, to have certain acts of the defendant declared void as against them, or at all events to allow the plaintiffs to recover what they have respectively paid on their shares to the defendant.
The present status of these plaintiffs is that of persons holding forfeited shares in the corporation and with no right or standing in it at law, but claiming equitable relief, and through it restoration to their forfeited rights.
The first question to consider, then, is whether the evidence in the case entitles them to this equitable relief or to damages for-being wrongfully deprived of their shares by the defendant. The shares held by the plaintiffs were not paid-up shares nor had their weekly dues been kept up, which were necessary to preserve their shares and maintain a standing in the corporation. The shares were forfeited in the way pointed out by the constitution, and upon due notice at the same time that the shares of a number of others in like position with themselves were forfeited. The proceedings te forfeit were regular in all respects. They were taken upon a notice of sixty days to pay up or the shares would be forfeited. The plaintiffs Reed and Shuster had been in default upon their dues from March, 1892, to December 28, 1894. The plaintiff P. C. Sliutt was in default from August 31, 1891, to December 28, 1894. The plaintiff'Buker from October, 1894, to July, 1895.
The chief claim that the plaintiffs make to excuse their default is that the defendant’s officers refused to allow the plaintiffs to examine the books of the corporation, and they consequently could not learn the real condition of affairs so as to judge whether to keep *556up-the payments upon the shares. There is no proof of such demand in the record, hut it is claimed that the plaintiffs offered to prove such demand, and that- it was excluded by the trial court, which was error.
Our attention has been called to only the following attempts to make this proof: Smith, the secretary of the defendant, while upon the stand as a witness at the trial, was asked by the plaintiffs’ counsel if he did. not remember a time when Buker came to his office and -asked the witness to allow him to see the books of the association. This was objected to as immaterial, and sustained, to- which the plaintiff excepted. Later on the witness was asked if, within thirty days prior to April 3, 1895, Buker asked the witness to allow 'him to see the books, accounts, documents and securities of- the association. This was objected to as before and the objection sustained. It will be •observed, as to the first question ruled upon, that no time is fixed when the request to examine the- books was made. The other question points to about the 1st of March, 1895, which was several months after Buber was in default upon his payments and after he had apparently decided not to make any further payments; besides, Buker was a director and had access as such to the boo ks and papers of the corporation, and it is absurd to say that he. had not the oppor-' tunity from all his experience, as disclosed by the evidence in the affairs of the corporation, to learn its condition.
The plaintiff P. -Cameron Shutt was examined as a witness, and he was asked by the counsel if he made a demand of Steele (one of the defendant’s directors) to show him the books,- accounts and securities of the Leighton Lea Association. This was objected to and excluded, to which the plaintiffs’ counsel excepted. The time referred to was in the fall of 1894; that was' long after this plaintiff' was in default upon Ms payments. It does not seem that any demand was made by the other plaintiffs to examine the books and papers. The trial was before the court without a jury, and, conceding that it was - error to reject this evidence, we do not see how it could have affected the result. The refusal to pay the weekly dues on the part of the plaintiffs was, evidently, upon consideration. What opposition occurred to the proceedings to amend the constitution and complete the settlement with Culver and the syndicate in a number of nearly 200 shareholders came from these four plaintiffs. They had fair and full notice of the consequences that would follow *557their failure to pay their weekly dues. In the meantime it was necessary to carry on the business of the corporation, raise money to pay the incumbrances upon its property, determine who were the shareholders and who were not; who had not paid in full their shares and who were to do so in the future; and but one course was left open to the officers of the corporation, if they did their duty, and that was to enforce the dues which the delinquent shareholders had contracted to pay or to forfeit their shares.
The ease fails to disclose any equitable reason why the plaintiffs should be relieved from these forfeitures.
The plaintiffs’ counsel insists that the new constitution was not legally adopted and was void, and that we should so declare. A careful examination of this subject leads us to the conclusion that this constitution was legally adopted and is the law of the defendant and its shareholders.
The defendant is not a stock corporation; therefore, the law as to the issue of stock and the responsibility of stockholders, has no application to it. The point made by the plaintiffs’ counsel that, under section 42 of the Stock Corporation Law (Chap. 564 of the Laws of 1890, as amended by chap. 688 of the Laws of 1892), the provision in the amended constitution and in the contract of settlement, allowing the syndicate' members paid-up shares of $612 for the payment of $300 is void, is not tenable. That question cannot, in any event, be passed upon in this action, as the syndicate members are not parties to this action in such a sense that their individual rights to the shares can be passed upon.
Finally, the plaintiffs insist that the syndicate contract, which gave its members a bonus of $50,000, was fraudulent and void as against the plaintiffs, and this fraud was not eliminated, waived or settled by subsequent transactions and settlements between the syndicate and the defendant and the long-share holders, and it is the duty of the court so to declare in this case. The difficulty ‘ with this position is, that the defendant has settled ■ this matter and put • that settlement in its constitution, and has received substantial benefit by reason of such settlement, -and all these plaintiffs, in one form or another, with full knowledge of all the circumstances, have approved of and consented to it. They have, therefore, waived the right to raise this question here.
*558Even an unconscionable arrangement will not be disturbed where there has been a ratification of it with knowledge of all its bearings, after time has been had for consideration. (Kent v. Quicksilver Mining Co., 18 N. Y. 159.)
The syndicate had taken the initiative in securing the land necessary for the purpose of the incorporation of the defendant before it was organized. They had advanced money for that purpose, or had contracted to do so, but the long-share holders concluded that the syndicate members were'asking too much and were1 taking an unfair advantage of the other shareholders, and they rebelled, investigated, and finally it was all settled upon such reasonable terms as seemed to suit all, or nearly all, of the parties interested in the shareholder’s property. It was a compromise, which left the defendant in a much better situation than it was before. This compromise was made with full knowledge of all the circumstances, of the case. The parties in interest having made it, or assented to it, the court will not. disturb it;
The true rule in such cases was laid down in Gamble v. Q. C. W. Co. (123. N. Y. 99), by Peckham, J.,, speaking for the Court of' Appeals, where he says: “It is "not, however, every question of mere administration or of policy, in which there is a difference of" opinion among the shareholders, that enables the minority to claim that the action of the majority is oppressive, ánd which justifies the minority in coming to a court of equity to obtain relief. Generally the rule must be that in such cases the will of the majority shall govern. The court would not be justified in interfering, even in "doubtful cases where the action of the majority might be susceptible of different constructions." To warrant the interposition of the court in favor of the minority shareholders in a corporation or joint stock association as against the contemplated action of the majority, where such action is within the corporate powers, a case must be. made out which plainly shows tliat such action is so far opposed to the true interests of the corporation itself as to lead to the clear inference that no one thus acting could have been influenced by any honest desire to secure such interests, but that he must have acted with an intent to . subserve some outside purpose, regardless of the conseqxiences to the company and in a manner inconsistent with its interests.”
*559In another portion of the opinion, the learned judge says (at page 98): “ I think that where the action of the majority is plainly ■ a fraud upon, or, in other words, is really oppressive to the minority shareholders, and the directors or trustees have acted with, and formed part of the majority, an action may be sustained by one of the minority shareholders suing in his own behalf and in that of all others coming in, etc., to enjoin the action contemplated, and in which action the corporation should be made a party defendant.”
From the rule thus laid down, we must reach the conclusion in this case that the majority, in making the settlement with Culver and the syndicate, and in amending the constitution to enforce such settlement, acted in fraud of the rights of the minority, and in reckless disregard of its interests to sustain the plaintiffs’ contention in this respect.
We cannot find any evidence of this on the part of the majority. The whole proceeding of settlement and adjustment seems to have been with an honest desire to adjust all differences upon a fair basis, so that the corporation might proceed to transact its business and its shareholders in the future be protected in their rights; and we are not prepared to say but that they made' the very best settlement, under the circumstances, that could have been made.
The judgment appealed from should be affirmed, with costs.
Ah concurred, except Follett and Gbeen, JJ., dissenting.