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Business Associations Keyed to Coffee, 9th Ed.
Clark v. Dodge
Citation:
269 N.Y. 410, 199 N.E. 641 (1936)Facts
In 1921, Clark and Dodge entered into a written agreement as the sole shareholders of two New Jersey corporations (Bell & Company, Inc. and Hollings-Smith Company, Inc.) that manufactured medicinal preparations using secret formulas known only to Clark. Under the agreement, Dodge promised to vote his shares and use his position as director to ensure that Clark would: (1) continue as a director, (2) remain general manager as long as he was “faithful, efficient and competent,” (3) receive one-fourth of the net income through salary or dividends, and (4) not have his income reduced by unreasonable salaries paid to others. In exchange, Clark agreed to disclose the secret formula to Dodge’s son and bequeath his stock to Dodge’s wife and children if he died without issue. Clark alleged that Dodge breached the agreement by failing to maintain him as director and general manager and by preventing him from receiving his share of income through wasteful practices.
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