Managers and the Legal Environment 7th Edition by David Madsen, Constance Bagley

Exercise 8

Francis McQuade was the manager of the New York Giants baseball team. Charles Stoneham (father of Horace Stoneham, who acquired the baseball franchise in 1936 and moved it from New York to San Francisco in 1958) owned a majority of the stock of the company that owned the Giants and sold shares in that company to McQuade and John McGraw. As part of this transaction, these three shareholders each agreed to use his best efforts to continue to keep each of the others as directors and officers of the company at their present salaries. Stoneham and McGraw subsequently failed to use their best efforts to continue to keep McQuade as a director and treasurer of the company. McQuade sued for specific performance of the agreement. What result? [McQuade v. Stoneham, 189 N.E. 234 (N.Y. 1934).]