## Facts

- Old Dominion Copper Mining and Smelting Company was organized in 1895 after two individuals, Lewisohn and Bigelow, assembled mining properties and options through a syndicate.
- The alleged plan was to form a new corporation, sell the properties to it at a marked-up price, and later sell additional shares to the public without disclosing the promoters’ profit.
- Old Dominion, after becoming organized and increasing its capital stock, acquired the mining properties at the advanced price, largely paying with its own shares.
- At and shortly after the transaction, substantially all issued shares were held by the promoters, syndicate members, or persons aligned with them; later, a large majority of the stock (alleged as thirteen-fifteenths) was held by persons who participated in or assented to the transaction with knowledge.
- After later public investors bought shares and learned of the promoters’ profit, Old Dominion (under new shareholder influence) sued Lewisohn’s estate seeking rescission of the sale or damages for fraud and breach of promoter duty.

## Issues

1. Whether a corporation may repudiate a transaction after its shareholder composition changes, when the corporation previously assented to the transaction through those who then owned substantially all its stock.
2. Whether the corporation may impose the full consequences of the transaction on a single promoter when a dominant majority of shareholders were parties to, or knowingly approved, the deal.

## Decision

- The Supreme Court affirmed dismissal of the bill on demurrer.
- The Court held that the corporation’s legal identity is unchanged by changes in shareholders or an increase in capital stock; prior corporate assent remains binding.
- Because the transaction was assented to through shareholders who owned and controlled substantially all the stock at the time (and a large majority later), the corporation could not later disaffirm the deal to obtain rescission or damages from Lewisohn’s estate.

## Legal Principles

- A corporation’s identity does not change with changes in membership or increases in capital stock; its earlier corporate actions remain binding on the same legal entity.
- Corporate relief for promoter self-dealing may be unavailable where the corporation, acting through those who then owned substantially all shares, knowingly assented to the transaction.
- A corporation should not be permitted to disregard its prior assent to shift the entire loss of a transaction onto one participant when most of the stockholders were parties to, or knowingly benefited from, the transaction.

## Conclusion

The Court denied rescission and damages because Old Dominion’s assent to the challenged sale—given when the corporation was controlled by stockholders who participated in or approved the promoters’ profit-making plan—remained binding despite later changes in ownership, and the corporation could not use later shareholder dissatisfaction to relitigate an earlier approved transaction.


Old Dominion Copper Mining & Smelting Co. v. Lewisohn, 210 U.S. 206 (1908)