Jones v. Wallace

Under the Oregon Business Corporation Act, a shareholders’ meeting requires a quorum of a majority of the voting shares unless a different quorum is provided in the articles of incorporation. ORS 57.165. The issue before us here is whether a 100 percent quorum requirement that is adopted as a corporate bylaw but not in the articles, as the statute provides, nevertheless may be enforced as a binding agreement among the shareholders of a closely held corporation by setting aside corporate action taken without such a quorum.

In 1972, when defendant Wallace was the sole shareholder of Capital…