Beale v. Columbia Securities Co.
Beale v. Columbia Securities Co.
Opinion of the Court
This is a petition for a writ of mandamus brought against the defendant corporation and the respondent, Charles M. Cram, who was the clerk of the corporation on April 16, 1925, on which date a special meeting of the stockholders was held to elect a treasurer, clerk, directors and other officers, and for other purposes referred to in the notice of the meeting. A single justice of this court, before . whom the case was heard, ruled that as matter of law the petition be dismissed, to which ruling the petitioner excepted.
The petitioner contends that he was duly elected clerk of • the corporation at the meeting above referred to. Article 5, Section 1, of the by-laws of the corporation is as follows: “The annual meetings of the stockholders shall be held at the office of the corporation in Boston, on the third Tuesday in January in each year after 1910, and a majority in interest of stock, entitled to vote at such meeting, issued and outstanding shall constitute a quorum. The preferred stock being restricted as to voting power, under articles of Association.” The special meeting so held was in lieu of the annual meeting. At this special meeting a roll call showed the following shares present or represented:
“Estate of D. M. James by A. M. Beale, Admr. 143 shares common, 27 shares preferred;
“H. J. James, 422 shares common and 44 shares preferred;
“Estate of D. W. James, Alice James, Admrx. represented by H. J. James proxy, 340 shares common and 55 shares preferred.”
No other stock was present or represented. The total number of shares of stock, issued and outstanding was twelve hundred and eighty-two shares of common and one hundred and seventy-three of preferred.
The answer to that question depends upon whether a quorum was present in accordance with article 5, section 1, of the by-laws. This by-law in plain language provides that a majority in interest of stock “entitled to vote at such meeting, issued and outstanding shall constitute a quorum.” Since the voting at this meeting of the stock belonging to the estate of D. W. James had been specifically restrained and enjoined by order of the Superior Court, it could not lawfully have been voted. It follows that it was not “entitled to vote.” The fact that it was present did not entitle it to be voted, in view of the restraining order. No action could be taken at the meeting in the absence of a quorum as defined by the by-law. Where a corporation by its by-laws defines what shall constitute a quorum, it means a quorum for the transaction of business. This is not like a case where stock is present and entitled to vote but the holders of it refrain from voting. The effect of the restraining order, while it remained in force, was to prevent a quorum being present and entitled to vote at a meeting of the stockholders.
The single justice rightly ruled that as matter of law the. petition should be dismissed.
Exceptions overruled.
Reference
- Full Case Name
- Arthur M. Beale v. Columbia Securities Company & another
- Cited By
- 1 case
- Status
- Published