Fearn v. George K. Culp, Inc.

The plaintiff in this case alleged a cause of action as salary for services said to have been rendered by his assignor, as vice-president of the defendant corporation, for two months and a half of the year 1922. The plaintiff recovered a sum which would equal a salary fixed at the rate of $1,000 a month with interest.

The complaint sets out that the plaintiff’s assignor was duly appointed vice-president on or about March 15, 1922, and held that office until June first of that year and discharged all the duties and services prescribed for his office;' that his salary was regularly fixed at the rate of $12,000 a year, payable in monthly installments of $1,000 each; that he had been paid $250 on account of the salary which left a balance of $2,250. There is then an allegation of the assignment to the apparently nominal plaintiff.

The testimony shows, and it is now conceded by plaintiff, that the so-called stockholders’ meeting at which the plaintiff’s assignor was elected a director, together with another, who knew nothing about such election, was illegal and void because of the failure to hold such meeting at the principal place of business of the corporation, which, was in Wilmington, Del., but it is sought to hold the election of vice-president a legal one by the device of considering the stockholders’ meeting as not held at all, looking only to a directors’ meeting which was held immediately afterwards by three out of five of the then directors who were legally considered as such directors before the meeting. There was no notice of this meeting of any character established, either appearing from the minutes of the company or from any other proof. In fact, the sole testimony relevant to the meeting by the secretary is that he sent no notice to anybody. The three legal directors, who had assembled for the so-called stockholders’ meeting prepared to create a new office of second vice-president, proceeded thereafter to elect the plaintiff thereto at a so-called directors’ meeting. At the stockholders’ meeting, illegal concededly, there was no new office of vice-president created, and plaintiff could not be elected thereto. Therefore, the expedient- is resorted" to of considering him as appointed to a subordinate office of vice-president under a by-law of the company which permits the election or appointment *27by the board of directors of such subordinate officers as they see fit to so appoint or elect. This procedure cannot hold under the complaint, the testimony and the charge of the learned court. The complaint is one based upon a regular appointment by election to an office in which a salary was regularly fixed by a proper resolution of the company. The proof shows an illegal meeting creating an office, an illegal appointment by a directors’ meeting not properly called, and the court’s charge states that if there were any informality in the election of the plaintiff as vice-president the jury might consider whether or not the action, if informal, was afterwards ratified by the defendant. The learned trial court then stated that if it was ratified, such “ ratification, the making good of the informal election, if you find there was such informal election, dated back to the time when plaintiff first began to serve as vice-president under what he claims was the election.” This charge put an element into the case which was not in the pleadings, the proof nor in any request to charge that appears in the record. This was called to the trial court’s attention, and an exception was taken which indicated to the court that defendant objected to the jury considering the plaintiff’s employment, as established through ratification, but the learned court declined to charge further on that point, and stated that plaintiff must prevail on the fact that he was elected to this position and that he served and performed his duties as vice-president and was not paid, which excluded the idea of ratification as the basis for recovery, since if he was elected, there was no need for ratification. This left the matter in such confusion that the jurors could not have understood the applicable principles of the law.

The judgment and order should, therefore, be reversed, with costs, and the complaint dismissed, with costs, for variance, but not on the merits.

Dowling, P. J., Merrell, Finch and Proskauer, JJ., concur.

Judgment and order reversed, with costs, and complaint dismissed, with costs, for variance, but not on the merits.