Case ID: nys_20/html/0495-01.html
Source: Caselaw Access Project
Author: {"author": "Van Brunt, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In re Election of Directors of Germicide Co.
    
      (Supreme Court, General Term, First Department.
    
    October 20, 1892.)
    1. Corporations—Stockholder—Proxy as Security.
    Laws 1892, c. 564, § 54, relating to corporations, provides that no stockholder shall still his vote or issue a proxy to vote on any stock or bond for any sum of money or anything of value. Held, that a proxy delivered by a stockholder to another person as security for a debt was void.
    '2. Same—Revocation.
    A proxy of a stockholder, purporting to be irrevocable, or one that is coupled with an interest, is void, under Laws 1892, c. 564, relating to corporations, which provide that every proxy shall be revocable at the pleasure of the person execut ing it.
    Appeal from special term, New York county.
    Application by Albert H. Leyton, a stockholder of the Germicide Company ■of New York, to have the election of directors of said company set aside, and a new election ordered. From an order denying the application, Leyton appeals. Affirmed.
    Argued before Van Brunt, P. J., and O’Brien, J.
    
      A. L. Sanger, for appellant. Palmer, Boothby & Warren, (J. W. Boothby, of counsel,) for respondent.
   Van Brunt, P. J.

One Cohn, being indebted to one Feuchtwang'er, had pledged, as collateral security for the payment of the indebtedness, certain stock of the Germicide Company, standing in his name, and delivered, as additional security, to one Isaacs, an irrevocable proxy for voting upon said •stock, said proxy to be used by said Isaacs or by his successors. Isaacs duly appointed one Sanger as his successor and substitute; and as such substitute, at the annual meeting of the company, said Sanger offered to vote upon the stock which had been pledged to Feuchtwanger, and which was standing in the books of the company in the name of said Cohn; and, if his vote had beén Accepted, the candidates for which Sanger offered to vote would have been elected at said election. Cohn undertook to revoke the power which had been executed .by him to Isaacs.- The inspectors thereupon refused the vote offered by Sanger, and accepted the vote offered by Cohn, Sanger protesting against their receipt; This motion was thereupon made to set aside the election, and, the.same having been denied, from the order thereupon entered this appeal is taken.

It is urged that the proxy given by Cohn to Isaacs was irrevocable, because such proxy was coupled with an interest, and was given for a valuable consideration ; and it is attempted to liken the proxy to a power of attorney, which, when coupled with an interest, is irrevocable. But the difficulty with the ■position of the appellant is that section 54, c. 564, Laws 1892, (which was an act in relation to corporations,) expressly provides that no stockholder shall •sell his vote, or issue a proxy to vote upon any stock or bond, for any sum of money or anything of value. Therefore the act has expressly prohibited parties from issuing a proxy coupled with' an interest.

But, if this was not a sufficient answer to the application, another provision -of the same act provides that every proxy shall be revocable at the pleasure. of the person executing it. It is the policy of the law that proxies shall not be made irrevocable, and, in order to voice that policy in the strongest and most unmistakable language, the legislature have expressly provided that stockholders in corporations shall not issue a proxy coupled with an interest; and, further than that, that every proxy issued by a stockholder shall be revocable. Parties cannot, by agreement, repeal acts of the legislature. It might just as well be said that the usury laws could be repealed by parties entering into an agreement that 7 per cent, should be paid upon a loan, and that the debtor would not plead usury. The order should be affirmed, with $10 costs and disbursements.