Case ID: misc_35/html/0424-01.html
Source: Caselaw Access Project
Author: {"author": "Nash, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The People ex rel. Frederick C. Kuefer, Relator, v. The Supreme Tent of the Maccabees of the World, Respondent.
    (Supreme Court, Monroe Special Term,
    July, 1901.)
    Benefit order — Membership — Status of a director in a corporation.
    A director of a corporation manufacturing and selling malt liquors is not within the prohibition of the laws of a fraternal order making ineligible to membership therein any person who “is engaged either as principal, agent or servant in the manufacture or sale of * * * malt * * * liquors as a beverage,” as a director is in no sense the principal, agent or servant of his corporation in the transaction of its business.
    Application for a writ of mandamus.
    James M. E. O’Grady, for relator.
    Love & Quackenbush, for respondent.
   Nash, J.

The question here is whether the relator “ is engaged either as principal, agent or servant in the manufacture or sale of spirituous, malt or vinous liquors as a beverage.”

The relator is a stockholder and one of the directors of the Miller Brewing Company, a corporation engaged in the manufacture and sale of malt liquors.

It is conceded that as_ a stockholder of the corporation the relator is not within the prohibition of section 142 of the laws of the Knights of the Maccabees, which provides that no person shall be eligible to membership in the order who is engaged either as principal, agent or servant in the manufacture or sale of spirituous, malt or vinous liquors as a beverage.

“ The individual shareholders of a corporation aggregate have no implied authority to represent the company for any purpose, or to interfere with the management of its business in any respect. But it is implied that the majority present at a regularly called shareholders’ meeting shall exercise a general supervisory power over the corporate affairs, and shall have authority to appoint the board of directors, or other agents who have the active management of the company’s business in their charge.” Morawetz Corp., § 503.

The directors of a corporation have no implied authority to act singly; they can act only as a board. Either all must be present at a m'eeting, or the meeting must be called in a regular manner and all the directors given notice; and in the latter ease, if a majority assemble they may act by a majority vote. A majority of the directors form a quorum in the absence of a different regulation, and a majority of the quorum determine the action of the board. Morawetz, § 531.

A director has no greater authority or power to act individually for a corporation than a stockholder. A director taking part in meetings of the directors is no more a principal, agent or servant in the management of the business of the corporation than is a stockholder who takes part in the meetings of the stockholders. Neither can be regarded in any sense as a principal, nor as agent or servant in the transaction of the business of the corporation.

If it was intended to exclude from membership the directors or officers of a corporation not directly engaged in the transaction of its business the by-laws should have said so. If there were an ambiguity in the phrase defining eligibility to membership, it would be resolved against the respondent. But there is none. Within the well-settled rules applicable to the relations existing between the directors and the body corporate, the relator individually in his capacity as director of the Miller Brewing Company cannot be regarded as either a principal or the agent or servant of the corporation.

Findings awarding the writ in accordance with the prayer of the petition may be submitted.

Writ granted.