Court Opinion

ID: 6655096
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:57:11.565123+00
Date Added: 2024-06-11T09:04:10.713198
License: Public Domain

The following opinion on motions for rehearing was filed October 7, 1903. Rehearing denied:
Pound, C.
It sometimes happens that a proposition, true enough in respect of the case in hand, is put in a general form which *116not only is broader than the decision to be rendered really requires, but is open to question in point of law. We think we fell into such an error in our former opinion in this cause. We stated, citing a well known text-writer, that “where a corporation has a fixed capital stock, divided into a definite number of shares, a majority of all the shares is necessary to ,a valid election, in the absence of. some rule to the contrary.” Haskell v. Read, ante, p. 107. Upon further examination, we find that the authorities cited do not entirely sustain the conclusion of the learned author, and that the question is one upon which there is some conflict of opinion. It is not essential to a disposition of the case at bar to pass upon that question, and we are of opinion that it should be left open.
The circumstances out of which the controversy as to the election arises are'these: After the district court had issued a temporary injunction, restraining Read from voting the twenty-two shares of stock in controversy, the annual meeting for election of officers came on. Upon production of the order of injunction, it became substantially impossible to hold an election, as the shares which could be voted were evenly divided between the contending factions, assuming that Haskell could vote the two shares he had pledged. Under these circumstances, all the stock being present, Read, as president, adjourned the meeting until the injunction proceedings could be determined. We are inclined to think that this was within his powers as presiding officer, in view of the impossibility of doing any business at the meeting. However this may be, the only proper course, for those who objected was to appeal from the ruling and put the matter to a vote. Procter Goal Co. v. Finley; 98 Ky. 405, 33 S. W. 188. It did not authorize the plaintiff and his faction, after lapse of some time, to convene what was in effect a new meeting and hold a valid election. Whatever may be the rule in case of stated meetings, or thos.e regularly called or convened, a minority of the shares, after failure of the stated meeting for the election of officers, can not call a new meeting on their own *117authority- and hold a binding election. To. permit this would be to concede to a minority of the shares the power to govern the corporation. This is not a case where a majority withdraw from a meeting regularly convened and suffer the minority to conduct it. Right or wrong, the president had adjourned the meeting in the presence of all the stockholders, and no appeal had been taken from his ruling. The attempt of plaintiff, after some time spent in consultation, to hold the meeting with less than a majority, was to all substantial purposes a new meeting.
We therefore recommend that the motions for a rehear-. ing be denied.
Barnes and Oldham, CC., concur.
By the Court: For the reasons stated in the foregoing opinion, it is ordered that the motions for a rehearing be denied.
Rehearing denied.