Court Opinion

ID: 5040668
Source: CourtListenerOpinion
Date Created: 2021-10-01 06:37:00.399463+00
Date Added: 2024-06-11T08:18:35.452247
License: Public Domain

ON MOTION FOR REHEARING
PER CURIAM.
In their petition for rehearing, appellants are correct in stating that the opinion does not treat of the fact that only ten directors were elected at the respondents’ shareholders’ meeting of December 6, 1970, when the by-laws, as amended, provide that twelve directors shall be elected. The trial court did, however, cover the matter in its finding by observing that the by-laws provide that officers, who are not directors, are members of the board of directors, which could make a board of the maximum size of seventeen. The court concluded that Francis Ross and Katherine Koch held unexpired terms, making a board of fifteen persons. Because Lewis Ellis and Francis Ross were present along with the five officers as ex-officio members of the Board of Directors, there was a quorum present of more than one-third. The shareholders’ actions, in the opinion held to be valid, should not be held to be a nullity because of failure to elect the full number. Those duly elected, and the holdover members, along with the officers may continue to conduct the association’s business and functions, and the matter may be corrected by a future annual shareholders’ meeting (if in the interim years corrective action has not been taken). “An election of a less number of directors than the number which the meeting was called to elect is valid as to those actually elected.”, 2 Fletcher, Cyclopedia Corporations, Sec. 291, p. 77; State v. Du Brul, 100 Ohio St. 272, 126 N.E. 87, 90; In re Excelsior Insurance Company, (N.Y.) 38 Barb. 297, 300, “As before suggested, an omission to elect the full number will not vitiate the election of the residue”; In the Matter of Union Ins. Co. (N.Y.), 22 Wend 591; 19 Am.Jur.2d, Corporations, Sec. 1083, p. 531 ; 19 C.J.S., Corporations, Sec. 716, p. 34; Schmidt v. Mitchell, 101 Ky. 570, 41 S.W. 929, 933; and Wright v. Commonwealth, 109 Pa. 560, 1 A. 794, 796. In this and all other respects, the petition for rehearing is overruled.