Court Opinion

ID: 9779288
Source: CourtListenerOpinion
Date Created: 2023-08-29 21:43:37.481695+00
Date Added: 2024-06-11T07:33:24.934312
License: Public Domain

ON MOTION FOR REHEARING
Several new contentions are raised in plaintiffs’ motion for rehearing. First, plaintiffs argue that equitable relief was necessary before completion of the election to prevent defendants from soliciting additional proxies and manipulating the election so as to deprive plaintiffs and other stockholders of their right to vote. Plaintiffs rely on the trial court’s finding that defendants “threatened to keep the voting polls at said meeting open an unreasonable period of time in order to increase management’s vote and to diminish Plaintiffs’ vote.”
This finding was challenged in defendants’ original brief as without support in the evidence. If supported by evidence, it could not justify the court’s adjudication of the result of the election and the membership of the board of directors in an action against the election officials alone. At most, it might have supported an order requiring defendants to close the polls. We do not decide whether this limited relief would have been proper, since that question has not been presented to us. In any event, it is now unnecessary because defendants have precluded themselves from accepting any additional ballots by the affirmative allegation in their answer “that voting for the election of directors was closed prior to November 10, 1972, and that Defendant Julian Meer certified the results of the election to the chairman of the meeting of the stockholders and President of the Corporation and that such certification was duly accepted and formally announced prior to November 10, 1972.” Although plaintiffs deny the factual accuracy of this allegation, and the trial court found to the contrary, it is a judicial admission binding on defendants. Consequently, we can assume that no more votes will be accepted.
Plaintiffs also contend that they have been deprived of their voting rights without due process by our holding that the election inspector has discretionary authority to determine the validity of proxies. We were careful to point out that since the inspector’s authority is not defined by statute or bylaw, any decision he makes in accepting and tabulating votes is only for the purpose of an initial declaration of the result and cannot bind the opposing candidates or the courts in post-election litigation. Plaintiffs insist, however, that due process requires judicial review of the inspector’s decisions before the result is de-*632dared. We hold that due process does not require judicial review of each step in a corporate election. Judicial scrutiny after the election is enough in the absence of extraordinary circumstances not shown here. In extraordinary cases, corporate election officials who fail to perform their duties may be required to do so, as may public election officials, but in such a case the court should not undertake to determine the result before the votes have been canvassed and the result has been formally declared.
Here plaintiffs have failed to show that defendants have done anything that would deprive plaintiffs of an effective post-election determination of their rights. On the contrary, the inspector was careful to tab-lulate all the votes, even those cast under the disputed proxies, in order that the validity of the proxies could be judicially ascertained. Except for the inspector’s failure to accept these proxies, none of the election irregularities found by the trial court appear to have had any effect on the result.
Plaintiffs insist that availability of quo warranto is not ground for denying equitable relief because under Tex.Rev.Civ.Stat. Ann. art. 6253 (Vernon 1970) quo warran-to is cumulative of other available remedies. We do not hold that quo warranto is the only remedy available to the losers in a proxy contest. We hold that stockholders are not entitled to extraordinary mandatory relief against the election officials before completion of the election without showing that their voting rights could not be fully protected after the election in a suit, such as a proceeding in quo warranto, in which the claims of all interested candidates may be presented and finally adjudicated. Quo warranto is normally an appropriate remedy for determining issues affecting the result of an election, such as the validity of disputed proxies, according to the authorities cited in our original opinion.
Finally we reject plaintiffs’ claim that Article 6253 is unconstitutional because it makes protection of voting rights depend on exercise of discretion by the district attorney or attorney general and deprives stockholders of the right to control the litigation and be represented by their own counsel. Plaintiffs made no showing in the trial court that these officers could not be expected to do their duty. Conceivably, a question of due process might arise after a corporate election if the losers could show that they were deprived of judicial determination of their rights because both the district attorney and attorney general refused to bring quo warranto, or refused to permit counsel for the stockholders to participate. That situation is not before us, and our opinion should not be taken as authority for denying equitable relief in such a case. We hold only that extraordinary mandatory relief is not available before the election process is complete in absence of a showing that the process is being frustrated or unreasonably delayed.
The motion for rehearing is overruled.