Court Opinion

ID: 9683528
Source: CourtListenerOpinion
Date Created: 2023-08-24 13:30:40.908922+00
Date Added: 2024-06-11T18:17:48.512402
License: Public Domain

Per Curiam
(on motion for rehearing). Upon rehearing, we have considered the propriety of a third person’s raising the question of the legal sufficiency of the notice of a special stockholders’ meeting under sec. 180.24, Stats.
The broad principle of corporation law involved is that defects as to notice of a stockholders’ meeting may not be taken advantage of except by the corporation itself or its shareholders. This is a principle that may be extracted from Perfex Radiator Co. v. Goetz (1923), 179 Wis. 338, 191 N. W. 755, and Lutheran T. Congregation v. St. Paul’s English E. L. Congregation (1914), 159 Wis. 56, 150 N. W. 190. See Brown Deer v. Milwaukee (1962), 16 Wis. (2d) 206, 222, 114 N. W. (2d) 493 (dissent). 5 Fletcher, Cyc. Corp. (perm, ed., 1952 rev.), p. 117, sec. 2024; Anno. Informality of meeting of stockholders as affecting action taken thereat, 51 A. L. R. 941, 962.
*591bThe plaintiff here is a third person within the meaning of the above-stated principle. However, under the peculiar circumstances of the instant case, we believe that an exception should be recognized and that the plaintiff should be permitted to raise the defect, since the contract between the plaintiff and the defendant provided that the sale of stock would be valid only if the bylaws of the corporation were amended to sanction the sale. The proper amendment of the bylaws was therefore of the very essence of the contract between the plaintiff and the defendant. Since notice of the special meeting of the shareholders at which the bylaws were to be amended was defective, this casts doubt on the propriety of the purported amendment of the bylaws. Thus, it follows that a condition of the contract was broken, and the plaintiff is entitled to recover his $2,000 paid under the terms of the contract.
The motion for rehearing is denied, without costs.