Court Opinion

ID: 5513604
Source: CourtListenerOpinion
Date Created: 2022-01-10 04:26:28.93336+00
Date Added: 2024-06-11T08:34:13.753803
License: Public Domain

*510
JBy the Court,

Savage, Ch. J.
In the case Ex parte Holmes, 5 Cowen, 426, we set aside an election of directors of an insurance company, because a trustee had been allowed to vote upon stock belonging to the company; not because a trustee had been permitted to vote instead of the cestui que trust, but for the reason that the stock in that case could not be voted upon, it being the property of the company, controlled by its officers; and we held, that neither within the meaning of the charter of the company, nor of the act under which the proceedings were had, could it be tolerated, that the officers of a monied institution should wield such stock, however obtained, to control the result of an election of directors, Such is the principle settled by that case, and what was said in relation to the rights of a trustee or cesím que trust to vote on stock, standing in the name of the trustee, either generally or specially, in his representative character, was said in reference to the peculiar circumstances of the case. The court never could have doubted the right of a person to vote upon stock standing in his name, although held by him in trust for another; the legal estate is in him, and until divested by assignment, either voluntary or compulsory, he is the only person entitled to vote. Indeed, the case Ex parte Holmes, admits that if the stock stands in the name of the trustee without expressing any trust, he has the right to vote. Jacob Barker, therefore, was entitled to vote upon the 35 shares holden by him as the trustee of his minor children.
He was also entitled to vote upon the 1255 shares standing in his name in his own right, although they were hypothecated to their full value. So was the decision of the court in Ex parte Willcocks, 7 Cowen, 402, where we held, that until the pledge was enforced and the title made absolute in the pledgee, and the names changed on the books, the pledgor should be permitted to vote. The restriction in the revised statutes, that hypothecated stock shall not be voted upon, applies only to corporations created, renewed, or extended, subsequent to 1st January, 1828; the Mercantile Insurance Company was created long previous to that date.
A rule must therefore be entered declaring null and void the election of Samuel Hazard and the six other persons *511who would have had a minority of votes, had the vote of Jacob Barker been allowed ; and that Wm. Israel and the six other persons for whom Jacob Barker offered, to vote, and who would have had a majority of the votes, had the vole of Jacob Barker been received, are duly elected directors of the company.
Although not necessary to the decision of the case now presented, it is deemed proper to express an opinion on a point raised on the argument. A vote was offered by the attorney of an alien, and rejected by the inspectors. In this the inspectors decided correctly. The right to vote is regulated by the act of incorporation, which provides that each stockholder personally present shall be, allowed to vote on the stock standing in his name, and that each stockholder being a citizen of the United States may vote by proxy. The right to vote by proxy is given only to citizens. This is,the enactment of the legislature, and no doubt made for wise purposes.