Court Opinion

ID: 6558636
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:05:47.969629+00
Date Added: 2024-06-11T15:56:26.616343
License: Public Domain

The Chancellor:
The petition in this cause is presented *282to the Chancellor under the provisions of section 31 of the general corporation law of this State, which is as follows:
“If the election for directors of any corporation shall not be held on the day designated by the by-laws, the directors shall cause the election to be held as soon thereafter as conveniently may be; no failure to elect directors at the designated time shall work any forfeiture or dissolution of the corporation, but the Chancellor may summarily order an election to be held upon the application of any stockholder, and may punish the directors for contempt of Court for failure to obey the order.”
It appears from the proofs, and is not disputed, that the petitioner is the holder upon the books of the corporation of a majority of the shares of the common stock of the corporation, and that the annual meeting and election of directors, which should have been held on the first Monday in March, 1911, was not held. It may be that proof of these two facts, even upon ex parte proof by the petitioner and without notice to the company, may under the language of the general corporation law above quoted, justify the Chancellor in “summarily” ordering such meeting and election to be held. But in this case an order was made upon presenting the petition, setting the petition down to be heard on a date fixed by the order, and requiring notice to be sent by registered mail to each of the officers and directors of the company, at the post office addresses furnished by the petitioner.
This Court certainly should not, on this petition, undertake to try the issues which have been raised in the New York Court, and which are to be tried there. It is evident that that Court, by so modifying its first order as to expressly authorize the stockholder, Jackson, one of the defendants in that suit, to exercise his right to bring this petition in this Court, must have concluded that the granting of the prayer of it would not have injuriously affected the rights of the parties to that suit. It should be noted that express consent of the New York Court, given to the stockholder, Jackson, not only to vote his shares of stock at an election, but also to ask for a summary order of this Court for the holding of an election, was not dependent in any way upon the giving of the bond by the complainant in the suit pending before that Court.
*283Therefore, an order will be made requiring the directors of the National Lumber Vulcanizing Corporation to hold a stockholders’ meeting for the election of a board of directors.
The order was in the following form:
“And now, to wit, this eighteenth day of December, A. D. 1911, the foregoing peti ion of Oliver D. Jackson,that the Chancellor summarily order the holding of a meeting of the stockholders of the National Lumber Vulcanizing Corporation for the purpose of electing a board of directors of said corporation, having come on to be heard before the Chancellor upon said petition, the answer of said corporation, affidavits and exhibits, and the same being duly considered, and argued by counsel for the respective parties,
“It is ordered by the Chancellor, that a special meeting of the stockholders of said National Lumber Vulcanizing Corporation be held for the purpose of holding an election of directors of said corporation, at eleven o’clock in the forenoon on Tuesday, the second day of January, A. D. 1912, at the registered office of said corporation in the State of Delaware, namely, at the office of The Capital Trust Company of Delaware, situate at the corner of State and North Streets, in the Town of Dover, Kent County, and State of Delaware, the said The Capital Trust Company of Delaware being a corporation by whom the said National Lumber Vulcanizing Corporation is represented in the State of Delaware;
“And further, that the said election shall be held pursuant to the laws of the State of Delaware and the by-laws of the said National Lumber Vulcanizing Corporation; and for this purpose, that the officers of said Corporation shall so hold said election at said time and place, and give due. notice thereof;
“And further, that a copy of this order be forthwith mailed by the Register in Chancery by registered mail to each of the officers of said National Lumber Vulcanizing Corporation, including the directors thereof, at their several and respective residences and places of business, as set forth in the said petition of the said Oliver D. Jackson;
“And further, that within three days after the tipie fixed for the holding of said election at said special meeting, the officers or other persons who shall hold said election shall.file in the office of the Register in Chancery for Kent County a report of their proceedings;
“And further, the Chancellor reserves the right to make such further or other orders in the premises as he shall deem proper.”