15 Del. Ch. 333 | New York Court of Chancery | 1927
The complainants must first establish their proposition that the ballots, a sample of which is given in the statement of facts, should have been counted straight instead of rejected as worthless. If they fail in this, their case is ended without regard to whatever disposition is made of the questions connected with the forty-five shares of Williamson and the fifty-four shares of Mrs. Snodgrass.
Having established their right to have the 671 votes counted straight, the complainants will succeed in establishing their titles to office if they are allowed the benefit of Williamson’s forty-five shares. If they are allowed the benefit of those shares' the Snodgrass share become unimportant. If they are not allowed the benefitof the Williamson shares, then the complainants, except Chappel, in order to succeed must- defeat the defendants on the issue touching the Snodgrass shares. Whether the Snodgrass shares need to be considered is therefore dependent on the views adopted with respect to the other two points, viz., the rejected ballots and the Williamson shares.
I turn then to a consideration of those items of controversy and first take up the,matter of the rejected ballots. Should they have been rejected and counted for naught? The ballots were deposited on the theory that cumulative voting was permissible. The judges of election took the view that such voting was not permissible in this corporation. In this, they were correct. While the Delaware statute allows the cumulating of votes, yet it is allowed only when the certificate of incorporation so provides. The cirtificate of this corporation contained no provision for cumulative voting and hence such voting was not permissible. From the evidence it appears that some controversy arose at the meeting upon this question of cumulative voting. The complainants claimed the right to vote in this manner because the laws of Pennsylvania allowed it. The judges of election insisted that the Delaware statute supplied the law for this Delaware corporation and that accordingly the complainants could not vote cumulatively. The judges insisted that the persons depositing the ballots should cast ballots in so-called straight form if they desired to vote straight. But the complainants or those voting for them insisted they were right in their contention as to the law and refused to submit other ballots.
The judges were undoubtedly right in refusing to count cumulatively the votes cast by these ballots. But were they justified in' rejecting them entirely as void? I think not. It is to be noted that the statute does not define the form in which ballots shall be written. Any form, I take it, may be used which shows the intent of the voter. And I accede to the proposition that in discovering that intent the ballot itself must be looked to for the evidence thereof. Examining these ballots it unquestionably appears that the stockholder meant to vote his shares. At the outset the ballot states “I, the undersigned, hereby vote 150 shares of stock for the following named persons,” etc. Then follow the names of the three complainants and Mr. Mcjunkin, whose title to office is undisputed. After each of the names appear figures. These figures are unexplained on the face of the ballots. Added up, their total equals seven times the number of shares voted. There being seven directors to be elected, the inference follows of course that the voter desired his votes to be cumulated on the four persons named allotting to each the respective number of votes appearing after each name. This was a clear voting of shares with a direction as to how they should be counted. The direction was in substance an instruction to the judges how to count the votes cast. If the instruction as to how to count was such as the law would not allow to be carried out, does it follow that the shares which the voter at the outset said he was voting should not be counted as voting at all? How that question can be answered in the affirmative I am unable to see. I look upon the body of the ballot as clearly showing an intent to vote for the four persons named and the figures at the right of the names as without any force or effect under the law. They are surplusage, amounting at the most to nothing more than this, that the voter requests the shares which he votes to be counted for his candidates to a greater extent than the law will permit. To say that because the judges cannot lawfully count the voted shares to the extent requested, they cannot count them to any extent whatever is to work an unjust disfranchisement of the shareholder based solely on his mistaken view as to how high the law allows his
The cases cited by the defendants contain nothing in conflict with this conclusion. Where voting may be done in either of two ways, that is either straight or cumulatively, it is of course not permissible for a voter of a straight ballot to insist that he meant his vote to be cast cumulatively. He is held to the intent as shown by the ballot. Such were the cases of In re P. B. Mathiason Mfg. Co., 122 Mo. App. 437, 99 S. W. 502, and Commonwealth v. Blatchford, 21 Pa. Dist. R. 453. And the converse of the proposition for which these cases stand would be true, namely, that, where the two ways of voting are possible, a voter who by his ballot shows an intent to vote cumulatively cannot have his ballot counted as straight. These cases hold, and correctly so, that a ballot where the law allows two meanings to be expressed cannot be given a meaning different from that which its face shows the voter to have intended. Similar to them in principle is the case of Loubat v. Le Roy, 15 Abb. N. C. (N. Y.) 1, where the question was involved of when the term of office of a director of a club commenced, whether from the date designated on the ballots or at an anterior date. It having been legally permissible for the voters at the election to name one date or the other, the court held that the date evidenced by the ballot itself could not be departed from. But where as here there is only one possible way of reading the count under the law, there can be no question of whether a ballot showing a legal intent of one kind may by extrinsic evidence be received as show
The next question in order for consideration is the right to vote of the forty-five shares of Williamson. It is argued in the first place that these shares were transferred to him too late to be voted at the coming election. The pertinent statutory provision in this regard is found in Section 29 of the General Corporation Law (Revised Code 1915, § 1943), and is as follows:
“After the first election of directors no stock shall be voted on at any election which shall have been transferred on the books of the company within twenty days next preceding such election.”
Williamson’s shares were transferred to him on February 15, 1927. The meeting for the election of directors was called for and held on March 7, 1927. The defendants argue that the twenty-day period ends on the day before the meeting and commences on the twentieth day prior to the day before the meeting. If this be so, Williamson’s stock was transferred within the twenty-day period. The method however by which the defendants calculate the twenty-day period is not the proper one. Where a thing is to be done “within” a certain period of time, in computing the time “either under a rule of court or a statute, in the absence of anything showing a contrary intent, the first day should ordinarily be excluded, but the day on which the act is to be done should be included.” The quoted language is that of Judge Harrington in the case of Simkin v. Cole, 2 W. W. Harr. 271, 122 A. 191. There is nothing showing a contrary intent against the rule of computation in this case. It follows therefore that the Williamson stock was not transferred on the books within the twenty-day period mentioned by the statute.
The right of the Williamson stock to vote is assailed upon another ground, one which challenges his right to be regarded as a stockholder at all, notwithstandng he paid for his stock, has a certificate evidencing his status as stockholder and appears as a stockholder on the corporation’s books. The complainants make
In the absence of Williamson as a party to these proceedings, I therefore decline to reject the ballot which was cast representing the stock held by him of record. It should be counted as cast for its full legal effect.
In view of the conclusion reached, it is unnecessary to proceed to a consideration of the questions presented by the Snodgrass shares.
Decree accordingly.
Note — From the decree entered in this cause an appeal was taken to the Supreme Court, which Court reversed the Chancellor’s decree. The report of the case in the Supreme Court will appear in 16 Delaware Chancery Reports. See also 141 Atl. 191.