Helsel v. Rodgers et al., Appellants.
Supreme Court of Pennsylvania
October 9, 1970
440 Pa. 516
Marvin L. Wilenzik, with him Eugene Cimino, for appellees.
OPINION BY MR. JUSTICE COHEN, October 9, 1970:
These are appeals from two orders of the Court of Common Pleas, Equity Division, of Clearfield County dismissing рreliminary objections to two complaints in equity. One action, at No. 361 January Term, 1970, concerns the affairs of Long‘s Dairies, Inc. The other, at No. 362 January Term, 1970, concеrns the affairs of Laurel Co-operative, an Agricultural Association.1
After the complaints were filed, the Long‘s appellants filed preliminary objections alleging that equity was without jurisdiction because quo warranto was the proper remedy, that the issue should have been tried in Blair County in which the principal office of the corporation was located and that there was no venue in Clearfield County because there had been no service on any defendant within that county. The Laurel aрpellants filed preliminary objections alleging that quo warranto rather than a complaint in equity was the proper remedy and that the jurisdiction for such was in Blair County аlone and secondly that there was no venue in Clearfield County because there had been no service on any defendant within that county. The court below felt the issues should not be decided upon the pleadings alone and that a hearing should be held. It therefore entered two orders dismissing the prelimin
The background of the Long‘s Dairy dispute is as follows. As a result of a dispute between shareholders a special board of directors was created on December 15, 1965 to serve for a three year term in order to resolve the difficulties. This attempt was unsuccessful, and the board expired on December 15, 1968. After that there was a dispute as to how the corporation would be run, and on February 14, 1969 a meeting was held at which thirty-one out of the forty-one shareholders were represented. At this meeting the Long‘s appellees were chosen as directors; thereafter they attempted to take control of the corpоration‘s affairs.
As to Laurel Co-operative, no directors had been elected in 1966, 1967 and 1968, and twenty members undertook to organize a special meeting early in 1969. That meeting was held on March 17, 1969, and the twenty-seven members present unanimously elected the Laurel appellees directors. When the Laurel appellees аttempted to take control of the co-operative, they met opposition from the Laurel appellants who were its manager and accountаnt.
The initial question we must face is whether the Long‘s appellants and the Laurel appellants have raised a jurisdictional question within the
A careful reading of the two complaints shows that essence of the dispute is the validity of the elections at which the two sets of appellees were elected and thus which group has the right to manage the affairs of the corporations. In the Long‘s Dairiеs complaint paragraph two states, “The Defendants are all pretenders to the offices and directorships of said Corporation and have falsely declared themselves to be entitled not only to occupy the titles of directors and officers but to operate and manage the entire business. . . .” Paragraphs 5-15 dеscribe the election, and paragraph eighteen states, “When Defendants learned of this (the election and appellees’ attempts to have finanсial institutions recognize them as the legitimate board) they contacted one Leo Mullen, an attorney, who had at one time represented plaintiffs in their efforts to seek their proper place in the Corporation much in the manner of what they are presently doing. . . .” (Emphasis supplied.) Paragraphs 21-25 repeat appellees’ contention that they are the rightful оfficers and directors and that appellants are pretenders who are refusing to relinquish control. Paragraphs 26-30 do allege improper conduct on the рart of the appellants in the management of Long‘s, but this is merely incidental to the question of the validity of the election which is the basis of appellees’ claim. Bеdford Springs Co. v. McMeen, 161 Pa. 639, 29 Atl. 99 (1894). This is not a case such as Moosic Lakes Club v. Gorski, 402 Pa. 640, 168 A. 2d 343 (1961) in which the election of officers was incidental to the main thrust of the action. The es
A close reading of the Laurel complaint leads to the same conclusion—that what is in issue is who has the right to the vаrious corporate offices. Appellees ask that they be declared the “true and lawful Board of Directors,” that appellants be required to turn over аll corporate records and render a full accounting and that appellants be forbidden from taking any role in the management of the co-operative.
It is the long-settled law of this Commonwealth that quo warranto is the exclusive method of determining the right of one claiming to exercise corporate office. Siranovich v. Butkovich, 359 Pa. 134, 58 A. 2d 461 (1948); Hanna v. Chester Times, 310 Pa. 583, 166 Atl. 243 (1933); Cella v. Davidson, 304 Pa. 389, 156 Atl. 99 (1931); Deal v. Miller, 245 Pa. 1, 90 Atl. 1070 (1914); Bedford Springs Co. v. McMeen, supra; Jenkins v. Baxter, 160 Pa. 199, 28 Atl. 682 (1894).
The orders of the court below are vacated and these cases are remanded to the court below for actiоn in accordance with this opinion.
CONCURRING OPINION BY MR. JUSTICE ROBERTS:
While I concur in the majority‘s conclusion that this interlocutory order is appealable under the