22 N.Y.S. 318 | N.Y. Sup. Ct. | 1893
The David Jones Company was organized in 1884. It is alleged upon the part of the appellants that a resolution was duly passed at a meeting of the board of trustees on the 28th of May, 1892, directing the secretary to take the steps necessary to procure a dissolution of the company, and in pursuance of that direction the petitioners—two of the three trustees—on the 3d of June, 1892, obtained the order to show cause which was vacated and set aside by the order appealed from. On the 4th of August, 1892,—two months after the making of the order to.show cause,—the remaining trustee and holder of the majority of the stock of the corporation transferred 600 shares of the capital stock to his attorneys, and thereupon a special meeting of the stockholders was called by the said trustee, and on the 29th of August, 1892, the said trustee and the persons to whom the said stock was transferred were elected trustees, and such trustees passed
It is urged upon the part of the appellants that the transfer of stock to the attorneys of the third and dissenting trustee was illegal, and did not in fact confer upon them (the transferees) the powers of legal stockholders, and that the call for the special meeting of stockholders was insufficient, because, although the call for the special meeting was issued under the provisions of the by-laws regulating elections, and the meeting purported to be held in conformity with the same, the by-laws were absolutely void by statute. The ground upon which it is urged that the transferees of the stock of the third trustee did not become legal stockholders is because of the provisions of a by-law of the company restricting the transfer of original certificates of stock. This bylaw provides that—
“ Whenever the holder or holders of one or more of such first or original certificates of stock shall be desirous of transferring all or any of the shares of stock represented by such certificate or certificates, he or they shall give notice thereof in writing to the secretary. It shall be the duty of the secretary, upon receiving any such notice, forthwith to give written notice thereof to the board ■of trustees and to the holders of all other first or original certificates of stock as they appear upon the books of the company. The holder or holders of such first or original shares of stock who are desirous of purchasing the shares offered for transfer may bid for or propose to purchase all or any of the shares ■offered for transfer at a price specified in the resolution to be passed at the first meeting in the months of July and January, respectively, fixing the optional price for the half year next succeeding such meeting. ”
The by-law further provides that—
“In case all bids or proposals made are for less than the apparent real value of the stock, the board of trustees shall cause a certificate to be made that the holder or holders desiring to transfer the stock have complied with article 7 of the by-laws, and such holder or holders shall be at liberty to have such stock transferred to any one who will take the same. ”
It appears that on the 6th of April, 1889, the said third trustee gave the notice required by the by-law, and such proceedings were thereupon had that a certificate was given on the 13th of May, 1889, by the ■secretary of the corporation that such trustee had complied with the provisions of the by-laws, and was at liberty to have his stock transferred to any one who would take the same; and thereupon, on the 1st of July, 1889, a new certificate of stock was issued to said trustee, •which contained no restrictions whatever upon its transfer. Under these circumstances it is clear, even if such by-law could be enforced, that there had been a compliance with its terms; and that the transferees of said trustee became stockholders, the stock being relieved from the restriction of the by-law. But it is not to be considered that the court in any way expresses an opinion upon the validity of a by-law thus restricting the transfer of stock.
The next point presented is that the special meeting was irregular, ■although called in pursuance of the by-law, because the by-law had .never been published pursuant to the requirements of the statute.