In re Union Insurance, 22 Wend. 591

In re Union Insurance

22 Wend. 591 | N.Y. Sup. Ct. | 1840

After advisement, the following opinion was delivered by Mr. Justice Bronson, which was concurred in by the other judges.

*599At the annual election in January, some of the ballots contained the names of less than twenty-three persons for directors, and it is said that those ballots were void. No authority was cited in support of this position, and both the law and the reason of the thing are the other way. When an elector or stockholder wholly omits to vote, he virtually consents that the election shall be made by those who choose to exercise the privilege, and he cannot afterwards object that they have selected officers whom he does not approve. If he vote for a part only of the officers to be chosen, he waives his privilege as to the residue, and tacitly consents that the other electors .or stockholders may select such persons as they deem proper." His vote is good, so far as it goes. This has, I think, never been questioned in relation to elections for senators,- members of assembly, assessors, and other public officers where several persons are to be elected to the same office. In The People v. Adams, 9 Wendell, 333, Jive constables were to be chosen, and none of the electors voted for more than four; and yet no one doubted that four were- duly elected. In the case at bar, a part of the stockholders voted for the whole number of directors to be chosen. No one thought of disregarding the charter. Those who voted for a part only, virtually acquiesced as to the residue, in what was done by the other stockholders. Old-Know v. Wainwright, 2 Burr. 1017. The ballots having less than twenty-three names upon them were clearly good.

II. Of the persons voted for at the annual election, two received a unanimous vote, the next nineteen received a majority of all the votes, and the next highest candidate received a plurality of votes, which is all that the charter requires. But it is said that there was no election in consequence of the accidental failure to choose a twenty-third director. I cannot yield to that argument. The charter, as amended, provides, that the affairs of the company shall be managed and conducted by twenty-three directors, “ the major part ” of whom “ shall constitute a board and be competent to the transaction of all .the business of the corporation.” <§>4, 8. The directors are to be chosen annually on *600a specified day, and are to hold their offices for one year, “ and until others shall be ehosen to supply their place.” $4. A failure to elect at the proper time, does not work a dissolution of the corporation. <§>6. On the charter day, an election was regularly held for a new board of directors, when twenty-two individuals received the requisite number of votes, and were, I think duly elected. If less than twelve, “ the major part of twenty-three, had received a plurality of votes, it may be that the whole election would have been void. There would not have been a sufficient number of the directors newly chosen, to constitute a board and transact the business of the company. They could not act in conjunction with the old directors, for then there would be two many ', and they could not displace a part only of the former directors, for it would be impossible to determine whose places in particular they should take. But here, there were twenty-two persons who received the requisite1 number of votes—they may constitute a board, an,d are competent to transact all the business of the corporation. The old directors—not twenty-two only, but all of them are out of office: others have been chosen “ to supply their place.” The provision for holding over was made for the purpose of guarding against the possible dissolution of the corporation for the want of proper officers to manage its affairs, and there was no danger of such an occurrence after a sufficient number of directors had been chosen to constitute a new board. This case does not differ in principle from The People v. Jones, 17 Wendell, 81, and we see no reason for departing from that decision. It follows, of course, that the special election held in February was irregular, and must be set aside.

III. We are authorized, in this summary way, not only to set aside the election and order a new one, but “ to make ' such order, and grant such releif, as the circumstances and justice of the case shall seem to require.” 1 R. S. 598, § 48. The power is broad enough, and as we entertain no doubt concerning the legal rights of the twenty-two persons who received a plurality of votes at the annual election, we shall declare them duly elected. The interest of *601the stockholders requires that the whole controversy should be terminated. In Ex parte Desdoity, 1 Wendell, 98, the election, as to certain persons, was set aside, and others were declared duly elected ; and see also Matter of the L. Island R. R. Co., 19 Wendell, 37, 45. It is true, that the twenty-two directors were not chosen at the special election which we set aside; but their legal rights, and the regularity of that election, stand indissolubly connected; and as the decision necessarily covers the whole ground of controversy, I think the order may be equally extensive in its influence.

IV. As we set aside the election of the twenty-three directors who are now managing the affairs of the company, and as only twenty-two persons were elected in January, there will be one vacancy in the board of directors. I- entertain little doubt that the stockholders may supply the place, without any order of this court. When there is nothing in the charter or other statutes controlling the question, the power of election is said to be a necessary incident to the corporation, for the purpose of perpetuating the succession. 2 Kyd on Corp. 3, 5. The King v. The Mayor of Thetford, 8 East, 270, and note (c). Angel & Ames on Corp. 63. But it is not necessary to decide that question. Our powers are broad enough to provide for the case, and we shall order an election to supply the vacancy; directing such notice as is required for other elections by this company, and the inspectors to be appointed by the board of directors.

Ordered accordingly.