| Ky. Ct. App. | May 14, 1909
Opinion op the Court by
Eeversing.
The action was instituted by appellants as stockholders in the appellee Williamstown Cemetery Company, against the company, J. H. Webb, C. S. Webb, Clay Conrad, J. M. Baker and D. L. Cunningham, its acting trustees, to compel of the latter an accounting for moneys received as trustees and its payment into the court, and to obtain a writ of mandamus requiring them to call and hold a meeting of the stockholders of the cemetery company for the election of trustees therefor as required by the charter of the company. It was, in substance, alleged in the petition that the Williamstown Cemetery Company was incorporated February 16,1860, by an act of the General Assembly of Kentucky; its business being to acquire and conduct a cemetery in the city of Williamstown, under the control of seven trustees named in the act of incorporation, whose successors in office should be elected every five years, at a meeting of the stock-, holders of the cemetery company called for that purpose ; that the charter of the Williamstown Cemetery Company provides that each person owning a burial lot in its cemetery of the value of $10 shall be regarded as holding a share and entitled to one vote for trustees; and that appellants each own a lot in the cemetery of the, appellee company. An amendment to the petition contains the further averments that two of the appellees, J. H. Webb and D. L. Cunningham were among the incorporators of the Williamstown Cemetery Company and of the board of trustees appointed by the act of incorporation, and that they have illegally claimed to be and acted as
The demurrer was sustained upon the ground that the petition does not state a cause of action, and it is insisted for appellees, J. H. Webb, C. S. Webb, Clay Conrad, J. M. Baker and D. L. Cunningham that it seeks a recovery against them, not as trustees, but merely as individuals, for intermeddling in the business of the Wiiliamstown Cemetery Company and wrongfully converting its funds, and that if they are guilty of the acts charged they are liable only to the Wiiliamstown Cemetery Company, and, while the company might maintain an action against them to enforce such liability, its stockholders can not do so. There is no just ground for this contention. While it is charged in the-petition that appellee Webb and associates were never elected trustees, the facts alleged with respect to their assumption of the offices and control of the cemetery and affairs of the company in effect make them de facto trustees, and the amended petition, which appellants offered to.file before the demurrer was passed on in the court below, removed any doubt that may have arisen from the language of the original petition as to the capacity in which they were sued, for the amendment in express terms entitles them de facto trustees, and explains tihat two of them are still acting as trustees by virtue of having been made such by the charter of the cemetery company granted by act of the Legislature 48 years ago, and that the other three were illegally appointed trustees by their predecessors in office, who had never.been legally elected or appointed trustees. The refusal of the circuit court to allow
We see no force in appellees’ further contention that appellants’ as stockholders, can not maintain such an action as this against the corporation and its trustees. The relief here sought is against the corporation, as well as the persons sustaining to it the relation of de facto trustees. In Orr v. Bracken County, 81 Ky. 593" court="Ky. Ct. App." date_filed="1884-02-09" href="https://app.midpage.ai/document/orr-v-bracken-county-7131478?utm_source=webapp" opinion_id="7131478">81 Ky. 593, 5 R. 632, this court said: “We are not disposed to adjudge that the chancellor was without power to require an election upon the presentation of a proper ease. * * * In case of public corporations mandamus will lie to compel election of officers ; and it is said in Angelí and Ames on Corporations (10th Ed.) p. 308 ‘We see no reason why the same remedy should not lie against a private corporation aggregate to enforce an obedience to the charter, if they neglect or refuse to elect their proper officers.’ ” We also find a concise statement of the same doctrine in 26 Cyc. 352. “The legal right of a stockholder or member of a corporation to have an election of directors or other officers, or meetings of stockholders or members for other purposes, as required by charter or by-laws, or to have a new elec tion in case of illegality, may be enforced by mandamus to compel the existing directors or other proper officers to call and hold a meeting for such purposes.” Bassett v. Atwater, 65 Conn. 355" court="Conn." date_filed="1895-01-08" href="https://app.midpage.ai/document/bassett-v-atwater-6583406?utm_source=webapp" opinion_id="6583406">65 Conn. 355, 32 Atl.
It should not be overlooked that it is averred in'the petition in the instant case that the appellees, assuming to act as trustees of the Williamstown Cemetery Company, “have failed and refused to call an election for a board of seven trustees as required by its charter, though demanded so to do.” In view of such refusal, there can be no doubt of the right of the stockholders to take the initiative, as appellants are now attempting to do. If, on the trial of the case, the circuit court should conclude that appellees are merely de facto trustees, and by reason thereof can not be required by mandamus to call or hold a meeting of the stockholders of the corporation for the election of • trustees, it can at least require of them an accounting, remove them as de facto trustees, and declare a vacancy in the office they have been assuming to hold, and in addition render such a judgment as will require the corporation or its stockholders to legally elect a board of trustees in conformity to the provisions of its charter.
For the reasons indicated, the judgment is reversed and cause remanded for further proceedings consistent with the opinion.