Smith v. Ferracute Machine Co.

68 N.J.L. 237 | N.J. | 1902

The opinion of the court was delivered by '

Collins, J.

In 1891 the Ferracute Machine Company, organized under the General Corporation act, undertook to issue preferred- stock, redeemable at par on three months’ notice by a vote of a majority of the common stock. At that time the act provided only that preferred stock might be made subject to redemption at par at a fixed time to be expressed in the certificate thereof. Gen. Stat., ¶. 951, pl. 212.

The holders of a majority of the common stock have voted to redeem half of the preferred stock outstanding, but the board of directors, being evenly divided, has not passed the necessary resolution. The relator, president of the company, seeks mandamus to compel such redemption. Frederick F. Smith, the largest holder of preferred stock, and Jacob G. Street, a holder of common stock, members of the board, resist the application.

Judicial action dependent on compliance with the organic law of the company cannot be invoked when that law has been disregarded.

All persons interested appear to have acquiesced in the irregularity, and the issue of such stock may have had the effect of a contract. Whether on that theory there is any way, legal or equitable, to compel its performance we are not now called on to decide.

The mandamus prayed is denied.