*2 SEITZ, Before PEI, SLOVITER and publicly a Pennsylvania held corpora- GREENBERG, Judges. Circuit principal place with its of business in

Wilkes-Barre, Pennsylvania. In 1987 and Carey, 1988 a OPINION OF THE he con- COURT trolled, made several unsuccessful offers to GREENBERG, Judge. Circuit buy Thereafter, PEI. as the district court This is a diversity case involving a dis- found: pute a Pennsylvania corporation, between September 9, or about 1988, PEI [o]n Pennsylvania Enterprises, (PEI), Inc. announced to its shareholders that it in- shareholders, one the resolution of tended to special convene a meeting of governed by law. shareholders to be held on October shareholder, Carey, Edward challenged upon to [in a Wilkes-Barre] validity of a election which proposal to amend the Articles of Incor- position opposing his split of PEI’s poration by of PEI authorizing an in- proposed by as management stock by lost crease in the number of authorized Thus, margin. narrow he commenced this shares of common stock from 5 million to 31, 1988, action on October in the district shares; 10 million to reduce the stated enjoin implementation court of the result value of said shares from per $10 share trial, of the election. After a the district share; per to $5 and to split authorize a opinion upheld memorandum in the common stock on 2a for 1 shares management’s position and on December share basis. 1988, entered a final judgment denying Carey Carey injunction. an v. Enterprises, Inc., Carey appeals from 88-1777, (M.D.Pa. No. slip op. that order. at 5-6 Dec. 8, 1988). Carey opposed proposal, Carey presents arguments several he apparently considered that it re- would demonstrate that some of votes count- sult in a wider stock, distribution of PEI ed in favor of the PEI should making it more difficult for him acquire disallowed, have been arguments and other the company. that additional votes favor should have been counted. Adoption We conclude that Car- of the amendment required the ey is correct in his approval assertion the Divi- of the voters representing a ma- (DRIP) votes, dend Reinvestment Plan i.e., jority of outstanding PEI’s stock, shares of the votes of additional acquired shares by since provision there was no in PEI’s arti- PEI shareholders reinvestment of cash cles of incorporation requiring super-ma- dividends, without which there was insuffi- jority. Pa. See Stat. Ann. tit. support approve cient split, Supp.). Thus, repre- improperly Thus, were counted. we will senting 1,350,171 2,700,341 outstand- reverse the of the district court ing required shares were proposal for the addressing any without of Carey’s other to succeed. contentions, disposition since their The board of directors of PEI Sep- fixed change not our result.1 2, 1988, tember as the record date for the meeting; thus the owner of each share as I. FACTUAL AND PROCEDURAL recorded on PEI’s books at the close BACKGROUND business on that date was entitled to vote York, a citizen of New owns or proposal at the October owned approximately shares of meeting. See Pa.Stat.Ann. tit. Corp. Whinney, & Ernst cast in favor of the Bradford-White overcome (3d Cir.1989). regard 872 F.2d In this invalidation of the DRIP votes. We also indi- point notwithstanding out that we the fact that cate that while our decision is limited to one Carey’s challenges certain of sustained and issue, certain of the other contentions rejected, one PEI was PEI does not advance questions, raise serious and thus we not do ground as an alternative for affirmance that the imply we do or do not see merit them. rejected of election sufficient valid votes (Purdon 1967). parties dispute do Cede as the record owners of the DRIP finding that: the district court’s they was aware that were the date, owners.3 It is disputed, of the record shares of also not as found [a]s court, the Defendant’s stock were issued and the district “[pjroxies outstanding under the Dividend Rein- shares ... were directly issued [the DRIP] *3 (DRIP). Plan Manufacturer’s holders,” vestment to the beneficial Carey, slip op. at Trust the administrator of 13, Hanover was rather than to Cede and Loriot and thus plan by were held and to the extent that the DRIP owners were and as nomi- Loriot & Co. Cede & Carey’s proxy owners forms should & nees of the administrator. Loriot Co. However, have reached them. PEI admits listed on and Cede & Co. were Defendant Carey’s proxy that form did not state the PEI's as the documents record holders by number DRIP shares owned slip op. these shares. at 13. shareholder. Appellee Brief of at 20. parties dispute management Nor do the that one of the also note that Carey both and provisions plan professional of the DRIP addressed who used firms to assist in the entitled to vote the shares in the would be proxies. solicitation of plan as follows: As by authorized Busi- participant be able to vote Will Corporation 15, ness Law.Pa.Stat.Ann. tit. the shares held in his account under (Purdon 1967), appointed PEI the Plan? judges of the employees election three Yes, all of the full shares participant’s Corporation Wilmington, Trust Co. of registered in the name and those —those Obara, Jr., Delaware: Frank J. Michael J. participant credited to the account of the Barbera, and Mark A. Ferrucci. These under the Plan —will be included on one three charged individuals were to oversee proxy participant in mailed to the meeting the conduct of the and determine regular manner. voting. the results of the App. (emphasis original). at 796 in 12, It uncontested that the October proxies by support PEI in Solicitation 1988, meeting began approximately began Sep- of the amendment on or about a.m., 10:00 and that the beneficial holders 9, PEI, explained by tember 1988. As votes, of DRIP shares cast their which “PEI’s form ... included both the were counted of election. At record and DRIP shares held each approximately polls 11:09 a.m. the Appellee shareholder.” Brief of at 20.2 declared closed the chairman of the every Inasmuch as almost instance the PEI, meeting, president with no ob- owner of DRIP shares was also a record being jection anyone present.4 made shares, owner of other distribution meeting adjourned The was then until No- majority record owners covered the 22, 1988, vember when the certified results DRIP requesting shares. After of the election were to announced.5 14, September shareholder list from PEI on cast, After the collected the votes receiving approximately and it one representatives Carey manage- and PEI later, Carey week on or about October permitted, ment were from October 25 began soliciting proxies oppo- also October review management proposal sition to the from voting. tally PEI and sheets used in the undisputed shareholders. It is that hearings since the shareholders’ list showed Loriot The held on October court, however, plan provided DRIP found that 2. This was because the closed. district participants polls would be able to vote their would "the chairman announced that the DRIP shares. specific Carey, slip op. at 6. close at a time.” Although contrary there is evidence suggest Carey 3. We do unaware of appeal. record we need this issue on not resolve plan. their status the DRIP under argument prior 5.We were at oral that this asserts there had been no informed meeting polls announcement of when the would be had not been held. 1988, during they ruled on chal- of Loriot in all cases where it held such lenges proxies by to votes and both shares, as publication well as of this management. PEI Based on the practice public (not documents sub- rulings, appeared 2,700,341 judges, them). mitted to the but known to shares, 2,226,147 outstanding had been management credited both credited, counted and proposal opposition proxies appropri- 1,373,968 passed favor, had ate shares due them. To disen- DR[I]P against, regarded and with franchise a category whole of holder due as abstentions. Since the re- to the lack of a appointment formal quired 1,350,171 favor, shares in it seemed unfair, would opinion. our App. at support had received 357.6 shares more than needed. Carey also made four objections. other *4 Carey calculating contends that in the First, he claimed judges refused to results, judges the made several erroneous 160,865 count votes7 received after the the decisions. To affect outcome of the closing polls. Second, of the judges the election individually these decisions or in accepted valid, management proxy cards shifting need result in combination consisting of the telecopied actual reverse 23,798 away approval net shares from card, side of each proxy containing the the amendment. name, shareholder’s signature vote, Carey’s challenges One of al- stapled to photostated side, obverse con- though the recordholders of the DRIP taining appointment the language. Third, Cede, shares were Loriot and voting for judges counted all the shares of share- purposes judges wrongfully attributed holders by proxy who voted telegrams by these shares to their beneficial owners. calling number, an 800 though even some challenge This was crucial inasmuch as in- telegrams of these did not include the num- validation of the affirmative DRIP votes ber of Fourth, shares owned. although would have reduced the affirmative vote to Carey’s proxy materials were never deliv- majority less than a outstanding ered to the beneficial owners8 of PEI’s PEI. The election judges resolved Employee Option (ESOP), Stock Plan challenge against this Carey, ruling: judges counted the these It is judges obvious to the that Loriot & shares, all in management favor of the Co., holder of passed shares DR[I]P proposal, during submitted September, to vote shares participants 1988, by Co., Cede & the Plan. This is evidenced record own- inclu- sion of these shares in Trust, er/nominee for Wall Street proxy, by past further practice evidenced which the ESOP shares were held judges 6. The challenge election resolved any controlling each bylaw, agreement the absence of an individual document referred binding provision to as a “Re- concerning or other earlier Determination, port, closing Certificate of polls, Fact." We of the “a stockholder ... why report are uncertain change did not refer to his or her vote at time before the Cede as an finally announced"). owner of record but we do not Consequently, result is regard significant the omission as as the district total number of votes and reversals could ex- Carey's challenges court considered outstanding as embrac- ceed the number of shares. Of the ing votes, both the Loriot and Cede shares and PEI uncounted 47,014 the district court found that suggest does not preserved has not were reversals. challenge the votes the beneficial A witness for indicated in his trial testi- owners of the Cede shares. We do note that votes, 131,893 mony proxy that of the late most of the DRIP shares were held in the name against proposal, pro- were for the Loriot, not Cede. posal, and there were abstentions. Carey, slip op. at 8 n. 4. large 7. This number of uncounted votes is at- tributable 8.Carey’s to the fact that shareholders were solicitor had submitted capable "reversing" shareholders, their earlier votes. See materials to the record Cede & generally Reinholtz, Co., Keating 5 C. & J. Fletcher and Bow & who forwarded those mate- Cyclopedia Corporations of the Law of Private rials to the trustee but the materials were not (rev. 1987) (stating vol. that in further forwarded to the beneficial owners. these PEI does not trustee, Bank.9 votes. contend that if First Eastern ESOP the DRIP the votes of shares are disal- 31, 1988, Carey filed a com- On October majority outstanding lowed a naming PEI and district court plaint proposal. have favored the would judges as defendants. three election asserting foregoing complaint, the five On December the district sought enjoin both the irregularities, denying injunctive court issued an order results of the vote and certification accompanying opinion in an relief and re proposal.10 Car- implementation of Carey’s arguments. jected each five preliminary motion for a ey also filed a found, among The district court other tempo- application for a injunction and an were, things, although the DRIP votes district court restraining order. The rary notwithstanding Pa.Stat.Ann. tit. day the same restrained the voting 1967), results. issuing certifying cast the beneficial owners, owners rather than the record 2, 1988, the of November By its order “this action of the [was not] temporary re- district court dissolved ‘direct violation of law’ as order, hearing on scheduled a straining Plaintiff, alleged by the since the basic injunc- preliminary Carey’s motion for duty of election under the ... tion. On November *5 possible law is to as reasonable as and results of the shareholders’ certified the disenfranchisement on mere tech to avoid parties, the the consent of the vote.11 With slip op. at 14. This nicalities.” preliminary hearing request on the for appeal Inasmuch as the into a trial on the followed. district injunction was converted ruling should merits to determine whether was a final on Car permanent injunctive relief. granted permanent injunctive ey’s request re 65(a)(2). lief, Fed.R.Civ.P. appellate jurisdiction See under 28 we have U.S.C. 1291.12 § testimony Carey presented At trial DRIP shares “disallowance of the reversing of would have the affect II. ANALYSIS App. at 181. Inas- affirmative votes.” court’s Our review of the district DRIP shares voted much as the number of interpretation legal prin of application and management’s proposal in favor of ciples predicate grant or denial of to margin, exceeds the plenary. relief injunctive in the absence of is See Ortiz would have been defeated damage not a Cede tional amount was met as this is The trustee held the shares nominees 9. only injunctive been was not action and relief has & Co. and Bow & Co. but the latter however, proxy voting. app. sought. Carey alleges, at 296- and it is admit involved in the ted, per four cent of the shares of 97. that he owned his shares were PEI on October and $5,900,000. Furthermore, approximately worth Carey's allegations were refined at the trial 10. originally $55 he testified that he offered specific than those in the where more statistics April description and in complaint presented. of share for the PEI stock in Our develop- alleged $57.50. errors is based on their full In the circumstanc creased the offer es, may ment in the record. that whatever be the diffi we conclude controversy culty determining the amount in of actions, $10,000 jurisdic injunction apparently Although judges still de- in some are fendants, appeal. See Rock only tional amount was met in this case. PEI has filed a brief on (S.D. case, F.Supp. SCM Corp., 1125 any clear that inasmuch as the well v. In it is N.Y.1980); Wright, certified and C. A. Miller & E. Coo of the election have been 14A results only implementation per, to bar of Practice and Procedure now seeks Federal $50,000 judges only (1985). split, nominal the election are for the amount increase parties. controversy diversity cases in the Judicial Act, Improvements Access to Justice Pub.L. and 100-702, 201, (1988), We, course, 102 Stat. satisfy No. must also ourselves of applicable this action inasmuch jurisdiction. is not While that the district court had Carey’s complaint the effective diversity was filed before question is of there is no but that there change. jurisdic- citizenship, date of the it is not obvious that Eichler, (3d Cir.1986).13 794 F.2d by-laws Unless the provide, otherwise Further, undisputed inasmuch as it is time, board of directors fix a applicable, fifty days prior more than Pennsylvania law is we must the date of any meeting shareholders, of or predict how the Court of the date Pennsyl- payment fixed for any of dividend or vania would decide the issues. See distribution, or the date for the allotment Centers, v. AMF Woodson Leisureland rights, or the any date when change Inc., (3d Cir.1988). 842 F.2d or conversion exchange of shares will go effect, be made or explained The district court into as a that un date for the determination of the Pennsylvania corporate der share- law: of, holders at, entitled to notice or to vote appointment judges per- election any such meeting, or entitled to receive fectly proper and that such are payment any such dividend or distribu- charged power responsi- with certain and tion, any or to receive such allotment of bility. 1512(c), Under 15 Pa.Stat.Ann. § rights, rights or to exercise the respect are of election to ‘hear and deter- any change, conversion, such or ex- (a) (b) voting power, mine’ authenticity, change case, of shares. such validity proxies, (c) and effect of such shareholders as shall be share- challenges questions arising holders record on the date so fixed provides vote. The same statute shall be entitled to of, notice or to vote a determination of the of election at, meeting such 'payment to receive prima facie evidence of the facts sur- dividend, such or to receive such of allotment rounding casting counting rights, or to exercise such votes. Within the framework rights, be, as the case notwith- legislation, therefore, the Courts are con- standing any any shares on transfer of give strained to considerable deference the books after determination of the *6 fixed, record date as Pa. aforesaid. slip op. election. Carey, at 4-5. 15, (Purdon Stat.Ann.tit. 1967) § While we will assume that factual determi- (emphasis added). nations of the judges election are entitled face, On its emphasized portion of this deference, such are no better provision states that the record owners predict situated than this court to how the rather than the beneficial owners of the Pennsylvania Supreme Court would con- DRIP shares were entitled to vote those statutory strue the governing the inter- shares.14 Accordingly, like other statutes nal affairs of Pennsylvania corporation. establishing date, a record “the Thus, we will not defer to the election vote is longer no an incident of stock own- legal issues, on although we have ership, but an finding incident of the stock- considered their views. holder’s name on the list of holders as the record date.” E. Aranow & H. Ein- Carey’s challenge to the election horn, Proxy Corporate Contests for Control judges’ acceptance of the DRIP votes (2d ed.1968). presents question statutory construc Pennsylvania under the Business Cor The district recognized poration dealing Law. The statute with election counted the DRIP shares record owners reads: notwithstanding foregoing statute. split 13. Inasmuch as the stock 14. This provision has not been appears to be a codification of Cantwell, appeal is not moot. See In re earlier 639 F.2d common law. In Com- 1050, (3d Cir.1981); Dalzell, monwealth ex rel. Eberhardt v. 1053-54 Brill v. General 152 Pa. 217, (1893), Enters., 25 A. 535 (3d Cir.1956). Indus. 234 F.2d general Court stated that “[t]he [common law] imply We do not this statement that the that, rule is person as between the appeal necessarily would have been moot if the vote, offering follows the split possible had been effectuated as it is title, of which the certificates and the stock again the shares could have been combined. prima books are the evidence.” Id. at facie 25 A. at 537. action, say “origi- the section does that the Nonetheless, observ- While upheld this duty ledger book, of the ing that “the basic nal share or transfer or a Pennsylvania Corpora- under prima election duplicate” shall be facie evidence as possible as is to be as reasonable tion law vote, entitled to the shareholders on mere disenfranchisement avoid suggest positive that the provi- does not slip op. at 14. Carey, technicalities.” (Pur- of Pa.Stat.Ann. tit. sions § 1967), displaced. are At don somehow Pennsylvania law and Carey cites both implies support argument of his most it that a shareholder could by-laws PEI judges improperly credited corporate the election show that the records were incor- owners of the of the beneficial the votes they did not rect reflect transfer of part, Pa.Stat. DRIP shares. relevant duly reported shares that was to the trans- 1967), 1504(A)(Purdon pro- Ann. tit. agent fer before the record date and should that, otherwise indicated save where vides ledger recorded in the have been share statutes or elsewhere in the relevant transfer book. incorporation, “every sharehold- articles of recognize that the district court did every right, at of record shall have er rely exclusively general policy on the meeting, to one vote for ev- shareholders’ favoring shareholder enfranchisement standing in his name on the ery share upholding the determination of the election corporation.” books judges. heavily It also relied on the both I, 2 of the Article Section above-quoted provision plan of the DRIP part, that: by-laws provides, in relevant participants permitted will be to vote holding [stockholders ruling their shares and the of the election classes entitled to vote vote class or judges permitting the DRIP beneficial own- meetings person either in the same at slip op. ers to vote their shares. writing by by proxy duly executed substance, approach 14. In this treats the duly or his authorized attor- stockholder beneficial owners of the DRIP shares as Each such stockholder shall ney fact. holding proxies from the record owners for one for each such be entitled to equitably Carey rebuts the shares owned. registered in his name share of stock theory by noting undisputed that it is App. at 634. Company. the books Cede, owners, Loriot and Together quoted the above Pa.Stat. granted proxy to the neither an omnibus 1967), these Ann. tit. owners, requested nor and acted beneficial *7 the record provisions clearly indicate that Brief of on the instructions of the latter. rather than the beneficial owners Appellant at 33. Thus, DRIP shares were entitled to vote. plan to permit We cannot the DRIP sub- of the district we will reverse proxy for a because to do so would stitute court.15 the interest of the not be consistent with ig- reaching result we have not In our the stockholders deter- corporation and 15, on Pa.Stat.Ann. tit. nored PEI’s reliance mining ownership quickly by refer- (Purdon 1967), that but we conclude showing record owner- ence to the books nothing in that section can be construed Matthews, ship. Salgo v. 497 S.W.2d of owner the situation allow a beneficial Thus, 620, (Tex.Cir.App.1973). the Su- place DRIP shareholders to vote recog- has proxy. preme Court owners absent a valid the record disposition. response In sale or other further claims that if 15. We also note that Carey’s argument, points out that properly shares were voted the DRIP owners, being to the record prejudiced did not forward materials beneficial he own- to these beneficial shares of owners for distribution ers, unable to solicit the owners of beneficially, shares involved and that the amount of owned for which there DRIP stock affected the outcome of ownership Brief of would not have record of stock. See was no Appellee at 21 n. 8. Inas- explained election. See Brief of Appellant While it is not at 29. DRIP shares were might much as we conclude that the owner not also be a briefs how a DRIP owners, properly we not voted the beneficial have been because the record owner it dispute. original need not resolve this DRIP owner transferred his shares “[cjorporate nized that elections cannot be nia ruled that the votes sellers stopped questions illegal to settle nice stated: title, important and it is to the interests of facie, Prima accompa- to vote corporation that their elections should legal title, nies the but when the title is rules, proceed divided, under their own exists, equity with and an as between pledgor Commonwealth pledgee, their own officers.” ex trustee and cestui trust, or, Dalzell, que rel. Eberhardt v. present case, as in the 222, 152 Pa. at vendee, between vendor and Furthermore, 25 A. at title provision a a a payment, until inchoate plan simply to vote thing DRIP is not the same as subject agreement is par- Moreover, proxy. we observe that ties. This is only the rule not weight authority establishes law, common but also of the act of 1889. right to inheres in the vote record owner of Our attention has any not been called to See, e.g., In re Giant Portland the stock. by-law which in 32, 39-41, Cement 26 Del Ch. 21 A.2d way affects Id. this result. 27 A. (1941); Gunzburg v. Gunzburg, at 999. 101 Misc.2d 422 N.Y.S.2d Patterson, While we have considered we (Sup.Ct.1979), aff'd, 74 A.D.2d conclude in light subsequent (2d Dept.1980); Salgo v. Mat N.Y.S.2d 151 enactment of the sections of Pennsylva- thews, Thus, 497 S.W.2d at 629. if the nia Corporation Business quot- Law above owner personally record does not vote the ed development shares, any person follows who at elsewhere,16 it unlikely that the Supreme tempts to do so must have a formal proxy Court of Pennsylvania would today find Surely from the record owner. a state agreement such an between the record corporation’s in a plan ment DRIP cannot owners and the beneficial owners sufficient regarded as a permit voting shares the latter. owner. point We further out that in Patterson In reaching our result we have not over- court said that it did not have occasion to looked Commonwealth ex rel. Langdon v. purchaser consider whether the vote Patterson, (1893). 158 Pa. 27 A. 998 the stock as he made no offer to so. do Patterson, In certain shareholders had sold Thus, if position even of the beneficial their shares but retained a contingent right owners of the DRIP regarded stock is as purchaser to resume title if the did not analogous to purchaser that of the in Pat- comply agreement required terson, Patterson authority for al- payment on an installment basis. The con- lowing any event, them vote. Patter- provided tract of sale purchaser son, only which involved single purchase, could vote the shares at an upcoming meet- hardly can regarded authority ing, selling but nevertheless the sharehold- proposition that a plan DRIP providing for ers voted the shares pur- themselves. The voting by beneficial owners be substi- attempt did not chaser tuted for statutory requirement *8 Supreme himself. The Pennsylva- Court of record persons holding owners their Reinholtz, It has been observed Keating that as a matter of 5 C. supra, & J. note general corporate law: 2033, at § statutes, necessity, Practical and the articles This rely rule allows the election to it, bylaws expression or quires that are the of re- corporate the records. "The election officers registration some record or in addition are not a dispute, court. In the event of a the certificate, whereby ownership to the the voting right only is the issue before them. known, may the stock be and thus the evidentiary force of the books and records of Consequently, vote.... express provision in the absence of an corporation may the be conclusive on elec- the contrary, the rule is upon but officers not a court." Id. at 190. that the person determined, to vote shares stock is in the case, not, In this "[t]he election officers will title, who has the and this is to be not, go records, corporate need behind the but facie, prima at least from the so, may the do courts as those are records corporation, books of the where stock is subject to rebuttal.” Id. transferrable on the books.

341 event, In are we not bound In re may The authorization vote. Bancorporation and Eastern observe that in such circum- owners by beneficial any Pennsylvania the court did not cite Legisla- the come can stances supporting directly holding.17 cases its ture. Further, nothing opinion there is in the that, as the above- point also out suggests that the court would have demonstrates, portion of Patterson quoted decided the issue the same manner Pennsylvania recog- Supreme Court pledgor/pledgee relationship where a corporation regulate nized that the Pa.Stat.Ann. tit. involved. See by-laws. Arti- right to vote 1967). Rather, it was con- I, by-laws express- 2 of the cle section cerned, court, as was the Patterson with ownership reg- right to vote to ly ties the transaction, large an individualized not a company. istered on the books regularly by-passing Penn- system scale Patterson, Thus, appears it even under corporate by-laws. sylvania law and rather than the record owners were entitled vote owners beneficial III. CONCLUSION DRIP shares. Overall, are satisfied that inasmuch we Bancorpo cites In re Eastern PEI also of the DRIP beneficial owners (Bankr.E.D.Pa. ration, B.R. not have a from the shares did “in 1982), proposition that some for the owners, they were not entitled to can owners circumstances beneficial reaching those shares. our result vote Appellee Brief of at 19. their shares.” vote impli- by no means overlooked the we have specific pledge case involved a That opinion cations of our as we infer from the upon providing that default agreement of the election determination owner, pledgee pledgor/record in this case practice followed the stock entitled would become Nevertheless, wide-spread. we are con- immediately, as if he were record owner. Pennsyl- Court of vinced that pledgee voted There was a default not condone the violation of vania would held that the shares. court theory Pennsylvania law on the present pledge agree circumstances practices, If to do so. modern convenient provisions of Pa. governed ment over of DRIP shares with such as the issuance (Purdon 1967). tit. Stat.Ann. consistent with voting rights, are not direct decision was rendered a situa But that legislature and statutory then it is the former officers were at tion which the must consider wheth- not the courts which agreements tempting repudiate changed.18 With er the law should is in no sense corporation. The case in- to the DRIP shares votes attributable proposition publicly that a authority for the prop- validated, court could not the district required to certify not be owned erly allow the election law and its own had comply position of PEI brought by Accordingly, a share will by-laws requisite in an action votes. we participate chal of the district did not reverse the holder who remand this and will December lenged transaction. management, to enforce strict quote not PEI seeks 17. The court did the decision of another court, Steinberg statutory provisions compliance v. American Bantam federal (W.D.Pa.1948), appeal F.Supp. bylaws. Car dismissed, (3d Cir.1949), for the 173 F.2d 179 *9 "permit, proposition should not ... that a court thing respect 18. The same true with corporation, a those in control of type voting possible under modern communi- compliance of technicalities or strict reliance have not determined wheth- cations. While we law, place provisions a sharehold- Pennsylvania reconciled with law er right,” position is denied the er in a F.Supp. where he (emphasis numbers, changes are telecopying if and 800 added), to communi- at 436 desirable, they necessary, must even or indeed On facts the other shareholders. cate with legislature, by not the courts. be made shareholder, that of this case it is clear entry of permanent injunc- case, matter for the tion in this telegram prox- barring taking PEI from ac- ies contain no signature. shareholder’s note, implement proposal. complete tion to There is also a paper absence of a however, injunction this trail which should not would evidence that the share- in appointed holder fact prevent again understood to Western Union or Computer Corp. Churchill presenting agent. to its shareholders to act as taking appropriate pursuant action The possibility patent, of fraud is since the outcome of such election. nothing suggests in this record recipient of the 800 ability call had the SLOVITER, Judge, concurring. Circuit check whether the caller was in fact the majority’s opinion. I in the concur How- Varalla, shareholder. generally, Data- ever, squarely presents this because case gram Gaps Proxies: at the Be- Interface validity the issue of the of shareholder tween Law Technology, The Com- by telegraphic votes transmission and puter Lawyer, August be- 1985 at Ap- likely cause again parently this issue to arise required information putative either in another election on pro- the same shareholder was the identity elsewhere, posal by PEI I of the Anyone believe shareholder. with that knowledge we should reach and decide the issue. vote the shares of a who, shareholder for one reason or anoth- In connection with the shareholder vote er, illness, disinterest, such as absence or case, arranged this solicitors failed to possi- vote the shares. It is even special that shareholders could call a procedure ble that could be used to number, telephone identify themselves to override an earlier by valid vote the share- operator, their by holder. phone. phone calls by were taken PEI argues crediting telegram prox- Computer Corp. Churchill or Western Un- ies is an accommodation to technology new prepared telegram ion containing who computer age. argu- This is an language cards and transmit- ment properly more addressed to the Penn- by telegram. ted that vote sylvania legislature may, if it so election counted all of the actually votes chooses, specifically provide type for this by though owned the shareholder even voting shares but which also number of by shares listed the shareholder safeguards include various to insure that telegram proxy was fewer than properly votes are cast and credited. Until actually those owned. Pennsylvania legislature acts, I would Carey challenges validity both hold that proxies shares voted proxygram and the action of the election manner shown in this record are invalid crediting excess of the and should not be credited. shares indicated telegram. as voted The resolution of the DRIP share issue

means that we do not have to involve our- appeal

selves on this with the number of by telegram proxy.

votes credited Be-

cause, however, I believe that the entire procedure of crediting telegraphic votes is UNITED STATES America law, invalid under current I think it appropriate why. to state BERKERY, John, Appellant. requires, alia, inter “[ejvery proxy shall be executed in No. 87-1637. writing by shareholder, duly Appeals, United States Court fact, attorney authorized and filed with Third Circuit. secretary corporation.” 15 Pa. May 1504(A). Stat.Ann. tit. Unlike the facsimile also credited the elec-