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68 Neb. 107

Haskell v. Read

Nebraska Supreme Court

Decided March 4, 1903

Nebraska Supreme Court · decided 1903-03-04

<p>1. Written Contract: Extrinsic Evidence. Where a written contract requires extrinsic evidence to explain its terms, the interpretation to he given in view of such evidence is a question of fact.</p> <p>2. Bight to Vote Pledged Shares of Stock. As a general rule, the right to vote pledged shares of stock remains in the pledgor until foreclosure.</p> <p>3. Corporation: Registered Stockholders: Election: Books of Corporation. The officers of the corporation, in conducting an election, will not look behind the books of the corporation which show who are registered as stockholders; but a court of equity-may do so, and may enjoin a pledgee from voting the shares pledged in prejudice of the rights Of the pledgor.</p> <p>4. Excessive Issue of Stock: No Consideration: Injunction: Cancelation. A stockholder may maintain a suit to enjoin the holder of shares issued in excess of the amount authorized by the articles of incorporation, and without consideration, from voting such shares in prejudice of his rights, and to procure cancelation thereof.</p> <p>5. Estoppel. Whatever might be the rule as to a bona fide purchaser of or subscriber for such an overissue of shares, one who procures the overissue without consideration, by false representations, will not be heard to assert that a stockholder who voted therefor, relying on such representations, is estopped to question the validity of the shares.</p> <p>6. Private Corporation: Stockholder: Officers: Validity of Election: Equity. It seems that in this state a stockholder may maintain a suit in equity to try the validity of an election of officers and directors of a private corporation, and determine whether persons claiming to be such are entitled to act in that capacity.</p> <p>7. Validity of Election: Jurisdiction of Court. In any event the court may inquire into the validity of the election and pass upon the title to corporate officers when necessary to do complete justice in a suit of which it has jurisdiction on other grounds.</p> <p>8.-: Majority of Shares. Where a corporation has a fixed capital stock, divided into a definite number of shares, a majority of all the shares is necessary to a valid election in the absence of some rule to the contrary.</p> <p>9. Voting Shares. It is not necessary that a stockholder shall have paid for his stock in full to enable him to vote all his shares at an election.</p> <p>1. Corporation: Stockholders: Acts of Minority. Whether less than, a majority of the shares of stock in a corporation having a fixed capital stock, divided into a definite number of shares, may hold a valid meeting and bind the corporation, in the absence of any rule upon the subject, left undecided.</p> <p>2. Minority of Shares: Special Meeting: Election of Officers. Whatever may be the rule in case of stated meetings, or those regularly called or convened, a minority of the shares, after failure of the stated meeting for election of officers, can not call a new meeting on their own authority and hold a valid election.</p>

Relies on Procter Coal Co. v. Finley

Good law ✅— No negative treatment on recordhow we know

Modified · Decided 1903-03-04

How this case has been cited

Cited by 8 later decisions — most recently May 1973

8 state decisions

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Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

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¶1The following opinion on motions for rehearing was filed October 7, 1903. Rehearing denied:

Pound, C.

¶2It sometimes happens that a proposition, true enough in respect of the case in hand, is put in a general form which *116not only is broader than the decision to be rendered really requires, but is open to question in point of law. We think we fell into such an error in our former opinion in this cause. We stated, citing a well known text-writer, that “where a corporation has a fixed capital stock, divided into a definite number of shares, a majority of all the shares is necessary to ,a valid election, in the absence of. some rule to the contrary.” Haskell v. Read, ante, p. 107. Upon further examination, we find that the authorities cited do not entirely sustain the conclusion of the learned author, and that the question is one upon which there is some conflict of opinion. It is not essential to a disposition of the case at bar to pass upon that question, and we are of opinion that it should be left open.

¶3The circumstances out of which the controversy as to the election arises are'these: After the district court had issued a temporary injunction, restraining Read from voting the twenty-two shares of stock in controversy, the annual meeting for election of officers came on. Upon production of the order of injunction, it became substantially impossible to hold an election, as the shares which could be voted were evenly divided between the contending factions, assuming that Haskell could vote the two shares he had pledged. Under these circumstances, all the stock being present, Read, as president, adjourned the meeting until the injunction proceedings could be determined. We are inclined to think that this was within his powers as presiding officer, in view of the impossibility of doing any business at the meeting. However this may be, the only proper course, for those who objected was to appeal from the ruling and put the matter to a vote. Procter Goal Co. v. Finley; 98 Ky. 405, 33 S. W. 188. It did not authorize the plaintiff and his faction, after lapse of some time, to convene what was in effect a new meeting and hold a valid election. Whatever may be the rule in case of stated meetings, or thos.e regularly called or convened, a minority of the shares, after failure of the stated meeting for the election of officers, can not call a new meeting on their own *117authority- and hold a binding election. To. permit this would be to concede to a minority of the shares the power to govern the corporation. This is not a case where a majority withdraw from a meeting regularly convened and suffer the minority to conduct it. Right or wrong, the president had adjourned the meeting in the presence of all the stockholders, and no appeal had been taken from his ruling. The attempt of plaintiff, after some time spent in consultation, to hold the meeting with less than a majority, was to all substantial purposes a new meeting.

¶4We therefore recommend that the motions for a rehear-. ing be denied.

Barnes and Oldham, CC., concur.

¶5By the Court: For the reasons stated in the foregoing opinion, it is ordered that the motions for a rehearing be denied.

¶6Rehearing denied.

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