Katz v. H. & H. Manufacturing Co.

Headnote

Katz v. H. & H. Manufacturing Co., 109 App. Div. 49 , affirmed.

Appeal, by permission, from an order of the. Appellate Division of the.Supreme Court in the first judicial department, entered December 12, 1905, which reversed an order of Special Term continuing a preliminary injunction to restrain the election of directors of the defendant company.

The following questions were certified :. ,

“(1) The by-laws of the defendant'. corporation provide that the directors shall be five in number, and also, provide that£ stockholders by a, vote of ninety per cent of the stock issued and outstanding may at any regular or special meeting, alter or amend’ the by-laws.'" A meeting was. duly called for the purpose of adopting a resolution to decrease the number of directors from five to four and to amend the provision of the by-laws by substituting the word ‘ four ’ for the word ‘five’ with respect to the number of directors." -The holders' and ■ owners of more' than, fifty per cent -of the issued and outstanding .stock of the defendant, but less than1- niuéty' per cent of such stock, duly voted voted in favor of this resolution.

“ Was it lawful for the company to reduce its number of directors by a vote of the holders of more than, fifty -per cent but less than ninety per cent of the issued and outstanding stock of the defendant where all the statutory requirements have been complied with ?

“ (2) Is it lawful for a corporation to provide in its by-laws that a vote of the holders of ninety per cent (90%) of its issued and outstanding stock shall be required in order to change the number of directors, notwithstanding section 21 of the Stock Corporation Law ? ” . ■