Hyperlawhypertext legal database In re Election of Directors of Rapid Transit Ferry Co. 43 N.Y.S. 538

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In re Election of Directors of Rapid Transit Ferry Co.

43 N.Y.S. 538 Court N.Y. Sup. Ct. English

Delivered by GAYNOR, J.

Contents

Majority

p. 538
In re ELECTION OF DIRECTORS OF RAPID TRANSIT FERRY CO.
(Supreme Court, Special Term, Kings County.
February, 1897.)

Headnote

Corporations—By-Laws—What Constitutes Quorum.
A by-law of a corporation, providing that “a majority of the stock present in person or by proxy at any meeting of the stockholders shall constitute a quorum,” requires the presence in person or by proxy of a majority of all the stock of the corporation to make a quorum.
Motion to set aside the election of directors of the Rapid Transit Ferry Company at the elections of 1895 and 1896, on the ground that there was no quorum at the meetings at which the elections were held. Election of 1896 set aside.
Julien T. Davies and W. N. Dykman, for the motion.
Albert B. Boardman, opposed.

By general law, the stockholders present in person or by proxy at a meeting of stockholders constitute a quorum. The general corporation law (Laws 1892, c. 687), however, allows the directors to change this by by-law, and fix the amount of stock which must he represented in order to make a quorum. Section 11. In this company the following by-law was passed, viz.: “A majority of the stock present in person or by proxy at any meeting of the stockholders shall constitute a quorum.” It is without any punctuation marks. Unless to establish a quorum different to that which the general law makes, this by-law could have had no object. It cannot be construed as meaning that a “majority” of the stock actually represented at a meeting should be a quorum, for that would be unlawful. A majority cannot separate itself from the minority, and be a quorum. All present are the quorum. It must therefore mean that it is necessary that a majority of the stock of the company shall be present in person or by proxy to make a quorum. I must therefore set aside the election of 1896. That of 1895 has been acquiesced in. I think that the statute contemplates that an application to set aside an election.of directors must be made with reasonable promptness, and that if, instead, the election is acquiesced in, stockholders so acquiescing lose the benefit of the statute.