Anderson v. Reid

Headnote

Clubs—Right to Issue Stock.

A boat club organized under Laws 1875, c. 267, relating to clubs for social, athletic, and similar purposes, has no power to issue stock on which the votes of members shall be based, as in stock companies.

Action by Henry Anderson against John W. Eeid, president of the Varuna Boat Club, and said Varuna Boat Club. Plaintiff moves for a preliminary injunction.

Denied.

Plaintiff as the owner of 23 shares of stock of the Varuna Boat Club claimed the right to vote upon his stock, and cast one vote, for each share, at the approaching annual election. Defendants had declared an intention to reject such votes. The defendants, admitting the allegations of the complaint and the statements contained in the affidavits, insist that as the Varuna' Boat Club was created under and in pursuance of chapter 267 of the Laws of 1875, for the purposes of boating, athletic and social sport, as appeared by the complaint, it had no right to issue stock, declare or pay dividends thereon, and confer upon its members the right to vote upon such stock, as it did by its constitution, and that the provisions of the constitution to such effect were ultra vires and void; that the members could only vote as such, each member having but one vote.

Quoted provisions of general corporation law defining distinction between different classes of corporations (chapter 563, Laws 1890), especially defining stock, nonstock, and membership corporations, the limitation of powers of corporations (section 10, c. 72, Laws 1895), and qualification of voters (section 20, c. 687, Laws 1892), and claimed that those acts merely recognized

and declared the distinction that had always previously existed in this country and in England, and cited decision of Lord Chancellor St. Leonard in 1832, that “a social club, although an association, was not such within the meaning of those acts which were obviously, although not specifically, designed to apply to associations of business and profit.” In re St. James Club, 13 Eng. Law & Eq. 589; In re Livingston Sportsmen’s Ass’n (Sup.) 2 N. Y. Supp. 63 .