Beardsley v. Johnson — 16 N.Y. St. Rep. 773

Majority

p. 773

Demin N. Beardsley et al., App’lts, v. Martin G. Johnson et al., Resp’ts.

(Supreme Court, General Term, First Department,

Filed June 19, 1888.)

Headnote

Corporations—Election of directors—1 Rev. Stat., 604, § 8.

The Revised Statutes (1 R. S., 604, § 8), provide for the holding of an election for directors of any incorporated company within sixty days after the the appointed day in case for any reason such election is not held, on that day. Held, that the provision of the statute is directory, and if the election be not held within sixty days immediately after the failure to hold the annual election it can be held at a later period. The corporation does not die becausv of failure to elect directors, nor is the omission an irreparable one.

Appeal from judgment entered upon a dismissal of the complaint upon a trial before the court without a jury.

Abram McKennan, for app’lts; James Armstrong, for resp’ts.

The only question necessary to be considered upon this appeal is as to the regularity of the judgment against the Eastern R. R. Co., of Long Island,, which is the foundation of this action.

The summons in the action against the railroad company was served July 28, 1883, upon one Martin G. Johnson, who must have been either president, secretary, cashier,

p. 774

treasurer, director or managing agent of the corporation to make the service regular or effectual. Code of Civil Procedure, § 431.

It appears that in November, 1879, Johnson was elected a director, and subsequently, on the same day, by the directors, elected president. Johnson swears that he never accepted the office of president, but he does not deny that he was a director, which, if he continued such, would make the service of the summons sufficient; and he did continue such under the statute, as he did not resign until some one else was elected in his place.

The by-laws of the company provided for an annual election of directors on the third Tuesday of November in each year. There however, does not appear to have been any election held until October 15, 1881, at which time it is claimed a new board of directors was elected, of which Johnson was not a member.

It is claimed that this election was wholly unauthorized, but for what particular reason is not stated.

The Revised Statutes (1 R S., 604, § 8) provide for the holding of an election for directors of any incorporated company within sixty days after the appointed day in case, for any reason, such election is not held on that day, and this provision of statute has been held to be directory, and if the election be not held within sixty days immediately after the failure to hold the annual election it can be held at a later period. Vandenburgh v. Broadway Railway Co;, 29 Hun, 348 . In other words, the corporation does not die because of a failure to elect directors, nor is the omission an irreparable one.

The stockholders of this corporation therefore had power to hold an election even though the sixty days had expired.

The objection that it does not appear that the election was sufficient as to number of votes cast to elect anybody, does not seem to be well taken.

There is no proof that there were not enough votes cast to elect, and as the directors declared elected received all the votes cast, there is no presumption to be indulged in that the votes cast were not sufficient to elect.

There is nothing to show but that the election i‘n October, 1881, was just as legal as the election of November, 1879.

We do not think therefore that there is any proof that Johnson was either president or a director of the railway company at the time he was served, and therefore the judgment against such company was improperly entered.

The fact that the newly elected directors may have subsequently acted illegally, in no way changed the situation. Their illegal action did not reinstate in office their predecessors.

p. 775

The judgment appealed from should be affirmed, with costs.

Brady and Daniels, JJ., concur.