In re the Election of Directors of the Germicide Co. — 48 N.Y. St. Rep. 294

Majority

p. 294

In the Matter of the Election of Directors of The Germicide Company.

(Supreme Court, General Term, First Department,

Filed October 20, 1892.)

Headnote

Corporations—Proxies—Laws 1892, chap. 687, § 20.

A stockholder in a corporation cannot give a proxy coupled with an interest, nor make a proxy irrevocable.

Appeal from an order denying application made by a stockholder to have the election of directors of a corporation set aside- and a new election ordered.

A. L. Sanger, for app’lt; J. W. Boothby, for resp’ts.

One Cohn, being indebted to one Feuchtwanger, had pledged as collateral security for the payment of the indebtedness certain stock of the Germicide Company standing in his name, and delivered as additional security to one Isaacs an irrevocable proxy for voting upon said stock, said proxy to be used by said Isaacs or by his successors. Isaacs duly appointed one Sanger as his successor and substitute; and as such substitute, at the annual meeting of the company, said Sanger offered to vote upon the stock which had been pledged to Feuchtwanger, and which was standing in the books of the company in the name of said Cohn; and if his vote had been accepted the candidates for whiph Sanger offered to vote would have been elected at said election. Cohn undertook to revoke the power which had been executed by him to Isaacs. The inspectors thereupon refused the vote offered by Sanger, and accepted the vote offered by Cohn, Sanger protesting against its receipt. This motion was thereupon made to set aside the election, and the same having been denied, from the order thereupon entered this appeal is taken.

It is urged that the proxy given by Cohn to Isaacs was irrevocable, because such proxy was coupled with an interest and was given for a valuable consideration, and it is attempted to liken the proxy to a power of attorney, which, when coupled with an interest, is irrevocable. The difficulty, with the position of the appellant is that § 20 of chap. 687 of the Laws of 1892 (which was-an act in relation to corporations), expressly provides that no stockholder shall sell his vote or issue a proxy to vote upon any stock, or bond for any sum of money or anything of value. Therefore, the act has expressly prohibited parties from issuing a proxy-coupled with an interest.

But, if this was not a sufficient answer to the application, another provision of the same act provides that every proxy shall be revocable at the pleasure of the person executing it. It is the policy of the law that proxies shall not be made irrevocable, and. in order to voice that policy in the strongest and most unmistakable language the legislature have expressly provided that stockholders in corporations shall not issue a proxy coupled with an-interest, and further than that, that every proxy issued by a stockholder shall be revocable. Parties cannot, by agreement, repeal acts of the' legislature. It might just as well be said that the

p. 295

.usury laws could be repealed by parties entering into an agreement that seven per cent, should be paid upon a loan, and that ithe debtor would not plead usury.

The order should be affirmed, with ten dollars costs and disbursements.

O'Brien, J., concurs.