State ex rel. Haeussler v. Greer

• Decision Date: 15 June 1880
• Citation: 9 Mo.App. 219
• Parties: STATE OF MISSOURI, EX REL. H. A. HAEUSSLER, Appellant, v. JAMES G. GREER, Respondent.
• Court: Missouri Court of Appeals

9 Mo.App. 219

STATE OF MISSOURI, EX REL. H. A. HAEUSSLER, Appellant,

v.JAMES G. GREER, Respondent.

St. Louis Court of Appeals, Missouri.

Jun. 15, 1880.

Where a charter provides a method for the election of directors of the corporation, and further provides that the general law which makes charters subject to alteration shall not apply to this corporation, a change of the methods of such elections, made by the subsequent adoption of a State Constitution, does not impair the contract obligations or vested rights of stockholders, and an election for directors is properly held under the latter method.

APPEAL from the St. Louis Circuit Court, BOYLE, J.

Reversed and remanded.

BROADHEAD, SLAYBACK & HAEUSSLER, for the appellant: “1. The provision in the charter in regard to the manner of selecting its managers did not vest a right in the individuals who might own the stock that could not be changed by the State. 2. The constitutional amendment neither impaired nor destroyed the powers of the franchise: it merely gave additional protection to owners of its stock, and provided an additional safeguard for citizens of the State who should deal with the institution. 3. The amendment was a mere police regulation, and a power or right that the State could not abandon to any corporation or private individual. 4. The Legislature has not the power to suspend the operation of the general law of the State in favor of a corporation any more than in favor of an individual, and the provision of the charter of the institution suspending the operation of sect. 8 of the act approved March 19, 1845, in respect to it, was void.-- Peters v. Iron Mountain R. Co., 23 Mo. 107 (end of opinion); The State v. Matthews, 44 Mo. 523, 530; Washington University v. Rowse, 42 Mo. 323; Price v. Insurance Co., 3 Mo. App. 262; Neal v. Ruggles (Sup. Ct. Ill.), 11 Ch. Leg. N. 20; Munn v. Illinois, 94 U. S. 113, 155, 180; Thorpe v. Rutland, etc., R. Co., 27 Vt. 140; Christ Church v. Philadelphia, 24 How. 300; Butler v. Pennsylvania, 10 How. 402; The People v. Commissioners, 47 N. Y. 501; The State v. Commissioners, 8 Vroom, 228-241; Charles River Bridge v. Warren Bridge, 11 Pet. 536; The Commonwealth v. Farmers', etc., Bank, 21 Pick. 542; Bank v. Attorney-General, 3 Wend. 588; Bank v. The State, 4 Smed. & M. 439.”

FINKELNBURG & RASSIEUR, for the respondent: The change in the method of electing the managers of corporations provided for in sect. 6, Art. XII., of the Constitution of 1875, materially and fundamentally modifies and alters the rights of stockholders in controlling the affairs of corporations.-- Hays v. The Commonwealth, 82 Pa. St. 518; Dartmouth College v. Woodward, 4 Wheat. 637; Pittman v. Adams, 44 Mo. 570; The Commonwealth v. Claghorn, 13 Pa. St. 133 The charter of the German Savings Institution having been granted long before the Constitution of 1875 went into force and effect, and without reservation of future control, created certain vested rights in the stockholders of that institution which the State could not alter, modify, or withdraw without their assent.-- Sloan v. Pacific R. Co., 61 Mo. 24; Scotland County v. Missouri, Iowa & Nebraska R. Co., 65 Mo. 123; Ang. & Ames on Corp., sect. 767; Cooley's Const. Lim. 279. The right of a majority in interest to control the election of every officer of the corporation was one of those vested rights, and the Constitution of 1875 can have no effect upon its exercise until the expiration of the present charter, which takes place on the first day of December, 1883.-- Webb v. Ridgely, 38 Md. 364; In re St. Mary's Church, 7 Serg. & R. 517; Mowry v. Indiana, etc., R. Co., 4 Biss. 83; City of Covington v. Covington & Cincinnati R. Co., 10 Bush, 76; Faulds v. Yates, 57 Ill. 416. The constitutional amendment in question does not fall under the reserved power of States to regulate corporations and individuals, usually called “police power.”--Cooley's Const. Lim. 572; Gorman v. Pacific R. Co., 26 Mo. 441; The State, ex rel. Pittman, v. Adams, 44 Mo. 570; Lake View v. Rose Hill Cemetery Co., 70 Ill. 194; The People v. Jackson, etc., Co., 9 Mich. 307.

HAYDEN, J., delivered the opinion of the court.

This is an information in the nature of quo warranto, the relator claiming that he had been a director of the German Savings Institution, here called for brevity the bank, and that the defendant has wrongfully intruded into the office. The German Savings Institution was chartered by special act of the General Assembly, approved on February 4, 1853, as a banking corporation. The ninth section of its charter is as follows:--

“The stock and affairs of the institution hereby established shall be managed and conducted by nine directors, who shall be elected every second year, at such time and place, in the city of St. Louis, as the board of directors for the time being shall appoint, and shall hold their office for two years, and until others be chosen, and no longer; and the election shall be held in such manner as said directors shall by ordinance or by-law prescribe, and shall be made by ballot, by plurality of the stockholders, allowing one vote for every share; and stockholders not personally present may vote by proxy, made in writing directly to the person representing them at such election. In case it should happen at any time that an election of directors should not be made on any day it ought to have been made, the corporation hereby established shall not for that cause be deemed to be dissolved, but it shall and may be lawful on any other day to make and hold an election of directors, in such manner as shall be regulated by the by-laws and ordinances of said corporation.”

By the next section it is provided that the seventh section of the first article of the act of March 19, 1845, which is to the effect that the charter of every corporation hereafter to be granted shall be subject to alteration, suspension, and repeal, etc., shall not extend to this corporation.

By the sixth section of Art. XII. of the present Constitution, which took effect on the 30th of November, 1875, it is provided:--

“In all elections for directors or managers of any incorporated company, each shareholder shall have the right to cast as many votes in the aggregate as shall equal the number of shares so held by him or her in said company, multiplied by the number of directors or managers to be elected at such election; and each shareholder may cast the whole number of votes, either in person or by proxy, for one candidate, or distribute such votes among two or more candidates; and such directors or managers shall not be elected in any other manner.”

On the eighteenh day of February, 1879, at a regular election for nine directors of said corporation, at which election sixty-one stockholders participated, the relator, the owner of 166 shares of stock, offered to vote the same on the cumulative plan, by multiplying the number of shares by nine, and giving the total number of votes which he claimed to be entitled to cast,-- viz., 9x166 = 1,494 votes,--and then offered to vote one-half of those votes-- to wit, 747 votes--for himself as a director. Three other stockholders, owning in the aggregate 380 shares, likewise offered to cumulate by casting nine times that number of votes--to wit, 3,420 votes--for relator as a director, which, together with the 747 votes offered by relator in his own behalf, and 94 votes cast for him on the regular plan, would have given him a total vote of 4,261 votes--enough to elect him as a director; while upon the ordinary plan of counting one vote for each share, for one director, he received...