Bartlett v. Fourton

• Decision Date: 05 June 1905
• Docket Number: 15,573,15,676
• Citation: 115 La. 26,38 So. 882
• Court: Louisiana Supreme Court
• Parties: BARTLETT et al. v. FOURTON et al

38 So. 882

115 La. 26

BARTLETT et al. v. FOURTON et al

Nos. 15,573, 15,676

Supreme Court of Louisiana

June 5, 1905

Appeal from Civil District Court, Parish of Orleans; Thomas C. W Ellis, Judge.

Action by T. J. Bartlett and others, as stockholders of the Young Men's Real Estate Improvement Company, Limited, against H. C. Fourton and others. Judgment for defendants, and plaintiffs appeal. Affirmed.

Theodore Cotonio, for appellants.

Charles Ferdinand Claiborne and Dart & Kernan, for appellees.

OPINION

MONROE J.

Statement.

Talbot J. Bartlett, Henry L. Nick, and Theodore Cotonio bring this suit as stockholders of the Young Men's Real Estate Improvement Company, Limited (the two first mentioned as candidates claiming to have been elected members of the board of directors of the company), and allege, in substance, as follows, to wit:

That said company was incorporated in 1891, is domiciled in New Orleans, and owns property exceeding $ 10,000 in value, and that petitioners are stockholders therein; that, according to the charter, the board of directors is to consist of nine stockholders, elected by ballot on the third Tuesday in November of each year, at elections to be held under the supervision of three commissioners appointed by the pre-existing board, of which elections, 10 days' notice is to be given by publication in a daily newspaper selected by said board, and that no election has been held as thus required.

"That H. C. Fourton, and others associated with him, claiming to be stockholders," attempted to hold an election on the third Tuesday in November, 1904, at the Grand Opera House, in this city, though said opera house is not the office of the company, and no commissioners had been appointed and no notice given as required by the charter of the company.

That in spite of petitioners' protest, R. H. Pollock, E. A. Neugass, and Hart D. Newman acted, under the appointment of said Fourton, claiming to be president, as commissioners of said election, and that the following named persons voted the stock mentioned in connection with their names, to-wit: D. H. March, 40 shares; J. O. Hans, 50 shares; R. L. Pollock, 50 shares; E. A. Neugass, 36 shares; and Hart D. Newman, 50 shares -- voting in person; and Charles de B. Claiborne, 5 shares; James Thibaut, 50 shares; Eugene Chassanoil, 50 shares; C. M. Smith, 50 shares; F. J. Eldridge, 5 shares; P. M. Schneidau, 5 shares; O. A. Schneidau, 5 shares; M. D. Gardner, 2 shares; L. De Fuentes, 5 shares; E. Claudel, 2 shares; Wm. H. Heyl, 14 shares; Dave Liberman, 2 shares; Simeon Emanuel, 50 shares; Leon N. Neugass, 50 shares; Moses Hollander, 24 shares; S. J. Schwartz, 50 shares; C. M. Morales, 50 shares; Leonard Stern, 50 shares -- voting by proxy; and that said persons were not bona fide stockholders, but had acquired the stock so voted in violation of the charter of the company, and particularly of article 5, which provides that:

"All stock shall be transferred on the books of this corporation by the stockholders in person or by power of attorney. No stockholder shall be allowed to sell or transfer his share, or shares, of stock in this corporation without, first, offering the same to the company, through its president or vice president. If the company fails to purchase the stock so offered, at its market value, within three days from such offer, then, the stockholder desiring to dispose of his stock may sell and transfer the same. All the stock so purchased by the company may be reissued by it. And no person can subscribe to, or hold more than fifty shares of said stock, in his individual name."

That moreover Hart D. Newman, who, as proxy, voted the stock in the name of James Thibaut, Eugene Chassanoil, C. M. Smith, F. J. Eldridge, P. M. Schneidau, O. A. Schneidau, M. D. Gardner, L. De Fuentes, E. Claudel, W. H. Heyl, Dave Liberman, Simeon Emanuel, Leon Neugass, Moses Hollander, S. J. Schwartz, C. M. Morales, and Leonard Stern, was without authority so to do, for the reasons, that he was acting as a commissioner, and that the proxies of said persons were made in favor of Wm. H. Heyl, who was not present, and contained no power of substitution. Petitioners further allege that the votes thus mentioned were cast in favor of H. C. Fourton, D. H. March, James Thibaut, C. B. Stroudbach, E. A. Neugass, John O. Hans, M. D. Gardner, Wm. H. Heyl, and Simeon Emanuel, to constitute the board of directors of the company, and that thereafter petitioners, with reservation of all their objections, for themselves and as proxies of other stockholders, cast 214 votes for T. J. Bartlett, Chas. W. Stumpf, W. J. Morgan, E. Dusse, Chas. G. Peter, M. Picheloup, L. A. Livaudais, Jr., Nathan Levy, and Theodore Cotonio, to constitute said board, and that, if said election had been legally conducted, the persons so voted for by petitioners would have been elected.

That "H. C. Fourton and his associates * * * have carried the election for board of directors * * * for several years past in like manner, and thus illegally taken control of the affairs of said corporation. That they have illegally issued to themselves shares of stock, * * * so as to have a majority of the stock, * * * placing blocks of fifty shares each in the names of persons who have no real interest, * * * in order to circumvent the prohibition in said charter. * * * That said H. C. Fourton and his associates have purchased stock in said corporation, well knowing that the same had not been previously offered to the corporation, as required by the charter, and they have, in addition thereto leased the corporate property for their own individual benefit and advantage, and not for the interest of all of the stockholders, and managing [?] the corporate property to the prejudice and injury of petitioners and all other stockholders similarly situated, and that it is necessary that a temporary receiver should be appointed for said corporation." They therefore pray that the parties said to have been elected directors, as also the company, through its acting president, be cited, and that there be judgment decreeing that said parties do not legally constitute the board of directors, and that said board is constituted of the persons for whom petitioners voted, or, in the alternative, that the election so attempted to be held by said Fourton and his...