Commonwealth ex rel. Laughlin v. Green
| Decision Date | 02 January 1945 |
| Parties | Commonwealth ex rel. Laughlin, Jr., et al. v. Green et al., Appellants |
| Court | Pennsylvania Supreme Court |
Argued Nov. 27, 1944
Appeals, Nos. 30 and 31, March T., 1945, from order of C.P Alleghney Co., July T., 1944, No. 459, in case of Commonwealth ex rel. John E. Laughlin, Jr., et al. v. Edward H. Green et al. Order affirmed.
Quo warranto proceeding.
Order entered sustaining demurrer to answer of respondents, before DITHRICH and KENNEDY, JJ., opinion by DITHRICH, J Respondents appealed.
Order affirmed.
Frank B. Ingersoll , with him William H. Eckert and Smith, Buchanan & Ingersoll , for appellants.
Earl F. Reed , with him Charles M. Thorp, Jr., J. Roland Johnston and Thorp, Bostwick, Reed & Armstrong , for appellees.
Before MAXEY, C.J., DREW, LINN, STERN, PATTERSON, STEARNE and HUGHES, JJ.
Two rival groups of stockholders maneuvered for places on their company's board of directions. It would seem that the ultimate object of the majority faction was to eliminate the others from representation, while, on the other hand, the minority sought to increase its strength of the board. By the strategic device of secretly cumulating their votes on a person whom they had not placed in nomination the minority succeeded, on the face of the returns, in electing their candidate, -- a result challenged by the majority on the ground that, under the by-laws of the corporation, nomination was a prerequisite to election. This raises the principal question on appeal.
The National Supply Company, a Pennsylvania corporation, had been governed by a board of directors of twelve persons elected annually for a term of one year, but at a meeting of the board on February 23, 1944, the by-laws were amended to read as follows: --
The minority group feared that under this new arrangement they would ultimately lose their representation on the board because, four directors being chosen each year instead of twelve, their power to concentrate their strength by cumulative voting would be lessened by two-thirds and would no longer be sufficient to elect a candidate of their own choosing. Accordingly, they sought proxies for the annual meeting of the stockholders, their announced purpose being to seek a repeal there of this by-law. In their solicitations they stated that their object was to re-elect three directors who then represented their interests on the board, that they would vote the proxies received by them cumulatively for those three, and that they were not attempting to oust the present management or to unseat any of the present directors. The majority solicited proxies to be voted for the re-election of the twelve persons then members of the board.
When the meeting convened the twelve incumbents were formally placed in nomination for re-election, and a motion was made and carried, without dissent, to close the nominations. Pittsburgh Steel Company, one of the minority group, and the holder of 120,000 shares, had given its proxy to J. H. Hillman, Jr., and he, in turn, had appointed John E. Laughlin, Jr., Esq., as his substitute. Laughlin, partially cumulating his vote, cast a ballot for 1,200,000 votes for himself as director, although he had not been nominated. This resulted in his being seventh on the list of successful candidates, thereby demoting one of the incumbents, Edward H. Green, Esq., to the first class for a term of one year and completely eliminating another, D. S. Faulkner, who was fourteenth on the list. The minority group succeeded also in placing one T. W. Kirkpatrick as thirteenth highest, but, since it is obvious that if Laughlin was properly elected Kirkpatrick was thereby eliminated, [1] his right is not being pressed, and the only question at issue is between Laughlin on the one hand and Green (because of his demotion) and Faulkner (because of his elimination) on the other. When the result was announced the votes cast for Laughlin and Kirkpatrick were challenged on the ground that they had not been placed in nomination; the judges of election sustained the challenge and declared that Green was elected to the second class, Faulkner to the first class, and Laughlin and Kirkpatrick were not elected. Thereupon Laughlin and Kirkpatrick brought the present quo warranto proceedings to oust Green from the second class and Faulkner altogether. The respondents filed an answer to which the relators demurred. The court sustained the demurrer. Green and Faulkner appeal.
.
Ordinarily of course, a person can be elected to office through "write-ins" of his name on the ballot; it is not necessary that he should have been placed in nomination. But appellants rely on the provision of the by-law that "the four nominees receiving the four highest number of votes shall be elected Directors of the third class... the four nominees receiving the next four highest number of votes shall be elected Directors of the second class... and the four nominees receiving the next four highest number of votes shall be elected Directors of the first class...." Because of this they insist that only nominees could be elected directors and that "write-in" votes were barred. Appellees contend, on the other hand, that if it had been intended to make formal nomination a qualification for election the by-law would have so stated in unambiguous language and not left it to implication from the use of the word "nominees". This position finds a measure of support in Commonwealth, ex rel. Grabert v. Markey , 325 Pa. 433, 190 A. 892, where...
To continue reading
Request your trial