Sylvania & G.R. Co. v. Hoge
| Decision Date | 19 December 1907 |
| Parties | SYLVANIA & G. R. CO. v. HOGE et al. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
The general railroad incorporation act (Civ. Code 1895, § 2163) gives the management of the affairs of the corporation to a board of directors of not less than 5, and not more than 15 members. The act further provides for the annual election of directors. Where stockholders attend a regular annual meeting of stockholders, they may transact the business of that meeting, and elect officers, although a majority in interest or in number of the stockholders are not present. If at any such meeting they fail or refuse to elect directors, any stockholder may by mandamus compel the corporation and the directors holding over to call a meeting for the purpose of electing a board of directors.
[Ed Note.-For cases in point, see Cent. Dig. vol. 33, Mandamus, § 262.]
A shareholder is not prevented from exercising his right as such because another may be beneficially interested in the ownership of the stock.
A sale of stock by one who is a party to a pooling agreement to some of the other stockholders, in violation of its terms, does not justify the corporation of its own motion for that reason alone to refuse to recognize the validity of such transfer.
[Ed Note.-For cases in point, see Cent. Dig. vol. 12 Corporations, § 489.]
Where neither the charter nor any statute or by-law of the corporation require that stock be transferred on the books of the company, or the surrender of the certificate and the issuance of a new certificate to the assignee, a mode or form of conveyance sufficient in law to transfer the absolute title to the assignee entitles such assignee to all the rights and benefits accruing to the assignor, just as if the certificate of shares stood in the assignee's name.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 12, Corporations, § 529.]
A shareholder who designedly absents himself from a stockholders' meeting surrenders no right appertaining to the ownership of his stock, except the right to participate in the meeting which he refuses to attend.
Where stockholders failed to hold a regular annual stockholders' meeting, and elect directors, a meeting of the old board of directors on the day on which the stockholders should have acted, in which they resolved to hold over until their successors were elected, is not in effect a reelection of them by the stockholders for another term.
Where the directors are reduced by death below the minimum number prescribed by the charter, and there is no provision in the charter or by-law for filling the vacancy by the directors, the stockholders may supply the vacancy.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 12, Corporations, § 1197.]
Error from Superior Court, Screven County; B. T. Rawlings, Judge.
Application by S.C. Hoge and others for a writ of mandamus to compel the Sylvania & Girard Railroad Company and three of its directors to cause a meeting of the stockholders to be held for the purpose of electing a board of directors. From an order granting the writ, respondents bring error. Affirmed.
If railroad stockholders at a regular annual meeting fail to elect directors, any stockholder may by mandamus compel the corporation and the directors holding over to call a meeting for the purpose of electing directors.
S. C. Hoge, L. H. Hilton, W. P. Williams, E. H. Hill, Jr., G. M. Hill, J. A. Mills, and J. R. Wells applied for a writ of mandamus to compel the Sylvania & Girard Railroad Company, and three of its directors, J. J. B. Morel, P. A. Mock, and J. W. Overstreet, to cause a meeting of the stockholders of the corporation to be held for the purpose of electing a board of directors. Applicants alleged in their petition that they were stockholders of the railroad company; that the capital stock of the corporation was $10,000, divided into 100 hundred shares of the par value of $100 each; that the Sylvania & Girard Railroad Company was organized on the 16th day of November, 1906, at a meeting of the stockholders of the company held at its principal office in Sylvania. At this meeting L. H. Hilton, H. C. Perkins, J. J. B. Morel, P. A. Mock, and J. W. Overstreet were elected directors of the corporation. The stockholders present at this meeting represented 88 shares of the capital stock of the company, and the following resolutions were adopted: On the first Wednesday in January, 1907, a minority of the stockholders met pursuant to the foregoing resolutions, but failed to elect a board of directors. The old board of directors, with the exception of H. C. Perkins, who departed this life intermediate his election and the meeting of the stockholders on the first Wednesday in January, 1907, continued to hold over and exercise the duties of the office of directors. Applicant, S.C. Hoge, is now the owner of 25 shares of stock formerly owned by H. C. Perkins. On April 11, 1907, applicants addressed a communication in writing to the four surviving directors, requesting that a meeting of the stockholders be called for the purpose of electing a board of directors. The board of directors refused to comply with this request, and still refuse to call a meeting of the stockholders to elect their successors. The charter of the company requires a board of five directors to manage its affairs, and, since the death of H. C. Perkins, this board is not constituted as required by law, and has no power to elect a successor to the deceased director. The prayer is that the directors Morel, Mock, and Overstreet be required to call a meeting of the stockholders for the purpose of electing a board of directors.
In response to the mandamus nisi, the defendants appeared and demurred to the sufficiency of the petition as affording ground for the relief prayed. They also filed an answer, in which it was charged on belief that, though the 25 shares alleged to be owned by Hoge stood in his name, he held them for L. H. Hilton, and he was not a real and bona fide stockholder. They denied that Mills was the lawful owner of the five shares which he claimed to own, on account of the following fact: That they were originally issued to his brother-in-law, J. A. Enneis, and were sold by Enneis to Hilton in violation of his agreement hereinafter set out, and in some way transferred to Mills, but not on the books of the company. The corporation, through its president, Morel refused to make the transfer, and these five shares stand on the books of the company in the name of Enneis. Defendants believe that they are held by Mills for the benefit of Hilton, but do not recognize either Mills or Hilton as the owner of these five shares. When Mills was endeavoring to purchase these shares from Enneis, he was informed by the latter that he could not sell his stock to him, and was in honor bound to keep it in pursuance of the agreement hereinafter set forth, of which Mills, Enneis, and Hilton were advised. It was admitted that the other applicants were stockholders as alleged. It was further averred that the railroad company was incorporated under the general law by the Secretary of State on October 18, 1905, and subsequently leased the railroad running from Rocky Ford to Sylvania, known as the "Sylvania Central Railroad," for 10 years, with the privilege of renewal for a like term; that this was the only road running into Sylvania; that the citizens of Sylvania were willing to get the charter for the Sylvania & Girard Railroad Company either to build or control a railroad running into Sylvania, provided L. H. Hilton should be kept out of the control of the company. At one time when the publication for a charter was running the publication was stopped because of the apprehension as to Hilton's control. Subsequently, and before the granting of the charter, there was a meeting to compromise and adjust matters at Sylvania, and at this meeting Hilton stated that he would offer a resolution giving to J. J. B. Morel and his friends, if they would go into the enterprise, one half of the capital stock, and that he and his friends would take the other half, and that Morel and his friends should have the right to name three out of five of the directors, and thus exercise a control. It was known by Hilton and all present that Morel and his friends would not go into the enterprise but for the understanding embodied in such a resolution; and but for this understanding the enterprise would not go through. According to this understanding, a meeting of the citizens was held and took the following action, as embodied in the minutes of the meeting: ...
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