Lippman v. Kehoe Stenograph Co.

Boyce, J.,

dissenting: The specific issue raised by the pleadings and the assignments of error is whether the shares-of stock of the Kehoe Stenograph Company, the respondent below, held by the complainant below, were legally forfeited. The determination of this question depends upon whether the forfeiture was made by a de jure board of directors of the company. This latter question in turn involves collaterally and incidentally the legality of the meeting and the election thereat of the. board of directors by the Dunlap faction, which had come into existence, on January 21, 1914.

In view of the conclusion reached by the majority of the court, a review of the testimony for findings of fact warranted by the record, or the- consideration of any other meeting than that of January 21, 1914, is of no special value here. Therefore, it is unnecessary that I should say more than is contained in the following statements:

There is considerable testimony in the record with regard to certain arrangements between certain persons of the contending factions of the respondent below, which is immaterial and irrelevant, and is not evidential of the fact in issue.

The minutes and. books of the Dunlap faction were self-serving and inadmissible -on the issue raised. Likewise the examination of these minutes in aid of testimony with regard to matters contained' therein was objectionable.

The testimony of R. Y. Slater discloses so many inconsistencies that its. value is greatly affected; and that of Waples is inexplicable. This comment is made independently of opposing testimony.

On and after the organization meeting of the incorporators, October 9, 1913, the legality .of which is conceded, R. Y. Slater and Ackerman, two of the three original subscribers of stock, *427and Waples, the assignee of Horn, the remaining subscriber, constituted the body corporate of the respondent below. Whatever may be said of the meeting of October 29, 1913, and of any subsequent ratification thereof these persons then constituted the body corporate, and their record of the minutes of the meeting initialed and signed by them, bound them inter sese. If, however, there was no de jure board of directors of the respondent corporation prior to January 21, 1914, then the meeting of that date, held by the Dunlap faction, did not create a de jure board of directors; for Waples was not at that time a stockholder or qualified director. R. Y. Slater was the only stockholder and qualified director at that meeting, and he was without authority to hold a valid meeting, or power to elect other persons for directors, whether legally qualified therefor, or not. If the by-laws of October 29, 1913, were not the bylaws of the corporation, binding upon Slater, Ackerman and Waples, then there were no by-laws authorizing the meeting of January 21, 1914, to be held outside of the State.

I do not concur in certain findings of fact or in the interpretation of certain provisions of the .general incorporation act by the court below, or by the majority of this court.

I am of the opinion, upon the facts and the law applicable thereto, that the Kehoe Stenograph Company, the respondent below, did not have a de jure board of directors on July 27, 1914, when the alleged officers representing the Dunlap faction of the company advertised the stock of the complainant below for sale; and that the forfeiture of his stock was illegal, and is a nullity.

I am constrained to the conclusion that the decree of the court below should be reversed.