3 facto.1 In New Jersey, where there was a statute which provided that all corporations whose charters did not designate the places of their meeting should hold their business meetings and the meetings of their directors within the State, it was held that a resolution of the board of directors of a corporation at a meeting held in the city of Philadelphia, in Pennsylvania, whereby certain transfers of stock were authorized, was void. The same rule prevails in Texas; and where the articles of association of a corporation, created under the laws of Texas, authorized the corporation to transact its business at Paris, in France, it was held that the corporation could not hold stockholders' meetings outside of Texas, and that directors elected at a meeting held at Paris were not even directors de facto, and that their acts were a nullity. On the contrary, the view taken in Colorado is that the fact that the annual meeting of the stockholders of a corporation created under the laws of that State, for the election of directors, is held outside the State, cannot be raised in a collateral proceeding, either by the corporation or by one who has contracted with it as such, although such a meeting is irregular and illegal; and this is in accordance with a principle elsewhere explained.5 A corporation created by the concurrent legislation of two States, receiving from each the same charter in legal effect, has a legal domicile in each State, and may lawfully hold its meetings and transact its corporate business in either State. In some of the new States and territories, whose policy it is to encourage the introduction of foreign capital, provisions have been made by statute, allowing corporate meetings to be held beyond the limits of the State or territory. Thus, the provisions of the civil code of Dakota territory, relating to the place of meeting of directors and stockholders of corporations, has been amended so as to permit such meetings to be held at any place within or without the territory, where the corporation appoints an agent within the territory upon whom service of 4 6 process may be made.1 And the statute of Colorado" allows meetings of directors to be held beyond the limits of the State, if provision is made therefor in the certificate of incorporation.3 The statute of Minnesota permits meetings to be held at any place within or without the State. 4 § 697. Meetings Held at what Place within the State.— Where the by-laws of a corporation authorize the president to call special meetings of the directors, upon giving notice of the time and place thereof, and such place is not prescribed by the by-laws, the president may call such meeting at a place other than the principal place of business of the corporation. Where the charter does not prescribe the place where the annual elections are to be held, the board of managers have the right to fix the place, and the officers elected at the place so fixed will be at least officers de facto, with power to hold their offices unless ousted by quo warranto brought during the official terms of such officers." 1 Act March 11, 1887, L. 1887, c. 36, p. 85. 2 Gen. Stat. Colo., chap. 19, § 18. 3 See Humphreys v. Mooney, 5 Col. 282. Rev. Stat. Minn. (1881), p. 449, § 404. 5 Corbett v. Woodward, 5 Sawyer, (U.S.), 403. 6 Commonwealth v. Smith, 45 Pa. St. 59. Mandamus refused to compel a corporation to keep its records at the place where its business of manufacturing was done; the evidence showing that the books had been correctly kept, and that the petitioner had been furnished with all the information from such books which he required: Pratt v. Meriden Cutlery Co., 35 Conn. 36. 539 CHAPTER XV. CORPORATE ELECTIONS. ART. I. ASSEMBLING THE MEETING, §§700--722. II. THE QUORUM, §§725–729. III. RIGHT TO VOTE, §§730–743. IV. CONDUCT OF THE ELECTION, §§745–758. V. RIGHT TO THE OFFICE: CONTESTING THE ELECTION, §§761-794. SECTION ARTICLE I. ASSEMBLING THE MEETING. 700. Mandamus to compel the holding of a corporate election. 701. Time of holding corporate elections. 702. Statutory provisions as to time of holding meeting. 703. Statutory provisions as to place of holding corporate meetings. 704. Who may call the meeting. 705. Statutory provisions as to who may call. 706. Necessity of having meeting duly assembled. 707. Corporate meetings invalid unless duly notified. 708. If the meeting is special all must 709. And in the statutory mode. $700. Mandamus to Compel the Holding of a Corporate Election. A mandamus has been frequently granted by the English Court of King's Bench, in the case of municipal corporations, to compel the corporate authorities to hold a corporate election.1 The English courts, it is well known, restrain the writ of mandamus to the enforcement of rights of a public nature, though in America the remedy has been much enlarged, and now extends in many cases to compel the doing of acts of a private nature, where the relator has no other remedy. The use of the writ to redress injuries in private corporations is vindicated by a decision of the Supreme Judicial Court of Massachusetts, where it was held, on a learned review of the decisions, that the circumstance that a corporation is in the nature of a partnership, as where it is merely a manufacturing company, does not preclude the use of the writ of mandamus in a proper case. This holding is a distinct authority for the proposition, denied in some of the English cases, that the use of mandamus in such cases is not restricted to instances where public rights are involved. On the other hand, the directors of a corporation, who are in office, cannot dispute the right of a stockholder, holding a majority of the stock, to have an election in accordance with the by-laws, on the ground that he intends to use his legal rights for purposes detrimental to the interests of the corporation, and that the desired election is merely a step toward that end.3 If 1 In one case a mandamus was granted to the mayor, bailiffs and burgesses of the corporation of Cambridge, to compel the holding of a corporate election. After the election had taken place, it was shown to be merely colorable and illusory, and had for the mere purpose of enabling the mayor to hold over. The election in question resulted in choosing as mayor an officer in the army, just gone to North America and without the least probability of returning till long after the year, which was the term of the office, would be expired. Rex v. Mayor of Cambridge, 4 Burr. 2008. In another case a mandamus was granted under a statutę, 11 Geo. I., c. 4, to compel the election of a mayor, although there was a mayor de facto. The objection that a de facto officer (who appeared to be holding without a shadow of right), ought to be first ousted was held not good, because the intent of the statute was to give the corporation a rightful officer as soon as might be; whereas this pretense would waste the whole year. This decision, however, was made to rest upon its own peculiar circumstances, the court saying that it "might be otherwise where there was a probable election and room to doubt; and that these writs were discretionary. Besides there was no harm done; for it is not a peremptory mandamus, and they may return that there is a rightful officer."" Case of the Borough of Boffiny, 2 Strange, 1003. 2 American Railway-Frog Co. v. Haven, 101 Mass. 398; s. c. 3 Am. Rep. 377. 3 Camden &c. R. Co. v. Elkins, 37 N. J. Eq. 273. the election is to fill a vacancy, the officer elect holds for unexpired term of the officer, whose death, resignation or removal created the vacancy, in the absence of a contrary provision in the governing statute or by-laws. The board of directors cannot enlarge the tenure of a ministerial officer of the corporation, beyond that expressed in the governing statute. When, therefore, the charter of an association required a chief engineer to be elected" annually" by the board of delegates, also elected annually, and a board elected one for a term of five years, it was held, that his tenure ended the election of another by the succeeding board; and this although such election did not take place on the day prescribed in the charter therefor, but at a later regular meeting.2 § 701. Time of Holding Corporate Elections. Several decisions are met with, on the question of the time at which corporate elections are to be held, but they mostly turn upon the language of particular charters or statutes, and do not follow the thread of any definite principle. On obvious grounds, it has been held that where the charter provides for an annual election of a board of managers, those in power cannot lengthen their term of office by changing the date of the annual election from May to November, and thus extend their official terms. The provision of a special charter requiring directors to be chosen at the annual meetings of the corporation, has been held directory and not restrictive, so that its observance was not deemed necessary to the validity of an election. It has been held that a statute requiring the directors and treasurer of a corporation to be chosen annually by the stockholders, at such time and place as shall be provided by the by-laws of the company, is inapplicable to the first choice of officers by persons associating themselves together, and proceeding to create and constitute themselves a body politic. The court reason that no by-laws can be adopted by or for a corporation before the corporation itself is created. When the associates first meet together, in pursuance of their articles of association, and then commence the in 1 People v. McKinney, 41 Barb. (N. Y.) 516. 2 State v. Batt, 38 La. An. 955. 3 Mattu v. Primrose, 23 Md. 482 Hughes v. Parker, 20 N. H. 58. |