8

be. Likewise, it follows that a majority of the votes actually cast will be sufficient, although it may not be a majority of those who are present.9

1 Citizens' Mutual etc. Ins. Co. v. Sortewell, 8 Allen, 217; and cases cited infra.

2 8 Vict. ch. 16, § 72.

3 Brown v. Pacific Mail etc. Co. 5 Blatchf. 525; People v. Walker, 2 Abb. Fr. 421; S. C. 23 Barb. 308; Field v. Field, 9 Wend. 394; Ec parte Willcocks, 7 Cow. 402; 17 Am. Dec. 525; Madison Ave. etc. Church v. Baptist Church, 5 Rob. (N. Y.) 649; Dudley v. Kentucky High School, 9 Bush, 578; New Orleans etc. R. R. Co. v. Harris, 27 Miss. 517, 537; Durfee v. Old Colony etc. R. R. Co. 5 Allen, 230, 212; Sargent v. Webster, 13 Met. 497; 43 Am. Dec. 743; Gifford v. New Jersey R. R. Co. 10 N. J. Eq. 171; In re St. Mary's Church, 7 Serg. & R. 517; Everett v. Smith, 22 Minor, 3. Cf. Treadwell v. Salisbury Manuf. Co. 7 Gray, 393; 66 Am. Dec. 400; Stevens v. Rutland etc. R. R. Co. 29 Vt. 545; Stevens v. South Devon R'y Co. 9 Hare, 313.

4 Sharpe v. Dawes, 46 Law J. Q. B. 104.

5 Hokins v. Roseclare etc. Co. 72 Ill. 373.

6 England v. Dearborn, 141 Mass. 590.

7 Button v. Hoffman, 61 Wis. 20; 50 Am. Rep. 131. Contra, Swift v. Smith, 65 Md. 428; 57 Am. Rep. 336.

8 Craig v. First Presbyterian Church, 88 Pa. St. 42: 32 Am. Rep. 417. In ret. Mary's Church, 7 Serg. & R. 517; Columbia Bottom etc. Co. v. Meier, 39 Mo. 53; King v. Whitaker, 9 Barn. & C. 618; S. p. Gowen's Appeal, 10 Weekly Notes Cas. 85. See Commonwealth v. Wickersham, 66 Pa. St. 131; Angell & Ames on Corporations, § 464; Willcock on Municipal Corporations, § 66.

9 State v. Green, 37 Ohio St. 227; Gowen's Appeal, 10 Weekly Notes Cas. 85. But see Commonwealth v. Wickersham, 66 Pa. St. 134, an earlier case than the Pennsylvania case cited above.

450. Cumulative voting-Minority representation. In several of the united American States there are constitutional or statutory provisions, creating what is known as "cumulative voting," conferring upon each member or shareholder the privilege of casting the whole number of his votes for one candidate, or of distributing them upon two or more candidates, as he may prefer.1 The purpose of these provisions is to enable a minority of the shareholders to obtain a representation upon the board of directors. Cumulative voting may be best explained in the words of the

BEACH ON RAILWAYS-46

California constitution: "In all elections for di rectors or managers of corporations every stockholder shall have the right to vote, in person or by proxy, the number of shares of stock owned by him, for as many persons as there are directors or managers to be elected, or to cumulate said shares and give one candidate as many votes as the number of directors multiplied by the number of his shares of stock shall equal, or to distribute them on the same principle among as many candidates as he shall see fit."" These constitutional provisions do not require an act of the legislature to render them operative.3

1 Pa. Const. (1873) art. xvi, § 4; Wright v. Commonwealth of Pennsylvania (Sup. Ct. of Penn. 1885), 11 Am. & Eng. Corp. Cas. 609; W. Va. Const. (1872) art. xi, § 4; Neb. Const. (1875) art. xi, Miscellaneous Provisions, § 5; Mo. Const. (1875) art. xii, § 6; Ill. Const. (1870) art. xi, § 3; People v. Kenny, 96 N. Y. 294; People v. Crissey, 91 N. Y. 616; State v. Greer, 18 Mo. 188; Hays v. Commonwealth, 82 Pa. St. 518, 522; State v. Constantine, 42 Ohio St. 437; 51 Am. Rep. 833. Ohio Rev. Stat. § 3245, enacting that "each share shall entitle the holder to as many votes as there are directors to be elected," has been held not to create the power of cumulative voting: State v. Stockley (1887), 45 Ohio, 304.

2 Cal. Const. (1879) art. xii, § 12; Wright v. Central California etc. Water Co. 67 Cal. 532.

3 Pierce v. Commonwealth, 104 Pa. St. 150.

§ 451. Combinations among shareholders to control the corporation.-Combinations among stockholders for the purpose of electing certain persons as officers are not necessarily illegal,' unless entered into for a fraudulent purpose."

Ordi

narily a court of equity will not interfere by injunction, to restrain a portion of the stockholders from voting upon their shares, upon the ground that they are about to gain control of the company to the injury of the corporate enterprise," unless an illegal combination in the nature of a conspiracy to defraud the plaintiffs can be shown. A combi

nation of shareholders for the purpose of controlling a railway corporation may lawfully transfer their stock to trustees, empowering them to vote upon the shares, and receiving from them transferable trust certificates. When this is done, the entire beneficial interest in the stock is severally vested in the certificate holders, the voting power in the trustees, and the situation does not differ materially from what it would be if the stockhold-ers retaining their shares had simply united in a proxy authorizing the trustees to cast the votes of all of them for directors.5 In the case last cited it was said: "We can perceive no reason why any number of shareholders, either by means of a proxy or by vesting the legal. title in another, may not authorize him to vote upon their stock, and as such is the substance of this agreement, we consider it not illegal. So long as the parties to it, or their successors in interest, are satisfied with it, no other person may complain." But stockholder may withdraw from such a contract, although it be expressly agreed that it shall be irrevocable. In a recent case, where steps had been taken by the officers of a corporation to obtain from the shareholders a deposit of their stock, together with powers of attorney, with themselves or their agents, in order that they might vote on them at a meeting of the shareholders, an injunction to restrain them from so doing, on the ground that a trust was created by the transaction in behalf of the company, was refused, as it did not appear that corporate funds had been employed.8

any

1 Havemeyer v. Havemeyer, 86 N. Y. 618; S. C. 43 N. Y. Super. Ct. 506, 513; Barnes v. Brown, 80 N. Y. 527, 537; Faulds v. Yates, 57 Ill. 416; 11 Am. Rep. 24.

2 People v. Albany etc. R. R. Co. 55 Barb. 314. See Fisher v. Bush, 35 Hun, Gil; Vander ilt v. Bennett, 2 Ry & Corp. Law J. 49, 505. See, also, Mr. Austin Abbott's learned annotation of this and other similar cases, in 19 Abb. N. C. 437 et seq.

3 Camden etc. R. R. Co. v. Elkins, 37 N. J. Eq. 273. Cf. Hilles v. Parrish, 14 N. J. Eq. 330; Ryder v. Alton etc. R. R. Co. 13 Ill. 516.

4 Brown v. Pacific Mail Steamship Co. 5 Blatchf. 525; People v. Albany etc. R. P. Co. 55 Barb. 314; Webb v. Ridgely, 33 Md. 364; Hafer v. New York etc. R. R. Co. (Ohio) 14 Week. Law Bul. 63; Hoppin v. Buffum, 9 R. I. 513; 11 Am. Rep. 291; Griffith v. Jewett (Ohio), 15 Week. Law Bul. 419. Cf. Reel v. Jones, 6 Wis. 630.

5 Griffith v. Jewett (Cin. Super. Ct. 1886), 15 Week. Law Bul. 419.

6 Griffith v. Jewett (Cin. Super. Ct. May, 1836), 15 Week. Law Bul. 419. But sec Fisher v. Bush, 35 Hun, 641.

7 Griffith v. Jewett (Cin. Super. Ct. 1886), 15 Week. Law Bul. 419. See upon this subject, Cook on Stock & Stockh. § C18.

8 Woodruff v. Dubuque etc. R. R. Co. 30 Fed. Rep. 91; S. C. 19 Abb. N. C. 437, and the note.

§ 452. Bribery.-In New York it is enacted that no person having the right to vote on stock or bonds shall sell his vote or issue a proxy for any sum of money or anything of value whatever, and if required by the inspector of election, he shall take an oath that in voting at the election he has not either directly or impliedly received any promise, or any sum of money, or anything of value, to influence his vote.1 Any person offering to vote as an agent, attorney or proxy may be required to swear that he has not induced the giving of the authority by bribery."

1 N. Y. Laws of 1880, ch. 510, § 2.

2 N. Y. Laws of 1880, ch. 510, § 2.

§ 453. Of irregularities and illegal proceedings. The proceedings of a shareholders' meeting, by which the wishes of the members of the company have been fairly expressed, will not be set aside as illegal merely upon the ground of some irregularity of procedure.1 But an illegal or fraud

ulent election may be set aside; and persons asLuming to act as officers of a corporation under color of an illegal election may be ousted by proceedings in the nature of quo warranto.3 But an

"election is not to be set aside and declared void merely because votes were received from persons not entitled to vote, if there was still a majority of legal votes for the ticket declared to be elected.” * Alter the illegal votes have been counted out, the candidate receiving the majority of those legally cast will be declared elected, although that majority be less than half of the total number of votes, legal and illegal.5

1 People v. Albany etc. R. R. Co. 55 Barb. 344; In re Wheeler, 2 Abb. Pr. N. S. 351; People v. Peck, 11 Wend. 604; 27 Am. Dec. 104; People v. Wickham, 1 Paige, 590; Hughes v. Parker, 20 N. H. 58; Downing v. Potts, 23 N. J. 66; Hardenburgh v. Farmers' etc. Bank, 3 N. J. Eq. 68; Gorham v. Campbell, 2 Cal. 135.

2 Davidson v. Grange, 4 Grant's Ch. (N. C.) 377; Wandsworth etc. Gas Light & Coke Co. v. Wright, 18 Week. R. 728; St. Lawrence Steamboat Co. 44 N. J. 529; Mechanics' National Bank v. Burnet Manuf. Co. 32 N. J. Eq. 236; Johnston v. Jones, 23 N. J. Eq. 216; Putnam v. Sweet, 1 Chandler (Wis.) 236; N. Y. 1 Rev. Stat. ch. xviii, tit. iv, § 5 (page 603); N. Y. 1 Rev. Stat. ch. xviii, tit. ii, art. 2, §§ 47-50 (page 598); The Schoharie Valley R. R. Case, 12 Abb. Pr. N. S. 394; Cal. Stat. 1876, § 5315; Brewster v. Hart'ey, 37 Cal. 15; 93 Am. Dec. 237. Cf. Wright v. Ceutral California etc. Water Co. 67 Cal. 532. But see Mickles v. Rochester City Bank, 11 Paige, 118; 42 Am. Dec. 103; New England etc. Co. v. Phillips (Mass. 1886), 13 Am. & Eng. Corp. Cas. 104; Mechanics' National Bank v. Burnet Manuf. Co. 32 N. J. Eq. 236; Johnston v. Jones, 23 N. J. Eq. 216; Owen v. Whitaker, 20 N. J. Eq. 122. Cf. Wandsworth etc. Gas Light & Coke Co. v. Wright, 18 Week. R. 728; Beecher v. Wells Flouring Mills Cɔ. 1 Fed. Rep. 276; S. C. 1 McCrary, 62.

3 People v. Albany etc. R. R. Co. 55 Barb. 344, 385. Cf. Ex parte Willcocks, 7 Conn. 402; 17 Am. Dec. 525; Boardman v Halliday, 10 Paige, 22; People v. Albertson, 8 How. Pr. 333; Weeks v. Ellis, 2 Barb. 325; Mechanics' National Bank v. Burnet Manuf. Co. 32 N. J. Eq. 236.

4 People v. Tuthill, 31 N. Y. 55); In re Chenango etc. Ins. Co. 19 Wend. 635; Ex parte Murphy, 7 Conn. 153; State v. Lehre, 7 Rich. 235, 325; School District v. Gibbs, 2 Cush. 39; First Parish in Sudbury v. Stearns, 21 Pick. 118; Christ Church v. Pope, 8 Gray, 140; McNeely v. Woodruff, 13 N. J. 352: People v. Devin, 17 Ill. 84.

5 Ex parte Desdoity, 1 Wend, 98; Mousseaux v. Urquhart, 19 La. An. 482; State v. Swearingen, 12 Ga. 23; In re etc. St. Lawrence Steamboat Co. 41 N. J. 529. Cf. In re Long Island R. R. Co. 19 Wend. 37; 32 Am. Dec. 42; Downing v. Potts, 23 N. J. 66. Contra, holding that a new election will be ordered in such a case, see People v. Phillips, 1 Denio, 388; In re Long Island R. R. Co. 19 Wend. 37; 32 Am. Dec. 429; State v. McDaniel, 22 Ohio St. 354.