Triesler v. Wilson , 89 Md. 169 ( 1899 )

Christian G. Triesler and six others, members of the Mutual Life Insurance Company of Baltimore, filed a petition in the Court of Common Pleas of Baltimore City for a mandamus against the respondents, alleging that at a regular election for directors of said company, four of the petitioners were in nomination as directors upon one ticket and the four respondents were in nomination upon another ticket; that in pursuance and execution of a conspiracy to defeat the will of the majority of the electors of said company, and to prevent a fair and free expression of the choice of the voters offering to exercise their rights as members and electors, certain members of the company, interested in respondents' ticket, did by artful, fraudulent and corrupt devices, at said election, so interfere with and manipulate the conduct thereof, that though according to the actual tender of votes by lawfully qualified electors, there was a majority of not less than 37 votes for petitioners' ticket, yet by means of such manipulation and fraudulent actions the election was counted or declared to have resulted in favor of respondents' ticket. The petition further alleged that said fraudulent count was accomplished by the rejection of the proxies of some 15 electors who offered to vote for petitioners' ticket and counting or declaring said proxies instead as cast in favor of respondents' ticket, by rejecting some four other votes lawfully tendered for petitioners' ticket, and by permitting some two persons who were not lawful electors, to cast votes for respondents' ticket; that the result of the voting as falsely announced was 63 votes for respondents' ticket, and 61 votes for petitioners' ticket; whereas upon a true and honest count the result is 65 votes for petitioners' ticket and 48 votes for respondents' ticket; that 15 lawful proxies in writing were fraudulently rejected, and some unlawful proxies in writing were fraudulently deposited in their place, the effect of which changed the result of the election; that respondents have wrongfully entered upon office as directors, and are exercising and controlling the concerns of the company to the exclusion of the petitioners, who are rightfully entitled thereto; that the company was, and is, a prosperous business concern, but that the corrupt and fraudulent installation of respondents as directors and managers is a serious menace to the welfare and prosperity of the company. The prayer of the petition is for a mandamus commanding respondents to vacate the office of directors and to yield the possession thereof to the petitioners. The respondents answered denying that said election was attended, or its result affected by fraud, conspiracy or any other form of misconduct on the part of any persons whatsoever. Respondents also set forth a certificate from the judges of said election showing the election of respondents, and made in pursuance of the following by-law:

"Prior to the regular annual election, the board shall appoint three persons to be judges thereat. They shall judge of the qualifications of all voters, and the sufficiency of all proxies offered, and their decision shall be final and conclusive in all cases. They shall deposit their certificate of the result of the election with the secretary of the company;" which by-law and certificate they pleaded in bar of all relief prayed in the petition. Issue was joined, and it was agreed by the parties that the by-law was correctly set forth, and the certificate was made and deposited, as stated, and that no one of the judges was a member of the company. The case was tried before the Court without a jury, and the Court (JUDGE DENNIS) passed an order declining to admit or hear any proof in support of the allegations of the petition, and dismissed the petition and gave judgment for the respondents, stating in the order that it appeared it had been formerly ruled in one of the Courts in Baltimore City that such facts constitute a bar to the relief prayed, and that in accordance with the usage in that judicial circuit the Court deemed itself bound to follow the precedent of this ruling. The only matter, therefore, for our determination, is whether in this proceeding the certificate of election under the by-law which has been transcribed, is final and conclusive as to the result of the election, and the consequent title of the respondents to the office of directors.

The petitioners here seek not only the removal of respondents, but the possession of their offices; and since the decision inHarwood v. Marshall, 9 Md. 99, it is settled that mandamus is the only proceeding in which the judgment could remove the occupants and install the petitioners, if they can sustain their charges and are not barred by the by-law. The appellees rely upon cases in Maryland and elsewhere, in which it is held that in private beneficial institutions, such as the one here concerned, operating on the members only, they may, for reasons of policy and convenience affecting their welfare and perhaps their existence, adopt laws for their government, to be administered by themselves, to which every person who joins them assents, and which require the surrender of no right that a man may not waive. It will suffice to refer to the Maryland cases so holding, which are: Anacosta Tribe v. Murbach, 13 Md. 91, and OsceolaTribe v. Schmidt, 57 Md. 102. It is stated in the brief of the appellees that the case referred to by JUDGE DENNIS, by which he deemed himself bound, was decided in 1886 in the Superior Court by JUDGE FISHER, who held that in the absence of any proof offraud, the action of judges of election taken in pursuance of this by-law could not be reviewed, and on that ground refused themandamus. The case now before us was argued upon the concession, as stated in the appellees' brief, "that the petitioners did not profess to have any evidence of bad faith on the part of the judges of election, against whom they could only allege honest mistakes of judgment," and it was stated that this admission was made in the Court below at the hearing of a preliminary question which arose, and that this circumstance led the Court to announce that it would be useless to hear the case on the facts as it should feel bound by the previous decision of JUDGE FISHER.

But we must consider and decide cases as they are presented by the record, not as they may have been presented in the Court below, or as apparently regarded by counsel in their arguments and briefs in contravention of the record; and when this record is examined we find not merely an averment of fraudulent and corrupt conduct by certain members of the company, affecting the result of the election, but a distinct charge that "the countwas fraudulent;" that the result of the voting was falselyannounced; "that lawful proxies were fraudulently rejected," and "unlawful proxies were fraudulently deposited," whereby the result of the election was affected. We have no means of knowing whether these charges are true or false. They may be wholly unfounded, but they confront us in the record, and their foundation can only be determined from evidence. Such fraudulent acts are not the acts of members elsewhere complained of in the petition, and in which the judges of election may have had no participation, or the commission of which can be consistent with the exercise of their own honest judgment. Only the judges could make a fraudulent count. They alone could deposit and reject proxies, and announce the result of the election; and if any of these acts were tainted with fraud, the fraud was theirs.

It is needless to say that such fraudulent conduct would vitiate the certificate of election as it vitiates any transaction into which it enters. The members of this company agreed to be bound by the honest judgment of the judges of election, certified under the by-law, not by a corrupt and false judgment which no by-law can sanctify, or impose upon a Court of Justice. As JUDGE FISHER'S decision is stated in the brief of the appellees, he held this by-law conclusive only in the absence of proof of fraud, and JUDGE DENNIS declined to hear evidence only because it was represented to him there was no charge of fraud.

It therefore follows that the order must be reversed that the allegations of fraud on the part of the judges may be heard upon the facts.

Order reversed and cause remanded with costs to the appellantsabove and below.

(Decided March 15th, 1899).