Janitors Political Club, Inc. v. Simmons , 183 Va. 321 ( 1944 )

Browning, J.,

delivered the opinion of the court.

The appellees, under section 3804 of the Code of Virginia, filed a petition addressed to the judge of the Corporation Court of the city of Norfolk, Virginia, to hear and determine the matters set forth therein and to accord to them the relief prayed for. It is alleged that a notice was attached to the petition acquainting the defendants, appellants, with the purposes thereof, and that the application would be made at 10 o’clock A. M. on the 30th day of September, 1943, to hear and determine the matters set forth.

The Janitors Political Club, Inc., one of the appellants, and also one of the defendants to the petition, is a corporation, existing under the laws of Virginia, with its principal office in the city of Norfolk. The charter was granted by the State Corporation Commission on the 5th day of February, 1942.

The officers named were: Joseph Simmons, President; Gladiola Crocker, Secretary; Thomas Neal, Treasurer. Directors: Joseph Simmons, Oliver Langston, John Gilliam, and J. E. Thornton.

Of these, four were petitioners praying the court for relief; three, Oliver Langston, Elsie Whitehurst and J. É. Thornton; presented the certificate for incorporation to the commission. The record discloses that fourteen colored persons were initially actively interested in effecting the corporation.

Soon after the certificate of incorporation was granted a meeting was held and the following officers and directors, were elected by the fourteen persons who constituted the appellees and the personal appellants: Joseph Simmons, President; Elsie Whitehurst, Vice-President; Gladiola Crocker, Secretary; Thomas Neal, Treasurer. Directors: Joseph Simmons, Oliver Thompson, and Thomas Neal.

It will thus be noticed that certain changes were made in the official personnel.

The by-laws, presently to .be specifically mentioned, provided'for annual meetings,-on the first Thursday of each year, for the purpose of electing officers and directors, and a regular meeting of the members of the club on the first Thursday of each month. At the first regular annual meeting, the same officers and directors were continued in office for one year. At this meeting those present and voting were confined to the fourteen persons already referred to.

Some unpleasantness of feeling seems to have crept into this corporate family, engendered, probably, by official ambition, which resulted in two factions, one composed of nine persons, numerically dominant, and the other of five persons, vocally so. This becomes apparent from the fact that on May 6, 1943, at a regular monthly meeting, at which nearly all of the fourteen persons referred to were present, another set of officers were chosen who turned out to be the five appellants, who were the defendants to the petition. They composed the recalcitrant minority.

It was said that this change in the official organization was accomplished by the statement of James E. Thornton that the officials of the Alcoholic Beverage Control Board had told him that it had become necessary to change the officers of the Club. This was denied, but it appears that the members became alarmed and were thrown into a state of panic because, forsooth, the license of the club to sell beer had to issue from the Alcoholic Beverage Control Board. It will be observed that in the new official family there were two Thorntons, James E., and James A., father and son, one the president, the other the secretary, and both members of the board of directors, the others were of their adherents. This, as we have seen, was allegedly brought about by the reputed false report declared and circulated by James E. Thornton. The burden of the petition is that they are usurpers of authority, made possible by their own sinister actions. The facts, as the petitioners saw them and alleged them, are made the basis for the relief prayed for, which is the ouster of the present officers and the restoration of those who were legally clothed with the ermine of official regularity.

Let us say that, as far as the record discloses, there has never been a formal and legal adoption of the by-laws; that therefore it becomes apparent that nothing bearing the impress of legality has been done since the certificate of incorporation issued. Whether it had continued existence de jure or de facto is a question as to which we hazard no opinion.

Thus the trial judge was confronted with a problem bearing as complete a potpourri of elements, some having a semblance of legality and some barren of it, as could have been conceived.

Pursuant to the statute, the trial judge called together the fourteen members, or stockholders, or whatnot, who had borne the heat and burden of the day by putting up the necessary funds to make the scheme a going concern, and. holding a meeting for the election of officers and directors, and starting on a new and legal road to the goal originally planned.

Just a few additional thoughts and we are through.

It is difficult to determine what sort of a corporation it is. Both factions, in the pleadings, termed it a non-stock and non-profit corporation—a- social or fraternal organization. As the case developed the fronts were somewhat changed, one faction adhering to the social and fraternal idea and the other urging the dominance of the commercial flavor of the scheme. It may be well to say that the certificate of incorporation, or of charter, fixed a capital stock with a minimum of 100 shares with the value of $1.00 each. This formed the basis of the contention of one faction, that those persons who joined the organization by the payment of a dollar and receiving a membership card, entitling them solely to the social privileges of the club, were entitled to vote at the regular annual meeting for the election of officers and directors.

The other faction urged that those persons who had furnished the funds necessary for the operation of the concern, should alone be entitled to vote, and on the basis of the amounts they had contributed, to represent shares of the value of $1.00 each of the stock of the corporate structure.

The trial court adopted the latter theory.

Conceivably, the solution was about the best that could be reached. At least, it was the interpretation that the parties, themselves, had placed upon the matter, which is important.

It is also noteworthy that the court heard the witnesses upon evidence ore terns and its decision is of high value. The decree is affirmed and the case is remanded to be further dealt with as the court may be advised.

Affirmed.