Citation Numbers: 183 Iowa 783
Judges: Gaynor, Preston, Stevens, Weaver
Filed Date: 5/17/1918
Status: Precedential
Modified Date: 7/24/2022
The National Life Association is a corporation -doing -a business- of life insurance at Des- Moines, Iowa. Its articles of incorporation provide for the election of one member of its board of directors at each annual meeting. Each person insured in the association is a member, entitled to one vote, either in person or by proxy, for each $1,000 of insurance carried by him. At the annual meeting and election held in January, 1916, the defendant E. T. Meredith and the relator, A. D. Pugh, were the only candidates for election to the board of directors. The votes were as follows : For the relator, 31 votes east by members in person and 216 votes cast by proxies; and for Meredith, 15 votes cast by members in person and 1,100 votes cast by proxies.
Stated as briefly as practicable, the plaintiff claims that the 31 votes received by him from members in person and the additional 216 cast for him by proxy were all valid and legal, and should be counted in Ms favor. Hie admits the validity of the 45 votes cast for Meredith by members in person, hut denies the validity of the 1,100 votes cast for the latter by-proxy'. The alleged grounds for such objection are as follows:
1. That the proxies were given to James P. Hewitt, in his official capacity as president of the association, and therefore to the association, instead of to a member, as required by the corporate articles and by-laws.
2. That Hewitt, with other officers and agents of the association, solicited the proxies, in order to insure the election of a director who would re-elect or retain them in their several positions, and that Hewitt abused his official trust by demanding the proxies in his official capacity and then using them in his own interest, rather than in the interest of the association.
3. That the funds of the association were expended in procuring the proxies.
4. That none of the proxies were given voluntarily, but were the result of a peremptory demand made by Hewitt in his official capacity.
The defendants denied the several allegations of irregularity in procuring and casting the votes by proxy for Meredith. They further deny that the relator is a member of the association, and allege that he is neither eligible or qualified to be elected to its board of directors.-
Thére was a trial to the court, aDd judgment entered dismissing the petition. The relator appeals.
While counsel have argued several of the foregoing objections, chief reliance is placed upon the proposition that the proxies used in the election of Meredith were obtained by improper solicitation. It appears without dispute that, on or about December 7,1915, and in anticipation of Hie annual meeting and' election to be held on January 18, 1916, Mr. Hewitt, with the assistance of some of the officers and employees of the association, addressed a written notice and request to a large number, and perhaps all, of the members of the association, in the following form:
“National Life Association.
“Des Moines, Iowa, Dec. 7, 191.5.
“Dear Member: The annual meeting of this association will be held January 18, 1916. We would like to have you, as a policy holder, represented at this meeting. Will you kindly date and sign your name to the attached stamped proxy card and mail to us immediately ?
“Very respectfully,
“James P. Hewitt,
“President National Life Association.”
To the postal card on which this communication was sent was attached a return card, addressed to the National Life Association, Des Mfoines, Iowa, and on this was printed the following matter:
*787 “This proxy should be signed by you and mailed to the home office.
“Proxy.
“Amount $........
“I hereby nominate and appoint James P. Hewitt (president of National Life Association), if present, and if not present, M. W. McCoy (vice president of said association), as my attorney, or proxy, in the order herein named, to represent me and cast my vote by proxy at the annual meeting of the policy holders of the National Life Association of Des-Moines, Iowa, to be held at the home office, January 18th, 1916, hereby ratifying .and confirming all my said attorney may legally do by virtue hereof.
“This proxy is given voluntarily and without any solicitation by an agent of the association. Any proxy heretofore given by me for said meeting is hereby revoked.
“Dated......................
“ (Sign here)....................
“Member of National Life Association.”
In response to the foregoing, many members signed and returned proxies, as requested, and the votes cast by Hewitt at the election in question as proxy for other members were thus obtained. The theory of the plaintiff’s case is that the manner of obtaining such proxies is in violation of law, and that the votes so cast should not be counted. The statute on which this contention is grounded provides, among other things, that an insurance company or association may, by its articles of incorporation, authorize its members or stockholders to “vote by proxies voluntarily given” upon all matters' of business at its meetings, including election of directors. To be valid, the proxies must be executed within two months prior to the meeting, and be filed with the company at least one day before the election at which they are to be used. Section 1821-x, Code Supplement, 1913. Other
“Sec. 1821-y. Soliciting of proxies by an agent of the company either for personal use or for the use of officers of the company or association, or for any other persons, is forbidden. Nor' shall any of the funds of a company or association be expended in procuring proxies.
“Sec. 1821-z. Any violation of this act shall be deemed a misdemeanor and punishable accordingly.”
The record in this respect suggests two inquiries: Was the request sent out by Bjewitt for proxies a violation of the statute? .If a violation of the statute, as argued by appellant, did it have the effect to invalidate the proxies or to deprive Meredith of the benefit of the votes so cast?
It is argued for appellant that, since the return card on which the proxies were printed was addressed and mailed to the association, they should be considered as proxies given to the association, a.nd therefore as not available for use by Mr. Hewitt. The objection is unsound. The proxies are, in express words, given to Hewitt, or, in case1 of his absence from the meeting, to McCoy. The form in this respect seems to be unexceptionable. So far as the mailing address was concerned, it was entirely proper that they be sent direct to the association. The statute, as we have seen, provides that all proxies must be “filed with the company” at least' one day before the election, and it is quite immaterial whether the member giving his proxy sends it direct to the company or sends it to the person authorized to act for him, if such person files it in time.
The conclusion above announced, that the alleged or admitted solicitation of the proxies is not, of itself, a sufficient objection to the validity of the votes so cast; renders it unnecessary for us to discuss or decide other questions argued