Tunis v. Hestonville, Mantua & Fairmount Pass. R. R.

Opinion by

Mb. Chief Justice Paxson,

This was not, as contended by the learned counsel for the appellees, merely an appeal from the granting of a preliminary injunction. It was an appeal from what was practically a final decree, made upon the report of the master, with all the facts before the court. The injunction referred to was issued in aid of, and to enforce the decree of the court. Hence, we need not refer to the cases in which we have held that, upon appeals from preliminary injunctions, we do not pass upon the merits, but decide merely whether the injunction shall be dissolved or remain until final hearing.

The appellees filed their bill in the court below, praying, the court to appoint a master to preside at the annual meeting of the Hestonville, Mantua & Fairmount Passenger R. R. Co., to be held in January, 1892, during its session, and to supervise the election for president and five directors thereof, and to make report thereof to the court.

Without going into detail, it is sufficient to say that the bill averred such acts of the appellants upon a previous election for directors as amounted to fraud; that the said meeting and election was conducted amid the greatest confusion and disorder, and resulted in personal violence. The bill further avers that, “ your orators verily believe that the same, or equally unlawful practices will be resorted to by the said defendants in the conduct of the election which will be held at the annual meeting of January, 1892, and that fraudulent means will be made to prevent the holding of a fair and just election, and that unless aid meeting and election are controlled by your honorable court, disorder, violence, and, possibly, bloodshed will occur, and your orators will be deprived of their right to vote at said election.”

The court below, being satisfied that the averments of the bill were sustained by sufficient evidence, appointed Angelo T. Freedley, Esq., as master, to conduct said election in accordance with the prayer of the bill.

We are of opinion that the facts averred in the bill brought the case within the equitable jurisdiction of the court. By the 13th section of the act of June 16, 1836, the Supreme Court and the several courts of common pleas have the jurisdiction and powers of a court of chancery, so far as relates to the supervision and control of all corporations, other than those of a municipal character. This gives the court all the powers and jurisdiction of a court of chancery over such corporations, to be exercised in the ordinary mode in which a court of chancery acts. This power includes that of supervising and controlling the election of directors, whenever it is made to appear that, by means of fraud, violence, or other unlawful conduct on the part of a portion of the corporators, a fair and honest election cannot be held. This power has been exercised, and its exercise approved by this court in a number of'instances. It is sufficient to refer, for present purposes, to Gowen’s Ap., 10 W. N. 85, where the court of common pleas No. 2 appointed a master to preside at and supervise the proceedings of a meeting of the Philadelphia & Beading R. R. Co. The equity rules of this court provide that the court may appoint a master pro hac vice in any particular case. The law upon this subject is too well settled to require elaboration.

The principal contention in the case was over the right to vote the 6900 shares of stock belonging to the estate of Charles Lafferty, deceased. It appears from the report of the master that Charles H. Lafferty offered to vote this stock; that the vote was challenged by a stockholder, and rejected by the master. Charles H. Lafferty was one of the executors and trustees of the estate of Charles Lafferty, deceased. The rejected ballot was in favor of what is known as the Lafferty ticket. The other two executors demanded that this stock should be voted for the opposing candidates, viz, for the “ Verner ” ticket, and tendered their ballot to that effect. They further asserted that certain of the cestuis que trustents had also objected to their permitting the said Charles H. Lafferty to have the sole vote of this stock.

As the executors could not agree as to how the stock should be voted, the master declined to receive the vote from either party.

The master has found the facts elaborately, from which we condense the following: The will of Charles Lafferty, deceased, provides that the executors and trustees shall always be three in number. The present executors and trustees are Charles H. Lafferty, Rose E. Lafferty and F. J. Corcoran. By a codicil to his will he provides as follows: “I do hereby authorize and direct that all the stock held by me in the Race and Vine streets* Arch street, and Hestonville, Mantua & Fairmount Passenger R. R. Company, shall be voted at all elections of said companies, as my son, Charles Lafferty, shall direct and appoint, and my executors are directed to give a proxy or authority to vote said stock as he may desire to vote the same.” The other two executors refused to give Charles H. Lafferty the proxy mentioned in the codicil, and protested, as before stated, against his right to so vote the stock. The judges of election announced that, unless otherwise instructed by the master, they would receive the ballot tendered by Charles H. Lafferty, and count it as he requested. If this ballot should be received and counted as. desired by him, it would elect the Lafferty ticket. The master sustained the objection to this ballot, and directed the judges of election to reject it, which was according^ done.

The master has given abundant reasons for his ruling. The principle may be briefly stated thus: At a corporate election* each vote cast and counted, must be so cast in person or by proxy. This is the law of the corporation, and the stock cannot be voted in any other way.

The codicil to Mr, Lafferty’s will was not a proxy, and could not be treated as such as to objecting owners or stockholders. A proxy is an authority or power to do a certain thing’ ,• in this case a power to vote stock. Such power can only be given by the owner. It cannot, of course, be given by a dead man. Charles Lafferty no longer owns this stock, for the reason that his ownership terminated with his death. It then passed, by his will, to the executors and trustees before named, in trust, for certain beneficiaries. The executors were entitled to vote this stock, because they held the legal title for the beneficial owners. If we concede that one executor could vote the stock* in the absence of objection by his coexecutors, it is clear that he could not vote it against such objection. It is true, the codicil to the will directs two of his executors to give a proxy to Charles H. Lafferty, for the purpose of enabling him to vote his stock, but they did not give such proxjr, nor does it appear that any attempt was made to enforce the provisions of the codicil by any legal proceeding. We are not called upon to say whether the dissenting executors could have been compelled to give the other executor a proxy. In point of fact, they did not give one, and, under the law of the corporation, the stock could not be voted. The testator could not, by a codicil to his will, affect the rights of other corporators. The codicil, so far as the corporation was concerned, had no legal effect.

What has been said in regard to Charles H. Lafferty’s right applies, with equal force, to the attempt of the other two executors to vote the stock against his objection. The right of voting stock is inseparable from the right of ownership. The one follows as a sequence from the other, and the right to vote cannot be separated from the ownership, without the consent of the legal owner. It follows, logically, that one joint-owner of stock cannot vote it against the protest and objection of his co-owner.

It is not needed, for the purposes of this case, that we should speculate as to the right of a man to control, from his grave, the election of directors of a corporation. No such question is legitimately raised by this record. It will be time enough to decide this grave question when it arises.

The decree is affirmed, and the appeal dismissed, at the costs of the appellants.