Harkrader v. Whitman

46 P.2d 1, 142 Kan. 186, 1935 Kan. LEXIS 308
CourtSupreme Court of Kansas
DecidedJune 8, 1935
DocketNo. 32,501
StatusPublished
Cited by8 cases

This text of 46 P.2d 1 (Harkrader v. Whitman) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harkrader v. Whitman, 46 P.2d 1, 142 Kan. 186, 1935 Kan. LEXIS 308 (kan 1935).

Opinion

The opinion of the court was delivered by

Thiele, J.:

This was an action in the nature of quo warranto to determine who are the duly elected directors of The Wheat Belt Building and Loan Association of Pratt.

The facts necessary for an understanding of the issues are summarized from the trial court’s findings: The association was organized in 1919.- The by-laws provided for an annual stockholders’ meeting on the second Monday in January, and for a special meeting on call of forty percent of the permanent stock. The board of directors was composed of eight members, who held office for a term of two years and until their successors were elected and qualified. Four were to be elected each year. At the annual meeting in January, 1934, four directors, Gebhart, Woolwine, Milne and Cramer, were elected or reelected. The other directors who held on were Barker, Cochran, Harkrader and Whitman, whose terms would expire in January, 1935. From this board Barker was elected president, Gebhart vice-president, and Cramer secretary of the association. In January, 1934, the authorized capital was $1,000,000, which included $50,000 of permanent stock designated as Class E, with a par value of $100. Of the permanent stock $15,500 had been issued. During the year the association had suffered losses which at various times were charged against the amounts credited to the permanent stock, and by the latter part of 1934 that stock, according to the books, was without value.

[188]*188At a directors’ meeting in December, 1934, the president raised a question as to giving notice of the annual meeting in January, 1935, but the secretary stated as there was no permanent stock there would be no election. Harkrader asked that the notices be issued. No notice was given, however, and no regular stockholders’ meeting was held at the appointed time.

On January 17, 1935, a special meeting of the board of directors was held, seven members being present. Harkrader had no notice and was absent. The secretary, Cramer, proposed the board elect officers for the ensuing year. The president, Barker, protested and left the meeting, and thereafter Gebhart was elected president, Milne vice-president, and Cramer secretary. Director Cochran seems likewise to have protested, but whether she refrained from voting or voted in a negative way does not appear clearly from the court’s findings.

On February 4, 1935, a petition was filed with the secretary for a special stockholders’ meeting. The secretary did not promptly give notice, an alternative writ of mandamus issued, and notice was given on February 15, 1935, for a meeting which was held February 25, 1935.

On January 28,1935, which was a regular meeting date, the board of directors amended the by-laws by stating the authorized capital to be $2,000,000, of which $50,000 might be issued as Class PC permanent stock, discontinuing issuance of Class ,E permanent stock. At the next regular meeting on February 11, 1935, the by-laws were further amended to provide for Class PC permanent stock to be issued at full par value and in series with Class CC full-paid shares. Class CC full-paid shares were to be issued upon payment of full par value, but fractional shares could be issued. These shares were given voting power of one vote for each $100 par value at any regular or special stockholders’ meeting, but the number of such votes could not exceed the number of Class PC permanent stock “owned and held by the stockholder as shown on the books of the association on the date of such meeting.” By amendment of another bylaw any permanent stock could be voted by the stockholder of record, or by his guardian or by other person having written proxy, the shareholder being entitled to one vote for each $100 share of permanent stock and one vote for each share of Class CC full-paid shares, with limitation as above noted.

When the stockholders’ meeting was held February 25, 1935, [189]*189trouble arose. Barker, as president, called the meeting to order and objection to his presiding was made on the ground Gebhart was president. Barker ceased to insist on his right, Gebhart was not present, and Milne, as vice-president, assumed the right and called for a roll call of voting shares which disclosed 152 Class E shares present by owner or proxy and 160 shares of PC permanent and CC full-paid, all present by proxy. Cramer’s right to vote eleven shares of Class E permanent stock which he claimed to own was challenged on the ground that the shares did not stand in his name on the association’s books, and this is conceded to be correct, and the right to vote any of the 160 shares of PC and CC stock was challenged on the ground the stock was illegally issued and had not been issued thirty days prior to the date of election. Harkrader and Milne were nominated for permanent chairman, and on vote Harkrader received 117 votes of Class E stock and Milne had received 33 votes of Class E stock and 160 votes of PC and CC stock. It is not necessary that we here notice the contention of the parties as to the right to vote classes of shares. Milne declared himself elected chairman. Harkrader, who seems to have led the opposition, and those favorable to his contention were occupying the west side of the room where the meeting was held, and after the result was announced by Milne, Harkrader and his supporters took no further part but, under Harkrader claiming to act as permanent chairman, held an election of their own, at which Hacker received 120 votes, Cochran 120 votes, Harkrader 121 votes and Erwin 119 votes, all of Class E stock, and they were declared by Harkrader elected as directors to serve for the ensuing year. At the same time the meeting under Milne continued, and 33 Class E votes were cast cumulatively for Whitman, giving him 132 votes of Class E stock, and he also received 60 votes of PC and CC stock. Gillett, Pedigo and Mawdsley each received 193 votes of PC and CC stock. These last four qualified as directors. Gillett later resigned. At the time the present action was filed Whitman, Pedigo and Mawdsley were acting as directors.

Plaintiffs brought the action to determine which group had been elected as directors, and after trial the court made findings of fact, some of which appellants contend are not supported by the evidence. The trial court concluded that plaintiffs were the duly elected directors, and that defendants were unlawfully withholding possession of office from the plaintiffs, and rendered judgment accordingly. [190]*190The defendants’ motion for a new trial was overruled, and they, appeal.

Although other matters are involved, as the statement of facts indicates, the main point of controversy between plaintiffs and defendants arose from difference of opinion as to just what classes of stock were authorized to be voted at the stockholders’ meeting, the plaintiffs contending that the provisions of the statutes with reference to corporations generally require that—

"No person shall at any election be entitled to vote on any stock, unless the same shall have been standing in the name of the' person so claiming to vote, upon the books of the corporation at least thirty days prior to such election.” (R. S. 17-604.)

And that none of the Class PC or CC stock had been so standing in the names of the persons voting the same for that required time, while the defendants contend that the general provisions of the statutes with reference to corporations do not control as against specific provisions of the statutes with reference to building and loan associations, to which reference is hereinafter made.

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Cite This Page — Counsel Stack

Bluebook (online)
46 P.2d 1, 142 Kan. 186, 1935 Kan. LEXIS 308, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harkrader-v-whitman-kan-1935.