Potter v. Patee

493 S.W.2d 58, 1973 Mo. App. LEXIS 1256
CourtMissouri Court of Appeals
DecidedJanuary 19, 1973
DocketNo. 25940
StatusPublished
Cited by5 cases

This text of 493 S.W.2d 58 (Potter v. Patee) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Potter v. Patee, 493 S.W.2d 58, 1973 Mo. App. LEXIS 1256 (Mo. Ct. App. 1973).

Opinions

PRITCHARD, Judge.

Plaintiffs were successful in securing a declaratory judgment that they were the duly elected and qualified officers and directors of the Pony Express Historical Association. That organization is an educational corporation, organized under the “General Not For Profit Act of Missouri,” Chapter 355, RSMo., 1969, V.A.M.S., and has as its main purpose the operation of the old Patee House as a museum in St. Joseph, Missouri.

The basic contention is whether defendants are the duly elected officers and directors of the corporation by reason of an “adjourned” meeting to the Patee House from a duly called meeting at the Y.W.C. A., in St. Joseph, or whether plaintiffs are such officers and directors by reason of a “rump” meeting held by them at the Y.W. C.A. after the other group repaired to the Patee House.

It is admitted by the pleadings that the corporation, pursuant to its By-Laws and the Laws of Missouri, issued its Notice of Annual Meeting for December 6, 1970, at 2:30 p. m., at the Y.W.C.A. in St. Joseph. It is further admitted that the members of the corporation did assemble at the Y.W. C.A. The evidence is that notices of the annual meeting were not sent to Mr. Carl Goatcher and Mr. Gary Chilcote, who were purportedly expelled from membership by a named disciplinary committee, nor were notices of the meeting sent to twelve other purported suspended members of the association.

Pony Express Historical Association is governed by its Articles of Incorporation and its By-Laws. Article VIII of the ByLaws provides that procedures are to be governed by Robert’s Rules of Order, unless such are inconsistent with the Articles or By-Laws.

It is first claimed by defendants that the courts will not interfere with the internal affairs of a non-profit corporation where severable property rights are not involved and the trial court therefore erred in finding that plaintiffs’ petition stated a claim for relief under the declaratory judgment act. Section 527.010 of that act provides: “The circuit courts and courts of common pleas of this state, within their respective jurisdictions shall have power to declare rights, status, and other legal relations whether or not further relief is or could be claimed. No action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for. * * Defendants cite and rely upon four cases in support of their contention that the court will not interfere where no property rights are involved. The first is State ex rel. Hyde v. Jackson County Medical Society, Mo., 295 Mo. 144, 243 S.W. 341 (1922). There the appellant sought relief by way of mandamus to compel the medical society to rescind its action in expelling him from membership. Among other grounds for denial of relief the court did say that relator did not have “that severable, proprietary interest in the respondent society which is a necessary requisite to his right [61]*61to relief.” (Loc. cit. 243 S.W. 343 [5].) Other and subsequent cases for this rule are: State ex rel. Buckner v. Landwehr, Mo.App., 261 S.W. 699, 701 (1924); Hall v. Morrin, Mo.App., 293 S.W. 435, 441 (1927); and State ex rel. Baumhoff v. Taxpayer’s League of St. Louis County, Mo.App., 87 S.W.2d 207, 208 (decided November 5, 1935). The latter case involved also mandamus in connection with the reinstatement of relator as a member of the society after it adopted a resolution that no new members should be enrolled until elected by the executive committee. The Baumhoff case was apparently decided shortly after the effective date of Missouri’s Declaratory Judgment Act (Laws 1935, p. 218, Sec. 1 et seq.), and clearly the action was not brought under that act to determine relator’s right to membership. That case, and the three others (all decided before the enactment of Chapter 527) cited by defendants are not persuasive of the effect of the Act upon a determination of which group of officers and directors are entitled to control the nonprofit corporation. It has been said that the Declaratory Judgment Act is to be liberally construed, Stewart v. Shelton, Mo., 356 Mo. 258, 201 S.W.2d 395, 398 (1947), and relief under the Act is sui generis (“Lat. Of its own kind or class; i. e., the only one of its own kind; peculiar.” Black’s Law Dictionary, Rev. 4th Ed., p. 1602), McDown v. Wilson, Mo.App., 426 S.W.2d 112 (1968). The wide scope of the relief afforded by declaratory judgment in its modern application is demonstrated by Borchard, Declaratory Judgments, 2nd Ed., p. 490, as to its possible use in cases of exclusion or ejection of persons as members of organizations, and p. 682 “Factional disputes between groups of directors and others interested in the corporation or association are most conveniently determined by declaration.” While, without doubt, quo warranto would be available to test the validity of defendant’s office (See Section 355.490, RSMo., 1969, V.A.M.S.), that remedy is by no means exclusive. It is merely alternative to the relief by way of declaratory judgment. Borchard, Declaratory Judgments, 2nd Ed., pp. 316, 317. The court did not err in holding that plaintiffs’ petition stated a claim to relief.

By Point III, defendants claim that the court erred in holding that the annual meeting conducted by defendants (held at the Patee House) was invalid. As noted, the notices of the annual meeting specified that it be held at the Y.W.C.A. at 2:30 p. m. on December 6, 1970. “There is a duty to proceed with a stockholders’ meeting at the place specified in the notice.” 19 Am. Jur.2nd Corporations, Section 602, p. 124. The By-Laws here (Section 10) provide, “An annual meeting of the members shall be held on the regular meeting day in December of each year at a time and place set by the Board of Directors. * * In Commonwealth ex rel. Sheip, et al. v. Vandegrift, 232 Pa. 53, 81 A. 153, after the annual meeting was Called to order with 846 more shares being represented than was required to constitute a quorum, a contending faction representing 992 shares withdrew and refused to participate in an election of a board of directors, for the purpose of breaking a quorum. The court said, loe. cit. 81 A. 155 [4], “Stockholders who attend a meeting, and then without cause voluntarily withdraw, are in no better position than those who voluntarily absent themselves in the first instance” and loe. cit. 81 A. 156 [5], “In this connection, it is worthy of comment that the duty of holding an annual election is imposed by statute, and the time and place for holding it are fixed by the by-laws. The duty as to the time and place of holding the election is quite as imperative as the provision relating to the amount of stock necessary to constitute a quorum. It was not only the privilege of appellants to participate in the annual election of directors, but it was a duty imposed by law upon them. They should have remained in the meeting to exercise their privileges and perform their duties. When they did not do so, but without sufficient cause withdrew, they are not in position to complain about the acts of [62]*62those who remained and performed their duties in a regular and lawful manner.”

There was some conflict in the evidence as to whether there were disturbances just prior to the time when the meeting was to be called to order, but there was a sufficiency of evidence for the court to find, as it did, that defendants were not prevented from holding an annual meeting by the plaintiffs, or anyone else. Mr.

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Bluebook (online)
493 S.W.2d 58, 1973 Mo. App. LEXIS 1256, Counsel Stack Legal Research, https://law.counselstack.com/opinion/potter-v-patee-moctapp-1973.