State ex rel. Lally v. Cadigan

174 P. 965, 103 Wash. 254, 1918 Wash. LEXIS 1090
CourtWashington Supreme Court
DecidedJuly 30, 1918
DocketNo. 14772
StatusPublished

This text of 174 P. 965 (State ex rel. Lally v. Cadigan) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Lally v. Cadigan, 174 P. 965, 103 Wash. 254, 1918 Wash. LEXIS 1090 (Wash. 1918).

Opinion

Mackintosh, J.

— The annual meeting of the stockholders of the New World Life Insurance Company was to be held on February 12,1918, and the defendant Cadigan, who was president of the company and one of its' trustees, held proxies for 88,698 of the 113,000 shares of the company’s capital stock. At a meeting of the board of trustees, held before the stockholders’ meeting, the question of allowing the voting of proxies by an officer of the company was discussed and acted upon. This was in pursuance of a requirement of the insurance code, which provides:

“Every domestic company shall hold an annual meeting in the month of January or February, of its [255]*255stockholders, if a stock company, or members, if a mutual company, for the purpose of receiving the report of its officers and trustees, and to elect trustees. Each share of stock in a stock company, and each policy-holder in a mutual company, shall be entitled to one vote in the election of trustees, and if unable to attend in person, may appoint any stockholder or member his proxy to vote his stock or policy, but no officer of said company shall be allowed to vote the proxy of any stockholder or member thereof: Provided, however, officers of stock companies may do so when the majority of the trustees vote to permit such action.” Laws 1911, ch. 49, p. 208, §63 (Rem. Code, §6059-63).

The action of the board of trustees took the form of a resolution that the officers of the company be authorized to vote proxies held by them at the annual meeting of the stockholders, but limited that authority to thirteen special matters and attempted to designate the persons to be voted for as trustees, and to prevent the voting for the removal of any of the then trustees, and limited the right of the proxy holder to vote other than as directed in the resolution, upon the question of amending the by-laws of the company. At the meeting of the stockholders, the defendant Cadigan voted the proxies held by him generally and not in accordance with the resolution, and as a result of this voting, trustees other than those named in the resolution were elected, which gave rise to this action, this being a proceeding in quo ivarrcmto to try title to certain offices of the company, the relators claiming to have been duly and legally elected by the old board of trustees, and the defendants being the officers selected by the board elected at the stockholders’ meeting in the manner referred to. The sole question presented is whether or not the defendant Cadigan legally voted the proxies held by him at the stockholders’ meeting; the relators’ [256]*256position being tbat tbe board of trustees had tbe right to limit tbe use of tbe proxies when it authorized tbe voting of proxies at tbe stockholders ’ meeting, and tbe defendants claiming tbat tbe only authority held by tbe board of trustees was to either grant or withhold permission for tbe officers of tbe company to vote proxies held by them.

Upon this question, there has been no adjudication so far as tbe diligence of counsel and this court can determine. Tbe relators claim tbat tbe situation is analogous to tbat presented where a city, in passing a franchise ordinance, inserts restrictions which it bad no right to impose, and cite decisions bolding tbat tbe public service corporation seeking tbe benefit of tbe franchise ordinance is nevertheless bound by such restrictions. Southern Bell Tel. & Tel. Co. v. Richmond, 103 Fed. 31. Also, by analogy, it is asserted, tbat the rule applying in tbe construction of statutes should be applied to tbe question at bar. Connolly v. Union Sewer Pipe Co., 184 U. S. 540. Tbat tbe resolution must be considered as a whole, and tbat if tbe trustees did not have tbe power to limit tbe manner of using tbe proxies, then tbe entire resolution must be held to be of no avail; because, without tbe limitations contained in tbe resolution, tbe board of trustees would not have passed it.

We have held in State ex rel. Lindsey v. Derbyshire, 79 Wash. 227, 140 Pac. 540, that, where tbe body of an act and tbe limiting clause are inseparably connected in purpose and substance, they cannot stand one without tbe other. It is apparent tbat tbe intention of tbe board was to dictate tbe manner of tbe use of tbe proxies.

On behalf of tbe defendants, it is claimed tbat tbe resolution should be interpreted under tbe maxim omne majus continet in se minimis; and tbat, where [257]*257more is done than ought to have been done, that portion for which there was authority is valid, and the resolution should be held to be void only as to that part passed in excess of authority; this rule being applied in cases where the legislative body has attempted to exceed the powers conferred upon it, and that, in cases where a city council was authorized to incur indebtedness to a certain amount, an attempt to create a greater indebtedness fails only so far as it exceeds the constitutional limitation. Dunn v. Great Falls, 13 Mont. 58, 31 Pac. 1017; Germania Sav. Bank v. Darlington, 50 S. C. 337, 27 S. E. 846.

In the case of Scott v. Flowers, 61 Neb. 620, 85 N. W. 857, the state constitution allowed the commitment to the reform school of children under sixteen, but the legislature of Nebraska provided for the commitment of children under eighteen- — the court held that, under the statute, commitment of those under sixteen was legal. In trade agreements, the courts have held valid so much of the agreements as the parties might lawfully make, and have disregarded those portions to which they could not lawfully agree; the agreements, being held to be divisible, were enforcible so far as valid. Lange v. Werk, 2 Ohio St. 519; Peltz v. Eichele, 62 Mo. 171; Thomas v. Miles, 3 Ohio St. 274; Smith’s Appeal, 113 Pa. St. 579, 6 Atl. 251; Mallan v. May, 11 M. & W. (Eng.) 653.

Analogy is also claimed between the situation here and that presented in cases involving the law relating to conditions, it being argued that that portion of the resolution which authorizes the voting of the proxies was in the nature of a grant, and that part which directed how the proxies should be voted was in the nature of a condition annexed to the grant, and the grant being valid but the condition invalid, the grant [258]*258will be sustained and the condition defeated. 4 Kent, Commentaries (13th ed.), 131; 13 Cyc. 687; St. Louis J. & C. R. Co. v. Mathers, 71 Ill. 592, 22 Am. Rep. 122; Barksdale v. Elam, 30 Miss. 694; Bradley v. Spokane & Inland Empire R. Co., 79 Wash. 455, 140 Pac. 688, L. R. A. 1917C 225.

Another analogy is claimed by the defendant to exist in the law of contracts, in reference to the enforcement of a contract legal in part and in part illegal.

A treatise might be written in an attempt to explain and differentiate these claimed analogous situations, but no purpose would be served thereby except to further burden the library space of the members of the bar here and yet to come. We are content to hold that the presumptions which are applicable where legislative acts are under consideration are not necessarily determinative of private rights between private individuals.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Connolly v. Union Sewer Pipe Co.
184 U.S. 540 (Supreme Court, 1902)
State ex rel. Lindsey v. Derbyshire
140 P. 540 (Washington Supreme Court, 1914)
Bradley v. Spokane & Inland Empire Railroad
140 P. 688 (Washington Supreme Court, 1914)
Smith's Appeal
6 A. 251 (Supreme Court of Pennsylvania, 1886)
Dunn v. City of Great Falls
31 P. 1017 (Montana Supreme Court, 1893)
Scott v. Flowers
85 N.W. 857 (Nebraska Supreme Court, 1901)
Germania Savings Bank v. Town of Darlington
27 S.E. 846 (Supreme Court of South Carolina, 1897)
St. Louis, Jacksonville & Chicago Railroad v. Mathers
71 Ill. 592 (Illinois Supreme Court, 1874)
Peltz v. Eichele
62 Mo. 171 (Supreme Court of Missouri, 1876)
Barksdale v. Elam
30 Miss. 694 (Mississippi Supreme Court, 1856)

Cite This Page — Counsel Stack

Bluebook (online)
174 P. 965, 103 Wash. 254, 1918 Wash. LEXIS 1090, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-lally-v-cadigan-wash-1918.