Ziegenheim v. Baltimore Wholesale Grocery Co.

69 A. 1071, 108 Md. 515, 1908 Md. LEXIS 79
CourtCourt of Appeals of Maryland
DecidedJune 24, 1908
StatusPublished

This text of 69 A. 1071 (Ziegenheim v. Baltimore Wholesale Grocery Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ziegenheim v. Baltimore Wholesale Grocery Co., 69 A. 1071, 108 Md. 515, 1908 Md. LEXIS 79 (Md. 1908).

Opinion

Schmucker, J.,

delivered the opinion of the Court.

This is an appeal from a judgment, of the Court of Common Pleas, for the defendant in application for a writ of mandamus. The purpose for which the writ was asked was to restore the applicant to membership in the Baltimore Wholesale Grocery Company of Baltimore City. There are two bills of exceptions in the record one of which brings up for review the action of the Court below on the prayers, and instructions to the jury, and the other relates to the striking out of certain testimony which had been admitted subject to exception.

It appears from the record, that the Grocery Company was incorporated under the general incorporation laws of the State, on the 21st of March, 1907, to conduct “the wholesale grocery business,” and that it had a capital stock of $10,000, divided into, one thousand shares of the par value of ten dollars each. The precise purpose for which the company was formed, as *517 disclosed by its constitution and by-laws, was to promote the interests of persons engaged in the retail' grocery business by enabling them, through its agency and by the use of its funds, to purchase their stock in trade at lower prices than they could otherwise do.

The constitution distinctly provides that “persons engaged in the retail grocery business only are eligible to membership.”

By-law VI provides that “Members retiring from or giving up the retail grocery business shall cease from all participation and profit in this company from the date of their retirement and shall surrender their stock within thirty days therefrom for redemption.” Other sections of the by-laws provide that neither membership in the company nor certificates of its stock shall be transferable but that the company will redeem all stock after thirty days notice in writing.

Sec. 3 of the constitution provided that “The power of the board of directors shall be to exercise the entire supervision and management over the property and business of the company, regulate the purchase and prices of goods, to borrow such sum. or sums of money as they may find necessary to properly conduct the business of the same, to take stock and audit the accounts as the company may require, to investigate all charges of neglection of duty or,the violation of the constitution and by-laws of the company that may be brought against any officer, member or .employee until the charges brought against them shall have been duly investigated, and upon conviction thereof shall expel any member, remove any officer or discharge any employee, shall pass upon the issuing, redemption and cancellation of all stock of the company and shall distribute goods for cash only.”

It further appears from the record that the appellant joined the company at its organization, he being then engaged in the retail business at No. 2944 Hudson street in Baltimore City, and that he remained a member and stockholder in it until he sold out the stock in trade and business at that place to a Mr. Sause, on March 1st, 1907.

There is evidence in the record tending to prove that after *518 thus selling out his former business the appellant continued in a small way in the grocery business and also evidence of an opposite tenor. There is also evidence tending to show that-, after the sale of his business by the appellant came to the notice of the board of directors of the company, they sent him the following letter:

Baltimore, 15th February, 1906.

“Frank Ziegenheim,

Baltimore City.

Dear Sir:

On and after the 19th day of February, 1906, your connection with this company, both as stockholder and purchaser, will cease’ and determine, you upon that date will have retired from the retail grocery business for the period of thirty days, within which under the by-laws of this company you must present your stock for cancellation.

You will be entitled to a withdrawal card, as provided in the by-laws, which withdrawal card is now ready at this office for you, and this company is now ready to redeem your stock as provided in the by-laws, and we hold the necessary amount of money for the redemption of the stock you hold, which upon the presentation of your stock will be paid you.

(signed) Respectfully,

J. F. Ahern, Secretary to the Board.”

And that having received the letter the appellant went to the company’s place of business and asked what the letter meant. He was informed that it had been sent because he had gone out of the business, when he replied that he was not out of business and wanted to buy goods. The board of directors being then in session he was invited to go into the meeting and, having done so, was asked to explain how he was in the retail grocery business, but he declined to answer insisting that he was under no obligation to do so. After that the company refused to recognize him as a member, and on June nth, 1906, he filed his petition fora 'mandamus to restore him to membership in the company.

The substantial allegations of the petition, after stating the facts of the formation and purpose of the company and that the petitioner has been a member and stockholder in it from *519 its formation, are that he has never retired from the retail grocery business and is not in default in any of his obligations to the company, but that it has wrongfully and illegally refused to recognize him as a member and has denied him the privilege of purchasing goods from it and excluded him from all of the benefits of membership in it, and that the board of directors which took action against him was not a legally constituted one, because, although the corporation law of the State requires that the directors of corporations like this company to be elected annually, after the first year, to serve for a full year, the company elected its directors, after the first year, semi annually to serve for a period of six months only.

The substantial defense set up by the company in its answer to the petition is that the petitioner lost his right to membership in it by retiring from the retail grocery business in January, 1906, when he sold and disposed of his business, that the action taken by its board of directors in his case was in accordance with the provisions of its constitution and bylaws and similar to the action in the cases of others who had retired from the business and that it had afforded the petitioner a reasonable opportunity to be heard upon the question of his retirement from the retail grocery business but he had declined to avail himself of it, and that the petitioner had all along participated in the elections of the successive boards of directors of the company including the one which took the alleged action against him and that there was no irregularity in its election.

The case was tried before the Court without a jury and at the close of the evidence, on the trial of the case, the petitioner offered three prayers of which the learned Judge below granted the first in connection with an instruction of his own and rejected the second and third.

The first prayer was as follows:

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Bluebook (online)
69 A. 1071, 108 Md. 515, 1908 Md. LEXIS 79, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ziegenheim-v-baltimore-wholesale-grocery-co-md-1908.