Brief Fact Summary. The President of R. Hoe & Co, Inc., refused to call a special meeting requested by Petitioners, class A stockholders. The trial court granted the mandamus to compel the special meeting.
Synopsis of Rule of Law. Class A stockholders have a right to call a special meeting to be heard on their disproval of management decisions, to elect and remove directors and to amend bylaws.
Issue. Whether Petitioners have a right to a special meeting for the purposes stated above?
Held. Yes. The trial court’s decision is affirmed. Petitioners are entitled to a meeting for the purposes discussed above.
Dissent. This proceeding should be dismissed because none of the stated purposes for the special meeting could legally be transacted.
A meeting for the purpose of reinstating the former president is unnecessary as it is the duty of the directors to manage the affairs of the corporation.
A recall and removal of elected directors before the expiration of their term is not permitted absent a full and fair trial by proxy.
An amendment to the by-laws to change the requirements of a quorum is unnecessary because the by-laws already address this issue and need to be adhered to.
Discussion. Although stockholders are unable to directly effect a change in officers, they are allowed to express themselves to the directors regarding this change. Further, stockholders may call a special meeting to elect and remove directors and to amend the by-laws effecting the removal and election of directors.