CORPORATIONS - DIRECTORS - POWER OF SHAREHOLDERS TO FILL VACANCIES

Authors

Abstract

One of a directorate of three having resigned in the middle of his term, a special stockholders' meeting was called to fill the vacancy, and defendant was elected to finish the term. The relator, a stockholder and director, brought a writ of quo warranto to oust the defendant on the ground that the Corporation Act (ch. 32, sec. 21, par. 5, Ill. Rev. Stat. Cahill, 1929) provided that "the directors shall fill all vacancies which may happen in the board * * * by death, resignation, or otherwise, until the next annual meeting of the stockholders," and that therefore the stockholders had no power to fill a vacancy in the board. Defendant pleaded that the Act was unconstitutional, because it was in conflict with sec. 3 of art. II of the Illinois constitution, which provides that in all elections for directors of incorporated companies "every stockholder shall have the right to vote * * * for as many persons as there are directors or managers to be elected, or to cumulate said shares * * *; and such directors shall not be elected in any other manner." The relator demurred, and the lower court upheld the demurrer and entered judgment of ouster against the defendant, who appealed to the supreme court on the ground that a constitutional question was involved. The supreme court declared the statute unconstitutional and upheld the elector. People ex rel. Weber v. Cohn, 339 Ill. 121, 171 N.E. 159.

Recommended Citation

CORPORATIONS - DIRECTORS - POWER OF SHAREHOLDERS TO FILL VACANCIES, 29 Mich. L. Rev. 109 (1930).
Available at: https://repository.law.umich.edu/mlr/vol29/iss1/18