Lippman v. Kehoe Stenograph Co.

Citations

• 11 Del. Ch. 412
• 102 A. 988
• 1918 Del. LEXIS 9

Syllabus

<p>While a court of equity in actions between a corporation and its stockholders will not ordinarily take jurisdiction fop the purpose of determining the legality of the election or the qualifications of directors of private corporations or of the sufficiency of notice of their meetings or of the orderly procedure of their meetings, yet where these questions arise collaterally in an action by a stockholder to restrain the illegal forfeiture of his stock, and upon independent ground the stockholder is entitled to equitable relief, such questions will be determined by a court of equity.</p> <p>Under such principles, in a suit to restrain an alleged illegal forfeiture of corporate stock, the question of the legality of the meeting of the board of directors held without the State of the corporation’s domicile is a proper one for determination by the Chancellor. •</p> <p>Though a statute of the corporation’s domicile required at least one director to be a resident of the State, a stockholder seeking an injunction to restrain an alleged illegal forfeiture of his stock by action of the board of directors cannot question the legality of the action of the directors on the ground that no one of them was a resident of the State, for that is a matter solely between the state and the corporation of which a court of equity in such proceedings cannot take cognizance.</p> <p>Where no directors’ meeting in fact was had, purported minutes of such meeting prepared and signed by some of the directors are of no force.</p> <p>Where a director at the request of one acting for the corporation assigned his stock certificate in blank but no transfer was, entered on the corporate books, and it was not contemplated either by the director or the company that he had lost his status as a stockholder so as to be ineligible, such director was still eligible to act in that capacity.</p> <p>Where less than four months after their election, as directors, such persons acquired the requisite three share