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OFFICIAL GA-ZETTE

6160

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VoL. 61, No. 39

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June 30, 1964]

[No. 33168--TI.

F. LOGAN JOHNSTON, ET AL., petitio11ers and appellees, vs.


LOUIS A. JOHNSTON, ET AL., respo11dents a11d appellants.
1. PnIVATE CORI'OltATlO:NS; STOCKHOLDERS' MEETING; WITIIDRA\YAL OP
CONTROLLING STOCI<IIOLDE:R; EFFECT.-In an annual stockholders'
meeting validly convened, the >vithdrawal for justifiiab!e reason,
before the existence of a quortnn could be detern1ined or dccla1ed,
of a stockholder \\'110 holds or represents the n1a.jority of the
corporate stocks, althougl1 it actually defeats the existence of
the quorum, renders null and void all further transactions take11
up after such \Vithdraval, including the election of ne>v sets
of directors and officers of tbe corporation.
2. In.; In.; VoTING.-By the \\'eight of authority, a majority of the
votes actually cast >vill decide, although sorne of the stockholders
or members \\ho are prcse11t may refuse to ote, and, therefore,
the 1najority of the votes cast may be less than a Jnajority
of the pe1sons present or stock represented, this on the theory
that U1os.e >Vho have an opportunity to vote and refrain, though
they have a majority of the sleek, 111ust be held to acquiesce i11
the result of the votes actually cast. (p. 89, Fletcher Corpora
tions, Vol. 5.) In the absence of inandatory provision to the
contrary in the chartel' 01 by la\VS, the voting at a corpo:rate
n1eeting may be either by ballot, or '!.'ivri voce, or by sho\v of
hands. (p. 81, Id.)
3. Io. ; Io.; APPLIC,\BILITY OF p ARLl.
PRACTICE.-Corporate
meetings shall be conducted with fairness and good fai.i1 towards
ali \vho ure entilled (o lakP pu:l, nnd in uth a \V:tJ' as to tnable
then1 to expre tlhir \ute \l]'>i" qu<cs.tions <.On1ing before the nieet
ing. The ordinary parlian1entar? usag;C>s and practice and rules
,-,f nr,ler nprly t'l SLLeh 111e1ing. i11lo1<linp: thnt of ap]1 P:t l i n!{ fro11
the decision uf tl'e (hun .;.nrl dh,placing- the presitling ofH.:el'
l1y vote of the ine;ting. (p. G'l, Fletchcl', Vol. G.) Parlia1nen
tary practice of al'iclCaling froin the tleci;,lun of the chair and th(
i.aking control of t, ,e 111 .,-eting h} n,;1jority is the la\\'. (footnote,
p. 6il, Jliid.)
-1. In.; Io.; NOTICE ; Pr:ESENCIC OF STOCKlIOLDt:KS PERSOKALLY OR BY
PROXY r.IAY Cl.IRE l)EFECT I:'< NoTlCE.\.Vhen all the stockholder
are present either in person or by p1oxy during the stock
holders' nreeting, \\"hat.>cver dlfeet there is in tl1e notiee is cured
i)y their presenee and acquiescence. (18 CJS, 1231.)

APPEAL from a judgn1ent of the Court of First Instance


of Zamboanga City.

TIIontejo, J.

The facts are stated in. the opinion of the Court.


San Jitan,

Africa

appellants.
Anibrosio

Padilla

& Benedicto for respondents and


Lau)

Offices

for

petitioners

and

appellees.

ANGELES, J,:
111 the Court of First I11sb.111ce of Zan1boanga, petitioners
appellees F. Logan Jol1nston, Irene R. Johnston and Felisa

P. Johnston filed a petition for quo \varranto alleging that

they \Vere elected as directors in the stockholders meeting

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of the Johnston Lun1ber Cu., Int.:. on July 20, 1963 and

OFFICIAL GAZETTE

SEPTEMBER 27, 1965

\Vere in turn elected respectively as president and general


manager, vice-president and assistant general manager,

and secretary-treasurer in the meeting of the board of

directors held on the same date, and praying in the main


for the ouster of the respondents-appellants Louis A. Johns
ton, Elizabetl1 J. Araneta and Rosario S. Johnston fro1n
the positions of president and general manager, vice

president and assistant general manager, and secretary

treasurer of the Johnston Lumber Co., Inc. The appellants


filed their answer averri11g that tl1ere was no election on

July 20, 1963 a11d claiming that they are occupying the

offices in question because they '"ere re-elected as directors


in the regular annual stockholders rneeti11g on April 2, 1963
and in turn re-elected as president a11d general manager,
vice-president and assistant general manager, and sec

retary-treasurer in the meeting of the board of director

held on the same date.

After trial, tl1e lower court rendered

judgment the dispositive portion of '\Vhich reads thus:

"Wherefore, in view of the foregoing, judgment is hereby rendered


in favor of

the

Petitioners and against the Respondents declaring

said respondents to be not entitled to the Office in question and


ousting them from the same and prohibiting them from exercising
the duties and prerogatives pertaining thereto and declaring peti
tioners as the legal persons entitled to hold and exercise the functions
of said offices and restoring them to their positions therein."

From this judginent, the responde11ts have appealed to this


Court.
Appellees anrl appellants are share11olders of a family

stock corporatio11 lno'\v11 as the Jol111ston Lumber Co., Inc.

According to Article II, Section 1, of the by-laws of tl1e

said corporation, the annual meeting of stockholders shall


be held in the principal office of the corporation at Zam
boanga City in the month of April. Pursuant to the prov

isions of the by-laws, the annual stockholders meeting for


the year 1963 \Vas scheduled for April 2, 1963. The pur

pose of the n1eeting, among others, was to elect a ne'\v set

of directors who would in turn choose the new officers of

the corporation.
On April 2, 1963, as scheduled, the stockholders composed
of Louis A. Johnston, F. Logan Johnston, Elizabeth J.
4.ra11eta, Rosario S. Johnston and Irene Johnston met at
the principal place of business of the corporation at 23

i\Iadrid

St., Zamboanga

City.

After the

meeting was

called to order by respondent Louis A. Johnston, who was


then presiding, the corporate secretary was requested by

the said respo11dent to make a formal report of the number


of stocks represented in the meeting to determine if there
existed a quorum. Immediately thereafter, proxies and
po'\vers of attorney \Vere presented for record purposes and
for the guidance of the secretary. Upon his name being
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OFFICIAL GAZETTE

VOL. 61, No. 39

called, petitioner F. Logan Joh11ston, himself the owner of


305 shares of the total of 2,462 shares of the corporation

issued and outstanding on April 2, 1963, presented a proxy


by his mother, Felisa P. Johnston, also a petitioner in this
case, who owned 320 shares; another proxy by his wife,

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Irene R. Johnston, likewise a petitioner herein, who O\vned

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Josephine J.B. Silos, Leonardo B. Silos, Joseph J. Silos and

5 shares; and the duly endorsed certificates of stock of

Albert J. Silos, requesting that the shares covered by the

said certificates totalling 305 be registered and listed in the


books of the corporation for voting purposes. This request
was denied by the Chair. Believing tl1at he would not be
allowed to vote the shares \Vhich he acquired from the Silos

family, F. Logan Johnston immediately sent for the original


owners in order that they could vote said shares in his
favor. This prompted the Chair to inform F. Logan Johns
ton that he \VOuld not also be allowed to vote the 307
shares of the iate Albert S. Johnston which he had been

voting in previous years in his capacity as ndministrator of


the intestate estate of the deceased, docketed as special case

No. 387 of the Court of First Instance of Zamboanga, o n


the ground that said administration case had already been
terminated.

F. Logan Johnston denied that the adminis

tration case had already been closed and maintained tl1at

assuming that this was so, still he should be allowed to


vote the shares of the late Albert S. Jol1nston inasmuch as

he is also the guardian of all the mlnor children of tl1e


deceased by virtue of special case No. 576 of the same ccurt.
IIis argumertt, however, \Vas ruled out by the Chair pointing
out tl1at in order for him to vote said shares as guardian

the same must first be registered in the names of the \Yards.


At this juncture, F. Logan Johnston, representi11g 1,242
of the 2,462 shares of the corporation, and his-wife, Irene

Johnston, accompanied by their two lawyers, walked out of

the room where the meeting \Vas being held. The respond
ents, ho\\'ever, remained and carried on with the meeting
and elected themselves directors and officers of the corpo

ration. The meBting of April 2, 1963 was not recognized


by the petitioners who maintained that it was held by
minority stockholders.
On May 29, 1963, F. Logan Johnston \Vrote a letter to

the president of the corporation requesting, personally and


in behalf of the minor heirs of Albert S. Johnston and
of Felisa P. Johnston, that a meeting of stockholders be

called on June 5, 1963 pursuant to the provisions of the


by-laws "to take up such matters as should have been taken
up during the regular annual meeting."
(Exhs. D, 5.) In

response to this letter, respondent Louis A. Johnston issued


a notice of a special stockholders meeting \Vhich states
among others the following:

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SEPTEMBER 27, 1965

OFFICIAL GAZETTE

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"This notice is being called at the instance of Mr. Logan Johnston
on the basis of his claim that he represents the majority of the
stocks of the Company.
"As indicated in the letter of Mr. Logmi Johnston, dated May 29,
1963, matters \Vhich were not taken up, or not finished, in the
regular annual stockholders meeting held last April 2, 1963 will be
taken up in this special stockholders' meeting.
'The busin'tlss agenda for this special stockholders' meeting shall
be as follows:
"1. Finamcial Report
2. Additional report of the President on the operations of the
business and the status of the Company
3. Recommendations and proposals of the President" (Exh. 6.)
Pursuant to this notice, another stockholders meeting was
l1eld at the principal office of the corporation on July 20,
1963.

During that meeting, \Vhich 1vas presided by re

spondent Louis A. Johnston, after the roll was called and


a quorum was declared, F. Logan Johnston moved for the
election of a ne\v board of directors, claiming that there
was no valid meeting on April 2, 1963 because there was no

quorum.

The motion >vhich was duly seconded by Ireme

Johnston was overruled by the Chair.

F. Logan Johnston

insisted that his motion las In order and asked for a div
ision of the house, but the Chair stood pat on its former
ruling.

Sensing that he owned and/or represented the

majority of the stocks of the corporation, F. Logan Joh11s


ton then and there nominated his own set of directors,
V1hich nomination the Chair overruled, and after moving for
a division of the house, properly seconded by Johnston,
\Vhich the Chair likewise ovt1ruled, the petitioner cast their
votes in faYor of their nominees. Those elected to the new
board \Vere F, Logan Johnston, Irene R. Johnston, Felisa
P. Johnston, I,ouis A. Johnston and Elizabeth J. Araneta.

Immediately after the election of the said directors, F.


Logan Joh11ston invited Louis A. Johnston and Elizabeth
J. Araneta to attend the board meeting which his bloc was
holding upstairs. The two respondents declined the invi
tation saying that they "do not recognize that body.'' Peti
tioners convened as a board and elected the follo\ving
officers: F. Logan Johnston, president and general manager;
Irene R. Johnston, vice-president and assistant general
manager; and Felisa P. Johnston, secretary-treasurer.
After the election of the petitioners to the offices above
mentioned, they made a demand on the respondents for the
turnover of the records and functio11s of their respective
positions, but as this de1nand \\'as not honored by the reM
spondents the instant petition for quo \varranto was filed
in court.
The crucial issues in this appeal are: (1) \vhether or not
the appellants 'vere validly elected as directors and officers
of the corporation in the meeting of April 2, 1963; (2)

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OFFICIAL GAZETTE

6164

VoL. 61, No. 39

whether or not the appellees were duly elected as directors


and officers of the corporation in the meeting of July 20,
1963.*
Appellees and appellants are agreed that the meeting of
April 2, 1963 was validly convened.

However, before the

existence of a quo1um could be determined or declared,


petitioner F. Logan Jolmston, who owned and/or repre
sented J.,242 shares of the total of 2,462 shares of the cor
poration, or more than 50 percent of the corporation's out
standing shares, walked out of the meeting convinced that
the rulings of the Chair with regard t o his requests to vote
the shares of the Silos family and of the minor children
of Albert S. Johnston were unreasonable and contrary to
the spirit of the corporation law. The stockholders who
\Vere left behind and who carried on with the meeting rep.
resented the minority and did 11ot constitute a quorum, and
it is clear that they could not have validly transacted fur
ther business much less have elected a new set of board
of directors. Section 31 of the Corporation La\v (Act No,
1459), as amended, explicitly requires the presence of a
quorum at all elections of directors.
"SEC. 31. At all elections of directors there must he present, either
in person or by representative authorized to act by written proxy,

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the o'vners of the majority of the subscribed capital stocks entitled


to vote, or, if there be no capital stock, then a majority of the
members entitled to vote.

The elections must be by ballots, and

every stockholder entitled to vote sl1all have the right t o vote in

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person or by pro;.-y the number of shares of stock standing at the


time fixed in the by.Jaws in his own nan1e on the stock books
of the co1poration, and said stockholder may vote such number of

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shares for as many persons al' there are directors or h e may


cumulate said shares and give one candidate as many votes as

the number of directors to be elected n1ultiplied by the nu1nber


of his shares shall equal, or he 111ay distribute the111 on the san1e prin
ciple among as many candidates as he shall see fit: Provided, That
the whole number of votes cast by him shall not exceed the number
of shares owned by hitn as shown by the books of the corporation
n1ultiplied b y the whole number of directors to b e elected! And
prov:ided, That no stock declared delinquent by the board of
directors for unpaid si;.bscriptions

shall

be

voted.

Unless other

>vise provided in the articles of incorporation or in the by.laws,


members af corpor8'tions which have no capital stock may cast as
many votes as there are directors to be elec'bed but may not cast
more than one vote for one candidate. Directors receiving the highest
number of votes shall be declared elected.

Any n1eeting

of the

stockholders or members called for any election may adjourn from


day to day or from time to time ii for any reason no e!ection is
"' The sc:1edulcd date of electio il of directors of the corporation,
1964, is now past and it v;ould appear that this case has

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of

April,

become moot and academic.

Ho\vever, this is not so, for the election

of 1964 has not as yet been held in view of the fact that a writ

of preliminary injunction suspending the election of

to
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1964 \Vas ob

tained by the appellees from the C!lurt of First Instance of Zain


boanga <luring the pendency of this appeal.

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SEPTEMBER 27, 1965

OFFICIAL GAZETTE

6165

had or if there are not present or represented by a proxy at the


meeting of o\vners of a majority of the subscribed capital stock
entitled to vote, or, if there be no capital stock, a majority of the
members entitled to vote. (As amended by Act No. 3518) "

The by-laws of the Johnston Lumber Co., Inc. provides


that:
"See. 4. A quorum at any meeting of the stockholders shall consist
of a majority of the voting stock of the company represented in
person or by proxy, and a majority of such quoru1n shall decide
any question that may come before the meeting, save and except
in those several n1atters in which the Jaws of the Philippine Islands
require the affirmative vote of a greater proportion." (Art.
II, Exh. 9.)

It fol}o,vs as a necessary and logical consequence that if


the electio11 of the directors of the corporation after the
withdrawal of F. Logan Johnston 'vas null and void, the
subsequent meeting of the board at which Louis A. John
ston was elected president and general manager, Elizabeth
J. Araneta as vice-president and assistant general manager,

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and Rosario S. Johnston as secretary-treasurer, was like


wise null and void. For, those who subsequently convened
to -choose the officers of the corporation were not directors
at all in the eyes and cotemplation of law.
Appellants, however, ieOntend that inasmuch as F. Logan
Johnston admitted on cross-examination that his purpose
in bolting the meeting \Vas to deliberately defeat the exis
tence of a quorum, the abse11ce of a quorun1 did 11ot produce
the effect of i1ullifying i.1e proceedings that transpired
after

11is

,yalkout,

citing

Fletcher in

support

of

the

contention.
"Under a by-la>v providing that a lnajority of stockholders shall
constitute a quorum at all meetings, stoekliolders present and par
tieipating at a lawfuimeeting cannot, without justifiable rci:ison,
break the quorum by \vithdra,ving and so defeat the elections of
those directors desired by a majority." (Hexter vs. Colu1nbia
Banking Co., 16 Del Ch. 263, 145 Atl. 115; 5 Fletcher, 85.)

The contention is untenable.

It is to be noted that even

the authority cited by the appellants implies that a stock


holder can, for justifiable reason, break the quorum by with
drawing from the meeting. Reviewing the record, we "fj.nd
that F. Logan Johnston 1''ithdrew from the meeting of April
2, 1963 because appellant Louis A. Johnston persistently
but without reason overruled hin1 o n his requests to vote
the shares of the Silos family and of the minor children
of Albert S. Johnston.
Appellant Louis A. Johnston, as presiding officer of the
meeting, should have allo\veil appellee F. Logau Johnsto11
to vote the shares which he ha<l validly purchased from the
Silos family. The excuse offered br hiln that there was no
more material time for the registration of the stocks in

6166

OFFICIAL GAZETTE

VoL. 61, No. 39

the books of the corporation is as flimsy as it is unreason


able. The request for the registration of the stocks of the
.
Silos family 1vas made before the shareholders met to elect
the directors and officers of the co1poration. Considering
that the request was made on time; that F. Logan Jol1nsto11
had done everything possible to have the stocks registered
so that they may be voted, which is in substantial com
pliance with the eharter and by-laws of the corporation;
that it would not require much time to register the stocks
contrary to the pretense of the presiding officer; that F.
Logan Johnston was claiming and insisting that he con
trolled the majority of the stocks of the corporation; in
fairness to him the Chair sl1ould have honored his request.
"Aside from express regulations, all that js necessary is that the
1neeting shall be conducted by the proper persons, with fairness and
good faith towards all who are entitled to take part, and in such
a 'vay as to enable them to express their vote upon questions coming
before the meeting."

(p. 64, FletcheJ:, Vol.

5.)

The denial by the Chair of the request of F . Loga11 Jol1ns


ton to vote the shares of the minor children of Albert
S. Johnston is likewise unreasonable. Although the order
of the Court of First Instance of Zan1boanga dated Feb-.
ruary 20, 1962 declared that the administration of the
estate of the late Albert S. Johnston was closeJ and ter
minated, there is no doubt that as of April 2, 1963 F. Loga11
Johnston \Vas still the adn1inistrator of the said estate, be
cause the order of the court "'as subject to the co11ditions
that the inheritance and estate taxes should be paid and
the receipts delivered to the cou1t, \Vhich conditions ha-ve
not as yet been complied with 011 that date.

IIe iemainerl

to be the administrator of the estate as sho\yn bY the fact


that the bond filed by him as administrator wal} still in
force and effect. Upon these ccnsideratio11s, F. Logan

Johnston should have been allo\Ved to vote the shares of


Albert S. Johnston as appellants have allowed hin1 in pre

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vious years, even after the issuance of the court's order

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of February 20, 1962, to vote said shares. Assuming that


special case No. 387 had already been terminated, F. Logan

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Johnston could still vote the shares of the deceased Albert

S. Johnston in his capacity as guardian of the latter's heirs


pursuant to the letters of guardianship issued to him in
special case No. 576 of the same court, 'vhich was still

effective on April 2, 1963 (Exh. I}.


Considering all the foregoing, the withdrawal of F.
Logan Johnston from the meeting of April 2, 1963, al
though it actually defeated the existence of the quorum,
was neither unreasonable nor u11justified. He11ce, the con
tention of the appellants that his withdra\val did not pro
duce the effect of nullifying all the proceedings ,,hich \vere
held thereafter, upon the authorities cited by thein, cannot

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SEPTEMBER 27, 1965

OFFICIAL GAZETTE

6167

Moreover, the authorities invoked by the ap


pellants pre-supposes the existence of a quorum formally

be sustained.

declared before the withdrawal occurred. Said authorities


are not applicable to this case because here there was no
formal declaration of a quorum before the withdrawal from
the meeting by F. Logan Johnston.

i..Appellants argue in their brief that "Although there was


no formal declaration of the presence of a quorum, this
did not prevent the meeting from starting."

(p. 23) be

cause the question of quorum was never raised in said meet


i11g; and as testified to by Elizabeth J. Araneta a formal
declaration of the presence of quorum >Vas not customary

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in meetings of the Johnston Lumber Co., Inc. The argu


\Ve are 11ot here

ment is off-tangent a11d 1vithout merit.

concerned 1vith the validity of the commencement of the


meeting. Al are agreed that the meeting 1vas properly
convoked. \Vhat tl1e appellees are questioning is whether
the meeting, after the withdrawal therefrom by F. Logan
Johnston, could validly continue and elect a new set of
board of directors of the corporation.

Whether or not the

question of quorum 1vas raised, the fact remains that


after such withdrawal there was no more quorum and the

remai11ing minority stoc1cholders could not validly transact


any further business. Anent the testimony of Elizabeth
J. Ara11eta, the same is refuted by the minutes of the cor
poration, Exhibits B, B-2, C, C-3, which show that the
usual practice among t11e shareholders is to declare the
existence

of

quorum

before

proceeding

to

further

business.
We now consider the meeting of July 20, 1963.

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This

meeting was properly convened. Present therein 1vere all


the respondents as 1vell as petitioners F. Logan Johnston
and Irene Johnston. The roll \\'as called and the presence

of a quorum 1vas declared by appellant Louis A. Johnston


as presiding officer. F. Logan Johnston at the time held
and/ or represented a n1aj ority of the stocks of the corpo.

ration. His majority holding was never questioned but


l\'as admitted by the respondents. After a quorum had
been declared, F. Logan Johnston moved for the election
of a new board of directors, contending that there 1vas no

valid meeting on April 2, 1963 because there was i10 quorum.


His motion 'vas duly seconded by Irene Johnston, but the

Chair overruled it.

He maintained that there was n o

quorum a t the meeting o f i\.pril 2 and insisti:r..g that his


motion 1vas proper and duly seconded, he moved for a divi
sion of the house. The Chair, however, dodged the issue
a11d transferred to another subject. F. Logan Johnston
nominated a block of directors composed of himself, Irene
Johnston_. Felisa P, Johnston, Louis A. Johnston and Eliza-

OFFICIAL GAZETTE

6168

VOL. 61, No. 39

beth J. Araneta, which nomination was duly seconded.

But

the Chair again overruled him. He insisted that his nomi


nation \Vas in order and duly seconded and moved for a
division of the house, but the Chair ignored him
and jumped to another subject. Whereupon, he and his

join them upstairs t o choose the new officers of tl1e corpo

wife cast their votes, representing the majority shares. of


the corporation's stocks, on his nominees. Thereafter, he
invited the two respondents \Vho \Vere elected directors to

ration.

Said respondents declined saying that they "do not

recognize that body".

Petitioners held a meeting

elec;ted themselves officers of the corporation.

and

l.- .Appellants contend that the foregoing proceedings did


not amount to an election of the board of directors. We
disagree. It must be remembered that the petitioners held

a majority of the stocks of the corporation when they cast


their votes in favor of their nominees. True it is that the
respondents. who \Vere present in the meeting failed or re
fused to participate in the election, but their inaction did

not have the effect of defeating o r invalidating the election.

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"It is of the essence of all elections that the will of the

(p. 88, Flet

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"By the \Veight of authority,

a majority of the votes actually cast will decide, although


some of the stockholders or mei.11bers vv ho are present n1ay
refuse to vote, and, therefore, the majority of the votes
cast nlay be less tha11 a 111ajority of the persons present

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majority, properly expressed, shall govern."

cher, Corporations, Vol. 5.)

or stock represented, this on the theory that 'those 'vho have


a11 opportunity to vote and refrain, though they hav a
majority of the stock, must be 11eld to acquiesce in the

result of the votes actually cast.'"

p. 89, Ibid.)

Nor may

the manner the votes of the petitio11ers \Vere cast be ques


tioned for, "In the absence of mandatory provision to the
contrary in the charter or byla\vs, the voting at a corporate
meeti-9.g may be either by ballot, vi-va voce, or by a sho'v
of hands."
(p. 81, Id.)
.

It is contended in the appellants' brief that "Consider

ing that Appellant Louis A. Johnston 'vas the person pres


iding over the meeting, how could Appellee Logan Johnston
put through a move for an election of directors after h e

'\Vas already told that only the business specified in tl1e


(pp. 13-14.) , implying that
notice could be taken up?''
a presiding officer could prevent a question to be put to the

house even ori whimsical and capl'icious gron11ds. As well


said, n1eetings shall be conducted witl1 fair11ess and good
faith to\vards all 'vho are entitled to take part, and in
such a wa}' as to enable then1 to express their vote upon
questions coming before the 111eeti11g.

"The ordinary par

liamentary usages and practice and rules of order apply to

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OFFICIAL GAZETTE

SEPTEMBER 27, 1965

6169

such (corporate) meetings, including that of appealing from


the decision of the chair and displacing the presiding officer
by vote of the meeting."
(p. 64, Ibid.)
"Parliamentary
practice of appealing from the decision of the chair and the
ta.king control of the meeting by majority is the law."
(footnote, p. 65, Ibid.)
Neither may the election held on July 20, 1963 be assailed
on the ground that the notice called for a special stock
holders meeting and that the agenda did not specifically
include the election of a new board of directors. It is
admitted by the appellants that the meeting of July 20 was
called pursuant to the letter of F. Logan Johnston dated
May 29, 1963, requesting that "!11 view of the aborted
meeting held last April 2, 1963 * *" a meeting of stock
holders be called "to take up such matters as should have
been taken up during tl1e anual meeting." In the notice
issued by Louis A. Johnston, it was stated that the meeting
being called at the instance of F. Logan Johnston who
claims to represent a majority of the stocks of the company,

\Vas

and that "As indicated i n the letter of Mr. Logan Johnston,


dated J'riay 29, 1963, matters which were not taken up, or
not fi11ished, in the regular annual stockholders meeting
held last April 2, 1963 \Vill be taken up in this special
stockholders' meeting." Upon these considerations, the
stockholders of the corporation kne'v that F. Logan Johns
ton \vould press for the electio11 of a ne\V board of direc
tors in the July 20 meeting and the stockholders \Vere
prepared for it.
"A

notice stating that the1e would be considered at a special meet

ing all questions l'elating to the property, management and business


policy of tle corporation and that such action as inight be deemed
expedient and necessary in connection there\vith would be taken, was
sufficient notice that such consideration might involve a change of
offiC'Cl's and di1ectors."

i,

(Lawrence v_ I. N. Parlier Estate Co., 15"

Cal. (2d) 220, 100 p. (2d) 765; 5 Fletche1 Cyc. Corp, p.

62.)

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Besides, all the stockholders were present either in person

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or by proxy dt1ring the meeting of July 20 and \Vhatever


defect there was in the notice \Vas cured by their presence
and acquiescence.
"In the case of a special meeting, the n0tice n1ust state the nature
of the business to be transacted, and, in the absence of appearance
and consent by aU of the stockholders, any acti-0n not 'vithin
scope of the notice is void.

the

The appearance and consent of all the

stockholders, however, validates a11y act taken at a special n1eeting


-although not unbraced within the notice."

(18

CJS 1231.)

\Ve conclude fron1 all the foregoing that the trial court
did not err in holding that the election of directors in the
July 20 meeting \Vas proper as well as the subsequent elec
tion of the officers of the corporation held on the same date.

,,

OFFICIAL GAZETTE

6170

VoL. 61, No. 39

WHEREFORE, finding no error in the judgment appealed


from, it is affirmed in all respects "\.Vith costs against the
appellants.

. SO ORDERED.
Co1icepcion Jr. and Gatmaitan, JJ., concur.

JwJ,gment affirmed.

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