to protect the lives of that class of the gen- | the anthracite mining act of 1891, a copy of eral public whose safety would be thereby said section being embodied in the notice, and endangered, and incidentally to conserve the requested that the defendant's engineer be mine property of the owners themselves. In instructed to attend such meeting to consult this latter aspect of the case the destruction with the engineer of the Lehigh & Wilkesof the right to mine the coal bears some Barre Coal Company for the purpose aforeanalogy to the destruction of buildings to said. prevent another sort of calamity-a conflagration. True, in the latter case the disaster is imminent, while here it is uncertain; so that perhaps a closer analogy in that respect would be the statute law requiring fire escapes to be placed on certain structures in order to avert a possibly remote catastrophe. Such laws were held to be a valid exercise of the police power of the state in Fidelity Insurance Trust & Safe Dep. Co. v. Fridenberg, 175 Pa. 500, 507, 508, 34 Atl. 848, 52 Am. St. Rep. 851. [2, 3] "The enactment here in question does not authorize a taking of property for public use, is not an exercise of the right of eminent domain, and therefore is not unconstitutional, because of failure to provide for compensation; but it regulates the use of tangible property-the coal in the pillarby requiring the owner to use it (negatively by leaving it unmined) as not to injure the rights of others, or, in another aspect of the case, does not affect tangible property at all. but destroys an intangible property right (that of mining out the pillar coal) in the interest of the public safety. In either case it is, in our opinion, an exercise of the police power, justified by the circumstances, and not violative of either the state or the federal Constitution. "By agreement of counsel this case is to be determined as upon final hearing, the depositions taken for use on motion to continue the preliminary injunction to be considered as evidence produced in open court on such hearing. In pursuance of this agreement of counsel, and upon admissions contained in the answer, and from the testimony, we make the following findings of fact: "(1) The plaintiff is the mine inspector of the ninth subdistrict of the first anthracite coal inspection district of Pennsylvania; and the Plymouth Coal Company, defendant, and the Lehigh & Wilkes-Barre Coal Company are mining corporations of this commonwealth, each employing more than ten per sons. "(2) The said two coal companies are the owners, proprietors, lessees, and occupiers of adjoining coal properties in the borough of Plymouth, Luzerne county, Pa., and within the limits of the said subdistrict of the first anthracite coal inspection district. "(3) The plaintiff as mine inspector gave to the president of the defendant company a written notice dated August 31, 1909, stating that a meeting would be held at the former's office on September 2, 1909, for the purpose of deciding upon the width of a boundary pillar of coal to be left between the coal properties of the said two companies, pursuant "(4) The defendant company declined to permit its engineer to attend such meeting, and refuses to leave any unmined coal as part of a boundary pillar between its coal property and that of the Lehigh & WilkesBarre Coal Company, claiming a legal right to mine to the boundary line of its property, and denying the constitutionality of section 10, art. 3, of the said mining act. "(5) No determination of the width of or necessity for such boundary pillar had been made, as required by the act, up to the time. of filing the bill in this case, nor has it heen made since, so far as the court is advised. "Conclusions of Law. "(1) Section 10 of article 3 of the anthracite mining act of June 2, 1891 (P. L. 183), is a valid exercise of the police power of the state, and is not in conflict with the Constitution of the United States nor with the Constitution of Pennsylvania. "(2) That enactment requires a boundary pillar of coal to be left unmined between the mine workings of the defendant company and the Lehigh & Wilkes-Barre Coal Company of such width as the proper mine inspector and the engineers of the said two companies shall deem necessary to the safety of the men employed in either mine in case the other should be abandoned and allowed to fill with water, unless, after due investigation and consultation, they shall decide that no such barrier pillar is required to insure the safety of such employés upon the happening of the contingency stated in the act. The same act requires the making by said engineers and inspector of duplicate surveys of the face of the workings along such pillar, and the filing of a copy of the same with the owners of the adjoining properties and with the mine inspector. "(3) The preliminary injunction heretofore granted should be continued until the width of such a boundary pillar, or the absence of necessity for one, shall have been determined by said inspector and engineers and surveys made and filed as required by the act, or until they shall duly decide that no such pillar is needed for the safety of the employés of either mine. "(4) The costs of this proceeding should be paid by the defendant." Argued before FELL, C. J., and MESTREZAT, POTTER, ELKIN, and MOSCHIZISKER, JJ. Wm. C. Price, F. W. Wheaton, and John T. Lenahan, for appellant. Evan C. Jones and Thomas H. Atherton, for the Commonwealth. PER CURIAM. The decree appealed from Pa.) (232 Pa. 53) COMMONWEALTH v. VANDEGRIFT 153 COMMONWEALTH ex rel. SHEIP et al. v. the very purpose of breaking a quorum, and ob VANDEGRIFT et al. (Supreme Court of Pennsylvania. May 23, 1911.) 1. CORPORATIONS (§ 283*) - STOCKHOLDERS MEETINGS-ELECTION OF OFFICERS. er an annual meeting is legally organized, for tain relief from the courts on the ground that a quorum was not present when the act complained of was done; the act of a majority of those present at a legally constituted meeting being the act of the corporation, though less than a majority of the total number of the stockholders or shares. [Ed. Note.-For other cases, see Corporations, Cent. Dig. § 744; Dec. Dig. § 195.*] 8. CORPORATIONS (§ 196*) - STOCKHOLDERS — MEETINGS-MODE OF VOTING. Eighteen hundred and eighty-seven shares in a corporation were represented at an annual meeting of stockholders out of a total of 2,081 outstanding. After the election of a chairman at the meeting by a viva voce vote, some of the stockholders demanded that a stock vote be taken for the chairman, and, on the refusal of this demand, they withdrew for the purpose of breaking the quorum. After their withdrawal, 992 shares, all of those remaining, were voted for [Ed. Note.-For other cases, see Corporations, officers elected for the ensuing year. Held, that Cent. Dig. §§ 745, 746; Dec. Dig. § 196.*] the election was valid, and that the withdraw-9. CORPORATIONS (§ 196*) - STOCKHOLDERS' ing members had no right to maintain quo warranto proceedings to oust the officers. [Ed. Note.-For other cases, see Corporations, Dec. Dig. § 283.*] 2. CORPORATIONS (§ 195*) - STOCKHOLDERS -STOCKHOLDERS MEETINGS-QUORUM. - A corporate by-law providing that the holders of a majority of the stock shall constitute a quorum for the transaction of business at any regular or special meeting, and, if no quorum be present at any meeting so called, a less number may meet and adjourn from time to time till a quorum be present, does not authorize a portion of the stockholders to withdraw from a meeting in order to break a quorum. [Ed. Note. For other cases, see Corporations, Cent. Dig. § 744; Dec. Dig. § 195.*] 3. CORPORATIONS (8 57*)-BY-LAWS-EFFECT. The by-laws of a corporation when duly enacted are written into the charter and are a part of the fundamental law of the corporation, binding, not only on the corporators and the corporation, but on those dealing with it. [Ed. Note. For other cases, see Corporations, Cent. Dig. §§ 157-159; Dec. Dig. § 57.*] 4. CORPORATIONS (§ 195*) - STOCKHOLDERS MEETINGS. Stockholders attending an annual meeting, and then without cause voluntarily withdrawing, are in no better position than those who voluntarily absent themselves in the first in stance. [Ed. Note. For other cases, see Corporations, Cent. Dig. § 744; Dec. Dig. § 195.*] 5. CORPORATIONS (§ 283*)-OFFICERS - ELECTION-TIME FOR HOLDING ELECTIONS. The duty of holding an annual election of officers of a corporation being imposed by statute, and the time and place for holding it being fixed by the by-laws, the duty as to the time and place of holding the election is quite as imperative as the provision relating to the amount of stock necessary to constitute a quorum. [Ed. Note. For other cases, see Corporations, Cent. Dig. §§ 1195-1205, 1207-1235; Dec. Dig. § 283.*] Corporate stockholders may at an annual meeting select a chairman by a viva voce vote, where there is no statute or by-law to the contrary; a stock vote not being necessary. MEETINGS-ELECTION OF CHAIRMAN. Even if a stock vote were demandable for the election of chairman at an annual stockholders' meeting, a request therefor coming after the organization has been effected is too late. [Ed. Note.-For other cases, see Corporations, Cent. Dig. §§ 745, 746; Dec. Dig. § 196.*] Appeal from Court of Common Pleas, Philadelphia County. Quo warranto by the Commonwealth, on the relation of Jerome H. Sheip and others, against Asa W. Vandegrift and others. From a judgment for respondents, relators appeal. Affirmed. Magill, J., found the facts to be as follows: "This matter is before the court on demurrer by relators to answers filed by respondents to an information for quo warranto. The answers in question are responsive and under oath, and by the demurrers filed the statements contained therein are admitted to be true. Upon the pleadings it appears that an annual meeting of the stockholders of the Philadelphia Veneer & Lumber Company, Incorporated, was held January 20, 1910, at the time and place prescribed by the by-laws, which meeting was attended by 11 stockholders owning 1,887 shares of a total issue of 2,081 shares. Four of the relators, Jerome H. Sheip, S. S. Koller, Stanley S. Sheip, and Charles H. Kunkel, were present at the meet: ing. Article 10, § 3, of the by-laws of the corporation, provides: "The holders of a majority of the stock issued shall constitute a quorum for the transaction of business at any regular or special meeting. If no quorum be present at any meeting so called, a less number may meet and adjourn from time to time, until a quorum be present.' A quorum was present at the meeting which was duly organized, and at which Asa W. Vandegrift, one of the respondents, was elected chairman. As shown by the answer, after the election of the chairman, Stanley S. Sheip, one of the relators, requested that a new election for chairman of the meeting be had by stock vote. He was informed by the chairman that his request was too late as the meeting had already elected its chairman, *For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key No. Series & Rep'r Indexes [2] The by-laws of the corporation in question provide, inter alia, as follows: "The holders of a majority of the stock issued shall constitute a quorum for the transaction of business at any regular or special meeting. If no quorum be present at any meeting so called a less number may meet and adjourn from time to time until a quorum be present." and thereupon, without appealing from the | the shareholders for the purpose of breaking decision of the chair, or taking any other the quorum and preventing an election at the method of questioning the ruling, said Stan-time and place fixed by the by-laws, caley S. Sheip, Jerome H. Sheip, S. S. Koller, priciously and without just cause withdrew, and Charles H. Kunkel, the relators, with- the decision of the questions raised by this drew from the meeting, having previously appeal under the great weight of authority notified the chairman that, unless they were must be adverse to the contentions of appelpermitted to have a new election by stock lants. vote on the question of chairman, they would withdraw for the purpose of making no quorum, and prevent the further transaction of business. After the relators above named had withdrawn from the meeting those remaining proceeded to an election, and respondents were elected to the several offices as set forth in the information and answer, the chairman having first appointed a judge and two tellers to conduct the election, who were duly sworn, etc., at which election, as shown by the answer, 992 votes were cast for each of the candidates, being a majority of the total number of shares represented at the meeting at the time of organization, but less than a majority of the whole number of shares issued. It is evident that the difficulty arose through the efforts of two factions of the stockholders to secure control of the offices of the corporation, and the relators, Jerome H. Sheip, S. S. Koller, Stanley S. Sheip, and Charles H. Kunkel, clearly appear to have withdrawn from the meeting for the sole purpose of preventing an election, and, having done so, they subsequently called a special meeting of the stockholders on February 11, 1910, for the purpose of electing officers, and at an election held on that date by themselves, and acting through proxies for other stockholders, elected themselves as officers of the corporation. This meeting was called by them, or some of them, upon the assumption that they at the time of the call for the special meeting continued to be directors of the corporation by virtue of their election in the previous year, and that they held over as such directors by reason of the alleged fact that the directors elected at the meeting of January 20, 1910, were not duly and properly elected." Argued before FELL, C. J., and MESTREZAT, POTTER, ELKIN, and MOSCHZISKER, JJ. Alex. Simpson, Francis Shunk Brown, and Ira Jewell Williams, for appellants. Frederick J. Shoyer and Henry Arronson, for appellees. ELKIN, J. [1] This is a proceeding by quo warranto to test the right of respondents, or either of them, to hold the respective of fices of president, vice president, secretary and treasurer, and director of a certain corporation named in the suggestion for the writ. The controversy grows out of alleged irregularities in holding the annual meeting of stockholders for the purpose of electing a board of directors. If this meeting was regularly organized in the first instance with [3] It is argued for appellants that the bylaws of a corporation, when duly enacted, are written into the charter and are a part of the fundamental law of the corporation, binding, not only upon the corporators and the corporation, but upon those dealing with it. With this proposition we can have no quarrel because it is settled law under the authority of our own cases. Millward-Cliff Cracker Co.'s Estate, 161 Pa. 157, 28 Atl. 1072; Wayne Title & Trust Co. v. Electric Railway Co., 191 Pa. 90, 43 Atl. 135; Worthington v. Electric Railway Co., 195 Pa. 211, 45 Atl. 927. It is contended that the legal effect of the by-law under consideration in the present case is to require, not only a majority of the stock issued to be represented when the meeting is organized, but that no business can be transacted if at any time after the organization and during the course of the meeting a sufficient number of shareholders withdraw to reduce the number of shares remaining below the amount necessary to constitute a quorum. In other words, that the plain meaning of the by-law is that no corporate act can be done except at a time when a majority of the stock issued is present. The second provision of the by-law is called to our attention for the purpose of strengthening the argument. If no quorum, be present, a less number may meet and adjourn from time to time until a quorum is secured. This provision of the by-law, it is argued, must be read in the light of the ordinary rules of parliamentary practice, which means that, if at any time the number present becomes less than a quorum, there is no power to do anything except to adjourn until a quorum be present. As correct statements of general principles of law, many of these propositions cannot be gainsaid. The validity of a corporate act is as a general rule tested by the requirements of the by-laws, and, when there is a positive direction to do an act in a particular way or in some specific formal manner, failure to observe the requirements imposed by the by-laws may, and as a rule does, render the act invalid. the present case several things must be taken · into consideration in disposing of the ques Pa.) COMMONWEALTH v. VANDEGRIFT 155 do not provide how many shares of stock | too late, as the meeting had already been shall be required to be voted in order to organized. No appeal was taken from the make a valid election of members of the ruling of the chairman, but the stockholder board of directors. The by-laws only pro- who made the request stated that, if a new vide how much stock shall be present at the election of a chairman by stock vote was meeting to constitute a quorum. As an il- not allowed, the faction represented by him lustration, there were 2,081 shares issued would withdraw for the purpose of breaking and outstanding in the present case at the a quorum and to prevent any further busidate of the annual meeting. To constitute a ness being transacted. To constitute a ness being transacted. In accordance with quorum it was necessary to have at least the suggestion made, they did withdraw and 1,041 shares present, and, if there had only refused to participate in the election of a been that amount of stock represented, 521 board of directors at that meeting. Before shares would have been sufficient to carry withdrawing, they were notified that the the election of each director. The learned election of directors would be by stock vote. court below has found as a fact that 992 After their withdrawal, the meeting having shares were voted for each of the respond- already been organized, those stockholders Appellants undertake to show by the who remained proceeded in a regular and orfigures that this was an erroneous finding. derly manner with the election. A judge and The discrepancy may be explained upon the two tellers were appointed and duly sworn theory that some shares were voted when to perform their duties according to law. the ballot was taken that had not been not- Nominations were made in the regular way ed at the convening of the meeting. How- and a stock vote by ballot taken with the ever, in the view we take of the case, the result that 992 shares were returned as havdiscrepancy pointed out is immaterial. ing been voted for each of the appellees, who Whether respondents received 992 or a less were declared duly elected directors. number of votes, they received not only a majority of the votes represented by the stock voted, but the entire vote of all the shares participating in the election. When appellants withdrew from the meeting and refused to participate in the election, they forfeited the right to have their stock counted in the election of a board of directors. They must stand or fall on the ground that they had the legal right to withdraw and refuse to participate in the meeting, and when they did so withdraw, thus leaving less than a majority of all the stock issued remaining when the final ballot was taken, the election of the respondents was invalid because a quorum was not then present. This brings us to the pinch of the case. When the meeting convened, 1,887 shares out of 2,081 were represented in person or by proxy. This was 846 shares more than were required to constitute a quorum. A majority of all the stock issued being represented, it was clearly the duty of those present to organize the meeting and proceed with the election. This was done. The president called the meeting to order and directed the secretary to note those present and the number of shares represented either in person or by proxy. He then stated to the meeting that the first business in order was the nomination and election of a chairman. Two nominations were made, one by the relators and the other by the respondents. A motion to close the nominations was then made and carried. Without objection from any one the meeting proceeded to elect a chairman by a viva voce vote, with the result that Mr. Vandegrift was declared elected. There was no call for a division or a poll of the vote. After the chairman had been thus declared elected, one of the appellants requested that a new election by stock vote be held. The chairman announced that the request came The case therefore turns upon the question of the right of the appellants to withdraw from the annual meeting under the circumstances hereinbefore referred to for the purpose of breaking a quorum. Fortunately we are not left in the position of groping our way in the dark for an answer, but have the light of credible authority as our guide. 2 Cook on Corporations (6th Ed.) § 606, among other things, says: "After the meeting is organized, the majority cannot withdraw and organize another meeting. Where a part of the stockholders secede from the meeting and hold another on the pretext of disorder, but in fact by reason. of a previously designed plan, the election by the seceders is not legal." 1 Thompson on Corporations (2d Ed.) § 910, states the rule in the following language: "If a meeting is once organized and all parties have participated, no person or faction can then, by refusing to vote or by withdrawing, thereby defeat the organization or render the proceedings invalid, and neither can seceders organize another meeting and hold a valid election. Even a majority cannot withdraw after the meeting is organized and hold a valid election." 1 Savidge on the Formation and Management of Corporations in Pennsylvania, § 725, expresses the view that: "It seems, after a meeting of a corporation is organized, the majority cannot withdraw and organize another meeting unless it be done in good faith to escape disorder." Mr. Justice Mercur in the Appeal of Gowen, 10 Wkly. Notes Cas. 85, speaking for this court, said: "Those who voluntarily absent themselves from a meeting duly called for an election must recognize the validity of au election regularly made by those who do attend. Such absentees present no ground for relief from their misfortune or their folly." [4] Stockholders who attend a meeting, and then without cause voluntarily withdraw, are in no better position than those who voluntarily absent themselves in the first instance. In Com. ex rel. Langdon v. Patterson, 158 Pa. 476, 27 Atl. 998, Mr. Justice Mitchell, in discussing the rights of stockholders to organize a meeting under facts somewhat similar to those in the case at bar, said, inter alia: "The call to withdraw was not to all the stockholders, or even to all desiring an orderly and legal election, but to the party of the relator, and was so understood, both by themselves and the others. It was without any justification in law, and there was no sufficient evidence to submit to the jury in that behalf." In the present case there was no justification in law for the withdrawal, and the call was, not to all the stockholders, but to the party of the relators. There was no disorder of any kind, and, as we see it, nothing to be gained by the withdrawal except to break a quorum, and this is not a sufficient cause. Even the majority after the regular and legal organization of the meeting did not have the right to capriciously and without justifiable cause withdraw for the declared purpose of breaking a quorum in order to prevent an election. Once concede the right, and there is no limit to the number of wrecked meetings which may, at the caprice of a majority, prerede the transaction of any business." [7] We have given due consideration to the very able argument of learned counsel for appellants, and have examined with an open mind all of the authorities and decisions relied on to support it, but have not been convinced of the wisdom or necessity of applying the no quorum rule to the facts of the present case. In our opinion the sounder and safer rule, as above indicated, is that even a majority cannot capriciously withdraw after the meeting is legally organized for the very purpose of breaking a quorum, and then ask the courts for relief on the ground that a quorum was not present when the act complained of was done. Where there is a legally constituted meeting, the acts of a majority of those present are the acts of the corporation, though such majority is less than a majority of the total number of stockholders or shares. 6 Am. & Eng. Ency. of Law (2d Ed.) 1004. in the present case there was a legally constituted meeting when the chairman was elected because several hundred shares more than a majority of all the stock issued, as the bylaw required, was present before an organization was attempted. [5] In this connection, it is worthy of comment that the duty of holding an annual election is imposed by statute, and the time [8] When no provision is made in the byand place for holding it are fixed by the by-laws for a chairman, the meeting itself laws. The duty as to the time and place of should proceed to select one. It frequently holding the election is quite as imperative happens that provision is made for the presias the provision relating to the amount of stock necessary to constitute a quorum. It was not only the privilege of appellants to participate in the annual election of directors, but it was a duty imposed by law upon them. They should have remained in the meeting to exercise their privileges and perform their duties. When they did not do so, but without sufficient cause withdrew, they are not in position to complain about the acts of those who remained and performed their duties in a regular and lawful man ner. [6] A stockholder, not voting, cannot get relief from the courts if he voluntarily refrain from voting, if he had an opportunity, and his claim of right to vote was not excluded. State v. Chute, 34 Minn. 135, 24 N. W. 353. In the case at bar the right of appellants to vote their stock at the election for directors was not denied. They could have remained in the meeting and voted their stock for candidates of their own selec tion. In the Argus Printing Co. Case, 1 N. D. 434, 48 N. W. 347, 12 L. R. A. 781, 26 Am. St. Rep. 639, the court, in discussing this question, said: "A minority must have a right to insist, after a meeting is organized, the majority shall not withdraw from it and organize another meeting at which the dent to preside at the stockholders' meeting, but, when no such provision is made, a chair- |