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Gearing v. Kelly

Court of Appeals of New York
182 N.E.2d 391 (1962)


Facts

Radium Chemical Company’s bylaws require a board of four directors, a majority of whom constitute a quorum. In 1955 the board included Mrs. Meacham, Kelly Sr., Kelly Jr., and Margaret Lee. In 1961 a board of directors’ meeting was called, at which Kelly Sr., Kelly Jr. (defendants), and Margaret Lee were present. Margaret Lee offered her resignation, which was accepted. Mrs. Meacham avoided the meeting to prevent a quorum from assembling. Following Margaret’s resignation at the meeting, the two Kellys elected Kelly Sr.’s son-in-law Julian Hemphill to replace Margaret on the board. Mrs. Gearing (plaintiff), a stockholder and Mrs. Meacham’s mother, brought suit, along with other stockholders, seeking to have the election set aside and a new election ordered. The Appellate Division of the Supreme Court of New York held that the stockholders could not complain of an irregularity that they had caused, and that justice therefore did not require a new election. The stockholders appealed.

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Issue

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Holding and Reasoning (Per Curiam)

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Dissent (Froessel, J.)

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