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Hall v. Hall

506 S.W.2d 42 (1974)

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Hall v. Hall

Missouri Court of Appeals

506 S.W.2d 42 (1974)

Facts

Edward H. Hall and Harry L. Hall (defendant) were equal stockholders and directors of Musselman and Hall Contractors, Inc. (Musselman). Edward died, passing his interest to his wife, Margaret L. Hall (plaintiff). Harry appointed his own wife, Florence E. Hall, director to fill the vacancy created by Edward’s death. Harry and Florence then appointed themselves president and vice-president of Musselman. Subsequently, Harry refused to attend shareholders’ meetings. Missouri law required the presence of a majority of stockholders to constitute a quorum. Thus, directors could not be elected, and Harry and Florence remained holdover directors. At a later directors’ meeting, the sale of unissued capital stock was approved. Margaret made clear that she wanted to exercise her right to purchase half of the stock, but asserted that the action was invalid because Harry and Florence were not legal directors. Margaret petitioned the court for an injunction that would bar Harry from refusing to go to shareholders meetings, bar the setting of a terminal date on Margaret’s preemptive purchase rights, and bar Harry and Florence from carrying on as directors and officers. The defendants moved to dismiss for failure to state a claim. The lower court granted the motion. Margaret appealed to the Missouri Court of Appeals.

Rule of Law

Issue

Holding and Reasoning (Clark, J.)

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