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Humphrys v. Winous Co.

Supreme Court of Ohio
133 N.E.2d 780 (1956)


Facts

Winous Co. (defendant) has three directors. The three directors were divided into three classifications, each class containing one director. The directors were to serve three-year terms of office, with one director to be elected each year. This classification took away the minority shareholders’ ability to elect a board member through cumulative voting. Under § 1701.64 of the Ohio code, a corporation’s articles may establish a term of office for its directors or class of directors, as long as the term does not exceed three years. Under § 1701.58, a shareholder may engage in cumulative voting by giving a candidate a number of votes equal to the number of his shares multiplied by the number of directors up for election. Section 1701.58 states that the right to vote cumulatively may not be restricted by the corporation’s articles. The court of appeals held that because 1701.58 is more specific, it limits 1701.64, and that the directors’ classification was therefore invalid because it restricted the right of the minority shareholders to vote cumulatively.

Rule of Law

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Issue

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Holding and Reasoning (Bell, J.)

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Dissent (Weygandt, C.J.)

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