Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/605

 CHAP. IX.] CORPORATION AND SHAREHOLDERS. [§ 511a. tion unless the charter of the corporation be subject to altera- tion and repeal. 1 In some states there are constitutional or legislative provi- sions the object of which is to enable a minority of shareholders to obtain through their votes, a minority representation on the board of directors, and in this way to have some voice in the management of the corporation. This is called cumulative voting. The typical provision is that of the Pennsylvania constitution of 1874, (article 16, sec. 4), which is as follows : " In all elections for directors or managers of a corporation, each member or shareholder may cast the whole number of his votes for one candidate, or distribute them upon two or more can- didates." Commenting upon this section the Pennsylvania Supreme Court say : "This section to us seems very plain and unambiguous. If there are six directors to be elected, the single shareholder has six votes, and, contrary to the old rule, he may cast those six votes for a single one of the candidates, or he may distribute them to two or more of such candidates as he may think proper. He may cast two ballots for each of three of the proposed directors, three for two, or two for one, and one each for four others, or finally he may east one vote for each of the six candidates." 2 It is clear that legislation cannot impose cumulative voting upon a corporation whose charter is not subject to alteration. 3 But when power to alter and repeal is reserved, a state legis- lature may so amend its corporation laws as to permit a share- holder in an existing corporation to "cumulate" his votes. 4 § 517a. It is the right of every shareholder that the elections Illinois, under construction of stat- utes, directors must be stockholders, and must be elected solely by vote of stockholders; a by-law giving bondholders a right to vote at cor- porate meetings is void. Durkee v. People, 155 111. 354. 1 Hays v. Commonwealth, 82 Pa. St. 518; State v. Greer, 78 Mo. 188; Lowenthal u. Rubber Co., 52 N. J. L. 440. Compare Everhart v. Phila. & W. C. R. R. Co., 28 Pa. St. 339, holding that a shareholder was not released from his subscription by an amendment accepted by the corpora- tion, changing the voting power. 2 Pierce v. The Commonwealth, 104 Pa. St. 150. For the New York statute, see section 20 of the General Corporation Law as amended by laws of 1901, chapter 355. 3 Cases in last note but one. Di- rectors cannot accept such an amend- ment. Baker's Appeal, 109 Pa. St. 401. For other cases upon special instan- ces of cumulative voting, see Horton 585
 * Looker v. Maynard, 179 U. S. 46.