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Barclay v. First National Bank of Hightstown

Decided: December 13, 1963.

ALBERT C. BARCLAY, JR., PLAINTIFF-APPELLANT,
v.
THE FIRST NATIONAL BANK OF HIGHTSTOWN, ET AL., DEFENDANTS-RESPONDENTS



Goldmann, Kilkenny and Collester. The opinion of the court was delivered by Collester, J.A.D.

Collester

This is an appeal from a summary judgment granted by the Law Division in favor of the defendant bank and eight individual defendants who are directors of said bank, upholding the election of the directors and declaring that the plaintiff was not elected a director at the annual meeting of the shareholders of the bank held on January 8, 1963. 80 N.J. Super. 302 (1963).

Plaintiff Albert C. Barclay, Jr. is a substantial shareholder of The First National Bank of Hightstown. Prior to the annual meeting of the bank, plaintiff solicited and obtained proxies from other shareholders, authorizing him to vote their shares.

On December 31, 1962 Beatrice Gaskill, owner of 130 shares of the capital stock of the bank, appointed M. H. Hageman and F. W. Branford as her proxies to vote her shares at the annual meeting. On January 5, 1963 Miss Gaskill revoked, in writing, the proxy previously given and appointed plaintiff as her proxy to vote said shares. The last proxy was undated.

On January 4, 1963 Mary Petterson, owner of 100 shares of the capital stock of the bank, appointed M. W. Hageman and F. W. Branford as her proxies to vote her shares at the annual meeting. On January 5, 1963 Mrs. Petterson also revoked, in writing, the proxy previously given and appointed plaintiff as her proxy to vote her shares. This proxy also was undated.

Plaintiff did not file proxies obtained by him with the cashier of the bank prior to the annual meeting of January 8, 1963. All proxies obtained by the eight directors, who are individual defendants in this action, had been filed with and were held by Kenneth G. Stults, cashier of the bank, prior to the meeting.

At the annual meeting Calvin L. Chamberlin, president of the bank, was elected chairman, and C. Lester Rue was elected secretary of the meeting. The chairman appointed Samuel Bard, Fred L. Dey and Daniel S. Feese to act as judges of the election. A resolution was adopted fixing the number of directors to be elected at eight. Plaintiff and the eight individual defendants were nominated for such offices.

During the progress of the meeting instructions as to the manner of voting were announced by the attorney for the bank. All shareholders present were told to mark their ballots, staple them to the appropriate proxies, and place them in a voting basket on the table at which the chairman and secretary of the meeting were seated.

After the polls opened the bank cashier turned over the proxies in his possession, stapled to ballots for the defendant directors, to Hageman and Branford, the proxy agents named therein. Plaintiff and other proxy holders, pursuant to the instructions given, likewise stapled their proxies and ballots together, with staplers provided by the bank. All ballots and proxies stapled to ballots were then voted by placing the same in the voting basket.

Pursuant to the federal statute cumulative voting was permitted, giving to each shareholder as many votes per share as there were directors to be elected, viz. , eight votes per share, and permitting each shareholder to cast all votes for one candidate or any combination of candidates.

Conflicting proxies were voted at the meeting and the judges of election asked defendants' attorney for advice in resolving such conflicts. The latter advised the judges to count undated proxy votes where no other proxy was submitted, but to count only the dated proxy votes where both a dated and an undated proxy for the same shares had been voted. This method was followed by the judges and 8,480 votes cast on undated proxies were counted for the plaintiff.

When all votes had been counted, the judges of election announced that 11,440 votes had been cast for plaintiff and 13,255 votes for each of ...


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