Goldstein v. Ewing. On petition to set aside election of directors. Final hearing on pleadings and proofs. Mr. John B. Vreeland, Mr. C. Franklin Wilson and Mr. Leo N. Levi (of the New York bar), for the petitioner. Mr. Richard V. Lindabury and Mr. Robert S. Green, for the defendants. PITNEY, V. C. (orally). This is a petition by Albert Goldstein, as a stockholder of the United Pneumatic Fire Alarm and Telegraph Company, to set aside an election of directors held on January 23d, 1901, pursuant to a notice of a meeting signed by three stockholders. The petition is based upon the act of March 24th, 1899. P. L. of 1899 p. 563. The validity of the election sought to be adjudged to be invalid is attacked on two grounds; one is of fact, and the other is of law. The one of fact is that the notice which was given under the forty-sixth section of the Corporation act was not signed by three stockholders. One of the stockholders signing the notice was a Mr. Collerd, and it was alleged that he had no stock standing in his name, or, if he had any, that it was not properly and legally issued to him, and that such issue was a fraud or misconduct on the part of the officers issuing it. The stock was issued to Mr. Collerd at the request and by the direction and on account of Mr. Bernard M. Ewing, the president and the largest stockholder of the company. Mr. Ewing was called as a witness and swore that on October 20th, 1900, he paid $10,000 for the benefit of the company to an unknown individual at the request of the petitioner. Evidence was gone into on this subject, with the result-without going into detail-that I am entirely satisfied that Mr. Ewing paid that money in good faith for the benefit, as he supposed, of the company and at the request of the petitioner himself. The payment created a debt due from the company to Mr. Ewing and was recognized and acknowl Goldstein v. Ewing. edged as such by the other stockholders, unless the petitioner be excepted; and, as I find it was done at the petitioner's special request, I must hold that the petitioner is estopped from denying that it was paid for the benefit of the company. It further appeared that the price of the shares issued to Collerd was charged to Ewing as against this $10,000 debt. Further, there was in fact no necessity for Mr. Ewing to resort to this indebtedness in order to procure the stock necessary to qualify Mr. Collerd, since he had a large number of shares already standing in his name. In fact, it was a mere matter of convenience. It is urged that the stock was issued to Mr. Collerd for a very small, if any, consideration paid by him to Ewing. But I am of the opinion that it was issued to him in good faith, and that if it had been issued to him without any consideration moving be tween Mr. Collerd and Mr. Ewing, still it constituted Mr. Collerd a stockholder in such a manner that he was competent to sign the call for a meeting. The meeting was called in good faith for the purpose of electing directors, and was held, and it was in my judgment a lawful meeting of the stockholders. The necessity for the call arose out of the failure of the secretary to advertise in the newspapers the regular annual meeting of stockholders for the election of directors in accordance with the by-laws of the company. It was alleged by the defendants that that failure was due to the petitioner's neglect, as he was the general manager of the company and expected to look after all those details. I think the contention of the defendants in that regard is well founded. It was a mere matter of detail under the by-laws, and as the petitioner was general manager and the factotum, you may say, of the company, he ought to have attended to it. I do not mean to intimate that he intentionally omitted to advertise, but if it was the fault of anybody it was his fault quite as much as it was that of the secretary. Therefore the meeting was, in my judgment, properly called, and the petitioner has no right to find fault that it was called; and the defendants, by their sworn answer, set up that he acquiesced in it and said he would attend it. Goldstein v. Ewing. The second ground is that such a meeting, called under the forty-sixth section of the act, was not competent to elect directors, and that the only proceeding efficient for that purpose was one to be taken under the forty-first section of the act, which provides for the application to a justice of the supreme court. This raises a nice question of law which I have not time to look into, and which, in my judgment, is not within the province of this court to determine. The defendants, by their answer, set up want of jurisdiction of this court, because the act in question authorizing this court to proceed as it has done is unconstitutional. The point was taken at the very outset of the proceedings and argued to a greater or less extent and overruled for the time being, and the merits gone into with the understanding that the question should be reserved until final hearing. Upon further consideration and hearing argument and citation of authority, I am entirely satisfied that the act is unconstitutional and that I ought not to have proceeded to hear the cause at all. But I did proceed at the instance and upon the pressure of the petitioner. His counsel insisted that the act was constitutional, and the hearing was had, and a large number of witnesses examined and evidence produced. The effect of that evidence upon my mind I have already stated, but I am now clearly of the opinion that the court had no jurisdiction to entertain the proceeding, and that the petition must be dismissed, with costs. The principle established by the authorities is this: that the power to inquire into and adjudicate upon the validity of an election of officers by both municipal and private corporations is, by the constitution, vested solely in the supreme court of this state, and the legislature has no power to vest any part of that judicial jurisdiction in any other tribunal. The authorities are collected in the two recent cases, just cited by counsel, of Flanigan v. Guggenheim Smelting Co., 34 Vr. 647, and Green v. Heritage, 35 Vr. 567. And see In the matter of Cleveland, 22 Vr. 311. American Central Ins. Co. v. Landau. THE AMERICAN CENTRAL INSURANCE COMPANY et al. v. GERHARDT W. I. LANDAU. [Submitted February 1st, 1901. Decided July 1st, 1901. 1. One of the provisions of a fire policy was that in case of a disagreement between the parties as to the amount of loss the same should be ascertained by two competent and disinterested appraisers, one to be chosen by each party, and the two to select an umpire, with further provision as to the mode of procedure by the appraisers and umpire and the rule of damages. After a fire, and disagreement as to the amount of damages, the parties entered into a written agreement, strictly in accordance with the terms of the policy, each appointing an appraiser. The two appraisers met and were sworn, appointed an umpire, and proceeded to the appraisement, and disagreed as to the damages, after which one appraiser refused to proceed with the appraisal and resigned. The other appraiser called in the umpire, and the two made an award.—Held, (1) that the resignation and refusal to proceed of the one appraiser did not revoke or put an end to the agreement of appraisal; (2) that in the case stated the party whose appraiser resigned and refused to proceed could not thereafter revoke such submission; (3) that if the party whose appraiser refused to act desired to have an appraiser present at the examination and conference between the other appraiser and the umpire, it was his duty to have appointed a new appraiser and ask that such new appraiser be permitted to take part in the proceedings. 2. The insured asserted at the hearing that the appraiser appointed by him did not honestly try to agree, but acted a part and insincerely demanded an appraisement for damages far beyond what he believed to be the real damage, and thereby led to a disagreement which was apparent only.-Held, that the motive of the appraiser in so doing could not be inquired into by the party appointing him, nor could that party, in equity, set up that the apparent disagreement was not an actual honest disagreement, and that for that reason it did not give jurisdiction to the umpire to come in an act with the other appraiser in making an award. 3. If a party to an arbitration agreement has good grounds to revoke the submission, he must exercise his right to revoke promptly. He cannot experiment and wait to ascertain whether the award is favorable or not to him, and, if it prove to be unfavorable, then assert his right to revoke. 4. The articles injured by fire were numerous, and situate in several different apartments. The two appraisers examined the greater part in number and value of the articles and disagreed as to the damage, and on 62 73 65 570 American Central Ins. Co. v. Landau. grounds which would prevent their agreeing as to the damage to the remaining articles.-Held, that in order to give jurisdiction to the umpire to take part in the appraisement it was not necessary that the appraisers should disagree as to the damages to each and every article injured. 5. That under the circumstances of the case the award made by the one appraiser and the umpire, in the absence of the other appraiser, was binding. 6. The case is distinguishable from that of Broadway Insurance Co. v. Doying, 36 Vr. 69, in that in the latter case the arbitration agreement was not in accordance with the terms of the policy. 7. The defendant was insured in several policies held by different companies, some of which insured all the machinery for a gross sum, and others insured each specific item for a fixed sum upon that item. The number of separate pieces of machinery injured or destroyed by the fire was great, and evidence as to the damage to each was technical and voluminous.-Held, that separate actions at law against each of the insurers should be restrained, for two reasons-first, that it would be impracticable for a jury to properly apportion the loss among the several policies; and second, that the evidence concerning the items of property injured or destroyed was so voluminous, and the items of property so numerous, that it would be impracticable for a jury to consider and apply it; and that the case was within the doctrine laid down in Cranford v. Watters, 16 Dick. Ch. Rep. 284. 8. By the terms of the policy the damages were confined to direct loss or damage by fire to the property, and to the amount necessary to repair or replace the same. The subject of the insurance was a plant of machinery for throwing silk, in actual use. The greater part of the machinery, in bulk and value, was not touched by fire, but was injured solely by smoke and water, but the building which covered it was rendered untenantable by the fire, and the further use of the machinery as a throwing plant in that building was rendered impracticable.-Held, that in ascertaining the damages the appraisers were confined to the direct injury to the machinery itself and the cost of repairing and replacing it, and could not take into consideration the fact that the result of the fire to the building was to stop the business and destroy the value of the plant as a going concern. Final hearing on bill, combined answer and cross-bill and replication and answer thereto. The object of this suit, on complainant's part, is to enforce a finding in the nature of an award by appraisers ascertaining the damage by fire to certain machinery, the property of the defendant. A statement of the bill, so far as it is necessary at present to be set forth, will be found in 11 Dick. Ch. Rep. |