Unless a statute specifies how notices of meetings shall be given, the bylaws may state the method to be followed, such as by publication in certain newspapers or by mailing notices a certain number of days prior to the meeting. "It is not within the province of the courts to declare any form of notice of a shareholders' meeting insufficient, if it complies with the charter and bylaws of the corporation, unless there is some specific statutory provision to the contrary."3 But where neither the statute, charter, nor bylaws authorized the giving of a notice of a special meeting which did not state the business to be considered at the meeting, such a notice was invalid.4 Generally, a bylaw providing for the giving of notices of meetings by mail should be so worded that the effectiveness of the notice will depend on its mailing rather than on its receipt. With respect to the general conduct of meetings, the fundamental rule is that the majority controls. A presiding officer, for instance, who refuses to allow the majority to express its will, may be removed and another chosen in his stead. Reasonable election rules may be set forth in the bylaws of an association. Where the bylaws authorized the directors to determine the election rules, a rule adopted by the directors was upheld providing that if a man votes twice, only the ballot first cast shall be counted." Where a bylaw provided that all nominations for the office of director were to be made by shareholders at the regular meeting of directors in the month preceding the annual meeting of shareholders, this did not prevent the stockholders from electing persons as directors who had not been so nominated.7 As a general rule, a meeting at which less than a quorum is present may not be lawfully adjourned to meet at a subsequent date unless authorized by the statute or the bylaws.8 If a quorum is 3 Citrus Growers' Dev. Association v. Salt River V. W. Users' Association, 34 Ariz. 105, 268 P. 773, 777 (1928). *Noremac, Inc. v. Centre Hill Court, 164 Va. 151, 178 S.E. 877 (1935). 'American Aberdeen-Angus Breeders' Association v. Fullerton, 325 III. 323, 156 N.E. 314 (1927). 'Davis v. S.C. Cotton Growers' Co-op Association, 127 S.C. 353, 121 S.E. 260 (1924). 1Commonwealth ex rel. Grabert v. Markey, 325 Pa. 433, 190 A. 892 (1937). Noremac, Inc. v. Centre Hill Court, 164 Va. 151, 178 S.E. 877 (1935). present at a meeting it may be adjourned to meet at a later date and the subsequent meeting is regarded simply as a continuation of the previous meeting." Quorum for Meetings of Members An association may adopt bylaws dealing with the procedure to be followed in the conduct of meetings and specifying the number of members required for a quorum. When the bylaws specify the number of members necessary to constitute a quorum, a valid meeting cannot be held unless the number of members specified is present at the time each proposition is voted upon. 10 If the law of the State in which an association is formed specifies the number of members that must attend a meeting to constitute a quorum, this is controlling, and a bylaw in conflict therewith is void.!! At common law and in the absence of a statutory, charter, or bylaw provision changing the rule, the members who attend a meeting of an association constitute a quorum for the conduct of business. In other words, at common law those who come constitute a valid meeting for the transaction of business. 12 If the bylaws require, say, a two-thirds vote of members present to carry a proposition, members present but not voting cannot be counted as voting for either side. 13 "Sagness v. Farmers' Cooperative Creamery Company, 67 S.D. 379, 293 N.W. 365 (1940). 10 Everts v. Kansas Wheat Growers' Association, 119 Kan. 276, 237 P. 1030 (1925); Beale v. Columbia Securities Co., 256 Mass. 326, 152 N.E. 703 (1926). See also Rust, “Mr. Chairman-," FCS Information 6, Farmer Cooperative Service, U.S. Dept. Agr. (1957). "Gentry-Futch Co. v. Gentry, 90 Fla. 595, 106 So. 473 (1925). 12 Morrill v. Little Falls Manufacturing Co., 53 Minn. 371, 55 N. W. 547, 21 L.R.A. 174 (1893); Alliance Co-op Ins. Co. v. Gasche, 93 Kan. 147, 142 P. 882 (1914); Gilchrist v. Collopy, 119 Ky. 110, 82 S.W. 1018 (1904); Green River Manufacturing Co. v. Bell, 193 N.C. 367, 137 S.E. 132 (1927). 13 James R. Kirby Post No. 50 v. American Legion, 258 Mass. 434, 155 N. E. 462 (1927). Voting Unit At common law, a stockholder or member of an association has but one vote on questions coming before meetings of stockholders or members irrespective of the number of shares held.14 In a case decided by the Supreme Court of the United States it was said: Usually a stockholder is a member of the company and Statutes providing for the formation of cooperatives in many cases specify that members shall be entitled to only one vote on any question affecting the association. Unless each share of stock is given a vote by statute, those interested in forming an association may, if the incorporation statute authorizes, include a suitable provision in the articles of incorporation establishing what the voting unit at meetings of the stockholders shall be. Unless in conflict with the law of the State or with a provision in its charter, the members of an association may adopt a bylaw establishing what the voting unit at meetings of the association will be. 16 If there is a statutory or charter provision dealing with the matter, it controls. A bylaw, to be valid, must be in harmony with the statute and the charter. Where there is no statutory, charter, or bylaw provision on the subject, the common law rule of one vote for each member or stockholder prevails, without regard to the number of shares owned. With respect to nonstock associations, this rule also prevails unless changed in one of the ways 14 Taylor v. Griswold, 14 N.J. Law 222, 27 Am. Dec. 33 (1834); Simon Borg & Co. v. New Orleans City R. Co., 244 F. 617 (E.D. La. 1917); In re Rochester District Telephone Co., 40 Hun. 172 (N.Y. 1886); 7 R.C.L. 339. 15 Bailey v. Railroad Co., 89 U.S. 604 (1874). 16 Detwiler v. Commonwealth ex rel. Dickinson, 131 Pa. 614, 18 A. 990, 7 L.R.A. 357 (1890). indicated. It should be observed that the generally accepted cooperative principle of one-man one-vote is merely an application of the common law rule on the subject. It has been said that "There is no rule of public policy which forbids a corporation and its stockholders from making any contract they please in regard to restrictions on the voting power,"17 provided their contracts do not violate any statutory or constitutional provisions, but if contrary to such provisions they have been held void. 18 Cooperatives frequently own stock of other corporations. In the absence of restrictions in the articles of incorporation or bylaws of such a cooperative, it appears that its board of directors is free to determine how such stock shall be voted and action on the part of the members of the cooperative is unnecessary. 19 Proxy Voting At common law, every vote must be personally cast; there is no right to vote by proxy.20 Many of the cooperative statutes prohibit voting by proxy. When proxy voting is permitted, it is not essential that the person to whom a proxy is given be himself a member or stockholder in the absence of a statute or bylaw requiring it. Many of the cooperative statutes permit the establishment of the delegate system of representation at meetings of cooperatives. Unless prohibited by statute, any nonprofit association would apparently be free to establish the delegate system of voting at its meetings. 22 17 State ex rel. Frank v. Swanger, 190 Mo. 561, 89 S. W. 872, 874, 2 L.R.A. (N.S.) 121 (1905); Orme v. Salt River Valley Water Users' Association, 25 Ariz. 324, 217 P. 935 (1923). 18 Brooks v. State, 3 Boyce 1, 79 A. 790, 51 L.R.A. (N.S.) 1126, Ann. Cas. 1915A 1133 (Del. 1911); Gaskill v. Gladys Belle Oil Company, 16 Del. Ch. 289, 146 A. 337 (1929). 19 Fower v. Provo Bench Canal & Irrigation Company, 99 Utah 267, 101 P. 2d 375 (1940), certiorari denied, 313 U.S. 564 (1941). 20 Sagness v. Farmers' Cooperative Creamery Co., 67 S.D. 379, 293 N. W. 365 (1940); Perry v. Tuskaloosa Cotton-Seed Oil-Mill Co., 93 Ala. 364, 9 So. 217 (1891); 14 C.J. 907; 19 Am. Jur. 2d, Corporations § 669. 21 Gentry-Futch Co. v. Gentry, 90 Fla. 595, 106 So. 473 (1925). 22 People ex rel. Hoyne v. Grant, 283 III. 391, 119 N.E. 344 (1918); Orme v. Salt River Valley Water Users' Association, 25 Ariz. 324, 217 P. 935 (1923). Where the statute under which a nonstock organization was incorporated authorized the adoption of bylaws providing for proxy voting but no such bylaw had been adopted, officers who were “elected" through votes cast by proxies were illegally elected and could be enjoined from carrying on the business of the corporation.23 A provision in the Agricultural Adjustment Act of 1937 authorized cooperatives to vote on behalf of their members on the matter of whether a marketing order should be adopted. The Supreme Court of the United States in upholding this provision said: This is not an unreasonable provision, as the coopera- 24 Bankruptcies and Receiverships A cooperative would seem to have the right to go into voluntary bankruptcy. Whether creditors can force a cooperative into bankruptcy has been litigated a number of times. The courts have differed on this question, although at least two circuit courts of appeal have held that cooperatives are amenable to involuntary proceedings. The Bankruptcy Act provides: 23 Pohle v. Rhode Island Food Dealers Association, 63 R.I. 91, 7 A. 2d 267 (1939). 24 United States v. Rock Royal Cooperative, Inc., 307 U.S. 533 (1939). The Bankruptcy Act, 11 U.S.C. 22(a), provides: "Any person, except a municipal, railroad, insurance, or banking corporation or a building and loan association, shall be entitled to the benefits of this title as a voluntary bankrupt." In re Poland Union, 77 F. 2d 855 (2d Cir. 1935). Note that in In re |