No. 207 Philadelphia, 1981, Appeal from the Order of the Court of Common Pleas, Civil Action, Equity, of Lehigh County, No. 79-C-3428.
Harry A. Dower, Allentown, for appellant.
James Bernard Martin, Allentown, for appellee.
Brosky, Rowley and Montgomery, JJ.
[ 315 Pa. Super. Page 452]
This case is before the Court on the appeal of Leland E. Smith from an order of the trial court dismissing his petition for the appointment of appraisers to value the shares of stock that he owns in Crowder Jr. Company, appellee. The Honorable Donald E. Wieand, now a Judge of this Court, determined, after a hearing, that appellant was not
[ 315 Pa. Super. Page 453]
entitled to relief as a "dissenting shareholder" under § 515 of the Business Corporation Law (BCL), 15 P.S. § 1515. On appeal, appellant argues that the "ultimate issue . . . is whether or not [he] is entitled to the rights and remedies of a dissenting shareholder under the" BCL. After careful review of the record and briefs and consideration of the oral arguments presented on behalf of the parties, we agree with Judge Wieand and adopt the opinion filed by him in the trial court.
Leland E. Smith has filed a petition alleging that he is a dissenting shareholder and entitled to the appointment of appraisers to determine the value of the shares of stock which he owns in Crowder Jr. Company. We conclude, after hearing, that he is not a dissenting shareholder under Section 515 of the Business Corporation Law, 15 P.S. § 1515, and that, in any event, his petition is not timely filed. Therefore, we must deny the requested relief.
Crowder Jr. Company, hereinafter "Crowder," was incorporated under the laws of the State of Delaware on January 10, 1920. On or about September 18, 1967, petitioner purchased 540 shares of the corporation's stock from a third person. He was elected to the Board of Directors on April 22, 1968. On December 16, 1970, the Board unanimously adopted a resolution to domesticate the corporation in Pennsylvania, effective the beginning of 1971, and to dissolve the corporation in Delaware, effective the end of 1970. The resolution also provided that the Pennsylvania corporation should have the same powers as the Delaware corporation. Smith not only voted in favor of the resolution but he, together with his fellow directors and stockholders, consented in writing to the resolution.
At the time of adopting the resolution, the matter of cumulative voting was not specifically discussed. Smith, however, was an experienced stockbroker and knew that under applicable provisions of law in Delaware, the corporation did not enjoy the right of cumulative voting. In the articles of domestication in Pennsylvania a specific provision was inserted which negated cumulative voting. This
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was made necessary because, under Section 505 of the Business Corporation Law as amended and in effect at the time of domestication, shareholders enjoyed the right of cumulative voting in the election of directors unless contrary provisions were included in the articles of incorporation. See: Act of July 20, 1968, P.L. 459, No. 216, § 28, 15 P.S. § 1501. The domesticated corporation ...