253 P. 185 | Cal. Ct. App. | 1927
When the demurrer to the complaint came on for hearing in the court below the point was raised that no certificate of counsel was attached to the demurrer as required by Rule 40 of the superior court of the city and county of San Francisco. The court thereupon granted defendant leave to file an amended demurrer. The amended demurrer was afterward filed containing the missing certificate. Thereafter a motion was made by plaintiff to strike *189 the amended demurrer upon the ground that the filing of the same was without authority of law. This motion was denied. Thereafter the court heard the amended demurrer upon its merits and made its order sustaining the same without leave to amend. Judgment was entered for defendant. This appeal is from the order refusing to strike and from the judgment for defendant.
[1] It is urged that a demurrer to a complaint is not a pleading and cannot be amended after issue joined. The case ofHedges v. Dam,
The next question to be considered is whether the complaint states a cause of action. In brief, it alleges as follows: That plaintiff, in 1892, entered into a verbal "partnership and association" with Fred G. King to engage generally in mining business. Plaintiff was to supply the capital and King his time and abilities to the business. Thereafter the business was carried on by them "in and under the firm name of Fred G. King" up to the time of the death of King in 1920, leaving the plaintiff the sole surviving partner of said firm; that large profits were made; that no accounting or settlement of the partnership affairs has been made; that a large sum of said profits was invested by said King for said partnership association in the purchase of 50,354 shares of the defendant corporation of the "face value" of over $300,000, "which were standing in said partnership name on the books of said corporation and were held by him as such partner at the date of his death, the certificates . . . which had been issued to him in his lifetime in his name being in his possession at said date as a part of the assets *190 and property of said partnership." It is further alleged: That demand was made of defendant to transfer and deliver one-half of said stock and certificates to plaintiff as sole surviving partner of said King; that defendant has refused to do so to the damage of plaintiff in the sum of $150,000. The prayer is that defendant be compelled by an order of court to transfer one-half of said stocks and certificates to plaintiff or for judgment for $150,000, the value thereof and damages to plaintiff by reason of said refusal.
Plaintiff calls this an action for conversion and cites authority to the effect that conversion lies against a corporation for refusing to transfer shares of stock to one entitled thereto. She especially relies on Ralston v. Bank ofCalifornia,
The Ralston case cited above does not support plaintiff's contention. In that case the plaintiff was the transferee and the holder of the certificate of stock. The defendant corporation refused to transfer the stock on demand, claiming a lien thereon under its by-laws on account of indebtedness to the bank of the former stockholder. The court held that inasmuch as the bank had sold the said indebtedness of the stockholder that it was no longer entitled to a lien.
[3] While in a proper case a surviving partner is entitled to possession of the partnership shares of stock, it does not for that reason alone follow that the corporation is guilty of conversion for its refusal to transfer stock upon the demand of an apparent stranger who produces no proof of legal title nor the certificate itself representing its shares. Whatever might be the ultimate right of plaintiff in the stock under the facts alleged, the fact is that the legal title to the stock was in the estate of Fred G. King, deceased. Notwithstanding the allegation in the complaint that the stock *191 was held in the name of the partnership, to wit, Fred G. King, that being also the name of the deceased, it was as if he held in his own individual name the legal title for the alleged partnership.
[4] A corporation occupies a fiduciary relation with its shareholders in holding and transferring title to shares of stock and is required to act in good faith and with care in making such transfers. (Cooper v. Water Co.,
[5] Under these authorities we think the defendant was justified in refusing to transfer the stock (one-half thereof) to plaintiff upon her demand as alleged in the complaint.
It is ordered that the judgment be affirmed.
Nourse, J., and Sturtevant, J., concurred. *192