133 P. 303 | Cal. | 1913
This case was decided by the district court of appeal and an order of the superior court dissolving an injunction pendentelite against the sale of plaintiff's stock for nonpayment of an assessment was upheld. This court granted a rehearing and upon a further consideration of the matter we have reached a different conclusion. However, we adopt the statement of fact from the opinion of the district court of appeal as follows:
"The defendant in this case is a corporation organized and existing under the laws of the state of Arizona. Its principal place of business is designated at Phoenix, Arizona, and it also maintains an office for the transaction of business in the city and county of San Francisco. The corporation is empowered to and is doing business in the state of California. All of the directors and officers of the corporation are residents of the state of California, and all of the meetings of its board of directors have been held in the state of California.
"The plaintiff is a stockholder in the corporation defendant, and all of his stock therein was issued to him as fully paid and nonassessable, and at the time of its purchase it was understood and agreed between the plaintiff and the corporation defendant that such stock would continue to be nonassessable.
"Prior to the commencement of this action the corporation defendant levied an assessment of one cent per share upon its capital stock and notified its stockholders that their stock would be sold at public auction if the assessment was not paid within a designated time. After a failure to pay the assessment, the defendant threatens to sell the plaintiff's stock, and the plaintiff seeks in this action to have said assessment declared *659 null and void, and to perpetually enjoin the corporation and its directors from making the threatened sale.
"Upon the filing of the complaint the lower court granted and issued its injunction pending the litigation, enjoining the sale of the plaintiff's stock. This appeal is from an order dissolving the injunction, and the case comes here upon a bill of exceptions made up of the plaintiff's complaint, the record of the defendant's motion to dissolve and the affidavits offered in support of the motion and used upon the hearing thereof. It appears from the affidavits, and it is also admitted here, that previous to and at the time of the levying of the assessment complained of the corporation defendant was indebted in the sum of $24,235.00 to various firms and persons, which indebtedness was legitimately and necessarily incurred in the maintenance and operation of the business of the corporation, and that the defendant had no funds on hand or income sufficient to pay said indebtedness, or to enable it to pay its necessary operating expenses as they accrued in the ordinary course of its business. In short, it was shown, and not disputed upon the hearing of the motion to dissolve the injunction, that the defendant was heavily in dept and practically insolvent, and that the assessment in question was levied primarily for the purpose of paying the claims of creditors of the corporation.
"It is conceded by both parties that although organized under the laws of the state of Arizona, the corporation defendant was created and chartered for the purpose of doing business in the state of California, and that therefore the laws of Arizona authorizing corporations organized there to issue stock as fully paid up and nonassessable have no bearing upon the question of the right of the defendant to levy and collect the assessment in controversy here.
"It is further admitted that the fact that the defendant is a `foreign corporation' doing business in this state does not entitle it to any consideration different from or more favorable than that which would be accorded to a corporation organized and existing under the laws of the state of California."
It is contended by William B. Bosley, Esq., and James S. Spilman, Esq., who have filed briefs as amici curiae that the concessions mentioned above were unnecessary. It is asserted by these counsellors that a foreign corporation in California is governed in all matters of internal concern by its charter *660
and the law under which its charter was granted, citing Relfe v.Rundle,
It is undoubtedly true that ordinarily under section
It will be noticed that this statute is in the same language as section
The enforcement of contracts between a corporation and its stockholders is, as we have indicated, no novel thing. In O'Dea
v. Hollywood Cemetery Association,
In Green v. Abietine Medical Co.,
In Dickerman v. Northern Trust Co.,
We decide, therefore, that the agreement between the corporation and its stockholders was valid, and that where, as here, the rights of creditors are not directly involved, the corporation may not, by its directors, levy an assessment against the stock so protected.
It follows that the order from which the appeal is taken should be reversed, and it is so ordered.
Shaw, J., Angellotti, J., Henshaw, J., Lorigan, J., and Sloss, J., concurred. *668