104 Cal. 649 | Cal. | 1894
The present proceeding is a motion for a substitution of attorneys in the above-entitled cause. Mr. James Alva Watt, claiming authority to represent the petitioner, makes the motion. The solution of the question here presented is dependent upon the following state of facts:
One E. H. Knight, a creditor, commenced an action in the superior court of the city and county of San Francisco, Department No. 4, against the petitioner. People’s Home Savings Bank and its directors, for the purpose of enforcing his demand, and asked that the board of directors be enjoined from the further transaction of business; that they be removed from office; that a receiver be appointed, and that the bank corporation be thrown into liquidation. Certain allegations
The legality of Watt’s appointment as attorney for the bank depends upon the validity of the election of the board of directors appointing him, and the only serious question presented, as to the validity of such election, involves the right of a person not a stockholder to participate in the election by virtue of his position as a proxy of a bona fide stockholder, and to this question we shall direct our attention.
While it is provided by section 312 of the Civil Code that' stockholders of corporations may be represented at
The stockholders of many of our corporations are limited in number, and the case would undoubtedly often arise where the absent stockholder, desirous of being represented at an election,-would be unable to find a friend among them in whom to trust his interests. The statute contemplates no such conditions, and • neither says nor intended to say that such a stockholder would be deprived of his right to vote by proxy. If you may limit by by-law the right of holding a proxy to stockholders, you may limit it to directors, or the president, or the secretary, and thus the interests in control
While no authority for or against the' principles we have here declared was cited by counsel upon the elaborate argument of the case we had no doubt at the time that they rested upon solid grounds, and, since the submission of the cause, our investigation has brought to light a recent case fully in line with all that we have said upon the question. The principle here involved was the sole question there involved, and, in an opinion covering the entire ground, the court there said: “ It has not restricted the right of the stockholder to select any person whom he may consider to be advisable for that object, to vote under his authority upon his shares as a stockholder. In this respect the largest liberty has been secured and provided for the stockholders, and, being entirely unrestrained by the legislature, this privilege was maintained by the authority of the law. Without having so declared expressly, the clear implication of the section is that it was not intended to impose any restriction whatever upon the stockholder as to the person he should be at liberty to select to act under his proxy, and, the statute having in this manner created this right in as general a manner as it did, the trustees of the corporation were not at liberty to restrict or declare by their by-laws that it should not be so used.” (Matter of Lighthall Manufacturing Co., 47 Hun, 258.)
Section 303 of the Civil Code provides: "A corpora
This provision does not give the corporation power to pass the by-law here assailed. It refers to the preliminary requirements to be followed in order that the proxy may be entitled to vote, as that the authorization must be in writing, properly witnessed, acknowledged, filed with the records, etc. In creating this provision it was not in the mind of the legislature to curtail the right of voting by proxy, but rather that such right might be exercised by stockholders within any reasonable restrictions which the corporation deemed proper to incorporate into their by-laws. The statute gives to the corporation the power to regulate the exercise of the right, but no power to either qualify or limit the right, and certainly no power to so shackle the right as to result in its nullification.
As a second ground of opposition to the granting of the motion for substitution it is insisted that James Alva Watt, by reason of his relations to the respondent as attorney, is disqualified to represent the petitioner in the prohibition proceeding. We attach but little importance to this contention, and do not deem it necessary to enter into a discussion of the questions, namely: 1. Are the interests of the receiver and the bank antagonistic? or 2. Is Watt attorney for the respondent in the above-entitled cause? The conclusion we have arrived at upon the preceding question discussed declares the business relations theretofore existing between the bank and its attorneys, Messrs. Delmas & Short-ridge, were severed by virtue of the action of the newly and legally elected board of directors, and such being the case the attorneys opposing this motion stand before us as strangers to the proceeding, having no interest or standing in the litigation; and we are unable to see that it is of any concern to them who represent the various parties in this proceeding. As to Mr. Watt’s conduct in the litigation, all that he has done has been open
The motion for a substitution as prayed for is granted.