Fritz v. Superior Court

NOURSE, P. J.

This is an original proceeding for a writ of prohibition. The petitioners herein were joined with fictitious defendants in an action filed in the superior court for declaratory relief and an injunction. The controversy arose over conflicting claims of several individuals as officers of the Apartment House Association of California, Inc. The defendants answered, pleading an election of new officers after the complaint whs filed and their consequent removal from that capacity. Their answer affirmatively alleged that, by reason of these changes, none of these defendants made any claim to be entitled to hold, or to exercise the duties of, any office of the corporation. A motion was then made in the superior court to dismiss the action upon the ground that no justiciable question was before the court. This motion was denied.

The whole controversy involves the validity of the claim of the respective parties to act as officers and directors of the corporation. Section 315 of the Civil Code provides an appropriate remedy to determine such disputes. By that section any

shareholder

may file an action in the superior court to determine the validity of any election or appointment of any director. Upon filing the complaint “and before any further proceedings are had”, the court shall enter an order fixing a date for the hearing which must be served, with a

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copy of the complaint, upon the corporation and upon the person or persons whose election is questioned. Since this is the method provided by statute, a substantial compliance therewith is necessary to give the court jurisdiction. Here the complaint was filed by the corporation and certain officers, not by a shareholder as required by the statute. An examination of the record discloses that no order was made by the trial court and, of course, none was served upon the defendants. This is necessary “before any further proceedings are had”. Except when the remedy provided in this section is pursued, no injunction may issue to restrain a corporate officer in possession from exercising the duties of his office. (Sec. 526, Code Civ. Proc.)

In support of the demurrer it is argued that, notwithstanding the failure to comply with the statute, the complaint is good in an action for declaratory relief, or in equity. An action for declaratory relief is authorized by section 1060 of the Code of Civil Procedure “in eases of actual controversy relating to the legal rights and duties of the respective parties”. Here the complaint pleads the necessity for a declaration of the rights or duties of the corporation and of the respective parties concerning the conflict as to the officers of the corporation. It is in every respect a plea for a determination of the validity of the election of certain persons as officers of the corporation and every plea and prayer of the complaint revolves about the question of such election. Though the existence of an available remedy in the ordinary action at law or in equity does not necessarily-bar the right to proceed under these sections of the code