La Plante v. Hopper

BARNARD, P. J.

This action was brought for the purpose of annulling an assessment upon, and restraining the defendants from selling, the plaintiff’s stock in the defendant corporation. A demurrer to the second amended complaint was sustained without leave to amend and judgment of dismissal entered, from which judgment this appeal is taken.

It appears from the second amended complaint that a portion of the articles of incorporation of the respondent corporation had been amended to read as follows:

“Eighth: The corporation shall have power and authority to levy and collect assessments upon all of its subscribed, issued and outstanding capital stock, in accordance with the provisions of Sections 332, 333, 334, 335 and 336 of the Civil Code of the State of California, as amended by Chap. 711 of the Statutes of 1929. ’ ’

The only point raised by the appellant is that under sections 290 and 331 of the Civil Code, these articles of incorporation, as so amended, conferred no power to levy an assessment for the reason that the quoted amendment purports to give such power to the corporation itself, and not to the board of directors.

[148]

The portion of section 290 of the Civil Code relied upon, at that time read as follows:

“8.

The articles of incorporation may also contain provisions; . . .

“(h) Granting or denying to the directors the power to "levy assessments upon the shares or any class thereof, or restricting such power; ...”

The pertinent part of section 331 of this code then read as follows:

• “Shares are not assessable except as provided in this article. If the articles expressly confer such authority, and subject to any limitations therein contained the directors of any corporation may in their discretion, levy and collect assessments upon all shares of any or all classes made subject to assessment by the articles.”

Section 331 was amended to read as above in 1929, and these articles of incorporation were later amended as above indicated. We are unable to agree with the appellant’s contention that it clearly appears from section 331 that unless the articles expressly confer “such authority” upon the directors, as distinct from the corporation, no power exists to levy assessments. While the authority referred to must be expressly conferred, section 331 did not expressly state to whom the authority should be given, and we think the granting of such authority by the articles, either to the corporation or to its directors, shows a sufficient conferring of authority under this code section. Such a power as the one in question could be exercised by a corporation only through its board of directors (Civ. Code, secs. 305, 308;