Ward v. California Celery & Produce Co.

Corporations—Assessment upon Stock—Reduction of One-half— Stockholders not Injured.—Although the directors of a corporation who have levied an assessment upon its capital stock outstanding cannot lawfully increase the same, yet they have power to reduce an assessment upon such capital stock of ten per cent thereon to five per cent, and its stockholders cannot complain that they are injured by such reduction.

Id.—Sale of Delinquent Stock—Estoppel of Stockholder as Director—Mover of Reduction Adopted.—Where a stockholder, whose stock had been sold to the corporation for nonpayment of the reduced assessment, less a credit in his favor against the corporation, was, as a director, the mover of the resolution for reduction of the assessment, which was unanimously adopted by the board of directors, he is estopped as a stockholder to complain of such reduction, or to insist that such sale of his stock was illegal, and amounted to a conversion of his stock.

Id.—Mere Irregularity in Reduction and Notice of Delinquency— Waiver of Collection—Code Provision.—The reduction of the assessment, if objectionable at all, was, at best, a mere irregularity, and the notice of delinquency was, if faulty at all, faulty only in stating that a less amount was due on the assessment as levied against plaintiff’s stock; yet under section 349 of the Civil Code, they were authorized to waive the collection of any portion thereof; and their action in reducing the assessment, if not valid otherwise, was effective as waiving the right to collect more than one-half of the amount of the original assessment.

Id.—Proceedings in Regular Form—Estoppel of Plaintiff to Deny Regularity.—It is held that the proceedings were in fact in regular form, and also that plaintiff, by his conduct, is estopped to assert any objection to their regularity.

Id.—Action for 'Conversion of Stock by Corporation—Failure to Tender Amount Due—Construction of Code.—The provision of section 347 of the Civil Code, that no action must be sustained to recover stock sold for delinquent assessments upon the ground of irregularity in the assessment, or defect or irregularity in the sale, unless the party seeking to maintain such action tenders to the corporation, or the party holding the stock sold, the sum for which the same was sold, with interest, is equally applicable to a plaintiff who seeks to recover damages for the conversion of the stock by the corporation under a sale thereto, instead of the stock itself.