National Etc. Oil Co. v. Chappellet, Jr.

HARRISON, P. J.

The plaintiff is a corporation organized under the laws of this state, and on September 8, 1902, its board of directors made an order, levying an assessment upon its capital stock, and in said order fixed October 15th as the day on which any unpaid assessment should be delinquent, and November 3d as the day for the sale of delinquent stock. October 13th said board of directors, by an order duly passed and entered upon its records, extended the date fixed in the notice for said assessment to become delinquent until November 11th, and the date fixed therein for the sale of delinquent stock until December 1st. November

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29th, by another order, the board extended the date fixed for the sale of delinquent stock until December 15th, and on December 13th again extended the date for said sale until January 8, 1903. Appropriate notices of each of the above orders were duly published. January 8, 1903, said board of directors, by resolution entered upon its records, elected to waive further proceedings for the collection of delinquent assessments upon the shares of capital stock held by the defendant by sale of said stock, and elected to proceed to recover the amount of the assessment by action, and thereupon the present action for such recovery was commenced. At the time of levying the assessment and thereafter until the commencement of the present action the defendant was a stockholder of the plaintiff, having thirty-four thousand nine hundred and twenty shares of its capital stock standing in his name upon its books. To the complaint setting forth the foregoing facts the defendant demurred upon the ground that it did not state a cause of action, and his demurrer having been sustained, the plaintiff has appealed.

The liability of the defendant, as well as the right of the corporation to recover a personal judgment against him for the amount of the assessment, exists solely by virtue of the statute (Civ. Code, secs. 331-349); and a strict compliance by the corporation with the provisions of those sections is essential, to its recovery. Section 349 is as follows: 1 ‘ On the day specified for declaring the stock delinquent, or at any time subsequent thereto and before the sale of the delinquent stock, the board of directors may elect to waive further proceedings under this chapter for the collection of delinquent assessments, or any part or portion thereof, and may elect to proceed by action to recover the amount of the assessment, and the costs and expenses already incurred, or any part or portion thereof.” The right of the corporation to recover the amount of the assessment by an action against the stockholder depends upon the condition that it shall have elected to “waive” its right to collect it by a sale of the stock upon which the assessment is delinquent; and if, at the time it elected to proceed by action, it had no authority to make such sale there was no existing right which it could waive. “The term ‘waiver’ or ‘to waive’ implies the abandonment of a