Millott v. Association of Mare Island Employees

BURNETT, J.

This is an original application to this court for a writ of mandate requiring respondent to repurchase certain stock of said corporation. An' alternative writ was issued and on the return day respondent filed a general demurrer and also an answer to the application. The contention of petitioners is grounded upon the provision in the by-laws of the association providing that “No stock shall be sold or certificates issued for less than ten shares. All stock of the Corporation is to be sold subject to the right of the Corporation to repurchase the same at any time upon paying one dollar ($1.00) per share and interest; and is to be sold subject to such other conditions as the Board of Directors may deem advisable and for the best interests of the Corporation, except that no compulsory action shall be taken by the Corporation that will reduce the ownership of stock to less than ten shares for each member. The corporation shall repurchase (the financial condition of the Corporation permitting), first, such shares of stock owned and held by any stockholder in excess of ten shares, thereby limiting the ownership of stock to ten shares for each stockholder, and giving to each equal rights and privileges.”

It is the theory of the petitioners that a large number of shares of said stock was sold to different stockholders in excess of ten shares for each stockholder, that it is for the interests of the corporation that said excess shares be purchased for the benefit of the association, and that the directors thereof refused to purchase said excess stock as required by said provision of the by-laws. But regardless of the merits of the controversy it appears by the answer of respondent and it is conceded by petitioners that:

“In the month of May of this year, plaintiffs herein, J. P. Millott, W. C. Ellis, D. E. Schofield, and J. C. Peterson,

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filed a petition for a Writ of Mandate against the defendants herein and its Board of Directors in the Superior Court of the State of California, in and for the County of Solano.

“That said petition and each and all of its allegations was and is substantially the same as the petition in this action and prayed for the same relief, as will be seen from the copy of said petition served on the defendant, which copy is made a part of this answer and will be handed to the Court at the hearing and marked ‘Exhibit A.’