Simpson v. Nielson

NOURSE, J.

The plaintiffs, who constitute the majority in number and in ownership of stock of the stockholders of the Diamond Laundry Company, a corporation, commenced this action under the provisions of section 315 of the Civil Code, to determine the validity of an election of directors of the corporation held on March 5, 1924. The plaintiffs alleged in their complaint that three of their number were elected directors at said meeting, but that defendant Collopy, claiming to act under a written proxy from one of the plaintiffs, voted his stock at said meeting, and that three of the defendants thereby claimed to have been elected directors; that these three defendants had taken possession

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of all the property of the corporation to the injury of the plaintiffs. The complaint closed with a prayer that the defendants be restrained from acting as officers of the corporation and from possessing its books and properties, and that the election of the three plaintiffs—Simpson, Neibel, and Mehegan—be declared valid, that the voting agreement, or proxy, be declared void, and for other equitable relief.

The trial court found all the allegations of the first cause of ‘action to be true and issued its temporary restraining order preventing the interference by defendants with the three plaintiffs named in their exercise of the functions of the offices to which they claimed to have been elected. From this order the defendants have appealed on typewritten transcripts.

The first point raised is that the trial court was without jurisdiction to issue the order because of the code provisions denying the right to an injunction to prevent the exercise of a public or private office by the person in possession. (Sec. 526, Code Civ. Proc.) The section has no application to a case of this kind. This action is brought under section 315 of the Civil Code, which expressly provides a mode of procedure to determine the validity of elections to corporate offices. The proceeding is one in equity.

(Dulin

v.

Pacific Wood & Coal Co.,

103 Cal. 357, 364 [35 Pac. 1045, 37 Pac. 207].) Thus the court had the power to issue a temporary restraining order as auxiliary relief pending final determination of the controversy. (See