Glenn v. California Trona Co.

BEASLY, J.,

pro tem.

This is an action brought to annul an assessment on the corporate stock of the California Trona Company, and to vacate the sale of delinquent stock belonging to the plaintiffs. The action was begun in May, 1912. A third amended complaint was filed on May 3, 1915. Demurrers by the defendants to this third amended complaint were sustained on April 21, 1916, and judgment was entered on April 25, 1916. The appeal is taken from that judgment.

One of the attacks upon the assessment made in the third amended complaint was based upon the allegation that the board of directors which levied the assessment was not the legal board of directors of the company. Between the time of the filing of the third amended complaint and the decision on demurrer the supreme court, in the case of

Dolbear

v.

Wilkinson,

172 Cal. 366, [Ann. Cas. 1917E, 1001, 156 Pac. 488], decided that this board of directors was the legally elected and constituted board of directors of the corporation. That point is, therefore, not insisted upon by the appellants; but they do insist that the assessment is void for other reasons arising out of the following facts: It is alleged that the assessment was levied for the purpose of “freezing out” the plaintiffs by having their stock sold thereunder. It is further alleged that certain of the individual defendants, namely, E'. J. Boyes, Guy Wilkinson, Lucien Simon, Goodrich, and Hanus, are the directors of the California Trona Company, and that the other individual defendants are stockholders of that company. It is further alleged that these stockholders and directors are mere dummies for the Foreign Mines Development Company, another corporation, organized in Great Britain. There is a further allegation that by a judgment of the superior court of the city and county of San Francisco entered previous to the sale of plaintiff’s stock, the defendants were enjoined from using a certain judgment of said court existing in their favor to settle any assessment upon any of the stock of the California Trona Company. This latter judgment is character

[603]

ized as a “purported” judgment, which it is alleged is “claimed” by Simon and his wife. There is no allegation in this third amended complaint sufficient to impeach the validity of that judgment. Indeed, from the allegations of the complaint it must be held to appear upon the face thereof that this judgment is a valid judgment, for it is presumed to be valid in the absence of allegations showing its invalidity, and this is especially true upon a collateral attack such as that made upon it in this action. It is further alleged that Simon and his wife and the other defendants did use this judgment in violation of the injunction for the settlement of the assessments upon certain stock of the defendants; and it is also alleged that the sale of, the stock was not made at public auction but behind closed and locked doors, in a room to which no person was admitted except upon permission of the individual defendants in this action. It is also averred that Phillips, one of the plaintiffs, who held twenty shares of the stock of the California Trona Company, evidenced by a single certificate, tendered immediately before the sale to a person who claimed at that time to be the secretary of the corporation, but who is not alleged to have been actually such secretary, sufficient money to cover the assessment on six of his shares and the costs incurred by the corporation up to that time in preparing for the sale.