Coombes v. Franklin

[166]

PRESTON, J.

The appeal in this cause must he dismissed, and it is ordered.

The reason for this holding is that 'the authority for the maintenance of the action against respondent has been removed by the elimination of the constitutional provision which furnished its sole support.

The complaint assumes the form of a general creditors’ and stockholders’ bill seeking to hold the defendants, and particularly respondent Getz, for embezzlements and defalcations of a fellow director of the corporation known as Getz Bros. & Company, which said defalcations aggregated the sum of about $550,000. Demurrer of said respondent to the complaint was sustained. Appellant declined to amend and judgment passed for respondent. This appeal followed.

Section 3 of article XII of the state Constitution, prior to November 4, 1930, read in part as follows: “The" directors or trustees of corporations and joint stock associations shall be jointly and severally liable to the creditors and stockholders for all moneys embezzled or misappropriated by the officers of such corporation or joint stock association, during the term of office of such director or trustee.” On said last-mentioned day, however, the People approved at a general election an amendment to said Constitution which repealed the said provision above quoted without a saving clause or reservation of any kind.

The rule of law in this respect is not in doubt. In

Napa State Hospital

v.

Flaherty,

134 Cal. 315, 317 [66 Pac. 322, 323], the court stated the rule as follows: “It is a rule of almost universal application that, where a right is created solely by a statute, and is dependent upon the statute alone, and such right is still inchoate, and not reduced to possession, or perfected by final judgment, the repeal of the statute destroys the remedy, unless the repealing statute contains a saving clause.” This rule has been consistently and continuously adhered to since said date.