Navajo Mining & Development Co. v. Curry

BEATTY, C. J.

This is an original proceeding in which a California corporation seeks to compel the respondent to file and issue certificates of increase of its capital stock. An alternative writ of mandate was issued upon the filing of the petition, and the respondent submits the controversy upon his general demurrer thereto, for want of facts to justify the issuance of the writ.

The facts are, that the petitioner having been originally organized with a capital stock of only seventy-five thousand dollars, became desirous of increasing the amount to one million dollars. To carry out this object a meeting of the stockholders was convened at the offices of the company in pursuance of a resolution of the directors for the purpose of

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considering the expediency of the proposed increase, and at said meeting the holders of all the issued stock were present in person or by proxy, as well as all subscribers for stock. And they all signed a written consent to the proposed increase on the record of the meeting. In short, the proceedings required for effecting an increase of the stqSk of a corporation were regularly pursued in every respect as prescribed by sec-, tion 359 of the Civil Code, except that the public notice therein specified was not given. A certificate in proper form of what was done was delivered to the respondent, and the fees for filing were duly tendered, but he refused to file the certificate upon the ground that it appeared therefrom that the whole proceeding was invalid for want of the statutory notice by publication in a newspaper of the call for the stockholders’ meeting.

The contention of the petitioner is, that the actual attendance and consent of all the holders of, and subscribers for, its stock, rendered the failure to publish notice of the meeting immaterial; that the statutory and constitutional requirement of published notice in such cases is wholly for the benefit and protection of the stockholders; and that when the sole object of the notice has been accomplished by the voluntary attendance of all interested parties the statutory provision for published notice should be held directory and not imperative. There is both reason and authority to sustain this contention as applied to a statute, but in this state we have not only a statute to construe, but a constitutional provision' which in express terms prohibits any increase of the capital stock of a corporation, “without the consent of the persons holding the larger amount in value of the stock,