Smith v. Gate City Oil Co.

SHAW, J.

The plaintiff appeals from an order dissolving

a preliminary injunction, restraining the sale of corporate stock upon a delinquent assessment. The order was made upon the ground that the facts stated in the complaint were not sufficient to warrant the injunction.

Plaintiff owns twenty-two thousand shares of the capital stock of the defendant corporation. On September 3, 1909, the corporation directors made an order levying an assessment of five cents a share upon the capital stock, declaring the same payable on October 16, 1909, and fixing November 1, 1909, as the day on which the assessment should become delinquent, if unpaid, and December 27, 1909, as the day of the sale of such delinquent stock. No order extending the time for that sale was ever made, and no advertisement of said sale was made. On March 26, 1910, the directors made an order declaring that the aforesaid assessment was payable immediately;

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that all stock upon which said assessment remained unpaid on May 5, 1910, should then become delinquent and would be advertised for sale, and that said sale should take place on Elay 26, 1910. The necessary notices and advertisements have been regularly given and made as required by law, so far as the last order is concerned. The object of the suit was to enjoin the sale proposed to be made on May 26, 1910.

The first objection made to the proceedings by the appellant is that it is in violation of the provisions of section 345 of the Civil Code, to the effect that “the dates fixed in any notice of assessment or notice of delinquent sale” of corporate stock “may be extended from time to time for not more than thirty days.” It is claimed that if the mode of procedure here followed is allowed, it would be within the power of directors to extend the dates for the payment, the delinquency and the sale of the stock, respectively, for more than thirty days, and indefinitely for any period, contrary to said statute.

The procedure is authorized by section 346 of the Civil Code and it appears to be entirely regular under that section. It reads as follows: “No assessment is invalidated by a failure to make publication of the notices hereinbefore provided for, nor by the non-performance of any act required in order to enforce the payment of the same; but in case of any substantial error or omission in the course of proceedings for collection, all previous proceedings, except the levying of the assessment, are void, and publication must be begun anew.” The failure to make the publication for the delinquent sale of December 27, 1909, first ordered, made the proceeding for a sale on that day, or on any subsequent day to which that sale should be postponed under section 345, void. It did not avoid the assessment, but it made it necessary to repeat all the proceedings except the assessment. A new date of maturity was to be fixed. This was done by declaring it payable immediately. A new date of delinquency was necessary, and it was declared to be May 5, 1910. A new day of sale was required, and it was fixed for May 26, 1910. The necessary notices for this new delinquency and sale were given and the proceeding thereby became complete and valid. Sections 345 and 346 must be construed together and the provisions of both given force,' if possible. They are not inconsistent. One provides for the extension of time in the case of proceedings for