Sayre v. Citizens' Gas Light & Heat Co.

California Supreme Court Mar 30, 1886 No. No. 8785Published

Before: Myrick, Ross

AI Brief

AI-generated · verify before citing

Holding. The court held that a shareholder who fails to challenge the assessment and sale of their stock while the company's prospects are poor, and only seeks to reclaim the stock after others have increased its value, is barred by the doctrine of laches and acquiescence.

Issues

Whether a corporation is authorized to levy an assessment on full-paid stock under the act of March 26, 1866.
Whether a shareholder who acquiesces in the sale of their stock for non-payment of an assessment is entitled to equitable relief after the stock has appreciated in value.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The court below was correct in its views that the act of March 26, 1866, authorized an assessment on full-paid stock.”

“Could he acquiesce in the sale as long as the stock of the company was of but little value, but when, by the exertions of others, the consolidation of the company with a rival one imparted to the stock of the combined properties more value, come into a court of equity and claim an equivalent of the stock of the new company? We think not.”

Synopsis

Equity—Action to Compel Transfer of Stock — Assessment Sale — Acquiescence — Delay.—The action was brought to compel the individual defendants to transfer to the plaintiff certain shares of stock of the Capital Gas Company, and to pay to him the dividends received by them thereon, and for other relief. The plaintiff had beon the owner of an equal number of shares of stock in the Citizens’ Gas Light and Heat Company, which corporation had been consolidated with the Capital Gas Company. Prior to the consolidation, his stock had been sold in satisfaction of am assessment levied thereon, and purchased by the individual defendants. On a review of the evidence, held, that the plaintiff had acquiesced in the sale, and had lost his right to equitable relief by reason of his delay.

Cobporation —Assessment on Stock Fullt Paid.—Under the act of March 26, 1866, the capital stock of a corporation, which has been fully paid for, is assessable.

Myrick, J. JAn opinion was filed by the court, in Department, June 23, 1885. After hearing by the court in Bank, we are satisfied of the correctness of the views expressed in that opinion. As to other points presented, but not referred to in the opinion, we will say we see no error. The court below was correct in its views that the act of March 26, 1866, authorized an assessment on full-paid stock.

The contract between Morris, the assignor of the plaintiff, and the Citizens’ Gas Light and Heat Company, did not call for unassessable stock, even if it should be conceded that under the laws of this state a corporation is authorized to issue stock upon which no assessment can be levied.

The judgment and order are affirmed.

Sharpstein, J., Morrison, C. J., Ross, J., McKinstry, J., and McKee, J., concurred.

The following is the opinion in Department One above referred to: ■—■

[209]Ross, J. This is a bill in equity, filed by plaintiff, to compel the defendants, Brown, Clark, Gallatin, Watson, Cummings, Stanford, Hopkins, Crocker, Huntington, and Miller to transfer to the plaintiff, as assignee of one Henry G. Morris, three thousand five hundred shares of the capital stock of the defendant, the Capital Gas Company, and to pay to him the dividends received by them thereon; to compel the Capital Gas Company to recognize such transfer and enter the same on its books, and to obtain judgment against the defendant, the Citizens’ Gas Light and Heat Company, for eleven thousand nine hundred dollars.

From the findings of the court below, these, among other facts, appear: The Citizens’ Gas Light and Heat Company was incorporated in January, 1872, with a capital stock of one million dollars, divided into twenty thousand shares, of the par value of fifty dollars each, and on the fourth day of October, of that year, entered into a contract in writing with one Henry G. Morris, of Philadelphia, by which the latter agreed to erect gas-works for the company in the city of Sacramento, within a stated time, in accordance with certain plans and specifications, in consideration of one hundred thousand dollars in money, and six thousand five hundred shares of the stock of the company, which consideration the company agreed to pay. Morris proceeded to and did construct the gas-works, but did not complete them within the time limited in the contract,—the works not having been completed until on or about February 4, 1874, whereas the time stipulated for their completion was September 1, 1873. The company paid Morris the one hundred thousand dollars, as provided for by the contract, and issued to him four thousand five hundred shares of its capital stock, and further advanced to him, to enable him to complete the works, other sums aggregating $41,371.33, which advances have never been repaid.

Sayre v. Citizens' Gas Light & Heat Co.

AI Brief

Synopsis

More from California Supreme Court

Related research

AI Brief