Robinson v. Spaulding Gold & Silver Mining Co.

Morrison, C. J. The defendant, a mining corporation in the state of California, had a judgment entered against it in the Superior Court of the city and county of San Francisco, for the sum of $619.25, on the second day of April, 1883. On the thirteenth day of the same month an execution was issued on said judgment, and on the first day of the following month the sheriff of said city and county levied on 99,280 shares of the capital stock of the mining company to satisfy the same, and on said last day all the right, title, and interest of said company in and to said shares was sold under said execution to satisfy the same, and a certificate of sale was issued by the sheriff to the plaintiff therefor, whereupon the plaintiff demanded of defendant a certificate of such stock, and defendant refused to issue stock to the purchaser thereof at such sale; wherefore plaintiff prayed for a decree of the court directing the defendant to issue to him said 99,280 shares of its. capital stock, in satisfaction of such execution.

On the trial in the court below it was found, as a con- ' elusion of law, that the plaintiff was entitled to a decree as prayed for, and costs of suit.

The question is, Did the Spaulding Mining Company become the owner of said stock on the purchase thereof for non-payment of an assessment? and did it become the owner in such a sense as to make it its duty, oh the sale thereof on execution, to deliver to the purchaser thereof new stock in place of that sold? We think it did not, and that it was not the owner of said stock, se as to subject it to sale on an execution against the company.

Section 344 of the Civil Code provides that “ all purchases of its own stock made by any corporation (for delinquent assessments) vest the legal title to the same in the corporation; and the stock so purchased is held subject to the control of the stockholders, who may make such disposition of the same as they deem fit, in. [34]accordance with the by-laws of the corporation, or vote of a majority of all the remaining shares. Whenever any portion of the capital stock of a corporation is held by the corporation by purchase, a majority of the remaining shares is- a majority of the stock for all purposes of election, or voting on any question at a stockholders’ meeting.”

When the stock of the corporation was sold for assessments, and purchased by the company, it thenceforth held it subject to the control of the stockholders, and it was not subject to resale on an execution issued against the corporation in satisfaction of its debts. The corporation had no interest which it could sell and dispose of, and it had no interest which a creditor could dispose of by forced sale.