McShane v. Carter

Hayne, C. This was a suit to enjoin the defendant Carter, who is a sheriff, from selling the property of the plaintiff under a judgment obtained by the defendant [311]Smith against the Nevada Reservoir Ditch Company, from which plaintiff deraigned his title. The property which the sheriff was proceeding to sell is described in the complaint as follows, viz.:—.

“That certain reservoir ditch, sometimes called the big ditch, having its head about one half mile above the residence of Joseph Perrin, on Little Wolf Creek, in Grass Valley township, Nevada County, state of California, and extending thence westerly to the west line of Nevada County; and also that certain water right, being the right to take the waters of said Wolf Creek, and divert the same from said creek to the extent of the capacity of said ditch.”

The plaintiff alleges that he was the owner of several mining claims described in the complaint, and that ‘?said property advertised for sale and levied upon under said execution has been for years past and now is by plaintiff used as appurtenant to said mining claims and reservoirs and mining lands of plaintiff, and is necessary and requisite to the working and operating thereof, cmd was and is appurtenant thereto.”- And this was found to be the fact, both as to the plaintiff himself and as to his predecessors in interest.

■ In the plaintiff’s chain of title to the claims and ditch were two deeds from mining corporations, viz., a deed from said Nevada Reservoir Ditch Company to the Golden Gate Consolidated Mining Company, made in 1882, and a deed from the latter to one Patrick Campbell, made in 1884. These deeds were authorized by the boards of directors of said respective companies, and were executed by the proper officers, but were not ratified by the stockholders of said corporations.

In 1880 the legislature passed an act entitled “An act for the further protection of stockholders in mining companies,” which contained the following provision:—

“Sec. 1. It shall not be lawful for the directors of any mining corporation to sell, lease, mortgage, or otherwise [312]dispose of the whole or any part of the mining ground owned or held by such corporation, nor to purchase or obtain in any way any additional mining ground, unless such act be ratified by the holders of at least two thirds of the capital stock of such corporation. Such ratification may be made either in writing, signed and acknowledged by such stockholders, or by resolution duly passed at a stockholders’ meeting called for that purpose.” (Laws of 1880, p. 131.)