People's Home Savings Bank v. Superior Court of the City & County of San Francisco

Garoutte, J. The present proceeding is a motion for a substitution of attorneys in the above-entitled cause. Mr. James Alva Watt, claiming authority to represent the petitioner, makes the motion. The solution of the question here presented is dependent upon the following state of facts:

One E. H. Knight, a creditor, commenced an action in the superior court of the city and county of San Francisco, Department No. 4, against the petitioner. People’s Home Savings Bank and its directors, for the purpose of enforcing his demand, and asked that the board of directors be enjoined from the further transaction of business; that they be removed from office; that a receiver be appointed, and that the bank corporation be thrown into liquidation. Certain allegations [651]of plaintiff’s complaint, charging fraud of the board of directors in the administration of the business of the corporation and insolvency of the bank, form the basis for the relief prayed for. In this action John F. Shee-han was by the court appointed receiver to take possession of the assets of the corporation, etc., and he retained James Alva Watt as his attorney and legal adviser in. carrying on the business of the receivership. Thereafter, the petitioner in the above-entitled cause, to wit, the People’s Home Savings Bank, made an application to this court for a writ of prohibition, asking that the proceedings of the superior court in the matter of the appointment of the receiver be annulled as being in excess of its jurisdiction. This application was made to the court by the petitioner through its regularly appointed attorneys, Messrs. Delmas and Shortridge. Thereafter a motion for a substitution of James Alya Watt as attorney for petitioner in the above-entitled cause, to act in the place and stead-of Messrs. Delmas and Shortridge, was made. This motion was based upon a showing hy affidavits to the effect that, subsequent to the inception of the prohibition proceeding, the directorate of the petitioner corporation had been changed at an election held by the stockholders, and that the corporation petitioner, by its new board of directors, appointed said Watt attorney for the corporation in the above-entitled cause, and revoked the authority of Messrs. Delmas and Shortridge to act for it in any litigation then pending.

The legality of Watt’s appointment as attorney for the bank depends upon the validity of the election of the board of directors appointing him, and the only serious question presented, as to the validity of such election, involves the right of a person not a stockholder to participate in the election by virtue of his position as a proxy of a bona fide stockholder, and to this question we shall direct our attention.