McDermont v. Anaheim Union Water Co.

Water Company—Rights of Stockholders—Void Amendment of Articles—Irrigation of Other Lands—Injunction.—An action may be maintained by stockholders in a water company formed for the purpose of supplying water, within a limited area, for irrigation and domestic uses to its stockholders, in whom the sole ■beneficial use of the water was vested, to enjoin the company from supplying the water for the irrigation of the lands of new stockholders made defendants, to whom stock was issued under a void amendment of the articles of incorporation including additional lands, where the complaint shows that the amendment was adopted and filed by the directors without the consent of the holders oil two-thirds of the subscribed capital stock, and without the required publication of notice of intention to amend the articles, and shows that the supplying of water to the new stockholders will deprive the plaintiffs of a portion of the water which is necessary to irrigate their lands and for their domestic uses.

Id.—Pleading—Sufficiency of Complaint—Averments upon Information and Belief.—Material allegations of the complaint relating to facts the truth of which is peculiarly within the knowledge of the defendant, may be made upon information and belief; and the fact that the records of the corporation defendant in relation to the matter of those allegations were open to the inspection of the plaintiff does not affect the rule. Such records may be contradicted, upon information and belief, if they do not speak the truth.

Id.—Averment as to Amendment of Articles—Following Language of Code.—An allegation of the complaint as to the amendment of the articles of incorporation, following the language of section 362 of the Civil Code, and negativing the facts therein required to be performed to make the amendment valid, is a sufficient allegation to show that that section was not complied with, as against a general demurrer.

Id.—Innocent Purchasers of Stock—Laches—Estoppel—Demurrer— Answer.—Where the complaint does not show on its face that any of the defendants were innocent purchasers of the new issue of stock, or that the plaintiffs were chargeable with laches or estoppel, neither of these matters can be taken advantage of upon demurrer, and eadh of them must be set up in the answer as matter of affirmative defense, in order to render them available.

Id.—Unexplained Delay. — An unexplained delay of forty days in bringing the suit after the amended ■ articles of incorporation were filed cannot be held to be laches per se.

Id.—Offer of Restitution—Theory of Complaint.—Where the complaint is framed on the theory that the attempted amendment of the articles of incorporation was null and void for noncompliance with the law, it need not aver an offer of restitution of the money paid by the defendants to the corporation.