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.. shares of stock, or any part thereof; that said defendant ... delivered no property for said .
shares of stock, or any part thereof; that said defendant ... neither paid nor rendered any consideration whatsoever for said stock purporting to have been issued to it, or any part thereof, and the issuance of said certificate to said defendant . .. was wholly illegal and void, and did not constitute said defendant ... a stockholder of said California Trona Company; that upon the so-called issuance of said certificate to said defendant ...
... the name of said The Foreign Mines Development Company, Limited, was entered upon the corporate records as the owner of said one hundred shares of stock."
The complaint further shows that the certificate of shares so issued to the defendant corporation was surrendered to the secretary of plaintiff, who was directed by the said corporation defendant to issue, and upon such direction did issue, a new certificate in lieu thereof to one S. Walker Janes, the agent of said defendant corporation; that on the same day there was also issued to said Janes a certificate for five shares of the capital stock of plaintiff ; that on the eighteenth day of April, 1911, said defendant corporation caused said certificates, aggregating one hundred and five shares of the capital stock of plaintiff, issued to said Janes as stated, to be surrendered to the secretary of plaintiff, who, upon the direction of said defendant corporation, issued in lieu thereof to the defendant, Wilkinson, a certificate for one hundred and five shares of the capital stock of the plaintiff.
It is further alleged that the plaintiff, on the fifth day of November, 1908, executed and delivered to the said defendant corporation a mortgage on all its real and personal property situated in the state of California, and that on the twenty-seventh day of November, 1909, said defendant corporation commenced an action in the circuit court of the United States in and for the northern district of California to foreclose said mortgage; "that said action is now pending in said court; that judgment has not yet been rendered in said action; that a meeting of the stockholders of plaintiff for the purpose of electing a board of directors will be held at the office of the plaintiff, in the city of Oakland, on the 3d day of May, 1911, at the hour of 10:30 A. M.; that said defendant,
Guy Wilkinson, threatens to vote at said meeting the said one hundred shares of stock so illegally issued as aforesaid.”
It is charged that, on the tenth day of April, 1911, said The Foreign Mines and Development Company, Limited, acting through said defendant, Guy Wilkinson, as its agent and manager, entered into an agreement with certain of the stockholders of plaintiff (naming them) whereby it was in effect agreed that said stockholders would vote with Wilkinson for the purpose of calling a meeting of the stockholders of the plaintiff for the third day of May 1911, and that, at such meeting, said stockholders (parties to said agreement) would “cast, or cause to be cast, the votes to which the said number of shares shall entitle such party of the first part in filling vacancies in the board of directors of the said corporation for such persons as shall be indicated by the party of the second part, through its managing director, Guy Wilkinson,” etc.
It is alleged that the one hundred shares of stock so illegally issued to the defendant corporation and finally to said Wilkinson will, in conjunction with the shares held by the said persons who are parties to the agreement above referred to, constitute a majority of all the capital stock of the plaintiff, and that, therefore, if said Wilkinson is permitted to vote said one hundred shares of stock he will control said election of directors to be held on the third day of May, 1911.
It is charged that the purpose of said defendant corporation and Wilkinson "in seeking to control the election of the board of directors of plaintiff is to compromise said foreclosure suit now pending in the said circuit court of the United States by causing plaintiff to confess judgment therein in favor of said The Foreign Mines Development Company, Limited; that in said foreclosure suit there is a controversy as to the amount of the debt secured by said mortgage, said defendant ... claiming that there is due from said plaintiff a sum nearly twice as great as the sum which plaintiff admits is due."
The complaint declares that, unless a temporary restraining order is issued whereby said defendant, Wilkinson, is prevented from voting said one hundred shares of stock “at said meeting of stockholders to be held on the 3rd day of May, 1911, or at any time to which said meeting is adjourned, great and irreparable injury will result to the plaintiff and its stockholders."
Plaintiff prays judgment: That said one hundred shares of stock was illegally issued and that the certificate therefor be delivered up and canceled, and that, pending the determination of this issue, and until the further order of the court, said Wilkinson, his agents, etc., etc., be restrained “from voting said one hundred shares of stock at the said meeting of stockholders to be held on the 3rd day of May, 1911, or at any time to which said meeting may be adjourned."
Upon the complaint (verified) the court granted a temporary restraining order, requiring said Wilkinson and his agents, etc., to desist and refrain from voting said shares of stock at the stockholders' meeting, to be held May 3, 1911, or "at any time to which said meeting may be adjourned.”
Said temporary restraining order was issued on the second day of May, 1911.
On the fourth day of May, 1911, the defendants, by a verified answer, replied to the complaint and at the same time served upon the plaintiff and its attorneys a notice of motion to dissolve the temporary restraining order issued as above indicated.
The answer denies all the equities of the complaint, at the same time admitting certain averments thereof, and then, by way of a special defense, sets forth in detail the transaction between the plaintiff and the defendant corporation whereby the latter became the owner of the one hundred shares of stock of the plaintiff referred to in the complaint, and from which it appears that, on the first day of August, 1908, the said plaintiff and the defendant corporation entered into an agreement in writing, the terms of which, insofar as they are important to the question here, are, in substance, as follows:
That the said defendant agreed to advance to the plaintiff the sum of fifty thousand dollars, more or less, with which to develop certain mining properties owned by the latter in the state of California; that, for the purpose of erecting a plant, etc., upon said properties, the sum of twenty-five thousand dollars was to be advanced, upon a favorable report by an engineer, selected for the purpose of investigating said proper. ties, that the representations of the plaintiff as to the character and extent of the minerals contained therein were true; that, after the completion of said plant, the said defendant “shall deposit in said bank (First National Bank, of Oakland,
California) such additional sums as shall be called for from time to time by said company (plaintiff), such additional sums, however, not to exceed in the aggregate the sum of twentyfive thousand dollars”; .. ; that, “as profit to the contractor (defendant corporation) for the advance of $50,000.00 there shall be delivered to the contractor 614 per centum of the gross sale value in San Francisco of all products of said claims marketed by said company, for a period of operation, which in the aggregate shall be equivalent to the continuous operation of such plant for a period of three hundred days at full capacity.” After making provision for a reduction of the per centum of the gross sale value of the products of said properties to be paid to the said defendant in case the full sum of fifty thousand dollars is not so advanced and for an increase thereof in the event that a greater sum than fifty thousand dollars is so advanced, the contract proceeds: “Sixth. As additional profit to said contractor (defendant corporation) for the advance of the sum of fifty thousand dollars, more or less, as above provided, said company (plaintiff) shall, upon receipt of the first payment of twenty-five thousand dollars, issue and deliver to said contractor or its nominees one hundred shares of the capital stock of said company, of the par value of one thousand dollars per share.”
It is then provided that the said sum of fifty thousand dollars, or such other sum as shall be advanced as aforesaid by the contractor, shall be secured by a first mortgage to the contractor or its nominee upon the property of the company,” etc.
In accordance with the provisions of the foregoing agreement, the answer alleges, the defendant, on the fifth day of November, 1908, deposited to the credit of, and advanced to, the plaintiff the sum of twenty-five thousand dollars and that, on the twenty-ninth day of November, 1909, it advanced to the plaintiff additional sums, exceeding the sum of fifty thousand dollars, making in all so advanced by the defendant corporation to the plaintiff a sum exceeding that of seventy-five thousand dollars.
The answer admits and alleges that the plaintiff, in pursuance of the terms of said agreement, executed to the defendant corporation "a mortgage on all its real and personal property situated in the state of California, which said mortgage was duly recorded in the offices of the county recorders
of San Bernardino and Inyo counties, state of California, in which the said property is situated.” It is admitted that an action for the foreclosure of said mortgage is now pending in the United States circuit court for the northern district of California, and that no judgment has yet been rendered in said action; admits the agreement entered into between the defendant Wilkinson and certain other stockholders of the plaintiff, as set forth in the complaint, and that the stock held by said Wilkinson and that of said stockholders would, together, constitute a majority of the shares of the capital stock of plaintiff : denies that there was to be an election of directors of plaintiff at the meeting to be held on the third day of May, 1911; denies that Wilkinson would have controlled the election of directors at said meeting; admits that there is a controversy as to the amount of the debt secured by the said mortgage, and that the defendant corporation claims a sum nearly twice as great as the sum which the said plaintiff admits in said foreclosure suit is due, but denies that the purpose of the defendant corporation and Wilkinson in securing control of the board of directors of the plaintiff "is to compromise the said foreclosure suit, now pending in the said circuit court of the United States, by causing the plaintiff to confess judgment therein in favor of the said defendant corporation," etc.
The plaintiff replies to the averments of the answer by an affidavit denying that there was any consideration rendered by the defendant for the one hundred shares of stock “other than the so-called and alleged consideration set forth in said contract,” referring to the agreement between the plaintiff And the defendant corporation.
Upon the record, of which the foregoing is a synopsis, the court, on the fifteenth day of May, 1911, made an order granting the motion of the defendants to dissolve the temporary restraining order.
This appeal is by the plaintiff from said order dissolving the temporary restraining order.
The contention of the appellant is that the purported issue of one hundred shares of stock by the plaintiff to the defendant corporation is unlawful and void under the terms of section 11 of article XII of the constitution of this state.
The respondents not only controvert the position thus taken by the appellant, but vigorously insist that the order from