Erickson v. Gospel Foundation of Calif.

275 P.2d 474, 43 Cal. 2d 581, 1954 Cal. LEXIS 277
CourtCalifornia Supreme Court
DecidedOctober 29, 1954
DocketL. A. 22542
StatusPublished
Cited by6 cases

This text of 275 P.2d 474 (Erickson v. Gospel Foundation of Calif.) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Erickson v. Gospel Foundation of Calif., 275 P.2d 474, 43 Cal. 2d 581, 1954 Cal. LEXIS 277 (Cal. 1954).

Opinions

GIBSON, C. J.

The membership of plaintiff in defendant Gospel Foundation of California was cancelled by vote of the members, and he brought this action for declaratory relief to determine the validity of the cancellation. Plaintiff joined as defendants Mary Liddecoat and Norman E. Johnson, who are both members and directors of the Foundation, Selma C. Abnot, who was elected a member and director in plaintiff’s place, and Walter E. Webb, the general manager. He has appealed from a judgment declaring that his membership was validly cancelled and annulled.

The Foundation is a nonprofit corporation formed in 1946 under the laws of California. Its purpose is to foster, promote and operate religious, charitable, evangelistic and mission enterprises, and members are required to subscribe to a doctrinal statement which consists of tenets of a solely religious nature.

The authorized number of members of the Foundation is the same as the number of directors, which is fixed at three, and the personnel of the membership and directorship is identical. No member is to obtain any pecuniary gain or profit, and in the event of dissolution the property of the Foundation is not to go to the members but to certain named organizations.

The by-laws provide that every member is entitled to one vote and, in addition, shall have one vote for each $1,000 in money or property conveyed to and accepted by the Foundation and that all contributions shall be subject to approval and acceptance by a majority of the votes of the members. It is further provided that a membership may be cancelled and annulled by a majority vote.

The original members and directors were A. M. Johnson, Mary Liddecoat and Norman Johnson. In December, 1947, [584]*584at a special meeting, the directors adopted a resolution that the Foundation accept a donation of $2,000 from Miss Liddecoat and that she be given two extra votes as provided by the by-laws. Later in December A. M. Johnson conveyed to the Foundation property valued in excess of a million dollars. At a special meeting on January 12, 1948, after the death of A. M. Johnson, plaintiff was elected a director. Plaintiff voted in favor of ratifying and approving the minutes of the prior meeting at which Miss Liddeeoat was granted two extra votes in return for her contribution. In 1950 Miss Liddeeoat became disturbed by plaintiff’s conduct and attitude toward the Foundation, and at a special meeting of members in August of that year, called to consider annulment of his membership, Miss Liddeeoat voted three votes in favor of cancellation, and Norman Johnson voted against such action. Plaintiff, although present, did not vote.

Plaintiff challenges the validity of the by-law which grants an additional vote to a member for each contribution of $1,000 accepted by the Foundation. His attack is based upon the claim that there is only one class of members in the Foundation and that the statutes require equal voting rights for all members of one class in a nonprofit corporation. At the time the Foundation was incorporated and this by-law was adopted the applicable statutes provided as follows: ‘ ‘ The authorized number and qualifications of its members, the different classes of membership, if any, the property, voting, and other rights and privileges of each class of membership, and [certain other matters] may be set forth either in the articles or in the by-laws.” (Civ. Code, §595, subd. 5, now embodied in Corp. Code, § 9301, 1st par.) The by-laws “may contain, among other things, provisions for: ... (9) The qualifications of members and different classes of memberships, and the property, voting and other rights, interests or privileges of each class. ’ ’ (Civ. Code, § 598, now embodied in Corp. Code, § 9402, subd. b.) “A nonprofit corporation shall have such memberships or classes thereof as may be specified in the articles or by-laws, but unless otherwise provided there shall be but one class of members whose rights and interests shall be equal.” (Civ. Code, § 600, 1st par., reenacted as Corp. Code, § 9602.) “Unless otherwise provided in the articles or by-laws every member of a nonprofit corporation shall be entitled to one vote and may vote or act by proxy. ... No member may cumulate his votes unless it is so provided in the articles or by-laws.” (Civ. Code, § 603, now embodied in Corp. Code, § 9601.)

[585]*585The quoted sections leave no doubt that it was competent for the Foundation, as a nonprofit corporation, to provide for unequal voting rights between members of different classes. The challenged by-law comes within this authorization because it, in effect, provides for different classes of membership, with different voting rights for each class, based upon the amount of contributions made by individual members and accepted by the Foundation. It operates equally among the members of each class, and we find nothing arbitrary or unreasonable in its application. Nor, as claimed by plaintiff, does the by-law violate section 9500

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Erickson v. Gospel Foundation of Calif.
275 P.2d 474 (California Supreme Court, 1954)

Cite This Page — Counsel Stack

Bluebook (online)
275 P.2d 474, 43 Cal. 2d 581, 1954 Cal. LEXIS 277, Counsel Stack Legal Research, https://law.counselstack.com/opinion/erickson-v-gospel-foundation-of-calif-cal-1954.