Miles v. Woodward

46 P. 1076, 115 Cal. 308, 1896 Cal. LEXIS 1011
CourtCalifornia Supreme Court
DecidedDecember 14, 1896
DocketS. F. No. 367
StatusPublished
Cited by35 cases

This text of 46 P. 1076 (Miles v. Woodward) 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
Miles v. Woodward, 46 P. 1076, 115 Cal. 308, 1896 Cal. LEXIS 1011 (Cal. 1896).

Opinion

Henshaw, J.

Appeals from the judgment and from the order denying a new trial.

Plaintiff, a stockholder of the Bodie Consolidated Mining Compan}', a corporation organized and existing under the laws of the state of California, brought this action against defendant, a director of said corporation, to recover one thousand dollars liquidated damages for a violation of the provisions of the act of April 23,1880. (Stats. 1880, p. 400.) The violation complained of was the alleged failure, refusal, and neglect of the directors of the corporation to make, or cause to be made and posted and filed the weekly reports of the superintendent, as required by the act.

1. It is first contended that the act in question is unconstitutional for the reason that it operates only upon domestic corporations, and thereby allows foreign corporations to transact business within this state upon more favorable conditions than are prescribed by law to similar corporations organized under the laws of this [311]*311state, in violation of article XII, section 15, of the constitution. But the act, as its title declares, is an act designed for the “ better protection of the stockholders in corporations formed under the laws of the state of California, for the purpose of carrying on and conducting the business of mining.” The statute is in its nature both penal and remedial. It is directed to the internal affairs of the corporation, and not to its outside dealings or to the conduct of its business. The constitution was not designed to limit the powers of the legislature when dealing with the organization and government of corporations which are created by its own will and act. Over such corporations it has and may exercise full powers of control. Over the organization and internal government of foreign corporations it has no such powers. The laws of the state do not have extraterritorial force. It would be meaningless for this state to try to legislate upon the internal affairs of such foreign corporations, and it has not attempted to do so. The law is designed to protect stockholders of domestic corporations, and to that end has declared that the directors of those corporations, the conduct of whose internal affairs is subject to the control of the legislature, shall do specific acts under a prescribed penalty for their failure ' and refusal. It does not, therefore, relate to the business of the corporation, nor impose burdens or restrictions upon domestic corporations in the conduct of their business from which foreign corporations are relieved, but pertains as exclusively to corporate management as do the code provisions relating to the organization and conduct of savings and loan corporations, street railroad corporations, and all corporations whose internal affairs are more or less carefully regulated by the laws of the state.

2. It is next contended that the act in question is unconstitutional as being a special law. Herein the argument is that a reading of the act discloses that it is made to apply: 1. Only to mining corporations which produce bullion, or corporations organized for the pur[312]*312pose of gold or silver mining; 2. That it applies only to such of those corporations as produce bullion from gold or silver bearing ores or quartz; that it is, therefore, special in that it does not apply to domestic corporations engaged in the mining of copper, lead, quicksilver, or of gold obtained by drift or hydraulic mining. Against this objection respondent urges the authority of the case of Hewlett v. Epstein, 63 Cal. 184. But in that case the sole argument pressed upon the attention of the court was that the act in question was unconstitutional because it applied to mining corporations alone, and not to all corporations. The language of the opinion in briefly disposing of this contention in a single sentence cannot justly be considered as conclusive of the question upon this new and distinct attack. Of the numerous cases in which judgment has been obtained under this act, and appeals taken to this court, Hewlett v. Epstein, supra, is the only one in which the constitutionality of the act was raised. The consideration of the question thus presented is, therefore, not foreclosed by any of the adjudicated cases.

If the construction which appellant puts upon the act, idz., that it applies only to those mining corporations which extract gold or silver from ores and quartz, were to be accepted as the true one, his attack upon the constitutionality of this law as being arbitrary special legislation would certainly be powerful, if not irresistible. But we cannot agree to that interpretation. The act provides for the doing of many things by the officers and agents of all mining corporations. Some of the things required to be done, such as keeping a complete set of books showing all receipts and expenditures of the corporation, the source of such receipts and objects of such expenditures, and all transfers of stock, are acts which may be performed by, and the doing of which is therefore properly imposed upon, all mining corporations. The provision requiring the superintendent to report weekly the number of men employed by him, and the rate of wages paid to' each, likewise applies 1 [313]*313all mining corporations. The superintendent is also required to report the amount of ore extracted, and from what part of the mine taken, the amount sent to the mill for reduction, and its assay value. These requirements from their nature apply only to those mining corporations which extract the precious metal from ores, but they apply to all such corporations, and are as general as from the varying character of mining corporations and of their operations they could be made. The requirement that the superintendent shall certify to the amount of bullion shipped to the office of the company or retained by him applies not only to corporations which extract gold or silver from ores, but equally to those which extract it by the methods of placer or hydraulic mining. In short, in the general scheme contemplated by the statute there are found many provisions applicable in their terms to all mining corporations, and others applicable only to such mining corporations as extract the precious metals from ores.

But the law does not lose its general characteristic nor fail of uniformity of operation because it requires all corporations to report all the ores mined by them, so long as it requires all of those which mine precious ores to make such report. The very fact that gold is obtained sometimes by hydraulic mining as free gold, and at other times by crushing quartz, shows the reason for the added provisions requiring the superintendent to report the nature and extent of new ore discoveries.

3. Appellant further contends that the trial court erred in overruling his demurrer to the complaint. The complaint averred in precise terms that the defendant directors, “disregarding their duty and obligation, and the rights of the plaintiff in the premises, on and at all the times and during all the weeks and periods herein mentioned, did entirely fail, refuse, and neglect to make, or cause to be made, and posted or filed, the weekly reports of the superintendent required to be made, etc.” It is alleged that this complaint is defective in not averring that the failure of the directors was [314]*314willful and intentional, and in this regard the case of „ Eyre v. Harmon, 92 Cal. 580, is relied upon.

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Bluebook (online)
46 P. 1076, 115 Cal. 308, 1896 Cal. LEXIS 1011, Counsel Stack Legal Research, https://law.counselstack.com/opinion/miles-v-woodward-cal-1896.