State ex rel. Sears v. Wright

10 Nev. 167
CourtNevada Supreme Court
DecidedJuly 15, 1875
DocketNo. 715
StatusPublished
Cited by21 cases

This text of 10 Nev. 167 (State ex rel. Sears v. Wright) is published on Counsel Stack Legal Research, covering Nevada Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Sears v. Wright, 10 Nev. 167 (Neb. 1875).

Opinions

By the Court,

Hawley, C. J.:

Relator in his petition alleges: that the Allen. Company is a corporation; that its capital stock is divided into one thousand eight hundred and fifty shares; that relator is the oWner and in the actual possession of one thousand eight hundred and seventeen shares; that the business and affairs of the Allen Company is managed and controlled by respondents as trustees; “that there has been no election of a board of trustees or other officers, by the stockholders of said corporation, for over three years last past, nor has there been any stockholders’ meeting of said corporation called for such purpose; but- said trustees, in defiance of the rights of [169]*169the stockholders and in violation of law and the by-laws of said corporation, have refused, and still continue to refuse to call any meeting of stockholders for the purpose of electing trustees;” that respondents, in February last, levied an assessment upon the capital stock of said corporation of five dollars per share; that on May 10, relator then béing the owner and holder thereof, presented to respondents certificates of the capital stock of said corporation, representing one thousand eight hundred and seventeen shares; that relator then paid, and the respondents accepted and received, nine thousand one hundred and fifteen dollars for the assessment and costs of advertising the same; that respondents at the same time accepted and received said one thousand eight hundred and seventeen shares and cancelled the same, and issued and delivered to relator certificates of stock of said corporation in lieu thereof, representing one thousand eight hundred and seventeen shares in the name of relator, “which said certificates relator now holds, owns and possesses;” that there has been no election, annual or otherwise, of a board of trustees of said corporation, called or held within three years last past; that relator, on May 14, served upon each of respondents a notice demanding that they should call a meeting of the stockholders for the purpose of electing a new board of trustees, and that respondents have refused to comply with such demand.

Upon presenting his petition, relator obtained an alternative writ, which was served upon “ W. T. Wright, the president of the board of trustees of the Allen Company.”

1. Respondents Driscoll, Skae and Reynolds, specially appear and move to quash the writ.

While we think the better practice would be to serve each individual trustee, yet we do not think that under the provisions of the statute it is absolutely necessary so to do. The proceedings are instituted not against respondents as individuals, but in their representative capacity as trustees. It is virtually the same as if commenced directly against the board of trustees. The service, therefore, upon the president must, in the present case, be held sufficient.

[170]*1702. Respondent Wright interposes a demurrer and claims: “That the writ doth not state facts sufficient to constitute a cause of action or proceeding against him.” His counsel argue that the demand for an annual election should have been made upon the board of trustees when in session, and rely upon the principles announced in The Yellow Jacket S. M. Co. v. Stevenson, 5 Nev. 224, and Hillyer et al. v. The Overman S. M. Co., 6 Nev. 51, to support this position. It is claimed that these cases virtually overrule the case of The State ex rel. Flagg v. The Board of Trustees of the Lady Bryan M. Co., 4 Nev. 400, wherein a similar demand to the one made in this case was held sufficient. We fail to find any conflict in the reasoning of the respective opinions. In our judgment, there is nothing in either inconsistent with the views expressed in the others. In the cases cited by counsel, contracts had been made and knowledge obtained by individual trustees, acting in an individual capacity, and it was sought thereby to bind the corporation, and the court held that the trustees acting individually, and not as a board, could not act for the corporation; that “the trustees represent the corporation only when assembled together and acting as a board.”

In the present case, as in Flagg v. Lady Bryan, relator is demanding that the trustees shall do an act which the law especially enjoins upon them as a duty pertaining to. their office.

It has been held that in the case of public officers who have failed to perform such duties, it is not necessary to make any demand. (Humboldt County v. The County Commissioners of Churchill County, 6 Nev. 39; Mottu et al. v. Primrose, 23 Md. 501; Commonwealth ex rel. Middleton v. Commissioners of Alleghany Co., 37 Penn. St. 246.) If a demand is necessary, and we proceed upon the theory that in cases like the present it is, we do not think relator was bound to wait until he caught the board in session to serve his notice.

In the case of Flagg v. Lady Bryan, the trustees had not adopted any by-law prescribing the manner in which an an[171]*171nual election should be held, and it was claimed tbat in tbe absence of sucb a by-law tbe time of calling sucb an election was in tbe discretion of tbe trustees. Tbe court beld tbat it was tbe duty of tbe trustees to call tbe annual election, and tbey could not avail themselves of tbe failure to adopt a bylaw “asa reason why tbey should not do another act which tbe law imposes upon them as a duty.” So, here, it was tbe duty of tbe trustees to meet as a board and call tbe annual election. Tbey cannot excuse themselves for not complying with tbe law, by showing tbat tbey have neglected some other duty, or failed to perform an act which should properly precede tbe one sought to be enforced.

If respondents’ position is correct, bow could relator ever obtain relief ? He must first proceed to obtain a writ to compel tbe trustees to bold a meeting of tbe board, and while it is in session be must make bis demand for an annual election. Would not relator have to serve a notice upon tbe individual trustees demanding them to meet as a board, and if tbe notice is insufficient in tbe one case, would not tbe same argument apply in tbe other ? Almost, it is a distinction without any substantial difference. No valid reason, in our judgment, exists against tbe rule of practice prescribed in Flagg v. Lady Bryan M. Co., and believing it to be correct we approve it.

^Respondents also argue in support of the demurrer, tbat tbe action- is wrongly brought against tbe individual trustees instead of against tbe board of trustees. We have already decided tbat tbe proceeding is virtually against the board. Tbe fact tbat it is directed to tbe individuals constituting tbe board furnishes no ground for demurrer.

In The Mayor v. Lord, tbe writ was directed to tbe mayor and aldermen of tbe city of Davenport, and it was claimed tbat tbe city was incorporated by tbe name and style of “ Tbe City of Davenport,” and tbat tbe writ ought to have been addressed to tbe corporation and was erroneously directed to tbe mayor and aldermen. Tbe Supreme Court of tbe United States, in passing upon this objection, said: “Tbe point tbat tbe writ was misdirected is not well taken. [172]*172The direction ivas substantially correct, and the court properly disregarded the objection.” (9 Wall. 413.) A similar objection was made and overruled in Fuller v. The Trustees of the Academic School in Plainfield (6 Conn. 532).

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Bluebook (online)
10 Nev. 167, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-sears-v-wright-nev-1875.