Evening capital news. (Boise, Idaho) 1901-1927, 1917-12-25
ATTACK SENATE
BILL IN FOURTH
DISTRICT COURT
Statute Prescribing Power
Of Corporations Organized
for Control of Irrigation
Projects Under Fire.
Alleged to Be Unconstitu-
tional-Issue Raised Over
Meeting of Directors of
Twin Falls Canal Com
pany at Twin Falls.


The constitutionality Of senate bill
No. "a. by Atherton. an act prescribing
power of corporations organized and
existing for control of irrigation pro-
1ects, is involved in cases that have
been submitted to Judge Babcock in
the Fourth judicial district court en-
titled T. F. Warner and D. B. Norman
ct al versus the Twin Falls Canal COM
pany.
The legislative act in question bears
directly upon the cases at issue be-
cause the October meeting was con-
vened pursuant to recess Of previous
stockholders meeting for the purpose
of taking advantage of provisions OF
the measure relating to the method or
management Of irrigation systems.
The annual meeting and election OF
directors in December is involved be-
cause It was held in accordance with
an amendment to the articles OF In
corporation adopted at the October
meeting, changing the date OF the an
nual meeting from the first Tuesday
In January to the first Tuesday in De-
cember.
BASIS OF CLAIMS.
The plaintiffs in the action, in ad-
dtion to charging that the proceed
ings of these meetings are illegal. con-
tend that the legislative act in ques-
ton is unconstitutional for the rea-
son that it confers power to amend or
adopt new articles of incorporation
and bylaws by a vote of two thirds
of the stock represented at any regular
or special meeting of the stockholders
duly called for that purpose.
1t is argued that it is an elementary
principle Of law that the control of
corporations shall vest ~ the majority
of the stockholders. and that this pro-
vision Is at variance with that princi-
pie. That the act, because it is made
applicable to corporations having more
than 5000 stockholders, is special or
class legislation which is prohibited
by the state constitution.
HISTORY OF CASES.
The cases are of recent origin. The
first of them is a petition asking for
order of the court declaring the pro-
ceedings of the October meeting null
and void, filed Dec. /. The second is
an action to enjoin the canal company
from carrying into effect the amend
doopltu dl TIE oClOppT meeting
and to secure a restraining order pro-
hibiting the directors elected at the
December meeting from acting.
Answer admitting practically all of
the material allegations was filed by
the canal company, and subsequently
the county farm bureau, as sponsor for
the amendments adopted at the Octo-
Der meeting. entered it's appearance as
intervenor.
The petition was based on tho
ground that no majority of the stock
has been represented at the October
meeting and that the action taken had
not been contemplated or provided for
In the call for the meeting. 1t was
proposed that suggested amendments
should be presented for the consider
alton of the stockholders on this oc-
casion and that definite action with
regard to them should be taken at a
later date: or in the language of the
call, suggested amendments should be
initiated" at this time, the petition
recites.
ALLEGATIONS OF COMPLAINT.
The complaint in the action for in
junction and restraining order incor
porates both these allegations ant
charges further that radical change:
affected at the Octobe. meeting, sucr
as the reduction of the number of di.
rectors from five to three and fixins
their salaries at $4,000 per annum
would result in irreparable injury t.
the corporation and its stockholders
and that unless the directors elected a
the December meeting should be re-
strained from acting a chaotic condi
ton would result.
The interverOrs entered their ap
pearance upon filing an objection as t,
the petition and a demurrer as to tn
complaint in the second case.