The twice-a-week Twin Falls times. (Twin Falls, Idaho) 1916-1918, 1917-12-18
CANAL COMP PANY LITIGATION.
ARE THE AMENDMENTS AND NEW
DIRECTORS TO Be OR NOT TO BE-?
Question of the Legality of the Action by the
Stockholders Meeting of Oct g. and the Con-
sequent Validity of the Election of Directors
on Nov. 4th, Argued Before Judge Babcoclx
Who Will Decide Later-Supreme Court Next.

Readers of the TIMES are aware
that the affairs of the Twin Falls
South Side Canal company were TAX
en- into court by Attorney Hackman's
application, on behalf of dissatisfied
stockholders, for an order temporarily
restraining the directors elected at
the December meeting from taking
charge of the affairs of the company,
and also filing a complaint with pc
tition that under Section 2735 of the
Code of Idaho, the proceedings of the
stockholders meeting of October 19
be set aside and declared null and
vOid-the latter, of course, vitiating
the election held in December under
the amendments to the charter and
bylaws supposed to have been adopt
ed in October A temporary injunc-
ton having issued, as prayed, the
whole matter came up on Monday of
this week before Judge Babcock for
hearing upon the merits.
1t having been agreed that all the
! issues involved should be combined
in the one hearing, Mr.. Hackman, as
attorney for the petitioners proceeded
J to state the cause of action and to
/ offer argument in favor of the con-
tention of his clients. without at
tempting to go into details or follow
legal phraseOlOgy, it may be said that
the real bone of contention was as to
the legality and effectiveness of the
amendments which were acted up
on and declared adopted at the special
meeting of stockholders held October
8, last
In maintaining the contention that
such amendments were not lawfully
made and that therefore the election
subsequently held hereunder was
null and void, Mr.. Haclman, after de-
fining a corporation, promised that,
being a creature of legislation, its
powers can be exercised only in pre-
else accordance with che laws of the
state. The first reference was to the
fact that under the law, no business
can be transacted at a called meeting
of the stockholders of a body corpo-
ate except that stated in the call as
the purpose of such meeting; and
that in this case the fact that the
call was for a meeting to initiate"
amendments to the charter and by
laws-for subsequent action after
their purport should have been known
and considered, barred the possibility
Of their legal adoption then and there
Not only was there this fault, but
while Section 2735 of the Code of Ida
no provides that, CAT all elections or
votes had for any purpose lin cor
pOration) there must be present a
majority of the subscribed capital
stock, or of the members, when there
is no capital stock, either in person
or by proxy in writing" in this case
out of 202,17S shares of stock, only
$500 shares-but little over one
fourth-were present and voted at
this meeting. Surely no radical and
revolutionary changes can be legally
effected in such manner.
1t is said that the Act of Assembly
known as Senate Bill No. S4, which ap-
pears in the Session Laws of 1917 at
pages 105-106, changes the provisions
! of Section 2735 of the Code as just
quoted Bearing in mind the we'll
, known principles of law governing the
construction of statutes which re-
uuires one to read all statutes in pari
', materia that is, statutes upon the
same subject, so that they harmonize
with one another, and at the same
time bearing in mind a further rule
Of construction, which is, that the
courts do not favor a repeal by i'm
plication, this will appear otherwise
Section g. has a provision that al
regular annual meeting at which the
stockholders are represented in per-
son or by proxy 100 shall constitute q
, quorum for the transaction of bust
ness and shall have the power by ma
jority vote OF the stockholders repre-
sented to elect directors and tran
sact any other business of the cor
J poration," referring exclusively ito reg
ular annual meetings" Then, by sec
ton 5 of the said act, it is provided
: that the articles of Incorporation, ol
bylaws, may be changed or new ar
ticles, or new bylaws, may be adopt
ed "by two-thirds vote of the stool
! represented, at any regular meeting
duly called for that purpose, in accor
dance with the provisions of section
: 2724 of the revised codes. 1t, there
: fore lacks two fundamental requisites
1. F'ifty-two per cent of the sub
scribed capital stock to be represent
: ed at the meeting.
, 2. 1t was not called under thu
! provision of Section 2724 but wa
y u called in an entirely different manner
! and under other provisions of law.
i To sum the matter up, the Twii
2 Falls Canal company has never beer
n conducted according to the plain pro
= visions of the laws of Idaho, con
cerning the incorporation of, and or
u ganization of corporations, from it,
inception to this time, so far as th
i matters now under consideration ar
!, concerned.
j Judge ]. R. Boutwell,, appearing 70
q the company e., for the holding
;. board of directors, took substantiall'
the same ground as Mr. Hackman, bu