Court Opinion

ID: 5194680
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:41:30.073413+00
Date Added: 2024-06-11T08:27:02.231292
License: Public Domain

Laughlin, J.:
As is shown by the statement of facts, the plaintiff makes no demand for any permanent relief which a court of equity may decree, and, therefore, there is no authority for granting a temporary injunction in this case where the right thereto depends upon the nature of the action. (Code Civ. Proc. § 603.) The allegations of the complaint and the statements contained in his affidavit so far as they set forth facts charging any improper management on the part of the directors are either made upon his understanding or upon information or belief, and neither the basis of his understanding nor the sources of his information nor the grounds of his belief are stated. This defect is not cured by the joint affidavit which, when applied to the allegations of the complaint and to the plaintiff’s affidavit, merely is to the effect, so far as these matters are concerned, that it is true that plaintiff’s understanding, information and belief are as alleged and stated. The in junction order has had the effect of completely tying the hands of the board of directors, and it appears, as might be expected, that the business of the company is at a standstill in consequence thereof. The provision of the order enjoining special and annual meetings of the stockholders, of which the plaintiff complains, is drastic; but it was evidently imposed as a condition of awarding that part of the injunction *318which the plaintiff desired. It'is evident that there is a serious disagreement between the plaintiff, who owns or controls a majority of the outstanding stock, and the individual defendants who, although minority stockholders, constitute a majority of the board of directors. It is manifest that the plaintiff’s object in bringing the action was not to obtain a permanent injunction, but to temporarily enjoin the board of directors from selling sufficient treasury stock to render him - a minority holder of the outstanding stock and prevent his controlling the next election of directors. This would be accomplished by the temporary injunction order restraining further sales of stock Until after the special meeting of the stockholders to increase the number of directors at which,'by reason of his controlling interest in the outstanding stock, he could secure the election of tWo individual directors friendly to his interests.
We are of opinion that the plaintiff was not entitled to the temporary injunction order, and that the order, in so far as it is appealed from by the plaintiff, should be reversed, and, in so far as it is appealed from by the defendants, should be reversed, thus vacating the entire order, without costs of the appeal to either party, and that the motion should be denied, with ten dollars costs.
Van Brunt, P. J., Patterson, Ingraham and Hatoh, JJ., concurred.
Order, so far as appealed from by plaintiff, reversed, and so far as appealed from by defendant, reversed, without costs of appeal to-either party, and motion denied, with ten dollars' costs.