Humphry v. Buena Vista Water Co. , 2 Cal. App. 540 ( 1905 )

Appeal from an order dissolving a temporary injunction. The temporary injunction, restraining the sale of certain corporate stock delinquent on account of nonpayment of an assessment, granted "until the further order of the court," was so granted upon notice, and upon the hearing of which affidavits of defendants and a certain certificate in relation to the diminution of the number of directors, together with the complaint, were considered by the court. Thereafter, a general demurrer was sustained to the complaint and leave given plaintiff to amend. Thereafter a stipulation was entered into that, without the formality of notice, a motion should be made to dissolve the injunction, "upon the ground that the defendants' demurrer to the complaint on the ground that said complaint does not state facts sufficient to constitute a cause of action, has been sustained. Said motion will be made upon the pleadings and papers on file herein and on said order, subject to plaintiff's objection that a motion to dissolve cannot now be made." At the time agreed upon for the hearing of the motion, and within the time given plaintiff to amend her complaint, she presented and filed an amendment thereto, which cured the defects of the original complaint. The court, however, upon hearing the motion to dissolve, refused to consider such amendment, but heard the matter on the papers filed and used in said action, and thereupon made its order dissolving the injunction. The right of the court to make such order, pending the hearing of the cause on its merits, is challenged on this appeal.

The original complaint, through its omission to aver that the defendant corporation was one organized for profit and thereby restricted by subdivision 5, section 290, of the Civil Code, in the manner of diminishing the number of its board of directors, otherwise than through an amendment of its articles of incorporation, was clearly defective; it not appearing therein what number of directors had been provided in its original articles, or that three thereof, who undertook to levy an assessment on August 13, 1904, did not constitute a quorum of such board. The amendment to the complaint supplied this defect, and by it the complaint, as amended, averred facts from which it appears that less than a quorum undertook to levy an assessment. This being true, the attempted levy of an assessment was void and of no effect. The amendment to the complaint was based upon the same cause of action. It related back to the date upon which the original complaint was filed. (White v. Soto, 82 Cal. 658, [23 P. 210].) The trial court had then before it on the motion to dissolve a sufficient complaint, and by relation of the amendment sufficient at the date of the issuance of the preliminary injunction. "We think that the whole theory of a preliminary injunction is that it is to preserve the rights of the party until the truth of the charges can be regularly investigated." (Lambert v. Haskell,80 Cal. 621, [22 P. 327].) That it cannot be dissolved until after the trial of the cause upon its merits is determined inNatoma Co. v. Clarkin, 14 Cal. 544, cited in Curtiss v.Bachman, 110 Cal. 439, [52 Am. St. Rep. 111, 42 P. 910]. The court, by the stipulation, was restricted upon the hearing of the motion to the one ground, namely, the effect of the order sustaining the demurrer to the original complaint. That order had lost all of its significance when by leave of court the complaint was amended, and afforded by itself no ground upon which the court could make an order dissolving the injunction. That the court considered no other ground is made to appear affirmatively in the record, wherein it says that only those papers on file were considered, not including the amendment to the complaint. Neither the certificate heretofore mentioned, nor the affidavit of defendants were on file, as appears from the record. In other words, the court, without reference to the sufficiency of the complaint, as amended, made its order solely on the ground that the original complaint before amendment was defective. This, we think, was error. Whatever effect may be given to the words, "until the further order of the court," they at least import an order that until such time, for good cause appearing, the same should be modified or dissolved, not an arbitrary right of dissolution at the court's discretion. The broadest powers given to courts in the control of their records and judgments do not comprehend arbitrary power of rescinding orders once entered, but do comprehend that such orders of modification or rescission should be based upon good reasons presented to the court. It is unnecessary here to determine the effect which should be given to the certificate when once considered by the court. This certificate was neither filed nor considered upon the motion to dissolve.

The order appealed from is reversed, and the cause remanded for further proceedings.