People ex rel. Meiresonne v. Arnold, No. 75--301

Docket NºNo. 75--301
Citation37 Colo.App. 414, 553 P.2d 79
Case DateMarch 11, 1976
CourtCourt of Appeals of Colorado

Page 79

553 P.2d 79
37 Colo.App. 414
The PEOPLE of the State of Colorado ex rel. Joseph
MEIRESONNE, as a stockholder of the Consolidated
Mutual Water Company, a corporation, et
al., Plaintiffs-Appellants,
v.
Leslie B. ARNOLD, et al., Defendants-Appellees.
No. 75--301.
Colorado Court of Appeals, Div. II.
March 11, 1976.
Rehearing Denied March 25, 1976.

[37 Colo.App. 415]

Page 80

Elias J. Candell, Lakewood, for plaintiffs-appellants.

Henry, Cockrell, Quinn & Creighton, Richard C. Cockrell, Peter J. Wiebe, Jr., Edward J. Lemons, Denver, for defendants-appellees.

STERNBERG, Judge.

This is an action in the nature of quo warranto and mandamus pursuant to C.R.C.P. 106 in which plaintiffs, unsuccessful candidates for the board of directors of defendant corporation, sought to oust the individually named defendants as directors. Both parties moved for summary judgment, and the defendants' motion was granted. We affirm.

The essence of plaintiffs' claim is that a corporate bylaw authorizing directors' terms of six years is illegal. See § 7--5--102, C.R.S.1973. Both parties agree that the validity of this contention depends on whether the company is a nonprofit corporation or an ordinary business corporation. If it is the former, the six-year bylaw provision, under which defendants hold their offices, is valid because the Colorado Nonprofit Corporation Act, § 7--20--101 et seq., C.R.S.1973, does not contain a limitation on the duration of directors' terms of office.

Defendant corporation was organized in 1926 as a nonprofit corporation. In 1969 it filed its election to accept the provisions of the Colorado Nonprofit Corporation Act, and the Secretary of State recognized that election and issued a Certificate of Acceptance. Plaintiffs contend, however, that powers of a commercial or business nature contained in the articles of incorporation and certain corporate acts destroyed the nonprofit aspects of the corporation and thereby made it a corporation for profit. They also urge that a 'finding' in a prior action, that the corporation was organized under the general corporations statute, is 'res judicata' on the issue of the corporation being for profit. We find these contentions unpersuasive.

Page 81

I.

In urging the for-profit nature of the corporation, plaintiffs first point to the objects and purposes section of the defendant corporation's original articles of incorporation. This section empowers the corporation:

'(d) To erect Houses and buildings of any and every kind, and to maintain the...

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1 practice notes
  • Pig Pro Nonstock Co-op. v. Moore, No. S-95-1163
    • United States
    • Supreme Court of Nebraska
    • August 29, 1997
    ...it is organized and operated for the economic gain of its incorporators or members. People ex rel [253 Neb. 85] Meiresonne v. Arnold, 37 Colo.App. 414, 553 P.2d 79 (1976); State v. North Star Research & Develop. Inst., 294 Minn. 56, 200 N.W.2d 410 (1972). See, also, Bethphage Com. Servs......
1 cases
  • Pig Pro Nonstock Co-op. v. Moore, No. S-95-1163
    • United States
    • Supreme Court of Nebraska
    • August 29, 1997
    ...it is organized and operated for the economic gain of its incorporators or members. People ex rel [253 Neb. 85] Meiresonne v. Arnold, 37 Colo.App. 414, 553 P.2d 79 (1976); State v. North Star Research & Develop. Inst., 294 Minn. 56, 200 N.W.2d 410 (1972). See, also, Bethphage Com. Servs. v.......

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