Von Schmidt v. Huntington

• Decision Date: 01 March 1850
• Citation: 1 Cal. 55
• Court: California Supreme Court
• Parties: VON SCHMIDT, ET AL. v. HUNTINGTON, ET AL.

1 Cal. 55

VON SCHMIDT, ET AL. v. HUNTINGTON, ET AL.

Supreme Court of the State of California

March Term, 1850

March 1, 1850

THIS was an appeal from a decree of the Court of First Instance of the District of San Francisco. The facts of the case are sufficiently stated in the opinion of the Court. The cause was argued in this Court by

John W. Dwinelle, for Plaintiffs, and

Hall McAllister, for Defendants.

By the Court, BENNETT, J. The parties to this suit, plaintiffs and defendants, in conjunction with others, formed a company in the City of New York, in the early part of the year 1849, under the name of the New York Union Mining Company. Articles of association were adopted, which declare that the persons whose names are subscribed thereto, agree to associate themselves for the purpose of prosecuting the business of mining in California, from the first day of January, 1849, until the first day of October, 1853; and that the company shall consist of not less than twenty-nine operative or working shareholders, who are required to devote their entire time and energies to promote the common interest in such manner as the company shall direct. In addition to various other officers, there was a finance committee provided for, consisting of the treasurer and two other operative shareholders, whose duty it was to take charge of the fiscal affairs of the company. The defendants constituted this finance committee, and the complainants were operative shareholders.

The stock of the company consisted of 338 shares of $250 each, making an aggregate of $84,500. Each operative shareholder was entitled to eight shares, or $2000 of the stock, and was required, in addition thereto, to subscribe and pay for not less than two other shares. The residue of stock, being 48 shares, was taken in part by operative shareholders, and in part by persons not otherwise connected with the company. Thus, the whole stock of the company was divided into two distinct species—the one of 232 shares was denominated labor stock, and the other, of 106 shares, was denominated money stock. The articles further provided, that on the first day of October, in the year 1853, a meeting of the stockholders should be held in California, at which it Was to be determined by a vote of a majority whether the company should continue another year, and the terms upon which it should be continued. There was a number of other regulations, and Article 22 was in the following words: "Any operative shareholder, who shall absent himself during any portion of the time hereby limited, without leave, or providing a proper substitute, unless relieved by a vote of a majority of the operative shareholders for good cause as- signed, shall forfeit his interest in the labor stock of the company; and any operative shareholder who shall, within three months after the arrival of the company in California, desert the company without leave, shall, in addition to his labor stock, forfeit his two shares of money stock." Other articles, so far as they are of importance in this suit, will be noticed hereafter.

The company arrived in California about the first of September, 1849. Peter Von Schmidt, one of the plaintiffs, arrived ten days after, and the other plaintiffs about three months before that date. Previous to the arrival of Peter Von Schmidt, the company had held a meeting, and had expelled him and the other plaintiffs from the company, and declared both their labor and money stock forfeited. On the twenty-sixth day of November last, the plaintiffs filed this bill to compel the company to reinstate them, alleging that it was found impracticable to keep the company together, that their labors as a company could have no profitable results, that a dissolution had been resolved upon and declared, that a part of the property had been sold, and that all the residue had been advertised for sale at auction. The bill also alleged that the defendants had been directed by the company to make a dividend of the proceeds of the sales upon the 232 shares of labor stock, equally with the 106 shares of money stock. The bill prays, in substance, for a decree that the proceeds arising upon the sale of the company's property be distributed amongst the money shares alone, and that the plaintiffs be relieved from the forfeiture of the stock incurred or pretended to have been incurred by them, so that they may receive their dividends, together with the other members, upon all the money shares which they had bought. The bill also prays for an injunction and the appointment of a receiver, but contains no express prayer for a dissolution of the company.

The defendants put in a plea in which it is alleged that the plaintiffs had not brought into Court any certificate of failure of conciliacion between the parties. The plea was overruled by the Court below, whereupon the defendants put in their answer, the material portions of which will be hereafter noticed.

The cause was heard on bill and answer, and a decree was made in the Court below, restoring the plaintiffs to their forfeited rights, appointing a receiver, and directing a distribution of the effects of the company equally upon the labor and the money shares. From this decree the appeal is taken by the defendants.

The first point which we propose to examine in reviewing the positions of counsel, is that relating to conciliacion. Although this point has been frequently made heretofore, it has not been found necessary in the disposition of any case for the Court to express its views upon the subject; but it is now presented in the formal shape of a dilatory exception, put in at the very outset of the proceedings, which we apprehend to be the proper, if not the only method of bringing the question regularly before the Court. (1 White's Recopilacion, 259, 260, and 383; Escriche Dic. Title, "Excepcion.") Being thus an objection in limine, taken in due time and in the appropriate form, it must, if valid, put an end to the whole case; if not valid, it must, nevertheless, be disposed of before the other points of the case can be reached.

The proposition naturally resolves itself into two subdivisions. First, that conciliacion is required in this case by the Mexican law; and secondly, that being essential by the Mexican law, it has not been legally dispensed with since the American administration of justice in this country commenced.

First, then, is conciliacion required in such a case as the present by the Mexican law? It is provided by article forty of the fifth Title (ley) of the Mexican Constitutional Law, that in order to the due institution of any suit whatsoever, either civil or criminal, for wrongs purely personal, the means of conciliacion must be first tried; and that the law will regulate the form of proceeding in such matters, the cases in which conciliacion need not take place, and everything else relating to the subject; and by article twenty-ninth of the sixth title it is declared, that it will be the province of alcaldes to exercise within their pueblos the functions of conciliators.

The Mexican decree of May 23d, 1837, which was made in pursuance of the above requirements of the Constitution, and which is generally supposed to have been in force in California at the time of the acquisition thereof by the American Government, says, that it belongs exclusively to the alcaldes of the Ayuntamientos, and to the justices of the peace in places whose population consists of one thousand persons or more, to exercise within their territory, in respect to all classes of persons, without any exception, the functions of conciliators, according to the above provisions of the Constitution. (Arrillaga's Colleccion de Decretos of 1837, p. 422; Escriche Dic. Appendix, p. 703, Ed. 1842.) It is there provided, that in order that the proceeding of conciliacion may take place, whosoever may have to institute any civil suit, the value of which exceeds one hundred dollars, or any criminal suit for severe injuries purely personal, shall make his complaint before the competent alcalde or justice of the peace, demanding, verbally, that the person who is to be made defendant be summoned, in order to proceed in the trial of conciliacion. (See authorities last above cited.) Article ten ordains that no complaint, either civil or criminal, concerning injuries purely personal, can be admitted, without proving by a competent certificate that the means of conciliacion have been attempted. (Arrillaga's Colleccion, 1837, p. 419, and Escriche, as above cited.) After excepting from the operation of article ten various cases relating to benefices and other ecclesiastical matters, causes which concern the public revenue, the municipal funds of towns, public institutions, and other matters not affecting the case at bar, article eleven proceeds as follows: "Neither is it (conciliacion) necessary in order to commence the summary and very summary possessory actions, that of the prohibition of a new work, or that of retraction; nor in order to expedite the making of inventories and the division of inheritances, nor in other urgent cases of like nature; but if a formal petition should afterwards have to be put in, which may give rise to a litigated suit, then conciliacion ought to precede it." The same article, after again excepting certain cases of bankruptcy, closes with a general clause requiring conciliacion, "whenever any citizen may have to de- mand, by due course of law, the payment of a debt, even though it accrue upon a contract of record." (Arrillaga and Escriche, as above cited.) This statute appears to have been only a revision of previous statutes, and but declaratory of a long established law, for we find the same doctrine laid down by Febrero (4 Feb. Mej. 420, et seq. Ed. 1834), and by Peña y Peña. (1 Prac. For. Mej. 70, Ed. 1835.) Indeed, its origin is to be traced far back, even to the period of the Nueva Recopilacion, in which it is declared, in speaking of the duties of...