Spurgeon v. Santa Ana Valley Irrigation Co.

TEMPLE, J., concurring.

I concur in the judgment, but I am not willing even by silence to seem to assent to the proposition, that the stock of a corporation can be made exempt from execution and practically un assessable by any possible by-laws. If the position of respondent be sustained, that has been accomplished. By this scheme the water is not made appurtenant to the several tracts of land, but the corporation stock, is thus converted into an appurtenance. Make one of the tracts a homestead, and the stock becomes at once exempt from execution, and the corporation can no longer collect assessments in the statutory mode. I do not dispute the proposition that one who purchases stock is bound by the articles and also by the by-laws, of the corporation, but in this state, where corporations are formed under general laws, such laws are themselves part and parcel of the charter of the corporation, and as such *78are beyond the control of the corporators. They can make no by-laws which conflict with or displace these. These laws expressly make stock subject to execution for the debts of the stockholder, and authorize the directors to levy assessments. The law also provides the mode in which the assessment may be enforced by sale and expressly declares the effect of the sale. Creditors of the corporation have an interest in this power, and may sometimes compel the corporation to exercise it. It cannot be waived or destroyed by anything in the by-laws or by any contract between the stockholders.

Corporations may be formed for any purpose for which- men may lawfully associate themselves, but men cannot, by any association or contract between themselves, make their property exempt from execution. If people will conduct their business by means of corporations they must hold their corporate property and conduct such business under the corporation laws of the state. In spite of all they can do, such laws will constitute their corporate charters.

It is not necessary to say what rights the purchaser will acquire under the sale, biff I think it plain that he cannot be held to be a stockholder and liable to assessment and still be deprived of all benefits of being a stockholder, nor can he be compelled to purchase any particular piece of land to get such benefit. Under the claim of respondent, if the former owner of the stock has put a homestead on his land the corporation could not sell the land to collect the assessment, and he need not concern himself as to the ownership of the stock if the right to the use of the water has become an appurtenance to the land. And if it has not become an appurtenance, and the result is simply that the water can be used nowhere else, he is not much worse off, for the stock is worthless to anyone else, and if not in law inalienable has become unsalable. Such a scheme, in my opinion, is against public policy as declared in the statutes concerning corporations.

Henshaw, J., concurred,