Lefurgey v. Prentice

This is an appeal from an order denying defendants ’ motion for a change in the place of trial from Tuolumne County to the city and county of San Francisco. It is not disputed that at the commencement of the action defendants Prentice and Duke had their residence in said city and county, where also was the principal place of business of the defendant corporation; the defendant Craig resided in Alameda County and the defendant Kinsey resided in San Mateo County, the two latter consenting that the cause might be transferred to the city and county of San Francisco. The question presented is whether the action was personal or local in its nature as involving real property. The complaint was filed in July, 1914; the motion to change the place of trial was denied on September 28, 1914, and the transcript on appeal was filed October 1, 1914. No briefs were filed in the case until after its transfer to this court in November, appel

The following facts alleged in the complaint will perhaps be sufficient to indicate the character of the action: The defendant corporation was, at the commencement of the action, the owner of certain mining property in Tuolumne County and plaintiff Lefurgey was then the owner of a large majority of its capital stock, and at the time of the execution of the agreement hereinafter referred to controlled its board of directors, and by virtue of such ownership and control had the management and control of the business and property of the corporation; on February 1, 1913, Lefurgey entered into an agreement with defendant Prentice by which the former agreed to sell to the latter two hundred and forty thousand shares of his stock, and to deliver possession of the mining properties of defendant company to defendant Prentice, and to cause four out of the five directors of the corporation controlled by Lefurgey to resign and to elect in their place four other directors to be nominated by Prentice, thereby Lefurgey surrendering control of the property to Prentice. It was also agreed that Prentice should have the right to work, operate, and develop the properties and to extract and remove the minerals therefrom, provided all work was done in a good and minerlike manner, and was to be done at Prentice’s sole cost and expense, and he also agreed to keep the premises and property free and clear of all liens and encumbrances. The agreement also fixed the purchase price to be paid by Prentice and the times and manner of payment, and that Prentice would arrange with other stockholders to pay them their proportion of minerals extracted from the mining property. The agreement also provided that on Prentice’s failure to pay the purchase price or any part thereof when it became due and payable and he should fail to keep or perform any of the conditions of the agreement, the agreement should thereupon terminate and end, and that Prentice should immediately deliver to Lefurgey the possession of the property which he obtained under said agreement from Lefurgey and also would procure the resignation of the directors nominated and controlled by Prentice, who had theretofore been elected in place of those controlled by Lefurgey. It was also alleged in the complaint that Lefurgey delivered possession of the property to Prentice and caused four direc

The complaint goes into great detail in setting forth the matters of which the foregoing is a brief epitome. It was stated in the complaint that Prentice defaulted in all the progressive payments which he was to make for the purchase of the said stock; that he had involved the corporation in a large indebtedness in the course of operating the mines and had caused a note and mortgage for twenty thousand dollars to be executed by the corporation to him as covering a part of the expenditures made by Prentice in operating the mine, and contrary to the express terms of the agreement, by which he was to operate the mine entirely at his own cost and expense and keep the mining property entirely free from all liens and encumbrances.

The prayer of the complaint is that the defendant, J.

Plaintiffs do not seek a money judgment against the defendants. The main objects of the action are, first, to compel Prentice to return the possession of the real property to Lefurgey, from whom he received the possession, and this in strict accordance with the agreement under which Prentice went into possession; second, to have the encumbrance on the real property removed which was placed on the property under Prentice’s direction, for his own.benefit and in violation of the agreement under which he had possession and control of the property of the corporation. It is true that the title to the property is in the corporation and that the business of the corporation is transacted through its directors. But it is alleged that Lefurgey, by reason of his owning a large majority of the shares of the corporation, did himself in fact control its acts; that in compliance with the agreement he caused his directors to resign and directors of Prentice’s selection to be substituted, thus for the time passing control over to Prentice, subject, however, to the agreement that should Prentice fail to keep its covenants on his part to be performed, he would cause his directors to resign and would surrender possession to Lefurgey. Having entered into possession under Lefurgey, Prentice is in no position to deny Lefurgey’s right to possession. (Garvey v. Lashells, 151 Cal. 526 , 532, [ 91 Pac. 498 ].) The nature of the action is to be determined by the averments of the complaint and the nature of the relief that can be granted in the action, and not by the

The order is affirmed.

Burnett, J., and Hart, J., concurred.

A petition to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on April 17, 1918.