Beautiful certificate from the Potomac Oil Company
issued in 1902. This historic document was printed by Los Angelos Litho Company and has an
ornate border around it with a vignette of the company's name and gilded overprint. This item has the signatures of the Company's V. President and Secretary, J. M. Dye and is over 105 years old.
The following is from the California State Court of Appeal in 1911:
J. R. Wilder, and Hunsaker & Britt, for Petitioners. C. E.
Arnold, and J. W. P. Laird, for Respondents.
ALLEN, P. J.—The material matters set forth in the petitioners'
application for this writ are fully stated in Potomac
Oil Co. v. Dye, 10 Cal. App. 534, [102 Pac. 677]. Upon that
hearing there was involved the sufficiency of the petition, the
jurisdiction of this court to grant relief by mandate, and its
appropriate character to compel a person claiming to act as
secretary of the corporation to deliver up to the corporation
its seal, books, papers, records, etc., all of which matters were
determined in favor of petitioner, and require no further consideration
or discussion upon this hearing.
In the single issue presented by the amended answer as to
the official character of petitioner is involved practically all
of the questions presented for determination upon this hearing.
The burden is cast upon petitioner to show that he is the
legally appointed secretary of the corporation and entitled to
the books, papers and seal of such corporation. The facts connected
with the establishment of such official relation of petitioner
are before the court in the report of a referee heretofore
appointed to take testimony, and in certain depositions and
exhibits on file. From all of these it is made to appear that
the Potomac Oil Company was organized in 1901 under the
laws of the territory of Arizona, having a capital stock of
$2,850,000, divided into 2.850,000 shares of the par value of
one dollar each; that by the articles and by-laws the affairs «
i the corporation were to be conducted by a board of five
directors, the first thereof to be elected upon the first Monday
in August, 1902, and annual elections to be thereafter held
upon the corresponding date of each succeeding year; that in
1904 a stockholders' meeting was held, at which five persons
were elected directors, and that no election has been held between
that date and the 29th of December, 1908, when a new
board was sought to be elected under proceedings hereinafter
to be noticed. The directors elected in 1904, or their successors
appointed by the board to fill vacancies, elected respondent
Dye secretary, and as such secretary he took charge
of and has had in his custody all of the books, papers and
seal of the corporation, which he removed to and has ever since
kept within the state of California, and within this district.
The corporation, while organized in the territory of Arizona,
had no place of business in that territory, maintained no office,
owned no property, and conducted no business in said territory,
all of its property and business being within the stnte
of California and within which state all of its directors, including
the secretary, were residents. Stockholders whose
holdings aggregated about one million shares of the stock,
becoming dissatisfied with the management of the corporation,
demanded of the officers of the corporation, in September,
1908, that they call a meeting of the stockholders for the purpose
of electing a board of directors. This the officers of the
corporation refused to do, and have endeavored through such
refusal to permanently keep and maintain the control of the
corporation and its property.
Basing their action upon such
refusal, shareholders in their own behalf and in behalf of
other dissatisfied stockholders, commenced proceedings in
mandamus in the district court for the third judicial district
of Arizona, praying that the court command and direct the
defendant corporation and its officers to call a meeting of the
stockholders, as by the articles of association and by-laws required,
for the election of a board of directors. An alternative
writ was issued directing said corporation and its officers
so to proceeed, or show cause, which writ was served upon
the corporation through a service upon a resident agent of
said corporation within the county and territory where the
proceedings were commenced, and service upon the individual
members of the board by mailing copies of the alternative writ
to their postoffice address and place of residence in California.
The corporation duly acknowledged in writing the receipt of
the writ, and all parties having made default at the time and
place to show cause designated in the alternative writ, a
peremptory writ was issued by the court, by which writ they
were commanded, on or before the twenty-first day of November,
1908, to call a meeting of the stockholders and to give the
notice required by the by-laws for the election of a board of
directors, which said peremptory writ was served in the same
manner as was the alternative writ. The Potomac Oil Company
and its officers, having failed and refused to observe the
mandate of the court, upon petition and affidavit showing such
facts to the court granting the peremptory writ, an order was made on November 21, 1908, appointing a special officer and
commissioner to do and perform the acts and things which
the said respondents were by said writ directed and commanded
to do and perform. On the 28th of December, 1908,
a petition in error to the supreme court of the territory of
Arizona was filed by the respondents in the mandamus proceedings,
and on the same day a bond, with the sureties approved
by a judge of the district court of Arizona, was filed
with the clerk of the district court for the third judicial district ;
and on the twenty-ninth day of December, 1908, a summons
in error was served upon petitioner.
No order staying
proceedings, however, appears to have been made by the lower
court. On the 28th of December, that being the day fixed
in the call for a meeting of the stockholders by the special "
fficer and commissioner theretofore appointed, stockholders
owning or representing 1,878,132 shares of the capital stock of
the corporation met at the time and place by the commissioner
designated, and, after electing one of their number chairman
and another secretary, proceeded to the election of a board of
five directors for the corporation. These directors thereafter
met and appointed petitioner herein as secretary of the corporation.
Thereafter, the proceedings in error in the supreme
court of the territory of Arizona were dismissed.
Due demand was made by petitioner upon respondent Dye
for the books, papers and seal of the corporation, delivery of
which was refused. After the commencement of these proceedings,
and when the referee appointed by this court was
taking testimony pursuant to order of the court, a subpoena
duces tecum was issued and served upon respondent Dye, requiring
his appearance before the referee, and to bring with
him the books and papers of the corporation. Tender was
made of the fee provided by law, which respondent refused
to accept and failed to observe the subpoena. Thereafter, on
June 7, 1910, respondent Dye presented a resignation to the
individuals composing the board which originally appointed
him, and such persons, assuming to be directors of the corporation,
made an order appointing one Scott secretary, and
thereupon Dye turned the books, papers and seal here in controversy
over to Scott, who is now in possession thereof.
These facts coming to the attention of petitioner, a supplemental
petition was filed setting forth those facts and asking board to control the business affairs of the corporation
under the statute.
The corporation thus designating them
as the governing board in the first instance vacated such appointment
and selection and substituted a new board. The
authority of the old board then ceased as between the individuals
constituting such old board and the corporation.
Such individuals thereafter possessed no rights in the management
and control of the corporate affairs as against the
corporation. Their attempt to elect a secretary after they had
ceased to be a board of directors was futile, and Scott did not
acquire even a color of right to the office, or an appearance
of right to retain the books or papers of the corporation.
When this court issued its alternative writ and caused the
same to be served upon Dye, who was then the custodian of
the books and papers, and directed him to turn the same over
to petitioner, or show cause, it thereby acquired jurisdiction,
not only over the person of Dye, but over the books and papers
in his possession, the subject of controversy; and Dye could
not by thereafter dispossessing himself of the property deprive
this court of its control over such property, or over
himself as the respondent. Scott, with full knowledge of the
circumstances, taking possession of the property acquired no
right thereto; did not and does not hold the same as secretary,
or in any other official capacity, but holds the same for Dye,
whose duty it was to retain the possession until the final disposition
of this case.
We are of opinion that satisfactory evidence is presented
establishing all of the material allegations of the original
petition and the supplemental petition.
It is ordered that a peremptory writ issue, and judgment
is awarded against respondent Dye for costs, and also against
respondent Scott for costs accruing since June 7, 1910.
Shaw, J., and James, 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 January 25, 1911.
Beatty, C. J., dissented from the order denying a rehearing
by the supreme court and filed the following opinion on January