Sam Wahyou, and v. Central Valley National Bank, a National Banking Corporation, W. A. Huggins and G. J. Ghiselli, And

This is an appeal from an interlocutory order of the district court granting the plaintiffs a temporary injunction. The facts may be simply stated. The directors of the Central Valley National Bank, a national banking association, were duly elected at its annual meeting of shareholders held in January, 1965. Thereafter, a dispute arose between the directors and persons claiming to represent 90 per cent of the voting shares. A special shareholders’ meeting called at the instance of such persons was held on June 30, 1965 and ten directors were elected to replace the incumbents.

The bank and two of the incumbent directors thereupon commenced this suit in district court to enjoin the “new” directors from taking office. Two grounds for relief were urged — (1) that properly construed, 12 U.S.C. Section 71 fixes one year as the term of office for a director and he may not be replaced prior to- the expiration of that term, and (2) that the “new” directors were not validly elected because (a) the meeting was improperly called; (b) notice of the meeting was not given to all shareholders entitled to vote as required by the by-laws of the bank and (c) those who cast ballots for the “new”…