Kohl

In 1882 two mining corporations—the Head Center Consolidated Mining Company, organized under the laws of California, and the Tranquility Mining Company, organized under the laws of New Jersey, were in possession of adjoining mining claims in the Tombstone mining district in the territory of Arizona. Litigation'of a vexatious character had arisen between them, and for the purpose of discontinuing the strife and of promoting the mutual interests of both companies, negotiations were entered into with a view to effecting a consolidation of the interests and properties of the two. Being organized under the laws of different states, they were advised that this could not be done by a consolidation of companies, as provided by the laws of California. After considerable negotiation on the subject, it was decided to organize a third company, to be knowm as the Head Center and Tranquility Mining Company, with a nominal capital stock, consisting of two hundred thousand shares, and to which each of the old companies should transfer its mining ground, each in consideration of five dollars and of one hundred thousand shares of the stock of the new company.

This new company was incorporated on…

I dissent. The simple project of the two corporations, having adjoining mining claims, consolidating by each conveying to a new corporation created for that express purpose, and the persons who held the stock of the two old ones taking their proportionate shares of stock in the new one, there being no creditors, does not seem to me to be at all within the provisions of section 309 of the Civil Code, against directors making dividends or paying capital stock to stockholders. I cannot conceive how, in the case at bar, the new corporation is to do any business or maintain its existence; for, according to the theory of the appellent, the new corporation has only two and can only have two stockholders, each of which is itself a corporation. It would be better to have the whole attempt at consolidation void for impossibility.

I dissent. I am of opinion that there was evidence sufficient to sustain the finding *391 of the court that it was agreed among the stockholders that one hundred thousand shares of stock in the new corporation should be divided among the stockholders in the Head Center Consolidated Mining Company as they held shares in the Head Center Company.

I adopt the opinion of the commissioners formerly rendered in this case as a correct exposition of the law applicable to it.

The following is the opinion of Department Two, rendered on the 18th of February, 1889, referred to and adopted by Mr. Justice Thornton in his preceding dissenting opinion: —

The plaintiffs claim to be the owners and holders of 63,138 shares of the stock of the Head Center Consolidated Mining corporation, and bring this action to compel the defendants to transfer, deliver, and issue to them 39,115 shares of stock of the Head Center and Tranquility Mining Company, and to restrain the defendants from representing, voting, or dealing in any way with these latter shares of stock, of which plaintiffs claim to be the owners.

The plaintiffs claim to derive their title to the last mentioned by reason of their ownership of…