JOSEPH L. BICKSTON, Plaintiff and Appellant, v. FEDERAL FIREARMS CORPORATION OF CALIFORNIA et al., Defendants and Respondents, 227 Cal. App. 2d 574

Summary

The lender, the corporation, and the individuals gave the stockholder money to invest in an enterprise and in exchange they received stock in the enterprise. The lender and the stockholder entered into a collateral agreement with the individuals to purchase their stock then the lender left the state as a fugitive and the stockholder, as president of the corporation, called a board of directors meeting and had the lender removed as an officer and director of the corporation. The stockholder converted all of the company's assets to cash and through a collateral agreement paid cash to the individuals, without notice to the lender and without authority of the board. The lender filed his action to recover the money he lent the stockholder. The court held that while a corporation may dispose of all of its assets and wind up its business when authorized by its directors and approved by a majority of the voting power of its stockholders, the officers or directors had no power to dispose of all...