Escondido Mutual Water Co. v. George A. Hillebrecht, Inc.

STONE, J.*

Respondent, Escondido Mutual Water Company, brought this action for declaratory relief, seeking court approval of a proposed contract for the sale of its water rights and water distribution facilities to the City of Escondido. The contract, although apparently approved by the directors of Mutual and by the city council, has never been executed. Nor has the contract been approved by the shareholders of Mutual, as required by Corporations Code section 3901, governing a sale of all or substantially all of a corporation’s assets.

The articles of incorporation of Mutual provide that upon…