section 11, provides that "the stock of corporations shall not be increased except in pursuance of general law, nor without the consent of the persons holding the larger amount in value of the stock, at a meeting called for that purpose, giving sixty days' public notice, as may be provided by law." This provision is not self-executing [Ewing v. Oroville Mg. Co., 56 Cal. 649], but pursuant to it the legislature has enacted a general law under which capital stock may be increased or decreased [C. C.359], which law contains the following language: "Every corporation may increase or diminish its capital stock, subject to the following provisions. "First: The capital stock of a corporation may be increased or diminished at a meeting of the stockholders by a vote representing at least two-thirds of the subscribed capital stock; such meeting must be called by the board of directors, and notice must be given by publication in a newspaper published in the county where the principal place of business of such corporation is located, or if there be none published in said county, then in a newspaper to be designated by the board of directors in the order calling the meeting, "Second: The notice must specify the object of the meeting and the amount to which it is proposed to increase or diminish the capital stock; the time and place of holding the meeting, which latter must be at the principal place of business of the corporation, and at the building where the board of directors usually meet. The notice herein provided must be published at least once a week for at least sixty days. The capital stock cannot be diminished to an amount less than the indebtedness of the corporation. "Fourth: In addition to the notice by publication, the secretary of the corporation shall also address a notice to each of the stockhold ers whose names appear upon the company's books as sufficiently addressed, at his place of residence if known, and if not known, then at the principal place of business of the corporation, which notice shall be mailed to such stockholders at least thirty days before the day appointed for such meeting. "And upon such increase or diminution of the capital stock being made as herein provided, a certificate must be signed by the president and secretary of the meeting, and a majority of the directors, showing a compliance with the requirements of this section, the amount to which the capital stock has been increased or diminished, and the amount of the stock represented at the meeting, and the whole vote by which the object was accomplished. The certificate must be filed in the office of the clerk of the county where the original articles of incorporation are filed, and a certified copy thereof in the office of the secretary of state; and thereupon the capital stock shall be so increased or diminished. "When the by-laws of the corporation prescribe the paper in which notices of meetings are to be published, notices herein provided for shall be published in such paper, unless publication thereof shall have ceased." SECTION 89-DECREASING WITHOUT PREVIOUS PUBLIC NOTICE. This section of the code [C. C. 359] contains all the law of the state applicable to the increase or decrease of capital stock. It is expressly provided in the section allowing corporations to amend their articles of incorporation that nothing contained in that section must be construed to authorize any corporation to diminish its capital stock. [C. C. 362.] It is not perfectly clear why this latter section speaks only of "diminishing" and not of "increasing" as well, but the apparent reason is this: The constitutional provision, article XII, section 11, requiring sixty days' public notice, relates only to increasing, and not to decreasing the capital stock; and as the legislature has provided a general law [C. C. 359] carrying out the constitutional provision, any law that provided for increasing the capital stock without such notice would be unconstitutional and void. [Ewing v. Oroville Mg. Co., 56 Cal. 649.] But the constitution does not prohibit decreasing the capital stock without sixty days' public notice, and therefore a law authorizing a decrease without such notice would be constitutional and valid; and as the section under discussion [C. C. 362] allows of the amending of the articles of incorporation on written consent of the stockholders representing twothirds of the subscribed capital stock, and as decreasing the amount of the capital stock is an amendment of the articles, the section would have allowed, had the qualification not been inserted, the capital stock to be diminished by written consent of those holding two-thirds of the stock. Inserting this qualification is therefore an assertion on the part of the legislature that it was not intended to allow the stock to be diminished by the written consent of the holders of two-thirds of the stock. In section 317, Civil Code, however, it is provided that when all the stockholders or members of a corporation are present at any meeting, however called or notified, and sign a written consent thereto on the records of such meeting, the doings of such meeting are as valid as if had at a meeting legally called and noticed. All the stockholders, therefore, by attending a meeting and signing the written consent, can diminish the capital stock, without the sixty days' public notice provided for in the general law. [C. C. 359.] [For a general discussion of the effect of section 317 Civil Code, see Chap. XIV, post.] CHAPTER XI. SHARES HOW ISSUED AND ACQUIRED. SEC. 90. SUBSCRIPTION TO FORMATIVE STOCK. SEC. 91.-SAME-ENFORCIBLE BY CORPORATION. SEC. 92.-SAME. SEC. 93.-DECEIT IN SUBSCRIPTION-CONTRACT A CRIME. SEC. 94. LIABILITY FOR CALLS. SEC. 95.-COLLATERAL AGREEMENTS. SEC. 96,-PURCHASE OF STOCK. SEC. 97.-ISSUE AT MARKET VALUE. SEC. 100.-CERTIFICATES OF STOCK. SEC. 101.-RIGHT TO DEMAND CERTIFICATES. SECTION 90-SUBSCRIPTION ΤΟ FORMATIVE Subscription to stock in a corporation about to be formed is defined in Marysville Co. v. Johnson, 93 Cal. 538, 29 Pac. 126, which case declares that such a "subscription creates a contract between the incorporators for the benefit of the proposed corporation, and on which it may sue.' Placing one's name on a subscription list is therefore the acceptance of an offer, and creates a contract between all the subscribers. But the corporation is not a party to the contract, for it is not in existence when the contract is made. [Hawkins v. Mansfield etc., Co., 52 Cal. 513; Mt. etc., Co., 52 Cal. 306.] thereon, and therefore is not Morrison v. Gold It cannot be sued bound to fulfill |