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Annotation.

Transactions at Stockholders' Meetings.-A resolution purporting to authorize a fraudulent transaction, passed at a stockholders' meeting, controlled by the parties to the fraud, is of no consequence. (Woodroof v. Howes, 88 Cal. 184, 26 Pac. 111.)

A corporation is not bound by the acts or admissions of its stockholders, otherwise than in stockholders' meetings, unless they act by its express authority. (Shay v. Water Co., 6 Cal. 73.)

MEETINGS, WHERE HELD.

Sec. 319, C. C. The meetings of the stockholders and board of directors of a corporation must be held at its office or principal place of business. En. March 21, 1872.

Changing place of business: See sec. 321a, C. C.

SPECIAL MEETINGS, HOW CALLED.

Sec. 320, C. C. When no provision is made in the by-laws for regular meetings of the directors and the mode of calling special meetings, all meetings must be called by special notice in writing, to be given to each director by the secretary, on the order of the president, or if there be none, on the order of two directors. En. March 21, 1872.

Section Cited.

Granger v. Original Empire M. & M. Co., 59 Cal. 681, 682; Thompson v. Williams, 76 Cal. 154, 9 Am. St. Rep. 187, 18 Pac. 153; Smith v. Dorn, 96 Cal. 79, 82, 30 Pac. 1024; Stockton C. H. & A. Works v. Houser, 109 Cal. 9, 10, 41 Pac. 809; Curtin v. Salmon River etc. Co., 130 Cal. 347, 80 Am. St. Rep. 132, 62 Pac. 552; Relley v. Campbell, 134 Cal. 177, 66 Pac. 220.

Annotation.

Notice. In the absence of a provision in the by-laws, section 320, Civil Code, designates the secretary as the person who shall give notice of special meetings of the directors, and the acts of a special meeting without such notice, and the minutes of which were never subsequently ratified as required by the by-laws, are not valid acts of the corporation. (Curtin v. Salmon River etc. Ditch Co., 130 Cal. 345, 80 Am. St. Rep. 132, 62 Pac. 552.)

So, also, in the absence of a different provision in the charter or by-laws of a corporation, formed under the general laws of this state, a special meeting of the trustees must be called by giving personal notice to each member of the board. (Harding v. Vandewater, 40 Cal. 77. Distinguished: Granger v. O. E. M. & M. Co., 59 Cal. 682; Stockton etc. Works v. Houser, 109 Cal. 11, 41 Pac. 809.)

But notice of meeting is sufficiently proved by evidence that sec retary sent written notices of all meetings. (Younglove v. Steinman, 80 Cal. 375, 22 Pac. 189. To same effect: Stockton etc. Works v. Houser, 109 Cal. 10, 41 Pac. 809.)

And notice of such meetings is presumed to have been received if sent. (Stockton etc. Works v. Houser, 109 Cal. 1, 41 Pac. 809. To same effect: Barrell v. Land Co., 122 Cal. 132, 54 Pac. 594.)

And the fact that the secretary had given notice of a special meeting to each of the directors by sending to them, by messenger, a written notice, at least twenty-four hours prior to the meeting, is sufficient notice of a special meeting of board of directors. (Balfour Investment Co. v. Woodworth, 124 Cal. 169, 56 Pac. 891.)

Where the by-laws do not designate the person by whom notice of a special meeting is to be given, such notice must be given by the secretary; and the acts of a mere majority of directors present at a special meeting, of which no such notice was given the absentees, are not valid. (Curtin v. Salmon River etc. Co., 130 Cal. 345, 80 Am. St. Rep. 132, 62 Pac. 552.)

A notice that specifies in substance that the purpose of the meeting was to consider and act upon a proposition to create a bonded indebtedness of a certain amount, a portion thereof to be used in retiring an existing bonded indebtedness and to increase the bondel indebtedness to a certain amount and to mortgage the property, and a resolution to the same effect, are sufficient, and are not indefinite and uncertain. (Market St. Ry. Co. v. Hellman, 109 Cal. 571, 42 Pac. 225.)

Under this section it is not necessary that the notice of a special meeting should specify the purpose of the meeting. A notice that the meeting will be held, the place where, and the time when, it will be held, will be sufficient. (Granger v. Oriental etc. Co., 59 Cal. 678.) A regular meeting adjourned to some future day, the hour of which is not fixed, becomes a special meeting, of which notice is required to be given to the absentees at the regular meeting. (Thompson v. Williams, 76 Cal. 153, 9 Am. St. Rep. 187, 18 Pac. 153.)

Where by-laws provide that special meetings shall be called by special notice, and that such notice shall be given upon the order of the president, or if there be none, on the order of two directors,'' a meeting called by two directors, while there is a president competent to act, is illegal. (Smith v. Dorn, 96 Cal. 74, 30 Pac. 1024.)

The execution of a mortgage in the name of a corporation, upon property belonging thereto, cannot be authorized at a special meet

ing of the directors, at which all of them were not present and of which no notice was given. (Relley v. Campbell, 134 Cal. 175, 66 Pac. 220.)

Neither can a ratification be had at a special meeting of directors, of which all the directors were not notified, as it is not a meeting duly assembled, and a ratification so attempted will not bind the corporation. (Pauly v. Pauly, 107 Cal. 8, 48 Am. St. Rep. 98, 40 Pac. 29.)

If it is not shown whether the meeting of directors at which the note in suit was authorized was a regular or special meeting, there is no presumption that it was a special meeting; and it is incumbent on the corporation defendant, if so claiming, to show that it was a special meeting, and that all of the directors were not notified thereof. (Barrell v. Land Co., 122 Cal. 129, 54 Pac. 594.)

Presumption of Notice.-Where a resolution was spread at length upon the records of a corporation, and it was authenticated by one purporting to be its secretary, the fact that it was passed at a special meeting, at which all the directors were not present, and that it did not appear that notice of the meeting had been given to all of the directors, does not vitiate the resolution. In the absence of evidence to the contrary, it will be presumed that proper notice was given. (Balfour Investment Co. v. Woodworth, 124 Cal. 169, 56 Pac. 891.)

In the absence of proof to the contrary notice to the directors of a meeting will be presumed, though not recited in the record of the meeting. (Granger v. Oriental etc. Co., 59 Cal. 678. To same effect: Stockton etc. Works v. Houser, 109 Cal. 9, 41 Pac. 809; Younglove v. Steinman, 80 Cal. 375, 22 Pac. 189.)

CERTAIN BOOKS TO BE OPEN FOR INSPECTION.

Sec. 321, C. C. Every corporation doing a banking business in this state must keep in its office, in a place accessible to the stockholders, depositors, and creditors thereof, and for their use, a book, containing a list of all stockholders in such corporation, and the number of shares of stock held by each, and every such corporation must keep posted in its office, in a conspicuous place, accessible to the public generally, a notice, signed by the president or secretary, showing: First, the names of the directors of such corporation. Second, the number and value of shares of stock held by each director.

The entries on such book, and such notice, shall be made and posted within twenty-four hours after any transfer of stock.

and shall be conclusive evidence against each director and stockholder of the number of shares of stock held by each. The provisions of this section shall apply to all banking corporations, formed or existing before twelve o'clock, noon, of the day on which this code took effect, as well as to those formed after such time. En. Stats. 1875-76, 72.

For records of corporations generally, see secs. 377, 378, C. C., post. See, also, similar provision in the act of April 23, 1880 (Stats. 1880, p. 134), relating to mining corporations.

Section Cited.

Chapman v. Doray, 89 Cal. 54, 26 Pac. 605.

Annotation.

Principal Place of Business.-The duties imposed by this section cannot be evaded by the failure to have an office or a principal place of business. It is the duty of every corporation to have an office and a principal place of business. (Chapman v. Doray, 89 Cal. 52, 26 Pac. 605.)

CORPORATION MAY CHANGE ITS PRINCIPAL PLACE OF BUSINESS.

Sec. 321a, C. C. Every corporation that has been or may be created under the general laws of this state may change its principal place of business from one place to another in the same county, or from one city or county to another city or county within the state. Before such change is made, the congent in writing, of the holders of two-thirds of the capital stock of the corporation must be obtained and filed in its office. When such consent is obtained and filed, notice of the intended removal or change must be published, at least once a week, for three successive weeks, in some newspaper published in the county, wherein said principal place of business is situated, if there is one published therein; if not, in a newspaper of an adjoining county, giving the name of the county or city where it is situated and that to which it is intended to remove it. Whenever any such change is made, a copy of the resolution or action of the board of directors authorizing the same together with a copy of an affidavit of the publication above required, all duly certified by the president and secretary of the corporation with the corporate seal affixed shall be filed in each office

where the original articles of incorporation are, or any copy thereof is required to be filed. This section shall not be construed to require such consent, notice or publication in the case of any such removal from one location to another in the same city, town or village. En. Stats. 1875-76, 73. Amd. 1903, 254.

Legislative History.

The last two sentences were added to the original section by the amendment of 1903.

Annotation.

Principal Place of Business.-It is the duty of every corporation to have an office and a principal place of business. (Chapman v. Doray, 89 Cal. 52, 26 Pac. 605.)

CHAPTER II.

CORPORATE STOCK.

Article 1. Stock and Stockholders, §§ 322-327.
II. Assessment of Stock, §§ 331-349.

ARTICLE I.

STOCK AND STOCKHOLDERS.

§ 322. Liabilities of stockholders.

323. Certificates, how and when issued.

§ 324. Shares personal property-Transfer of stock-Irrigation stock.

§ 325. Transfer of shares held by married women, etc.- Dividends payable to married women.

§ 326. Affidavit or bond may be required before transfer.

$327. Contract to relieve directors void.

LIABILITIES OF STOCKHOLDERS.

Sec. 322, C. C. Each stockholder of a corporation is individually and personally liable for such proportion of its debts and liabilities as the amount of stock or shares owned by him bears to the whole of the subscribed capital stock or shares of the corporation, and for a like proportion only of each debt or claim against the corporation. Any creditor of the corporation may institute joint or several actions against any of its

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