Sec. 4. When the certificate shall have been filed, the persons who shall have signed and acknowledged the same, and their successors, shall be a body politic and corporate, in fact and in name, by the name stated in the certificate, and by their corporate name have succession for the period limited, and power:

First. To sue and be sued in any court.

Second. To make and use a common seal, and alter the same at pleasure.

Third. To purchase, hold, sell, and convey such real and personal estate as the purposes of the corporation shall require.

Fourth. To appoint such officers, agents, and servants, as the business of the corporation shall require, to define their powers, prescribe their duties, and fix their compensation.

Fifth. To require of them such security as may be thought proper for the fulfillment of their duties, and to remove them at will, except that no trustee shall be removed from office unless by a vote of two-thirds of the whole number of trustees, or by a vote of a majority of the trustees, upon a written request signed by stockholders of two-thirds of the whole stock.

Sixth. To make by-laws not inconsistent with the laws of this state for the organization of the company, the management of its property, the regulation of its affairs, the transfer of its stock, and for carrying on all kinds of business within the objects and purposes of the company.

Sec. 5. The corporate powers of the corporation shall be exercised by a board of not less than three trustees, who shall be stockholders in the company, and a majority of them citizens of the United States and residents of this state, and who shall, after the expiration of the term of the trustees first selected, be annually elected by the stockholders at such time and place, and upon such notice and in such mode as shall be directed by the by-laws of the company; but all elections shall be by ballot, and each stockholder, either in person or by proxy, shall be entitled to as many votes as he owns shares of stock; and the persons receiving the greatest number of votes shall be trustees. When any vacancy shall happen among the trustees by death, resignation, or otherwise, it shall be filled for the remainder of the year in such manner as may be provided by the by-laws of the company.

Sec. 6. If it should happen, at any time, that an election of trustees shall not be made on the day designated by the by-laws of the company, the corporation shall not for that reason be dissolved, but it shall be lawful on any other day to hold an election for trustees, in such manner as shall be provided for by the by-laws of the company; and all acts of the trustees shall be valid and binding upon the company until their successors shall be elected.

Sec. 7. A majority of the whole number of trustees shall form a board for the transaction of business, and every decision of a majority of the persons duly assembled as a board, shall be valid as a corporate act.

Sec. 8. The first meeting of the trustees shall be called by a notice, signed by one or more of the persons named trustees in the certificate, setting forth the time and place of the meeting, which notice shall either be delivered personally to each trustee, or published at least ten days in some newspaper of the county in which is the principal place of business of the corporation, or if no newspaper be published in the county, then in some newspaper nearest thereto.

Sec. 9. The stock of the company shall be deemed personal estate, and shall be transferable in such manner as shall be prescribed by the by-laws of the company; but no transfer shall be valid, except between the parties thereto, until the same shall have been so entered on the books of the company, as to show the names of the parties by and to whom transferred, the number and designation of the shares, and the date of the transfer.

Sec. 10. The trustees shall have power to call in and demand from the stockholders the sums by them subscribed, at such times and in such payments or installments as they may deem proper. Notice of each assessment shall be given to the stockholders personally, or shall be published once a week for at least four weeks in some newspaper published at the place designated as the principal place of business of the corporation, or if none is published there, in some newspaper nearest to such place. If, after such notice has been given, any stockholder shall make default in the payment of the assessments upon the shares held by him, so many of such shares may be sold as will be necessary for the payment of the assessment on all the shares held by him. The sale of said shares shall be made as prescribed in the by-laws of the company; provided, that no sale shall be made except at public auction to the highest bidder, after a notice of thirty days, published as above directed in this section; and that at such sale the person who will agree to pay the assessment so due, together with the expenses of advertisement and the other expenses of sale for the smallest number of whole sales, shall be deemed the highest bidder.

Sec. 11. Whenever any stock is held by any person as executor, administrator, guardian, or trustee, he shall represent such stock at all meetings of the company, and may vote accordingly as a stockholder.

Sec. 12. Any stockholder may pledge his stock by a delivery of the certificates or other evidence of his interest, but may nevertheless represent the same at all meetings, and vote accordingly as a stockholder.

Sec. 13. It shall not be lawful for the trustees to make any dividend except from the surplus profits arising from the business of the corporation; nor to divide, withdraw, or in any way pay to the stockholders, or any of them, any part of the capital stock of the company; nor to reduce the capital stock, unless in the manner prescribed in this act; and in case of any violation of the provisions of this section, the trustees, under whose administration the same may have happened, except those who may have caused their dissent therefrom to be entered at large on the minutes of the board of trustees, at the time, or were not present when the same did happen, shall, in their individual and private capacities, be jointly and severally liable to the corporation, and the creditors thereof, in the event of its dissolution, to the full amount so divided, withdrawn, paid out, or reduced; provided, that this section shall not be construed to prevent a division and distribution of the capital stock of the company, which shall remain after the payment of all its debts, upon the dissolution of the corporation or the expiration of its charter.

Sec. 14. The total amount of the debts of the corporation shall not at any time exceed the amount of the capital stock actually paid in; and in case of any excess, the trustees, under whose administration the same may have happened, except those who may have caused their dissent therefrom to be entered at large on the min

utes of the board of trustees at the time, and except those who were not present when the same did happen, shall, in their individual and private capacities, be liable jointly and severally to the said corporation, and in the event of its dissolution, to any of the creditors thereof, for the full amount of such excess.

Sec. 15. No corporation organized under this act shall, by any implication or construction, be deemed to possess the power of issuing bills, notes, or other evidences of debt for circulation as money. Sec. 16. Each stockholder shall be individually and personally liable for his proportion of all the debts and liabilities of the company contracted or incurred during the time that he was a stockholder, for the recovery of which joint or several actions may be instituted and prosecuted. In any such action, whether joint or several, it shall be competent for the defendant or defendants, or any or either of them, on the trial of the same, to offer evidence of the payment by him, or them, or any or either of them, of any debts or liabilities of such corporations, and upon proof of such payment, the same shall be taken into account and credited to the party or parties making such payment, and judgment shall not be rendered against the party or parties defendant proving such payment for a sum exceeding the amount of his or their proportion of the debts and liabilities of such incorporations, after deducting therefrom the sums proven to have been paid by him, them, or any or either of them, on account thereof. [Amendment, approved Apri 27, 1863, 736; took effect from passage.]*

Sec. 17. No person holding stock as executor, administrator, guardian, or trustee, or holding it as collateral security, or in pledge, shall be personally subject to any liability as a stockholder of the company; but the person pledging the stock shall be considered as holding the same, and shall be liable as a stockholder accordingly; and the estate and funds in the hands of the executor, administrator, guardian, or trustee, shall be liable in like manner and to the same extent as the testator or intestate, or the ward or person interested in the trust fund would have been, if he had been living and competent to act and hold the stock in his own name. Sec. 18. It shall be the duty of the trustees of every company incorporated under this act, to cause a book to be kept containing the names of all persons, alphabetically arranged, who are or shall become stockholders of the corporation, and showing the number of shares of stock held by them respectively, and the time when they respectively became the owners of such shares; which book, during the usual business hours of the day, on every day except Sunday and the Fourth of July, shall be open for the inspection of stockholders and creditors of stockholders and creditors of the company at the office or principal place of business of the company; and any stockholder or creditor shall have the right to make extracts from such book, or to demand and receive from the clerk or other officer having charge of such book, a certified copy of any entry made therein; such book or certified copy of any entry shall be presumptive evidence of the facts therein stated, in any action or proceeding against the company, or against any one or more stockholders.

Sec. 19. If the clerk or other officer having charge of such book shall make any false entry, or neglect to make any proper entry

*The original section consisted only of the first sentence of the section as amended, down to and including the words "instituted and prosecuted."

therein, or shall refuse or neglect to exhibit the same, or to allow the same to be inspected, or extracts to be taken therefrom, or to give a certified copy of any entry therein, as provided in the preceding section, he shall be deemed guilty of a misdemeanor, and shall forfeit and pay to the party injured a penalty of one hundred dollars, and ali damages resulting therefrom; and for neglecting to keep such book for inspection as aforesaid, the corporation shall forfeit to the people the sum of one hundred dollars for every day it shall so neglect to be sued for and recovered in the name of the people by the district attorney of the county in which the principal place of business of the corporation is located.

Sec. 20. Any company incorporated under this act, may, by complying with the provisions herein contained increase or diminish its capital stock to any amount whch may be deemed sufficient and proper for the purposes of the corporation; but before any corporation shall be entitled to diminish the amount of its capital stock, if the amount of its debts and liabilities shall exceed the sum to which the capital is proposed to be diminished, such amount shall be satisfied and reduced so as not to exceed the diminished amount of capital.

Sec. 21. Whenever it is desired to increase or diminish the amount of capital stock, a meeting of the stockholders may be called by a notice signed by at least a majority of the trustees, and published for at least four weeks in some newspaper published in the county where the principal place of business of the company is located, which notice shall specify the object of the meeting, the time and place where it is to be held, and the amount to which it is proposed to increase or diminish the capital; and a vote of twothirds of all the shares of stock shall be necessary to an increase or diminution of the amount of the capital stock.

Sec. 22. If at any meeting so called a sufficient number of votes has been given in favor of increasing or diminishing the amount of capital, a certificate of the proceedings, showing a compliance with these provisions, the amount of capital actually paid in, the whole amount of the debts and liabilities of the company, and the amount to which the capital stock is to be increased or diminished, shall be made out, signed, and verified by the affidavit of the chairman and secretary of the meeting, certified by a majority of the trustees, filed, as required by the second section of this act; and when so filed, the capital stock of the corporation shall be increased or diminished to the amount specified in the certificate.

Sec. 23. Upon the dissolution of any corporation formed under this act, the trustees at the time of the dissolution shall be trustees of the creditors and stockholders of the corporation, dissolved, and shall have full power and authority to sue for and recover the debts and property of the corporation, by the name of trustees of such corporation, collect and pay the outstanding debts, settle all its affairs, and divide among the stockholders the money and other property that shall remain after the payment of the debts and necessary expenses.

Sec. 24. Any corporation formed under this act may dissolve and disincorporate itself by presenting to the county judge of the county in which the meetings of the trustees are usually held, a petition to that effect, accompanied by a certificate of its proper officers, and setting forth, that, at a general or special meeting of the stockholders called for that purpose, it was decided by a vote of twothirds of all the stockholders to disincorporate and dissolve the

corporation; notice of the application shall then be given by the clerk, which notice shall set forth the nature of the application, and shall specify the time and place at which it is to be heard, and shall be published in some newspaper of the county once a week for four weeks, or if no newspaper is published in the county, by advertisement posted up for thirty days in three of the most public places in the county. At the time and place appointed, or at any other to which may be postponed by the judge, he shall proceed to consider the application, and, if satisfied the corporation has taken the neces sary preliminary steps, and obtained the necessary vote to dissolve itself, and that all claims against the corporation are discharged, he shall enter an order declaring it dissolved.

Sec. 25. The fifth chapter of an act concerning corporations, passed April twenty-second, one thousand eight hundred and fifty, is repealed; but this repeal shall not be construed to destroy the existence of any company already formed under the provisions of said chapter, nor to affect any right acquired, or liability incurred under the same; but as to all such companies, the provisions of said chapter shall continue in full force, except in those instances in which any company heretofore incorporated may avail itself of the provisions of the next section of this act.

Sec. 26. Any company incorporated under the said fifth chapter of an act concerning corporations, passed April twenty-second, one thousand eight hundred and fifty, may continue its corporate existence under this act by adopting a resolution to that effect by a vote of two-thirds of all the stockholders, and filing a certificate thereof, signed by its proper officers, in the office of the Secretary of State and of the county clerk of the county in which is located the principal place of business of the corporation. From the time of filing the certificate, the corporation shall be subject only to the provisions of this act, but the change so made shall not affect any right acquired or liability incurred previously by the corporation.

Sec. 27. Corporations formed under this act, and the members thereof, shall not be subject to the conditions and liabilities contained in an act entitled "An act concerning corporations," passed April twenty-second, one thousand eight hundred and fifty.

Act Cited.

Smith v. Eureka Flour Mills, 6 Cal. 7; Cal. Steam Nav. Co. v. Wright, 8 Cal. 590; Ede v. Johnson, 15 Cal. 58; Wolf v. St. L. Ind. Water Co., 15 Cal. 320; Heyneman v. Blake, 19 Cal. 593; Union Water Co. v. Murphy's Flat F. Co., 22 Cal. 627; Larrabee v. Baldwin, 35 Cal. 158; Indian Canon Road Co. v. Robinson, 13 Cal. 520; Mudget v. Howell, 33 Cal. 27; Harris v. McGregor, 29 Cal. 127; Natoma Water etc. Co. v. Clarkin, 14 Cal. 552; Gashweiler v. Willis, 23 Cal. 19; McAuley v. York Min. Co., 6 Cal. 81; French v. Teschemaker, 24 Cal. 543; People v. Elmo, 35 Cal. 653; Miners' Ditch Co. v. Zellerbach, 37 Cal. 575, 576, 99 Am. Dec. 300; Martin v. Zellerbach, 38 Cal. 306, 99 Am. Dec. 365; Vandall v. S. S. F. Dock Co., 40 Cal. 83; San Buenaventura Co. v. Vassault, 50 Cal. 537; Winter v. Belmont Min. Co., 53 Cal. 430; People v. Perrin, 56 Cal. 347; S. V. W. W. v. San Francisco, 61 Cal. 11; S. V. W. W. v. Schottler, 62 Cal. 104; People v. Robinson, 64 Cal. 375, 1 Pac. 156; Santa Cruz R. R. v. Spreckels, 65 Cal. 197, 3 Pac. 661, 802; Mora v. Murphy, 83 Cal. 17, 23 Pac. 3; Smith v. S. F. & N. P. R. R., 115 Cal. 589, 56 Am. St. Rep. 119, 47 Pac. 582.