bonus in that stock, it cannot be considered in the light of a mere donation. (Italics ours.) Nor, if it were done in good faith, would it necessarily afford a ground of complaint to dissenting stockholders."

We have no fault to find with the cases cited by counsel for the plaintiff, notably the case of Central Trust Co. v. New York City etc. Co., 18 Abb. N. C. (N. Y.), 381, which held that stock issued by a corporation without any consideration is illegal, and that such issue may be set aside upon that ground. Indeed, obviously, the views expressed here are in perfect harmony with those announced in those cases.

In the Central Trust case, just mentioned, the transaction whereby certain parties secured, without any consideration whatsoever, a large amount of the bonds and stock of the corporation, came so close to actual fraud that the learned justice who wrote the opinion found no way of relieving it from that imputation except upon the ground that such a method of manipulating bonds and stocks of corporations had been for many years a common practice in that line of the world's activities. Obviously, if, as in that case, the corporation here had parted with a large amount of its capital stock without any sort or kind of consideration-indeed, by gift pure and simple, as in that case-then most unquestionably would the transaction be held to have been in direct violation of the pro-. visions of section 11 of article XII of the constitution; but, as an examination of this record clearly and distinctly discloses, there was a consideration and a most valuable one for the issuance of the stock by the plaintiff to the defendant.

As stated in the beginning, a discussion of other points made by the respondents in support of the order dissolving the restraining order is altogether unnecessary in view of the opinion as to the merits of the dispute to which we have been per suaded by an examination of this record; yet, we cannot refrain from observing that the plaintiff is in an awkard posi tion as a supplicant for relief through the extraordinary remedial power of a court of conscience. It does not complain that it has received no benefits from the act of issuing the stock to the defendant. It does not charge actual fraud whereby it suffered any injury, nor, indeed, urge any objection which would render the transaction unconscientious; but, after complacently acquiescing therein for a long time and recognizing

the validity of the stock issue by various positive acts (such as issuing new certificates for the old, etc.) and after the transaction had been a thing of the past by a number of years, it merely relies, for the establishment of the invalidity of the issue, upon what may well be regarded, at least before a court of equity, as an alleged technical violation of the law of this state concerning the matter of the issuance of stock by corporations. Of course, it is not possible that a corporation may, through an ultra vires transaction of its own making, receive something beneficial or advantageous to its corporate purposes, and then escape the burden of the obligations to which such transaction bound it upon the plea of ultra vires. But, as shown, upon the merits of this controversy, the order should be affirmed, and it is so ordered.

Chipman, P. J., and Burnett, J., concurred.

[Civ. No. 1103. First Appellate District.-December 27, 1912.] JOSEPH W. McTIGUE, Plaintiff, Appellant, v. ARCTIC ICE CREAM SUPPLY COMPANY, Defendant, Respondent, and GEORGE W. MORSE et al., Codefendants. ACTION ON CONTRACT TO STABLE HORSES AGAINST CORPORATION AND INDIVIDUAL DEFENDANT JOINTLY-CORPORATION NOT LIABLE-PRIOR

LEASE FOR YEARS.-In an action by the plaintiff as the proprietor of a livery stable, upon an alleged contract for the stabling of horses therein, charged to have been made with the corporation defendant and an individual defendant jointly, it appears from the record therein that no such joint contract was made, that the individual defendant confessed judgment for the amount claimed, and that the corporation was not liable thereon, since, prior to the making of such contract, it had made a lease of all its property and business to the individual defendant for the term of five years, in which it was provided that he should be responsible for all debts contracted by him, and could incur no debts on behalf of the corporation.

CONSTRUCTION AND EFFECT OF LEASE-UNTENABLE CONTENTIONS OF PLAINTIFF. The contentions of the plaintiff that the contract in controversy, though a lease in form, with the usual covenants, was not in fact a lease, but was in legal effect an agreement of partnership, and that however construed, it was an ultra vires act of the cor

poration, and that in the dealings of the individual defendant with the plaintiff, he was acting in the capacity of an agent of the corporation, and that his contract with the plaintiff, was the contract of the corporation, were wholly untenable.

ID. VALIDITY OF LEASE BY CORPORATION-RULE OF LAW-LEGISLATIVE RESTRICTION UPON EXECUTION.-It is the rule of law in this state that an ordinary private corporation may lease its entire business, whenever such a course is necessary for the best interests of the corporation, stockholders, and creditors. The only legislative restriction placed upon the execution of such a lease is that the consent of at least two-thirds of the issued corporate capital stock must first be procured, and that such consent must be expressed, either in writing and acknowledged by such stockholders, and made a part of the lease, or by vote at a stockholders' meeting called for the purpose of considering and consenting to such lease.

ID.-MERE LEASE BY CORPORATION-INVALIDITY OF PARTNERSHIP WITH INDIVIDUAL NOT INVOLVED.-Where the instrument in question is one of mere lease by a corporation for a term of years, which expressly declares that it shall not be construed as constituting a partnership, no question is involved as to the invalidity of a partnership between a corporation and an individual, and such question need not be discussed.

ID. RENT RESERVED IN LEASE BY CORPORATION-PERCENTAGE OF NET PROFITS-PARTNERSHIP NOT ESTABLISHED CONSTRUCTION OF LEASE AGAINST PARTNERSHIP. The provision in the corporation's lease of its business for a term of years that the rent reserved should be a sum equal to twenty-five per cent of the net profits of the business, did not in and of itself, establish a partnership relation with the lessee. As there is no express agreement to divide the profits, there is no implied agreement to share the losses. Not only are the express terms of such lease against any construction thereof as constituting a partnership, in that it provides that the division of the profits herein provided shall be construed merely as the method of ascertaining the rental to be paid; but also the idea of a permanent lease for a definite term of years is at war with the notion of such an indeterminate and fitful relation as a partnership.

ID.-COUNTERCLAIM BY CORPORATION DEFENDANT AGAINST PLAINTIFF—

NEGOTIATION FOR SALE-HORSES WRONGFULLY WITHHELD-PAYMENT OBTAINED BY DURESS OF GOODS.-In the action by the plaintiff against the corporation defendant and its lessee to recover for the care of horses kept in plaintiff's stable, such corporation may plead, by way of counterclaim in such action, that before the commencement of the action it had negotiated for a sale of all of its business and property, including such horses, and that, in order to obtain the possession thereof for the purpose of such sale, it was compelled to make or permit a payment to effect the same, which was deemed

obtained by "duress of goods," and may be counterclaimed by the corporation defendant in such action.

ID. PAYMENT BY PROPOSED PURCHASER TO AVOID THREATENED LOSS TO CORPORATION-PAYMENT DEEMED BY CORPORATION.-Where the purchaser refused to complete the proposed sale, the failure to complete which would have resulted in great loss and damage to the corporation, unless such horses were delivered, and in order to procure the delivery, it was compelled, under protest, to permit the proposed purchaser to make the necessary payment to secure the same, and deduct the same from the proposed purchase price, such payment must be deemed to have been made for the corporation, and consequently made by it, to justify its counterclaim therefor. ID. LIEN FOR SERVICES PERFORMED ON PERSONAL PROPERTY-CREATION BY OR FOR OWNER ESSENTIAL ABSENCE OF LIEN ON HORSES AGAINST CORPORATION.-In order to create a lien for services rendered upon personal property or for the care and keeping thereof, while lawfully in the possession of the claimant of such lien, under section 3051 of the Civil Code, it is essential that it should be created only by the act of the owner of the property sought to be charged, or by the act of another person duly authorized by the owner. It is held that, upon the facts of the present case, the plaintiff was entitled to no lien upon the horses in question for their care and keeping as against the corporation defendant, as its only contract was made with its lessee, who had no authority to charge the corporation with any debt.

ID. GENERAL RULE AS TO VOLUNTARY PAYMENTS-QUALIFICATION-PAYMENT OF UNLAWFUL DEMAND UNDER PROTEST-SERIOUS LOSS TO OWNER FROM DELAY.-The general rule of law that if a person knowingly submits to an illegal demand by paying that which is demanded, instead of invoking the remedy which the law affords against such demand, such payment will be deemed to be voluntary, is subject to the qualification, that in cases where the person making the demand obtains possession of another person's property, without first resorting to judicial proceedings to test its validity, payment under protest will be deemed compulsory, if the demand is unlawful, and the delay incident to the recovery of the property by legal proceedings would result in serious loss to the owner of the property.

APPEAL from a judgment of the Superior Court of the City and County of San Francisco and from an order denying a new trial. John J. Van Nostrand, Judge.

The facts are stated in the opinion of the court.

William P. Hubbard, for Appellant.

William J. Hayes, and S. J. Hankins, for Respondents.

LENNON, P. J.-Appeal from judgment and order denying motion for new trial.

In this action the plaintiff sought to recover from the defendants, Arctic Ice Cream Supply Company (a corporation) and George W. Morse, the sum of $921.35, claimed to be due to the plaintiff under the terms of an oral agreement alleged to have been entered into with the plaintiff, by the defendants Arctic Ice Cream Supply Company and Morse jointly, for the care, feed, and treatment of twelve horses belonging to the corporation, and which it was claimed were used by it in the transaction of its business at the time the indebtedness here sued on was incurred. Seven of the stockholders of the corporation defendant were joined as defendants in the action. but the demurrers of five of them, viz., Eggers, Powers, Parker, Harbour, and Kellum were sustained by the lower court; and subsequently at the request of the plaintiff the action as to these particular defendants was dismissed. The record does not show that the defendants Binglay and Parry appeared in the action, or that any judgment was rendered for or against either of them. The defendant, Grace D. Ohnimus, sued as a stockholder, joined in the answer of the defendant corpora

tion.

The trial was commenced March 30, 1910, and upon May 26th of the same year the defendant, George W. Morse, filed his consent to a judgment against him in the sum of $921.35. Judgment was rendered and entered accordingly, and after a trial of the action against the defendants Arctic Ice Cream Supply Company and Grace D. Ohnimus, judgment was rendered and entered on April 26, 1911, that the plaintiff take nothing by his action, and that the corporation defendant recover from the plaintiff on a counterclaim the sum of three hundred and fifty dollars.

Plaintiff's complaint alleges that the plaintiff was a livery stable proprietor, and among other things "that on or about the 26th day of July, 1908, plaintiff made and entered into an agreement with the defendants Arctic Ice Cream Supply Co. (a corporation), and George W. Morse, wherein and whereby the plaintiff, as such livery stable proprietor, agreed with said defendants to keep, care for, feed, treat and generally