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the full amount unpaid upon the capital stock; or if a less .
amount is sufficient, then it may be for such a percentage as
will raise that amount;

2. The directors of railroad corporations may assess the
capital stock in instalments of not more than ten per cent
per month, unless in the articles of incorporation it is other-
wise provided;

3. The directors of fire or marine insurance corporations
may assess such a percentage of the capital stock as they
deem proper.

History: Enacted March 21, 1872.

See Kerr's Cyc. C. C. for 16 pars, annotation.

65 C. 193, 194, 195, 196 (construed with §331), 199 (referred
to in discussion), 200 (construed in dis. op.), 201 (construed
with §323 in dis. op.), 202, 209, 210 (referred to in dis. op.), 3
P. 661, 802; 93 C. 538, 549, 550, 27 A. S. 215, 29 P. 126 (con-
strued as not applying); 99 C. 9, 14, 33 P. 741, 742 (construed);
107 C. 447, 450, 40 P. 542 (applied); 129 C. 293, 296, 61 P. 939
(construed and applied with §§331-349); 145 C. 696, 701, 702,
707, 709, 710, 79 P. 441 (applied to assessment levied by directors
of savings bank); 2 C. A. 122, 136, 83 P. 62 (construed with
other sections as constituting terms of contract); 2 C. A. 445,
448, 84 P. 329 (validity of "call," by directors, for unpaid por-
tion of capital stock).

As to its construction with § 331, see Kerr's Cyc. C. C. § 331
pars. 22-25.

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

As to purposes for which assessments are allowed, see 26
Encyc. L. 924; 10 Cyc. 484; and ante § 331, note part IV.

197



§§ 333, 334 CIVIL CODE. [Div.I.Pt.IV.

§333. LEVY OF ASSESSMENT— OLD ASSESSMENT
REMAINING} UNPAID. No assessment must be levied while
any portion of a previous one remains unpaid, unless:

1. The power of the corporation has been exercised in
accordance with the provisions of this article for the purpose
of collecting such previous assessment;

2. The collection of the previous assessment has been
enjoined; or

3. The assessment falls within the provisions of either the
first, second, or third subdivision of section 332.

History: Enacted March 21, 1872.

See Kerr's Cyc. C. C. for 10 pars, annotation.

65 C. 193, 194, 195, 196 (construed as limiting § 332), 201 (con-
strued with § 332 in dis. op.), 3 P. 661, 667, 802; 129 C. 293, 296, 61
P. 939 (construed with other sections); 66 P. 660, 662 (construed
and applied).

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

§334. WHAT ORDER SHALL CONTAIN. Every order
levying an assessment must [1] specify the amount thereof,
when, to whom, and where payable; [2] fix a day, subsequent
to the full term of publication of the assessment notice, on
which the unpaid assessments shall be delinquent, not less
than thirty nor more than sixty days from the time of making
the order lev>'ing the assessment; and [3] a day for the sale
of delinquent stock, not less than fifteen nor more than sixty
days from the day the stock is declared delinquent.
History: Enacted March 21, 1872.

See Kerr's Cyc. C. C. for 16 pars, annotation.

129 C. 293, 296, 61 P. 939 (construed with other sections); 108
C. 490, 493, 41 P. 487 (construed and applied, erroneously cited
as §324); 6 C. A. 356, 358, 92 P. 194 (section is part of charter
of corporation, and the order levying the assessment must spe-
cify where the assessment is payable).

As to action to recover stock, see Kerr's Cyc. C. C. § 347 and
note.

As to construction of this section along with § 331, see Kerr's
Cyc. C. C. § 331 and note.

As to effect of forfeiture of stock and non-payment of assess-
ments, see 26 Encyc. L. 930; 10 Cyc. 503.

198



Tit.I,Ch.II,art.II.] ASSESSMENT NOTICE. §§ 335, 336

As to forfeiture of stock, see 26 Encyc. L. 927-929; 10 Cyc.
499; 68 A. D. 83; 27 L. 305-321; 45 L>. 365.

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

As to payment and time and place of payment of assess-
i ments, see 26 Encyc. L. 925; 10 Cyc. 486.

§ 335. NOTICE OF ASSESSMENT— FORM. Upon the mak-
ing of the order, the secretary shall cause to be published a
notice thereof, in the following form:

(Name of corporation in full. Location of principal place
of business.) Notice is hereby given, that at a meeting of
the directors, held on the (date), an assessment of (amount)
per share was levied upon the capital stock of the corpora-
tion, payable (when, to whom, and where). Any stock upon
which this assessment shall remain unpaid on the (day
fixed) will be delinquent and advertised for sale at public
auction, and, unless payment is made before, will be sold
on the (day appointed), to pay the delinquent assessment,
together with costs of advertising and expenses of sale.

(Signature of secretary, with location of office.)

HLstory: Enacted March 21, 1872.

See Kerr's Cj'c. C. C. for 6 pars, annotation.

101 C. 70, 81, 35 P. 349, 350 (construed and applied); 129 C.
293, 296, 61 P. 939 (construed with other sections).

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

As to notice not being a prerequisite to section, see 81 A. D.
394.

§336. PUBLICATIOX AND SERVICE OF NOTICE. The

notice must [1] be personally served upon each stockholder,
or, in lieu of personal service, must [2] be sent through the
mail, [a] addressed to each stockholder at his place of resi-
dence, if known, and if not known, at the place where the
principal office of the corporation is situated, and [b] be pub-
lished once a week, for four successive weeks, in [c] some
newspaper of general circulation and devoted to the publica-
tion of general news, published at the place designated in
the articles of incorporation as the principal place of busi-

199



§ 337 CIVIL CODE. [Div.I.Pt.IV.

ness, and also [d] in some newspaper published in the
county in which the works of the corporation are situated, if
a paper be published therein. If the works of the corporation
are not within a state or territory of the United States, pub-
lication in a paper of the place where they are situated is not
necessary. If there be no newspaper published at the place
designated as the principal place of business of the corpora-
tion, then the publication must be made in some other news-
paper of the county, if there be one, and if there be none, then
in a newspaper published in an adjoining 'county.

History: Enacted March 21, 1872; amended March 30, 1874,
Code Amdts. 1873-4, p. 206.

See Kerr's Cyc. C. C. for 2 pars, annotation.

129 C. 293, 296, 61 P. 939 (construed with other sections).

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

As to notice of assessment, see Kerr's Cyc. C. C. §§ 333, 334
and note, § 337 and note.

§337. DJILINQUENT NOTICE— FORM. If any portion of
the assessment mentioned in the notice remains unpaid on
the day specified therein for declaring the stock delinquent,
the secretary must, unless otherwise ordered by the board
of directors, cause to be published in the same papers in
which the notice hereinbefore provided for shall have been
published, a notice substantially in the following^ form :

(Name in full. Location of the principal place of busi-
ness.) Notice. — There is delinquent upon the following
described stock, on account of assessment levied on the
(date), (and assessments levied previous thereto, if any),
the several amounts set opposite the names of the respect-
ive shareholders, as follows: (Names, number of cer-
tificate, number of shares, amount.) And in accordance
with law (and an order of the board of directors, made
on the [date], if any such order shall have been made),
so many shares of each parcel of such stock as may be
necessary, will be sold, at the (particular place), on the
(date), at (the hour) of such day, to pay delinquent assess-

200



Tit.I,ch.II,art.II.] CONTENTS OF NOTICE. §§338,339

ments thereon, together with costs of advertising and expenses
of the sale.

(Name of the secretary, with location of office.)

History: Enacted March 21, 1872, founded upon § 2 Act April
4, 1864, Stats. 1863-4, pp. 492-493.

See Kerr's Cyc. C. C. for 7 pars, annotation.

101 C. 70, 76, 35 P. 349 (construed with other sections); 108
C. 490, 493, 41 P. 487 (construed with other sections); 109 C.
1, 8, 41 P. 809 (construed and applied); 129 C. 293, 296, 61 P.
939 (construed with other sections).

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

§338. CONTENTS OF NOTICE. The notice must specify
[1] every certificate of stock, [2] the number of shares it
represents, and [3] the amount due thereon, except where
certificates may not liaye been issued to parties entitled
thereto, in which case [1] the number of shares and [2]
amount due thereon, together with [3] the fact that the cer-
tificates for such shares have not been issued, must be stated.

History: Enacted March 21, 1872.

See Kerr's Cyc. C. C. for 2 pars, annotation.

101 C. 70, 76, 35 P. 349 (construed with other sections); 129
C. 293, 296, 61 P. 939 (referred to with other sections).

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

§ 339. HOW PUBLISHED. The notice, wlien published in
a daily paper, must be published for ten days, excluding Sun-
days and holidays, previous to the day of sale. When pub-
lished in a weekly paper, it must be published in each issue
for two weeks previous to the day of sale. The first publica-
tion of all delinquent sales must be at least fifteen days prior
to the day of sale.

History: Enacted March 21, 1872.

See Kerr's Cyc. C. C. for 5 pars, annotation.

101 C. 70, 76, 35 P. 249 (construed with other sections); 108
C. 490, 493, 41 P. 487 (construed with other sections); 129 C.
293, 296, 61 P. 939 (referred to with other sections).

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

201



§§ 340-343 CIVIL CODE. [Div.I,Pt.IV.

§ 340. JURISDICTION ACQUIRED, HOW. By the publica-
tion of the notice, the corporation acquires jurisdiction to
sell and convey a perfect title to all of the stock described
in the notice of sale upon which any portion of the assess-
ment or costs of advertising remains unpaid at the hour
appointed for the sale, but must sell no more of such stock
than is necessary to pay the assessments due and costs of
sale.

HLstory: Enacted March 21, 1872,

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

§ 341. SALE TO BE BY PUBLIC AUCTION. On the day,
at the place, and at the time appointed in the notice of sale,
the secretary must, unless otherwise ordered by the directors,
sell or cause to be sold at public auction, to the highest bid-
der for cash, so many shares of each parcel of the described
stock as may be necessary to pay the assessment and charges
thereon, according to the terms of sale; if payment is made
before the time fixed for sale, the party paying is only
required to pay the actual cost of advertising, in addition to
the assessment.

History: Enacted March 21, 1872.

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

§ 342. HIGHEST BIDDER TO BE THE PURCHASER. The

person offering at such sale to pay the assessment and costs
for the smallest number of shares or fraction of a share is
the highest bidder, and the stock purchased must be trans-
ferred to him on the stock-books of the corporation, on paj''-
ment of the assessment and costs.

History: Enacted March 21, 1872.

§343. IN DEFAULT OF BIDDERS, CORPORATION MAY
PURCHASE. If, at the sale of stock, no bidder offers the
amount of the assessments and costs and charges due, the
same may be [1] bid in and purchased by the corporation,

202



Tit.I,ch.II,art.II.] purchase OF stock. §§344,345

through the secretary, president, or any director thereof, [2]
at the amount of the assessments, costs, and charges due; and
[3] the amount of tlie assessments, costs, and charges must
be credited as paid in full on the books of the corporation,
and [4] entry of the transfer of the stock to the corporation
must be made on the books thereof. While the stock remains
the property of the corporation it is not assessable, nor must
any dividends be declared thereon; but all assessments and
dividends must be apportioned upon the stock held by the
stockholders of the corporation.

History: Enacted March 21, 1872.

57 C. 396, 398 (cited in holding- that neither allegations nor
evidence proved ownership of stock, or that disposition thereof
by sale was authorized by by-laws, or by vote of stockholders).

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

§344. DISPOSITION OF STOCK PURCHASED BY COR-
PORATION. All purchases of its own stock made by any
corporation vest the legal title to the same in the corporation;
and the stock so purchased is held subject to the control of
the stockholders, who may make such disposition of the
same as they deem fit, in accordance with the by-laws of
the corporation or vote of a majority of all the remaining
shares. Whenever any portion of the capital stock of a cor-
poration is held by the corporation by purchase, a majority
of the remaining shares is a majority of the stock for all pur-
poses of election or voting on any question at a stockholders'
meeting.

History: Enacted March 21, 1872.

See Kerr's Cyc. C. C. for 9 pars, annotation

57 C. 396, 398 (cited); 72 C. 32, 33, 34, 13 P. 65 (construed and
applied); 109 C. 571, 588, 42 P. 225 (construed and applied with
other sections).

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

§345. EXTENSION OF TIME OF DELINQUENT SALE—

[NOTICE]. The dates fixed in any notice of assessment or
notice of delinquent sale, published according to the pro-

203



§§346,347 CIVIL CODE. [Div.I,Pt.IV.

visions hereof, may be [1] extended from time to time for not
more than thirty days, by order of the directors, entered on
the records of the corporation; but no order extending the
time for the performance of any act specified in any notice is
effectual unless [2] notice of such extension or postponement
is appended to and published with the notice to which the
order relates.

History: Enacted March 21, 1872.

4 C. A. 505, 508, 88 P. 506 (construed as limiting right of ex-
tension of time for sale to thirty days in the aggregate).

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

§34G. ASSESSMENTS SHALL NOT BE INVALIDATED.

No assessment is invalidated by a failure to make publica-
tion of the notices hereinbefore provided for, nor by the non-
performance of any act required in order to enforce the pay-
ment of the same; but in the case of any substantial error
or omission in the course of proceedings for collection, all
previous proceedings, except the levying of the assessment,
are void, and publication must be begun anew.

History: Enacted March 21, 1872.

See Kerr's Cyc. C. C. for 8 pars, annotation.

76 C. 26, 28, 17 P. 939, 940 (construed and applied); 108 C.
490, 495, 41 P. 487 (construed and applied with §349); 109 C.
1, 8, 41 P. 809 (construed and applied).

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

§ 347. ACTION FOR RECOVERY OF STOCK, AND LIMI-
TATION THEREOF. No action must be sustained to recover
stock sold for delinquent assessments, upon the ground of
[1] irregularity in the assessment, [2] irregularity or [3]
defect of the notice of sale, or [4] defect or irregularity in
the sale, unless the party seeking to maintain such action
first pays or tenders to the corporation, or the party holding
the stock sold, [1] the sum for which the same was sold,
together with [2] all subsequent assessments which may
have been paid thereon and [3] interest on such sums from

204



Tit.I,ch.II,art.II.] PROOF— waiver. §§ 348, 349

the time they were paid; and no such action must be sus-
tained unless the same is [4] commenced by the filing of a
complaint and the issuing of a summons thereon within six
months after such sale was made.

History: Enacted March 21, 1872.

See Kerr's Cyc. C. C. for 12 pars, annotation.

76 G. 26, 28, 17 P. 939, 940 (construed and applied); 133 C.
64, 66, 65 P. 143 (construed and applied).

As to many miscellaneous matters affecting' corporations gen-
erally, see note § 283, ante.



§ 348. PROOFS OF PUBLICATION AND SALE. The pub-
lication of notice required by this article may be proved by
the affidavit of [1] the printer, [2] foreman, or [3] principal
clerk of the newspaper in which the same was published; and
the affidavit of tlie secretary or auctioneer is prima facie
evidence of [1] the time and place of sale, or [2] the quantity
and particular description of the stock sold, and [3] to whom,
and [4] for what price, and [5] of the fact of the purchase
money being paid.

The affidavits must be filed in the office of the corporation,
and copies of the same, certified by the secretary thereof, are
prima facie evidence of the facts therein stated. Certificates,
signed by the secretary and under the seal of the corporation,
are prima facie evidence of the contents thereof.

History: Enacted March 21, 1872; amended March 30, 1874,
Code Amdts. 1873-4, p. 207.

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

§349. WAIVER OF SALE. ACTION TO RECOVER

ASSESSMENT. On the day specified for declaring the stock
delinquent, or at any time subsequent thereto and before
the sale of the delinquent stock, the board of directors may
elect to waive further proceedings under this chapter for the
collection of delinquent assessments, or any part or portion
thereof, and may elect to proceed by action to recover the

205



§ 349 CIVIL CODE. [Div.I,Pt.IV.

amount of the assessment and the costs and expenses already
incurred, or any part or portion thereof.

History: Enacted March 21, 1872.

See Kerr's Cyc. C. C. for 36 pars, annotation.

101 C. 70, 76, 77, 35 P. 349 (construed and applied); 108 C.
490, 493, 495, 41 P. 487 (construed and applied); 109 C. 1, 5, 41 P.
809 (cited in discussion); 110 C. 632. 635, 52 A. S. 136. 43 P. 10
(construed and applied); (C. March 24, 1900), 60 P. 776, 778
(applied and construed); 129 C. 293, 296, 61 P. 939 (referred to
in other sections); 145 C. 696, 700, 701, 79 P. 441 (amount of as-
sessment may be recovered by suit in name of the corpora-
tion); 2 C. A. 122. 136, 83 P. 62 (construed with other sections
as forming terms of contract); 4 C. A. 505, 507, 88 P. 506 (what
is essential to recovery of judgment for assessment); 5 F. 403,
408, 409, 410, 429 (construed and applied, though erroneously
cited as C. C. P.).

As to actions and remedies for amounts due on assessments,
see 26 Encyc. L. 926; 10 Cyc. 510.

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

As to power of court to compel payment of calls of assess-
ments, see 100 A. D. 552.

As to prerequisites of action for assessments of stock, see 26
Encyc. L. 926; 10 Cyc. 511.

As to right to proceed in equity to compel payment, see 100
A. D. 553.

As to right to sue upon contract for subscription before
issuing certificate, see 81 A. D. 394.



206



Tit.I,ch.III,art.I.] CORPORATE POWERS. §354

CHAPTER III.
CORPORATE POWERS.

Article I. General Powers, §§ 354-365.

II. Records, §§ 377, 378.

III. Examinations of corporations, etc., §§ 382-384.

IV. Judgment Against and Sale of Corporate Property,

§§ 388-393.

ARTICLE I.

GENERAL POWERS.

§ 354. Powers of corporations.
§ 355. Limitation of powers.
§ 356. Banking expressly prohibited.
§ 357 Misnomer does not invalidate instrument.
§ 358'. Corporations, time in which must be organized, and con-
tinuance of business.
8 359 Increasing and diminishing capital stock. [Fictitious
increase of stock void.] Bonded Indebtedness, how
created or increased.
§ 360 Corporations may acquire real property, and how much.
§ 36L Consolidation of mining companies owning adjoining

claims [repealed].
§ 361a. Transfer of franchise of corporation not valid without

consent of the stockholders.
§362. Amendment of articles or certificate of incorporation-
Filing, penalty.
§ 363. Corporations to own their own lots and buildings [re-
pealed]. . .
§363[a]. Correction of erroneous filing of incorporation-Peti-
tion, nature of — Action of court.
§ 364 Corporation may transfer foreign concessions.
§ 365. Restoration of lost records, certificates of stock, etc.

§ 354. POWERS OF COKPORATIONS. Every corporation,
as such, has power:

1. Of succession, by its corporate name, for the period lim-
ited; and when no period is limited, perpetually;

2 To sue and be sued, in any court;

207



§ 354 CIVIL CODE. [Div.T.Pt.IV.

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

4. To purchase, hold, and convey such real and personal
estate as the purposes of the corporation may require, not
exceeding the amount limited in this part;

5. To appoint such subordinate officers or agents as the
business of the corporation may require, and to allow them
suitable compensation ;

6. To make by-laws, not inconsistent with any existing law,
for the management of its property, the regulation of its
affairs, and for the transfer of its stock;

7. To admit stockholders or members, and to sell their
stock or shares for the payment of assessments or instal-
ments;

8. To enter into any obligations or contracts essential to
the transaction of its ordinary affairs, or for the purposes of
the corporation.

History: Enacted March 21, 1872.

See Kerr's Cj^c. C. C. for 118 pars, annotation.

52 C. 53, 59, 28 A. R. 629 (referred to); 56 C. 61, 63 (construed
and applied); 62 C. 69, 104 (referred to); 63 C. 359, 363, 364 (con-
strued and applied); 93 C. 300, 309, 28 P. 1049, 1051 (construed
with other sections); 108 C. 549, 558, 41 P. 495, 29 L. 839 (ap-
plied); 109 C. 160, 163, 41 P. 855 (construed and applied); 116 C.
410, 414, 415, 48 P. 375 (construed with other sections); 117 C.
168, 177, 48 P. 1075 (construed and applied); 118 C. 131, 138, 50
P. 269 (construed and applied); 126 C. 413, 416, 417, 58 P. 914
(construed and applied); 144 C. 578, 594, 77 P. 1113 (section ex-
pressly authorizes corporation to "hold" land); 1 C. A. 189, 195,
81 P. 1029 (cited as to power of corporation to make by-laws);
2 C. A. 624, 627, 84 P. 271 (cited as to power of corporations to
make by-laws).

As to business being conducted by board of directors, see
Kerr's Cyc. C. C. § 305 and note.

As to compensation of directors, see Kerr's Cj'C. C. C. § 305
and note.

As to many miscellaneous matters affecting- corporations gen-
erally, see note § 283, ante.

As to provisions of by-laws, see Kerr's Cyc. C. C. § 303 and
note.

Railroad companies — Power to acquire real estate. — See Kerr's
Cyc. C. C. § 465 subds. 2, 3, 7, §§ 474, 477.

208



Tit.I,ch.III,art.I.] LIMIT OF POWER. §§ 355-357

Recording, amending-, and repeal of by-laws. — See Kerr's
Cyc. C. C. § 304 and note.

Sale of stock for non-payment of assessments. — See Kerr's
Cyc. C. C. § 331 and note.

§355. LIMITATION OF POWERS. In addition to the
powers enumerated in the preceding section, and to those
expressly given in that title of this part under which it is
incorporated, no corporation shall possess or exercise any
corporate powers, except such as are necessary to the exer-
cise of the powers so enumerated and given.

History: Enacted March 21, 1872.

See Kerr's Cyc. C. C. for 4 pars, annotation.

59 C. 22, 24 (cited as to power of agent of company to raise
money for it and to pay debts); 62 C. 69, 104 (referred to in
connection with § 354).

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

§356. BANKING EXPRESSLY PROHIBITED. No corpo-
ration shall create or issue bills, notes, or other evidences of
debt, upon loans or otherwise, for circulation as mone3\

History: Enacted March 21, 1872.

See Kerr's Cyc. C. C. for 4 pars, annotation.

As to many miscellaneous matters affecting corporations gen-
erally, see note § 283, ante.

As to powers of corporation, see Kerr's Cj^c. C. C. § 354 and
note.

For Commissioners' comment on this section see Kerr's Cyc.
C. C. § 356, note.

§357. MISNOMER DOES NOT INVALIDATE INSTRU-



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