CORPORATIONS (Continued). power of attorney consistent with an assumption of ownership. (Id.) 3. ACTION UPON STOCKHOLDER'S LIABILITY-DENIAL OF OWNERSHIPABSENCE OF ESTOPPEL.-In an action to recover from the wife upon her alleged stockholder's liability, the doctrine of estoppel to deny ownership cannot be invoked where the creditors did not know at the time the credit was extended that she was shown by the books of the corporation to be a stockholder. (Id.) 4. CONTRACT EMPLOYING SUPERINTENDENT OSTENSIBLE AUTHORITY OF OFFICERS EVIDENCE.-Ostensible authority of the president and secretary of a corporation to execute a binding contract employing a general superintendent for the corporation is shown by proof that such officers were in control of the corporation's property, that they had the custody of and used the corporate seal, used the corporation's stationery, replied with apparent authority to telegrams directed to the corporation, paid the prospective employee's expenses to and from this state, and generally held themselves out as the authorized representatives of the corporation in such manner that the corporation and its directors could not well have been ignorant of their assumption of ostensible power. (Newton v. Johnston Organ etc. Mfg. Co., 185.) 5. HOLDING OUT OF PERSONS AS HAVING GENERAL AUTHORITY OSTENSIBLE AGENCY-ESTOPPEL.-Where a corporation holds out to the world as its agents persons apparently clothed with power to transact its ordinary business, third parties will not be permitted to suffer from the acts of such agents by the corporation's attempted defense that the ostensible authority was not in fact conferred. (Id.) 6. CONTRACT FOR SERVICES OF EMPLOYEES OSTENSIBLE AGENCYLACK OF ACTUAL AUTHORITY-BY-LAWS AND MINUTES.-A showing of ostensible agency to contract for services of employees of a corporation cannot be overthrown by mere proof that the by-laws or minutes of the corporation failed to disclose actual authority of the president and secretary to so contract. (Id.) 7. ACTION FOR DAMAGES - - BREACH OF CONTRACT OF EMPLOYMENT -ACTUAL AND PHYSICAL TENDER OF SERVICES. - In an action against a corporation for breach of contract to employ plaintiff, no actual and physical tender of services was necessary, where the plaintiff closed his business in another state and had prepared to come to this state, the gist of the action being the change of position caused by the conduct of defendant. (Id.) 8. EVIDENCE-MINUTES AND BY-LAWS PROPERLY EXCLUDED.-Where in such action, the trial court based its finding of agency exclusively upon the ostensible agency of the officers who signed the con CORPORATIONS (Continued). tract of employment, it was not error to exclude the minutes and the by-laws of the corporation offered by the corporation to show that its president and secretary had not been authorized to employ the plaintiff. (Id.) 9. BY-LAWS INADMISSIBLE AGAINST THIRD PERSONS WITHOUT KNOWLEDGE.-By-laws of a corporation are of no binding force upon third persons having no knowledge of them. (Id.) 10. DISSOLUTION FOR NONPAYMENT OF LICENSE TAX-DIRECTORS TRUSTEES FOR CREDITORS-CONSTRUCTION OF CODE AMENDMENT OF 1905. The legislature contemplated that section 400 of the Civil Code, as amended in 1905 (Stats. 1905, p. 563), providing that unless other persons are appointed by the court, the directors or managers of the affairs of a corporation at the time of its dissolution are trustees of the creditors and stockholders, or members of the corporation dissolved, and have full power to settle the affairs of the corporation, would apply to corporations dissolved for nonpayment of license tax, as well as to corporations dissolved under the provisions of the codes. (Hanson v. Choynski, 275.) 11. APPLICATION OF TRUST FUNDS TO PAYMENT OF CLAIMS-DUTIES OF CREDITORS-LEGAL REMEDIES.-Where a corporation has been dissolved for nonpayment of its license tax and the affairs of the corporation are under the control of the directors as trustees, the creditors must ordinarily seek the usual remedies at law before applying to a court of equity to compel the application of the funds in the hands of the trustees to the payment of their claims. (Id.) 12. MISAPPLICATION OF TRUST FUNDS ACTION TO COMPEL APPROPRIATION IN PAYMENT OF CREDITORS' CLAIMS-EQUITY.-Creditors of a corporation dissolved for nonpayment of its license tax are justified in seeking the interposition of a court of equity to compel the application of trust funds to the payment of their claims, where it is made to appear that one of the directors was seeking to appropriate the major part of the assets to his own claim, and relief had been unsuccessfully sought in the only legal tribunal that could defeat such a preference. (Id.) 13. DIRECTOR AS CREDITOR-PAYMENT OF OWN CLAIM VOID.-A director of a corporation who is at the same time a creditor is precluded from using his position as director to obtain a preference over other creditors in the payment of his own claim. (Id.) 14. MISAPPLICATION OF TRUST FUNDS BY ONE TRUSTEE-ACTION TO COMPEL APPLICATION TO PAYMENT OF CREDITORS' CLAIMS-PLEADING PARTIES OTHER TRUSTEES NECESSARY DEFENDANTS.-Where one of three trustees of a corporation dissolved for nonpayment of license tax has applied trust moneys in his hands in payment CORPORATIONS (Continued). of his own claim, the other two trustees are necessary parties defendant in an action by creditors of the corporation to compel the application of the money to the payment of their claims. (Id.) 15. REORGANIZATION-LIABILITY FOR DEBTS OF FORMER CORPORATION.— Where a corporation reorganizes under a new name but with practically the same stockholders and directors, and continues to carry on the same business, a court of equity will regard the new corporation as a continuation of the former corporation, and will hold it liable for the debts of the former corporation. (Stanford Hotel Co. v. M. Schwind Co., 348.) 16. ACTION FOR RENT-PLEADING-PARTIES-FORMER CORPORATION UNNECESSARY DEFENDANT.-In such action it is unnecessary to make the former corporation a party defendant. (Id.) 17. DONATION OF STOCK TO CORPORATION COLLATERAL ATTACK BY PURCHASER-RIGHT OF CREDITOR.-Where a corporation issues all of its capital stock and thereafter a donation back to the corporation is made of certain shares by those stockholders whose shares were issued to them for property, purchasers of a part of such returned stock cannot contend as against a creditor of the corporation that the stock issued to them was an overissue of treasury stock. (Hasson v. Koeberle, 359.) 18. SALE OF STOCK FOR MONEY-PURCHASE PRICE LESS THAN PAR VALUE MEASURE OF STOCKHOLDER'S LIABILITY TO CREDITORS.Where stock is sold for money and the purchase price is less than the par value of the stock, the difference between the par value and the amount actually paid is the measure of the stockholder's liability to creditors, as to unpaid subscriptions. (Id.) 19. ISSUANCE OF STOCK FOR PROPERTY OF UNCERTAIN VALUE-FICTITIOUS VALUATION-CONSTRUCTIVE FRAUD ON CREDITORS.-Where the stock is not sold for cash but is issued for real or personal property having no generally defined value, the rule is that where the corporation and stockholder have agreed upon a given valuation for the property transferred, such valuation is binding and conclusive unless it is fraudulent in purpose or effect. But if the parties have put upon the property a valuation in excess of what they knew or believed to be its true value, this is a construetive fraud upon the creditors and the stock will be deemed paid only to the extent of the actual value of the property received in exchange for it. (Id.) 20. APPLICABILITY OF RULE TO MINING CORPORATIONS SOUTH MOUN TAIN MINING COMPANY CASE OVERRULED.-The rule enunciated in Herron v. Shaw, 165 Cal. 668, and Harrison v. Armour, 169 Cal. 787, that stockholders of a corporation are liable to creditors for the CORPORATIONS (Continued). difference between the value of property exchanged for stock and the par value of the stock, is a general rule applicable to all classes of corporations, and the rule stated In re South Mountain Consolidated Min. Co., 7 Sawy. 30, excepting its application in the cases of certain classes of mining corporations, no longer properly expresses the law in force in this state. (Id.) 21. ACTION ON STOCKHOLDER'S LIABILITY MINING CORPORATION BELIEF OF CORPORATORS AS TO VALUE OF PROPERTY RECEIVED FOR STOCK EVIDENCE. In an action by a judgment creditor of a mining corporation to recover of certain stockholders who had purchased shares of stock from the corporation which had been donated back to it by certain stockholders, evidence should have been received at the trial bearing on the belief of the corporators as to the value of the property, to the end that it might have been determined what that belief was, and whether it was in fact honest and intelligent. (Id.) 22. ACTUAL VALUE OF PROPERTY-PROPER STANDARD.-In such action, a finding of value of the property at the time of the transfer to the corporation based upon prospective earning power as determined at a time subsequent to the transfer, is not the proper standard, since it was the duty of the court to determine the value by ascertaining as nearly as possible what a reasonably prudent investor who contemplated spending his own money would have been willing to pay for the property under the circumstances under which the corporators acted on the date of the transfer. (Id.) 23. OSTENSIBLE AUTHORITY OF CORPORATION OFFICERS RIGHTS OF THIRD PERSONS.-If a corporation allows its officers to conduct its business and third persons act upon the apparent authority thus shown, it cannot defeat the rights of such persons arising from transactions done and completed under such ostensible authority by failing to enter upon its minutes any order giving its officers authority to act. (Fowler Gas Co. v. First Nat. Bank, 471.) 24. LIABILITY FOR TORTS OF SERVANTS.-A corporation is liable for the torts of its servant if such servant has authority from it to do the tortious act, but not otherwise, which authority may be either express or implied. (Concoff v. Hippodrome Theater Company, 626.) 25. FALSE ARREST BY THEATER USHER-LACK OF IMPLIED AUTHORITY -NONLIABILITY OF EMPLOYER.-A person employed by a corporation as an usher in a theater whose duty it is to attend to the seating of patrons and keep order has no implied authority to arrest or imprison persons who might commit criminal offenses in the theater, and the corporation is not liable for an alleged false arrest and imprisonment of a disorderly patron, made by such employee. (Id.) CORPORATIONS (Continued). 26. EVIDENCE-MINUTES OF MEETING-PAROL TESTIMONY.-Minutes of a corporation meeting are not a written instrument, and in the absence of the element of estoppel, as where a party has acted in justifiable reliance upon them, it is permitted to the corporation or to anyone else to show what actually did take place at the meeting. (Lawrence v. Premier Indem. Assur. Co., 688.) PAROL EVIDENCE INADMISSIBLE. 27. CONTENTS OF MINUTES Testimony showing that the minutes of a corporation meeting are not a full or true record of what took place at the meeting is not the same as testimony as to the contents of the minutes, and testimony of the latter sort is not competent because it is an endeavor to prove the contents of a writing by evidence other than the writing itself. (Id.) 28. SOURCE OF DIVIDENDS-DETERMINATION OF DIRECTORS, WHEN NOT CONCLUSIVE UPON COURTS.-The determination of the directors of a corporation as to the source of its dividends has no binding or even persuasive effect upon the court when it is required to decide whether a stock dividend constitutes income which goes to the tenant for life or for years or is principal to be held for the benefit of the remaindermen. (Estate of Duffill, 748.) 29. GIVING OF DIVIDEND-REDUCTION OF CORPUS OF ESTATE—QUESTION FOR DETERMINATION.-In such a case the court will ascertain whether the giving of the stock dividend or the money dividend to the life tenant reduces the value of the corpus of the estate as it existed at the time of the death of the testatrix. (Id.) ་ 30. TRUST IN STOCK PAYMENT OF DIVIDENDS OUT OF EARNINGS AFTER DEATH OF TRUSTOR-SUFFICIENCY OF EVIDENCE.-That stock dividends declared payable out of surplus accumulated prior to death of testatrix were actually paid out of earnings of a corporation after the death of a testatrix, who created a trust in the stock owned by her, is demonstrated by the fact that after the payment of dividends declared after death of testatrix, the corporation had on hand surplus and undivided profits in excess of the amount held at her death. (Id.) 31. LIFE TENANCY IN CORPORATION STOCK APPORTIONMENT OF DIVIDENDS.-If the fund out of which the dividend is paid accrued before the life estate arose, it is principal belonging to the corpus of the estate, but if the fund was earned after the life estate arose, it is income belonging to the life tenant. (Id.) See Findings; Pleading, 9. CRIMINAL LAW. 1. INSANITY AS DEFENSE-MEANING OF.-Insanity interposed as a defense in a criminal prosecution means such a diseased and deranged condition of the mental faculties as to render the person |