the certificate may be issued at once, whereupon the subscriber becomes the owner of the stock subject to the unpaid installments. The certificate so issued gives the subscriber complete possession of the stock, as much so as if it were issued for fully paid-up stock, and the corporation is without a lien thereon for the unpaid subscription. (Lankershim Ranch Land etc. Co. v. Herberger, 82 Cal. 602, 23 Pac. 134.)

The par value of the capital stock of a corporation either actually paid in or due is the basis of credit of a corporation, and the subscribed stock is a trust fund for creditors which equity will enforce, and will not allow to be defeated by any device short of actual payment in good faith, and whatever effect an agreement among subscribers to take stock at less than par may have among them. their liability to the creditors is fixed at the par value of the stock by the subscription to and taking the stock at less than par. (Vermont etc. Co. v. Declez etc. Co., 135 Cal. 579, 87 Am. St. Rep. 143, 67 Pac. 1057.)

When, by consent of all the stockholders, reserved stock is sold by the corporation for less than its par value, it is to be considered as fully paid-up stock. (Green v. Medical Co., 96 Cal. 322, 31 Pac. 100. To same effect: Stockton etc. Works v. Houser, 109 Cal. 7, 41 Pac. 809.)

Subscriber's Liability on Subscription.-A stockholder is liable to pay his subscription according to the terms of the subscription agreement, and where it is agreed that the subscriptions are to be paid at such times and in such installments as the subscribers can be lawfully called on to pay, the full amount can be called for at once without an assessment having been levied or a decree for assessments made. (Kohler v. Agassiz, 99 Cal. 9, 33 Pac. 741.)

A stockholder may at any time pay to the corporation the anrount of his unpaid subscription to its stock, in discharge of his liability thereupon. (Welch v. Sargent, 127 Cal. 72, 59 Pac. 319.)

The subscriber's liability for unpaid subscription is not fixed by section 322 of the Civil Code, but by the terms of the subscription agreement. (Marysville etc. Co. v. Johnson, 93 Cal. 538, 27 Am. St. Rep. 215, 29 Pac. 126.)

One who contracts to purchase stock on a given date must take it at the time indicated in his contract cum onere, and if he fails to do so he is liable not only for the purchase price and interest, but also for all assessments levied upon the stock after his breach of the contract, which his vendor is compelled to pay. (Gay v. Dare, 103 Cal. 454, 64 Pac. 466.)

A subscriber for shares of stock is responsible as a stockholder, although he has not paid for his stock or received a certificate therefor. A corporation may give a subscriber credit for his stock as for any cther property. (Mitchell v. Beckman, 64 Cal. 117, 28 Pac. 110.)

Where, by oral agreement, stockholders have paid-up shares issued to themselves at a purchase price less than par value, they are liable, upon the insolvency of the corporation, to the collection from them of the unpaid residue of the par value of the stock, upon a creditor's bill. (Vermont etc. Co. v. Declez etc. Co., 135 Cal. 579, 87 Am. St. Rep. 143, 67 Pac. 1057.)

But, where stock of a corporation is sold at the highest market price, but at a discount from its face value, the purchaser is not liable as a subscriber for any unpaid balance of the face value. (Kellerman v. Maier, 116 Cal. 416, 48 Pac. 377.)

A subscriber to the stock of a corporation to be formed under certain conditions waives the nonperformance of the conditions by voluntarily and intentionally acquiescing, with a knowledge of the facts, in the incorporation of the company, and a payment of a call with full knowledge of the facts is a waiver. (California etc. Hotel Co. v. Callender, 94 Cal. 120, 28 Am. St. Rep. 99, 29 Pac. 859.)

A subscriber to the stock of a corporation proposed to be formed, who, after its formation, partially paid for such stock, and received, and retained for six years, the certificates thereof, becomes a stockholder in the corporation, and cannot escape from liability as such on the ground that the purposes of the corporation, as named in its articles, differed from those in the subscription agreement. (Walters v. Academy Assn., 126 Cal. 582, 59 Pac. 136.)

Enforcement of Subscriber's Liability.-Corporate stockholder may be compelled by creditor's suit to pay unpaid balances due upon his subscription. (Baines v. Babcock, 95 Cal. 581, 29 Am. St. Rep. 158, 27 Pac. 694, 30 Pac. 776. To same effect: Potter v. Dear, 95 Cal. 578, 30 Pac. 777; San Joaquin etc. Co. v. Beecher, 101 Cal. 78, 35 Pac. 349. Note citations: 66 Am. St. Rep. 272; 31 Am. St. Rep. 650.)

An action against a subscriber upon his subscription is not an action to recover an assessment upon subscribed capital stock, and an equal demand upon all subscribers and a liability to an assessment under the statute do not have to be averred. (Marysville etc. Co. v. Johnson, 93 Cal. 538, 27 Am. St. Rep. 215, 29 Pac. 126.)

A stockholder of a corporation is liable personally to a judgment creditor of the corporation for the amount of his unpaid subscription; and such creditor's right to recover such amount does not depend upon, nor is it limited in any way by, the other debts of the corporation. In an action to enforce such liability it is not necessary that all the stockholders should be made parties defendant. (Walter v. Academy Assn., 126 Cal. 582, 59 Pac. 136.)

The liability is several, and not joint, and in action to enforce the payment of unpaid subscriptions it is not necessary to join the other stockholders as defendants. (Baines v. Babcock, 95 Cal. 581, 29 Am. St. Rep. 158, 27 Pac. 694, 30 Pac. 776.)

Stockholders organizing a corporation and receiving paid-up shares at a purchase below par are liable upon the insolvency of the corpoCorporation Laws-14

ration, to pay the unpaid balance of the par value of the stock, upon a creditor's bill filed for that purpose by judgment of the creditors of the corporation. (Vermont etc. Co. v. Declez etc. Co., 135 Cal. 579, 87 Am. St. Rep. 143, 67 Pac. 1057.)

Though a contract of subscription to the stock of a corporation may be modified or annulled only by the unanimous consent of the stockholders, or by the board of directors duly authorized to release it, yet such release may be proved not only by the records, but as well by the acquiescence of the stockholders, and by the fact that the corporation itself did not regard it as binding. (Tulare etc. Bank v. Talbot, 131 Cal. 451, 63 Pac. 172.)

An action upon unpaid subscriptions to capital stock is an action upon contract, and an attachment will lie against nonresident stockholders who are defendants therein. (Kohler v. Agassiz, 99 Cal. 9, 33 Pac. 741.)

An execution returned unsatisfied is conclusive as to the exhaustion of remedies against a corporation, and a judgment creditor can thereupon enforce the payment of unpaid subscription without showing that he had pursued his statutory remedy against the stockholders. In such an action evidence that the corporation was the owner and in the possession of personal property is properly rejected when the execution has been returned. (Baines v. Babcock, 95 Cal. 581, 29 Am. St. Rep. 158, 27 Pac. 674, 30 Pac. 776.)

The statute of limitations does not begin to run against a stockholder until a call is made, or there is an evident disbandment of the company and a relinquishment of business. (Harmon v. Page, 62 Cal. 448.)

An original call for payment of subscriptions upon shares made pursuant to the oral agreement of the original stockholders under which shares were issued of a price below par did not set the statute of limitations in motion as against subsequent calls for the residue of the par value made upon a creditor's bill against the original stockholders. (Vermont etc. Co. v. Declez etc. Co., 135 Cal. 579, 87

Am. St. Rep. 143, 67 Pac. 1057.)

A judgment against a corporation, which it is endeavored to satisfy by an action against the stockholders for unpaid subscriptions, is conclusive against the stockholder in such action, and until it is reversed. (Tatum v. Rosenthal, 95 Cal. 129, 29 Am. St. Rep. 97, 100, 30 Pac. 136. Note citation: 62 Am. St. Rep. 697.)

Where the claims of creditors of an insolvent corporation were presented against the estate of a deceased subscriber to the stock of the corporation, a judgment under the creditors' bili that the administration do pay the amount of the subscription in due course of administration to a receiver appointed by the court, to be subject to the further order of the court is proper in form. (Welch v. Sargent, 127 Cal. 72, 59 Pac. 319.)

A judgment creditor of a corporation can sue to enforce unpaid subscriptions of stocks and can join several stockholders and several

causes of action in one suit and the complaint in such action is sufficient against a general demurrer. (Ryan v. Jacques, 103 Cal. 280,

37 Pac. 186.)

SHARES PERSONAL PROPERTY—TRANSFER OF STOCK-IR

RIGATION STOCK.

Sec. 324, C. C. Whenever the capital stock of any corporation is divided into shares, and certificates therefor are issued, such shares of stock, except as hereinafter provided, are personal property, and may be transferred by indorsement by the signature of the proprietor, his agent, attorney, or legal representative, and the delivery of the certificate; but such transfer is not valid, except as to the parties thereto, until the same is so entered upon the books of the corporation as to show the names of the parties by whom and to whom transferred, the number of the certificate, the number or designation of the shares, and the date of transfer; provided, however, that any corporation organized for, or engaged in the business of selling, distributing, supplying, or delivering water for irrigation purposes or for domestic use, may in its by-laws provide that water shall only be so sold, distributed, supplied, or delivered to owners of its capital stock, and that such stock shall be appurtenant to certain lands when the same are described in the certificate issued therefor; and when such certificate shall be so issued, and a certified copy of such by-law recorded in the office of the county recorder in the county where such lands. are situated, the shares of stock so located on any land shall only be transferred with said lands, and shall pass as an appurtenance thereto. En. March 21, 1872. Amd. 1895, 118.

Legislative History.

Section 12 of the corporation act of 1850, page 347; section 9 of the corporation act of 1853, page 88; section 13 of the turnpike road act of 1853, page 169, and section 12 of the railroad act of 1861, provided for the transfer of shares. The original section, as enacted in 1872, is in substance the same as the text, except that it does not contain the proviso. The words "his agent" do not occur in the original.

Section Cited.

Winter v. Belmont Mining Co., 53 Cal. 431; Brown v. S. F. Gaslight Co., 58 Cal. 426; Anglo-Cal. Bank v. Grangers' Bank, 63 Cal.

364; Oakland Paving Co. v. Tompkins, 72 Cal. 9, 1 Am. St. Rep. 17, 12 Pac. 801; Jennings v. Bank of California, 79 Cal. 331, 12 Am. St. Rep. 145, 21 Pac. 852; Ranch Land etc. Co. v. Herberger, 82 Cal. 603, 23 Pac. 134; Tafft v. Presidio etc. R. R. Co., 84 Cal. 137, 18 Am. St. Rep. 166, 24 Pac. 436; San Bernardino I. Co. v. Merrill, 108 Cal. 493, 41 Pac. 487; Nicholls v. Reid, 109 Cal. 632, 42 Pac. 298; Spreckels v. Nevada Bank, 113 Cal. 276-278, 54 Am. St. Rep. 348, 45 Pac. 329; Calkins v. Equitable B. & L. Assn., 126 Cal. 534, 59 Pac. 30; Ashton v. Zeila Mining Co., 134 Cal. 410, 66 Pac. 494; Abbott v. Jack, 136 Cal. 513, 69 Pac. 257.

Annotation.

Character of Certificate of Stock.-Shares of stock in a corporation are personal property. (Tregear v. Etiwanda Water Co., 76 Cal. 537, 9 Am. St. Rep. 245, note, 249, 18 Pac. 658. Note citation: Bloede Co. v. Bloede, 57 Am. St. Rep. 379.)

They constitute property in esse or posse which entitles the holder to certain privileges of value, and may entitle him to profits. (Chatter v. S. F. Sugar Co., 19 Cal. 219.)

A certificate of stock is not a negotiable instrument. (Barstow v. Savage Mining Co., 64 Cal. 388, 49 Am. St. Rep. 705, 1 Pac. 349. To same effect: Graves v. Mining Co., 81 Cal. 326, 22 Pac. 665; Swim v. Wilson, 90 Cal. 129, 25 Am. St. Rep. 110, 27 Pac. 33; Spreckels v. Bank, 113 Cal. 276, 54 Am. St. Rep. 350, 45 Pac. 329; Craig v. Hesperia etc., 113 Cal. 13, 54 Am. St. Rep. 317, 45 Pac. 10. Note citation: Atkins v. Gamble, 42 Cal. 86, 10 Am. Rep. 282; Young v. Iron Co., 4 Am. St. Rep. 759. And see Winter v. Belmont Min. Co., 53 Cal. 432.)

And a certificate of stock not being a negotiable instrument, in analogy to other non-negotiable instruments, a purchaser takes subject to all equities in favor of the corporation. (Craig v. Water Co., 113 Cal. 7, 54 Am. St. Rep. 317, 45 Pac. 10.)

Transfer-Generally.-No formal assignment is necessary in order to substitute one stockholder for another. (Tulare etc. Bank v. Talbot, 131 Cal. 45, 63 Pac. 172.)

In general, the law places no restriction upon the right of a stockholder to transfer his stock, so long as the corporation is solvent. But after the corporation has become insolvent to the knowledge of the stockholder he cannot, by a transfer of his stock to an irresponsible person, escape liability for an unpaid subscription to stock, as against a creditor's bill to enforce such liability filed by the creditors of the corporation, who are entitled to have all such transfers canceled, and to have judgment entered against the transferrers. (Welch v. Sargent, 127 Cal. 72, 59 Pac. 319.)

But corporations cannot pass retrospective by-laws forbidding stock transfers until owners' debts to it are paid and it may be compelled by mandamus to transfer stock on its books. (People v.