ment and the costs and expenses already incurred, or any part or En. March 21, 1872.

portion thereof.

Legislative History.

See sec. 331, C. C., ante.

Section Cited.

San Joaquin L. & W. Co. v. Beecher, 101 Cal. 76, 77, 35 Pac. 349; San Bernardino etc. Co. v. Merrill, 108 Cal. 493, 495, 41 Pac. 487; Stockton C. H. & A. Works v. Houser, 109 Cal. 5, 41 Pac. 809; Visalia etc. R. R. Co. v. Hyde, 110 Cal. 635, 52 Am. St. Rep. 136, 43 Pac. 10; Shively v. Eureka etc. Mining Co., 129 Cal. 296, 61 Pac. 239.

Annotation.

Recovery of Assessments.—The Civil Code provides two methods of enforcing assessments, one by sale of stock and the other by an action of law, at the option of the board of directors. The latter method is equally valid and in many cases more efficacious. Joaquin L. & W. Co. v. Beecher, 101 Cal. 71, 35 Pac. 349.)

(San

CHAPTER III.

CORPORATE POWERS.

Article I. General Powers, §§ 354-364.

II. Records, §§ 377, 378.

III. Examination of Corporation, §§ 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. Corporation to organize within one year.

$359. Increasing and diminishing capital stock, how.

§ 360. Corporations may acquire real property, and how much. Consolidation of mining corporations owning adjoining claims.

§ 361.

361a. Transfer of franchise not valid without consent of stock

holders.

§ 362.

§ 363.

Amendment of articles or certificate of incorporation.
Corporations may own their lots and buildings.

Correction of erroneous filing of articles of incorporation.

§ 363.

§ 364. Corporations may transfer foreign concessions.

POWERS OF CORPORATIONS.

Sec. 354, C. C. Every corporation, as such, has power: 1. Of succession by its corporate name, for the period limited; and when no period is limited, generally;

2. To sue and be sued in any court;

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 installments;

8. To enter into any obligations or contracts essential to the transaction of its ordinary affairs, or for the purposes of the corporation. En. March 21, 1872.

The code, in defining a corporation, says it has certain powers and duties of a natural person': Sec. 283, C. C. Section 354, Civil Code, proceeds to enumerate these powers, and section 355 limits its powers to those enumerated and to those necessarily incidental.

Succession for period limited: See code limit of fifty years, sec. 290, C. C. Limit for homestead corporations ten years: Sec. 557, C. C.

Where action against corporation may be brought: See Const. Cal. 1879, art. XII, sec. 16; see Code Civ. Proc., sec. 395.

Acquiring property by eminent domain: See Code Civ. Proc., sec. 1237 et seq.

Power to make by-laws: See ante, sec. 301, C. C.
Selling delinquent shares: See ante, sec. 331, C. C., et seq.
For particular powers of particular corporations, see Index.

Legislative History.

Sections 354 to 356, inclusive, of this article are taken from the corporation act of 1850, page 347, sections 1, 2, 3, 4, 5, 6, and the corporation act of 1853, page 87, section 4. The telegraph act of 1861, page 84, the savings and loan society act of 1862, page 199, and the insurance act of 1866, page 747, contain provisions regulating the general powers of those corporations.

Section Cited.

Low v. Central Pacific R. R. Co., 52 Cal. 59, 28 Am. Rep. 629; McKiernan v. Lenzen, 56 Cal. 63; Seeley v. San Jose I. M. & L. Co., 59 Cal. 24; Spring Valley W. W. v. Schottler, 62 Cal. 104; Anglo-Cal. Bank v. Grangers' Bank, 63 Cal. 363; Underhill v. Santa Barbara etc. Co., 93 Cal. 309, 28 Pac. 1049; San Diego Water Co. v. Flume Co., 108 Cal. 558, 41 Pac. 495; Bates v. Coronado Beach Co., 109 Cal. 163, 41 Pac. 855; Vercoutere v. Golden St. L. Co., 116 Cal. 414, 48 Pac. 375; San Luis Water Co. v. Estrado, 117 Cal. 177, 48 Pac. 1075; Granite Gold Mining Co. v. Maginness, 118 Cal, 138, 50 Pac. 269; Savings Bank etc. v. Barrett, 126 Cal. 416, 58 Pac. 914.

Annotation.

General Powers.-All corporations organized under laws of this state are by general law vested with certain powers by express grant. They are invested with further powers by the particular act under which they are incorporated, or by the title of the code under which they are incorporated. (S. V. W. W. v. Schottler, 62 Cal. 69.) When persons organize themselves into a corporation under general laws, the corporation possesses no powers or privileges except such as are conferred by general laws. (S. F. v. S. V. W. W., 48 Cal. 493.)

A corporation can exercise no other powers than such as are speeifically granted, or such as are necessary for carrying into effect the powers granted. (Vandall v. S. F. Dock Co., 40 Cal. 83; Dunbar v. Alcalde etc., 1 Cal. 355; Argenti v. S. F., 16 Cal. 255; Union Water Co. v. Fluming Co., 22 Cal. 627; McKiernan v. Lenzen, 56 Cal. 61; Smith v. Morse, 2 Cal. 524; Smith v. Eureka Flour Mills, 6 Cal. 1; Neal v. Hill, 16 Cal. 145, 76 Am. Dec. 508; Miners' Ditch Co. v. Zellerbach, 37 Cal. 543, 99 Am. Dec. 300; People v. President etc., 38 Cal. 166.)

Corporations are bound to follow strictly the letter of their charter, and can exercise no power unless granted to them or absolutely necessary to carry out the power so granted. (Smith v. Morse, 2 Cal. 524. To same effect: Union Water Co. v. Fluming Co., 22 Cal. 627.)

A given act is within the power of a corporation first if it falls within the powers expressly enumerated in its certificate, or, second, if it is necessary to the exercise of one of such enumerated powers. (Vandall v. South S. F. Dock Co., 40 Cal. 83. To same effect: Temple Street etc. R. R. v. Hellman, 103 Cal. 640, 37 Pac. 530; San Diego v. Pacific Beach Company, 112 Cal. 58, 44 Pac. 333.)

Powers, How Exercised.-The express powers of a corporation must be exercised in the manner pointed out by the statute, but the powers merely incident thereto may be exercised by its officers and agents. (Smith v. Eureka Flour Mills, 6 Cal. 1; Carey v. Philadelphia etc. Co., 33 Cal. 696; Union Water Co. v. Murphy's Flat Co., 22 Cal. 627.)

Legislative grants of corporate power must be exercised and enjoyed in the mode, manner and upon the conditions prescribed. (French v. Teschemaker, 24 Cal. 518. To same effect: McCoy v. Briant, 53 Cal. 250, 21 Am. Rep. 704. Note citation: 81 Am. Dec. 107.)

When a statute defines the mode in which corporate powers are to be exercised, the corporation cannot by by-laws, resolutions, or contracts change mode of exercise of such powers or the person by whom they are to be exercised. (Brewster v. Hartley, 37 Cal. 15, 99 Am. Dec. 237. Note citations: 85 Am. Dec. 621; 43 Am. St. Rep. 154.)

A corporation must confine its functions to the limits prescribed for its actions, and if the law expressly inhibits it from doing a given thing it is powerless to do that thing, and if it can do it only in a given manner, the prescribed method becomes the measure of power. (Griffith v. New York etc. Ins. Co., 101 Cal. 642, 40 Am. St. Rep. 96, 36 Pac. 113.)

The corporate powers of a corporation can be exercised by trustees only when duly assembled and acting as a board. (Gashwiler v. Willis, 33 Cal. 11, 91 Am. Dec. 607.)

Subd. 1. Period Limited: See secs. 290, 401, 557, C. C.

Consolidated Corporations-New Corporations.-Consolidated corporations become new corporations, and as such may exist for fifty years irrespective of the term of existence of the constituent corporations. (Market St. Ry. Co. v. Hellman, 109 Cal. 571, 42 Pac. 225.)

A corporation duly organized and having done business, has the full term of life prescribed by law, and does not become dissolved or cease to exist by cessation thereafter to transact business. (San Diego Gas Co. v. Frame, 137 Cal. 441, 70 Pac. 295.)

Subd. 2. Power to Sue and be Sued.-A corporation represents and binds its stockholders in all matters within its corporate powers so long as it acts in good faith and without fraud; and in suing

and being sued upon its rights and obligations it binds the stockholders who cannot interfere in its right to maintain and defend such actions except where the directors refuse to act or are guilty of fraud in the maintenance or defense of the action. (Baines v. Babcock, 95 Cal. 581, 29 Am. St. Rep. 158, 27 Pac. 674, 30 Pac. 776.)

Venue: See sec. 16, art. XII, Const., ante, and sec. 395, C. C. P. Filing articles of incorporation: See sec. 399, C. C., ante.

Parties.-A corporation cannot be made a defendant in an action where its existence is questioned. (People v. Stanford, 77 Cal. 360, 18 Pac. 85, 19 Pac. 693. To same effect: State v. Webb, 38 Am. St. Rep. 159.)

Writ of prohibition to prohibit court from further proceeding in matter of removal of such officers may be brought in the name of the corporation. As representing the stockholders it is a party beneficially interested. (Chollar Mining Co. v. Wilson, 66 Cal. 374, 5 Pac. 670.)

In action to compel corporation to transfer stock sold under foreclosure of mortgage thereon, mortgagor is not necessary party. He is to be treated as vendor of plaintiff, who sold his stock through the sheriff as agent. Failure to join him in complaint is not ground for demurrer. (Tregear v. Etiwanda Water Co., 76 Cal. 537, 9 Am. St. Rep. 245, 18 Pac. 658.)

In an action for accounting against two corporations and the stockholders of the first, brought by parties who had assigned rights to the first corporation which had been fraudulently transferred to the second corporation in consideration of the issuance of stock in the second corporation to certain stockholders of the first, such stockholders and the second corporation are proper parties defendant. The other stockholders are not proper parties defendant. (Schaak v. Eagle Automatic Can Co., 135 Cal. 472, 63 Pac. 1025, 67 Pac. 759.)

In insolvency proceeding against corporation neither president, secretary, individual directors, nor stockholders are parties; nor does the president become a party by verifying the pleadings. (Ex parte Hollis, 59 Cal. 405.)

Pleading.-A corporation is recognized in law by its corporate name and must sue and be sued in such name. (Curtiss v. Murry, 26 Cal. 633.)

Allegation that plaintiff is an association duly organized under an act of the legislature of Pennsylvania, entitled "An act authorizing the formation of partnership associations," held insufficient in failing to allege that laws of Pennsylvania gave plaintiff power to sue, or any other corporate powers. (Parks Canal etc. Co. v. Hoyt, 57 Cal. 44.)