Dec. 628; Hudepohl v. Liberty Hill etc. Co., 80 Cal. 558, 22 Pac. 339; Illinois etc. Bank v. Pacific etc. Co., 117 Cal. 347, 49 Pac. 197.) The reception and retention by a corporation of the benefits of a pledge precludes question as to the power of the corporation to make the pledge. (Lawrence v. Johnson, 131 Cal. 175, 63 Pac. 176.)

Where the defense of ultra vires is made to avoid an unauthorized and not a prohibited act, the courts are inclined to treat a corporation as estopped to set up such defense in all cases where it has received and retains the benefit of the transaction, and seeks by plea to avoid its correlative obligation. (Kennedy v. California Sav. Bank, 101 Cal. 495, 40 Am. St. Rep. 69, 72, 35 Pac. 1039. Notes: Kadish v. Assn., 42 Am. St. Rep. 263; Williams v. Bank, 42 Am. St. Rep. 511.)

A corporation must account for benefits received under an ultra vires contract with interest on the amount found due, and money furnished by a bank, and applied to the proper use and benefit of a corporation may be recovered back by the receiver of a bank to the extent they have not been repaid. There is an implied promise of the corporation to repay the money to the bank. (Pauly v. Pauly, 107 Cal. 8, 48 Am. St. Rep. 98, 40 Pac. 29.)

A corporation which engages in the business of innkeeping and assumes the liability of an innkeeper toward a guest, and receives a consideration therefor, cannot in an action for damages for destruction of personal property by fire, plead that its acts as innkeeper were ultra vires as included in its corporate powers. (Magee v. Pacific Imp. Co., 98 Cal. 678, 35 Am. St. Rep. 199, 201, 33 Pac. 772.)

Ultra Vires-Estoppel.-The term "ultra vires," when used in reference to corporation, is employed in different senses. An act is said to be ultra vires when it is not in the power of the corporation to perform it under any circumstances; and an act is also said to be ultra vires with reference to the right of certain parties when the corporation cannot perform it without their consent; and it may also be ultra vires with reference to some specific purpose when the corporation cannot perform it for that purpose.

v. Zellerbach, 37 Cal. 543, 99 Am. Dec. 300.)

(Miners' etc. Co.

When an act is ultra vires with reference to the rights of certain parties or with reference to some specific purpose, the act is not void in toto, but its validity would depend upon the circumstances of the case, and the defense of ultra vires may or may not be available. (Miners' etc. Co. v. Zellerbach, 37 Cal. 543, 99 Am. Dec. 300. To same effect: Evans v. Bailey, 66 Cal. 113, 4 Pac. 1089.)

An act of a corporation is void in toto when it is not within the power of the corporation to perform it under any circumstances or for any purposes. (Miner's etc. Co. v. Zellerbach, 37 Cal. 543, 99 Am. Dec. 300. Note citations: 3 Am. St. Rep. 699, 36 Am. St. Rep. 76; 42 Am. St. Rep. 262.)

When a corporation seeks to avoid its contract on the ground of its want of power to contract, where the contract is not upon its face necessarily beyond the scope of its authority, it will, in the absence of proof, be presumed to be valid, and the corporation must make good its defense of ultra vires by plea and proof. v. Board of Education etc., 103 Cal. 531, 37 Pac. 503.)

(Brown

In the absence of evidence showing that the employment of a physician by a corporation to treat a person injured in connection with its business was ultra vires, it must be presumed that the contract was within the powers of the corporation. (Deane v. Gray Bros. etc., 109 Cal. 433, 42 Pac. 443.)

Estoppel in Pais, What is.-An estoppel in pais is a right arising from acts, admissions or conduct, which have induced a changed position in accordance with the real or apparent intention of the party against whom it is alleged; and where a person by word or conduct induces another to act on a belief in the existence of a certain state of facts, he will be estopped as against him to allege a different state of facts. (Pope v. Armsby Co., 111 Cal. 159, 43 Pac. 589.)

Estoppel in Pais-Distinguished From Ratification.-An estoppel in pais addresses itself to equity, and is to be distinguished from ratification, which is a question of legal cognizance; and it is only where the acts fall short of a legal ratification that the necessity exists of invoking the doctrine of estoppel. (Blood v. Water Co., 113 Cal. 221, 41 Pac. 1017, 45 Pac. 252. Cited: Pacific Bank v. Stone, 121 Cal. 206, 53 Pac. 634.)

Ratification: See under subd. 5, sec. 303, and also sec. 305, C. C.,

ante.

LIMITATION OF POWERS.

Sec. 355, C. C. 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 exercise of the powers so enumerated and given. En. March 21, 1872.

Incidental Powers.-This section is a negative grant of incidental powers, with respect to which see sec. 354, C. C.

BANKING EXPRESSLY PROHIBITED.

Sec. 356, C. C. No corporation shall create or issue bills, notes, or other evidences of debt, upon loans or otherwise, for circulation as money. En. March 21, 1872.

Issuing or circulating paper money, except as authorized by the United States, punished by Penal Code, sec. 648.

Constitutional provisions to the same purpose: Const. Cal. 1879, art. XII, sec. 5.

That this limitation upon corporate powers does not prevent the execution of negotiable instruments, see sec. 354, subd. 8, C. C.

Annotation.

Act of 1850 concerning corporations prohibits them from issuing bill or notes for circulation as money. (Magee v. Mok. Hill Co., 5 Cal. 258. To same effect: Smith v. Eureka Flour Mill, 6 Cal. 7.)

The above provision of law does not prevent corporation from borrowing money and issuing usual evidence of debt therefor. (Magee v. Mokelumne Hill Co., 5 Cal. 258. Affirmed: Smith v. Eureka Flour Co., 6 Cal. 7. To same effect: Seeley v. Lumber Co., 59 Cal. 25.)

MISNOMER DOES NOT INVALIDATE INSTRUMENT.

Sec. 357, C. C. The misnomer of a corporation in any writ ten instrument does not invalidate the instrument, if it can be reasonably ascertained from it what corporation is intended. En. March 21, 1872.

Section Cited.

Underhill v. Santa Barbara etc. Co., 93 Cal. 314, 28 Pac. 1049; Donohoe-Kelly Banking Co. v. S. P. Co., 138 Cal. 183, 94 Am. St. Rep. 28, 71 Pac. 93.

Annotation.

Misnomer-Garnishment.-A notice of garnishment served upon the "Donohoe-Kelly Company" instead of the "Donohoe-Kelly Banking Company" is not void when there is no pretense that it was not served on the right party owing the debt, and it appears that the levy was made as required by law, and no question is made that the corporation intended to be reached was the "DonohoeKelly Banking Company." (Donohoe-Kelly Banking Co. v. S. P. Co., 138 Cal. 183, 94 Am. St. Rep. 28, 71 Pac. 93.)

Execution of Mortgage.-Where mortgage was executed as that of the "Santa Barbara Land and Improvement Company," instead of

the "Santa Barbara Land Building and Improvement Company," the instrument is not invalid, where it appears that the execution was attested by the corporate seal and the note expressed the full name of the corporation. (Underhill v. Santa Barbara Co., 93 Cal. 301, 28 Pac. 1049.)

JORPORATION TO ORGANIZE WITHIN ONE YEAR.

Sec. 358, C. C. If a corporation does not organize and commence the transaction of its business, or the construction of its works within one year from the date of its incorporation, or if, after its organization and commencement of its business, it shall lose or dispose of all of its property, and shall fail for a period of two years to elect officers and transact, in regular order, the business of said corporation, its corporate powers shall cease, and the said corporation may be dissolved at the instance of any creditor of the said corporation, at the suit of the state, on the information of the attorney general, but the resumption. of its business in good faith by such corporation prior to the commencement thereof shall be a bar to such suit. The due incorporation of any company claiming in good faith to be a corporation under this part, and doing business as such, or its right to exercise corporate powers, shall not be inquired into collaterally in any private suit to which such de facto corporation may be a party; but such inquiry may be had at the suit of the state on information of the attorney general; provided, however, as to any company claiming in good faith to be, and which has been doing business for ten consecutive years as a corporation, no such inquiry shall be made either by the state or by any person whatsoever. En. March 21, 1872. Amended 1900-01, 632.

Same respecting street railroads: See post, sec. 502, C. C. Provision respecting railroad companies, two years: See post, sec. 468, C. C.

See sec. 285, C. C., ante, for formation of corporations.

Legislative History.

The original section reads as follows: "If a corporation does not organize and commence the transaction of its business or the construction of its works within one year from the date of its incorporation, its corporate powers cease. The due incorporation of any company claiming in good faith to be a corporation under this

principle and doing business as such, or its right to exercise corporate powers shall not be inquired into collaterally in any private suit of which such de facto corporation may be a party, but such inquiry may be had at the suit of the state on information of the attorney general.''

Section Cited.

Weaverville W. R. Co. v. Board of Supervisors, 64 Cal. 72, 28 Pac. 496; People v. Standford, 77 Cal. 372, 18 Pac. 85, 19 Pac. 693; Lakeside Ditch Co. v. Crane, 80 Cal. 186, 22 Pac. 76; Mill etc. Co. v. Machine Works, 82 Cal. 186, 23 Pac. 45; People v. Montecito Water Co., 97 Cal. 277, 33 Am. St. Rep. 172, 32 Pac. 236; Martin v. Deetz, 102 Cal. 64, 66, 67, 41 Am. St. Rep. 151, 36 Pac. 368; People v. Leonard, 106 Cal. 310, 39 Pac. 617; Market St. Ry. Co. v. Hellman, 109 Cal. 601, 42 Pac. 225; Los Angeles Holiness Band v. Spires, 126 Cal. 545, 58 Pac. 1049; People v. Rosenstein-Cohn Cigar Co., 131 Cal. 154, 63 Pac. 163; San Diego Gas Co. v. Frame, 137 Cal. Cal. 445, 70 Pac. 295.

Annotation.

Organization Within One Year.-The purchase of railroad iron and the expenditure of money in the construction and equipment of a railroad constitutes the commencement of business within the terms of this section. (People v. Stockton etc. R. R. Co., 45 Cal. 306, 13 Am. Rep. 178.)

If a franchise is granted by the state upon the condition that the corporation constructs certain works in a specified time, a failure so to do works a forfeiture without judgment at suit of state. (Oakland R. R. Co. v. Oakland etc. R. R. Co., 45 Cal. 365, 13 Am. Rep. 181.)

Cessation of Business.-A corporation which has been organized in substantial compliance with law, has elected directors and adopted by-laws, and begun in good faith to transact business as a corporation, 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.)

De Facto Corporations-What are.-A corporation de facto is one acting as a corporation in good faith, and its existence is not subject to collateral attack. (Lakeside Ditch Co. v. Crane, 80 Cal. 181, 22 Pac. 76.)

A corporation de facto exists where a number of persons have organized and acted as a corporation; but where the directors named in the articles never met nor acted; and no stock is issued, nor bylaws passed, nor seal adopted nor election held, nor any other act done by an intended corporation, it is not a corporation de facto, and its right to exist may be collaterally attacked in a private