OTHER RECORDS TO BE KEPT BY CORPORATIONS FOR PROFIT, AND OTHERS.

Sec. 378, C. C. In addition to the records required to be kept by the preceding section, corporations for profit must keep a book, to be known as the "Stock and Transfer Book," in which must be kept a record of all stock; the names of the stockholders or members, alphabetically arranged; installments paid or unpaid; assessments levied and paid or unpaid; a statement of every alienation, sale, or transfer of stock made, the date thereof, and by and to whom; and all such other records as the by-laws prescribe. Corporations for religious and benevolent purposes must provide in their by-laws for such records to be kept as may be necessary. Such stock and transfer book must be kept open to the inspection of any stockholder, member, or creditor. En. March 21, 1872.

Section Cited.

Pacific Fruit Co. v. Coon, 107 Cal. 453, 40 Pac. 542; Knowles v. Sandercock, 107 Cal. 636, 40 Pac. 1047.

Annotation.

Books as Evidence.-The amount of assessable stock of a corporation may be proven by the certificate-book in the absence of a "stock and transfer book" required by the section. (Pacific Fruit Co. v. Coon, 107 Cal. 453, 40 Pac. 542.)

Books of corporation are competent evidence to prove number of shares of stock subscribed and issued, and who are the stockholders. (Evans v. Bailey, 66 Cal. 112, 4 Pac. 1089.)

A stock ledger and stock journal is admissible in the absence of the book required by this section, when it appears to have been designed for a stock and transfer book, and its contents, so far as set out in the record, correspond with what is required by the code in respect of a stock and transfer book. The fact that the book is not named as the code requires is not material. (Knowles v. Sandercock, 107 Cal. 629, 40 Pac. 1047.)

The stock book of a corporation is not admissible in evidence in an action by a creditor of the corporation against one claiming to be a stockholder, for the purpose of proving that he is such stockholder. (Mudgett v. Horrell, 33 Cal. 25. Note citations: 8 Am. Dec. 640; 3 Am. St. Rep. 833, 867.)

The stock and transfer book of a corporation is but presumptive evidence a person named therein as a stockholder is such. (Mudgett v. Horrell, 33 Cal. 25.)

(Boston

Parol evidence is competent to prove the fact that a certain individual is an officer and stockholder of the corporation. Tunnel Co. v. McKenzie, 67 Cal. 485, 8 Pac. 22.)

ARTICLE III.

EXAMINATION OF CORPORATIONS, ETC.

§ 382. Examination into affairs of corporation, how made by officers of state.

§ 383. Examination made by the legislature.

§ 384. Chapter and article may be repealed.

EXAMINATION INTO AFFAIRS OF CORPORATION, HOW MADE BY OFFICERS OF STATE.

Sec. 382, C. C. The attorney general or district attorney, whenever and as often as required by the governor, must examine into the affairs and conditions of any corporation in this state, and report such examination, in writing, together with a detailed statement of facts, to the governor, who must lay the same before the legislature; and for that purpose the attorney general or district attorney may administer all necessary oaths to the directors and officers of any corporation, and may examine them on oath in relation to the affairs and condition thereof, and may examine the books, papers and documents belonging to such corporation, or appertaining to its affairs and condition. En. March 21, 1872.

Permitting inspection of books: See Pen. Code, sec. 565.

Legislative History.

This article is derived from sections 29 and 30 of the corporation act of 1850 (Stats. 1850, p. 350).

Section Cited.

People v. Hibernia Sav. & L. Soc., 72 Cal. 23, 13 Pac. 48.

Annotation.

Examination of Books of Attorney General.-This section does not authorize the attorney general to examine the books of a corporation at his option, and independent of any judicial action. While the section may be free from ambiguity, it was intended to provide for a proceeding in court with authority in the court to require the corporation to render accounts and to submit its books

and papers for inspection, under the supervision of tthe court. (People v. Hib. S. & L. Soc., 72 Cal. 23, 13 Pac. 48. Afirmed: People v. German S. & L. Soc., 72 Cal. 28, 13 Pac. 51. See, also, sec. 474, Pol. Code.)

FXAMINATION MADE BY THE LEGISLATURE.

Sec. 383, C. C. The legislature, or either branch thereof, may examine into the affairs and condition of any corporation in this state at all times; and, for that purpose, any committee appointed by the legislature, or either branch thereof, may administer all necessary oaths to the directors, officers, and stockbolders of such corporation, and may examine them on oath in relation to the affairs and condition thereof; and may examine the safes, books, papers, and documents belonging to such corporation, or pertaining to its affairs and condition, and compel the production of all keys, books, papers, and documents by summary process, to be issued on application to any court of record or any judge thereof, under such rules and regulations as the court may prescribe. En. March 21, 1872. Permitting inspection of books: See Pen. Code, sec. 565.

Legislative History,

See sec. 382, C. C., supra.

CHAPTER AND ARTICLE MAY BE REPEALED.

Sec. 384, C. C. The legislature may at any time amend or repeal this part, or any title, chapter, article, or section thereof, and dissolve all corporations created thereunder; but such amendment or repeal does not, nor does the dissolution of any such corporation, take away or impair any remedy given against any such corporation, its stockholders, or officers, for any liability which has been previously incurred. En. March 21, 1872.

Legislative History.

In the Constitution of 1849, in force when this code was adopted, was the following section: "Corporations may be formed under general laws, but shall not be created by special act except for municipal purposes. All general laws and special acts passed pursuant to this section may be altered from time to time or re

pealed': Art. IV, sec. 31. The Constitution of 1879, article XII, section 1, preserves this section in the following language: "Corporations may be formed under general laws, but shall not be created by special act. All laws now in force in this state concerning corporations, and all laws that may be hereafter passed pursuant to this section may be altered from time to time or repealed." The code commissioners quote the section from the former constitution and say: "Section 384 was inserted in this code out of an abundance of caution, and not because it was deemed necessary, for there can be but little doubt that the constitutional provision quoted at the head of this note enters into and becomes a part of the contract, thereby reserving to the legislature the right to repeal, impair, or alter any law relative to the formation of corporations, even though the result reached would be the dissolution of every corporation organized within the state."

Annotation.

Alteration and Repeal of Charters: See notes to sec. 1, art. XII, Const. 1879, ante.

ARTICLE IV.

JUDGMENT AGAINST AND SALE OF CORPORATE PROPERTY.

§ 388. Franchise may be treated as property, and sold under execution.

§ 389. Purchaser to transact business of corporation.

§ 390. Purchaser may recover penalties, etc.

FRANCHISE MAY BE TREATED AS PROPERTY, AND SOLD UNDER EXECUTION.

Sec. 388, C. C. For the satisfaction of any judgment against any person, company, or corporation authorized to receive tolls, the franchise, and all the rights and privileges thereof, may be levied upon and sold under execution, in the same manner, and with the same effect, as any other property. En. March 21, 1872. Amd. 1873-74, 208; 1897, 16.

Seizure on execution: See Code Civ. Proc., sec. 688.

Legislative History.

The original section had the words "organized for profit' instead of the words "authorized to receive tolls," which were sub

stituted by the amendment of 1872-73. The words "any person, company," were inserted by the amendment of 1897.

Code Commissioners' Note: "By section 388, the government consents that franchises may be levied upon and sold under execution in like manner as other property is levied upon and sold."

Section Cited.

Welch v. County of Plumas, 80 Cal. 341, 22 Pac. 254; Southern Pacific Co. v. Burr, 86 Cal. 283, 24 Pac. 1032; Gregory v. Blanchard, 98 Cal. 311, 33 Pac. 199.

Annotation.

Sale of Franchises Under Execution.-The franchises of a corporation are privileges granted and held in personal trust, and cannot be transferred by forced sale or voluntary assignment, except by permission of the government, and, when that permission is granted, the mode of transfer pointed out must be followed. (Wood v. Truckee etc. Co., 24 Cal. 474 (turnpike). To same effect: Appeal of North Beach Co., 32 Cal. 529, Sanderson and Rhodes, JJ., in dissenting opinion; People v. Duncan, 41 Cal. 510; S. P. Co. v. Burr, 86 Cal. 283, 24 Pac. 1032 (railroad); Gregory v. Blanchard, 98 Cal. 313, 33 Pac. 199 (toll road); Monroe v. Thomas, 5 Cal. 470; Thomas v. Armstrong, 7 Cal. 289. Note citations: 99 Am. Dec. 335; 35 Am. St. Rep. 391.)

In the absence of a statutory provision, a franchise cannot be levied on or sold under execution. This section changes the common-law rule, and permits of the sale of corporate franchises under execution in the manner in which other property is so levied upon and sold. (Southern Pacific Co. v. Burr, 86 Cal. 283, 24 Pac. 1032.) This section is limited, however, to franchises owned by a corporation, and does not authorize the sale of a franchise owned by an individual. (Gregory v. Blanchard, 98 Cal. 311, 33 Pac. 199. To same effect: Risdon etc. Works v. Citizens' etc. Co., 122 Cal. 97, 68 Am. St. Rep. 25, 45 Pac. 529. Note citation: 35 Am. St. Rep. 402.)

But even those rules of law which exempt a franchise when held by an individual from levy and sale under execution do not extend the exemption to such property as may be necessary or even indispensable to the enjoyment of the franchise. (Risdon etc. Works v. Citizens' etc. Co., 122 Cal. 96, 68 Am. St. Rep. 25, 45 Pac. 529.)

A corporation is a necessary party to an action which seeks to enforce a judgment by levy and sale under execution of the corporate franchise. (S. V. W. W. v. Schottler, 62 Cal. 69.)

Transfer of Franchises.-The question as to the validity of a transfer of a corporation's franchise is one which concerns the public alone. (Oakland R. R. Co. v. Oakland etc. Co., 45 Cal. 365, 13 Am. Rep. 181.)