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and papers for inspection, under the supervision of tthe court. (People v. Hib. 8. & L. Soc., 72 Cal. 23, 13 Pac. 48. Amrmed: People v. German S. & L. Soc., 72 Cal. 28, 13 Pac. 51. See, also, sec. 474, Pol. Code.)

FIXAMINATION 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CHAPTER AND ARTICLE MAY BE REPEALED.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. .

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Legislative History.

In the Constitution of 1849, in force when this code 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 cor. porations, and all laws that may be hereafter passed pursuant to this section may be altered from time to time or repealed."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 con. tract, 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 execu

tion. $ 389. Purchaser to transact business of corporation. $ 390. Purchaser may recover penalties, etc. § 391. Corporation to retain powers after sale. § 392. Redemption of franchise. $ 393. Sale where made.

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 Plumras, 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 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; 8. 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.)

A franchise is not capable of manual delivery. (Gregory v. Blanchard, 98 Cal. 311, 33 Pac. 199.)

Concerning transfer by corporation, see sec. 361a, C. C., ante, and notes.

PURCHASER TO TRANSACT BUSINESS OF CORPORATION.

Sec. 389, C. C. The purchaser at the sale must receive a certificate of purchase of the franchise, and be immediately let into the possession of all property necessary for the exercise of the powers and the receipt of the proceeds thereof, and must thereafter conduct the business of such corporation, with all its powers and privileges, and subject to all its liabilities until the redemption of the same, as hereinafter provided. En. March 21, 1872.

Annotation.

Delivery.-A franchise is not capable of manual delivery. (Gregory v. Blanchard, 98 Cal. 311, 33 Pac. 199.)

PURCHASER MAY RECOVER PENALTIES, ETC.

Sec. 390, C. C. The purchaser or his assignee is entitled to recover any penalties imposed by law and recoverable by the corporation for an injury to the franchise or property thereof, or for any damages or other cause, occurring during the time he holds the same, and may use the name of the corporation for the purpose of any action necessary to recover the same. A recovery for damages or any penalties thus had is a bar to any subsequent action by or on behalf of the corporation for the same. En. March 21, 1872.

Legislative History.

The commissioners, in their note, say: "For this change in the law it is deemed sufficient simply to refer to Monroe v. Thomas, 5 Cal. 470, Thomas v. Armstrong, 7 Cal. 286, and Wood v. Truckee etc. Co., 24 Cal. 487.The cases referred to declare the commonlaw doctrine that a franchise is a personal privilege incapable of sale or assignment without statutory permission granted by the gov. ernment. For a discussion of this view, see sec. 388, C. C., supra, and notes.

CORPORATION TO RETAIN POWERS AFTER SALE.

Sec. 391, C. C. The corporation whose franchise is sold, as in this article provided, in all other respects retains the same powers, is bound to the discharge of the same duties, and is liable to the same penalties and forfeitures, as before such sale. En. March 21, 1872.

REDEMPTION OF FRANCHISE.

Sec. 392, C. C. The corporation may, at any time within one year after such sale, redeem the franchise, by paying or tendering to the purchaser thereof the sum paid therefor, with ten per cent interest thereon, but without any allowance for the toll which he may in the meantime have received; and upon such payment or tender, the franchise and all the rights and privileges thereof revert and belong to the corporation, as if no such sale had been made. En. March 21, 1872.

SALE WHERE MADE.

Sec. 393, C. C. The sale of any franchise under execution must be made in the county in which the corporation has its principal place of business, or in which the property, or some portion thereof, upon which the taxes are paid, is situated. En. March 21, 1872. Amd. 1873-74, 209.

Legislative History.

The following is the original section: "Sec. 393. The levy and sale of any franchise under execution may be had in any county in which the president or any director, the treasurer or the secretary of the corporation may reside, or in which the corporation has its principal place of business."

The amendment had the effect to restrict the place where a fran. chise may be sold under execution to the county where the corporation has its principal place of business and the county where some of the taxable corporate property is situated. The matter of residence of some one of the enumerated officers is eliminated.

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