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 commolaw 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 taxcs 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 franchise 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 resi dence of some one of the enumerated officers is eliminated. CHAPTER IV. EXTENSION AND DISSOLUTION OF CORPORATIONS. $399. § 400. § 401. § 402. Proceedings to disincorporate. On dissolution, directors to be trustees for creditors. How corporations may continue their existence. (Repealed.) § 403. Title I to apply to all corporations, with certain exceptions. PROCEEDINGS TO DISINCORPORATE. Sec. 399, C. C. The dissolution of corporations is provided for: 1. If involuntary-in chapter V of title X, part II, of the Code of Civil Procedure; 2. If voluntary-in title VI, part III, of the Code of Civil Procedure. En. March 21, 1872. Involuntary dissolution: See Code Civ. Proc., secs. 227, 802. Voluntary dissolution: See Code Civ. Proc., secs. 1227-1233. Act providing for dissolution of savings banks, trust companies and banks of deposit: See post, Appendix, title "Banks and Banking." Section Cited.. Havemeyer v. Superior Court, 84 Cal. 365, 366, 367; Yore v. Superior Court, 108 Cal. 436. Annotation. Disincorporation.-Under this section provision is made by refer ence to the provisions of the Code of Civil Procedure for involuntary as well as for voluntary dissolution. (Havemeyer v. Superior Court, 84 Cal. 367.) Although in this section it is declared that the involuntary dissolution of corporations is provided for in the Code of Civil Procedure, it is rather singular that in turning to that code we find no express provision about the dissolution of corporations, or any mention of a corporation at all. However, it is provided that a person usurping any franchise may be excluded from such franchise by the judgment of the court; and it has been held that under this provision a corporation may be dissolved. (Yore v. Superior Court, 108 Cal. 436, 41 Pac. 477.) ON DISSOLUTION, DIRECTORS TO BE TRUSTEES FOR CRED ITORS. Sec. 400, C. C. Unless other persons are appointed by the court, the directors or managers of the affairs of such corporation at the time of its dissolution are trustees of the creditors and stockholders or members of the corporation dissolved, and have full power to settle the affairs of the corporation. En. March 21, 1872. Section Cited. Havemeyer v. Superior Court, 84 Cal. 358, 365-367, 369, 370, 374, 280, 18 Am. St. Rep. 192, 24 Pac. 121; People v. Superior Court, 100 Cal. 119, 34 Pac. 492; State I. & I. Co. v. San Francisco, 101 Cal. 147-149, 35 Pac. 549. Annotation. Construction of Section.-This section applies to involuntary as well as to voluntary dissolution of a corporation. It provides a means of settlement of the affairs of a dissolved corporation without the intervention of a court, unless such intervention is invoked, and that is its whole scope. And so far as the rights and interests of beneficiaries of the trust reposed in the directors are concerned, the section is in harmony with section 565 of the Code of Civil Procedure. A distinct proceeding by a creditor or stockholder under section 565 of the Code of Civil Procedure is necessary to take the property out of the control of the trustees designated by this section. (Havemeyer v. Superior Court, 84 Cal 327, 18 Am. St. Rep. 192, 24 Pac. 121.) Disposition of Property on Dissolution-Prior to Code.-Prior to code, upon dissolution, directors continued to be trustees of the creditors and stockholders for certain purposes, or in case directors died subsequent to dissolution, district court could appoint new trustees for like purposes. (Clarke v. San Francisco, 53 Cal. 306. To same effect: Kohl v. Lilienthal, 81 Cal. 385, 20 Pac. 401, 22 Pac. 689. Note citation: 57 Am. St. Rep. 76.) On the dissolution of a literary corporation, by a surrender of its franchise, after the payment of its debts, all its personal property, and all its real property acquired by purchase for value vests by operation of law in the state. Such real estate as remains undisposed of, and which had been acquired by donation, would revert to the donors. (People v. College of California, 38 Cal. 166.) A court of equity has no jurisdiction over corporations for the purpose of restraining their operation of winding up their concern. Such court may compel the officers of the corporation to account for any breach of trust, but the jurisdiction for this purpose is over the officers personally, and not over the corporation. (Neall v. Hill, 16 Cal. 145, 76 Am. Dec. 508. To same effect: State etc. Co. v. S. F., 101 Cal. 146, 35 Pac. 549.) The trustees of a college can disincorporate it and transfer all its property to a similar institution. (People v. College of California, 38 Cal. 166.) Disposition of Corporate Property After Dissolution.-The method prescribed by the code for dissolution of corporation is exclusive, and there can be no distribution of its capital stock under any other circumstances. (Kohl v. Lilienthal, 81 Cal. 378, 20 Pac. 401, 22 Fac. 689.) Corporations organized under laws of the state of California can be dissolved only in the manner prescribed by those laws. Its property is to be managed and controlled by its duly elected officers. (Merrill Lodge etc. v. Ellsworth, 78 Cal. 166, 20 Pac. 399, 400.) And after final judgment that a de facto corporation has no legal existence, proceedings should be had for winding up and settling its affairs by trustees. (People v. Flint, 64 Cal. 49, 28 Pac. 495.) The funds of an insolvent corporation are all to be dispensed solely for the benefit of creditors; and no stockholder can be permitted to share therein by subrogation or otherwise. (Sacramento Bank v. Pacific Bank, 124 Cal. 147, 71 Am. St. Rep. 36, 56 Pac. 787.) Directors as Trustees.-The rights of the directors of a building and loan association to wind up its affairs cannot be interfered with by the appointment of a receiver at the suit of the state, which is neither a creditor nor stockholder of the corporation, and has no pecuniary interest therein, where no facts are alleged and found as to fraud, mismanagement or incompetency of the directors, such as would justify the appointment of a receiver if the application had been made by a creditor or stockholder of the corporation. (People ex rel. v. B. & L. Assn., 127 Cal. 400, 59 Pac. 692.) And when the state has secured the dissolution of the corporation, its function in the action has ceased and the property still belongs to the stockholders, and is to be distributed by the directors, who can be deprived of control of the property only at the instigation of a creditor or stockholder. (State Investment etc. Co. v. Superior Court, 101 Cal. 135, 35 Pac. 459.) If there are no directors to act, or worthy to be trusted to act under this section, as trustee of a dissolved corporation, the court can, under section 2289 of the Civil Code, appoint trustees who will have the power and duties that are conferred upon directors by section 400 of the Civil Code. (State Investment etc. Co. v. Superior Court, 101 Cal. 135, 35 Pac. 459.) The powers of the court to appoint other persons to settle the affairs of a dissolved corporation under this section does not au |