Page images

remains a perpetual easement to the land. (Price v. Riverside L. & I. Co., 56 Cal. 440.)

Under this section it is not only the duty of an irrigation company to continue the supply of water to lands that it has sold, but it is also its duty to continue to furnish water to those within the flow, and along the line of the ditches, who are cultivating land which has been furnished with water for irrigation at such rates and terms as may be established by the corporation. (Merrill v. Southside Irr. Co., 112 Cal. 426, 44 Pac. 720.)

The act of March 12, 1885 (Stats. 1885, p. 95), does not destroy the right of contract between irrigation companies and the owners of the land. It merely allows the supervisors to fix maximum rates, and the power of contract within such rates is preserved. Until such rates are fixed, persons selling water are allowed to charge and collect their established and customary rates. (Fresno Canal Co. v. Park, 129 Cal. 437, 62 Pac. 87.)

The refusal of an irrigation company to supply water for irrigation purposes cannot be excused on the grounds that the rates for a previous year are unpaid. (Crow v. San Joaquin etc. Co., 130 Cal. 319, 62 Pac. 562, 1058.)

Easement to the Land.-By the terms of the section, all persons purchasing lands of the corporation have the right to be supplied with water, and it remains a perpetual easement to the land. (Price v. Riverside L. & I. Co., 56 Cal. 440.)

Where a right of way for a ditch is granted on verbal agreement that grantor shall have the use of certain quantity of water to be taken from the ditch and used perpetually, the agreement is within the statute of frauds, and cannot create a servitude or easement upon the ditch property, or constitute an irrevocable license, or justify the diversion of the water. (Dorris v. Sullivan, 90 Cal. 279, 27 Pac. 216.)



$ 557. Time of corporate existence. § 558. By-laws must specify time for, and amount of payment of, in

stallments, and penalty for failure to pay-By-laws to

be furnished to any member on demand. $ 559. Advertisement and sale of delinquent and forfeited shares. $ 560. May borrow and loan funds-How, and for what time. § 561. Minor children, wards, and married women may own stock. § 562. Forfeiture for speculating in or owning lands exceeding two

hundred thousand dollars. $ 563. When corporation is terminated, and how. $ 564. Payment of premiums. $ 565. Annual report to be published. § 566. Publication in certain cases.


Sec. 557, C. C. Corporations organized for the purpose of acquiring lands in large tracts, paying off encumbrances thereon, improving and subdividing them into homestead lots or parcels, and distributing them among the shareholders, and for the accumulation of a fund for such purposes, are known as homestead corporations, and must not have a corporate existence for a longer period than ten years. En. March 21, 1872.

Time of corporate existence: See post, Statutes at Large, title “Homesteads."

Legislative History.

Sections 1 and 3 of the homestead act of 1861, page 567, as amended 1866-67, page 539, are the basis of this section.


MENT OF INSTALLMENTS, AND PENALTY FOR FAILURE TO PAY-BY-LAWS TO BE FURNISHED TO ANY MEMBER ON DEMAND. Sec. 558, C. C. Such corporations must specify in their by-laws the times when the installments of the capital stock are payable, the amount thereof, and the fines, penalties, or forfeitures incurred in case of default. A printed copy of the articles of incorporation and by-laws must be furnished to any shareholder on demand. En. March 21, 1872.


FEITED SHARES. Sec. 559, C. C. Whenever any shares of stock are declared forfeited, by resolution of the board of directors, the directors may advertise the same for sale, giving the name of the subscriber and the number of shares, by notice of not less than three weeks, published at least once a week in a newspaper of general circulation in the city, town, or county where the principal place of business of such corporation is located. Such sale must be made at auction, under the direction of the secretary of the company. The corporation may be a bidder, and the shares must be disposed of to the highest bidder for cash. No defect, informality, or irregularity in the proceedings respecting the sale invalidates it, if notice is given as herein provided. After the sale is made the secretary must, on receipt of the purchase money, transfer to the purchaser the shares sold, and after deducting from the proceeds of such sale all installments then due, and all expenses and charges of sale, must hold the residue subject to the order of the delinquent subscriber. En. March 21, 1872.

Legislative History.

Section 4 of the homestead act of 1861, page 567, as amended 186364, page 492, and section 2 of the amendatory act of 1867-68, page 540, are the basis of this section,


TIME. Sec. 560, C. C. Homestead corporations may borrow money for the purposes of the corporation, not exceeding at any one time one-fourth of the aggregate amount of the shares or parts of shares actually paid in, and the income thereof; no greater rate of interest must be paid therefor than twelve per cent per annum. For the purpose of completing the purchase of lands intended to be divided and distributed, they may borrow on the security of their shares on the land thus purchased, or that owned by the corporation at the time of procuring the loan, any sum of money which, together with the interest contracted to become due thereon, will not exceed ninety per cent of the unpaid amount subscribed by the shareholders; but no loan must be made to the corporation for a term extending beyond that of its existence. En. March 21, 1872.

Legislative History.

Section 5 of the homestead act of 1861, page 567, as amended 1870, page 474, is the basis of this section.


OWN STOCK. Sec. 561, C. C. Such shares of stock in homestead corporations as may be acquired by children, the cost of which, and the deposits and assessments on which are paid from the personal earnings of the children, or with gifts from persons other than their male parents, may be taken and held for them by their parents or guardians. Married women may hold such shares as they acquire with their personal earnings, or those of their children, voluntarily bestowed therefor, or from property bequeathed or given to them by persons other than their husbands. En. March 21, 1872.

Legislative History.

Section 6 of the homestead act of 1861, page 567, is the basis of this section.


CEEDING TWO HUNDRED THOUSAND DOLLARS. Sec. 562, C. C. Homestead corporations must not purchase and sell, or otherwise acquire and dispose of real property, or any interest therein, or any personal property, for the sole purpose of speculation or profit. Nor must any such corporation at any one time own or hold, in trust or otherwise, for its purposes, real property, or any interest therein, which in the aggregate exceeds in cash value the sum of two hundred thousand dollars. For any violation of the provisions of this section corporations forfeit their corporate rights and powers. On the application of any citizen to a court of competent jurisdiction such forfeiture may be adjudged, and the judgment carries with it costs of the proceedings. En. March 21, 1872.


Sec. 563, C. C. Except for the purpose of winding up and settling its affairs, every homestead corporation must terminate at the expiration of the time fixed for its existence in the articles of incorporation, or when dissolved as provided in this part. No dividend of funds must be made on termination of its corporate existence, until its debts and liabilities are paid; and upon the final settlement of the affairs of the corporation, er upon the termination of its corporate existence, the directors, in such manner as they may determine, must divide its property among its shareholders in proportion to their respective interests, or, upon the application of a majority in interest of the stockholders, must sell and dispose of any or all of the real estate of the corporation upon such terms as may be most conducive to the interest of all the stockholders, and must convey the same to the purchaser, and distribute the proceeds among the shareholders, or may at any time, when best for the interests of all the shareholders, cause the lands of the corporation to be subdivided into lots and distributed, , by sale for premiums, at auction or otherwise, among the shareholders. En. March 21, 1872.

Legislative History.

Section 7 of the homestead act of 1861, page 567, and section 1 of the amendatory act of 1870, page 74, are the basis of this section,


Sec. 564, C. C. Such premiums on lots may be made payable at the time they are bid off, and, if not so paid on any lot of land the directors may immediately offer the same for sale

« PreviousContinue »