large sums of money in reclaiming the land embraced therein; and have enjoyed the fruits of their labors. (People v. Reclamation District, 121 Cal. 522, 50 Pac. 1068, 53 Pac. 1085.)

Nonuser of Franchise-Proof.-The nonuser of a street railway franchise is clearly established by proof that there was a sham pretense of user by running but one car a day, without intending to accommodate the public. (People v. Sutter St. Ry. Co., 117 Cal 604, 49 Pac. 736.)

Fine-Reasonableness.-The court declaring the forfeiture of the franchise has power to impose a fine, and the amount fixed, though large, will not be disturbed upon appeal, where the appellate court cannot declare it unreasonable. (People v. Sutter St. Ry. Co., 117 Cal. 604, 49 Pac. 736.)

Fine-Interest.-No interest is allowed on a fine imposed under this section, as it is penal in its nature, though the action be in the form of a civil action. (People v. Sutter St. Ry. Co., 129 Cal. 545, 79 Am. St. Rep. 137, 62 Pac. 104.)

Receiver-Appointment in quo Warranto Proceedings.-Receiver will not be appointed in quo warranto proceedings at instance of the state, for the purpose of taking control of assets of a corporation which has forfeited its charter by entering into a monopoly merely for the purpose of breaking up the monopoly; nor can the state prevent the stockholders in whom the assets of the corporation rest upon its dissolution from doing with them whatever other natural persons may do with their property. (Havemeyer v. Superior Court, 84 Cal. 327, 18 Am. St. Rep. 192, 24 Pac. 121; Yore v. Superior Court, 108 Cal. 436, 41 Pac. 477.)

Superior court has no jurisdiction to appoint a receiver of property of corporation in quo warranto proceeding, upon judgment of forfeiture of corporation charter. Rendition of judgment authorized by section 808, Code of Civil Procedure, ends the proceeding. (Havemeyer v. Superior Court, 84 Cal. 327, 18 Am. St. Rep. 192, 24 Pac. 121. To same effect: State etc. Co. v. San Francisco, 101 Cal. 146, 35 Pac. 549.)

Judgment of forfeiture of corporate franchise is stayed upon appeal, by giving of proper undertaking, and precludes subsequent appointment of a receiver by superior court to carry such judg ment of forfeiture into effect. (Havemeyer v. Superior Court, 84 Cal. 327, 18 Am. St. Rep. 192, 24 Pac. 121. To same effect: State etc. Co. v. San Francisco, 101 Cal. 150, 35 Pac. 549; San Jose Bank v. Bank, 121 Cal. 545, 54 Pac. 85.)

It is no function of a court to supply the want of penal legisla tion; and it cannot punish the stockholders of a corporation for the abuse of its charter beyond the terms of the law, by appointing a receiver to administer its assets. The punishment prescribed

is the forfeiture of the charter and a fine. (Havemeyer v. Superior Court, 84 Cal. 327, 18 Am. St. Rep. 192, 24 Pac. 121.)

are

Franchise - Forfeiture of Quo Warranto.-Corporations creatures of the law, and when they fail to perform duties which they are incorporated to perform, and in the performance of which the public has an interest, and do acts which are unauthorized or forbidden them to do, state may forfeit their franchises and dissolve them by information in nature of quo warranto. (People v. Dashaway Assn., 84 Cal. 114, 24 Pac. 277.)

Franchise-Condition of Grant.-Grant of corporate franchise is always subject to implied condition that they will not be abused. Principle of forfeiture is that franchise is a trust, and terms of charter are conditions of the trust, and if one of the conditions is violated it will work a forfeiture of the charter. To work a forfeiture the case must be one of perversion by an act inconsistent with the nature of the grant and destructive of its ends, and which amounts to an injury to the public, who are interested in the franchise, or it must have usurpation by the exercise of an unauthorized power, regardless of any interest or injury to the public. (People v. Dashaway Assn., 84 Cal. 114, 24 Pac. 277.)

Franchise-Forfeiture-Benevolent

Association.-Information

in

nature of quo warranto will not lie to enforce dissolution of corporation organized merely "to promote the cause of temperance," en the ground that it has disregarded its corporate trust and violated its charter by perversion and misapplication of its funds, by dividing the same among its members, for the reason that the perversion of the funds is not an injury to the public. (People v. Dashaway Assn., 84 Cal. 114, 24 Pac. 277. To same effect: People v. Cogswell, 113 Cal. 138, 45 Pac. 270.)

Quo Warranto-Forfeiture of-Willful Acts of Officers.-In action in quo warranto to forfeit franchise of corporation, the willful acts and neglect of the officers are regarded as the acts and neglects of the corporation, and will render the corporation liable to decree of dissolution unless the officer or agent has departed from his duties as prescribed by the corporation, or violated his instructions in performance of acts complained of. (People v. Dashaway Assn., 84 Cal, 114, 24 Pac. 277.)

Nature of Action-Judgment.-An action for the usurpation of a franchise under this section is in the form of a civil action, and follows the procedure of civil cases, but the judgment rendered thereon is penal in its nature. (People v. Sutter St. Ry. Co., 129 Cal. 545, 79 Am. St. Rep. 137, 62 Pac. 104.)

Interest of State in Dissolved Corporation.-In an action by the state to dissolve a delinquent corporation, the state has no interest

either in the assets of the corporation or in its debts, and when it has secured the dissolution of the corporation its functions in the (State I. & I. Co. v. Superior Court, 101 Cal.

action have ceased.

135, 35 Pac. 549.)

The imposition of a fine payable to the state in quo warranto proceedings does not authorize the state to institute an action for the appointment of a receiver, and the court cannot do so under section 565, Code of Civil Procedure. (Yore v. Supreme Court, 108 Cal. 431, 41 Pac. 477.)

TITLE XIV.

CHAPTER VI.

COSTS.

§ 1036. When plaintiff is a nonresident or foreign corporation, defendant may require security for costs.

WHEN PLAINTIFF IS A NONRESIDENT OR FOREIGN CORPORATION, DEFENDANT MAY REQUIRE SECURITY FOR

COSTS.

Sec. 1036, C. C. P. When the plaintiff in an action or special proceeding resides out of the state, or is a foreign corporation, security for the costs and charges, which may be awarded against such plaintiff, may be required by the defendant. When required, all proceedings in the action or special proceeding must be stayed until an undertaking, executed by two or more persons, is filed with the clerk, to the effect that they will pay such costs and charges as may be awarded against the plaintiff by judgment, or in the progress of the action or special proceeding, not exceeding the sum of three hundred dollars. A new or an additional undertaking may be ordered by the court or judge, upon proof that the original undertaking is insufficient security, and proceedings in the action or special proceeding stayed until such new or additional undertaking is executed and filed. En. March 11, 1872. Amd. 1903, 187.

Legislative History.

This section is based on section 512 of the practice act of 1851, page 51. The words "or special proceeding" were added by the amendment of 1903.

Section Cited.

As to foreign corporations: Meade County Bank v. Bailey, 137 Cal. 449, 70 Pac. 297.

Annotation.

Nature of Security-Dismissal for Want of.-In an action by a foreign corporation, where security for costs is demanded under this section, the undertaking must be of the same nature as a cost bond upon appeal, that the sureties will pay such costs and charges as may be awarded against the plaintiff by judgment not exceeding three hundred dollars. For failure to give such bond within thirty days the action will be dismissed. (Meade Co. Bank v. Bailey, 137 Cal. 447, 70 Pac. 297.)

CHAPTER VII.

GENERAL PROVISIONS.

§ 1056. Corporations may become sureties on undertakings and bonds.

§ 1057. Undertakings mentioned in this code, requisites of.

CORPORATIONS MAY BECOME SURETÌES ON UNDERTAKINGS AND BONDS.

Sec. 1056, C. C. P. In all cases where an undertaking or bond, with any number of sureties, is authorized or required by any provision of this code, or of any law of this state, any corporation with a paid-up capital of not less than one hundred thousand dollars, incorporated under the laws of this or any other state of the United States for the purpose of making, guaranteeing, or becoming a surety upon bonds or undertakings required or authorized by law, or which, by the laws of the state where it was originally incorporated has such power, and which shall have complied with all the requirements of the law of this state regulating the formation or admission of these corporations to transact such business in this state, may become and shall be accepted as security or as sole and sufficient surety upon such undertaking or bond, and such corporate surety shall be subject to all the liabilities and entitled to all the rights of natural persons' sureties; provided, that the insurance commis

sioner shall have the same jurisdiction and powers to examine the affairs of such corporations as he has in other cases; shall require them to file similar statements and issue to them a similar certificate. And whenever the liabilities of any such corporation shall exceed its assets, the insurance commissioner shall require the deficiency to be paid up in sixty days, and if it is not so paid up, then he shall issue a certificate showing the extent of such deficiency, and he shall publish the same once a week for three weeks, in a daily San Francisco paper. And, until such deficiency is paid up, such company shall not do business in this state. In estimating the condition of any such company, the commissioner shall allow as assets only such as are allowed under existing laws at the time, and shall charge as liabilities, in addition of eighty per cent of the capital stock, all outstanding indebtedness of the company, and a premium reserve equal to fifty per centum of the premiums charged by said company on all risks then in force. En. March 11, 1872. Rep. 1880, 111. En. 1889, 215.

Power of insurance commissioner to examine into affairs: See sec. 616, Pol. Code.

See act of March 12, 1885, page 114, post, Appendix, for incorporation for giving bonds, title "Bonds."

Legislative History.

The section repealed had no relation to the present section.

Section Cited.

Gutzeil v. Pennie, 95 Cal. 599, 600, 30 Pac. 836; Fox v. Hale & Norcross S. M. Co., 97 Cal. 355, 357, 359, 32 Pac. 446.

Annotation.

Foreign Corporation.-When it appears from the certificate of the insurance commissioner of this state that the surety corporation is duly authorized to transact business in this state, the failure to designate some person residing in the state upon whom service of process can be made, as required by the act of April 1, 1872 (Stats. 1871-72, p. 826), is not ground for the dismissal of an appeal because of the execution of the undertaking by such company. (Gutzeil v. Pennie, 95 Cal. 598, 30 Pac. 836.)

This section and section 616 of the Political Code apply to a foreign surety company, and when such corporation has filed with the insurance commissioner the designation required by section 616, that