UNITED STATES.

Revised Statutes, sec. 2322, Mining Claims.......... 14 Statutes, 526, Bankruptcy...

123

866, July 27, Railroad Grants

175 209

KANSAS.

General Statutes, sec. 137, County Attorney...

520

44 and 45 Vict., c. 41, sec. 37, Estates of Deceased Persons..

422

REPORTS OF CASES

DETERMINED IN

THE SUPREME COURT

OF THE

STATE OF CALIFORNIA.

[No. 19409. Department Two.-September 5, 1895.] STOCKTON COMBINED HARVESTER AND AGRICULTURAL WORKS, APPELLANT, v. DANIEL HOUSER, RESPONDENT.

CORPORATIONS-PURCHASE OF STOCK AT DISCOUNT-LIABILITY TO ASSESSMENT.-Where each of the stockholders of a corporation had paid to the corporation $50 per share on their several shares of stock, and the owner of a manufacturing plant offered to sell it to the corporation for certain cash payments, the corporation assuming the mortgage on the property, and $20,000 of the purchase price to be paid by the issuance to him of 400 shares of the capital stock at $50 a share, and upon consummation of the purchase and conveyance of the property a certificate of stock was issued in the usual form and accepted and receipted for in the usual manner, without any indorsement on the certificate that it was for fully paid or nonassessable stock, and without proof that it was agreed or understood by the parties at the time of its issuance, or at any time, that the stock should be nonassessable, it must be presumed that the stock received was taken and held by the vendor of the manufacturing plant subject to the same conditions and liabilities as if he had been an original subscriber for the stock, or had purchased it from the original subscriber, and is liable to be assessed upon the remainder of the par value of the stock. ID.-PUBLICATION OF NOTICES-CONSTRUCTION OF CODE.-Under section 337 of the Civil Code it is not essential that the secretary of a corporation should cause a notice of delinquent sale to be published in the same paper in which the notice of assessment was published, except when so ordered by the board of directors; but the board may order the notices to be published in different papers, and, if they are regularly so published, the requirements of the statute are complied with.

ID.—WAIVER OF DELINQUENT SALE-SPECIAL MEETING OF DIRECTORS— NOTICE OF MEETING-PRESUMPTION.-Where a special meeting was held at which only five out of seven directors of the corporation were in attendance, at which the board voted to waive further proceedings for the collection of an assessment by sale, and to proceed by action at law to collect the amount of the assessment, and it is proven that notice in writing of the special meeting signed by the secretary was sent by him by mail, properly addressed and postpaid, to each of the directors, about three days before the day named for the meeting, it must be presumed that all notices sent were received, in the absence of evidence to the contrary, and that the meeting was duly and regularly convened.

APPEAL from a judgment of the Superior Court of Los Angeles County. LUCIEN SHAW, Judge.

The facts are stated in the opinion.

Nicol & Orr, for Appellant.

Every stockholder in every corporation organized under the laws of this state, with the possible exception of mining corporations, receives and holds stock with the necessary and inseparable liability to answer thereon for any and all proper assessments, and that without regard to the character of the contract by which his ownership of stock arose. (Santa Cruz R. R. Co. v. Spreckels, 65 Cal. 193; Civ. Code, sec. 332; Upton v. Tribilcock, 91 U. S. 47; Ogilvie v. Knox Ins. Co., 22 How. 380; Buffalo etc. R. R. Co. v. Dudley, 14 N. Y. 342; Webster v. Upton, 91 U. S. 66; Cook on Stockholders, secs. 4, 52, 146-97, 256, 481; Bell's Appeal, 115 Pa. St. 88; 2 Am. St. Rep. 538; Merrimac Min. Co. v. Levy, 54 Pa. St. 227; 93 Am. Dec. 697; New Albany etc. R. R. Co. v. Fields, 10 Ind. 187; San Joaquin Land & Water Co. v Beecher, 101 Cal. 70; Hartford etc. R. R. Co. v. Boorman, 12 Conn. 530; Merrimac Min. Co. v. Bagley, 14 Mich. 501; West Philadelphia Canal Co. v. Innes, 3 Whart. 198; Green v. Abietine Medical Co., 96 Cal. 322; Gay v. Keys, 30 Ill. 413; Fry v. Lexington etc. R. R. Co., 2 Met. (Ky.) 314; Shaeffer v. Missouri etc. Ins. Co., 46 Mo. 248; Harmon v. Page, 62 Cal. 448; Taylor v. North Star etc. Min. Co., 79 Cal. 286; California Sugar Mfg. Co. v. Shafer, 57 Cal. 398.) A notice, served by publication or mail, that

the meeting of the board of directors will be held, the place where and time when it is to be held, is sufficient. (Code Civ. Proc., secs. 1010, 1013; Granger v. Original Empire etc. Co., 59 Cal. 681; Sargenţ v. Webster, 13 Met. 497; 46 Am. Dec. 743; Morawetz on Corporations, sec. 532; Cook on Stockholders, 639; Younglove v. Steinman, 80 Cal. 377.) It was not necessary that the resolution of the board of directors directing that the notice of sale be published in a certain paper should be entered in the minutes of the board. (Civ. Code, sec. 346; Gilson etc. Min. Co. v. Gilson, 51 Cal. 341; Pixley v. Western Pac. R. R. Co., 33 Cal. 183; 91 Am. Dec. 623; Bay View Assn. v. Williams, 50 Cal. 353; Waters v. Gilbert, 2 Cush. 27; Sutherland on Statutory Construction, 575; People v. Supervisors, 34 N. Y. 272; Estate of Johnson, 98 Cal. 531; Baines v. Babcock, 95 Cal. 581; 29 Am. St. Rep. 158; Cook on Stockholders, sec. 4 a, note 1.)

Anderson & Anderson, for Respondent.

One who has purchased stock at an agreed price, less than par, cannot be held liable to calls for the difference between the price paid and the par value, for the reason that he has not subscribed for the stock and has not promised to pay any thing more than he has paid. (Green v. Abietine Medical Co., 96 Cal. 331; Johnson v. Lullman, 15 Mo. App. 55; Morawetz on Corporations, secs. 61, 154, 306; Stein v. Howard, 65 Cal. 616; Scoville v. Thayer, 105 U. S. 143; Cook on Stockholders, secs. 38, 47; Louisa County Nat. Bank v. Tracr, 16 N. W. Rep. 120 (Iowa, June 12, 1883); Christensen v. Eno, 106 N. Y. 97; 60 Am. Rep. 429; Van Cott v. Van Brunt, 82 N. Y. 535; Handley v. Stutz, 139 U. S. 417; Clark v. Bever, 139 U. S. 96; Great Western Tel. Co. v. Burnham, 79 Wis. 47; 24 Am. St. Rep. 698.) The notice of assessment and notice of sale should have been both published in the same paper, and the minutes should have contained the resolution ordering the publication. (Civ. Code, secs. 337, 346, 349.) A special meeting of the directors held without notice and at