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Legislative History.

See sec. 331, C. C., ante.

SALE TO BE BY PUBLIC AUCTION.

Sec. 341, C. C. On the day, at the place, and at the time appointed in the notice of sale, the secretary must, unless otherwise ordered by the directors, sell or cause to be sold at public auction, to the highest bidder for cash, so many shares of each parcel of the described stock as may be necessary to pay the assessment and charges thereon, according to the terms of sale; if payment is made before the time fixed for sale, the party paying is only required to pay the actual cost of advertising, in addition to the assessment. En. March 21, 1872.

Legislative History.

See sec. 331, C. C., ante.

HIGHEST BIDDER TO BE THE PURCHASER.

Sec. 342, C. C. The person offering at such sale to pay the assessment and costs for the smallest number of shares or fraction of a share is the highest bidder, and the stock purchased must be transferred to him on the stock-books of the corporation, on payment of the assessment and costs. En. March 21,

1872.

Legislative History.

See sec. 331, C. C., ante.

IN DEFAULT OF BIDDERS, CORPORATION MAY PURCHASE. Sec. 343, C. C. If, at the sale of stock, no bidder offers the amount of the assessments and costs and charges due, the same may be bid in and purchased by the corporation, through the secretary, president, or any director thereof, at the amount of the assessments, costs, and charges due; and the amount of the assessments, costs, and charges must be credited as paid in full on the books of the corporation, and entry of the transfer of the

stock to the corporation must be made on the books thereof. While the stock remains the property of the corporation it is not assessable, nor must any dividends be declared thereon; but all assessments and dividends must be apportioned upon the stock held by the stockholders of the corporation. En. March 21, 1872.

Legislative History.

See sec. 331, C. C., ante.

Section Cited.

California Sugar Mfg. Co. v. Schafer, 57 Cal. 398.

DISPOSITION OF STOCK PURCHASED BY CORPORATION.

Sec. 344, C. C. All purchases of its own stock made by any corporation vest the legal title to the same in the corporation: and the stock so purchased is held subject to the control of the stockholders, who may make such disposition of the same as they deem fit, in accordance with the by-laws of the corporation or vote of the majority of all the remaining shares. Whenever any portion of the capital stock of a corporation is held by the corporation by purchase, a majority of the remaining shares is a majority of the stock for all purposes of election or voting on any question at a stockholders' meeting. En. March 21, 1872.

Legislative History.

See sec. 331, C. C., ante.

Section Cited.

California Sugar Mfg. Co. v. Schafer, 57 Cal. 398; Robinson v. Spaulding Gold & Silver M. Co., 72 Cal. 33, 13 Pac. 65; Market St. R. R. Co. v. Hellman, 109 Cal. 588, 42 Pac. 225.

Annotation.

Corporation Owning its Own Stock.-A corporation cannot become a stockholder of its own stock. (Brewster v. Hartley, 37 Cal. 15, 99 Am. Dec. 237.)

Stock of a corporation purchased by it under section 344, Civil Code, at a sale for delinquent assessment, is held subject to control of stockholders, and cannot be levied on under an execution against

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the corporation. (Robinson v. Spaulding etc. Co., 72 Cal. 32, 13 Pac. 65.)

The presumption is that a corporation has no stock to sell. (California Sugar Mfg. Co. v. Schafer, 57 Cal. 396.)

EXTENSION OF TIME OF DELINQUENT SALE.

Sec. 345, C. C. The dates fixed in any notice of assessment or notice of delinquent sale, published according to the provisions hereof, may be extended from time to time for not more than thirty days, by order of the directors, entered on the records of the corporation; but no order extending the time for the performance of any act specified in any notice is effectual unless notice of such extension or postponement is appended to and published with the notice to which the order relates. En. March 21, 1872.

Legislative History.

See sec. 331, C. C., ante.

ASSESSMENTS SHALL NOT BE INVALIDATED.

Sec. 346, C. C. No assessment is invalidated by a failure to make publication of the notices hereinbefore provided for, nor by the nonperformance of any act required in order to enforce the payment of the same; but in case of any substantial error or omission in the course of proceedings for collection, all previous proceedings, except the levying of the assessment, are void, and publication must be begun anew. En. March 21,

1872.

For publication, see sec. 339, C. C., ante.

Legislative History.

See sec. 331, C. C., ante.

Section Cited.

Burham v. S. F. Fuse Mfg. Co., 76 Cal. 28, 17 Pac. 939; San Bernardino I. Co. v. Merrill, 108 Cal. 495, 41 Pac. 487; Stockton C. H. & A. Works v. Houser, 109 Cal. 8, 41 Pac. 809.

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Annotation.

Insufficient Publication.-An assessment is not invalidated by a publication of thirteen days instead of fifteen, as required by section 339, Civil Code. (Burham v. S. F. Fuse Mfg. Co., 76 Cal. 28, 17 Pac. 939.)

ACTION FOR
THEREOF.

RECOVERY OF STOCK, AND LIMITATION

Sec. 347, C. C. No action must be sustained to recover stock sold for delinquent assessments, upon the ground of irregularity in the assessment, irregularity or defect of the notice of sale, cr defect or irregularity in the sale, unless the party seeking to maintain such action first pays or tenders to the corporation, or the party holding the stock sold, the sum for which the same was sold, together with all subsequent assessments which may have been paid thereon and interest on such sums from the time they were paid; and no such action must be sustained unless the same is commenced by the filing of a complaint and the issuing of a summons thereon within six months after such sale was made. En. March 21, 1872.

Legislative History.

See sec. 331, C. C., ante.

Section Cited.

Burham v. S. F. Fuse Mfg. Co., 76 Cal. 28, 17 Pac. 939; Herbert Kraft Co. Bank v. Bank of Orland, 133 Cal. 66, 65 Pac. 143.

Annotation.

Limitation of Action to Recover.-Section 347, Civil Code, and subdivision 2 of section 341, Code of Civil Procedure, have no application to an action relating to stock sold under a void assessment, which the corporation had no power to levy or enforce. (Herbert Kraft Co. Bank v. Bank of Orland, 133 Cal. 64, 65 Pac. 143.)

Assessments-Remedies of Stockholders Against Void Assessments. A stockholder wrongfully deprived of his shares under a void assessment may either sue the corporation in trover for the value of his shares, or may mandamus the corporation to allow the registry of his shares, or to pay damages if registry is impossible, or he may sue in equity to vacate the sale, and to have the shares sold ordered to be delivered up and canceled. A court of equity has Corporation Laws-16

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case.

jurisdiction to give full relief to the stockholder in such (Herbert Kraft Co. Bank v. Bank of Orland, 133 Cal. 64, 65 Pac. 143.)

AFFIDAVITS OF PUBLICATION-AFFIDAVITS OF SALE-TO BE FILED.

Sec. 348, C. C. The publication of notice required by this article may be proved by the affidavit of the printer, foreman, or principal clerk of the newspaper in which the same was published; and the affidavit of the secretary or auctioneer is prima. facie evidence of the time and place of sale, of the quantity and particular description of the stock sold, and to whom, and for what price, and of the fact of the purchase money being paid. The affidavits must be filed in the office of the corporation, and copies of the same, certified by the secretary thereof, are prima facie evidence of the facts therein stated. Certificates, signed by the secretary, and under the seal of the corporation, are prima facie evidence of the contents thereof. En. March 21, 1872. Amd. 1873-74, 207.

Legislative History.

See sec. 331, C. C., ante.

The original section contains the words "primary evidence," instead of the words "prima facie evidence," as above.

Annotation.

Where notice of sale of delinquent assessments is insufficiently published, the directors have no authority to waive the right to sell the stock and to elect to collect the delinquent assessment by personal action. (San Bernardino etc. Co. v. Merrill, 108 Cal. 490, 41 Pac. 487. To same effect: Hibernia etc. Soc. v. Lewis, 111 Cal. 522, 44 Pac. 175.)

WAIVER OF SALE-ACTION TO RECOVER ASSESSMENT.

Sec. 349, C. C. On the day specified for declaring the stock delinquent, or at any time subsequent thereto and before the sale of the delinquent stock, the board of directors may elect to waive further proceedings under this chapter for the collection of delinquent assessments, or any part or portion thereof, and may elect to proceed by action to recover the amount of the assess

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