corporation for a commission tends, in connection with other evidence, to prove authority to such agents to promote the corporation.Ex-Mission Land etc. Co. v. Flash, 97 Cal. 610, 32 Pac. 600.

§ 43. Duty in Selling Property to Corporation.

[a] A promoter of a corporation or joint stock association may sell property thereto, but it is incumbent upon him, as a person occupying a fiduciary position, to make full and fair disclosure of his interest and position with respect to the property, and not to make any false representations as to its cost price. Burbank v. Dennis, 101 Cal. 90, 35 Pac. 444.

[b] In an accounting had against a promoter of the corporation he should be credited with a sum paid to perfect the title of one of the tracts sold, and should only be charged with the profit actually realized upon a particular tract.-Burbank v. Dennis, 101 Cal. 90, 35 Pac. 444.

ESTOPPEL TO QUESTION CAPACITY OR EXISTENCE, § 54.

OFFICERS OF CORPORATION, § 55. COMMENCEMENT OF CORPORATE EXISTENCE,

$56.

EXTENDING FRANCHISE TO TERM OF EXIS TENCE, $ 57.

AMENDMENT OR REPEAL OF CHARTER, § 58.

§ 46. Nature of Franchise.

[a] The right to be a corporation is a franchise, and to acquire a franchise under a general law the required statutory conditions must be complied with.-People ex rel. Hamilton v. Selfridge, 52 Cal. 331.

[b] Franchises are legal estates, not mere naked powers, and are powers coupled with an interest which vest in corporation by virtue of charter and constating instruments. Spring Valley W. W. v. Schottler, 62 Cal. 69. [c] Very existence of corporation as such is franchise, and it exercises its franchise in every act which it performs as a corporation. A corporation whose existence is a franchise may possess powers and privileges which in themselves are not franchises; but it usually owns along with such privileges some that are franchises, but whether the powers be entirely of the kind which are franchises or not, its existence and right to employ its corporate powers is a franchise.-Spring Valley W. W. v. Schottler, 62 Cal. 69.

[d] That a corporation is organized to and may acquire public uses or franchises does not make such franchises "when acquired" a part of the corporation's general franchise to be and act as a corporation.-San Joaquin etc. Irr. Co. v. Merced County (Cal. App.), 84 Pac. 285.

TO

Assignability and Liability to

Forced Sale.

[a] Franchises of a corporation are privileges granted and held in personal trust, and cannot be transferred by forced sale, or by voluntary assignment except by permission of the government, and, when that permission is granted, the mode of transfer pointed

out must be followed.-Wood v. Truckee Turnpike Co., 24 Cal. 474.

[b] Corporate franchise may be assigned to a legally organized corporation by persons having lawful right to exercise and transfer it.-People v. Stanford, 77 Cal. 371, 18 Pac. 85, 19 Pac. 693.

§ 50. Evidence of Corporate Existence. See, also, post, § 482.

Right to prove corporate existence by hearsay evidence, in criminal prosecution. See Criminal Law, 192.

Degree of proof required to prove corporate existence. See Criminal Law, § 279.

[a] Existence of a corporation formed under a general statute cannot be proved without proof of at least a substantial compliance with the requirements of the statute, differing herein from a corporation under a special charter, whose existence is proved prima facie by production of the charter, and proof of a user under it.-Mokelumne Hill Canal etc. Co. v. Woodbury, 14 Cal. 424, 73 Am. Dec. 658.

[b] Existence of corporation formed under general corporation laws of this state is proved by its articles of association or incorporation, executed and filed in accordance with the statute.-Spring Valley W. W. v. City of San Francisco, 22 Cal. 434.

[c] Proof of a company raises no presumption that it is an incorporated company; nor, if the name of a state appears in the name of the company, does it raise the presumption that it was incorporated under the laws of that state.-Briggs v. McCullough, 36 Cal.

542.

[f] Evidence reviewed and held sufficient to prove corporate existence.-Fresno etc. Co. v. Warner, 72 Cal. 382, 14 Pac. 37.

[g] Proof that body was recognized in community as corporation and was acting as such is sufficient proof of corporate existence.-Lakeside Ditch Co. v. Crane, 80 Cal. 185, 186, 22 Pac. 76.

[h] Where a patent to a mining claim was issued to the California Iron, Mining and Smelting Company, which patentee conveyed the claim to defendant, the patent was proof that the patentee was a corporation.Galbraith v. Shasta Iron Co., 143 Cal. xviii, 94, 76 Pac. 901, 1127.

[i] Receipt showing that defendants contracted with plaintiff in its corporate name held competent evidence as to plaintiff's in

corporation.-Sierra Land etc. Co. v. Bricker (Cal. App.), 85 Pac. 665.

FOR AUTHORITIES FROM OTHER STATES:

22 L. R. A. 276, note. See, also, 10 Cyc. 235-244; 12 Cent. Dig., cols. 192-214, §§ 106-118.

§ 51. Attack on Corporate Existence.

[a] The allegation that the plaintiffs are a corporation is an indispensable allegation in any action brought by them, and necessarily the adverse party may deny it. The statute does not contemplate that the mere allegation that the company has been duly organized should put that fact beyond dispute, but only that, when the evidence establishes that the company claims in good faith to be a corporation, and is actually doing business as such, then its due incorporation shall not be inquired into collaterally. Irregularities or defects in the mode of performing the acts prescribed by law as constituting a corporation cannot be set up by a private individual, but he may show that those acts have not been performed at all.-Oroville etc. R. Co. v. Plumas County Supervisors, 37 Cal. 354.

[b] Upon an application for a mandamus to compel county authorities to complete their subscription to the stock of plaintiff's railroad company, the defendants may deny the plaintiff's incorporation, and may deny that they have complied with the provisions of the law prescribing their organization, or are doing business as a railroad company.— Oroville etc. R. Co. v. Plumas County Super. visors, 37 Cal. 354.

[c] The corporate existence of a company which is neither a de facto nor de jure corporation may be questioned in a private action to which it is a party.-Martin v. Deetz, 102 Cal. 55, 41 Am. St. Rep. 151, 36 Pac. 368.

§ 54. Estoppel to Question Capacity or Existence.

[a] In contracts of corporations, where the question is one of capacity or authority to contract, arising either upon a question of regularity in the corporate organization, or of power conferred by the charter, a party who has had the benefit of the contract cannot be allowed, in a suit upon it, to question its validity,—Argenti v. City of San Francisco, 16 Cal. 255.

[b] Under act of 1862, page 110, section 6, providing that a corporation's right to exercise corporate powers cannot be inquired

into collaterally in any private suit to which it is a party, defective incorporation cannot be set up as a defense to an action by a corporation to recover on a note.-Pacific Bank v. De Ro, 37 Cal. 538.

[e] The provisions of Statutes of 1862, page 110, section 6, does not go to the extent of precluding a private person from denying the existence de jure or de facto of an alleged corporation. The mere allegation that a party is a corporation cannot put the question whether it is such a corporation beyond the reach of inquiry in a suit with a private person.-Oroville etc. R. Co. V. Plumas County Supervisors, 37 Cal. 354.

[d] A person making a contract with a corporation as such is estopped to deny its corporate existence, where the contract was within the power of the corporation to make, and where its organization was sufficient to make it a de facto corporation.-Pacific Bank v. De Ro, 37 Cal. 538.

[e] One contracting with an alleged corporation in the use of corporate powers and franchises, and within the scope of such powers, is estopped to deny its corporate existence, in an action by the corporation to enforce the contract.-Grangers' Business Assn. v. Clark, 67 Cal. 634, 8 Pac. 445; Fresno Canal etc. Co. v. Warner, 72 Cal. 379, 14 Pac.

37.

[f] One who has contracted with an apparent corporation as such is estopped, in an action on the contract, from denying the existence of the corporation.-Fresno Canal etc. Co. v. Warner, 72 Cal. 379, 14 Pac. 37.

[g] Making a corporation a party in a proceeding to forfeit its charter is not such an admission of its corporate character as to preclude the state from questioning its right to corporate existence.-People v. Montecito Water Co., 97 Cal. 276, 33 Am. St. Rep. 172, 32 Pac. 236.

[h] One who has given a note or other evidence of indebtedness to a corporation by its corporate name cannot deny that the corporation was legally organized.-Bank of Shasta v. Boyd, 99 Cal. 604, 34 Pac. 337.

[i] One purchasing goods from a corporation is estopped to deny its corporate capaeity. Raphael Weill & Co. v. Crittenden, 139 Cal. 488, 73 Pac. 238.

[j] Party making contract with corporation eannot, by way of collateral attack, deny that it was a corporation.-California etc. Assn. v. Stelling, 141 Cal. 720, 75 Pac. 320. FOR AUTHORITIES FROM OTHER STATES:

FOR AUTHORITIES FROM OTHER STATES:

10 Cyc. 205, 223; 12 Cent. Dig., cols. 181184, § 103.

a

§ 56. Commencement of Corporate Existence. [a] Under our law corporations have legal existence from the date of filing the certificate of incorporation in the county clerk's office.-Mokelumne Hill Min. Co. v. Woodbury, 14 Cal. 424, 73 Am. Dec. 658.

§ 57. Extending Franchise or Term of Existence.

[a] Where a corporation organized prior to the adoption of the code had thereafter continued its existence thereunder, it became a code corporation, and might therefore extend the term of its existence beyond the original period of its limitation.-People v. Pfister, 57 Cal. 532.

[b] Constitution, article 12, section 7, provides that no act shall be passed extending the charter of any corporation or remitting the forfeiture of a franchise. During the pendency of an action to forfeit the charter of a street-car company alleged to be operating under an unwarranted city ordinance authorizing the use of electric power, acts of 1891, chapters 18, 19, were passed, one amending Civil Code, section 497, so as to invest municipal corporations with power to authorize street railways to use electricity as a motive power; the other ratifying existing ordinances granting such power. Held, that the acts did not extend the company's franchise or charter, and, as there had been no decree of forfeiture, there was none to remit, and therefore the acts were not repugnant to the constitution.-People v. Los Angeles Electric Ry. Co., 91 Cal. 338, 27 Pac. 673.

[c] Civil Code, section 288, provided that no corporation formed or existing before the code took effect should be affected by its provisions unless such corporation should elect to continue its existence thereunder. Held, that the provisions which did not affect such corporation without its election were such only as related to the formation and existence of corporations.-McGowan v. McDonald, 111 Cal. 57, 43 Pac. 418.

[d] Civil Code, sections 287, 401, permitting corporations to continue their existence for fifty years, on certain terms, is not limited to private corporations as distinguished from quasi public corporations.-People v. Auburn, etc. Turnpike Co., 122 Cal. 335, 55 Pac. 10.

§ 58. Amendment or Repeal of Charter.

[a] Charters may be amended or repealed at any time.-San Francisco v. Insurance Co., 74 Cal. 119, 15 Pac. 380.

[b] Power of legislature to amend or repeal the charters of corporations organized in California does not authorize the legislature, while the corporation exists, to deprive it of the rights, guaranteed to it by the federal constitution, to due process of law, and to the equal protection of the laws, nor has the legislature any power to alter, amend, or re

§ 59. Change of Names.

[a] Code of Civil Procedure, section 1276, providing that any religious, benevolent, literary, scientific, or other corporation," or any corporation having, or being known by, the name of any benevolent or charitable society, may apply to the superior court for a change of its corporate name, is not restricted in its application to corporations of the kind specially enumerated, but applies to a corporation organized for profit. In re La Societe Francaise De Pargnes et de Prevoyance Mutuelle, 123 Cal. 525, 56 Pac. 458, 787.

FOR AUTHORITIES FROM OTHER STATES:

10 Cyc. 155, 156; 12 Cent. Dig., cols. 235, 237, §§ 134, 135.

§ 60. Use of Name Similar to that of Another Company.

[a] While a private person may engage in a business in his own name, although his name is used in the same business by a corporation of which he was at one time a leading stockholder, so long as he does not resort to any artifice to produce the impression that the place of business conducted by him and that conducted by the corporation are identical,

[a] Where a name adopted by a corporation is so similar to that of another corporation as to create confusion and enable the later corporation to obtain the business of the prior one, injunction will lie to restrain the simulation, so far as necessary to protect the rights of the prior corporation.-Dodge Stationery Co. v. Dodge, 145 Cal. 380, 78 Pac. 879.

[b] The use by one corporation or individual of a name similar to that of another corporation engaged in the same business will be enjoined only so far as is necessary to protect against fraudulent representations.Dodge Stationery Co. v. Dodge, 145 Cal. 380, 78 Pac. 879.

[c] A corporation engaging in business under a name similar to that of another corporation engaged in the same business should be enjoined from making use of that name only in the business in which both corporations were engaged, and not from making use thereof in any other business.-Dodge Stationery Co. v. Dodge, 145 Cal. 380, 78 Pac. 879.

[d] The names "The Dodge Stationery Company" and the "J. S. Dodge Company," when taking into consideration the fact that the business conducted by the latter is the same as that conducted by the former, are sufficiently similar to warrant an injunction restraining the latter from conducting its business under the name adopted by it.-Dodge Stationery Co. v. Dodge, 145 Cal. 380, 78 Pac. 879.

[e] A person whose name was used as the corporate name of a corporation of which he was at one time president, and whose surname was used as the popular name of that corporation, who engaged in the same business, after the termination of his connection with the corporation, in a new corporation making use of his name as a corporate name and of his surname standing alone as a popular name, was properly enjoined from engaging in the business and at the place in the same city where the new corporation had established itself, and had used misleading signs similar to those used by the old corporation, and from causing any business similar to that of the old corporation to be carried on by the new corporation in the city under the designation of the surname without a qualifying statement that the business so carried on was not the business theretofore carried on by the old corporation under that name, and from in any manner representing that such business was the same business as that carried on

[a] Admitted, for the purposes of this decision, that a corporation may adopt the private seal of the several trustees or any one of them as its seal for the occasion.-Gashwiler v. Willis, 33 Cal. 11, 91 Am. Dec. 607.

[b] A seal affixed to an instrument, which purports to be the corporate seal of a corpora tion, must, in the absence of objection, be presumed to be genuine, as well as to have been affixed by proper authority. and is evidence of the corporate act which it purports to authenticate.-Burnett v. Lyford, 93 Cal. 114, 28 Pac. 855.

[c] Where a seal which had not been formally adopted by a corporation was used for the first time in the execution of instruments afterward in question, the finding that it had become the common seal of the corporation by use is sustained by a showing that it had afterward been employed as the seal of the corporation in all transactions requiring the impress of a seal.-Blood v. La Serena Land etc. Co., 113 Cal. 221, 41 Pac. 1017, 45 Pac. 252.

[a] A sole corporation has no need of a corporate seal, nor of a secretary or treasurer, nor of by-laws. His own will and judgment alone regulate his acts, like any other individual acting in his own right. His possession of land, when the title is in him as an individual, can in no way be distinguished from his holding thereof as a sole corporation when the title is in the corporation.-Roman Catholic Archbishop of San Francisco v, Shipman, 79 Cal. 288, 21 Pac. 830.

§ 64. Domicile or Place of Business.

[a] Every corporation has a "residence," within the meaning of the word as used in the practice act, where its principal office or place of business is established.-Jenkins v. California Stage Co., 22 Cal. 537.

[b] It is duty of every corporation to have an office and principal place of business, Chapman v. Doray, 89 Cal. 54, 26 Pac. 605. [e] Corporation's residence is county where it has its principal place of business.-Treze

[a] By-laws are the body of rules laid down for government of corporation, its officers and stockholders in conduct of its affairs.-Wells v. Black, 117 Cal. 161, 59 Am. St. Rep. 162, 48 Pac. 1090.

[b] The function of a by-law of a private corporation is to prescribe the rights and duties of members with reference to the internal government of the corporation, the management of its affairs, and the rights of members inter se.-Bornstein V. District Grand Lodge No. 4, Independent Order B'nai B'rith (Cal. App.), 84 Pac. 271.

[a] A corporation's power to make by-laws, conferred by Civil Code, section 354, held not limited by section 303.-People's Home Sav. Bank v. Sadler, 1 Cal. App. 189, 81 Pac. 1029.

[b] Corporations may make only such bylaws as are consistent with the constitution and laws of the state.-Wells v. Black, 117 Cal. 157, 59 Am. St. Rep. 162, 48 Pac. 1090.

[c] A corporation's right to enact by-laws, while inherent and incident to its existence, is subject to the condition that the by-laws must be reasonable and not contravene the charter or any existing state law.-Bornstein Order B'nai B'rith (Cal. App.), 84 Pac. 271. v. District Grand Lodge No. 4, Independent