and does not cover sales of franchises on execution, and was not referred to in any of the decisions cited.

If the meaning is that it is such semi-public franchises which may be sold, then there is no statute by which the franchise to exist can be sold on execution, and this could not be done at common law.20

Such enabling statutes are found in many states, for a considerable part of the value of the property of a corporation is dependent upon the corporation being a going concern upon the use of the franchise in connection with the property. Separated from its use in this manner, indeed, the value of the property may be slight.

A lease of only a part of the property does not come within the restrictions contained in this section.21

PURCHASER TO CONDUCT BUSINESS OF CORPORATION, ETC. Sections 389 to 393 of the Civil Code are as follows:

§ 389. The purchaser at the sale must receive a certificate of purchase of the franchise, and be immediately let into the possession of all property necessary for the exercise of the powers and the receipt of the proceeds thereof, and must thereafter conduct the business of such corporation, with all its powers and privileges, and subject to all its liabilities, until the redemption of the same, as hereinafter provided. (Enacted March 21, 1872.)

§ 390. The purchaser, or his assignee, is entitled to recover any penalties imposed by law and recoverable by the corporation for an injury to the franchise or property thereof, or for any damages, or other cause, occurring during the time he holds the same, and may use the name of the corporation for the purpose of any

20 Gregory v. Blanchard, 98 Cal. 311-313, 33 Pac. 199, and other cases cited in the preceding notes to this section.

21 Seal of Gold Min. Co. v. Slater, 161 Cal. 621, 630, 120 Pac. 15.

action necessary to recover the same. A recovery for damages or any penalties thus had is a bar to any subsequent action by or on behalf of the corporation for the same. (Enacted March 21, 1872.)

§ 391. The person, company, or corporation whose franchise is sold, as in this article provided, in all other respects retains the same powers, is bound to the discharge of the same duties, and is liable to the same penalties and forfeitures, as before such sale. (Amended March 20, 1905; Stats. 1905, p. 409.) 22

§ 392. Redemption from any such sale may be had as provided in the Code of Civil Procedure in the case. of redemptions from sales of real estate on execution. (Amended March 20, 1905; Stats. 1905, p. 409.) 23

§ 393.

The sale of any franchise under execution must be made in the county in which the corporation has its principal place of business, or in which the property, or some portion thereof, is situated. (Amended March 20, 1905; Stats. 1905, p. 409.)

There appear to have been no decisions of our appellate courts considering questions arising under the above sections.

MISNOMER

"The misnomer of a corporation in any written instrument does not invalidate the instrument, if it can be reasonably ascertained from it what corporation is intended." (Civil Code, sec. 357.)

It was held before the passage of the above statute that a promissory note signed "Bradley & Co.," a corporation, would not bind the corporation of Bradley,

22 Section 391. The amendment makes the section applicable to persons and companies as well as to corporations.

23 Section 392. The amendment makes applicable to an execution sale of franchises the law of redemption applicable to other sales of real property. But see Title Ins. and T. Co. v. Califorria Dev. Co., 171 Cal., 152 Pac. 555.

Berdan & Co., because the contract was not made by it. But the court said if the latter corporation knew of the deceit practiced, and participated in the fraud by receiving the consideration, recovery could be had on the consideration for which the note was given.24

The leading case upon this subject25 contains probably the full measure of confusion. The name of the corporation was the "Santa Barbara Land, Building and Improvement Company." A note was signed by the above name, excepting the word "Building"; the mortgage securing the same was signed by C. P. Low as president, leaving out the words "Santa Barbara" and "Building," and the acknowledgment left out the word "Building." In the bodies of both the note and mortgage, however, the correct name appears, and the proper seal was attached to each. The court said it could be reasonably ascertained from each instrument what corporation was intended and that the acknowledgment was good for the same reason, and held both the note and mortgage binding obligations on the corporation.

Where a notice of garnishment was addressed to the Donohue-Kelley Company, instead of to the DonohoeKelly Banking Company (the proper name), and this notice was served on the proper party, it was held to be good.26 A publication of a summons to the "Clio Mill and Mining Company," the name of the corporation intended being the "Clio Mining Company," (some special appearances in the case, however, aiding the matter) was also held good.27 An assessment for taxation of the "Sierra Buttes Quartz Mining Company"

24 Sargent v. Wilson, 5 Cal. 504, 505.

25 Underhill v. Santa Barbara etc. Co., 93 Cal. 300, 314, 28 Pac. 1049. 26 Donohoe-Kelly Banking Co. v. Southern Pac. Co., 138 Cal. 183, 194, 94 Am. St. Rep. 28, 71 Pac. 93.

27 Nisbet v. Clio Mining Co., 2 Cal. App. 436, 83 Pac. 1077.

Cal. Corp.-10

by the proper name, except the omission of the word "Mining," was held good, especially as the company had appeared before the board of equalization and on complaint secured a reduction of the amount of its assessment.28

The foregoing decisions indicate that the courts are disposed to treat mistakes in the names of corporations with a great deal of indulgence, yet each case must stand upon its own special circumstances and, for reasons quite obvious, misnomers are liable to be attended with serious consequences.

28 People v. Sierra Buttes etc. Min. Co., 39 Cal. 511, 514.

CHAPTER VIII

BY-LAWS, ADOPTING

Section 301 of the Civil Code in regard to the adoption of by-laws reads as follows:

§301. Every corporation formed under this title must, within one month after filing Articles of Incorporation, adopt a code of by-laws for its government not inconsistent with the constitution and laws of this state.

The assent of stockholders representing a majority of all the subscribed capital stock, or of a majority of the members, if there be no capital stock, is necessary to adopt by-laws, if they are adopted at a meeting called for that purpose;

And in the event of such meeting being called, two weeks' notice of the same by advertisement in some newspaper published in the county in which the principal place of business of the corporation is located, or if none is published therein, then in a paper published in an adjoining county, must be given by order of the acting president.

The written assent of the holders of two-thirds of the stock, or of two-thirds of the members if there be no capital stock, shall be effectual to adopt a code of by-laws without a meeting for that purpose. (Amended March 30, 1874; Amdts. 1873-4, p. 200.)

A by-law has been defined to be a permanent and continuous rule for the government of the corporation and its officers.1 A resolution, as distinguished from a 1 "By-laws are the body of rules, laid down for the government of a corporation, its officers and stockholders, in the conduct of its affairs." They do not bind a depositor in a bank unless expressly assented to. Wells v. Black, 117 Cal. 157-161, 59 Am. St. Rep. 162, 37 L. R. A. 619, 48 Pac. 1090; Bornstein v. District Grand Lodge etc., 2 Cal. App. 624, 84 Pac. 271.