and the judgment of the lower court declaring such election valid and unseating the director elected by the vote of the proxies given by those in whose names these shares stood on the books of the company, was reversed.19 The rule laid down in this case is further strengthened by the elimination of the words "bona fide" from the statute since that decision was made.

A very singular decision was made in a case where brokers bought stocks on a regular stock exchange for their customers, the customers putting up margins only on the purchase, and the certificates for the stocks being issued to trustees of the brokers as security for the advances made by the brokers on the purchases. The court said that the stocks were the property of the brokers, as the margin contracts between the brokers and their customers were void under the constitution (as it then existed) and that the brokers could lawfully vote the stocks, but, nevertheless, they were bound to vote them in the interest of those for whom they purchased the stocks,20 and that the brokers' contract was a pledge. But it will be observed that this decision is opposed to the general rule and the decisions of this state that where the stock is transferred on the books of the company to a trustee, or to any person whomsoever, the latter, as between the corporation and its stockholders, is the owner of the stock, and the only person (in the absence of a proxy) entitled to vote it. No reference is made to any of these decisions. Nor is any reference made to the expression then in the statute of "bona fide stockholders." The case has never been cited or followed on this point, and, if it should be, demoralization would result.

The exercise of the right of voting being regulated by statute, the by-laws can not either give or take it

19 Krause v. Durbrow, 127 Cal. 681, 60 Pac. 438.

20 Fox v. Hale & Norcross etc. Co., 108 Cal. 369-385, 41 Pac. 308.

away,21 nor can the by-laws require a proxy to be a stockholder.22

FILING PROXIES

Every proxy, to be effective, must be filed with the corporation, and it is usual to provide in the by-laws that proxies shall be filed a certain number of days before the meeting, so that the corporation may have an opportunity to verify their genuineness, and to give stockholders an opportunity to confer with them concerning the affairs and management of the corporation.

PROXIES ARE REVOCABLE

All proxies are revocable and the latest proxy revokes all previous proxies, whether so expressed or not. Under section 321b of the Civil Code proxies can not continue longer than eleven months from their date, unless a longer time is expressly fixed, and then not longer than seven years. A proxy can not be created by a will, and the death of the owner of the stock extinguishes the proxy.

VIVA VOCE VOTING

On a viva voce vote a reasonable rule is that the proxy counts as only one, and not one for each of the persons for whom he is a proxy, for such voting disregards the stock held or represented by any person, and for consultation and judgment the proxy is only one

21 Brewster v. Hartley, 37 Cal. 15-24, 99 Am. Dec. 237.

22 People's etc. Bank v. Superior Court, 104 Cal. 649, 43 Am. St. Rep. 147, 29 L. R. A. 844, 38 Pac. 452; Smith v. San Francisco & N. P. Ry. Co., 115 Cal. 584, 606, 56 Am. St. Rep. 119, 35 L. R. A. 309, 47 Pac. 582; Market St. Ry. Co. v. Hellman, 109 Cal. 571, 599, 42 Pac. 225.

person. In England, by statute, a proxy can not vote on a viva voce vote.

PROXY LIMITED

A proxy can not appoint a proxy, unless specially empowered to do so.

A proxy limited to a special purpose can not be voted on for any other purpose. Voting trusts have been already considered.

PLEDGOR OR PLEDGEE VOTING

A case arose where the pledgor voted stock which he had pledged for borrowed money and his vote decided the election. The court, sustaining the validity of the vote, said the pledgee did not claim the right to vote the shares. But it also said no proxy was given to the pledgee, and that the court could not compel the giving of a proxy (in accordance with the equities of special transactions between the parties), and it is fairly to be inferred that the stock was not transferred on the books of the company.23 As a result of the statutes concerning the necessity of a stockholder standing on the books of the company as such, unless he gives the pledgee a proxy, the pledgor only can vote the stock. By amendment of Civil Code, section 313, unless otherwise agreed, the pledgor or beneficiary of a trust has a preferred right to vote the stock, but if he fails to do so the pledgee or trustee may vote it. (Stats. 1911, p. 318, see below.)

23 Dulin v. Pacific etc. Co., 103 Cal. 357, 35 Pac. 1045, 37 Pac. 207; but where stock belonging to the corporation, often called treasury stock, is issued to a party lending money to the corporation, or to a third party as trustee or pledgee, to secure the loan, those shares can not be voted by any person, Brewster v. Hartley, 37 Cal. 15, 27-31, 99 Am. Dec. 237.

REPRESENTATION OF PLEDGEE, TRUSTEE, MINOR, INSANE OR DECEASED STOCKHOLDERS

Section 313 of the Civil Code is as follows:

§ 313. The shares of stock of an estate of a minor, or insane person, may be represented by his guardian, and of a deceased person by his executor or administrator, and, except when otherwise agreed, all shares of stock standing on the books of a corporation in the name of any person as pledgee or trustee may be represented or voted by such pledgee or trustee only when such pledgor or beneficial owner fails to represent and vote the same. (As amended, Stats. 1911, p. 318.)

In order for an executor to vote the shares of the deceased person it is not necessary that the shares be transferred on the books of the company to the executor.24 And the same rule applies to a surviving partner.25 All of the above section following the word "administrator" was added by the amendment of 1911. See also Civil Code, section 312, and comments, and Civil Code, section 321a.

ADJOURNMENTS

The provision in the last sentence of section 312 for adjournments of stockholders' meetings if a quorum be not present, or if the election be not had, is clear, and is in the usual form of statutes on that subject. No difficulty, uncertainty or confusion would result if it were not for the provisions of the next section but one, section 314, which reads as follows:

24 Market St. Ry. Co. v. Hellman, 109 Cal. 571, 590, 42 Pac. 225. Without reference to this case, this doctrine is intimated in a dictum in Smith v. San Francisco & N. P. Ry. Co., 115 Cal. 584, 590, 591, 56 Am. St. Rep. 119, 35 L. R. A. 309, 47 Pac. 582.

25 People v. Hill, 16 Cal, 113.

§ 314. If from any cause an election does not take place on the day appointed by law or the by-laws, or otherwise, it may be held on any day thereafter as is provided for in such by-laws, or to which such election may be adjourned or ordered by the directors. If an election has not been held at the appointed time, and no adjourned or other meeting for the purpose has been ordered by the directors, a meeting may be called by the stockholders as provided in section 310. (Stats. 1905, p. 559.)

So far as adjournments are concerned sections 312 and 314 are irreconcilable and destructive of each other. The English of section 314 is very bad; both the intent and method are obscure. A case, just decided, says that under this section the stockholders may call a special meeting for the election, following the provisions of section 310; it is also said that no meeting of stockholders at times other than those appointed in the statutes or by-laws for the election of directors, in the absence of a notice specifying that such election is one of the purposes of the meeting, has the power to elect directors. This is going far when it is remembered that stockholders can bind the corporation in no ordinary business matter, and meet only to elect directors, and sometimes to consent to certain matters specially named in the statutes.25

ONE CORPORATION VOTING STOCK IN ANOTHER

Our statutes do not say how, that is by whom, such stock may be voted. One corporation can not be present at the meeting of the stockholders of another; nor can its board of directors. A director can exercise no authority except in a meeting of the board. Nor can the president or other officer represent the corporation in such a matter, for the voting of stock of a corporation can be regulated only by the by-laws of