44

UNLAWFUL FOR COMPANIES WHICH HAVE NOT PAID TAX TO OPERATE

§ 24a. It shall be unlawful for any company, either domestic or foreign, which has not paid to the state all taxes, penalties and costs as in this act prescribed and levied, to exercise the powers of such company, or to transact any business in this state, after the Saturday preceding the first Monday in March following its delinquency.

PENALTY

Each and every person exercising any of the powers of such delinquent company or transacting any business for or in behalf of such company after the Saturday preceding the first Monday in March following the delinquency of such company as provided in this act, except to settle the affairs of such company, shall be guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine of not less than twenty-five dollars nor more than one hundred dollars for each day such violation of the law continues, which fine shall be paid into the general fund of the state treasury. (Stats. 1913, p. 625.),

CHAPTER XXXIX

MINING COMPANIES AND THEIR REPORTS

The penalty of $1,000 imposed by the act of 1880 upon directors of a mining company for failure to post a verified balance sheet in the office of the company (now materially amended, see section 588 of the Civil Code, post) is penal in its nature, but no more than one penalty may be recovered although they failed for several months before suit to post these balance sheets; the law will be strictly enforced and the balance sheets must be posted on time, and lack of sufficient information on the part of the directors is no defense.2 If a "balance sheet" is posted the statute is complied with, without posting an itemized account; the statute is in the alternative. The act is constitutional and it is not necessary to show that the failure to post the account is willful; if any facts exist which would excuse the failure they must be set forth and proved. The failure of a company to have an office will not excuse the directors; it is the duty of the company to have an office, and each failure is a delinquency if sued on as it occurs," and it does not matter whether the company is actually carrying on business if it was formed for that purpose,' and while the account may

1 Loveland v. Garner, 71 Cal. 541, 12 Pac. 616.

2 Schenck v. Bandmann, 81 Cal. 231, 22 Pac. 654.

3 Eyre v. Harmon, 92 Cal. 580, 28 Pac. 779.

4 Miles v. Woodward, 115 Cal. 308, 314, 46 Pac. 1076; Ball v. Tolman, 119 Cal. 358, 51 Pac. 546.

5 Chapman v. Doray, 89 Cal. 52, 26 Pac. 605.

• Schofield v. Doray, 89 Cal. 55, 26 Pac. 606; Shanklin v. Gray, 111 Cal. 88, 43 Pac. 399.

7 Francais v. Somps, 92 Cal. 503, 28 Pac. 592.

cover a period greater than one month if it is not verified by the superintendent the penalty may be recovered. No actual damages need to be proved.

PENALTIES

Under the amendment to section 590, Civil Code, post, the extent of the liability of the president for refusing to issue the order granting the privilege is limited to $1,000, and the superintendent failing to obey the order to a like penalty, and to forfeiture of his salary, and he can never be employed again by the corporation; the liability of the directors for failing to have the reports and accounts posted is limited to the actual damage sustained by the stockholder. The provision in the Act of 1897 limiting these liabilities to corporations whose stock is listed on some public exchange was left out of this section when it was put in the code.

Sections 588 and 589 of the Civil Code are to be construed together, as to the penalties provided, and the penalty provided by section 589 may be imposed upon the officer for the refusal to allow the stockholder to take samples to which he is entitled under the former section.9

MANDAMUS-FOREIGN CORPORATIONS

The officers of a foreign mining company, whose mines are in another state, but the corporation having its principal office in this state where the directors hold all their meetings, the officers, residing here, may be compelled by mandamus to issue an order to the superintendent to allow a stockholder to inspect the mining property. It was said that under our statutes the

8 Shanklin v. Gray, 111 Cal. 88, 43 Pac. 399.

Symmes v. Sierra etc. Min. Co., 171 Cal. —; 153 Pac. 710.

stockholder is entitled to that right regardless of his motives or the existence of good cause, and at common law also upon his showing good cause.10

TRANSFER AGENCIES

§ 586, Civil Code. Any corporation organized in this state for the purpose of mining or carrying on mining operations in or without this state, may establish and maintain agencies in other states of the United States, for the transfer and issuing of their stock; and a transfer or issue of the same at any such transfer agency, in accordance with the provisions of its by-laws, is valid and binding as fully and effectually for all purposes as if made upon the books of such corporation at its principal office within this state. The agencies must be governed by the by-laws and the directors of the corporation. (Enacted March 21, 1905; Stats. 1905, p. 584.)

STOCK ISSUED AT TRANSFER AGENCIES

§ 587, Civil Code. All stock of any such corporation, issued at a transfer agency, must be signed by the president and secretary of the corporation, and countersigned at the time of its issue by the agent having charge of the transfer agency. No stock must be issued at a transfer agency unless the certificate of stock, in lieu of which the same is issued, is at the time surrendered for cancellation. (Enacted March 21, 1905; Stats. 1905, p. 585.)

CONSOLIDATION OF MINING CORPORATIONS

§ 587a, Civil Code. It is lawful for two or more corporations formed, or that may hereafter be formed, under the laws of this state, for mining purposes, which own or possess mining claims or lands adjoining each other, or lying in the same vicinity, to consolidate their

10 Hobbs v. Tom Reed G. M. Co., 164 Cal. 497, 43 L. R. A. (N. S.) 1112, 129 Pac. 781; Hobbs v. Davis, 168 Cal. 556, 143 Pac. 733.

capital stock, debts, property, assets, and franchises, in such manner and upon such terms as may be agreed upon by the respective boards of directors or trustees of such corporations so desiring to consolidate their interests;

But no such consolidation must take place without the written consent of the stockholders representing two thirds of the capital stock of each corporation,

And no such consolidation can, in any way, relieve such corporations, or the stockholders thereof, from any and all just liabilities;

And in case of such consolidation, due notice of the same must be given, by advertising, for one month, in at least one newspaper in the county where the said mining property is situated, if there is one published therein, and also in one newspaper published in the county where the principal place of business of any of said corporations is.

And when the consolidation is completed, a certificate thereof, containing the manner and terms of such consolidation, must be filed in the office of the county clerk of the county in which the original certificate of incorporation of each of said corporations is filed, and a copy thereof must be filed in the office of the secretary of state;

Such certificate must be signed by a majority of each board of trustees or directors of the original corporations,

And it is their duty to call, within thirty days after the filing of such certificate, a meeting of the stockholders of all of said corporations so consolidated, to elect a board of trustees or directors for the consolidated corporation, for the year thence next ensuing; and to cause notice of the time and place fixed for such meeting to be mailed to each stockholder of each of such corporations at his last known place of residence or business at least ten days before the time fixed for such meeting.