Smith v. Ferries & C. H. Railway Co.

Citations

• 5 Cal. Unrep. 889
• 51 P. 710
• 1897 Cal. LEXIS 996

Syllabus

<p>Appeal—Divided Court.—Where One Justice of the supreme court is disqualified, and the six remaining are equally divided in opinion, the judgment will be affirmed.</p> <p>Corporation—Purchase of Railway.—A Stockholder of a corporation, which purchased -a street railroad of another corporation and agreed to assume bonds issued by it, cannot raise the question of fraud in constructing the road, or attack the validity of the bonds.</p> <p>Corporation—Stockholder’s Suit—Parties.—Where a Corporation Purchased! all the property of another corporation-, including a street railway, and all the property it might acquire, and all its rights, except its right to be a corporation, and assumed certain bonds that it had issued, the latter corporation is a necessary party defendant, where a stockholder of the former attacks the validity of the bonds, and charges that the railway was fraudulently constructed.</p> <p>Corporation—Assumption of Bonds.—It is not Ultra Vires for a corporation to assume the payment of bonds that were issued by another corporation, in violation of Civil Code, section 309, prohibiting the contraction of debts beyond the subscribed capital stock.</p> <p>Corporation—Limitation on Indebtedness. — A Corporation Which, in Payment for property, assumes the payment of bonds issued by another corporation, cannot retain the property, and claim the bonds were invalid, as being overissued, in violation of Civil Code, section 300, prohibiting the contraction of debts beyond the subscribed capital stock.</p> <p>Corporation—Original Bonded Indebtedness.—Prior to the Statute of 1889, directors of a corporation had power to create an original bonded indebtedness.</p> <p>Corporation—Bonds—Notice of Meeting.—A stockholder claiming that bonds issued by the directors were void, because issued without notice to the stockholders, must allege that the stockholders did not consent to the meeting at which the indebtedness was created, as Civil Code, section 317, provides that su