Stockholders' meetings, who may vote, and use of proxies. § 3216. At all meetings of stockholders of corporations organized under the laws of this state, or in the case of corporations having no capital stock, then at all meetings of the members of such corporation, only the stockholders or members actually present shall be entitled to vote on any proposition, including the election of directors and other officers of the corporation, unless proxies from absent or non-attending stockholders or members shall be held by some person or persons present at such meeting and shall be executed in accordance with the provisions of this section. Every such proxy must be executed in writing by the member o stockholder himself, or by his duly authorized attorney. No proxy heretofore given or made shall be valid after the expiration of eleven months from the passage of this act, unless the member or stockholder executing it shall have specified therein the length of time for which such proxy is to continue in force, which must be for some limited period, and in no case to exceed seven years from the date of the execution of such proxy. No proxy hereafter to be given or made shall be valid after the expiration of eleven months from the date of its execution, unless the member or stockholder executing it shall have specified therein the length of time for which such proxy is to continue in force, which must be for some limited period, and in no case to exceed seven years from the date of the execution of such proxy. Every proxy shall be revocable at the pleasure of the person executing it; but a corporation having no capital stock may prescribe in its by-laws the persons who may act as proxies for members, and the length of time for which such proxies may be executed. Enacted February 27, 1905; stats. 1905, p. 22. CHAPTER II. CORPORATE STOCK. ART. I. Stock and stockholders. §§ 322-329. II. 323. 324. companies. 325. 326. Certificates, how and when issued. Shares are personal property; how transferred; water Transfer of shares held by married women, etc. Dividends are individual property. Non-resident stockholders. Bonds required before transfer. 327. 328. 329. Contract to relieve directors void. New or duplicate certificates of shares of stock, court may order issue. Lost or destroyed bonds, how duplicates may be obtained. Summons. Judgment. Indemnity. Liabilities of stockholders-They may be released, when. § 322. Each stockholder of a corporation is individually and personally liable for such proportion of all its debts and liabilities contracted or incurred during the time he was a stockholder as the amount of stock or shares owned by him bears to the whole of the subscribed capital stock or shares of the corporation. Any creditor of the corporation may institute joint or several actions against any of its stockholders, for the proportion of his claim payable by each, and in such action the court must ascertain the proportion of the claim or debt for which each defendant is liable, and a several judgment must be rendered against each, in conformity therewith. If any stockholder pays his proportion of any debt due from the corporation, incurred while he was such stockholder, he is relieved from any further personal liability for such debt, and if an action has been brought against him upon such debt, it must be dismissed, as to him, upon his paying the costs, or such proportion thereof as may be properly chargeable against him. The liability of each stockholder is determined by the amount of stock or shares owned by him at the time the debt or liability was incurred; and such liability is not released by any subsequent transfer of stock. The term stockholder, as used in this section, applies not only to such persons as appear by the books of the corporation to be such, but also to every equitable owner of stock, although the same appears on the books in the name of another; and also to every person who has advanced the installments or purchase money of stock in the name of a minor, so long as the latter remains a minor; and also to every guardian, or other trustee, who voluntarily invests any trust funds in the stock. Trust funds in the hands of a guardian, or trustee, are not liable under the provisions of this section, by reason of any such investment; nor must the person for whose benefit the investment is made be responsible in respect to the stock until he becomes competent and able to control the same; but the responsibility of the guardian or trustee making the investment continues until that period. Stock held as collateral security, or by a trustee, or in any other representative capacity, does not make the holder thereof a stockholder within the meaning of this section, except in the cases above mentioned, so as to charge him with any proportion of the debts or liabilities of the corporation; but the pledgor, or person or estate represented, is to be deemed the stockholder, as respects such liability. In a corporation having no capital stock, each member is individually and personally liable for an equal share of its debts and liabilities, and similar actions may be brought against him, either alone or jointly with other members, to enforce such liability as by this section may be brought against one or more stockholders, and similar judgments may be rendered. The liability of each stockholder of a corporation formed under the laws of any other state or territory of the United States, or of any foreign country, and doing business within this state, is the same as the liability of a stockholder of a corporation created under the constitution and laws of this state. Amended March 20, 1905; stats. 1905, p. 396. 59 Cal. 109, 286; 62 Cal. 461; 64 Cal. 121, 288; 65 Cal. 210; 87 Cal. 31; 95 Cal. 580, 589; 97 Cal. 95; 99 Cal. 92 ; 107 Cal. 381, 446; 108 Cal. 4; 109 Cal. 588; 111 Cal. 63 ; 113 Cal. 25; 115 Cal. 380, 594; 116 Cal. 384; 118 Cal. 276; 122 Cal. 672; 124 Cal. 150; 125 Cal. 8, 412; 127 Cal. 82, 675; 130 Cal. 274; 133 Cal. 507; 136 Cal. 513; 140 Cal. 104, 105; 141 Cal. 227; 142 Cal. 384; 145 Cal. 710; 147 Cal. 575; XXXVII Cal. Dec. 36; 2 Cal. App. 131, 134, 138, 139, 447; 4 Cal. App. 293, 693; VIII Cal. App. Dec. 737. NOTE.- 322. The change consists in the substitution of the language of the first sentence of section 3 of article XII of the constitution in place of the first sentence of the old section. As the section stood, it is believed to be unconstitutional. (See Larrabee vs. Baldwin, 35 Cal. 155.) The words "an equal share" are substituted for "his proportion." Liability of stockholders: Constitution of California, art. XII, § 3; protection of stockholders: See "Fraudulent Reports," statutes at large, Appendix. Certificates, how and when issued. § 323. All corporations for profit must issue certificates for stock when fully paid up, signed by the president and secretary, and may provide, in their by-laws, for issuing certificates prior to full payment, under such restrictions and for such purposes as their by-laws may provide, but any certificate issued prior to full payment must show on its face what amount has been paid thereon. All certificates of stock issued by corporations authorized by their articles of incorporation to issue stocks of different classes, shall express upon their face the character of stock represented by said certificates. The said certificates shall also state the number of shares of stock of each class which said corporation is authorized to issue, and the said certificates shall also contain a statement of the nature and extent of the preference granted to the preferred stock. Amended March 18, 1907; stats. 1907, p. 348. 82 Cal. 603; 96 Cal. 329; 101 Cal. 79; 135 Cal. 583; XXXVI Cal. Dec. 79, 285; 2 Cal. App. 130, 131. NOTE. § 323. The change in 1905 consisted in the addition of the words "but any certificate issued prior to full payment must show on its face what amount has been paid thereon," the object being to require a certificate issued prior to full payment to show the amount paid thereon. The change in 1907 consisted in the addition of the last two sentences, to cover cases of the issuance of preferred and common stock. Shares are personal property; how transferred; water companies. § 324. Whenever the capital stock of any corporation is divided into shares, and certificates therefor are issued, such shares of stock, except as hereinafter provided, are personal property, and may be transferred by indorsement by signature of the proprietor, his agent, attorney, or legal representative, and the delivery of the certificate; but such transfer is not valid, except as to the parties thereto, until the same is so entered upon the books of the corporation as to show the names of the parties by whom and to whom transferred, the number of the certificate, the number or designation of the shares, and the date of the transfer; provided, however, that any corporation organized for, or engaged in the business of selling, distributing, supplying, or delivering water for irrigation purposes or for domestic use, may in its by-laws provide that water shall only be so sold, distributed, supplied, or delivered to owners of its capital stock, and that such stock shall be appurtenant to certain lands when the same are described in the certificate issued therefor; and when such certificate shall be so issued, and a certified copy of such by-law recorded in the office of the county recorder in the county where such lands are situated, the shares of stock so located on any land shall only be transferred with said lands, and shall pass as an appurtenance thereto. Whenever any officer of any corporation shall refuse to make entries upon the books thereof, or to transfer stock therein, or to issue a certificate or certificates therefor to the transferee as provided by this and the next preceding section, such officer shall be subject to a penalty of four hundred dollars, to be recovered as liquidated damages, in an action brought against him by the person aggrieved. Amended March 22, 1907; stats. 1907, p. 854. 53 Cal. 431; 58 Cal. 428; 63 Cal. 364; 72 Cal. 9; 79 Cal. 331; 82 Cal. 603; 84 Cal. 137; 108 Cal. 493; 109 Cal. 632; 113 Cal. 276; 126 Cal. 534; 134 Cal. 410; 136 Cal. 513; 141 Cal. 16; 147 Cal. 240, 242; 150 Cal. 108, 109, 110; 2 Cal. App. 131. Transfer of shares held by married women, etc.-Dividends are individual property. § 325. Shares of stock in corporations standing on the books of the corporation in the name of a married woman may be transferred by her, her agent or attorney, without the signature of her husband, and in the same manner as if such married |