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5. Whenever, from any cause, there is no person authorized to call or to preside at a meeting of a corporation, any justice of the peace of the county where such corporation is established may, on written application of three or more of the stockholders or of the members thereof, issue a warrant to one of the stockholders or members directing him to call a meeting of the corporation, by giving the notice required, and the justice may in the same warrant direct such person to preside at such meeting until a clerk is chosen and qualified, if there is no other officer present legally authorized to preside thereat.
SEC. 413. Individual liability.—Each stockholder of a corporation is individually and personally liable for such proportion of its debts and liabilities as the amount of stock or shares owned by him bears to the whole of the subscribed capital stock or shares of the corporation, and for a like proportion only of each debt or claim against 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 shall 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, shall apply 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 appear 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 shall not be liable, under the provisions of this section, by reason of any such investment, nor shall 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 shall continue 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 corporations having no capital stock each member is individually and personally liable for his proportion 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.
SEC. 414. Valid uncalled meeting.-When all the stockholders or members of a corporation are present at any meeting, however called or notified, and sign a written consent thereto on the record of such meeting, the doings of such meeting are as valid as if had at a meeting legally called and noticed. The stockholders or members of such corporation, when so assembled, may elect officers to fill all vacancies then existing, and may act upon such other business as might lawfully be transacted at regular meetings of the corporation.
SEC. 415. Non-resident stock transfers.-When the shares of stock in a corporation are owned by parties residing out of the territory, the president, secretary, and directors of the corporation, before entering any transfer of the shares on its books or issuing a certificate thereof to the transferee, may require from the attorney or agent of the nouresident owner, or from the person claiming under the transfer, an affidavit or other evidence that the non-resident owner was alive at the date of the transfer, and if such affidavit or other satisfactory evidence be not furnished, may require from the attorney, agent, or claimant a bond of indemnity, with two sureties satisfactory to the officers of the corporation, or if not so satisfactory, then one approved by the district judge of the county in which the principal office of the corporation is situated, conditioned to protect the corporation against any liability to the legal representatives of the owner of the shares, in case of his or her death before the transfer; and if such affidavit or other evidence or bond be not furnished when required as herein provided, neither the corporation nor any officer thereof shall be liable for refusing to enter the transfer on the books of the corporation.
SEC. 416. Changing amount of stock.-Every corporation may increase or diminish its capital stock at a meeting called for that purpose by the directors, as follows:
1. Notice of the time and place of the meeting, stating its object and the amount to which it is proposed to increase or diminish its capital stock, must be personally served on each stockholder resident in the territory, at his place of residence, if known, and if not known, at the place where the principal office of the corporation is situated, and be published in a newspaper published in the county of such principal place of business once a week for four weeks successively.
2. The capital stock must in no case be diminished to an amount less than the indebtedness of the corporation, or the estimated cost of the works which it may be the purpose of the corporation to construct.
3. At least two-thirds of the entire capital stock must be represented by the vote in favor of the increase or diminution before it can be effected.
4. A certificate must be signed by the chairman and secretary of the meeting and a majority of the directors, showing a compliance with the requirements of this section, the amount to which the capital stock has been increased or diminished, the amount of stock represented at the meeting, and the vote by which the object was accomplished.
5. The certificate must be filed in the office of the register of deeds where the original articles of incorporation were filed, and a certified copy thereof in the office of the secretary of the territory, and thereupon the capital stock shall be so increased or diminished.
6. The written assent of the holders of three-fourths of the subscribed capital stock shall be as effectual to authorize the increase or diminution of the capital stock as if a meeting were called and held; and upon such written assent the directors may proceed to make the certificate herein provided for.
ART. IV.-Corporate records.
SEC. 417.-Entries required in journal-Stock-book-Publicity.—All corporations for profit are required to keep a record of all their business transactions, a journal of all meetings of their directors, members, or stockholders, with the time and place of holding the same, whether regular or special, and if special, its object, how authorized, and the notice thereof given. The record must embrace every act done or ordered to be done, who were present, and who were absent, and, if requested by any director, member, or stockholder, the time shall be noted when he entered the meeting or obtained leave of absence therefrom. On a similar request the ayes and noes must be taken on any proposition, and a record thereof made. On a similar request the protest of any director, member, or stockholder, or any action or proposed action must be entered in full; all such records to be open to the inspection of any director, member, stockholder, or creditor of the corporation.
2. In addition to the records above required to be kept, corporations for profit must keep a book to be known as the "stock and transfer book", in which must be kept a record of all stock, the names of the stockholders or members, alphabetically arranged, installments paid or unpaid, assessments levied and paid or unpaid, a statement of every alienation, sale, or transfer of stock made, the date thereof, and by and to whom, and all such other records as the by-laws prescribe. Corporations for religious and benevolent purposes must provide in their by-laws for such records to be kept as may be necessary. Such stock and transfer book must be kept open to the inspection of any stockholder, member, or creditor.
ART. V.-Dissolution of corporations.
SEC. 418. Involuntary-Voluntary, how.-A corporation is dissolved:
1. By the expiration of the time limited by its articles of incorporation.
2. Its involuntary dissolution is provided for in chapter XXVI of the code of civil procedure.
3. If voluntary, its dissolution may be effected in the following manner:
1. A corporation may be dissolved by the district court of the county where its office or principal place of business is situated, upon its voluntary application for that purpose.
2. The application must be in writing and must set forth that at a meeting of the stockholders or members called for that purpose the dissolution of the corporation was resolved upon by a two-thirds vote of all the stockholders or members, and that all claims and demands against the corporation have been satisfied and discharged.
3. The application must be signed by a majority of the board of directors, trustees, or other officers having the management of the affairs of the corporation, and must be verified in the same manner as a complaint in a civil action.
4. If the court is satisfied that the application is in conformity with this article, it must order the application to be filed, and that the clerk give not less than thirty nor more than fifty days' notice of the application, by publication in some newspaper published in the county, and if there are none such, then by advertisement posted up in five of the principal public places in the county.
5. At any time before the expiration of the time of publication any person may file his objections to the application.
6. After the time of publication has expired the court may, upon five days' notice to the persons who have filed objections, or without further notice, if no objections have been filed, proceed to hear and determine the application; and if all the statements therein made are shown to be true, the court must declare the corporation dissolved.
7. The application, notices, and proof of publication, objections (if any), and declaration of dissolution constitute the judgment roll, and from the judgment an appeal may be taken in the same manner as in other actions.
SEC. 419. Lapse by non-user.—If a corporation does not organize and commence the transaction of business or the construction of its works within one year from the date of its incorporation, its corporate powers cease.
SEC. 420. Directors trustees on dissolution.-Unless other persons are appointed by the court, the directors or managers of the affairs of such corporation at the time of its dissolution are trustees of the creditors and stockholders or members of the corporation dissolved, and have full power to settle the affairs of the corporation, and to collect and pay debts, and divide among the stockholders the property which remains after the payment of debts and necessary expenses; and for such purposes may maintain or defend actions in their own names by the style of the
trustees of such corporation dissolved, naming it; and no action whereto any such corporation is a party shall abate by reason of such dissolution.
SEC. 431. Liability.-The trustees mentioned in the preceding section are jointly and severally responsible to the creditors, stockholders, and members of the corporation to the extent of its property in their hands.
SEC. 422. Revival.—A corporation once dissolved can be revived only by the same power by which it could be created.
ART. VI.-Assessments of stock.
SEC. 423. Levied, when.-The directors of any corporation formed or existing under the laws of this territory, after one-fourth of its capital stock has been subscribed, may, for the purpose of paying expenses, conducting business, or paying debts, levy and collect assessments upon the subscribed capital stock thereof in the manner and form and to the extent provided herein.
SEC. 424. Limitation of.—No assessment must exceed ten per cent. of the amount of the capital stock named in the articles of incorporation, except in the cases in this section otherwise provided for, as follows:
1. If the whole capital of a corporation has not been paid up, and the corporation is unable to meet its liabilities or to satisfy the claims of its creditors, the assessment may be for the full amount unpaid upon the capital stock; or if a less amount is sufficient, then it may be for such a percentage as will raise that amount.
2. The directors of railroad corporations may assess the capital stock in installments of not more than ten per cent. per month, unless in the articles of incorporation it is otherwise provided.
3. The directors of fire or marine insurance corporations may assess such a percentage of the capital stock as they deem proper.
SEC. 425. New assessment only.—No assessment must be levied while any portion of a previous one remains unpaid, unless :
1. The power of the corporation has been exercised in accordance with the provisions of this article for the purpose of collecting such previous assessment;
2. The collection of the previous assessment has been enjoined; or,
3. The assessment falls within the provisions of either the first, second, or third subdivision of section four hundred and twenty-four.
SEC. 426. Requisites of assessment.-Every order levying an assessment must specify the amount thereof, when, to whom, and where payable; fix a day subsequent to the full term of publication of the assessment notice, on which the unpaid assessments shall be delinquent, not less than thirty nor more than sixty days from the time of making the order levying the assessment; and a day for the sale of delinquent stock, not less than fifteen nor more than sixty days from the day the stock is declared delinquent.
SEC. 427. Form of notice.-Upon the making of the order, the secretary shall cause to be published a notice thereof, in the following form:
[Name of corporation in full; location of principal place of business.] Notice is hereby given that at a meeting of the directors, held on the [date], an assessment of [amount] per share was levied upon the capital stock of the corporation, payable [when, to whom, and where]. Any stock upon which this assessment shall remain unpaid on the [day fixed] will be delinquent and advertised for sale at public auction, and, unless payment is made before, will be sold on the [day appointed], to pay the delinquent assessment, together with costs of advertising and expenses of sale.
[Signature of secretary, with location of office.]
SEC. 428. Service thereof.-The notice must be personally served upon each stockholder, or, in lieu of personal service, must be sent through the mail, addressed to each stockholder at his place of residence, if known, and if not known, at the place where the principal office of the corporation is situated, and be published once a week for four successive weeks in some newspaper of general circulation and devoted to the publication of general news, published at the place designated in the articles of incorporation as the principal place of business, and also in some newspaper published in the county in which the works of the corporation are situated, if a paper be published therein. If the works of he corporation are not within a state or territory of the United States, publication in a paper of the place where they are situated is not necessary. If there be no newspaper published at the place designated as the principal place of business of the corporation, then the publication must be made in some other newspaper of the county, if there be one, and if there be none, then in a newspaper published in an adjoining county.
SEC. 429. Delinquent levy.—If any portion of the assessment mentioned in the notice remains unpaid on the day specified therein for declaring the stock delinquent, the secretary must, unless otherwise ordered by the board of directors, cause to be published, in the same papers in which the notice hereinbefore provided for shall have been published, a notice substantially in the following form:
[Name in full; location of principal place of business.]
NOTICE. There is delinquent upon the following described stock, on account of assessment levied on the
[date] (and assessments levied previous thereto, if any) the several amounts set opposite the names of the respective shareholders, as follows: [Names, number of certificate, number of shares, amount.] And in accordance with law (and an order of the board of directors made on the [date], if any such order shall have been made), so many shares of each parcel of such stock as may be necessary will be sold, at the [particular place], on the [date], at [the hour] of such day, to pay delinquent assessments thereon, together with costs of advertising and expenses of the sale. [Name of secretary, with location of office.]
SEC. 430. Contents of notice.-The notice must specify every certificate of stock, the number of shares it represents, and the amount due thereon, except where certificates may not have been issued to parties entitled thereto, in which case the number of shares and amount due thereon, together with the fact that the certificates for such shares have not been issued, must be stated.
SEC. 431. Publication.-The notice, when published in a daily paper, must be published for ten days, excluding Sundays and holidays, previous to the day of sale. When published in a weekly paper, it must be published in each issue for two weeks previous to the day of sale. The first publication of all delinquent sales must be at least fifteen days prior to the day of sale.
SEC. 432. Effect of same.-By the publication of the notice the corporation acquires jurisdiction to sell and convey a perfect title to all of the stock described in the notice of sale upon which any portion of the assessment, or costs, or advertising remains unpaid at the hour appointed for the sale, but must sell no more of such stock than is necessary to pay the assessments due and costs of sale.
SEC. 433. Manner of sale.—On the day, at the place, and at the time appointed in the notice of sale the secretary must, unless otherwise ordered by the directors, sell, or cause to be sold, at public auction, to the highest bidder for cash, so many shares of each parcel of the described stock as may be necessary to pay the assessment and charges thereon, according to the terms of sale; if payment is made before the time fixed for sale, the party paying is only required to pay the actual cost of advertising in addition to the assessment.
SEC. 434. Bidder defined.—The person offering at such sale to pay the assessment and costs for the smallest number of shares or fraction of a share is the highest bidder, and the stock purchased must be transferred to him on the stock-books of the corporation on payment of the assessment and costs.
SEC. 435. Bidding in.-If at the sale of stock no bidder offers the amount of the assessment and costs and charges due, the same may be bid in and purchased by the corporation, through the secretary, president, or any director thereof, at the amount of the assessments, costs, and charges due; and the amount of the assessments, costs, and charges must be credited as paid in full on the books of the corporation, and entry of the transfer of the stock of the corporation must be made on the books thereof. While the stock remains the property of the corporation it is not assessable, nor must any dividends be declared thereon; but all assessments and dividends must be apportioned upon the stock held by the stockholders of the corporation.
SEC. 436. Stock held by corporation.-All purchases of its own stock made by any corporation vest the legal title to the same in the corporation; and the stock so purchased is held subject to the control of the stockholders, who may make such disposition of the same as they deem fit, in accordance with the by-laws of the corporation or vote of a majority of all the remaining shares. Whenever any portion of the capital stock of a corporation is held by the corporation by purchase, a majority of the remaining shares is a majority of the stock for all purposes of election or voting on any question at a stockholders' meeting.
SEC. 437. Extended notice.—The dates fixed in any notice of assessment or notice of delinquent sale, published according to the provisions hereof, may be extended from time to time, for not more than thirty days, by order of the directors, entered on the records of the corporation; but no order extending the time for the performance of any act specified in any notice is effectual unless notice of such extension or postponement is appended to and published with the notice to which the order relates.
SEC. 438. Irregularities.-No assessment is invalidated by a failure to make publication of the notices hereinbefore provided for, nor by the non-performance of any act required in order to enforce the payment of the same; but in case of any substantial error or omission in the course of proceedings for collection, all previous proceedings, except the levying of the assessment, are void, and publication must be begun anew.
SEC. 439. Redemption—Limitation.-No action must be sustained to recover stock sold for delinquent assessments upon the ground of irregularity in the assessment, irregularity or defect of the notice of sale, or defect or irregularity in the sale, unless the party seeking to maintain such action first pays or tenders to the corporation, or the party holding the stock sold, the sum for which the same was sold, together with all delinquent assessments which may have been paid thereon, and interest on such sums from the time they were paid, and no such action must be sustained unless the same is commenced by the filing of a complaint and the issuing of a summons thereon within six months after such sale was made.
SEC. 410. Proof of notice-Sale.-The publication of notice required by this article may be proved by the affidavit of the printer, foreman, or principal clerk of the newspaper in which the same was published; and the affidavit of the secretary or auctioneer is prima facie evidence of the time and place of sale, of the quantity and particular description of the stock sold, and to whom, and for what price, and of the fact of the purchase money being paid. The affidavits must be filed in the office of the corporation, and copies of the same, certified by the secretary thereof.
are prima-facie evidence of the facts therein stated. Certificates signed by the secretary, and under the seal of the corporation, are prima-facie evidence of the contents thereof.
SEC. 441. Action-Option.-On the day specified for declaring the stock delinquent, or at any time subsequent thereto and before the sale of the delinquent stock, the board of directors may elect to waive further proceedings under this article for the collection of delinquent assessments, or any part or portion thereof, and may elect to proceed by action to recover the amount of the assessment and the costs and expenses already incurred, or any part or portion thereof.
ART. VIII.-Examination of corporations, etc.
SEC. 448. Power of legislature.-The legislative assembly, or either branch thereof, may examine into the affairs and condition of any corporation in this territory at all times; and for that purpose any committee appointed by the said assembly, or either branch thereof, may administer all necessary oaths to the directors, officers, and stockholders of such corporation, and may examine them on oath in relation to the affairs and condition thereof; and may examine the safes, books, papers, and documents belonging to such corporation or pertaining to its affairs and condition, and compel the production of all keys, books, papers, and documents by summary process, to be issued on application to any district court or any judge thereof, under such rules and regulations as the court may prescribe.
SEC. 449. Power reserved.-The legislative assembly may at any time amend this chapter, or any article or section thereof.
ART. XII.—Mining and manufacturing corporations, etc.
SEC. 511. Limited twenty years.-Corporations for mining, manufacturing, and other industrial pursuits may be formed as provided in this chapter; and such corporations have all the rights and are subject to all the duties, restrictions, and liabilities therein mentioned, so far as the same apply or relate to such corporations, but the term of existence of any such corporation shall not exceed twenty years.
SEC. 512. Loan to stockholder forbidden.—The purposes for which every such corporation shall be formed must be distinctly and definitely specified in the articles of incorporation, and it must not appropriate its funds to any other purpose, nor must it loan any of its money to any stockholder therein; and if any such loan or misappropriation be made, the officers who shall make it, or who shall assent thereto, shall be jointly and severally liable, to the extent of such loan or misappropriation and interest, for all the debts of the corporation contracted before the repayment of the sum so loaned or misappropriated.
SEC. 513. Accounts-Publicity-Statement.-Regular books of accounts of all the business of such corporations must be kept, which, with the vouchers, shall be at all reasonable times open for the inspection of any of the stockholders; and as often as once in each year a statement of such accounts shall be made by order of the directors and laid before the stockholders.
SEC. 514. Liability for labor.—The stockholders of any corporation formed for the purposes mentioned in this article shall be jointly and severally liable, in their individual capacities, for all debts due to mechanics, workmen, and laborers employed by such corporation, which said liability may be enforced against any stockholders by an action at any time after an execution against such corporation shall be returned not satisfied: Provided, Such action be commenced within four mouths: And provided always, That if any stockholder shall be compelled by any such action to pay the debts of any creditor, or any part thereof, he shall have the right to call upon all the stockholders to contribute their part of the sum so paid by him as aforesaid, and may sue them jointly or severally, or any number of them, and recover in such action the ratable amount due from the person or persons so sued.
SEC. 515. Annual report-Contents.-Every such corporation shall annually, within twenty days from the first day of January, make a report, which must be published in some newspaper published at or nearest to the place where the business of said corporation is carried on, which report must state the capital stock and the amount thereof actually paid in, the amount and nature of its indebtedness, and the amounts due the corporation, the number and amount of dividends and when paid, and the net amount of profits. The said report must be signed by the president and a majority of the directors, and be verified by the oath of the president or secretary of the corporation, and filed in the office of the register of deeds of the county where the business of the corporation is carried on; and if any such corporation shall fail so to do, the directors shall be jointly and severally liable for all the debts of the corporation then existing, and for all that shall be contracted before such report shall be made.
SEC. 516. Demand for statement.-Whenever any person or persons owning twenty per cent. of the capital stock of any corporation formed for the purpose mentioned in this article shall present a written request to the treasurer thereof that they desire a written statement of the affairs of the corporation, he must make such statement under oath, embracing a particular account of all its assets and liabilities in detail, and deliver the same to the persons presenting the written request within twenty days after such presentation; and such treasurer shall also, at the same time, place and keep on file in his office for six months thereafter a copy of such statement, which shall, at all times during business hours, be exhibited to any stockholder of such corporation demanding an examination thereof; the treasurer, however, shall not be required to make or deliver such statement in the manner aforesaid oftener