Section 840.-HOW BY-LAWS ADOPTED.-The assent of stockholders, representing a majority of all the subscribed capital stock, or a majority of the members, if there be no capital stock, is necessary to adopt By-Laws, if they are adopted at a meeting called for that purpose. By-Laws may also be adopted, without a meeting for that purpose, by the written assent of the holders of two-thirds of the stock, or by the written assent of two-thirds of the members, if there is no capital stock. If a meeting of stockholders is called for the purpose of adopting By-Laws, notice must be given by publication in a newspaper for two weeks, by order of the acting President.

Civil Code, Section 301.

Section 841.-WHAT BY-LAWS MAY PROVIDE FOR. A corporation may, by its By-Laws, provide for the following things: (1) The time, place, and manner of calling and conducting its meetings, and may dispense with notice of all regular meetings of the stockholders or Directors; (2) The number of stockholders or members constituting a quorum; (3) The mode of voting by proxy; (4) The qualifications and duties of Directors, the time of their annual election, and the mode and manner of giving notice of such election; (5) The compensation and duties of officers; (6) The manner of election and the term of office of all officers other than the Directors; (7) Suitable penalties may be provided for the violation of the By-Laws, not exceeding $100 for any one offense; (8) The amount of stock to be owned by a Director; (9) For the filling of vacancies on the Board of Directors; (10) For the issuing of certificates of stock before full payment therefor; (11) For the disposal of stock owned by the corporation; and, (12) The By-Laws may specify the newspaper in which all notices of the meetings of stockholders or Directors, when notice is necessary, shall be published.

Civil Code, Sections 301, 305, 308, 323, 344.

Section 842.-BOOK OF BY-LAWS.-The law provides that all By-Laws adopted must be certified by a majority of the Directors and Secretary of the corporation, and copied in a legible hand, in a book kept in the office of the corporation, to be known as the "Book of By-Laws," and no By-Law shall take effect until so copied, and the book shall then be opened to the inspection of the public during office hours of each day except holidays.

Civil Code, Section 304.

Section 843.—AMENDMENT OF BY-LAWS.-The By-Laws can be amended by a vote of the stockholders at the annual meeting, or at a special meeting called for that purpose. There must be a vote representing twothirds of the subscribed stock. The By-Laws may also be amended, without a meeting, by the written assent of the holders of two-thirds of the stock, or two-thirds of the members if there is no capital stock.

Civil Code, Section 304; Statutes of 1905, page 557.

Section 844.-REPEALING OLD AND ADOPTING NEW BY-LAWS.-Old By-Laws may be repealed absolutely, and new By-Laws adopted in their place, in the same manner as amendments are made, stated in Section 843.

Section 845.-RECORD OF AMENDMENTS.-The law provides that, "whenever any amendment or new ByLaw is adopted, it shall be copied in the Book of By-Laws with the original By-Laws, and immediately after them. and shall not take effect until so copied. If any By-Law be repealed, the fact of repeal, with the date of the meeting at which the repeal was enacted, or written assent was filed, shall be stated in said book, and until so stated the repeal shall not take effect."

Civil Code, Section 304.

Section 846.-THE BOARD OF DIRECTORS.-The corporate powers, business, and property of corporations must be exercised, conducted, and controlled by a Board of Directors.

Section 847.-NUMBER OF DIRECTORS.-The law is, that the number of Directors cannot be less than three, but may be any number more than three. The number of Directors may be increased to more than three without limit, to as many as may be desired at any time after articles of incorporation have been filed, by a vote of the majority of the stockholders of the corporation; and if the corporation has been formed with more than three Directors, a majority of the stockholders may vote to decrease the directors to any number not less than three. The increase or decrease of the number of Directors must be at a meeting of the stockholders called for that purpose. When the number of Directors has been increased or decreased, a certificate stating that fact must be filed in the same manner as articles of incorporation were filed.

Act of the Legislature, in effect May 18, 1907.

Section 848.-QUALIFICATION OF DIRECTORS. -A majority of the Directors must be citizens of California. Directors of corporations for profit must be holders of its stock to an amount fixed by the By-Laws of the corporation; Directors of all other corporations must be members thereof.

Statutes of 1901, page 308.

Section 849.-DIRECTORS FOR THE FIRST YEAR. -The Directors to serve for the first year, or until the time fixed for the election of Directors, are designated in the Articles of Incorporation; and the persons named in the Articles of Incorporation, upon the organization of a corporation, will serve until their successors are regularly elected.

Section 850.-ELECTION OF DIRECTORS.-The Directors of a corporation must be elected annually by the stockholders or members, and if no provision is made in the By-Laws for the time of election, the election must be held on the first Tuesday in June. There must be a majority of the subscribed capital stock, or of the members where there is no capital stock represented at the meeting for the election of Directors, either in person or by proxy in writing. The election must be by ballot, and every stockholder has the right to vote in person or by proxy the number of shares standing in his name, for as many persons as there are Directors to be elected, or he may cumulate his shares and give one candidate as many votes as the number of Directors multiplied by the number of his shares of stock shall equal; or the stockholder may distribute his shares on the same principle among as many candidates as he shall think fit. These provisions of the law to apply to all corporations doing business in this State, domestic or foreign. The Director receiving the highest number of votes shall be declared elected. In corporations having no capital stock, each member of the corporation may cast as many votes for one Director as there are Directors to be elected, or he may distribute them among any or all the candidates.

Civil Code, Sections 302, 312; Statutes of 1903, page 253.

Section 851.-NOTICE OF MEETINGS.-Notice of meetings of the stockholders to elect Directors must be given, by the Secretary, unless all of the stockholders waive such notice in writing. 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 records of such meetings, or if those not present sign in writing a waiver of notice of such meeting, which waiver is presented and made a part of the records of such meeting, the doings

of such meeting are as valid as if had at a meeting legally called and noticed.

Act of the Legislature, approved February 22, 1909.

Section 852.-WHO MAY VOTE AT ELECTION OF DIRECTORS.-To entitle a person to vote at the election of Directors, he must be a bona fide stockholder, having stock in his own name on the stock books of the corporation at least ten days before the election. It is made a requisite of the right to vote that the voter shall not only be registered as a stockholder, but that he shall have been so registered for at least ten days prior to the election, and` that he shall also be a bona fide stockholder at the time of the election. The voter must be either the owner of the stock, or have some other interest in it, in order to be a bona fide stockholder. Therefore, one in whose name stock has been registered upon the books of the corporation, but who has never had any interest in the stock, and is only a dummy for the real owner, and when the change on the books was made for the purpose of enabling the real owner to avoid his liabilities, is not a bona fide stockholder, within the meaning of the law, and should not be allowed to vote at an election of Directors. (Decided by the Supreme Court in the case of Smith vs. S. F. and N. P. Railway Company, which decision is printed in Volume 115 of the California Reports, page 584.)

Civil Code, Sections 307, 312.

Section 853.—WHO MAY VOTE STOCK IN HANDS OF PLEDGEE OR TRUSTEE.-All shares of stocks 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, but only in case the pledgor or beneficial owner fails to represent and vote the same. It may be agreed, however, that the stock shall be voted in a different manner.

Act of the Legislature, approved March 9, 1911.