A. K. Robinson, Dist. Atty., and F. P. Tuttle, for appellant. L. L. Chamberlain and J. E. Marks, for respondent.

HENSHAW, J. This action was brought by the district attorney of the county of Placer in the name of the county, against the defendant, who was a member of the board of supervisors of the county. As such supervisor he was ex officio a road commissioner of the county. Pol. Code, § 2641. road commissioner he presented for payment claims against the county aggregating the sum of $458.10. These claims were for traveling and personal expenses incurred as road commissioner. The action by the county was to recover back these moneys, and was prosecuted under the provisions of the county government act of 1897. St. 1897, p. 452, c. 277, § 8. The constitutionality of this section has been upheld in Burr v. Board of Supervisors, 138 Cal. 57. By the provisions of the county government act, each member of the board of supervisors of Placer county became ex officio a road commissioner of the county. At the time when the defendant, as road commissioner, paid out the several sums of money for traveling and personal expenses and these claims were ordered paid. by the board of supervisors, the warrant drawn by the auditor and paid by the treasurer, there was nothing in the law making special provision for the repayment of the money so expended. To the contrary, section 215 (page 572) of the county government act provided that the salaries and fees provided for should be in full compensation for all services rendered the county as such officer or ex officio officer. To this com

plaint was interposed a demurrer and a mo

tion to dismiss. The motion was overruled. The court, in an opinion overruling the demurrer suggested to the attorney for the respondent that it would entertain a motion to strike out from the complaint many of the items charged upon, as having been illegally collected, and the defendant, following this suggestion with a motion to strike out, the motion was granted under opposition and objection by the plaintiff. To the granting of the motion plaintiff reserved its exception. The granting of this motion left the complaint as charging upon a few items, trifling in amount, not exceeding in the ag gregate $20. The complaint thus charging for the recovery of a sum less than $300, plaintiff and defendant both appear to have entertained the view that the court had no jurisdiction of such an action. A judgment of dismissal followed, which judgment is in the following language: "Both plaintiff and defendant having admitted in open court that the court has no jurisdiction of this action, it is therefore ordered, adjudged and decreed that the same be and is hereby dismissed."

From this judgment of dismissal plaintiff promptly appealed, causing a bill of exceptions to be settled, upon which it sought to review the soundness of the order of the trial court striking out portions of the complaint. Upon this appeal respondent urges a preliminary objection that the judgment of dismissal was a "consent judgment"; that being such a judgment, plaintiff is bound by its terms, and no appeal from it will, therefore, be considered. Much authority is cited as to the meaning, force, effect, and finality of a consent judgment. These authorities are unimpeachable in point of law, but do not call for consideration, because the judgment here appealed from is in no legal sense a judgment by consent. If plaintiff had assented to the order of court striking out the items and allegations of the complaint, some force might attach to the argument that plaintiff's concurrence in the judgment which it was believed necessarily followed, was a consent judgment. But the facts are that plaintiff was strenuously opposing the motion to strike out, and reserved its exception to the order which was given. The order having been made against its objection and exception, it was the conviction of plaintiff that, by the order striking out, the court had stripped itself of jurisdiction to proceed further with the action. Whether plaintiff was correct in this view of the law or not is quite immaterial. It assented to the judgment only in the sense. that one assents who, protesting against a given course of conduct or procedure, agrees with his adversary that but one consequence can follow the adoption of that course of procedure or conduct. Thus a man who is told

that he is going to be executed, but may have

his choice of modes of execution between shooting and hanging. can scarcely be said to have consented to his execution if he express a preference for being shot. An attorney, against whose complaint a general demurrer has been sustained without leave to amend, and who thereupon states to the court that, under his view of the law, nothing remains but to give judgment for the defendant, would hardly be said to have assented to the order sustaining the demurrer and to have bound himself through his declaration to a consent judgment. An attorney who objects to a question propounded of a witness, and who reserves his exception to the order of the court overruling his objection, can scarcely be said to have waived his objection and exception if thereupon he should turn to the witness and say "proceed with your answer." This proposition seems so plain as not to require the citation of authority, but reference may be made to Mecham v. McKay, 37 Cal. 154; Harvey v. Bunker Hill Co., 2 Idaho, 765, 24 Pac. 30; Smith v. Dittman, 16 Daly (N. Y.) 427.

Coming thus to consider the ruling of the court in striking out the allegations in the

complaint as to the claims, it appears, as has been said, that there is no warrant in the law for their collection by the road commissioner, unless it is found in subdivision 8 of section 228, page 576) of the county government act, which declares the following to be county charges: "Section 228, subd. 8. The contingent expenses necessarily incurred for the use and benefit of the county." It is a forced construction to hold that this provision contemplated the repayment of the personal expenses of the road commissioners, particularly in view of the fact that it makes no reference to these expenses, whereas, subdivision 2 of the same section expressly makes a county charge of "the traveling and other personal expenses of the district attorney," etc. The county government act, as to many officers, makes express provision as to repayment of their personal and traveling expenses, and in the case of Placer county it is provided that (besides the clause touching the district attorney) the superintendent of schools shall be allowed his actual traveling expenses, not to exceed $500 per annum. County Gov. Act, St. 1897, p. 539, c. 277, § 185, subd. 11. If the law, therefore, contemplated that the supervisors should receive repayment of such traveling expenses it would have said so. Whereas, in fact, what it does say in section 215 is that the salaries and fees provided for shall be in full compensation for all services rendered the county as such officer or ex officio officer. That this language is in absolute repugnancy and hostility to the idea that where compensation for all services is fixed by statute, personal and traveling expenses may still be allowed, is well expounded in the case of Albright v. County of Bedford, 106 Pa. 582, and State v. Trousdale, 16 Nev. 357, where it is held, as indeed it must be, that a statute providing in terms or in effect that the compensation fixed "shall be in full for all services" excludes the idea that the Legislature intended to allow extra compensation for traveling and like expenses. In the case at bar, if subdivision 8 of section 228, in providing that contingent expenses necessarily incurred for the use and benefit of the county are county charges, contemplated such expenses as are here in suit, it must necessarily include the traveling and personal expenses of every county officer, so that judges, sheriffs, county clerks, one and all, without any express provision of the law to that effect, would be entitled to recover their traveling expenses incurred in the performance of their duties. This certainly is not the construction of the section.

At a later session, in 1901, the Legislature seems to have considered it a hardship that road commissioners should be compelled to bear the cost of their traveling expenses, and made provision by act adopted March 23, 1901 (St. 1901, p. 752, c. 234, § 185, subd. 15) for the repayment to them of such item

ized expenses as they had actually incurred, the result being that supervisors elected after the law of 1901 went into effect became clearly entitled to such reimbursement, while the supervisors who went into office before and retained office after the enactment of that law did not come within the scope of its liberality. But notwithstanding the fact that the result is as in this case, that certain members of the board of supervisors are entitled to reimbursement for their expenses as road commissioners, while other members of the board are not, the inequality and individual hardship which thus results cannot be permitted to overthrow, or even modify, the rule that the compensation of a public officer may not be increased during the term for which he is elected. This complaint, as has been said, was framed under the provisions of section 8 of the county government act (St. 1897, p. 452, c. 277) and under section 53 (page 473) of the same statute. The complaint was certainly sufficient in form. Solano County v. McCudden, 120 Cal. 648. 53 Pac. 213. It was, therefore, error for the court to strike out the allegations of the complaint.

The judgment is reversed, with directions to the trial court to deny the motion to strike out, and to allow defendant a reasonable time in which to answer to the merits of the complaint.

We concur: ANGELLOTTI, J.; SHAW. J.; MCFARLAND, J.; SLOSS, J.; LORIGAN, J.

(4 Cal. App. 291) SAN FRANCISCO COMMERCIAL AGENCY v. MILLER et al. (Civ. 267.)

(Court of Appeal, Third District, California. Sept. 18, 1906. Rehearing Denied Oct. 16, 1906; Denied by Supreme Court Nov. 15, 1906.)

CORPORATIONS STOCKHOLDERS-LIABILITIES FOR DEBTS-ACTION-PLEADING.

Const. art. 12, § 3, provides that each stockholder of a corporation shall be individually liable for such portion of the debts incurred while he was a stockholder as the amount of stock owned by him bears to the whole of the subscribed capital stock. Held, that a complaint to enforce stockholders' liability under such section, alleging that the whole capital of the corporation was divided into 60,000 shares, of which about 37,735 shares were "issued" was not equivalent to an allegation that only that number of shares were "subscribed," and that the complaint was, therefore, fatally defective for failure to allege the whole number of shares subscribed.

[Ed. Note. For cases in point, see Cent. Dig. vol. 12, Corporations, § 1129.]

Appeal from Superior Court, City and County of San Francisco; J. M. Troutt, Judge.

Action by San Francisco Commercial Agency against M. K. Miller and others. From a judgment for plaintiff, defendants William H. and Charles Dunphy appeal. Reversed.

W. J. Bartnett, for appellants. P. A. Bergerot and G. H. Perry, for respondent.

MCLAUGHLIN, J. This is an action against certain stockholders of the Eureka Consolidated Oil Company to recover their proportionate share of the indebtedness of said corporation.

The only question presented for decision involves the sufficiency of an allegation in the complaint, which reads as follows: "That the capital stock of said Eureka Consolidated Oil Company now is, and at all the times hereinafter mentioned was, the sum of $60,000, divided into 60,000 shares of the par value of $1 each; that at all said times there had been issued by said company 37,735 shares of its capital stock, and no more, which shares were duly subscribed for, owned, and held by the shareholders of said company; and that there are now owned and held, and at all the times hereinafter mentioned there were owned and held, by the defendants above named the number of shares set after their respective names," etc. The appellants demurred to the complaint on the ground that no cause of action was stated. The demurrer was overruled, and the appeal is taken from the judgment thereupon entered in favor of plaintiff.

Section 3 of article 12 of the Constitution provides that "each stockholder of a corporation or joint-stock association shall be individually and personally liable for such proportion of all of 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 or association." In the complaint before us the number of shares issued and the number of shares subscribed for and owned by the defendants is stated, but we are left groping as to the number of shares constituting the whole of the "subscribed capital stock." It is contended that the averment that but 37,735 shares were issued is equivalent to a statement that only that number of shares were subscribed. With this contention we cannot agree. In the case at bar the averment in question might be absolutely true, and yet the remaining number of shares might have been subscribed by one or more persons not made defendants in this action. "To constitute the subscribers stockholders, it was not necessary that the certificates of stock should have issued to them." S. J. L. & W. Co. v. Beecher, 101 Cal. 79, 35 Pac. 349; Cal. S. H. Co. v. Callender, 94 Cal. 127, 29 Pac. 859, 28 Am. St. Rep. 99; Mitchell v. Beckman, 64 Cal. 121, 28 Pac. 110. The averment that stock has been issued amounts to no more than a statement that the stock certificates have issued. Tulare Sav. Bank v. Talbot, 131 Cal. 49, 63 Pac. 172. And it is a matter of common knowledge that stock is invariably subscribed for before it is issued. From this it follows that one ele

ment necessary to fix the proportion of the indebtedness for which appellants were liable is entirely wanting. We know the amount of stock issued and the number of shares owned by appellants, but we are not informed as to the total number of shares subscribed.

It has been held repeatedly that a complaint failing to state the whole number of shares subscribed is fatally defective, and we have neither the inclination nor the right to depart from a rule so well settled and sound. John A. Roebling's Sons. Co. v. But ler, 112 Cal. 678, 45 Pac. 6; Bidwell v. Babcock, 87 Cal. 32, 25 Pac. 752; Const. art. 12, § 3; Civ. Code, § 322.

The judgment is reversed.

(44 Wash. 456) CARSTENS & EARLES, INC. v. HOFIUS. (Supreme Court of Washington. Nov. 20, 1906.)

1. CORPORATIONS - TRANSFER OF PROPERTY LIABILITY OF TRUSTEES TO CREDITORS.

Under Ballinger's Ann. Codes & St. § 4265, making trustees of a corporation under whose administration its stock is divided or reduced, unless in the manner prescribed by law, liable to the corporation and its creditors for the amount so divided or reduced, a trustee of a corporation consenting to the transfer of all its property in consideration of the transferee assuming its debts and giving something to the stockholders, the trustee directly or indirectly sharing in the fruits of the transfer, is liable to a creditor of the corporation, who did not, until after beginning suit, know of the assumption of debts by the transferee.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 12, Corporations, §§ 1451, 1454.]

2. SAME-LIABILITY OF PURCHASER TO CRED

ITORS.

Where one corporation purchases all the property of another, whereupon the latter ceases to do business, the consideration going to its trustees for their benefit, and is thereupon unable to pay its creditor, the facts being known to the purchaser at the time of the transfer, it is liable for the debt of the corporation.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 12, Corporations, §§ 2361-2367.]

Appeal from Superior Court, King County; Walter A. McClure, Pro Tem. Judge.

Action by Carstens & Earles, Inc., against W. D. Hofius and others. From the judgment, plaintiff and defendant Hofius appeal. On appeal of Hofius affirmed; on appeal of plaintiff reversed, and remanded, with instructions.

Ballinger, Ronald, Battle & Tennant, for appellant Hofius. J. B. Alexander, for Carstens & Earles, Inc.

HADLEY, J. This action was brought to recover by reason of an alleged improper disposition of the assets of a corporation. The plaintiff and the defendants Corbin Machinery Company and Wittler-Corbin Machinery Company are corporations. In Jan

uary, 1902, the Corbin Machinery Company became indebted to plaintiff corporation in the sum of $406.73, and in December, 1902, the indebtedness being unpaid, the defendants Corbin Machinery Company and W. J. Corbin executed promissory notes to plaintiff for the amount of said previously existing indebted

The notes being unpaid, the plaintiff in January, 1905, obtained judgment against the said makers, and thereafter execution was issued thereon, which was returned wholly unsatisfied. When the indebtedness was incurred, the defendants Corbin and Hofius were owners of capital stock in said Corbin Machinery Company, and were also trustees thereof. On July 8, 1902, Hofius resigned as trustee and was succeeded by one Wittler. In June, 1902, the Wittler-Corbin Machinery Company was organized, and the said Corbin and Wittler became stockholders and trustees therein. In the same month the trustees of the Corbin Machinery Company and the trustees of the Wittler-Corbin Machinery Company made an agreement whereby the former corporation agreed to sell to the latter one all the property of the Corbin Machinery Company, except one certain contract with Perkins & Co., of Grand Rapids, Mich., the sale to include the good will of the Corbin Machinery Company. It was also agreed It was also agreed that, as part of the purchase price and consideration to be paid, the purchasing corporation should assume and pay all the outstanding obligations of the selling corporation, excepting a certain promissory note for $10,000 owing to the defendants Hofius and Pigott, and that the difference between the appraised or inventory value of the property so purchased and the total of said outstanding obligations should be paid by the issuance of stock in the Wittler-Corbin Machinery Company to defendant Corbin, or to such persons as he should direct; it having been previously agreed between Corbin, Hofius, and Pigott that the two latter should sell to the former all their stock in the Corbin Machinery Company. In pursuance of said agreement, the two defendant corporations carried it into effect through the passage of resolutions by their respective boards of trustees; the stockholders consenting therein. At the time of the sale it appeared from the statements and inventories of the Corbin Machinery Company, and it was estimated by the parties to the sale, that the reasonable value of the property, including the good will of the selling company, was $27.500, over and above all the outstanding indebtedness of the selling company, except the $10,000 note mentioned. At about the time of the sale the Wittler-Corbin Machinery Company issued to defendant Corbin certificates for its capital stock to the amount of $20,000 par value, and all the property of the selling corporation was transferred to the purchasing one, except the single contract mentioned. The purchasing corporation continued the business formerly conducted by the selling one, and there

after exercised complete ownership and control over the property and business formerly owned and conducted by the selling corporation. The capital stock of the purchasing corporation was $40,000, divided into 400 shares of $100 each. Defendant Corbin became a subscriber for 200 shares of said stock, and said Wittler subscribed for the remaining 200 shares. Corbin had purchased the stock of Hofius and Pigott in the selling corporation, and as such stockholder his entire equity in the assets sold was accepted as the consideration and payment by him for his subscription for the 200 shares in the purchasing corporation. Wittler, the other subscriber, paid $12,500 cash for his 200 shares. The purchasing corporation paid all the outstanding obligations of the selling one, except the claim of the plaintiff and the $10,000 note above mentioned. Plaintiff's claim was not presented to the purchasing corporation, but was presented to Corbin, who was at the time the president of the selling company, and thereupon the notes aforesaid, representing the previously existing indebtedness to plaintiff, were executed by the selling corporation and Corbin. The plaintiff had no knowledge of the agreement for the sale and transfer of the assets of the selling corporation until after the giving of said notes, and it had no knowledge, at the time of the commencement of this action, of the agreement of the purchasing company to pay the indebtedness of the selling one. Prior to the agreement for the sale, the selling corporation was indebted to Hofius and Pigott in the sum of $10,000, evidenced by its promissory note. It was agreed between Hofius, Pigott, and Corbin that the stock of Hofius and Pigott in the selling corporation should be purchased by Corbin, but that the said stock should be held by Hofius and Pigott as collateral for the payment of the said $10.000 note, the payment of which Corbin guarantied. Prior to the sale $750 had been paid upon the note, leaving a balance of $9,250. At about the time of the sale it was agreed that Corbin should pay Hofius and Pigott $2,250 cash upon the note, and should execute to them his note for $7,000, which latter note should be secured by depositing with Hofius and Pigott $17,000 of Corbin's stock in the purchasing corporation. Thereupon Corbin hypothecated $3,000 of his stock in the purchasing corporation to Wittler, and borrowed thereon $2,250, which sum he paid to Hofius and Pigott, and he executed his note for $7,000, secured by $17,000 of stock in the purchasing corporation, as aforesaid; the old $10,000 note held by Hofius and Pigott being then surrendered. Afterwards the stock of the purchasing corporation so pledged by Corbin was sold to satisfy said loans, and, after applying the proceeds of the sale to the payment of the loans, there was left

balance of $1,200. Neither Hotius nor Pigott became a purchaser of the stock at the said sale thereof, and neither one has

ever been the owner of any part of the stock of the Wittler-Corbin Machinery Company. No money was paid by the Wittler-Corbin Machinery Company to the Corbin Machinery Company for the transfer of the latter's assets. No consideration passed to it for the transfer other than the assumption by the Wittler-Corbin Machinery Company of the outstanding indebtedness of the other company, not including the said $10,000 debt owing to Hofius and Pigott. The remaining consideration was paid by means of the issue of fully paid-up stock of the Wittler-Corbin Machinery Company to Corbin, of the par value of $20,000. At the time of the transfer of the assets of the Corbin Machinery Company defendant Pigott was not a trustee of said company, but at the time the sale was authorized the defendant Hofius was a trustee, was present at the trustee's meeting, consented to the plan for. the transfer and to the resolution authorizing it, and did not cause his dissent therefrom to be entered at large upon the minutes of the board of trustees.

The above facts we have gleaned from the court's findings in the case. The findings are very extensive, and the above is but an abbreviated statement thereof. There is no evidence here, and the findings are therefore conclusive as to the facts. The complaint, after setting forth some of the above facts, together with other allegations, asks, among other things, for judgment for the amount of plaintiff's claim against both defendant corporations, and also against Corbin, Hofius, and Pigott. The defendants Corbin Machinery Company and Corbin made default, and the defendants Wittler-Corbin Machinery Company and Hofius demurred to the complaint; the demurrer of the former being sustained and the latter overruled. Defendant Hofius answered, and, after a trial, judgment was awarded against the two defaulting defendants and also against Hofius. Judgment was granted in favor of the defendants WittlerCorbin Machinery Company and Pigott. The defendant IIofius nas appealed from the judgment against him, and the plaintiff has appealed from the judgment in favor of the Wittler-Corbin Machinery Company.

With respect to the appeal of appellant Hofius, we think it is manifest from the foregoing statement of fact that he shared the fruits of the transfer of the assets from the Corbin Machinery Company to the WittlerCorbin Machinery Company. At the time the transfer was consummated he was a trustee of the selling corporation. The method pursued was a circuitous one for disposing of his stock in the Corbin Machinery Company, and for realizing therefor from the consideration paid for the corporate property the value of his stock. He either participated directly in the distribution of the consideration which should have passed directly to the selling corporation or he sold his stock in said corporation to Corbin and took a lien upon $17,

000 of the stock of the purchasing corporation, which was a part of the consideration for the transfer of the selling corporation's assets. Either view, it seems to us, necessarily leads to the same result. After the transfer of its property the selling corporation had nothing left except a certain contract, the value of which does not appear. The consideration paid, as we have seen, passed into the control of others, and not to the selling corporation. That said corporation was deprived of the means of paying its debts is shown by the failure of the respondent, the plaintiff below, to recover upon execution against the corporation. Under such circumstances, we think appellant Hofius, as a trustee participating in the transaction, became liable to the creditors of the corporation under section 4265, Ballinger's Ann. Codes & St., as said section was construed and applied by this court in Tacoma Ledger Company v. Western Home, etc., Ass'n, 37 Wash. 467, 79 Pac. 992. It is argued by appellant that in that case no provision was made for the assumption of the debts of the selling corporation, as was done in the case at bar. At the time this action was commenced the respondent did not know that the purchasing corporation had assumed the payment of the indebtedness, and it was not bound to know it, since the record thereof was a private one made by the two corporations, and was in no sense a public record. In Hibernia Insurance Company v. St. Louis, etc., Transportation Company (C. C.) 13 Fed. 516, the court said: "Equity will not compel the creditor of a corporation to waive his right to enforce his claim against the visible and tangible property of the corporation, and to run the chances of following and recovering the value of shares of stock after they are placed upon the market." No more will equity require a creditor to waive his right to recover upon the obligation of a trustee who has permitted all the tangible assets of a corporation to be absorbed by another in the proceeds of which he has shared, and run his chances of recovering from the other, merely because such other corporation may have assumed to pay the debts of the one whose assets have vanished, to the extent, at least, of being unavailable to creditors. Particularly is this true when the creditor for a long time has no knowledge of the transfer of the tangible property of the debtor corporation, and at no time before suit has knowledge that the other one has assumed the payment of its vendor's debts, as was true of the respondent here. We, therefore, think the court did not err in entering judgment against appellant Hofius.

Appellant Carstens & Earles, Inc., plaintiff below, assigns as error that the court sustained the demurrer to the complaint interposed by the Wittler-Corbin Machinery Company. By its demurrer the said corporation admits the averments of the complaint; that it purchased the assets of the Corbin