§ 367. Dissolution of company - In order to effect a dissolution of a joint-stock company, application must be made to a court of equity, unless the company is organized under the provisions of some particular statute, with a time fixed for its dissolution, or the existence of the company is predicated upon the happening of some certain event.1 Where the company is organized for a fixed term, it is dissolved ipso facto at the expiration of the term, and where the existence of the company is to terminate on the happening of a certain event, the happening of such event would, of itself, cause a dissolution. And if the manner for terminating the existence of the company is provided by the articles of association, on the happening of some particular event, any one of the members of the company would have a right to insist on a dissolution, in the manner provided, on the happening of such event.2 But a sale by a member, of his property, or the withdrawal of a stockholder from the association, will not operate as a dissolution of the company, so as to exonerate continuing members from assessments laid by the association, for the obligation would rest upon those who remain, after any withdrawal of a member from the company, to contribute their due proportion as previously agreed upon, to defray the expenses of sustaining the company. Where a dissolution is decreed, the trustees should convert the assets into money, and distribute the proceeds among the stock

1 Wordsw. Joint Stock Cos., 392; Mann v. Butler, 2 Barb. Ch. 362; Wait's Act. & Def., Vol. IV., p. 166.

2 Berry v. Cross, 3 Sandf. Ch. 1; Buckley v. Cater, 17 Ves. 19, note; Beaumont v. Meredith, 3 Ves. & B. 180; Ellison v. Bignold, 3 Jac. & W. 511. The exclusion of a member is sufficient ground for decreeing a dissolution. Gorman v. Russell, 14 Cal. 532; s. c. affirmed 18 Id. 688; Berry v. Cross, 3 Sandf. Ch. 1.

3 Troy Iron &c. Factory v. Winslow, 45 Barb. 231.

holders. They have no right to exchange the company's assets for stock in any other association, without the consent of the stockholders, and a member not consenting to such exchange may recover his stock so wrongfully disposed of.1

1 Penfield v. Skinner, 11 Vt. 296; Lake v. Mumford, 12 Miss. 312; Frotheringham v. Barney, 6 Hun (N. Y.), 366; Mann v. Butler, 2 Barb.Ch.

362.

CHAPTER XXIII.

COST-BOOK MINING COMPANIES.

SECTION 368. General nature of cost-book company.
369. Cost-book-What it is.

370. Distinguished from ordinary partnership.
371. Proof of membership.

372. Signing not essential.

373. Character of member's interest.

374. Liability of shareholders.

375. Same Member's authority to bind company.

376. Liability for torts of the company.

377. Transfer of shares.

378. Calls-Liens - Forfeiture.

379. Right to an accounting.

380. Contribution.

381. Right of shareholder to retire.
382. Local custom must be proved.
383. Suits by and against.

384. Same Power of majority.

§ 368. General nature of cost-book company. - Cost book companies are very common, although of modern origin, in England, and exist, to a limited extent, in the Western States and Territories of the United States. The company consists of an association of persons, organized for the purpose of working a mine or lode.1 The capital of the company is divided into a number of shares, which are allotted and apportioned among the different members. A true cost-book mining company never has a fixed capital. An agent is appointed by the members of the company to transact the company's business, and this

1 Beach on Private Corporations, § 82, p. 157.

2 Lindley on Partnership, 133, 348; MacSwinney, 444.

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agent is commonly called a purser. 1 Such companies are usually organized for the purpose of prospecting for mineral, and the work is, generally, conducted under a mere license with the owner of the soil, with a contract for a future lease, in case valuable discoveries are made upon the land. The rules of the company are very simple; all the concerns of the partnership are entered in the cost-book; the business of the company is transacted by the "purser" and the shareholders meet and adopt his reports and instruct him in regard to the affairs of the company's business, without the intervention or assistance of any other directing body. The purser " is the general manager of the mine, and all the business of the mining company that he represents. He is given authority by the shareholders of the company to transact the business of the company, such as ordering the necessary materials to work the mine, and the securing of laborers and workmen necessary to carry on the mining operations; 5 but neither the "purser " nor a shareholder of the company

3

"

1 Bainb. on Mines, 343; Arundell on Mines, 30; Blanchard & Weeks Ld. Cas. 538. "Cost-book companies were first known and chiefly exist in Cornwall and Devon. They are to be met with in Wales, Ireland, and other parts of England." MacSwinney Mines, p. 442.

2 Beach on Cor., § 82; Wharton's Legal Dictionary, tit. Cost Book Min. Cos.; MacSwinney Mines, p. 443.

3" Mines conducted on the cost- book principle may be said to occupy an intermediate position between joint-stock companies and ordinary trading partnerships. Companies which adopt the cost-book system of management are often small associations, commencing with little capital, though with a full list of shareholders." (16 Jur. 22.) Blanchard & Weeks Ld. Cas., p. 538, et sub.

4 Newton v. Daily, 1 F. & F. 26; B. & W. L. C. 540; Beach on Pri. Cor., § 82; In re Wrysgay Slate Co., 28 L. J. Ch. 894; Kittow v. Liskeard, L. R. 10 Q. B. 9.

5 Beach on Pri. Cor., § 82, et sub.; MacSwinney, p. 449; Wharton's Leg. Dict. tit. Cost Book Cos.; Bainb. on Mines, § 343, et sub.; More v. Malachy, 1 M. & Cr. 560; Kilto v. Liskeard, L. R. 10 Q. B. 9.

has any authority to bind the company for materials that are not necessary for carrying on the mining operations, or for borrowed money, or on any species of commercial paper, for such is not within the legitimate scope of the company's business.1

§ 369. Cost-Book What it is. The cost-book is an ordinary blank book into which the agreement for the business enterprise is recorded. The affairs and proceedings of the company are transcribed therein, together with the minutes of each regular meeting, signed by the members present at such meeting, the whole being kept or regulated, by or under the supervision of the "purser." It contains, among other things, the names of all the shareholders and the number of shares held by each, together with the transfer of shares and the accounts of the respective shareholders with the company; the receipts and expenditures of the mine, and such other matter, connected

2

1 Burmester v. Norris, 6 Exch. W. H. & G. 796; Blan. & Werks Ld. Cas., p. 540; Howtayne v. Bourne, 7 M. & W. 595; German Mining Co., 4 De G., M. & G. 40; MacSwinney on Mines, pp. 460, 461; Brown v. Byers, 16 M. & W. 252; Dickinson v. Valpy, 10 B. & C. 128; More v. Charles, 5 E. & B. 978; Nichols v. Diamond, 9 Exch. 154; 23 L. J. Ex. (N. s.) 1. "By attempting, however, to accept bills for the company, the purser may make himself personally liable, though the company will not be held, as where a bill directed to J. A. Purser, West Downs Mining Company,' was accepted by him in these terms, 'J. A. accepted per proc, West Downs Mining Company.' No authority to accept bills for the company being shown, he was held individually liable as a member of the company. (Nichols v. Diamond, 23 L. J Ex. (N. s.) 1; Owen v. Van Uster, 10 Com. B. 318.) It must appear in some manner that he is a member of the company." Blan. & Weeks Ld. Cas., p. 339; Ricketts v. Bennett, 4 C. B. 686.

2 The cost-book is not evidence against strangers claiming adversely to the adventurers." Curling v. Flight, 6 Hare, 41; s. c. 2 Phillips, 613, M. M. D. 58; Beach on Cor., § 82; Wordsworth on Mines, 193; Bainb. 93; MacSwinney, p. 444.