§ 380. Contribution. - When the company is unable to pay its debts in the usual course of business, a member who is sued for a company's debt by creditors of the company, if he is not behind with his own calls, can obtain contribution from his associates.1 The right to contribution, however, cannot be enforced by a member in arrears with his calls, for having embarrassed the company by a failure to pay his own calls, he is in no condition to complain of others for the same acts.

§ 381. Right of shareholder to retire. A shareholder in a cost-book mining company may retire at any time, upon a relinquishment of his shares and payment of his dues to the company.3 The right to retire is established by custom and therefore imported into the contract by which the members of such companies are mutually bound. Any restriction upon such right would not be enforced by the courts, as in accordance with a sound public policy, but the company would have a perfect right to prescribe rules preliminary to the surrender of a member's shares, and a rule providing for a written notice to the "purser," for the surrender of a member's stock, would be supported by the courts as a reasonable and necessary regulation.

But

1 Welsh Potosi Co., 27 L. J. Ch. 311; Tretoil &c. Co., 2 J. & H. 421; Wheal Alma Co., 11 W. R. 330; Peimont Co., 15 Jur. 1192.

2 Wyld's Case, 1 May & G. 1.

3 In re Bodwin U. Min. Co., 23 Beav. 370. And his liability is terminated with such surrender. In re Welsh Potosi Min. Co., Lofthouse Case, 2 De G. & J. 69; Birch's Case, 28 L. J. Ch. 894; MacSwinney, p. 470; B. & W. L. C., p. 543-44.

4 Thus, where a regulation provided that any shareholder might determine his responsibility or liability upon giving notice in writing to the purser of his desire of retiring, and upon depositing with the purser the transfer of the shares held by him, and signing a relinquishment of all claims or demands on the company in respect to such shares, these provisions being complied with, the liability of the shareholder ceased."

where it was proved to be the established custom of a company to permit shareholders to retire, upon any terms agreed upon at a public meeting, and a member was allowed, at a general meeting, to surrender his shares, it was held that he had ceased to be a shareholder, notwithstanding the fact that he had failed to pay the arrears of calls that were assessed against him on the same.1

§ 382. Local custom must be proved. The general law of partnership applies to all cost-book mining companies and when this law is to be governed by local custom, the custom must be specially pleaded and proved by the party relying on the same,2 for the courts will not take judicial notice of what the cost-book principle is, but will invariably apply the general law of partnerships to companies organized on that principle, unless it is proved that such law does not apply. And it is not sufficient to show

(Fenn's Case, 4 De Gex, M. & G. 285.) But this was a controversy between the members. See Mayhew's Case, 24 L. J. Ch. (N. s.) 335); Welsh Potosi M. Co., supra.

1 In re Bodwin Union Min. Company, 23 Beav. 370. "The transteree of shares is liable to the company. The transfer carries with it a transfer of liabilities." (Ex parte Mayhew, 24 L. J. Ch. (N. s.) 353.) Blanchard & Weeks Ld. Cas. 544. But a transferee in a company requiring transfers to be registered in order to convey an interest, is not liable for debts of the company contracted before registry of his shares. Thomas v. Clark, 18 C. B. 660. But see, generally, on liability of members, after withdrawal, to third parties. Blanchard & Weeks Ld. Cas. (544), where the author, in commenting on Fenn's case (supra), says: "This case, however, it must be borne in mind, was a controversy between the shareholder and the officers of the company, and not a question of individual liability to third parties." See, to the same effect, Case of the Welsh Potosi Mining Co., 27 L. J. B. K. (N. s.) 1; 4 lbid. Ch. 311 (limited); 2 De Gex & J. 10, 69; Case of the Bodwin United Mines, 26 L. J. Ch. (N. s.) 570; B. & W. L C. supra.

2 In re Bodwin U. Min. Co., 23 Beav. 370; Curling v. Flight, 6 Hare. 41; Fenn's Case, 4 De G., J. & S. 293.

3 Ante, idem. Dickinson v. Valpey, 10 B. & C. 128; Frank Mills Co., 23 Ch. D. 55; Richardson's Case, 4 W. R. 670.

that a custom had provided, or that a certain rule was adopted. If such an issue is made, the party invoking the aid of a local rule or custom, must show that the same is still in force,1 or was at the time his rights were acquired.2 But when the existence of a local rule or custom has been clearly established by competent proof, the courts will, as often as such custom is brought into question, recognize the same, as fixing the rights of all those within the section where the custom in question is in force, unless the same is unreasonable, or in conflict with positive law, as definitely as could be done by statute.3

§383. Suits by and against. - All unincorporated companies that are not empowered by statute to sue or be sued by a public officer, must sue and be sued like an ordinary partnership. In England, cost-book mining companies have been empowered by statute to sue in the name of their "purser," 5 but it does not follow, because a company is empowered by a statute to sue and be sued by a public officer, that a creditor may not sue any one or more of the members constituting the company upon which such right

1 Pralus v. Jefferson G. & S. M. Co., 34 Cal. 558; Harvey v. Ryan, 42 Cal. 626.

2 T. M. Tunnel Co. v. Stranahan, 31 Cal. 387.

3 Hicks v. Bell, 3 Cal. 219; Fairbanks v. Woodhouse, 6 Cal. 434; Jenny Lind Co. v. Bower, 11 Cal. 194; Gore v. McBrayer, 18 Cal. 583; Coleman v. Clements, 23 Cal. 245; Bradley v. Lee, 38 Cal. 362; Strong v. Ryan, 46 Cal. 33; Robertson v. Smith, 1 Mont. 410; Belk v. Meagher, 3 Mont. 65; Smith v. North Amer. Min. Co., 1 Nev. 123; Leet v. John Dore Silver Min. Co., 6 Nev. 218; Golden Fleece v. Cable Car Min. Co., 12 Nev. 312; Sparrow v. Strong, 3 Wall. 104; Basey v. Gallaghar, 20 Wall. 679; Atchison v. Peterson, 20 Wall. 507; also 3 Wall. 800-777.

Lindley Part. 149, 150; Turner v. Hill, 11 Sim. 1; Cox's Case, 4 De G., J. & S. 56; MacSwinney Mines, p. 459.

5 MacSwinney Mines, p. 446; Escott v. Gray, 47 L. J. C. P. 606. But in the absence of statute, in suits against the company all the members must be joined. Sib.ey v. Minton, 27 L. J. Ch. (N. 8) 53.

is conferred,1 for creditors are not deprived of their common law right to pursue the property of their debtors by an act of the legislature which is consistent with the retention of such a right, and it has been held that although a creditor might sue the public officer of a debtor company, it is not incumbent on him to do so, but he can pursue his remedies against any one or more of the members composing such company.2 Nor would the authority given the purser " by statute to represent the company in the suits by and against the same, empower him to represent one set of shareholders against another, in an action between different members of the company, for he is only the representative of the entire body of shareholders and could not exercise his authority to the prejudice of certain members of the company whose rights it was intended he should protect.3

§ 384. Same - Power of majority. The majority of the shareholders of a cost-book company have no power to bind a minority of the shareholders of the company, with reference to a relinquishment of their shares. Both principle and authority are opposed to such a doctrine. Nor could the shareholders delegate the authority to the "purser,' to accept a surrender of such shares, for this would be an illegal appropriation of one's property.

But if certain shares have been surrendered with full knowledge of the shareholders, and all the circumstances, in connection

1 MacSwinney Mines, p. 459; Turner v. Borlose, 11 Sim. 18.

2 Lindley on Part. 149, 150; MacSwinney Mines, 420, 421, 459; Cox's

Case, 4 De G., J. & S. 56; Escott v. Gray, 47 L. J. C. P. 606.

3 Ante, idem. MacSwinney, p. 455; Tippett v. Johns, Topping, 187.

4 Lindley on Part. 149, 150; MacSwinney, p. 470; Northey v. Johnson, 19 L. T. 104; Palmer's Case, 7 Ch. 286.

5 Ante, idem. Hybert v. Evans, supra; B. & W. L. C. 544; Hybert v. Parker, 27 L. J. C. P. (N. s.) 120.

with the surrender, have been disclosed to the company, it would afterward be precluded from disputing the validity of the surrender, if such surrender had not been questioned for a considerable time.1

§ 385. Dissolution - Sale of assets. As a general rule, and by statute in England 2 the members of a cost-book company can, by resolution, dispose of the property of the company at public auction,3 and, if the company is insolvent, a winding-up order can be obtained, and all proceedings against the company restrained until the proceeds of the property can be applied to the payment of the debts, the wages of miners, under the English statute, being preferred debts. But no sale or winding-up order will be made if the rights of creditors or lessors would be jeopardized thereby; the creditor could enforce his lien for debt against the property and the sale or removal 10 restrained until judgment could be obtained thereon.11

7

8

1 See, generally, as to recognition of surrender and transfer by company, B. & W. L. C. 541.

2 Comp. Act, 1862, § 4; MacSwinney Mines, p. 475.

3 MacSwinney, pp. 449, 475.

4 Idem, 476.

5 Geoke v. Jackson, 36 L. J. C. P. 108.

632 & 33 Vict., Ch. 19, Sec. 26.

7 Hoyton v. Tucker, 4 K. & J. 243.

8 Cox's Case, 4 De G., J. & S. 56; Turner v. Hill, 11 Sim. 1.

9 MacSwinney, p, 475.

10 Ante, idem.

11 Hoyton v. Tucker, supra.