CHAPTER XV.

CORPORATIONS.

CONSTITUTIONAL PROVISIONS.'

CORPORATIONS may be formed under general laws, but shall not be created by special acts, except for municipal purposes. All general laws and special acts passed pursuant to this section may be altered from time to time or repealed.

Dues from corporations shall be secured by such individual liability of the corporators and other means, as may be prescribed by law.

The term corporations, as used in this article, shall be construed to include all associations and joint-stock companies, having any of the powers or privileges of corporations not possessed by individuals or partnerships. And all corporations shall have the right to sue, and shall be subject to be sued, in all courts, in like cases, as natural persons..

The legislature shall have no power to pass any act granting any charter for banking purposes; but associations may be formed, under general laws, for the deposit of gold and silver; but no such associations shall make, issue, or put in circulation, any bill, check, ticket, certificate, promissory note, or other paper, or the paper of any bank, to circulate as money.

The legislature of this state shall prohibit by law any person or persons, associations, company, or corporation from exercising the privileges of banking, or creating paper to circulate as money.

Each stockholder of a corporation, or joint-stock association, shall be individually and personally liable for his proportion of all its debts and liabilities.

It shall be the duty of the legislature to provide for the organ

1 Const. Cal. art. 4, §§ 81-87.

ization of cities and incorporated villages, and to restrict their power of taxation, assessment, borrowing money, contracting debts, and loaning their credit, so as to prevent abuses in assessment and in contracting debts by such municipal corporations.

STATUTORY PROVISIONS.

A serviceable outline of the statutes concerning corporations would be nearly of equal length with the statutes themselves. The following selection includes the general corporation law, the law concerning steam navigation, water, and telegraph companies, agricultural societies, and benevolent, religious, and literary associations, with portions of the acts concerning plankroad insurance, and mechanical mining, commercial, &c., companies, sufficient to show respectively their modes of organization, their principal authority, and the personal liabilities of their members.

ACT OF APRIL 22, 1859, CONCERNING CORPORATIONS.'

SECTION 1. Every corporation, as such, has power: 1. To have succession by its corporate name, for the period limited, and when no period is limited, perpetually. 2. To sue and be sued in any court. 3. To make and use a common seal, and alter the same at pleasure. 4. To hold, purchase, and convey such real and personal estate as the purposes of the corporation shall require, not exceeding the amount limited by law. 5. To appoint such subordinate officers and agents as the business of the corporation shall require, and to allow them a suitable compensation. 6. To make by-laws not inconsistent with any existing law, for the management of its property, the regulation of its affairs, and for the transfer of its stock.

SEC. 2. In addition to the powers enumerated in the preceding section, and to those expressly given in the chapter of this act under which it shall be incorporated, no corporation shall possess or exercise any corporate powers, except such as shall be necessary to the exercise of the powers so enumerated and given. SEC. 3. No corporation created, or to be created, shall, by any

1 Wood's Dig. p. 115,

implication or construction, be deemed to possess the power of discounting bills, notes or other evidences of debt, of receiving deposits, of buying gold or silver, bullion or foreign coin; of buying and selling bills of exchange, of issuing bills, notes or other evidences of debt, upon loans, or for circulation as money. SEC. 4. Where the whole capital of a corporation shall not have been paid in, and the capital paid shall be insufficient to satisfy the claims of its creditors, each stockholder shall be bound to pay, on each share held by him, the sum necessary to complete the amount of such share as fixed by the charter of the company, or such proportion of that sum as shall be required to satisfy the debts of the company.

SEC. 5. When the corporate powers of any corporation are directed to be exercised by any particular body or number of per sons, a majority of such, body or persons shall be a sufficient number to form a board for the transaction of business, and every decision of a majority of the persons duly assembled as a board, shall be valid as a corporate act.

SEC. 6. If any corporation hereafter formed shall not organize and commence the transaction of its business within one year from the date of its incorporation, its corporate powers shall

cease.

SEC. 7. All corporations may, by their by-laws, where no other provision is specially made, determine the manner of calling and conducting their meetings, the number of members that shall constitute a quorum, the number of shares that shall entitle the members respectively to one or more votes, the mode of voting by proxy, the mode of selling shares for the non-payment of assessments, and the tenure of office of the several officers; and they may prescribe suitable penalties for the violation of their by-laws, not exceeding, in any case, one hundred dollars for any one offence.

SEC. 8. The first meeting of every corporation, where no other provision is specially made, shall be called by a notice, signed by one or more of the persons named in, or associated as corporators under the law by which it is incorporated, setting forth the time, place and purposes of the meeting; and such notice shall, at least twenty days before the meeting, be delivered to each member, or published in some newspaper of the county

where the corporation shall be established, or if no newspaper be published in the county, then in some newspaper nearest thereto. SEC. 9. Whenever, by reason of the death, absence or other legal impediment of the officers of any corporation, there shall be no person duly authorized to call or preside at a legal meeting thereof, any justice of the peace of the county where such corporation is established, may, on written application of three or more of the members thereof, issue a warrant to either of the said members, directing him to call a meeting of the corporation, by giving such notice as shall have been previously required by law, and the justice may, in the same warrant, direct such' person to preside at such meeting until a clerk shall be duly chosen and qualified, if there shall be no other officer present legally authorized to preside thereat.

SEC. 10. When all the members of a corporation shall be present at any meeting, however called or notified, and shall sign a written consent thereto on the record of such meeting, the doings of such meeting shall be as valid as if legally called and

notified.

SEC. 11. The 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. 12. Whenever the capital stock of any corporation is divided into shares, and certificates thereof are issued, such shares may be transferred by endorsement and delivery of the certifi cates thereof, such endorsement being by the signature of the proprietor, or his attorney or legal representative; but such transfer shall not be valid, except between the parties thereto, until the same shall have been so entered on the books of the corporation as to show the names of the parties by and to whom transferred, the number and designation of the shares, and the date of the transfer.

SEC. 13. It shall not be lawful for the directors or managers of any incorporated company in this state to make dividends, excepting from the surplus profits arising from the business of such corporation; and it shall not be lawful for the directors of any such company to divide, withdraw or in any way pay to the stockholders or any of them, any part of the capital stock of such

company, or to reduce the said capital stock, without the consent of the legislature; and in case of any violation of the provisions of this section, the directors, under whose administration the same may have happened, except those who may have caused their dissent therefrom to be entered at large on the minutes of the said directors at the time, or were not present when the same did happen, shall in their individual and private capacity jointly and severally be liable to the said corporation, and to the creditors thereof in the event of its dissolution, to the full amount of the capital stock of the company so divided, withdrawn, paid out or reduced, and no statute of limitations shall be a bar to any suit against such directors for any sums for which they are made liable by this section; provided, that this section shall not be construed to prevent a division and distribution of the capital stock of such company which shall remain after the payment of all its debts, upon the dissolution of such company, or the expiration of its charter.

SEC. 14. The total amount of the debts which any incorporated company shall owe, shall not at any time exceed the amount of the capital stock actually paid in; and in case of any excess, the directors under whose administration the same may have happened, except those who may have caused their dissent therefrom to be entered at large on the minutes of the said directors at the time, and except those who were not present when the same did happen, shall, in their individual and private capacities jointly and severally be liable for such excess to the said corporation, and in the event of its dissolution, to any of the creditors thereof to the full amount of such excess, with legal interest from the time such liability accrued, and no statute of limitation shall be a bar to any suit against such directors for any sums of money for which they are made liable by this section.

SEC. 15. Upon the application of any persons, or body incor porate, that may be aggrieved by, or may complain of, any election held by any corporate body, or any proceeding, act, or matter in or touching the same, it shall be the duty of the district judge of the district in which such election is held (reasonable notice having been given to the adverse party, or to those who are to be affected thereby, of such intended application,) to proceed forthwith and in a summary way to hear the affidavits,