CHAPTER XI.

CORPORATIONS, THEIR CREATIONS, RIGHTS, POWERS, &C.

CORPORATIONS are aggregate or sole, ecclesiastical and lay, eleemosynary and civil. Civil corporations are either public or private. Ecclesiastical corporations are known in the United States as religious corporations. Counties, townships, towns or cities, are public corporations. The powers given them may be taken back, changed, and modified, at the pleasure of the legislature; so, too, may their corporate character be destroyed; but the lawful acts of the corporation during its existence are valid. Private corporations are such as insurance, bridge, or railroad companies. Religious corporations are such as churches.

The constitution of this state, prohibits the creation of any corporation to put in circulation, as money, checks, bills, tickets, certificates, promissory notes, or other paper; or to put into circulation the paper of any bank, to circulate as money.

There is a general law, authorizing the creation of corporations, and defining their powers, manner of creation, and duration of their existence. Insurance companies, railroad companies, turnpike and plank road companies, manufacturing, mining, mechanical and chemical companies, telegraph companies, bridge companies, steam navigation companies, and companies for the purpose of engaging in any species of trade or commerce, foreign or domestic, religious associations and societies, may become corporations under the law.(a)

INSURANCE COMPANIES.

An insurance company, to become a body corporate, must consist of seven or more persons, who are to make, sign, and

(a) Laws of 1850, p. 347; Laws of 1853, p. 87.

acknowledge, before some person authorized to take acknowledgments of deeds, duplicate certificates in writing, stating the corporate name of the company, the amount of capital. stock, the term of its existence not to exceed fifty years, the number of shares of which its stock shall consist, the number of directors and their names, who are to manage the concerns of the company for the first year, and the name of the town and county in which the office of the company is to be established; one of which, after it is signed and acknowledged, is to be filed with the clerk of the county where the company is established; the other with the secretary of state. A certified copy of such certificate by the clerk, is prima facie evidence of the facts stated in the certificate. The business of the company must be managed by seven directors, one of whom is to be president. All must be citizens of the United States, and stock holders, and a majority of them citizens of one state. Except the first year, they are to be elected by the stock holders-every year at such time and place fixed by the by-laws. The by-laws of the company are to regulate the election of the officers of the company, and the security required from them to insure a faithful discharge of their duties. The by-laws of the company are to regulate the transfer of the stock-which must be paid up in full within one year from filing the certificate. The company may require the stock paid up at such times as to the company may seem right, and, on failure so to do, the stock, as well as previous payments, may, by the by-laws, become forfeited, on personal demand for the same, or notice given to pay, by publishing for six successive weeks in the newspaper nearest to the place where the business of the company is carried on. The company may make insurance upon vessels, money, goods and effects, and against the captivity of persons, and on the life of any person during his absence at sea, and on money lent upon bottomry and respondentia, and against fire on any dwelling or other buildings, merchandize or other property within the United States; but no one risk is to exceed one-tenth part of the capital stock paid in. All policies are to be subscribed by the president, and, in case of his death, inability or absence, then by two of the directors, and

countersigned by the secretary. The president and a majority of the directors, within thirty days after the time fixed for the payment of the last instalment of the stock, are to certify the amount of the stock so fixed and amount thereof paid in, and after signing and swearing to the certificate they are to record it in the office of the clerk of the county where the business of the company is carried on. The company is to make, annually, within twenty days from the first day of January, a report, stating the amount of capital stock, and the proportion thereof actually paid in, the amount of its existing debts, and of insurances effected; and after being signed and sworn to by the president or secretary, it is to be filed in the office of the clerk of the county where the business is established and carried on; and, in addition thereto, it is to be published in a newspaper published nearest the place of bu siness of the company. The president and directors of the company shall, previous to subscribing any policy, and once in every year afterwards, publish in two newspapers printed in this state, the amount of their stock, against what risk they insure, and the largest sum they will take on any one. risk. The dividends to be made, are of the interest collected on their stock, and profits on their business; but the premiums received in money or notes, for insurances not determined, are not to form any part of the dividends.

If the company shall pay any dividend which will reduce the capital stock, or render it insolvent, the directors (except those who opposed it, and at the time fixed for its payment file a certificate of their objections in writing, with the clerk or secretary of the company, and with the county clerk) are individually liable for the debts of the company, and any contracted while they are in office. Where the company's liabilities for losses equal their stock, and further risks are taken, with knowledge on the part of the directors of such liabilities, the estates of those taking and consenting to such risks are jointly and severally liable for the losses on any of such risks. The stockholders at any time can require the directors to lay before them an exact and particular statement of the profits, if there be any, after deducting losses and dividends; and whether required or not required by the

stockholders, it must be done every three years; and whenever required by the legislature, they must lay before them a statement of their affairs, and submit to an examination under oath concerning the same.

The company has no power to deal or trade in buying or selling any goods, wares, merchandize, stocks, or commodities whatever, directly or indirectly.

RAILROAD.

A subscription of one hundred dollars to each mile of the road, and payment of ten per cent. thereon, must be made before the company can become a corporation. After such subscription and payment, directors may be elected by the company, and articles of association subscribed, setting forth the name of the corporation, the time of its existence, not over fifty years, the amount of stock, which must equal the cost of the road and its construction and property necessary to its operation; the number of the stock, the names of the directors, who are not to be equal to half of the stockholders, who are to hold their offices until others are elected; the place from and to which said road is to be constructed, and each county through which the road is to pass; its length, as estimated; the names of five persons to act as commissioners to open books of subscription to the stock. Each subscriber in the articles of association is to fix his place of residence and amount of stock taken. Three of the directors named in the articles are to testify that the amount of stock is subscribed in good faith, and ten per cent. thereon paid in, and annex their testimony to such articles, after which the same is to be filed with the secretary of state; after which the company becomes incorporated. A copy of the articles and testimony, certified by the secretary of state, is prima facie evidence of its contents, and the incorporation of the company. The corporation has then power to go for. ward and complete the objects of it, by causing the stock to be taken. It is then to elect thirteen directors, a majority of whom are to be citizens of the United States; and they must be present in person or by proxy. They are to make

by-laws for the government of the company. The directors have power to require the stock to be paid up at such times. as they shall think proper, on forfeiture of stock-forfeiture not to occur until personal demand made or published in a newspaper of each county, if any is published, through which the road passes, for six weeks successively. They have power to cause surveyors for the road; to compel persons to sell lands necessary for the road, its stations, depots, and other accommodations, by summary proceedings by petition to the district court, at appraisement by five commissioners, to be appointed by that court; to lay the same not over six rods wide; to use any lands along its line for embankments and excavations, as may be necessary; to use materials, such as timber, stone, and gravel, as is necessary; to cross any other railroad, highway, stream or water-course, or canal; but not permanently to impair its usefulness.

The president and majority of the directors, within thirty days from the time fixed for the payment of the last instalment of the stock, are to make certificate of the amount of stock, the amount paid in, and sign it; the president or secretary to make affidavit to it, and, within the same time, to file it for record in the office of the secretary of state.

The company shall, on the first day of January, at the end of each year, report to the surveyor-general the operations of the year, giving the amount of stock, and what has been actually paid in, the different expenditures for land, buildings, engines, and cars, respectively, and the amount and nature of its indebtedness, and amount and nature due the company.

It is to report the amount received for the transportation of passengers, mails, property, and from all other resources; the tons of freight, and kinds; the amount paid out for repairs, engines, cars, buildings, and salaries; the number and amount of dividends, and, when made, their character; the number of miles run by passage, freight, and other trains, respectively; the number of men employed, and their occupations; the number of persons injured in life or limb, and the cause of such injuries; whether any accidents have arisen from carelessness or negligence of any person in the