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of the future acts and conduct of corporations; in such matter preexisting corporations are governed by the codes and subsequent statutes. (Market St. Ry. Co. v. Hellman, 109 Cal. 571, 42 Pac. 225. To same effect: McGowan v. McDonald, 111 Cal. 66, 52 Am. St. Rep. 154, 43 Pac. 418. But see Murphy v. Pacific Bank, 119 Cal. 342, 51 Pac. 317).
Held similarly with respect to the reincorporation act of 1858 (Stats. 1858, p. 218), that such statutes are permissive and not mandatory; and that it was not necessary that a corporation should reincorporate in order to become the recipient of the privileges and benefits intended by the act. (Heyneman v. Blake, 19 Cal. 579.)
The provisions of the Civil Code relating to corporations which do not affect and are not applicable to such corporations as were formed before the code took effect, and have not elected to continue their existence under it, are such only as relate to the formation and existence of the corporations. And while the liability of the stockholder is a constituent element in the life of a corporation, and necessary to its existence, it is still only a burden imposed on the stockholder, and has otherwise nothing to do with the formation or existence of a corporation. (McGowan v. McDonald, 111 Cal. 66, 52
Am. St. Rep. 154, 43 Pac. 418.)
The interpretation given this section in Market St. Ry. v. Hellman, 109 Cal. 571, 42 Pac. 225, and McGowan v. McDonald, 111 Cal. 66, 52 Am. St. Rep. 154, 43 Pac. 418, is disapproved, and it is held that prior acts remain in force, so far as corporations theretofore formed are concerned, not only to sustain their existence, but also to fix their character, and define their powers, duties, obligations and liabilities, except so far as modified by inconsistent code provisions relating to such corporations, unless they should elect to come under the code provisions. (Murphy v. Pacific Bank, 119 Cal. 242, 51 Pac. 317.)
There has never been any question that, as to a corporation electing to continue its existence under the code, the former laws under which it was formed and existed, and which were applicable to it, were expressly repealed by section 288 of the Civil Code. (People v. Auburn etc. Turnpike Co., 122 Cal. 337, 55 Pac. 10.)
Conversely, all laws relating to corporations formed under them prior to the code were continued in force by this section, and this is true of the act of April 22, 1850. (Estate of Eastman, 60 Cal. 308; Murphy v. Pacific Bank, 119 Cal. 334, 51 Pac. 317.)
Transfer of Privileges Secured Prior to Code.-The fact that a railroad corporation has secured certain privileges due to its incorporation prior to the code, and is not subject to the code provisions, cannot inure to the benefit of a lessee of such corporation's road, which lessee is a corporation organized under the code, nor exempt such lessee from the obligations imposed upon it as a code corporation. (Robinson v. S. P. Co., 105 Cal. 526, 38 Pac. 94, 722.)
NAME OF INSTRUMENT CREATING CORPORATION.
Sec. 289, C. C. The instrument by which a private corporation is formed is called "Articles of Incorporation."
Application. This provision applies to all corporations incorporated in this state, unless provision is otherwise made by special statute. (People ex rel. v. B. & P. O. of Elks, 128 Cal. 257, 60 Pac. 865.)
Articles as Evidence.-Existence of a corporation is proved by its articles of incorporation. (S. V. W. W. v. San Francisco, 22 Cal. 434.)
But articles of incorporation are not admissible to show who were the shareholders at time subsequent to the date of the articles. (Evans v. Bailey, 66 Cal. 112, 4 Pac. 1089.)
ARTICLES OF INCORPORATION, WHAT TO CONTAIN. Sec. 290, C. C. Articles of incorporation must be prepared, setting forth:
1. The name of the incorporation.
2. The purpose for which it is formed.
3. The place where its principal business is to be transacted. 4. The term for which it is to exist, not exceeding fifty years.
5. The number of its directors or trustees, which shall not be less than five, and the names and residence of those who are appointed for the first year; provided, that the corporate powers, business, and property of corporations formed or to be formed for the purpose of erecting and managing halls and buildings for the meetings and accommodation of several lodges or societies of any benevolent or charitable order or organization, and in connection therewith the leasing of stores and offices in such building or buildings for other purposes, may be conducted, exercised, and controlled by a board of not less than five or more than fifty directors, to be chosen from among the stockholders of such corporation, or from among the members of such order or organization; and provided, also, that at any time during the existence of corporations for profit, other than those of the character last hereinabove provided for, the number
of the directors may be increased or diminished, by a majority of the stockholders of the corporation, to any number not less than five, who must be members of the corporation; whereupon, a certificate stating the number of directors must be filed, as provided for in section two hundred and ninety-six for the filing of the original articles of incorporation; and provided, also, that the corporate powers, business, and property of corporations formed or to be formed for social purposes, and not directly for profit, may be exercised, conducted, and controlled by a board, consisting of such number of directors as may be in the Constitution or by-laws provided; and corporations so formed may, in their Constitution or by-laws, provide for the length of time that the directors, or any number thereof, shall act, and may, in like manner, provide that certain directors, or a certain number of the board of directors, to be selected by the corporation or the board of directors, in the mode aud manner provided in the Constitution or by-laws, shall act for any specified length of time, or otherwise, as shall be in the Constitution or by-laws set forth.
6. The amount of its capital stock, and the number of shares into which it is divided.
7. If there is a capital stock, the amount actually subscribed, and by whom. En. March 21, 1872. Amd. 1873-74, 199; 1875-76, 70; 1880, 11; 1891, 285; 1900-01, 322.
For change of name, see section 300a of the Civil Code, post. For de facto corporations and corporations defectively organized, see section 358 of the Civil Code, post.
Prior to the adoption of the Civil Code, there was no uniform requirement as to what the articles of incorporation should contain. The various acts under which the various classes of corporations were then formed contained the requirements as to the articles of incorporation of the particular classes of corporations with which they dealt. These acts are to be found hereafter in the Appendix. The original section as adopted March 21, 1872, was like the section as above given, except that subdivision 5 contained no provisos and no restriction upon the number of the directors or trustees. The section was first amended March 30, 1874 (Amendments 1873-74, p. 199), so as to have only six subdivisions, the first four being the same as in the original and the fifth and sixth
as follows: "5. The number of its directors, or trustees, and the names and residences of such of them who are to serve until the election of such officers, and their qualification; 6. If there be a capital stock, its amount and the number of shares into which it is divided." By amendment approved April 1, 1876 (Amendnrents 1875-76, p. 70), the section was amended to have seven subdivisions and to read as the original with the following proviso added to subdivision 5: "Provided that at any time during the existence of the corporation, the number of the directors may be increased, in corporations for profit, by a majority of the stockholders of the corporation, to any number not exceeding eleven, who must be members of the corporation, whereupon a certificate stating the number of directors must be filed as provided for in section two hundred and ninety-six for the filing of the original articles of incorporation.'
By amendment approved April 16, 1880 (Amendments 1880, p. 11), this section was amended so as to read as printed above, with the exception that in subdivision 5 it had the words "nor more than eleven" following the words "less than five" in the first sentence, and the words "not exceeding eleven" preceding the words "nor less than five" in the second proviso, and did not contain the last proviso.
By amendment approved March 31, 1891 (Stats. 1891, p. 285), the last proviso contained in subdivision 5 as printed above was added. The amendment of 1901 omitted the words "nor more than eleven," and "not exceeding eleven," from subdivision 5; otherwise the section is the same as amended in 1891.
Additional requirements for the articles of incorporation of railroad, wagon road or telegraph corporations are found in section 291 of the Civil Code, of benevolent corporations in sections 593 and 594 of the Civil Code, and of colleges and seminaries of learning in section 649 of the Civil Code.
By section 557 of the Civil Code, the term of existence of homestead corporations is limited to ten years.
M. & S. V. R. R. Co. v. Hildreth, 53 Cal. 128; People v. Flint, 64 Cal. 52, 28 Pac. 495; Thomas v. Placerville etc. Co., 65 Cal. 601, 4 Pac. 641; Chapman v. Doray, 89 Cal. 54, 26 Pac. 605; Martin v. Deetz, 102 Cal. 64, 41 Am. St. Rep. 151, 36 Pac. 368; Porter v. Lassen County etc. Co., 127 Cal. 267-269, 59 Pac. 563; People v. Leonard, 106 Cal. 309, 39 Pac. 617; People v. G. G. Lodge, 128 Cal. 260, 60 Pac. 865; Wall v. Mines, 130 Cal. 39, 62 Pac. 386.
Articles of Incorporation-What to Contain.-This section applies to all corporations incorporated in this state, unless provision is otherwise made by special statute. (People v. G. G. Lodge, 128 Cal. 260, 60 Pac. 865.)
A strict compliance with all the requirements of the statute in matters of detail is not essential, and the proceedings will not be held invalid for slight defects or omissions. (See note to sec. 285, C. C.)
1. Name of Corporation.-The fact that a company is designated as "The Pacific Mutual Life Insurance Company of California '' raises no presumption that it is a corporation, or that it is incorporated under the laws of California. (Briggs v. McCullough, 36 Cal. 542.) "The Roman Catholic Orphan Asylum" is a sufficient designation of the name of the corporation, by which it may acquire and dispose of property. (R. C. O. A. v. Abrams, 49 Cal. 455.)
When owners of land use a corporate name in making a contract for its sale and instruct their agent to prepare and sign the contract in that form, they cannot impeach the contract because made in such name. (Karns v. Olney, 80 Cal. 90, 13 Am. St. Rep. 101, 22 Pac. 67.)
Where an individual would not be allowed to use a trade name under similar circumstances, a corporation may not take it as a part of its corporate namre, and thus by indirection accomplish ends otherwise forbidden by law. (Hainque v. Cyclops Iron Works, 136 Cal. 351, 68 Pac. 1014.)
But persons entitled to use a trade name may incorporate and embody the trade name in the name of the corporation, and such corporation may sue to enjoin an infringement of the trade name. The use of the trade name for two years prior to the incorporation in the same firm as the corporate name is no fraud on the public. (Nolan Bros. Shoe Co. v. Nolan, 131 Cal. 271, 82 Am. St. Rep. 346, 63 Pac. 480.)
2. Purpose of Incorporation.-A corporation organized to own and run a sawmill and manufacture lumber can include in its articles the power to operate, construct and deal in railroads and trainways and rights of way, but cannot exercise the power of eminent domain to acquire a right of way. (People v. Mt. Shasta Mfg. Co., 107 Cal. 256, 40 Pac. 391.)
For particular purposes see sections referring to such corporations. Generally, see sec. 286, C. C., and notes infra.
3. Place of Business.-A certificate of incorporation must show substantial compliance with statutory conditions before corporation can be considered in existence, and a failure to name the place of business in the certificate renders it insufficient. (Harris v. McGregor, 29 Cal. 124. To same effect: McCallion v. Hibernia S. & L. Soc., 70 Cal. 168, 12 Pac. 114. Distinguished: Pacific Bank v. De Roe, 37 Cal. 542; Fresno etc. Co. v. Warner, 72 Cal. 384, 14 Pac. 37. Note citations: 75 Am. Dec. 661; 33 Am. St. Rep. 177.)
It is the duty of every corporation to have an officer and a principal place of business, and the directors of a mining corporation