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be regulated, and no person shall be selected who is an officer or stockholder in any such corporation.

145 Cal. 633, 634, 635, 636.


Use of streets for gas and water pipes.

SEC. 19. In any city where there are no public works owned and controlled by the municipality for supplying the same with water or artificial light, any individual, or any company duly

incorporated for such purpose under and by authority of the ☆ laws of this State, shall, under the direction of the Superin

tendent of Streets, or other officer in control thereof, and under such general regulations as the municipality may prescribe for damages and indemnity for damages, have the privilege of using the public streets and thoroughfares thereof, and of laying down pipes and conduits therein, and connections therewith, so far as may be necessary for introducing into and supplying such city and its inhabitants either with gaslight or other illuminating light, or with fresh water for domestic and all other purposes, upon the condition that the municipal government shall have the right to regulate the charges thereof. [Amendment adopted November 4, 1884.]

54 Cal. 246; 56 Cal. 654; 57 Cal. 616; 61 Cal. 24, 277; 62 Cal. 108, 232; 69 Cal. 466, 481 ; 72 Cal. 5; 73 Cal. 75; 79 Cal. 281 ; 81 Cal. 497 ; 92 Cal. 296, 342; 93 Cal. 161 ; 98 Cal. 618; 118 Cal. 5, 584; 129 Cal. 402; 137 Cal. 118; 142 Cal. 287; 143 Cal. 371; 145 Cal. 632, 633, 634, 635, 636, 640.


Formation of corporations.

SECTION 1. Corporations may be formed under general laws, but shall not be created by special Act. All laws now in force in this State concerning corporations, and all laws that may be hereafter passed pursuant to this section, may be altered from time to time or repealed.

61 Cal. 38; 73 Cal. 77; 77 Cal. 371; 83 Cal. 396, 413; 92 Cal. 316; 109 Cal. 584; 123 Cal. 527; 125 Cal. 412 ; 131 Cal. 33.

Dues from corporations.

SEC. 2. Dues from corporations shall be secured by such individual liability of the corporators and other means as may be prescribed by law.

62 Cal. 460; 125 Cal. 410.

Liability of stockholders and directors.

SEC. 3. Each stockholder of a corporation or joint-stock association shall be individually and personally liable for such proportion of all its debts and liabilities contracted or incurred during the time he was a stockholder, as the amount of stock or shares owned by him bears to the whole of the subscribed capital stock or shares of the corporåtion or association. The directors or trustees of corporations and joint-stock associations shall be jointly and severally liable to the creditors and stockholders for all moneys embezzled or misappropriated by the officers of such corporation or joint-stock association during the term of office of such director or trustee.

59 Cal. 286; 63 Cal. 289; 87 Cal. 32; 97 Cal. 95; 108
Cal. 425; 111 Cal. 63; 116 Cal. 384 ; 122 Cal. 523; 124
Cal. 150; 125 Cal. 410; 136 Cal. 449; 142 Cal. 384; 143
Cal. 224.

Meaning of corporations.

SEC. 4. 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 be subject to be sued, in all courts, in like cases as natural persons.

95 Cal. 592.


SEC. 5. The Legislature shall have no power to pass any Act granting any charter for banking purposes; but corporations or associations may be formed for such purposes under general laws. No corporation, association, or individual shall issue or put in circulation, as money, anything but the lawful money of the United States.

73 Cal. 77.

Existing charters, repealed in certain cases.

SEC. 6. All existing charters, grants, franchises, special or exclusive privileges, under which an actual and bona fide organization shall not have taken place, and business been commenced in good faith, at the time of the adoption of this Constitution, shall thereafter have no validity. Franchises not extended by Legislature.

SEC. 7. The Legislature shall not extend any franchise or charter, nor remit the forfeiture of any franchise or charter, of any corporation now existing, or which shall hereafter exist, under the laws of this State.

91 Cal. 340; 121 Cål. 19.

Corporate property subject to eminent domain.

SEC. 8. The exercise of the right of eminent domain shall never be so abridged or construed as to prevent the Legislature from taking the property and franchises of incorporated companies and subjecting them to public use the same as the property of individuals; and the exercise of the police power of the State shall never be so abridged or construed as to permit corporations to conduct their business in such manner as to infringe the rights of individuals or of the general well-being of the State.

Limitation on business of corporations.

SEC. 9. No corporation shall engage in any business other than that expressly authorized in its charter, or the law under which it may have been or may hereafter be organized; nor shall it hold for a longer period than five years any real estate, except such as may be necessary for carrying on its business.

107 Cal. 643; 133 Cal. 612; 143 Cal. 206.

Liabilities not released by transfer of franchise.

SEC. 10. The Legislature shall not pass any laws permitting the leasing or alienation of any franchise, so as to relieve the franchise or property held thereunder from the liabilities of the lessor or grantor, lessee or grantee, contracted or incurred in the operation, use, or enjoyment of such franchise, or any of its privileges.

116 Cal. 100.

Issuance of stock.

Sec. 11. No corporation shall issue stock or bonds, except for money paid, labor done, or property actually received; and all fictitious increase of stock or indebtedness shall be void. The stock and bonded indebtedness of corporations shall not be increased, except in pursuance of general law, nor without the consent of the persons holding the larger amount in value of the stock, at a meeting called for that purpose, giving sixty days' public notice, as may be provided by law.

56 Cal. 654; 65 Cal. 617; 72 Cal. 55; 73 Cal. 77; 93 Cal. 307; 117 Cal. 344; 135 Cal. 250, 582.

Elections for directors.

SEC. 12. In all elections for directors or managers of corporations, every stockholder shall have the right to vote, in person or by proxy, the number of shares of stock owned by him, for as many persons as there are directors or managers to be elected, or to cumulate said shares and give one candidate as many votes as the number of directors multiplied by the number of his shares of stock shall equal, or to distribute them, on the same principle, among as many candidates as he shall think fit; and such directors or managers shall not be elected in any other manner, except that members of coöperative societies formed for agricultural, mercantile, and manufacturing purposes may vote on all questions affecting such societies in manner prescribed by law.

67 Cal. 585; 109 Cal. 597.

State credit not to be loaned.

SEC. 13. The State shall not, in any manner, loan its credit, nor shall it subscribe to or be interested in the stock of any company, association, or corporation. Office of corporation.

SEC. 14. Every corporation, other than religious, educational, or benevolent, organized or doing business in this State, shall have and maintain an office or place in this State for the transaction of its business, where transfers of stock shall be made, and in which shall be kept, for inspection by every person having an interest therein, and legislative committees, books in which shall be recorded the amount of capital stock sub


scribed, and by whom; the names of the owners of its stock, and the amounts owned by them, respectively; the amount of stock paid in, and by whom; the transfers of stock; the amount of its assets and liabilities, and the names and places of residence of its officers.

135 Cal. 584, 625.

Foreign corporations.

SEC. 15. No corporation organized outside the limits of this State shall be allowed to transact business within this State on more favorable conditions than are prescribed by law to similar corporations organized under the laws of this State.

99 Cal. 133; 115 Cal. 311.


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Corporations may be sued, where.

SEC. 16. A corporation or association may be sued in the county where the co act is made or is to be performed, or where the obligation or liability arises or the breach occurs; or in the county where the principal place of business of such corporation is situated, subject to the power of the court to change the place of trial, as in other cases.

66 Cal. 209; 71 Cal. 488; 73 Cal. 183; 83 Cal. 469, 493;
88 Cal. 611; 94 Cal. 137; 97 Cal. 138, 643; 98 Cal. 166;
102 Cal. 48; 106 Cal. 58; 107 Cal. 380; 108 Cal. 262;
115 Cal. 200; 117 Cal. 52; 122 Cal. 649; 134 Cal. 587;

136 Cal. 439; 141 Cal. 315; 144 Cal. 205, 207.
[For sections relating to Railroads, see Appendix.]



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No corporation now existing or hereafter formed under the laws of this State shall, after the adoption of this Constitution, employ, directly or indirectly, in any capacity, any Chinese or Mongolian. The Legislature shall pass such laws as may be necessary to enforce this provision.

[Tiburcio Parrott on Habeas Corpus, Pacific Coast Law Journal, p. 161.]

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