Personal liability.-An act authorizing the formation of corporations without attaching an individual liability to the stockholders would be void. The same rate of liability must be imposed upon all stockholders, and the law must operate alike upon all corporations.2 Persons contracting with a corporation may stipulate to waive the individual liability of the stockholders, and such stipulation is valid. This section contains apt and sufficient words, creating in themselves a right of action enforceable by the ordinary remedies under the law existing at the time of the adoption of the constitution. 4

1 French v. Teschemaker, 24 Cal. 539.

2 French v. Teschemaker, 24 Cal. 539; same questions discussed in Robinson v. Bidwell, 22 Cal. 379.

3 French v. Teschemaker, 24 Cal. 560, per Crocker, J., in Robinson v. Bidwell, 22 Cal. 379.

4 Cummings v. Spaunhorst, 5 Mo. Ct. App. 21.

§ 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 shall be subject to be sued, in all Courts, in like cases as natural persons.

See Ala. XIII, 12, 13; Kans. XII, 6; Mich. XV, 11; Minn. X, I; Neb. XI, Misc. 3; Nev. VIII, 5; N. Y. VIII, 3; N. C. VIII, 3; Pa. XVI, 13.

§ 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.

Ala. XIII, 14; Ark. XII, 10; Ill. XI, 5; Ind. XI, 1; Mo. XII, 25; Nev. VIII, 6; Or. XI, 1; Wis. XI, 4.

Banking. A corporation may be formed for the purpose of receiving deposits and loaning money, if it does not issue paper to circulate as money.

Bank of Sonoma v. Fairbanks, 52 Cal. 196.

§ 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.

Ala. XIII, 2; Ark. XII, 1; Colo. XV, 1; Ill. XI, 2; Mo. XII, 1; Neb. XI, Misc. 6; Pa. XVI, 1; W. Va. XI, 3.

§ 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.

Ala. XIII, 3, 10; Ark. XVII, 8; Mo. XII, 2, 3; Pa. XVI, 2; Va. X, 21.

§ 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 the general well-being of the State.

Ala. I, 24; Ark. XVII, 9; Colo. XV, 8; Ill. XI, 14; Mo. XII, 4; Neb. XI, Misc. 6; Pa. XVI, 3; W. Va. XI, 12.

DESTY CAL. CON.-28.

§ 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.

Ala. XIII, 5; Mo. XII, 7; Pa. XVI, 6.

§ 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.

§ 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.

Ala. XIII, 6; Ark. XII, 8; Colo. XV, 9; Ill. XI, 13; Mo. XII, 8; Neb. XI, 5; Pa. XVI, 7; Tex. XII, 6.

This section prohibits the increase of the indebtedness of a corporation.

Ahl v. Rhoades, 84 Pa. St. 319.

§ 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 co-operative societies formed for agricultural, mercantile, and manufacturing purposes, may vote on all questions affecting such societies in manner prescribed by law.

Ill. XI, 3; Mo. XII, 6; Neb. XI, Misc. 5; Pa. XVI, 4; W. Va. XI, 4.

§ 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.

Ala. IV, 54; Ark. XII,7; Iowa, VII, 1; Kans. XIII, 5; Mich. XIV, 6,8; Minn. IX, 10; Miss. XII, 5; Neb. XII, 3; Nev. VIII, 9; Or. XI, 6; Va. X, 17; W. Va. X, 6; Wis. VIII, 3. See ante, Art. IV, § 31.

State credit.-This section prohibits the loaning of public credit for private purposes under any circumstances, but it does not prohibit the appropriation of its funds to aid a corporation in the construction of a railroad to be used for military purposes.2 An imposition of a tax to aid in building a railroad in consideration of services to be rendered the State is not a gift or loan of credit.3

1 S. & V. R. R. Co, v. Stockton, 41 Cal. 167; Ramsey v. Haeger, 76 Ill. 432.

2 People v. Pacheco, 27 Cal. 225.

3 People v. Pacheco, 27 Cal. 225.

§ 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 subscribed, 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 place of residence of its officers.

Ark. XVII, 2; Ill. XI, 9; Mo. XII, 15: Neb. XI, 1; Pa. XVII, 2: Tex. X, 3.

§ 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.

Ark. XII, 11.

§ 16. A corporation or association may be sued in the county where the contract 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.