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SECTION 30. When a congressional, senatorial or assembly district shall be composed of two or more counties, it shall not be separated by any county belonging to another district; and no county shall be divided, in forming a congressional, senatorial or assembly district.
SECTION 31. Corporations may be formed under eral laws, but shall not be created by special act, except for municipal purposes. All general laws and special acts passed pursuant to this section may be altered from time to time, or repealed.
For general purpose of the section see Brooks v. Hyde, 37 Cal. 379; Smith v. Judge, 17 Cal. 552.
The act of 1876 [Stats. p. 82] to establish water rates in San Francisco is unconstitutional in so far as it adopts a mode of fixing rates different from the mode prescribed by general law. S. V. W. W. v. Bryant, 52 Cal.
The act of April 23, 1858 [Stats. p. 254], known as the "Ensign Act," granting special privileges to Ensign and his assignees, (Spring Valley Water Works Co.) is unconstitutional as special legislation [overruling Cal. State Tel. Co. v. Alta Tel. Co., 22 Cal. 398.] S. F. v. S. V. W. W., 48 Cal. 515.
The state has no proprietary interest in the streets of a city, and the grant of an easement in such streets by the legislature is a franchise only, and does not affect the proprietary title in the land used as streets. The grant of powers to an individual and his assigns when such persons organize themselves into a cor
poration under the general laws of the state, is a grant to the corporation and not to the individuals. San Francisco v. S. V. W. W. Co., 48 Cal. 493.
The term "municipal" cannot be extended to embrace commercial corporations. Lowe v.. City of Marysville, 5 Cal. 214.
It is held in People v. Stanford, 77 Cal. 371 that this provision relates to the creation of corporations and to powers directly conferred upon them, and does not preclude a corporation duly organized from taking an assignment of a franchise from an individual to whom such franchise has been granted.
Under this section it is said that both the legislature and the people had the power to change the law, in regard to the liability of stockholders, without violating any provision of the constitution of the United States. McGowan v. McDonald, 111 Cal. 66.
Where a franchise was granted to certain individuals and their assigns, to supply the inhabitants of a town with water, without any provision that they should incorporate, the grantees of the franchise may thereafter assign to a corporation organized for the purpose of supplying the same town with water, and the purchase of such franchise is within the powers of such corporation. San Luis Water Co. v. Estrada, 117 Cal. 176.
This section is referred to in Murphy v. Pacific Bank, 119 Cal. 341.
SECTION 32. Dues from corporations shall be secured by such individual liability of the corporators and other means as may be prescribed by law.
How far the legislature may regulate the individual liability of stockholders is discussed and held open for future decision, in Robinson v. Bidwell, 22 Cal. 379. A legislative act authorizing San Francisco to subscribe for stock in W. P. R. R. Co., and C. P. R. R. Co., provided that such subscription be made upon the condition that the municipality should not be liable for any of the debts of the railroad company and that this provision should be made a part of and be stipulated in all contracts made by the railroad company for the construction, etc., of its road. Held, the immunity of the municipality from liability does not exist further than such exemption or immunity can be secured by persons contracting with the company expressly stipulating in their contracts to waive all claims against the municipality. French v. Teschamaker, 24 Cal. 519. See also Larabee v. Baldwin, 35 Cal. 155.
This and section 36 are considered in Harmon v. Page, 62 Cal. 461, together with sections 2, 3, article XII, constitution 1879, and section 322 Civil Code, and it is held that they do not oust a court of equity of jurisdiction (under the circumstances stated) to compel stockholders to pay in for benefit of creditors, the amount subscribed by them. The two remedies of the creditors are concur
rent-in the one case it is constitutional or statutory, in the other equitable.
SECTION 33. 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 franchise of a turnpike company cannot be sold under execution issued on a judgment against the corporation. The road does not belong to the corporation. It has only an easement therein. Wood v. Truckee Turnpike Co., 24 Cal. 474.
The formation of banking corporations for the purposes of deposit and loan, which do not issue paper to circulate as money are not prohibited. Bank v. Hemme O. & L. Co., 105 Cal. 377.
SECTION 34. 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 association 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, association, company or corporation from exercising the privilege of banking or creating paper to circulate as money.
SECTION 36. Each stockholder of a corporation or joint-stock association shall be individually and personally liable for his proportion of all its debts and liabilities.
[See notes under section 32.]
An act of the legislature authorizing the formation of corporations whose stockholders would not be liable individually would be unconstitutional; but this provision of the constitution is not self-executing, and requires legislation which will impose the same rate of liability upon all stockholders, and the law must affect all corporations alike. French v. Teschemaker, 24 Cal. 518. Persons contracting with a corporation may waive the right to hold stockholders individually liable, and such contract is not prohibited by the constitution. Id. See also Robinson v. Bidwell, 22 Cal. 388.
A toll road represents a franchise which cannot be sold at forced sale under execution issued against the corporation. Wood v. Truckee Turnpike Co., 24 Cal. 474.
This section is referred to in Murphy v. Pacific Bank, 119 Cal. 340.
The legislature could not exempt the stockholders of a banking corporation from liability for any portion of the debts or liabilities. of the corporation, in proportion to the amount of his stock; and the act of April 11, 1862 [Stats. p. 199], is unconstitutional, in so far as it attempts such exemption. McGowan v. McDonald, 111 Cal. 61.