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power of regulation over the subject than that expressly conferred and cannot impose additional burdens or terms as a condition to the exercise of the right so granted. (In re Johnston, 137 Cal. 115, 69 Pac. 973.)

An ordinance requiring a verified application for a permit from the superintendent of streets, and making it a misdemeanor to lay down pipes without such permit is void. A person proceeding under the constitutional grant of power after permit was refused and arrested for not having first obtained the permit, will be released on habeas corpus. (In re Johnston, 137 Cal. 115, 69 Pac. 973.)

Water Companies.—The privilege of distributing water for pay is a franchise which might have been withheld altogether. (Temple, J., San Diego Water Co. v. San Diego, 118 Cal. 585, 62 Am. St. Rep. 261, 50 Pac. 633.)

This section does not deprive the right to collect rates for water of its character of a franchise. (Spring Valley W. W. v. Schottler, 62 Cal. 69.)

The provision of the act of 1858, requiring water companies to furnish water free of charge to cities and counties, was abrogated by this section. (Spring Valley W. W. v. San Francisco, 61 Cal. 18.) For regulation of water rates, see Const., art. XIV, post.

Lighting Companies.—Under this section the city may require spe. cial permission from the city before poles can be erected in the streets by an electric light company; and the mere fact that the permission is granted to one company and unjustly refused to another will not entitle the latter to enjoin the city authorities from interfering with the erection of such poles—the proper remedy being to compel the granting of the permit by mandamus. (Mutual Electric etc. Co. v. Ashworth, 118 Cal. 1, 50 Pac. 10.)

Although a contract fixing the price of gas may be void, still if the gas is actually furnished to and used by the municipality, the board may allow for its payment such sum as it is reasonably worth. (San Francisco Gas Co. v. Dunn, 62 Cal. 580.)

In the absence of an express limitation, a contract by the board as to rates for the term of five years will not be held unreasonable. (San Francisco Gas Co. v. Dunn, 62 Cal. 580.)

The board of supervisors has no power to delegate to a commission the power to fix the rates to be paid by the county for gas. But where the board afterward ratifies the rates fixed by the commission, the final determination with respect to the rates is exercised by the board, and is valid. (San Francisco Gas Co. v. Dunn, 62 Cal. 580.)


§ 1. Corporations to be formed under general laws.
§ 2. Dues to be secured by individual liability, etc.
§ 8. Stockholders to be individually liable.
§ 4. Term “corporations” construed.

5. Banking prohibited. § 6. Existing charters, when invalid. § 7. Charters not to be extended, nor forfeiture remitted. § 8. All franchises subject to the right of eminent domain. § 9. Restrictions on powers of corporations. § 10. Liabilities of franchise under lease or grant. § 11. Corporation stock, restriction on issue of. $ 12. Election of directors—Cumulative or distributive votes. $ 13. State not to loan its credit nor subscribe to stock of car.

porations. § 14. Corporations to have office for transaction of business in

stocks. § 15. Foreign corporations, conditions. § 16. Corporations, where to be sued. § 17. Transportation companies, rights and liabilities of. $ 18. Officers of corporations, restriction as to interests. $ 19. Free passes on railroads prohibited to state officials. $ 20. Fares and freights to be regulated by government. § 21. Discrimination in charges by carriers forbidden. $ 22. Railroad districts, organization of. § 23. Temporary railroad districts. § 24. Legislature to pass laws to enforce this article.


Sec. 1, Art. XII. 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 hereinafter passed pursuant to this section, may be altered from time to time or repealed.

See subdivision 19, section 25, article IV, ante.

Legislative History.

The parallel provision in the Constitution of 1849 is section 31 of article IV, as follows: "Corporations may be formed under general laws, but shall not be created by special act, except for municipal purposes. All general laws and special acts passed pursuant to this soction may be altered from time to time, or repealed.”

Concerning these provisions, it is said by Justice Crockett in San Francisco v. S. V. W. W., 48 Cal. 512, that it was the special purpose of the framers of the Constitution to guard against the abuse of conferring extraordinary privileges, oppressive powers and onerous monopolies upon some and denying them to others engaged in the same business, and so interfering with the enterprise and industry of the individual citizen. Nor were they content to leave it doubtful whether the legislature would have power to modify or abrogate these general laws so far as to affect the rights of existing corporations. Hence, the Constitution contains the further provision that all general laws and special acts may be altered from time to time or repealed. It was intended by this provision to keep corporations within the wholesome legislative control and to repel the assumption that their rights were held under a contract which the legislature was powerless to modify. The true construction of this constitutional provision is that all private corporations shal! derive their powers from general laws and not from special statutes. The general laws under which they were formed and such others as shall afterward be enacted shall alone define their rights and powers.

On this theory all private corporations formed for similar purposes will stand upon the same footing, enjoy the same rights and be subject to the same burdens which cannot be increased or diminished except by general laws applicable to all. In harmony with this theory and accepting it as a true construction of the Constitution, the legislaturo at its first session enacted general laws under which private corporations might be formed, and defined minutely their powers and duties. These laws constituted the charters under which corporations, when organized pursuant to them, acted. The laws conferred and measured their powers and prescribed the mode of their exercise. These laws have been modified from time to time, and have never omitted to prescribe the powers to be exercised, and the duties to be performed by the corporation. Nothing short of some imperative rule of constitutional construction will justify us in holding at this late day, that, though corporations must be formed der general laws, it is nevertheless competent for the legislature, by special grant, to confer upon a corporation once organized any powers, however extraordinary. I think, on the contrary, that no corporate rights or powers can be conferred by special grant, but must all be derived under general laws.


Mr. Chief Justice Waite, in S. V. W. W. v. Schottler, 110 U. S. 347, 4 Sup. Ct. Rep. 48, says the Constitution puts this reservation into every charter, and that corporations from the moment of their creation are subject to the legislative power of alteration, and if expedient, of absolute extinguishment as corporate bodies.

Section Cited.

Constitution, 1849: Lowe v. The Mayor etc. of Marysville, 5 Cal. 216; Cal. State Tel. Co. v. Alta Tel. Co., 22 Cal. 424; Brooks v. Hyde, 37 Cal. 379; Pacific Bank v. De Ro, 37 Cal. 540; S. F. v. S. V. W. W., 48 Cal. 509; Ex parte Frazer, 54 Cal. 95; People v. Stanford, 77 Cal. 371, 18 Pac. 85, 19 Pac. 693; Swamp Land Dis. trict v. Silver, 98 Cal. 53, 32 Pac. 866; Market St. Ry. v. Hell. inan, 109 Cal. 580, 42 Pac. 225; McGowan v. McDonald, 111 Cal. 66, 52 Am. St. Rep. 149, 43 Pac. 418; Murphy v. Pacific Bank, 119 Cal. 341, 51 Pac. 317. Constitution, 1879: S. V. W. W. v. S. F., 61 Cal. 38; Thomason v. Ashworth, 73 Cal. 77, 14 Pac. 615; People v. Stanford, 77 Cal. 371, 18 Pac. 85, 19 Pac. 693; People v. C. P, R. R., 83 Cal. 396, 413, 23 Pac. 303; In re Madera Irr. Dist., 92 Cal. 316, 27 Am. St. Rep. 106, 28 Pac. 272; Market St. Ry. Co. v. Hellman, 109 Cal. 584, 42 Pac. 225; Matter of La Societe Francaise, ctc., 123 Cal. 527, 56 Pac. 458; Santa Rosa Nat. Bank v. Barnett, 125 Cal. 412, 58 Pac. 85; People v. Levee Dist. No. 6, 131 Cal. 30, 65 Pac. 676.


Corporations Within This Section- What are.- A levee district is not a private corporation, neither is it a municipal corporation, but it belongs to a class by itself, the creation, organization and control of which is not limited by the Constitution. (People v. Levee Dist. No. 6, 131 Cal. 30, 63 Pac. 676.)

Prior to the new Constitution, a reclamation district was held to be a public corporation, which could be created by special act. (Reclamation Dist. No. 124 v. Gray, 95 Cal. 601, 30 Pac. 779; Swamp Land Dist. v. Silver, 98 Cal. 53, 32 Pac. 866.)

Creation of.—The legislature cannot confer upon corporations any powers or grant them any privileges by special act. (San Francisco v. Spring Valley W. W., 48 Cal. 493; Const. 1879, subd. 18, sec. 25, art. IV.)

A corporation sole can be created only by compliance with the provisions of the Civil Code. (Blakeslee v. Hall, 94 Cal. 159, 29 Pac. 623.) Cannot be created by legislative recognition but only by general

, law. (Oroville etc. Co. v. Plumas Co., 37 Cal. 354.)

Private corporation to supply city with water cannot be created by special act, nor can power to supply city with water be cons

ferred upon private corporation organized under general laws by special act. (San Francisco v. S. V. W. W., 48 Cal. 493. Affirmed: S. V. W. W. v. San Francisco, 61 Cal. 11. See, also, Harris v. Contra Costa Co. W. Co., 5 Saw. 290, Fed. Cas. No. 6235.)

Private Corporations.-Must be formed under general laws, and can esercise no powers, except such as are conferred by general laws. Legislature cannot confer on such corporation any powers or grant any privileges by special act. (San Francisco v. S. V. W. W., 48 Cal. 493. Approved: Waterloo etc. Co. v. Cole, 51 Cal. 384; S. V. W. W. v. Bryant, 52 Cal. 140; S. F. v. S. V. W. W., 53 Cal. 611; Omnibus R. R. v. Baldwin, 57 Cal. 166, 170, 174; People v. Stanford, 77 Cal. 379, 18 Pac. 85, 19 Pac. 693; People v. C. P. R. R., 83 Cal. 413, 23 Pac. 303; Home of Inebriates v. Reis, 95 Cal. 150, 30 Pac. 205; South Pasadena v. Terminal Ry. Co., 109 Cal. 320,- 322, 41 Pac. 1093. Distinguished: Ex parte Frazer, 54 Cal. 96.)

The rule that an incorporation is incomplete until the charter is accepted has no application to corporations formed under general laws. (S. V. W. W. v. S. F., 22 Cal. 434.)

The general and uniform operation of a statute is not affected because it authorizes corporations to adopt or reject a particular provision, if all corporations of a class have the same opportunity and neither of the provisions conflicts with the Constitution. (Murphy v. Pacific Bank, 119 Cal. 341, 51 Pac. 317.)

The term “municipal” cannot be extended to embrace commercial corporations. (Lowe v. City of Marysville, 5 Cal. 214.)

Special Franchises or Privileges.—Corporation formed under general laws for purpose of receiving grant of powers and privileges through special act possesses no powers or privileges other than such ag are conferred by general laws. (S. F. v. S. V. W. W., 48 Cal. 493. To same effect: People v. Selfridge, 52 Cal. 331.)

Act granting to individuals certain powers and privileges, act not to take effect unless such individuals organized themselves into á corporation within a specified time, is a grant, not to the individuals as persons, but to the corporation when formed. Such act is attempt to confer powers and privileges upon corporation by special act and is unconstitutional. (S. F. v. S. V. W. W., Cal. 493.)

Aet granting special privileges to particular corporation or imposing peculiar obligations on particular corporation not applicable to all similar corporations is void. (Waterloo Turnpike R. Co. v. Cole, 51. Cal. 381.)

The fact that a party is a corporation in exercise of its corporate powers does not tend to establish its right to a special franchise. (Schierbold v. N. B. & M. R. R. Co., 40 Cal. 447.)

An act “to establish water rates in the city and county of San Francisco," and a supplemental act, held unconstitutional in so far


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