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the corporation. (Lady Washington etc. Co. v. Wood, 113 Cal. 482, 45 Pac. 809.)

In an action by stockholders against the trustees, proof that any one of the plaintiffs is a stockholder is sufficient to maintain the action. (Parrott v. Byers, 40 Cal. 614.)

TERM “CORPORATIONS” CONSTRUED.

Sec. 4, Art. XII. 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 section 354, Civil Code, post, as to power to sue and be sued.

Legislative History.

This section is the same as section 33, article IV, of the Constitu. tion of 1849.

Section Cited.

Baines v. Babcock, 95 Cal. 592.

Annotation.

Right to Sue.-The right to sue and be sued, to maintain and defend actions concerning corporate rights and liabilities, is a power incident to every corporation. In this state it is not only conferred by statute, but is preserved by constitutional provision. With this right the stockholders cannot interfere, except when the directors refuse to act, or are guilty of fraud in the maintenance or defense of the action. (Baines v. Babcock, 95 Cal. 581, 29 Am. St. Rep. 158, 27 Pac. 674, 30 Pac. 776.)

BANKING PROHIBITED.

Sec. 5, Art. XII. 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.

See section 356, Civil Code, post, for similar provision as to circulation,

Legislative History,

Similar provisions to this section are found in sections 34, 35, article IV, of the Constitution of 1849, as follows:

"Sec. 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 associations 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.

“Sec. 35. The legislature of this state shall prohibit by law any person or persons, association, company, or corporation from exercis. ing the privileges of banking or creating paper to circulate as money."

There is no general law for the incorporation of commercial banks other than the bank commissioners' act. (Stats. 1903, p. 365.) Sections 571-580, Civil Code, post, provide for savings and loan corporations, which see for prior and supplemental legislation.

Section Cited.

Thomason v. Ashworth, 73 Cal. 77, 14 Pac. 615.

Annotation.

Banking Corporations.- A corporation may be formed for the purpose of receiving deposits and loaning money under section 34, article IV, Constitution of 1849, and if it does not issue paper to cir. culate as money, it is not a bank, although it is called such. (Bank of Sonoma v. Fairbanks, 52 Cal. 196.)

Sections 34 and 35, article IV of the Constitution of 1849 did not prohibit the formation of banking corporations for the purpose of deposit and loan, which do not issue paper to circulate as money. (Bank of Martinez v. Hemme etc. Land Co., 105 Cal. 376, 38 Pac. 963.)

EXISTING CHARTERS, WHEN INVALID.

Sec. 6, Art. XII. 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.

This section has no parallel in the Constitution of 1849, and has never been cited or construed.

CHARTERS NOT TO BE EXTENDED, NOR FORFEITURE RE

MITTED. Sec. 7, Art. XII. The legislature shall not extend any franchise or charter, nor remit the forfeiture of any franchise oi charter of any corporation now existing, or which shall hereafter exist under the laws of this state.

See subãivisions 16 and 26 of section 25, article IV, ante.

Legislative History.

This section has no parallel in the Constitution of 1849. It was adopted to restrict the power of the legislature to grant special privileges and to prevent the enactment of special legislation. (Con. stitutional Debates, p. 433.)

Section Cited.

People v. Los Angeles etc. Ry. Co., 91 Cal. 340, 27 Pac. 673; Melvin v. State, 121 Cal. 19, 53 Pac. 417.

Annotation.

Waiver of Forfeiture.- An act waiving a right to enforce a for: feiture does not “remit the forfeiture," since there is no forfeiture until the sovereignty, which created the franchise, by proper proceeding in a proper court, procures an adjudication of forfeiture, and enforces it. (People v. Los Angeles etc. Ry. Co., 91 Cal. 338, 27 Pac. 673.)

ALL FRANCHISES SUBJECT TO THE RIGHT OF EMINENT

DOMAIN. Sec. 8, Art. XII. The exercise of the right of eminent doinain 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.

See section I, article IV, Constitution, ante, for exercise of "eminent domain."

This section has no parallel in the Constitution of 1849, and has rot been cited or construed.

RESTRICTIONS ON POWERS OF CORPORATIONS.

Sec. 9, Art. XII. 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.

See section 355, Civil Code, post, for limitation of powers.

Legislative History.

This section has no parallel in the Constitution of 1849. Its adoption was an expression of the policy of the state to prevent the accumulation of property in the hands of corporations. (Constitutional Debates, p. 438.)

Section Cited.
Knowles v.

Sandercock, 107 Cal. 643, 40 Pac. 1047; People v. Stockton Sav. etc. Soc., 133 Cal. 612, 85 Am. St. Rep. 225.

Annotation.

Corporate Purposes.-A corporation is forbidden to engage in any business other than such as is expressly authorized in its charter or the law under which it is organized. To hold stock in another corporation is to engage in the business of such corporation. (Knowles v. Sandercock, 107 Cal. 629, 643, 40 Pac. 1047.)

This section does not cause property held in violation of it to escheat to the state. (People v. Stockton Sav. etc. Soc., 133 Cal. 612, 85 Am. St. Rep. 225, 133 Cal. 611.)

LIABIKITIES OF FRANCHISE UNDER LEASE OR GRANT.

Sec. 10, Art. XII. 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.

Legislative History.

This section is new and peculiar to this state. It is not to be construed as a grant of authority to lease, but as a restriction upon the legislature to make such a grant of authority. It is for the purpose of preventing a corporation from leaving remediless a cred. itor and to preserve the right of the state to a forfeiture of the franchise. (Lee v. S. P. R. R. Co., 116 Cal. 101, 47 Pac. 932, 58 Am. St. Rep. 140, and note.)

Section Cited.

Lee v. S. P. R. R. Co., 116 Cal. 97, 47 Pac, 932, 58 Am. St. Rep. 140, and note.

Annotation.

Alienation of Franchises.— This section does not give a personal action against the corporation which owned property for an injury which has resulted to an employee of a lessee of the owner in the use of the property in the hands of the lessee, but is designed to subject the franchise and property to liability incurred in its occupation, whether the franchise be exercised or the property be used by the original owner or the lessee or grantee. (Lee v. Southern Pac. R. R. Co., 116 Cal. 97, 58 Am. St. Rep. 140, and note, 47 Pac. 932.)

CORPORATION STOCK, RESTRICTION ON ISSUE OF.

Sec. 11, Art. XII. 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.

See section 359, Civil Code, post, for similar provision.

Legislative History.

This section has no parallel in the Constitution of 1849. The purpose of the section was to prevent the fictitious increase of the stock or indebtedness of corporations. (Constitutional Debates, p. 438; Pacific Trust Co. v. Dorsey, 72 Cal. 56, 12 Pac. 49.)

Section Cited.

Ewing v. Oroville M. Co., 56 Cal. 654; Stein v. Howard, 65 Cal. 617, 4 Pac. 662; Pacific Trust Co. v. Dorsey, 72 Cal. 55, 12 Pac. 44; Thomason v. Ashworth, 73 Cal. 77, 14 Pac. 615; Underhill v. Santa Barbara Co., 93 Cal. 307, 23 Pac. 1049; Illinois T. etc. Bank v. Pacific Ry. Co., 117 Cal. 344, 49 Pac. 197; Smith v. Martin, 135 Cal.

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