CONSTITUTION OF CALIFORNIA

                               passed in 1879

                                ARTICLE XII.

                               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     or repealed.

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

     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 corporation 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.

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

     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.

     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.

     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.

     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 the general well-being of the State.

     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.

     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.

     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.

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

     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.

     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 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 the transfers 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.

     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.

     Sec. 16. A corporation or association may be sued in the county
     where the contract is made or is to be performed, or where the
     obligatory or liability arises, or the breach occurs; or in the
     county where the principle 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.

     Sec. 17. All railroad, canal, and other transportation companies
     are declared to be common carriers, and subject to legislative
     control. Any association or corporation, organized for the
     purpose, under the laws of this State, shall have the right to
     connect at the State line with railroads of other States. Every
     railroad company shall have the right with its road to intersect,
     connect with or cross any other railroad, and shall receive and
     transport each the other's passengers, tonnage, and cars, without
     delay or discrimination.

     Sec. 18. No president, director, officer, agent, or employé of any
     railroad or canal company shall be interested, directly or
     indirectly, in the furnishing of material or supplies to such
     company, not in the business of transportation as a common carrier
     of freight or passengers over the works owned, leased, controlled,
     or worked by such company, except such interest in the business of
     transportation as lawfully flows from the ownership of stock
     therein.

     Sec. 19. No railroad or other transportation company shall grant
     free passes, or passes or tickets at a discount, to any person
     holding any office of honor, trust, or profit in this State; and
     the acceptance of any such pass or ticket by a member of the
     Legislature or any public officer, other than railroad
     Commissioner, shall work a forfeiture of his office.

     Sec 20. No railroad company or other common carrier shall combine
     or make any contract with the owners of any vessel that leaves
     port or makes port in this State, or with any common carrier, by
     which combination or contract the earnings of one doing the
     carrying are to be shared by the other not doing the carrying. And
     whenever a railroad corporation shall, for the purpose of
     competing with any other common carrier, lower its rates for
     transportation of passengers or freight from one point to another,
     such reduced rates shall not be again raised or increased from
     such standard without the consent of the governmental authority in
     which shall be vested the power to regulate fares and freights.

     Sec. 21. No discrimination in charges or facilities for
     transportation shall be made by any railroad or other
     transportation company between places or persons, or in the
     facilities for the transportation of the same classes of freight
     or passengers within this State, or coming from or going to any
     other State. Persons and property transported over any railroad,
     or by any other transportation company or individual, shall be
     delivered at any station, landing, or port, at charges not
     exceeding the charges for the transportation of persons and
     property of the same class, in the same direction, to any more
     distant station, port, or landing. Excursion and commutation
     tickets may be issued at special rates.

     Sec. 22. The State shall be divided into three districts as nearly
     equal in population as practicable, in each of which one Railroad
     Commissioner shall be elected by the qualified electors thereof at
     the regular gubernatorial elections, whose salary shall be fixed
     by law, and whose term of office shall be four years, commencing
     on the first Monday after the first day of January next succeeding
     their election. Said Commissioners shall be qualified electors of
     this State and of the district from which they are elected, and
     shall not be interested in any railroad corporation, or other
     transportation company, as stockholder, creditor, agent, attorney,
     or employé; and the act of a majority of said Commissioners shall
     be deemed the act of said Commission. Said Commissioners shall
     have the power, and it shall be their duty, to establish rates of
     charges for the transportation of passengers and freight by
     railroad or other transportation companies, and publish the same
     from time to time, with such changes as they may make; to examine
     the books, records, and papers of all railroad and other
     transportation companies, and for this purpose they shall have
     power to issue subpoenas and all other necessary process; to hear
     and determine complaints against railroad and other transportation
     companies, to send for persons and papers, to administer oaths,
     take testimony, and punish for contempt of their orders and
     processes, in the same manner and to the same extent as Courts of
     record, and enforce their decisions and correct abuses through the
     medium of the Courts: Said Commissioners shall prescribe a uniform
     system of accounts to be kept by all such corporations and
     companies. Any railroad corporation or transportation company
     which shall fail or refuse to conform to such rates as shall be
     established by such Commissioners, or shall charge rates in excess
     thereof, or shall fail to keep their accounts in accordance with
     the system prescribed by the Commission, shall be fined not
     exceeding twenty thousand dollars for each offense, and every
     officer, agent, or employé of any such corporation or company, who
     shall demand or receive rates in excess thereof, or who shall in
     any manner violate the provisions of this section, shall be fined
     not exceeding five thousand dollars, or be imprisoned in the
     county jail not exceeding one year. In all controversies, civil or
     criminal, the rates of fares and freights established by said
     Commission shall be deemed conclusively just and reasonable, and
     in any action against such corporation or company for damages
     sustained by charging excessive rates, the plaintiff, in addition
     to the actual damage, may in the discretion of the Judge or jury;
     recover exemplary damages. Said Commission shall report to the
     Governor, annually, their proceedings, and such other facts as may
     be deemed important. Nothing in this section shall prevent
     individuals from maintaining actions against any of such
     companies. The Legislature may, in addition to any penalties
     herein prescribed, enforce this article by forfeiture of charter
     or otherwise, and may confer such further powers on the
     Commissioners as shall be necessary to enable them to perform the
     duties enjoined on them in this and the foregoing section. The
     Legislature shall have power, by a two thirds vote of all the
     members elected to each House, to remove any one or more of said
     Commissioners from office, for dereliction of duty, or corruption,
     or incompetency; and whenever, from any cause, a vacancy in office
     shall occur in said Commission, the Governor shall fill the same
     by the appointment of a qualified person thereto, who shall hold
     office for the residue of the unexpired term, and until his
     successor shall have been elected and qualified.

     Sec. 23. Until the Legislature shall district the State, the
     following shall be the railroad districts: The First District
     shall be composed of the Counties of Alpine, Amador, Butte,
     Calaveras, Colusa, Del Norte, El Dorado, Humboldt, Lake, Lassen,
     Mendocino, Modoc, Napa, Nevada, Placer, Plumas, Sacramento,
     Shasta, Sierra, Siskiyou, Solano, Sonoma, Sutter, Tehama, Trinity,
     Yolo, and Yuba, from which one Railroad Commissioner shall be
     elected. The Second District shall be composed of the Counties of
     Marin, San Francisco, and San Mateo, from which one Railroad
     Commissioner shall be elected. The Third District shall be
     composed of the Counties of Alameda, Contra Costa, Fresno, Inyo,
     Kern, Los Angeles, Mariposa, Merced, Mono, Monterey, San Benito,
     San Bernardino, San Diego, San Joaquin, San Luis Obispo, Santa
     Barbara, Santa Clara, Santa Cruz, Stanislaus, Tulare, Tuolumne,
     and Ventura, from which one Railroad Commissioner shall be
     elected.

     Sec. 24. The Legislature shall pass all laws necessary for the
     enforcement of the provisions of this article.


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