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Constitution of the State of New Jersey

AS AMENDED IN 1875.

PROVISIONS RESPECTING CORPORATIONS.

ARTICLE I.

No county, city, borough, town, township or village. shall hereafter give any money or property, or loan its money or credit to or in aid of any individual, association or corporation, or become security for or be directly or indirectly the owner of any stock or bonds of any association or corporation.

20. No donation of land or appropriation of money shall be made by the state or any municipal corporation to or for the use of any society, association or corporation whatever.

ARTICLE IV.

SECTION VII.

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3. The legislature shall not pass any pairing the obligation of contracts or depriving a party of any remedy for enforcing a contract which existed when the contract was made.

8. Individuals or private corporations shall not be authorized to take private property for public use, without just compensation first made to the owners.

11. The legislature shall not pass private, local or special laws in any of the following enumerated cases, that is to say: * * * Granting to any corporation, association or individual, any exclusive privilege, immunity or franchise whatever. Granting to any corporation, association or individual the right to lay down railroad tracks The legislature shall pass general laws providing for the cases enumerated in this paragraph, and for all other cases which, in its

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judgment, may be provided for by general laws. The legislature shall pass no special act conferring corporate powers, but they shall pass general laws under which corporations may be organized and corporate powers of every nature obtained, subject, nevertheless, to repeal or alteration at the will of the legislature.

An act, general in form, but the particularity of the descriptive language in which showed that its framer was providing for a particular corporation, was held to be unconstitutional, as being a special act, as having a misleading title, and as being inimical to the provision of the constitution that "the legislature shall pass no special act conferring corporate powers." (Grey v. Newark Plank Road Co., 46 Atl. Rep., 606; aff'd 48 Atl, Rep., 557.)

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All *

ARTICLE X.

* claims and rights of individuals and bodies corporate, and of the state, and all charters of incorporation shall continue.

THE GENERAL CORPORATION LAW

OF NEW JERSEY.

LAWS OF 1896, CHAPTER 185.

Being "An Act Concerning Corporations (Revision of 1896)," including the amendments and supplements to the end of the legislative session of 1901.

I.-Powers.

1. Every corporation shall have power:

I. To have succession, by its corporate name, for the period limited in its charter or certificate of incorporation, and when no period is limited, perpetually;

II. To sue and be sued in any court of law or equity;

III. To make and use a common seal, and alter the same at pleasure;

IV. To hold, purchase and convey such real and personal estate as the purposes of the corporation shall require, and all other real estate which shall have been bona fide conveyed or mortgaged to the said corporation by way of security, or in satisfaction of debts, or purchased at sales upon judgment or decree obtained for such debts; and to mortgage any such real or personal estate with its franchises; the power to hold real and personal estate shall include the power to take the same by devise or bequest;

V. To appoint such officers and agents as the business of the corporation shall require. and to allow them suitable compen

sation.

81 VI. To make by-laws, fixing and altering the number of its directors, and providing for the management of its property, the regulation and government of its affairs, and the transfer of its stock, with penalties for the breach thereof not exceeding twenty dollars;

VII. To wind up and dissolve itself, or be wound up and dissolved in manner hereafter mentioned.

P. L. 1846, p. 16; P. L. 1846, p. 65; P. L. 1849, p. 301; P. L. 1850, p. 280; P. L. 1872, p. 77; Act of 1875, § 1.

FUNDAMENTAL POWERS.

I. To have succession.-The Corporation Act of 1875 limited corporate existence to fifty years. Companies formed under the Act of 1875 may now have the period of their corporate existence extended or made perpetual by complying with the provisions of Section 27, post.

As to corporate name, see notes, Section 8.

II. To sue, etc.-The power to sue and be sued implies also the power to compromise suits (Ellerman v. Chicago Junc. Ry., &c., Co., 49 N. J. Eq., 217).

Individual stockholders are not the proper parties to sue or defend on behalf of corporate interests without the consent of a legal majority of the stockholders (Silk Mfg. Co. v. Campbell, 27 N. J. Law, 539).

But a stockholder may sue in equity in his own name to enforce a right of the corporation, without first requesting the directors to sue, when it is made to appear that if such request had been made it would have been refused, or, if granted, that the litigation following would necessarily be subject to the control of persons opposed to its success (Knoop v. Bohmrich, 49 N. J. Eq., 82; Ackerman v. Halsey, 37 N. J. Eq., 356; s. c., 38 N. J. Eq., 501).

It is not necessary for a corporation plaintiff to allege its incorporation (German R. Church v. Von Puechelstein, 27 N. J. Eq., 30).

A corporation may sue for a libel against it in its business, but special damage must always be shown (Trenton Mut. Life Ins. Co. v. Perrine, 23 N. J. Law, 402).

A corporation may be sued for a tort in which the element of evil intent is involved. It may be sued for malicious prosecution, for libel and for assault and battery (State v. Passaic, &c., Soc., 54 N. J. Law, 260, 265; Vance v. Ry. Co., 32 N. J. Law, 334; McDermott v. Evening Journal Assn., 43 N. J. Law, 488; 44 N. J. Law, 430; Brokaw v. Ry. Co., 32 N. J. Law, 328).

A corporation is liable for the torts of its agents and is liable for the acts of its agents done by its authority, express or implied (State v. Ry. Co., 23 N. J. Law, 360; Brokaw v. Ry. Co., 32 N. J. Law, 328).

A corporation cannot defend itself in an action for a tort done by it on the ground that the business in the prosecution of which the tort was done was ultra vires (N. Y., L. E. & W. R. R. Co. v. Haring, 47 N. J. Law,137). A corporation may be sued on an implied contract (Worrell v. 1st Pres. Church, 23 N. J. Eq., 96, and cases cited).

As to what is personal service on a corporation (Laufman v. Hope Mfg. Co., 54 N. J. Law, 70).

III. Common seal.-The general rule is that a corporation need use its seal only in cases where it would be essential for an individual to use a seal. The old common law idea that a corporation can only act under its corporate seal no longer prevails. (Crawford v. Longstreet, 43 N. J. Law, 325; see also Bap. Church v. Mulford, 8 N. J. Law, 182; Mendham v. Losey, 2 N. J. Law, 327.)

It is not necessary to use wax or wafer. An impression of the seal on the paper is sufficient. (P. L. 1875, p. 56; P. L. 1898, p. 677, § 20.)

Primarily the corporate character of the seal must be proved.

It requires evidence to substantiate its character. (Manhattan Co. v. N. J. Stock Yard Co., 23 N. J. Eq., 162; Leggett v. N. J. Mfg. Co., 1 N. J. Eq., 541; Vaughn v. Hankinson's Admr., 35 N. J. Law, 79; Den v. Vreelandt, 7 N. J. Law, 352.)

No presumption of authority arises from the use of a common paper seal not on its face appearing to be the corporate seal, although accompanied by the recitation "witness the corporate seal." (Raub v. Blairstown Creamery Assn., 56 N. J. Law, 264.) There are two essential elements in the proof of a corporate deed—that the seal is the seal of the company; that it was affixed by authority. (Osborne v. Tunis, 25 N. J. Law, 635.) For further cases relative to corporate seal and its proof (see Manhattan Mfg. Co. v. New Jersey Stock Yard Co., 23 N. J. Eq., 162; Parker v. Washoe Mfg. Co., 49 N. J. Law, 465; Whitehead v. Hamilton Rubber Co., 52 N. J. Eq., 78.)

IV. Power to hold real estate. This section is a practical re-enactment of a similar provision of the Statute of 1846.

The practical point under this section of the statute is that it rests with the State, and with the State alone, to question the power of a corporation to hold real estate. (State v. Mansfield, 23 N. J. Law, 510.)

Except, perhaps, the case of a devise to a corporation of lands in excess of the amount expressly limited in the charter, where the court allowed the question to be raised by an heir-at-law by a suit in chancery. (DeCamp v. Dobbins, 29 N. J. Eq., 36; s. c., 31 N. J. Eq., 671.)

Under the Act of 1875 a corporation was not authorized to hold real property "exceeding the amount îimited in its charter," but all such limitations, express or implied, were removed in the Revision of 1896.

The English statutes of Mortmain have never been in force in this State. (State v. Mansfield, 43 N. J. Law, 514; State v. Newark, 25 N. J. Law, 315.) A corporation may hold title to lands in fee simple, even though the period of the corporation's existence is limited. (State v. Brown, 27 N. J. Law, 13; State v. Haight. 35 N. J. Law, 178; s. c., 36 N. J. Law, 471.) As to power to grant easements, see Benton v. Elizabeth, 61 N J. Law, 411; aff'd 61 N. J. Law, 693.

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