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2. The powers enumerated in the preceding section shall vest in every corporation that shall hereafter be created, although they may not be specified in its charter, or in the act or certificate under which it shall be incorporated. (Vide sections 8, 9, 14.)

3. In addition to the powers enumerated in the first section of this act, and to those expressly given in its charter, or in the act or certificate under which it is or shall be incorporated, no corporation shall possess or exercise any corporate powers, except such as shall be necessary to the exercise of the powers so enumerated and given.(j)

4. Banking powers never implied.

No corporation created or to be created shall, by any implication or construction, be deemed to possess the power of discounting bills, notes, or other evidences of debt, of receiving deposits, of buying gold or silver bullion, or foreign coins, of buying and selling bills of exchange, or of issuing bills, notes or other evidences of debt, upon loan or for circulation as money, unless such corporation is or shall be expressly incorporated for banking purposes, or unless such powers are or shall be expressly given in its charter.(k)

5. Holders of stock not fully paid up, liable to creditors for balance unpaid.

Where the whole capital of a corporation shall not have been paid in, and the capital paid shall be insufficient to satisfy the

(j) Public grants are strictly construed, and whatever is not plainly granted must be understood to be withheld. Jersey City Gaslight Co. v. Consumers' Gas Co., 13 Stew. Eq. 427. The presumption is, that all contracts made by a corporation are within its powers. 3 C. E. Gr. 542. A corporation created by statute can exercise no power, and has no rights except such as are expressly given or necessarily implied. National Trust Co. v. Miller, 6 Stew. Eq. 155. A contract not within the scope of the powers conferred on a corporation, cannot be made valid by the assent of every one of the stockholders. Ibid. The acts of a de facto corporation are valid so far, at least, as they create rights in favor of third persons. 5 Id. 236; 9 Id. 548. The directors have power to make any contract which may be necessary, fit or proper to enable the corporation to accomplish the purposes of its creation. The question of the expediency of any contract which is within the power of the corporation is committed to the managers. 13 Id. 114. The legality of a corporation which exists under form of law can only be impugned by proceedings instituted by the attorney-general. West Jersey R. R. Co. v. Cape May, &c., R. R. Co., 7 Id. 164; National Docks Railway Co. v. Central R. R. Co., 5 Id. 755; vide Hackensack Water Co. v. De Kay, 9 Id. 548, 559; 5 Cent. L. Rep. 333; Jersey City Gaslight Co. v. Consumers' Gas Co., 13 Stew. Eq. 427. Nobody can take advantage of a breach of the condition on which the company is created, for the purpose of depriving it of its franchises, except the sovereign power which created the corporation. Elizabethtown Gaslight Co. v. Green, I Dick. Ch. Rep. 118.

(k) See "An act to authorize and regulate the business of banking." Rev. 58.

claims of its creditors, each stockholder shall be bound to pay on each share held by him the sum necessary to complete the amount of such share, as fixed by the charter of the company, or such proportion of that sum as shall be required to satisfy the debts of the company.(1)

6. Charters may be repealed, altered or suspended.

The charter of every corporation which shall hereafter be granted by or created under any of the acts of the legislature, shall be subject to alteration, suspension and repeal, (m) in the discretion of the legislature. (Vide proviso to section 13 to like effect, also section 35.)

7. Directors to make dividends only from surplus or profits; otherwise personally liable for debts.(n)

It shall not be lawful for the directors of any bank, or moneyed or manufacturing corporation in this state, or corporation organized under this act, to make dividends, except from the surplus or net profits arising from the business of the corporation, nor to divide, withdraw, or in any way pay to the stockholders or any of them, any part of the capital stock of the said corporation, or to reduce the said capital stock, except according to this act, without the consent of the legislature; (0) and in case of any violation of

(1) A creditor, having exhausted his remedy by judgment and execution, and a return nulla bona, may file a bill against the stockholders to compel the payment of unpaid subscriptions to the capital stock. Such suit can only be prosecuted by a creditor suing in behalf of all the creditors of the corporation. The corporation is a necessary party to the suit; all the property and assets of the corporation must be brought into the suit, and put in the course of administration. Wetherbee v. Baker, 8 Stew. Eq. 501; Bickley v. Schlag, Dick. Ch. Rep. 533. See, also, section 96.

(m) This is a reservation to the state for the benefit of the public, to be exercised by the state only. It is not so incorporated in the charter of a corporation specially chartered after its passage, as to injuriously affect the vested rights of stockholders. Mills v. Central R. R. Co., 14 Stew. Eq. 1; Zabriskie v. Hackensack R. R. Co., 3 C. E. Gr. 178. It reserves to the legislature authority for proper ends to make any change of a charter which will not defeat or substantially impair the object of the grant. The change may be made by supplement to this act. Montclair v. Greenwood Lake R. R. Co., 18 Stew. Eq.

436.

(n) For other provisions as to dividends, see sections 25, 52, 53, 106, 144. (0) Vide sections 33, 117, 120, 138, 169. If such unlawful division be made, the money may be recovered back from the stockholders for the benefit of creditors. Williams v. Boice, 11 Stew. Eq. 364, and notes. The power of the directors (except when restrained by statute or by contract) over the gains of the business is absolute so long as they act in the exercise of an honest judgment. They may reserve what they deem necessary or judicious for repairs, improvements and contingencies before making a dividend. The words "net profits mean what shall remain as the clear gains of any business venture, after deducting the capital invested in the business, the expenses incurred in its conduct and the losses sustained in its prosecution. Park v. Grant Locomotive Works, 13 Id. 114.

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the provisions of this section, the directors under whose administration the same may happen, shall, in their individual and private capacities, jointly and severally, be liable at any time within the period of six years after paying any such dividend to the said corporation, and to the creditors thereof, in the event of its dissolution or insolvency, to the full amount of the dividend made or capital stock so divided, withdrawn, paid out, or reduced, with legal interest on the same from the time such liability accrued; provided, that any of the said directors who may have been absent when the same was done, or who may have dissented from the act or resolution by which the same was done, may respectively exonerate themselves from such liability, by causing their dissent to be entered at large on the minutes of the said directors, at the time the same is done, or forthwith after they shall have notice of the same, and by causing a true copy of the dissent so entered on the minutes to be published, within two weeks after the same shall have been entered on said minutes, in some public newspaper published in the county where the said corporation has its office or place of business; and if none be published in such county, then in a newspaper printed in an adjoining county, and circulating in the neighborhood of such office or place of business of said corporation; and provided also, that this section shall not be construed to prevent a division and distribution of the capital stock of the corporation, which shall remain after the payment of all its debts, upon the dissolution of the corporation or the expiration of its charter.

8. Corporation sole has all powers granted in this act. If any act shall hereafter be passed by the legislature of this state which shall by its terms enact that any person therein named or described shall be incorporated by any name and for any purpose therein stated, such corporation shall immediately be vested with and possessed of all powers in this act specified and set forth, subject to all provisions and restrictions therein contained, unless such special act incorporating the same shall otherwise in whole or in part direct to the contrary. (Vide sections 2, 9, 14.) 9. Company organized under any general law has all the powers granted in this act.

Any corporation organized under any general law of the legislature now or hereafter to be passed, shall, in addition to the powers and restrictions thereon to which it may become subject or of which it shall be possessed by virtue of its organization

and the act authorizing the same, be additionally, possessed of all' powers and be subject to all restrictions thereon in this act contained, as far as the same are consistent with the act under which it may, as aforesaid, be organized. (Vide sections 2, 8, 14.)

II. Formation, Constitution, Alteration, Dissolution.

10. Purposes for which corporations may be formed. [This section is given as amended by the act of April 12th, 1876, the act of March 3d, 1880, and the act of February 29th, 1888. P. L. 1888, p. 112.]

It shall be lawful for three (vide section 124) or more persons (p) to associate themselves into a company to carry on any kind of manufacturing, mining, chemical, trading or agricultural business, agricultural fairs and exhibitions for the encouragement of competition in agriculture, horticulture, breed of stock and development of speed in horses; the transportation of goods, merchandise or passengers, upon land or water; inland navigation; the building of houses, vessels, wharves or docks, or other mechanical business; the reclamation and improvement of submerged lands; the improvement and sale of lands; the examination, insurance and guaranty of the title to lands; the constructing, maintaining and operating (except in a town or city in which water-works are established and owned by the corporate authorities) works for the special purpose of supplying water for extinguishing fires in mills, factories, manufacturing establishments and other buildings; the damming of rivers and streams, including the storage, transportation and sale of water, and water-power and privileges, with the right to take rivulets, raceways and lands, and erect and maintain dams, reservoirs, raceways, mills, manufactories and other erections, and lease, mortgage, sell and convey the same, or any part thereof; the making, purchasing and selling manufactured articles, and also of acquiring and disposing of rights to make and use the same; the renting buildings and steam or other power therewith; the cutting and digging peat, stone, marl, clay, or other like substance, and dealing in the same, manufactured or unmanufactured, or any wholesale or retail mercantile business, or any lawful business or purpose whatever, upon making and filing

(p) A general law authorizing any number of persons, not less than seven, to form a corporation to construct a railroad, does not exclude non-residents as corporators. Central R. R. Co. v. Penn. R. R. Co., 4 Stew. Eq. 475.

a certificate in writing of their organization, in manner hereinafter mentioned; (q) provided, that nothing herein contained shall be construed to authorize the formation of any insurance company (except companies for the insurance or guaranty of the title to lands or any estates or interests in lands), banking company, savings bank or other corporation intended to derive profit from the loan and use of money, nor of any railroad company, turnpike company or any other company which shall need to possess the right of taking and condemning lands, except for the damming of rivers and streams, and for the purposes appertaining thereto, as hereinbefore specified (vide sections 202, 204); and further provided, that this act shall not apply to any river or stream of a less width and volume of water than the Delaware river, ordinarily, at Phillipsburg, in this state, below its junction with the Lehigh, nor to any river or stream below the head of tide-water in the

same.

11. The certificate, its contents, authentication, filing and record. (r)

[The proviso to this section was added by supplement of March 18th, 1884. P. L., p. 82.]

Such certificate, in writing, shall set forth,

I. The name assumed to designate such company, and to be* used in its business and dealings;

II. The place or places in this state or elsewhere where the business of such company is to be conducted, and the objects for which the company shall be formed (vide section 15);

III. The total amount of the capital stock of such company, which shall not be less than two thousand dollars (vide section 124), the amount with which they will commence business, which shall not be less than one thousand dollars, and the number of shares

(q) As in favor of creditors and third persons dealing with a corporation in good faith, the regularity and validity of its organization, effected under color of its charter, cannot be impeached. Hackensack Water Co. v. De Kay, 9 Stew. Eq. 548.

(r) When the certificate is defective, an amended certificate may be filed. Sections 126, 127, 180. When lost, copy may be filed. Section 175. The corporate name may be changed. Sections 114, 115. Principal office may be changed. Section 125. The capital stock may be increased. Sections 116, 119, 193, 194; or decreased. Section 184. In certain cases number of directors may be increased. Section 116. The capital stock may be decreased and the par value changed. Sections 117, 118. The corporate existence may be extended. Sections 109, 110, 111, 177, 178, 187, 197, 198. The certificate may contain a provision for the guaranty of dividends on stock issued for property purchased. Section 144. Merger of corporations. Section 190. Classification of directors. Section 17. Choice of directors by one class of stockholders. Section 17.

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