Charters are contracts. "Charters of private corporations are regarded § 5-6 as executed contracts between the State and the corporator, and the rule is settled, that if the charter does not contain a reservation of power in the Legislature to modify or change the contract, the Legislature cannot repeal, impair or alter such a charter against the consent or without the default of the corporation." (Montclair v. N. Y. & Greenwood Lake Ry. Co., 45 N. J. Eq., 436.)

It was to avoid the rule of the Dartmouth College case that this section was enacted.

"The power of the Legislature has its limits. It can repeal or suspend the charter; it can alter or modify it; it can take away the charter; but it cannot impose a new one and oblige the stockholders to accept it." (Zabriskie v. Hackensack & N. Y. R. Co., 18 N. J. Eq., 178, 192.)

The power to repeal, suspend or alter the charter is "a reservation to the State for the benefit of the public, to be exercised by the State only. The State was making what had been decided to be a contract, and it reserved the power of change, by altering, modifying or repealing the contract." (Mills v. Central R. R. Co., 41 N. J. Eq., 1, 8.)

The Legislature has no authority to make any alteration or amendment in a charter granted subject to this section, that will defeat or substantially impair the object of the grant, or any rights which have vested under it. (Zabriskie v. Hackensack & N. Y. R. Co., 18 N. J. Eq., 178.)

The Legislature has power to confer upon a court authority to declare a charter forfeited for a specified misfeasance or malfeasance. (Huylar v. Cragin Cattle Co., 40 N. J. Eq., 392, 395.) See section 44, post.

5. This act may be amended or repealed, at the pleasure of the legislature, and every corporation created under this act shall be bound by such amendment; but such amendment or repeal shall not take away or impair any remedy against any such corporation or its officers for any liability which shall have been previously incurred; this act and all amendments thereof shall be a part of the charter of every corporation heretofore or hereafter formed hereunder, except so far as the same are inapplicable and inappropriate to the objects of such corporation.

P. L., 1846, p. 65; P. L., 1849, p. 301; Act of 1875, §§ 14, 35.
See notes to Section 4, ante.

II.-Formation, Constitution, Alteration, Dissolution.

6. Purposes for which corporations may be formed.

Upon executing, recording and filing a certificate pursuant to all* the provisions of this act, three or more persons may become *See section 43a, post.

§ 6 a corporation for any lawful purpose or purposes whatever other than a savings bank, a building and loan association, an insurance company, a surety company, a railroad company, a telegraph company, a telephone company, a canal company, a turnpike company or other company which shall need to possess the right of taking and condemning lands in this state, or other than a corporation provided for by "An Act concerning banks and banking (Revision of 1899)," or by "An Act concerning trust companies (Revision of 1899)," or by "An Act concerning safedeposit companies (Revision of 1899)"; it shall, however, be lawful to form a company hereunder for the purpose of constructing, maintaining and operating railroads, telephone or telegraph lines outside of this state.

(As amended by Chap. 176, Laws of 1899; P. L., 1899, p. 473.)

P. L., 1846, p. 64; P. L., 1849, p. 300; P. L., 1852, p. 87; P. L., 1853, p. 427; P. L., 1855, p. 705; P. L., 1865, p. 707; P. L., 1865, p. 913; P. L., 1869, p. 1001; Act of 1875, § 10; P. L., 1876, p. 103; P. L., 1880, p. 92; P. L., 1888, p. 112; P. L., 1889, p. 411; P. L., 1894, p. 497.

Corporations may be organized under this act for any lawful purpose or purposes, and are not limited to a single object or purpose.

The incorporation of the classes of corporations expressly excepted from the provisions of this section is provided for by other acts. Some of these acts contain express provisions prohibiting the incorporation of companies provided for by them under any other act. See “An Act concerning banks and banking, Revision of 1899” (P. L. 1899, p. 431). Under the provisions of the Trust Company Act of 1899 not only is the organization of a trust company forbidden under any other act, but the act forbids the exercise of certain specified powers exclusively conferred upon trust companies (P. L. 1899, p. 453), the more important of which are:

"(1) To act as the fiscal or transfer agent of any State, municipality, body politic or corporation, and in such capacity to receive and disburse

money.

"(2) To transfer, register and countersign certificates of stock, bonds or other evidences of indebtedness, and to act as agent of any corporation, foreign or domestic, for any purpose now or hereafter required by statute or otherwise.

"(5) To act as trustee under any mortgage or bond issued by any municipality, body politic or corporation, and to accept and execute any other municipal or corporate trust not inconsistent with the laws of this State.

"(16) To receive and manage any sinking fund of any corporation, upon such terms as may be agreed upon between said corporation and those dealing with it.

"(17) Generally to execute trusts of every description not inconsistent with the laws of this State or of the United States."

There are other classes of corporations not specified in this section for the incorporation of which separate acts have also been passed. Among them are gas companies (G. S., p. 1608), water companies (G. S., p. 2199), street railways (G. S., p. 3216), and traction companies (G. S., p. 3235), These acts are not by their terms expressly exclusive. Can companies, for the organization of which other general laws exist, be lawfully incorporated under this act? The safe answer is the negative.

* * * *

In Richards v. Dover, 61 N. J. Law, 400, 402, the court said: "The passage of these general laws authorizing the incorporation of gas companies shows a clear legislative intent to separate gas companies from those corporations which may lawfully be organized and provided under the general corporation act, and to subject the former to limitations and restrictions not applicable to the latter. Mr. Justice Magie, in Domestic Telegraph Co. v. Newark, 49 N. J. Law, 344, 348, said that the passage of the act * * * providing for the organization of telegraph and telephone companies, in modes and under conditions quite inconsistent with those prescribed by the general corporation act, seemed to be a strong legislative declaration that such companies could not be organized so as to acquire a corporate existence under the latter act. In my judgment, the Legislature has clearly expressed its intention that no corporation shall acquire or exercise the franchise of a gas company without subjecting itself to the salutary provisions of the gas act by incorporating under it."

See also to the same effect dictum of Collins, J., in Montclair Military Institute v. Assessors, 65 N. J. Law, 516.

Person.-The word " persons" in this act does not include corporations. By analogy Coddington v. Exrs. of Havens, 8 N. J. Eq., 590.

A corporation cannot in its own name subscribe for stock, or be a corporator under the General Railroad Law; nor can it do so by simulated compliance with the provisions of the law through its agents as pretended corporators and subscribers for stock. (Central R. R. Co. of N. J. v. Pa. R. R. Co., 31 N. J. Eq., 475, 494.)

Compare Section 51, post, giving any corporation the power to purchase, hold, &c., stock and bonds of other corporations.

Infants. The statute authorizes persons to form a corporation; it is implied that they shall be of full age. (Matter of Globe, &c., Assn., 135 N. Y., 280, 284, and cases cited. See also Lindley on Companies, p. 39.) In England it has been held that the incorporation is not rendered invalid by the fact that one of the subscribers was an infant. (Nassau Phosphate Co., 2 Ch. D. 610.)

7. Any corporation of this state may conduct business in other states or in foreign countries and have one or more offices

§ 7

§ 7 out of this state, and may hold, purchase, mortgage and convey real and personal property out of this state; provided, such powers are included within the objects set forth in its certificate of incorporation.

P. L. 1865, p. 354, Act of 1875, § 15; P. L. 1889, p. 412.

The power of a corporation to do business in a state other than the state of its creation depends primarily on the charter, subject to the conditions imposed by the state where the business is carried on. (Baltimore & Ohio R. R. Co. v. Koontz, 104 U. S., 5; see also Bank of Augusta v. Earle, 13 Pet., 519, 588.)

The power of a New Jersey corporation to do business without the state is based upon this provision. The corporation exists by force of the law that created it, and where that law ceases to exist and is not obligatory, the corporation can have no existence. (Hilles v. Parrish, 14 N. J. Eq., 380, 383.)

It is usual to insert in the certificate of incorporation a clause somewhat as follows:

"The corporation shall also have power to conduct its business in all its branches, and have one or more offices, and unlimitedly to hold, purchase, mortgage and convey real and personal property outside of the State of New Jersey, in any and all of the several states, territories and dependencies of the United States and in the District of Columbia, and in any or all foreign countries."

Under the Act of 1875 and the supplement of 1889 (P. L. 412) a corporation could carry on a part of its business out of the state, provided that the portion of such business to be carried on out of the state and the location of its principal office or place of business out of the state were stated in the certificate of incorporation. An act of 1892 permitted any corporation to carry on and conduct its business outside of the state, though not so empowered in the certificate of incorporation. (P. L. 1892, p. 90.) The question arose whether a manufacturing corporation, incorporated under the Act of 1875, which stated in its certificate that the business to be carried on in the state was manufacturing, and that the portion of its business outside the state was the selling of its manufactured products in the cities of New York and Brooklyn, could under the Act of 1892, remove its manufacturing plant to another state. It was held by the Court of Chancery that such a removal was a material change in the object of the company which could not take place without the consent of every stockholder. The Court held, however, that a removal to another part of the state was not a material change. (Stickle v. Liberty Cycle Co., 32 Atl. Rep. 708.)

Section 7 of the present act was apparently drafted for the purpose of meeting this case, and where the certificate of incorporation is properly

drawn the power can be put in the directors to carry on the business of the company wherever from time to time they deem will be best suited to the objects of the company.

Where the corporation is to conduct its operations in another state it is important to ascertain what laws of that state are applicable to foreign corporations. Such laws are, in some instances, in express terms applicable to foreign corporations, and other laws, applicable to corporations generally, have been construed by the courts to apply to foreign as well as domestic corporations. For an example of the latter, see Williams v. Gaylor, 185 U. S., 157, where it was held that a statute of California prohibiting the directors of a mining corporation from selling or encumbering its mining ground unless ratified by the stockholders, applied to foreign corporations, having been so held by the Supreme Court of California, and that such a requirement was not a regulation of the internal affairs of the corporation, but had reference to the conduct by it of its business.

"The power of a state to impose conditions upon foreign corporations is certainly as extensive as the power over domestic corporations." (Dayton Coal & Iron Co. v. Barton, 183 U. S., 23.)

Liability of stockholders under laws of other states.

The laws of some of the states with respect to the liability of stockholders are in express terms made applicable to foreign corporations. Thus it has been held by the United States Supreme Court construing a California statute to that effect, that where a corporation was chartered in Colorado for the express purpose of carrying on part of its operations in the State of California, the stockholders were liable to creditors ac-cording to the provisions of the California statute. (Pinney v. Nelson, 183 U. S., 144.)

8. The certificate of incorporation shall be signed in person by all the subscribers to the capital stock named therein, and shall set forth :

I. The name of the corporation; no name shall be assumed already in use by another existing corporation of this state, or so nearly similar thereto as to lead to uncertainty or confusion;

II. The location (town or city, street and number, if number there be) of its principal office in the state;

III. The object or objects for which the corporation is formed; IV. The amount of the total authorized capital stock of the corporation, which shall not be less than two thousand dollars,