75 Md. 304 | Md. | 1892
delivered the opinion of the Court.
The Act of 1856, chapter 97, incorporated the “Maryland Agricultural College.” By the provisions of that statute commissioners were appointed and empowered to receive, and they did receive, subscriptions to the capital stock of the body corporate. The Act further prescribed the method of electing twenty-two trustees to manage the affairs of the college, and by the eighth section, upon the conditions therein set forth, but not necessary to he stated here, appropriated, out of the State Treasury, the sum of six thousand dollars as an annual endowment of the college. The eleventh section enacted, “that the Gfeneral Assembly of Maryland hereby expressly reserves the right, at any future session, to withdraw any part or all of said endowment of six •^thousand dollars, hereinbefore appropriated, or to repeal, vacate, and make void all and every part of the incorporation aforesaid, and all rights, privileges, and immunities hereinbefore mentioned, and the endowment and donation of the six thousand dollars to he paid out of the treasury as hereinbefore provided for, shall cease to be paid.” By the Act of 1858, ch. 265, the number of trustees was increased to twenty-five, and by subsequent legislation in 1865, chapter 178, the Comptroller of the State was directed to make additional payments to the college, and the State Board of Education was declared to he ex officio members of the board of trustees. Notwithstanding the State’s-liberal aid, the college seems to have become heavily involved in debt, and in 1866 the Legislature by chapter 53 of the Acts of that session,
The Circuit Court decided that the Acts of 1880, chapter 231, and 1888, chapter 326, were unconstitutional and void and ordered a mandamus to issue as prayed. From that order this appeal was taken.
The grounds upon which the alleged invalidity of this legislation is rested by the Circuit Court are — -first, that the Act of 1866, chapter 53, was a contract between the State and the stockholders of the college, which could not be impaired by subsequent enactments; and secondly, that whilst the original charter of the college — the Act of 1856, chapter 97 — contained a provision reserving to the State the right to repeal and totally abrogate the char
When the charter was granted by the Legislature the Constitution of 1851 was in force. By section 41 of Article 3 of that Constitution it was provided that “ corporations may be formed under general laws, but shall not be created by special Act, except for municipal purposes, and in cases where, in the judgment of the Legislature, the object .of the corporation cannot he attained under general laws. All laws and special Acts pursuant to this sectionmay be altered from time to time, or repealed A * * ” This provision was designed to bé, and as far as language could make it so was, a clear and explicit limitation upon the power of the General Assembly to pass thereafter any Act of incorporation not subject to repeal or amendment by legislative authority. Upon the adoption of that Constitution, every charter thereafter granted, even though it contained no reservation of the right to repeal ■or alter it, was subject to the paramount provision of the organic law, which was binding on the Legislature and the corporation alike. The right of the State to repeal or alter an Act of incorporation was the express •condition upon which the grant was made in every instance after the adoption of the Constitution of 1851, •and an acceptance of the grant was an unequivocal, as it was an irrevocable, acceptance of that condition. This right could have been no more effective had it been written in the charter in the very words of the Consti- ■ tution itself; and its exercise by the Legislature can not, y when it invades no vested right of property, be successfully resisted in the Courts as an infringement of a contract, because the constitutional provision is a term or stipulation embodied in the contract to which the State and the incorporators are equally parties. But it is^ needless to pursue the subject further, for it has been distinctly, and we had supposed finally, settled by this
There is nothing in the cases of Norris vs. Trustees of the Abingdon Academy, 7 G. & J., 7; Regents of the University of Maryland vs. Williams, 9 G. & J., 365, and Pennsylvania Railroad Co. vs. Balto. & Ohio Railroad Co., 60 Md., 263, relied on by the appellees, at all in conflict or at variance with these fundamental principlés, for those cases all involved questions arising under charters which contained no reservation of the right to repeal or amend, and which had been granted prior to the adoption of the Constitution of 1851. Under such conditions, the charter being a contract between the State and the incorporators, the State was powerless, without the consent of the corporation, to change, by any enactment whatever, the terms of a perfected contract. It was the absence of such a provision from the organic law as the Constitution of 1851 contained, or the absence of a reservation of like import from the charters themselves, which marks the broad and palpable difference between those cases and the one at bar. It is certainly true that “ beyond the sphere of the reserved powers, the vested rights of property in corporations in such cases are surrounded by the same sanctions and are as inviolable as in other cases,” Sinking Fund Cases, 99 U. S., 721; but the case before us involves no question of vested rights at all.
The State, as we have seen, is, and since 1866 has been, an equal joint owner of the Maryland Agricultural College. It is, consequently, interested in its management. It has donated to the College large sums of'
Nor is there anything in the Act of 1866, chapter 53, which could possibly deprive the General Assembly of the power to pass either the Act of 1880, chapter 231, or the subsequent Act of 1888, chapter 326. The Act of 1866 was, it is tru,e, accepted by the stockholders of the College, and whilst such of its provisions as related to a sale to the State of a one-half interest in the property, when accepted, undoubtedly formed a contract which neither party could, without the consent of the other, disregard, its other provisions relative to the number of trustees and the mode of electing them, were matters affecting merely the government of the affairs of the corporation, and were clearly within the control of the General Assembly, and subject to modification by it under the Constitutions of 1864 and 1861.
The case of New Jersey vs. Yard, 95 U. S., 104, so much relied on by the appellees, has no application to the case at bar. The Constitution of New Jersey contained no such provision as we have cited from our own, though there was a statute which declared that every Act of incorporation should he subject to amendment and repeal. The Supreme Court held that where a charter had been granted containing a clause reserving the right to amend, and subsequently an amendment was passed and accepted containing no such reservation, the amendment could not thereafter be altered without the consent of the corporation. The reason assigned was that, as the restriction upon the Legislature was only an Act of Assembly, the Legislature might disregard that restriction, and by disregarding it repeal it to that extent; and that the failure to incorporate the reservation in the amendatory Act was a repeal of the reservation in that instance. But the Court was careful to distinguish that case from those which might arise and had arisen in States where the organic law contained, as in Maryland, the reservation and restriction we have cited.
But there is still another view of the case that is, in our opinion, equally conclusive against the right of the petitioners to have the relief they seek; and it is this: Assuming the Acts of 1880 and 1888 to have been passed without constitutional authority, they were acted on and acquiesced in by the stockholders of the college with full knowledge of their provisions, and thereby were legally accepted. Acceptance of a charter need not he proved by a vote of the stockholders; it may he inferred from an exercise of the powers granted. New Central Coal Co., et al. vs. George’s Creek Coal and Iron Co., 37 Md., 537; Hammond vs. Straus, 53 Md., 1. This is equally true of an amendment to a charter. Now, as we have said, by the Act of 1880, the number of.trustees was reduced from tioénty-two to tiuelve, six of the twelve being officers of the State, one, the United States Commissioner of Agriculture, and five constituting the representation of the private stockholders. The number of trustees these stockholders were authorized to elect was distinctly restricted to five instead of seven allowed by the Act of 1866. For seven years consecutively the stockholders forebore to elect seven, and only elected five. There was no Act of Assembly in force empowering them to elect less than seven save the Act of 1880. In annually electing but five trustees they of necessity acted on and acquiesced in its provisions. They adopted those provisions as unmistakably as if they had passed a formal resolution to that effect. The Act of 1888, still restricting the number of trustees on the part of the stockholders to five, was also acted on, in the same manner, for three years. After this affirmative recognition of and deliberate acquiescence in the terms of these statutes, it is too late for the stockholders to say in a
It follows from the views we have expressed that the order appealed from must be reversed, and the petition for a mandamus must be dismissed.
Order reversed, and petition dismissed, with costs in both Courts.