*1 478 The Miller State. of the case.
Statement Miller “ York, may in 1826, made ordains that corporations
A constitution New o£ laws, by but shall not be created act general special under be formed cases;” general special and also “that and in all laws except certain section, from to time acts, pursuant may to this be altered time passed 1828, Y’ork, passed a statute of enacts And New A.D. repealed.” “ be every corporation of that shall thereafter charter alteration, subject suspension, repeal, legislature shall legislature.’’ discretion of the 1850, things, general passed railroad law author- In this state was corporations of railroad with thirteen directors. The izing the formation being this company general subsequently of a under law con- formation $800,000, a road capital fifty long, to build miles templated, with a $300,000 city Rochester to legislature authorized the subscribe company accepted if the it; subscription, and enacted that $75,000 it, director for every one subscribed appoint should city four say, directors out the thirteen contem- appoint is to should stockholders, course, ; appointing remaining other nine. plated accept the and the subscription, did stockholders other The $677,500; $255,000. only city paid up than the subscribed but Then eighteen for all but miles of the road enterprise abandoned. $300,000 city had subscribed. In 1867 paid city giving appoint another act passed one director for $42,855.57 city; of stock owned every other words establish- among same existed the subscribers ing the ratio that for the slock at subscription was made. The effect original give time the was to to leave the stockholders city sevendirectors and but six. These stockholders, making regarding act 1851 last contract that four, nine directors and the they should have and that the act contract, Meld, violated that elected their old nine. quo on a warranto, not, did act of 1867 in view of the State constitution making alteration, suspension, the act charters contract, such a that the act repeal; make was constitu- tional. New York; Court the case Supi’eme
Error thus: being 1 of article 8 of the constitution the State,
Section just A.D. ordains as named, follows: adopted “ be formed under may laws, but Corporations shall certain created cases. by special All except not gen- acts pursuant this special passed laws section eral be time or time to repealed,” from altered Dee. The State. *2 of case.
Statement title of the Revised And 3 of the first of 18 chapter part of enacts Statutes thus: be of hereafter “The charter that shall every corporation be subject shall alteration, suspen- sion, in and the discretion of the repeal, legislature.” this of the constitution and this
With enact provision of in force, ment of the Statutes the State Revised legis of for lature New York passed and of railroad of formation companies regulation of not less same. This act authorized number persons, form for the of con than twenty-five, company purpose and for railroads maintaining, operating public structing, use, and this to make articles of . . for and . purpose sign in which the name of the should be association company from'which and to which the road was stated, places the amount which constructed, stock, capital mile of con $10,000 should not be less than road every of which the structed, the number of shares stock capital of names and residence of and the consist, places should who should its thirteen directors company manage were and uutil others chosen in for the first their affairs year, to state what number of was shares Each subscriber place. were to be filed take; and the articles office would he and after certain of formalities of Secretary gone had who subscribed the them, persons through and all should become who association, stock articles the act “be a “shall,” in the says company, corpo holders in such articles association, the name specified ration by and to cor powers privileges granted shall possess and contained title provisions porations, the Revised Statutes.”* chapter first to be a railroad styled The formation Railroad Company, and Genesee Yalley Rochester the town of Rochester between Portage, city run a course it, contemplated south miles being fifty quoted; at top page. last above provisions The of the case. Statement miles should run the town of about Avon, eighteen through amend- south named Rochester, an act of the State just 3d, 1851, the charter of that ing city July passed to borrow which its common council were authorized stock the new credit to be invested in the $300,000, authorized, thus virtue of the company, subscription was declared all the privileges acquire stock- and be liable to the same responsibilities as otherwise holders provided company, except case elected to receive the act. In the railroad company *3 the were authorized to nomi- common council subscription, $75,000 one director for nate every capital appoint each election of direc- the at the time of stock held city by in the election could have no voice tors, but the city 1851, the arti- the 10th of July, directors. On remaining filed in the new were cles of association the of State, the Secretary office of organizing 1850, railroad act of already under to be the article was declared The corporation quoted. and main- created for purpose constructing, owning, the town of from the of Rochester to a railroad city taining miles, with a as distance, said, already fifty Portage, into shares $800,000, divided $100 stock of capital June, 1852, the 15th mayor each. On Rochester and, for shares of the stock company, subscribed the directors of the rail- at a same day, meeting on was Other unanimously accepted. such road, subscription amount of $677,500, stock so for subscribed parties the stock taken subscribed, amount including whole whole amount of $977,500* was capital the city, was: up stock fully paid Rochester,......$300,000 city
By 255,200 By parties,....... all other $555,200 amount,......- Total was of the stock subscribed The balance extinguished this time also the March Before 9th, before forfeited had aban- Railroad and Genesee Company Valley Rochester Dec. v. The State.
Argument for the nine directors. Avon, of their road south of doned the construction all and franchises their beyond point assigned another corporation.
On act was 1867, the 9th of May, passed, amending the common council authority act of 1851 giving of stock owned $42,855.57 one director every appoint same words, ratio that in other establishing city; subscribers for stock at the time the existed among The effect of this made. act was subscription original Rochester seven of appoint city give and the other directors, thirteen stockholders six. At the election, however, next annual other thau stockholders, 8d, the act of made 1851, a con- July city, alleging and the other that the stockholders, tract between the city should elect but four directors out of the thirteen, the election 1867, that the act of vio- seven, authorizing of that contract, to elect one lated the proceeded obligation directors Miller and others as the directors eight eligible by council, them; the'same and on common day pursu- ance of the act of seven other appointed persons directors them. Thereupon, eligible attorney-general on relation of Powers and York, of New the six other *4 the issued a directors by warranto appointed city, quo against co-directors; and the and his ease Miller eight coming that court of held that the the Court Appeals appointment and the was election of the valid, the nine directors city by side Miller and his other irregular. the co-directors now by the case here. brought involved was the
The question only of constitutionality If that act was act of constitutional the the decision was court correct, to be the State was of affirmed. If was a violation of the Constitution the of the United was the decision erroneous was States, to be reversed. Bacon and Selden, Theodore H. Messrs. R. plaintiff the case and submitted error, also the orally, argued opinions certain of court below of who judges dissented A there. from the one follows judgment VOL. XV. Ot The
Argument nine for the directors. made it The act of lawful for two 3d, July corpora- into which one them tions to enter an arrangement become a in the other if both should con- stockholder might ar- sent, and declared to the what the parties rights each if availed should be as between other they rangement themselves of this There was no exercise permission. will further than to confer this all beyond legislative power; the mutual consent of the depended parties. The and the to the making acceptance subscription stock were acts of the parties, they thereby adopted conditions contained in the act of the and mutu- legislature consented to be them. The consent of ally governed each must be in consider- deemed to been party given ation thus and a other, assumed obligation was thus made valid contract between subscriber stock and the other stockholders railroad company, stockholders, such company representing it can be shown that the unless subject-matter arrange- one contract could be ment was not concerning to be made. made or authorized by this secured to Rochester, The arrangement, city four out thirteen direc- itself the appointing right absence, for in valuable its if the This right, tors. be should all of the company paid up, stock city holding not the stock have been able to ob- a minority might director of selection. In election con- tain surrendered to the of this city sideration privilege elect nine directors. remaining stockholders in consideration of that surrender, railroad company, to admit the four directors. Neither itself party bound acted to have on that this assumption can be presumed without its consent. could It changed arrangement that those interested well supposed were about to embarked, embark, had their capital who not have consented so would it, place amount large *5 hands of the had in the not been they stock secured city, of the control the afiairs of the the possibility against in so and invested uncertain a becoming changing Dec.
Argument for the nine directors. as a officers would body whose municipal corporation, no interest in the inducement personal no road and special to init the interest of its stockholders. manage
It will reserved however, argued, power alter, constitution York, and statutes of New to State or all charters of suspend repeal corporations, gives which the the terms power legislature change the number of received, and subscription to enlarge act of directors to be and that the appointed city, seven authorize the purports appoint directors four, instead of thus city majority giving instead is valid as board, a minority representation amendment of the charter railroad company. The reservation this object purpose conceded to have been to alienation prevent generally the State of such franchises, in form that corporate they from could held free State against legislative control which interests from time time public might When it was settled Court of the Supreme require. States that an unconditional charter to a United cor- private contract between State and was a poration corpora- not be State tion, laws, which could and that impaired by withdrawn, could never be several franchises thus granted to make no more such the States resolved irrevocable either laws or contracts, and provisions inserted the themselves condition such charters charters be altered repealed. might the constitution has In New York deprived charters, there is irrepealable granting amake of this now no description which grant on the as an irrevocable contract shall operate is for benefit of this the State State. But reservation the relations between and affects the cor- alone, only of this reserved power exercise un- may, poration. affect interests which private indirectly rights doubtedly,- and franchises of the the powers corpo- are dependent upon The individual in- no others. itself, ration members corporation, persons terests *6 Miller The State. v. the nine directors. Argument for cannot be acted it, upon directly by legisla dealing the charter. the form an amendment of ture even under a between A individuals or contract between to the action of and individuals is not subjected legisla it is embraced in a charter or ture the mere fact that a had with or results from amendment to a dealing has an enactment. The State to reference to such power contracts where it has in them revoke its own making such But it has no reserved impair right. even of contracts of its citizens, corporations lawful such contracts relate to it. When created rights not to the individuals and corporation, any powers a reserve such would ineffectual. And attempt is no more effectual for such a State constitution purpose than a statute.* Railroad, and New York v. Hackensack Co.,†
In Zabriskie is that' the reservation in a charter stated, the doctrine alter, amend, at time it, the State repeal for its own benefit and is not in the State reservation as affect the between each corporators tended not other; that it does State authorize one empower their for own benefit and the stockholders at their their contract with the other mere change part, option and franchises is confined powers And the charter. the case cited although corporation by iii a manner doctrine was inconsistent with some applied none the latter will be our own found to adjudications, with the doctrine itself. conflict and Lincoln Railroad v.Co. the charter In Oldlown Veazie‡ 11,000 not less than shares should be sub required could before be enforced subscriptions scribed calls. subscribed for 1000 defendant shares. The 9500 shares Only A subscribed all. act was then were supplemental passed, the limit to 8000 shares. It was held that the re reducing to amend the charter did not authorize served Howard, Dodge Woolsey, Greene, 831. 8 C. E. Maine, Dec. 1872.]
Argument nine directors. of the stockholders between thems liability change elves.* Bank,‡
The cases of Reciprocity Sherman Smith† are in *7 side, which will be relied probably upon by these char strict accordance with views. alterations chief related to the franchises. One of the there, ters privi . act of be incorporation may leges without as an that of business body doing aggregate incor which, members for the individual the liability the acts attach. By would necessarily amendatory poration, was taken away the privilege enjoyment prospective made to from there. No impose attempt corporations contracts of the on members corpo the existing liability alike, and affected the whole ration. The amendment body make should declared all contracts that for corporation should be liable. This the members 1850, after January, reserved, and of the within the scope power was clearly case. In all the different from the adju present essentially exercise of this to be found in which dications has related to cor the amendment has been maintained affected and rights franchises only incidentally porate had in interest which stockholders, they through and itself, affected interests franchises of corporation have alike. The cases which the stockholders gone of all of this are within this power§ support length greatest those in which corporate powers are limit. They stock, and the sub after subscriptions been enlarged this held not scribers discharged enlargement In these and kindred cases the enterprise. the corporate and duties of the cor affected powers alteration purely and to the State in its l-elations public, poration well as the of stock stock as purchaser the subscriber Calef, Wallace, 10; Trapnall, 2 v. Woodruff v. 10 see Hawthorn And Howard, 190; 15 Id. 304. Curran Black, York, York, 22 New New Thatcher, v. Schenectady Saratoga York, Plankroad 11 New Co. § 102; v. City Dudley, York Railroad Buffalo New Co. Id. 336. v. The State. for the nine directors.
Argument reference have contracted with must be deemed to over those subjects. conceded exercise of are other limits There acknowledged amendment where it trenches the reserved In vested of the corporation. rights rights property is maintained Essex the doctrine Company* v. Commonwealth “ ac in a charter have been that, when under power rights no amendment of the charter vested, and become quired take which have become can away property exercise of the vested under the powers legitimate granted.” Boston See Colony Roxbury also Old Railroad† Durfee and ProvidenceRailroad.‡ however, that,
It will be conceding principle argued, and its that contracts between the stockholders, from provisions pro- though resulting tected the Constitution United States when they *8 to franchises of the do not relate the corporation, yet vote their of stockholders to on stock or to right appoint a directors or chartered of right managers to the reservation in the constitution. State subject This leads to the result that position necessarily right to vote of in business stockholders private corporations their stock under the control of is wholly legislature; contract; and that whether that it cannot be secured by any charter or under a con- claimed under the of the provisions at it tract made in authority, may pursuance legislative a be taken in ioto from the stockholders by time away any it be mere exercise of the will or may legislature; taken from and vested in the residue. portion and the inevitable, This result is for if the right toting in extent of the voice which each stockholder shall have of the and the affairs corpora- management property are the act tion mere charter or franchises created by lights sus- and within the to incorporation, scope power constitution, alter, they reserved pend, repeal withdrawn even cannot, by authority legislature, 230, Allen, Cushing, Gray, 239. 5† Dec. The Argument for the nine directors. can at time the exercise of that
from they power, their without the stockholders be taken from away entirely consent. is the
The most essential element of right property control the object to management manage as property. which is common parlance designated en- in a corporate Is it property argued investing the owner consents management terprise, control of the legislature? of this extent; a certain This is true to fallacy consists as now point question applicable argument the owner the extent to which omission qualify with his own thus his has, parted investing property, over it. has doubtless restricted hims’elf to the use of He prop- invested, while in such business as the State so erty sanction, and such State may per- through agencies has him to but he not consented mit appoint; within those over its limits. his control management which creates the artificial must nec- body essarily prescribe organs through is a But this different from it shall act. arbitrarily thing itself, possession through taking for whose benefit the parties corpora- property have antici- cannot be tion was created. presumed They a charter them privilege managing giving pated their in a certain could benefit, own way, their property amendment into a reserved transformed this *9 or should transfer from them to vehicle which all they over property control appointees, a doc- To hold such invested enterprise. corporate all invested corporate trine would be place property of the Federal protection beyond pale enterprises nearer to one of an act would Such approach Constitution. confiscation than legislation. so the act of works is no answer
It say which it If the result. arrangement secure equitable contract, no difference a it makes assumes to change The Opinion of the court. whether it was beneficial to one or another. unduly party has no over it. power is misnomer to call the act
It a an amendment the charter of the railroad It afiects no company. corpo- or franchise of the Its more rate company. appropri- ate would be “An act to the rights description enlarge one of the stockholders of the company.” Cochrane,
Mr. J. contra. C. of the court. Mr. CLIFFORD delivered Justice opinion if franchises, corporations, Corporate private the nature of corporators, accepted partake duly if circumstances, aud under such estates, grant, legal its terms, and without condition or reser be absolute any intent, a a different becomes contract vation, importing of that clause of the Constitution within the protection that no State shall law which ordains pass any impairing of contracts. Charters of private corporations obligation as executed contracts between the State and are regarded and the rule is well settled that the the corporators, legisla if the charter does not contain reservation or ture, or the nature of the contract, modifying limiting provision alter a cannot or such charter repeal, impair, against without the default of the corporation, consent judicially and declared. ascertained Subsequent legislation, altering where there is no such such reserva or modifying if it is unauthorized, is tion, prejudicial plainly and was without their assent. corporators, passed is in the charter, such it is Where provision incorporated and that the that it ex clear qualifies grant, subsequent reserved cannot be as an of that ercise regarded of the Constitution.* Such within the prohibition alter, is the an act also, modify, repeal the State reserved to a frequently incorporation, gen to all acts of or to certain incorporation, eral law applicable College Cases, Wallace, Pennsylvania *10 Dee. Miller of opinion.
Restatement the case in the case it is be; classes in which same, of as the case may whenever it clear that be exercised equally power may one which falls of appears incorporation was reservation, within the and that the charter even law, of subsequent though passage general nor allusion condition, charter no such contains such a reservation.* fact, ascer- of not must be first
Matters dispute, though in the case tained, in that the involved order questions for decision. stated the ma- Briefly presented properly terial are as follows, facts appears by finding and court from concessions of jurisdiction, of original the parties: is a
That the railroad company corporation duly organized act óf on railroad under the passed and that the articles association were, 2d April, filed in on the 10th office July, year, succeeding state; the articles of association secretary construction of railroad from for the Rochester provided miles, a distance fifty capital eight Portage, into shares dollars, thousand divided each for hundred as therein the stock sub dollars, one hundred specified; amounted for the scribed paid unpaid, corporation, shares, hundred and seventy-five thousand seven nine five hundred shares five thousand fifty-two which only certificates have been for which ever were paid, fully of Rochester, was conferred upon city Authority issued. to subscribe the charter of an act to amend city, railroad amount stock of that or purchase and the dollars, hundred provision three thousand or purchase of that virtue subscription that be liable all should acquire privileges, stockholders said com as other same responsibilities not to be ment in certain necessary except particulars pany, officers Pursuant to that authority proper ioned.† Cranch, Taylor, 9 Id. Peck, 136; Terret v. Fletcher 1851, p. Acts Session The State. *11 in of the case the opinion. Restatement the rail for that amount of stock of the subscribed the city and it officers the road the company, appears proper and railroad elected receive the subscription, company and that that the full amount of the was paid, subscription shares were issued to the the certificates of the city, duly since the and owner and that the has ever been holder city con Power was also number of said shares. of the whole re the elected the in case company ferred upon city, “ one di to nominate and ceive their appoint subscription,” dollars of rector for thousand capital seventy-five every time of each election at the stock held by municipality, was that directors, city provision further di have no voice in the election of should remaining of the at rectors; the common council city, consequently annual election of elected four— directors, time of each limited law to thirteen —and the the number being by elected without interference from the nine, stockholders arose from the fact that four authorities. Complaints city thousand and three hundred dollars hundred fifty-two subscribed other than had stock, of the by city, parties had been for never been nor certificates issued in, paid ever On unpaid contrary, any part subscription. in existence as before been stock, same was not having long and forfeited for non-payment, consequence extinguished had the construc of which the railroad abandoned company all their Avon, tion of their road south and assigned and franchises beyond point right way, property, so that as constructed another their railroad corporation, at Avon, terminates only operated eighteen railroad, of the three-fourth miles Control length. not when the of circumstances contemplated plan change in the hands of stockholders organized, being owning of the on the stock, minority March, 1861, 9th of enacted that common council of “ should have the to nominate and appoint director -of the thousand one company every forty-two dollars and five-sevenths of a hundred eight fifty-five stock of the said railroad held by capital dollar Dec. 1872.] opinion. case in the
Restatement of directors each election said at the time of city, the common council of Thereafter said company.”* each annual entitled at became claim, as the plaintiffs city, allowed seven of the number to elect election of directors w;ere elect entitled to and that the other stockholders law, six as authorized apportionment remaining only, Ac act of the amendatory legislature. prescribed at the annual common council of city, cordingly elected seven election held year, June succeeding *12 the stockholders, other but the directors, denying validity the old nine directors under act, the elected amendatory entered the so chosen law, and persons immediately upon, the said offices as directors of said cor used, and exercised as insisted and without warrant or authority, poration, any as defined the the of their by plaintiffs. Deprived by in action, the act the present plaintiffs brought amendatory in the Court warranto, the of a writ nature Supreme quo directors elected the nine the State, of the by alleging offices the of directors of stockholders usurped the was made and Service defend the railroad company. filed an was had, and answer. and ants Hearing appeared for the Court rendered plaintiffs, the Supreme judgment the cause transferred the defendants Court of and affirmed; where judgment thereupon Appeals, a sued out writ error and removed the record losing part}1 seek to reverse the court. into this of the They judgment that the act of the courts State upon State ground legis council of the lature, common to elect authorizing in thirteen directors the railroad seven company, and void their act of unconstitutional incor repuguant and in submit the fol support theory they poration, That of the before- propositions: siguers lowing (1.) articles of when .association, mentioned articles were the office of the in became state, filed a secretary corpo the name those articles, ration specified with all the by law privileges granted by general powers Acts p. Sessions v. The State.
Opinion the court. State That the subject.* privi powers (2.) thus were conferred and that the leges State, granted by as an act of and was an exe became grant, incorporation, cuted contract. That powers (8.) privileges charter are and defined in the railroad prescribed general law of the State. named as That persons corpora- (4.) tors a charter cannot be accept compelled nor modification or extension of the incorporation, powers whether conferred or modi privileges granted, fied or extended, act or virtue of a by special law. That a contract an act created (5.) incorpora tion, when once is unalterable either complete, party without the consent of other.
Undoubtedly powers railroad privileges in this case are the same as would have company been they if the had been act, and incorporated by special also be conceded that the when the articles of association were filed office of the secretary became state, an executed contract, to the restric- tions ordained constitution and to reservations *13 contained the law the State relat- general and also in the ing corporations, act, railroad general which it is admitted and defines the prescribes powers of the railroad privileges company.
Section one of article of the constitution of the State eight ordains as be formed under follows: Corporations may gen eral laws, but shall not be created act by special except certain cases. All acts laws general special passed pur suant to this section be altered from time to time or may repealed.†
Provision is aleo made the section the act by eighth the and liabilities of powers, defining privileges, corpora- tions, that the charter of that shall here- every corporation after be the shall be by altera- granted legislature subject §§ 618, Stats., 3 Edm. 1-4. 1846, Constitution Article § 1.
Dec.
Opinion of the court. in the discretion of the tion, suspensión, repeal, legisl ature.* for railroad
Articles association the incorporation in the be filed and recorded office cannot companies dollars of state until at least one thousand secretary to be made is sub stock for mile of railroad every proposed con nor without thereto, scribed complying second ditions in the section of railroad specified general act; and section of that such cor the first provides to the those en shall be subject provisions poration (except seventh in title three of acted contained section) chap of the first of the revised which statutes, ter eighteen reservation includes that the section containing eight, hereafter charter of that shall corporation every granted alteration, shall be repeal, suspension, reservation, therefore, discretion Such legislature.† State is not ordained constitution only and it is conceded has been enacted twice legislature, are force. those statutes in full Superaddéd that both of is the further contained in the one, those reservations forty- which act, railroad section of provides eighth at time annul or dissolve any any act, the effect of it is which, formed under this into the defendants, admitted is to incorporate grant which all seems revocation, supersede necessity remark further subject.‡ to the con Much consideration under given question Woodward,§ sideration in the case Dartmouth College was denied to amend the State charter the Crown before the Devolution, college by restrict the same without the consent of and modify the charter. Four de trustees under were propositions case, court in cided opinion being given by *14 was a That the charter contract within the Chief Justice: (1.) clause of Constitution which of that ordains the meaning law that no State shall obligation pass any impairing * Statutes, 1850, 212, Session Acts 1. 1 Revised 600. § Wheaton, 675. p. Ib. § The State. of the court.
Opinion not dissolved contracts. That the charter was (2.) alter- That the of the State Re'volution. acts legislature (3.) without the consent in a material charter, ing respect, an act was obligation corporation, impairing and void. That charter, and was unconstitutional (4.) a and not a under its private public college, corporation. were also two of the associ- opinions
Concurring given by ate in his re- Story, views, justices, Judge enforcing, a marked that where is thus created private corporation it is to no other Crown, the charter of control on the Crown what is or than expressly implicitly a the charter itself. be reserved Unless reserved Crown in for this virtue of its cannot, purpose preroga- amend the charter divest the alter or or tive, corporation or add or them, of its or diminish franchises, augment any or remove trustees, number of members, any the administration the funds, or control or com- change new to receive a charter. the corporators pel Court of Massa that adjudication Prior to Supreme decided that in a had chusetts rights legally vested corpora controlled or any cannot destroyed by tion subsequent for that be reserved unless statute, purpose the act of learned incorporation; judge legislature to that case remarked that the referred principles having down are so consonant sound laid justice, there policy, is that it difficult to resist the reasoning, impres and legal correctness, showing very plainly their perfect sion of valid if for that would purpose such legislation act Con incorporating company.* is reserved was the that such that learned opinion evidence clusive from his remarks in that derived subsequent also judge of a he which case, says same or franchises vested any powers takes away which or its officers, corporate private charter exercise of or controls the them, legitimate restrains Stetson, Case, Wheaton, 708; College v. Woodward Wales Dartmouth Massachusetts, *15 Dec. Miller court.
Opinion is a vio assent, or transfers them to other without persons, “ If charter, lation of the of the adding: obligations must be re such an it mean to claim authority served in the grant.”* it
Where such a provision incorporated and that the is clear that it subsequent qualifies grant, as an exercise that reserved cannot be regarded within the prohibition Constitution.† enacted it was associations,
Members of banking individu should not be York, law of New general banking was so unless it association, liable for the debts of the ally held, court but this in the articles of provided organization, statute that a in the case of v. Smith,‡ subsequent Sherman the shareholders of asso such a upon imposing liability charter reserved to law, as the ciation was valid legis or the act incorporation. lature the to alter repeal at as the bar, resisted a conclusion was Such earnestly was embodied in from such conditional exemption liability .the the de court overruled association, the articles charter the reservation in the fence ground alter the act paramount repeal controlling. both courts, instances,
Decisions of State repeated same have been made to the time, and since that before the Court case was before Appeals, When that effect. revision, here for the Court was removed before the record that the reserving decided provision legis Appeals law alter or repeal general banking lature the power association formed the contract every became the State it, modify prospectively and that under might article of the Fed without infringing or retrospectively shall that no State pass any ordains Constitution, eral and this court contracts, law obligation impairing case.§ affirmed judgment Wheaton, 712; Cooley’s Constitu Woodward, 4 College v. Dartmouth Limitations, 279. tional Wallace, Black, Cases, College Pennsylvania York, 146. Bank, 19 New & Oliver Lee Co.’s § v. The State.
Opinion court. under the constitution in not be enacted force Laws could law to create, alter, was passed, when the banking or renew without continue, politic *16 any body corporate, the assent of members in each branch two-thirds it was contended that the Consequently legislature. associations, members of such could created, subsequently not be affected the statute that shareholders by declaring association, should be liable the debts individually but the Court reaffirmed decision in the pre Appeals case, and determined that the statute ceding imposing was in that a valid exercise of the reserved liability and that its effect was that the franchises act, privileges were all times or at subject abrogation change the State; re by legislative power exercised served was one to be at time by any existing however and in mode constituted, legislative authority, law of the State for the time conforming organic being.* the same was in the case of
Exactly principle adopted it was an Railroad where held that alteration Dudley,† the charter of the made company, pur legislature, reserved suance to alter or the act, repeal its name, its changing increasing capital, extending did not a road, subscriber to the stock lia from discharge for his whether such alteration was or bility subscription, was not beneficial to the- him, alteration been having duly on made and fraud without company.‡ such a reservation it also held Under the same court, member of the holds his stock corporation attach to him of an ex- such liability consequence or renewal made without his tension applica- that the estate of an intestate consent, tion succeeds individual the owner on in his life- liability imposed in a stockholder, as a whose corporation charter would time Co., Bank, York, 14; 22 New Reciprocity White Railroad Barbour, 559. York, 14 New York, Thatcher, 11 also Plankroad v. New See
Dec. v. The State.
Opinion of the court. not if it had been renewed, was extended expired death; after his and that his administrator liable for debts of the contracted after the death of the intestate.*
Even the defendants admit that the exact question pre for decision in this case was decided sented Supreme the State in case between these same Court parties, them, and which was or some transferred subsequently and was there to the Court reversed Appeals, of local question involving exception law.† earlier the same Nearly forty years question, substantially was decided in the same the chancellor of that byway he in which held that where a State reserves to itself, charter it to a very grants private corporation, the act in altering, amending, repealing *17 a of the charter is valid subsequent corporation, repeal constitutional; that such a reservation in the charter of a common law is not upon corporation, principles, repugnant but a constitutional to the limitaliou of the grant, powers none, Few it is or will presumed, question granted.‡ of that but the rule, court here is correctness of the opinion is valid and the reservation effectual if equally that it exists of the or in a in the constitution prior general law.§ in a charter where the to an So insur legislature granting it, reserved the to alter ance subse right they that that if exercised right by declaring assets quently should into the hands of a such corporation pass receiver make assessments it upon premium notes, he might exercise of this was a held that legitimate reserved and that it authorized receiver fully to make power, it became whenever to in- necessary assessments carry Rochester, Hollister, York, 116; City 26 New Clarke ». Bailey v. 28 Hills, 631; v. 35 Id. 449. People Id. Hills, Barbour, 344. v. 46 People Paige Ch., 1 Pennington, McLaren 213; Cases, Wallace, 13 College General Pennsylvania Hospital v. In § Co., 227; Boxbury v. Railroad Co., Gray, Cushing, 6 424; Suy surance Barbour, 363; Angel ed., & Ames on Moore, Corporations, dam v. 9th § ' vol. xv. of the court.
Opinion into effect.* Power to tention of legislate, legislature a in charter to a founded such reservation a private well limit, is and it not without corporation, may certainly de be admitted that cannot be exercised to take away a virtue of such charter, stroy acquired by rights have become use of powers legitimate but it affirmed vested corporation, may safely ex the reserved and to almost exercised, any tent, into of the to effect carry original purposes grant as or to secure the due administration of its affairs so stock! and of creditors, of the olders protect for the Such a reserva disposition proper assets.† will held, it is not warrant the tion, legislature passing au laws the control of institution from re one change or to the fund another, sect divert of the donors ligious new use inconsistent with the intent and any purpose or to subscribers to the charter, whose stock, compel to waive conditional, the conditions subscription of their contract.‡ is made this case to show that the
Attempt right elect all of directors four had vested in except become the stockholders and that minority shares, owning elect amendatory giving seven vested but the court is impairs right, entirely a different opinion, conceding concession made the to the reserved to alter as ordained in the constitution repeal ’ *18 and also the several statutes mentioned, which to clearly give augment diminish number or to as the change apportionment ends of or the best interest all . concerned justice require. McMahon, Hyatt Barhonr, v. 25 Co., 253; Commonwealth v. Essex 13 Gray, Co., Miller v. Railroad
Barbour, 517. Missouri, Adams, 570; v. State Co., Zahriskie Railroad 3 C. E. Green, 180; Veazie, Maine, Railroad 581; Sage Hillard, Co. v. 15 B. Monroe, 357.
Dec. Field, JJ., dissenting. Bradley Opinion formed, All when the charter was parties supposed, when the stock were to paid, capi- subscriptions dollars, hundred and that tal stock would thousand eight of the thir- to elect four out conceded to the city right teen would a fair directors city proportion give conse- but circumstances number, whole changed to class of the subscribers of the failure of large quence their the stock to make subscriptions. Payments being good reduce the found it refused, the necessary route, as before stock, and to explained. shorten capital new made These from the legis- original changes design to the ends of the amendatory lation justice, necessary is of the and the court act was effect object, passed is a law and that that the valid amendatory opinion should judgment
Affirmed. with concurred Mr. Jus- BRADLEY, whom Mr. Justice FIELD, tice dissenting. in this on case, court from
I dissent opinion that the number agreement respect ground elect, Rochester should directors which of the charter not a company, agreement collateral it. Whilst the outside of and legislature may revoke own char- change reserve grant right reserve a it cannot to invalidate contracts tered right rights, as that would enable it to reserve the third between parties; all contracts, and thus evade validity impair the Constitution the United the inhibition of States. the next [See case.]