CHAPTER XXII.

OF THE DISSOLUTION AND REVIVAL OF A CORPORATION.

§ 1. In England, it has been much questioned, whether a municipal corporation could be dissolved except by the death of all the people in the place, or, it may be, by act of parliament. There is certainly nothing in the nature of corporations of this kind which renders them incapable of dissolution; and the only substantial difficulty seems to be, the hardship of making the local government and privileges of the many dependent upon the acts or neglects of the few, who usually enjoy the principal franchises, and fill the offices, of municipal corporations. It is evident that this objection applies with less force to private corporations, many of which, in our own country, are little more than limited partnerships, every member exercising through his vote an immediate control over the interests of the body. Indeed, the general force of the objection is almost done away by the fact, that even those who contend for the indissolubility of municipal corporations admit, that they may be suspended, or practically dissolved; that the members cannot enjoy the principal advantages of incorporation without a renovating grant from the sovereign power. By far the better opinion at the present day, as we shall have occasion to consider, is, that even municipal bodies may be dissolved, and their privileges and franchises granted to a new, or to the old set of corporators. In England, a corporation may, at least to all practical purposes, be dissolved, first, by act of Parliament; secondly, by the loss of all its members, or of an integral part, by death or otherwise; thirdly, by the surrender of

1 Willcock on Mun. Corp. 325, 326.

2 Ibid. 327.

its franchises; and, fourthly, by forfeiture of its charter, through negligence or abuse of the privileges conferred by it.'

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2. By the theory of the British constitution, parliament is omnipotent; and hence an act of that body would undoubtedly be effectual to the dissolution of a corporation. It is to the honor of the British nation, however, that this power, restrained by public opinion, rests mainly in theory; and except in the instances of the suppression of the order of Templars in the time of Edward the Second, and of the religious houses in the time of Henry the Eighth, we know of no occasion on which parliament have thought proper to dissolve, or confirm the arbitrary dissolution of corporate bodies. When, in 1783, a bill was introduced for the purpose of remodelling the charter of the East India Company, it was opposed by Mr. Pitt and Lord Thurlow, not only as a dangerous violation of the charter of the company, but as a total subversion of the law and constitution of the country. In the nervous language of the latter, it was "an atrocious violation of private property, which cut every Englishman to the bone." Indeed some of the greatest jurists and judges of England have not hesitated to declare, that an act of parliament against common right and natural

12 Kyd on Corp. 446, et seq.; Willcock on Mun. Corp. 325, et seq.; 1 Black. Comm. 485; 2 Kent Comm. 245; see Boston Glass Manufactory v. Langdon & Trustee, 24 Pick. (Mass.) R. 52; McIntyre Poor School v. Zanesville Canal Co., 11 Ohio Rep. 203.

21 Co. Lit. 176, n.; Black. Comm. 160, 485; 3 Kyd on Corp. 446, 447; Vanhorne's lessee v. Dorrance, 2 Dallas (Penn.) R. 307, 308, per Patterson, J.; Dartmouth College v. Woodward, 4 Wheat. R. 643, per Marshall, C. J.; 2 Kent Comm. 248.

3 See Sawyer's Arg. Quo Warranto, 13; 2 Kyd on Corp. 446.

4 1 Hallam's Const. Hist. of England, 94, et seq. Some of the great foundations were held to fall, against every principle of law, by the attainder of their abbots for high treason; and these illegal forfeitures were confirmed by act of Parliament. The smaller convents, whose revenues were less than £200 a year, were suppressed by act of Parliament, to the number of three hundred and seventy-six, and their estates vested in the crown. Ibid.

97.

equity is void.' Corporate property and franchises, important as they usually are in amount and extent, and undefended by the same strong sympathies which guard individual rights, offer a more tempting and easier spoil to misguided power, whether it reside in the prince or the people; and we find a late elegant and critical historian regarding them as upon a different footing from the property and rights of private persons, and admitting the full right of the legislature to remould and regulate them in all that does not involve existing interests (as the interests of the successors) upon far slighter reasons of convenience. It is a happy feature in the constitution of our own government, that the power of the legislatures of the dif ferent States resembles in this particular the prerogative of the King of Great Britain, who may create, but cannot dissolve a corporation, or, without its consent, alter or amend its charter." In the tenth section of the first article of the Constitution of the United States it is declared, that, "no State shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, er post facto law, or law impairing the obligation of contracts, or grant any title of nobility." Under this clause it has been settled, that the charter of a private corporation, whether civil or eleemosynary, is an executed contract between the government and the corporators, and that the | legislature cannot repeal, impair, or alter it, against the consent, or without the default of the corporation judicially ascertained and declared. A distinction was, however, taken be

1 Bracton, L. 4, fol. 228; Dr. Bonham's Case, 8 Co. 234, per Coke, C. J.; London v. Wood, 8 Mod. 687, 688, Per Holt, C. J.; Day v. Savage, Hob. R. 87, per Hobart, C. J.; and see The Regents of the University of Maryland v. Williams, 9 Gill & Johns. (Md.) R. 408, 409, Buchanan, C. J. 21 Hallam's Const. Hist. of England, 101, 102.

3 Rex v. Amery, 2 T. R. 568, 569; Sir James Smith's Case, 4 Mod. 54, 55, arg.; Rex v. Passmore, 3 T. R. 205, 206, arg.; Dartmouth College v. Woodward, 4 Wheat. R. 657, 658, per Washington, J., 675, per Story, J.; 2 Kyd on Corp. 447; 2 Kent Comm. 248.

4 Constitution of the United States, Art. 1, § 10, 1.

Dartmouth College v. Woodward, 4 Wheat. R. 518; Fletcher v. Peck,

tween private corporations, and public, such as counties, cities, towns, and parishes, which existing for public purposes only, the legislature have, under proper limitations, a right to change, modify, enlarge, or restrain, securing, however, the property to the use of those for whom it was purchased.' And corporations, created by the King of Great Britain previously to the revolution, are equally within the protection of the constitution with those since created by the different States; for the dismemberment of empire, it is well settled, caused no destruction of the civil rights of individuals or corporate bodies. But it has been held, that a provision in the act of incorporation, which gave a summary process to a bank, was no part of its corporate franchises, but as the mere remedy, and not the right, might be repealed or altered at pleasure by the legislative will." And a law raising a commission to visit a bank, examine its

6 Cranch, 88; The State of New Jersey v. Wilson, 7 Cranch R. 164; Terrett v. Taylor, 9 Cranch, 43; The Town of Pawlet v. Clark, 9 Cranch, 292; Wales v. Stetson, 2 Mass. R. 143; Enfield Toll Bridge Co. v. Connecticut River Co. 7 Conn. R. 53, per Daggett, J.; McLaren u. Pennington, 1 Paige (N. Y.) Chan. R. 107, per Walworth, Chan. ; 2 Kent Comm. 245, 246; Green v. Biddle, 8 Wheat. R. 1; The Society for establishing useful Manufactures v. The Morris Canal & Banking Co. per Chan. Williamson, cited Halst. Dig. 93; The Regents of the University of Maryland v. Williams, 9 Gill & Johns. (Md.) R. 402, 403; Payne v. Baldwin, 3 Smedes & Marsh. (Miss.) R. 661; Coles v. the County of Madison, Bre. (Ill.) R. 120; Le Clercq v. Gallipolis, 7 (Ohio) R. 217; State v. Commercial Bank of Cincinnati, 7 (Ohio) R. 125; State v. Wash. Soc. Lib. 9 (Ohio) R. 96.

1 Dartmouth College v. Woodward, 4 Wheat. 694, 695, 659 to 664; Hampshire v. Franklin, 16 Mass. R. 76; Marietta v. Fearing, 4 (Ohio) R. 427; 2 Kent Comm. 245.

Dawson's Lessee v. Godfrey, 4 Cranch R. 323; Terrett v. Taylor, 9 Cranch R. 43; Dartmouth College v. Woodward, 4 Wheat. R. 518, 706, 707; Society, &c. v. New Haven, 8 Wheat. R. 481; People of Vermont v. Society for Propagating the Gospel, 1 Paine C. C. R. 653.

3 Bank of Columbia v. Oakley, 4 Wheat. R. 245; and see Young v. Bank of Alexandria, 4 Cranch R. 384; McLaren v. Pennington, 1 Paige (N. Y.) Chan. R. 107, 108, per Walworth, Chan.; Sturges v. Crowninshield, 4 Wheat. R. 122.

officers, who are compelled to testify under a penalty, and if the bank is in a condition dangerous to the public, to apply to a justice of the Supreme Court for an injunction and the appointment of a receiver, is not unconstitutional on the ground that a suspension of the proceedings of the bank by injunction diminishes the period for which the bank by charter is empow ered to act, since this is but a process in the administration of justice. In consequence of the construction that has been put upon the clause of the constitution above quoted, it has become usual for legislatures, in acts of incorporation for private purposes, to reserve to themselves a power to alter, modify, or repeal the charter at their pleasure; and as the power of modification and repeal is thus made a qualifying part of the grant of franchises, the exercise of that power cannot of course impair the obligation of the grant. Nor can a creditor of the corporation, in such case, interpose a valid objection to the constitutional power of the legislature to repeal the charter, on the ground that such an act would prevent the prosecution of a pending suit by him brought against the corporation in which property had been attached. And where the legisla ture has, under a general statute, reserved to itself power to wind up the concerns of banking corporations, those provisions of the statute calculated to apprize all interested of the fundamental change about to be wrought should be complied with, in order to give legal efficacy to the acts done under it; other wise the property of the corporation will not be divested, and its charter will continue in force. It is obvious from the distressing consequences which ensue the dissolution of a corpo

1 Commonwealth v. Farmers and Mechanics Bank, 21 Pick. (Mass.) R. 512; and see Commercial Bank of Rodney v. The State, 4 Smedes & Marsh. (Miss.) R. 439.

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* Wales v. Stetson, 2 Mass. R. 146, per Parsons, C. J.; Dartmouth College v. Woodward, 4 Wheat. R. 708, Story, J.; McLaren v. Pennington, 1 Paige (N. Y.) Chan. R. 108, 109; Enfield Toll Bridge Co. v. Connecticut River Co. 7 Conn. R. 53, per Daggett, J., 2 Kent Comm. 246.

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Read v. Frankfort Bank, 23 Maine R. 318.

Farmers Bank of Delaware v. Beaston, 7 Gill & Johns. (Md.) R. 492.