Mining Co. v. Anglo-Cal. Bank, 104 U. S. 192; 1891, Wait v. Nashua Armory Assn., 66 N. H. 581, 49 Am. St. Rep. 630, 14 L. R. A. 356; 1895, Merrill v. Hurley, 6 S. D. 592, 55 Am. St. Rep. 859; 1896, Board of Trade v. Nelson, 162 Ill. 431, 53 Am. St. Rep. 312; 1896, Ford v. Hill, 92 Wis. 188, 53 Am. St. Rep. 902; 1897, Swasey v. Emerson, 168 Mass. 118, 60 Am. St. Rep. 368; 1897, White v. Taylor, 113 Mich. 543; 1897, Jones v. Williams, 139 Mo. 1, 61 Am. St. Rep. 436, 37 L. R. A. 682; 1897, Brush, etc., Co. v. Montgomery, 114 Ala, 433, 21 So. Rep. 960; 1898, Pacific Bank v. Stone, 121 Cal. 202; 1899, Chambers v. Lancaster, 160 N. Y. 342, 54 N. E. Rep. 707; 1899, Moore Mercantile Co. v. Arnold, 108 Ga. 449, 34 S. E. Rep. 176; 1899, White v. Elgin Creamery Co., 108 Iowa 522, 79 N. W. Rep. 283; 1902, St. Clair v. Rutlege, 115 Wis. 583, 95 Am. St. R. 964. 62 As to functions and powers of vice-president, see: 1872, Smith v. Smith, Ill. 493; 1890, Huse v. Ames, 104 Mo. 91; 1891, Wait v. Nashua Armory Assn., 66 N. H. 581, 49 Am. St. Rep. 630, 14 L. R. A. 356; 1892, Shaffer v. Hahn, 111 N. C. 1; 1895, Missouri, etc., Co. v. Faulkner, 88 Tex. 649; 1897, Pond v. Nat'l Mtg. & D. Co., 6 Kan. App. 750. As to powers of secretary, see: 1889, Read v. Buffum, 79 Cal. 77; 1893, Hastings v. Brooklyn, etc., Co., 138 N. Y. 473; 1895, Wolf & Gaines v. Davenport, etc., R. Co., 93 Iowa 218; 1899, Colorado S. Co. v. Am. Pub. Co., 97 Fed. Rep. 843. As to functions and powers of treasurer, see: 1881, Mining Co. v. Anglo-Cal. Bank, 104 U. S. 192; 1889, Craft v. South Boston R. Co., 150 Mass. 207, 5 L. R. A. 641; 1893, Merchants' National Bank v. Citizens', etc., Co., 159 Mass. 505; 1894, Appeal of Philler, 161 Pa. St. 157; 1898, Chicago, etc., Co. v. Chicago National Bank, 176 Ill. 224; 1899, Colorado S. Co. v. Am. Pub. Co., 97 Fed. Rep. 843; 1899, First National Bank v. Garretson, 107 Iowa 196. As to functions and powers of general managers, general superintendents, general agents, cashiers, road-master, division superintendent, station-master, yardmaster, station agent, foreman, conductor, etc., see: 1884, The Louisville, Evansville & St. L. R. Co. v. McKay, 98 Ind. 391, where the cases are collected and discussed. Further as to powers of general manager, see: 1898, Helena National Bank v. Rocky, etc., Co., 20 Mont. 379, 63 Am. St. Rep. 628; 1898, Butte & B. Con. M. Co. v. Mont. Ore. P. Co., 21 Mont. 539, 10 Am. & E. C. C. (N. S.) 415, note 419; 1899, New South Brewing, etc., Co. v. Shuck, 20 Ky. L. Rep. 2005, 10 A. & E. C. C. (N. S.) 423; 1901, Spelman v. Gold Coin Mining Co., 26 Mont. 76, 91 Am. St. R. 402, 66 Pac. 597. SUBDIVISION III. INTERNAL RELATIONS AND CONSTITUTION. ARTICLE I. THE CORPORATE FRANCHISES. "A cor Sec. 195. The franchises of the corporation itself. poration aggregate is an artificial body of men, composed of divers constituent members, ad instar corporis humani, the ligaments of which body politic or artificial body are the franchises and liberties thereof, which bind and unite all its members together; and the whole frame and essence of the corporation consists therein. Argument of Sergeant Pemberton in King v. London, Carth. 217 (1692). See, also, People v. Utica Insurance Co., 15 Johns. (N. Y.) 358, supra, p, 113; Spring Valley Water-Works v. Schottler, 62 Cal. 69, supra, p.120, on pp, 45-WIL. CASES. 121, 123, 129; State, ex rel. Waring, v. Medical Society, 38 Ga. 608, supra, p. 136, on p. 137; Fietsam v. Hay, 122 Ill. 293, supra, p. 141, on pp. 141-142; Memphis & L. R. Co. v. Railroad Commrs., 112 U. S. 609, supra, p. 143, on pp. 146-147; Wales v. Stetson, 2 Mass. 143, supra, p. 150, on p. 151; Higgins Note to artiv. Downward, 8 Hous. (Del.) 227, supra, p. 152, on pp. 155–156. cle iv, supra, p. 157. and Note. It has been said that "All the functions of a corporation are in one sense franchises. The right to hold property in the corporate name, to sue and be sued in that capacity, to have and use a corporate seal, and by that to contract, and some others perhaps, are franchises, which constitute the very definition of a corporation."-Chief Justice Redfield, in State v. Boston, etc., R. Co., 25 Vt. 442 (1853). Also Perley, C. J., in Pierce v. Emery, 32 N. H. 507 (1856), says: "A corporation is itself a franchise belonging to the members of the corporation; and a corporation, being itself a franchise, may hold other franchises, as rights and franchises of the corporation, being itself a franchise, consists and is made up of its rights and franchises." It is sometimes difficult to distinguish between a franchise and a mere license. Many of the courts hold that the right of way of a street railroad company or the right to lay gas or water pipes, or erect telegraph or telephone poles in the streets of a city granted by the city council is a franchise. See, 1883, Hovelman v. Kansas City R. Co., 79 Mo. 632, on 643; 1885, New Orleans, etc., R. Co. v. Delamore, 114 U. S. 501; 1888, State v. Madison, etc., R. Co., 72 Wis. 612; 1888, People v. O'Brien, 111 N. Y. 1, 7 Am. St. Rep. 684, 2 L. R. A. 255; 1894, Detroit Citizens' S. R. Co. v. Detroit, 64 Fed. Rep. 628, 26 L. R. A. 667; 1896, Stevens v. City of Muskegon, 111 Mich. 72; 1897, Tower v. Tower & S. S. R. Co., 68 Minn. 500, 64 Am. St. Rep. 493; 1897, Wright v. Milwaukee, etc., R. Co., 95 Wis. 29, 60 Am. St. Rep. 74; 1897, Milwaukee Elec. R. Co. v. Milwaukee, 95 Wis. 39, 60 Am. St. Rep. 81; 1897, State v. East Fifth St. R. Co., 140 Mo. 539, 62 Am. St. Rep. 742, 38 L. R. A. 218; 1898, Suburban etc., Co. v. Inhabitants, etc., 41 Atl. Rep. 865 (N. J. Ch.); 1898, Ghee v. Northern Union Gas Co., 158 N. Y. 510; 1899, People v. Suburban R. Co., 178 Ill. 594; 1899, East St. L. C. R. Co. v. E. St. L., 182 Ill. 433; 1899. Township of Hamtramck v. Rapid R., 122 Mich. 472, 81 N. W. Rep. 337. Other cases hold such grants to be licenses only. See, 1878, People v. Mutual, etc., Co., 38 Mich. 154; 1885, Galveston, etc., R. Co. v. Gulf City, etc., R. Co., 63 Texas 529; 1888, Atchison, etc., R. Co. v. Nave, 38 Kan. 744, 5 Am. St. Rep. 800, note 804; 1893, Lake Roland El. Co. v. Baltimore, 77 Md. 352, 20 L. R. A. 126; 1894, City of Belleville v. Citizens', etc., R. Co., 152 Ill. 171, 26 L. R. A. 681; See 1901, People v. Cent. U. Tel. Co., 192 Ill. 307, 85 Am. St. R. 338. Sec. 196. Franchises of the members. "It is likewise a franchise for a number of persons to be incorporated and subsist as a body politic; with power to maintain perpetual succession, and do other corporate acts; and each individual member of such corporation is also said to have a franchise or freedom." Blackstone's Comm., Bk. II, p. *37. See, also, State, ex rel. Waring, v. Medical Society, 38 Ga. 608, supra, p. 136; Fietsam v. Hay, 122 Ill. 293, supra, p. 141; Memphis & L. R. Co. v. R. Commissioners, 112 U. S. 609, supra, p. 143. Note. In Board of Trade of Chicago v. The People, 91 Ill. 80, it was held that a member did not have a franchise in his membership sufficient to give a court of appeals jurisdiction in appeal, under a statute authorizing appeals in cases involving a franchise. The court's argument is given above in note on pp. 161, 162. See cases infra on the right of corporations to expel members, p. 1165. ARTICLE II. CONTRACTS CONTAINED IN THE CHARTER OF A CORPORATION. Sec. 197. (1) In general. "The charter of a corporation having a capital stock is a contract between three parties, and forms the basis of three distinct contracts. The charter is a contract between the state and the corporation; second, it is a contract between the corporation and the stockholders; third, it is a contract between the stockholders and the state." Cook Stock and Stockholders, 3d ed., § 492. "The contracts which are ordinarily found in the charter of a private corporation fall into three classes: (1) Those between the state and the incorporators. (2) Contracts (3) between the corporation and the stockholders. By incorporation for business purposes, the corporators acquire from the state a franchise to employ certain methods of acting (which they could not otherwise lawfully exercise), and certain designated funds or property, in attaining or furthering certain specified objects. It is the dedication of certain funds, by the mutual and express consent of the state and the corporators, to the attainment of certain purposes, in a certain way. Because the state believes the purposes desirable, it authorizes the peculiar method; because the corporators deem the method necessary or desirable, and the end profitable, they contribute the funds. The peculiar method is by the state authorizing a changing body of persons, through a specified form of organization, and under a designated name, to act and be considered as one person in whom are vested the funds contributed, and upon whom is placed the duty of applying them to the purposes named. The state has the right to have the funds so applied; so does the corporation; so do the members; so do those who are selected to act in the corporate name; so do those who become creditors in the performance of the corporate functions. In this way there arise many implied contracts or grants of franchises, as to the purposes to be accomplished, the method of accomplishing them, and the application of the funds thereto, protected under the national constitutional provision that "no state shall pass any law impairing the obligation of contracts." (Art. i, § 10, cl. 1. Sec. 198. Same. TRUSTEES OF DARTMOUTH COLLEGE v. WOODWARD.1 1819. IN THE SUPREME COURT OF THE UNITED STATES. 4 Wheaton (17 U. S.) Rep. 518-715. February 2, 1819. The opinion of the court was delivered by MARSHALL, Ch. J. This is an action of trover, brought by the trustees of Dartmouth College against William H. Woodward, in the state court of New Hampshire, for the book of records, corporate seal and other corporate property, to which the plaintiffs allege themselves to be entitled. A special verdict, after setting out the rights of the parties, finds for the defendant, if certain acts of the legislature of New Hampshire, passed on the 27th of June, and on the 18th of December, 1816, be valid and binding on the trustees, without their assent, and not repugnant to the constitution of the United States; otherwise, it finds for the plaintiffs. The superior court of judicature of New Hampshire rendered a judgment upon this verdict for the defendant, which judgment has been brought before this court by writ of error. The single question now to be considered is, do the acts to which the verdict refers violate the constitution of the United States? This court can be insensible neither to the magnitude nor delicacy of this question. The validity of a legislative act is to be examined; and the opinion of the highest law tribunal of a state is to be revised -an opinion which carries with it intrinsic evidence of the diligence, of the ability and the integrity with which it was formed. On more than one occasion this court has expressed the cautious circumspection with which it approaches the consideration of such questions; and has declared that in no doubtful case would it pronounce a legislative act to be contrary to the constitution. But the American people have said, in the constitution of the United States, that "no state shall pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts." In the same instrument, they have also said, "that the judicial power shall extend to all cases in law and equity arising under the constitution." On the judges of this court, then, is imposed the high and solemn duty of protecting, from even legislative violation, those contracts which the constitution of our country has placed beyond legislative control; and, however irksome the task may be, this is a duty from which we dare not shrink. 1 Facts are sufficiently stated in the opinions, and supra, p. 426. Arguments, and parts of the opinions of Story and Washington, JJ., omitted. The case was argued in the state court by Mason, Smith and Webster, for plaintiffs, and by Sullivan and Bartlett, for defendants; in the United States Supreme Court by Webster and Hopkinson, for plaintiff in error, and by Holmes and William Wirt, attorney-general, for defendants in error. The decision of the state court is reported (without the arguments of counsel) in 1 N. H. 111, and reprinted (with the arguments of counsel) in 65 N. H. 473. Farrar's Report (1817, 1819) contains decisions of both courts. The original charter and the acts of the state legislature are given in full in 4 Wheat. 519–551. The title of the plaintiffs originates in a charter dated the 13th day of December, in the year 1769, incorporating twelve persons therein mentioned by the name of "The Trustees of Dartmouth College," granting to them and their successors the usual corporate privileges and powers, and authorizing the trustees, who are to govern the college, to fill up all vacancies which may be created in their own body. The defendant claims under three acts of the legislature of New Hampshire, the most material of which was passed on the 27th of June, 1816, and is entitled "an act to amend the charter and enlarge and improve the corporation of Dartmouth College." Among other alterations in the charter, this act increases the number of trustees to twenty-one, gives the appointment of the additional members to the executive of the state, and creates a board of overseers, with power to inspect and control the most important acts of the trustees. This board consists of twenty-five persons. The president of the senate, the speaker of the house of representatives of New Hampshire, and the governor and lieutenant-governor of Vermont, for the time being, are to be members ex officio. The board is to be completed by the governor and council of New Hampshire, who are also empowered to fill all vacancies which may occur. The acts of the 18th and 26th of December are supplemental to that of the 27th of June, and are principally intended to carry that act into effect. The majority of the trustees of the college have refused to accept this amended charter, and have brought this suit for the corporate property, which is in possession of a person holding by virtue of the acts which have been stated. [The circumstances constituted a contract.] It can require no argument to prove, that the circumstances of this case constitute a contract. An application is made to the crown for a charter to incorporate a religious and literary institution. In the application, it is stated, that large contributions have been made for the object, which will be conferred on the corporation, as soon as it shall be created. The charter is granted, and on its faith the property is conveyed. Surely, in this transaction every ingredient of a complete and legitimate contract is to be found. The points for consideration are: I. Is this contract protected by the constitution of the United States? Is it impaired by the acts under which the defendant holds ? 2. 1. [Character of contracts protected by the constitution.] On the first point it has been argued that the word "contract," in its broadest sense, would comprehend the political relations between the government and its citizens; would extend to offices held within a state, for state purposes, and to many of those laws concerning civil institutions, which must change with circumstances, and be modified by ordinary legislation; which deeply concern the public, and which, to preserve good government, the public judgment must control. That even marriage is a contract, and its obligations are affected by the laws respecting divorces. That the clause in the constitution, if construed in its greatest latitude, would prohibit these laws. Taken in its broad, unlimited sense, the clause would be an unprofitable and vexatious inter |