Cyclopedia of the Law of Private Corporations

tion of a charter is a question of legislative intent.93 Even when the legislature has reserved the power to repeal the charter of a corporation, a subsequent statute will not be construed as repealing it unless such an intention on the part of the legislature is expressed in the statute or necessarily implied, in conformity with the rule that repeals are not favored and such a construction should be placed upon statutes, when possible, as to avoid a repeal.94 And not only is there no presumption that a repeal was intended, but the intention not to repeal special charter provisions by subsequent general statutes will be presumed.95 Thus, the repeal of a general law authorizing the formation of corporations will not be construed as a repeal of the charters of corporations which have been formed under it,96

93 Morris & E. R. Co. v. Railroad Taxation Com'r, 37 N. J. L. 228, aff'd 38 N. J. L. 472; Smock v. Farmers' Union State Bank, 22 Okla. 825, 98 Pac. 945.

94 Alabama. Bibb v. Hall, 101 Ala. 79, 14 So. 98.

Georgia. Force v. Dahlonega Tanning & Leather Mfg. Co., 22 Ga. 86.

Iowa. Donworth v. Coolbaugh, 5 Iowa 300.

Massachusetts. United Hebrew Benev. Ass'n v. Benshimol, 130 Mass. 325.

New Jersey. Morris & E. R. Co. v. Railroad Taxation Com'r, 37 N. J. L. 228, aff'd 38 N. J. L. 472; Mechanics' & Traders' Bank v. Bridges, 30 N. J. L. 112.

New York. People v. Raymond, 194 N. Y. 189, 87 N. E. 90.

Oklahoma. Smock v. Farmers' Union State Bank, 22 Okla. 825, 98 Pac. 945.

95 In re Morgan's Louisiana & T. R. & S. S. Co., 117 La. 593, 42 So. 150.

Where a statute does not in express terms annul a right or power given to a corporation by a former act, but merely confers the same rights and powers upon it under a new name, and gives it additional powers, the latter act does not repeal the former. Waring v. Mobile, 24 Ala. 701.

An intent to abrogate the particu

lar enactment in an earlier statute is sufficiently manifested where the provisions in the two statutes are so inconsistent that they cannot stand together. Morris & E. R. Co. v. Railroad Taxation Com 'r, 37 N. J. L. 228, aff'd 38 N. J. L. 472.

96 Bibb v. Hall, 101 Ala. 79, 14 So. 98; Donworth v. Coolbaugh, 5 Iowa 300; United Hebrew Benev. Ass'n v. Benshimol, 130 Mass. 325.

Where the charter of a corporation and a subsequent general statute, which subjected to its regulations, so far as the same were applicable, all corporations theretofore formed, both provided that at all corporate elections each stockholder should be entitled to as many votes as he owned shares, but the charter limited the stockholders to 20 votes each, while there was no limitation in the statute, it was held that the statute did not repeal the charter provision, as it was not applicable thereto. Webb V. Ridgely, 38 Md. 364.

The repeal of a general incorporation act providing for the incorporation of banks and the re-enactment of a new act does not affect existing corporations formed under the former act, unless expressly so provided, especially where the manifest purpose of the new act is to revise and substitute a more perfect statute, ex

unless such an intention on the part of the legislature appears from the express terms of the repealing statute or by necessary implication, 97 And the reserved power to alter or repeal a charter will not be held to have been exercised by implication in a case where to do so will result in the violation of a promise by the state through which the conveyance of property to a domestic benevolent corporation was induced.98 A charter right to lay gas pipes in the street of a township is not repea! l or modified by a subsequent act subdividing such township into several townships, and in such case it will not be presumed that the legislature intended to interfere with the granted right.99

But if the charter of a corporation is subject to alteration, amendment or repeal, a subsequent statute which is applicable to the corporation impliedly repeals the charter, in so far as it is inconsistent therewith.1

$4354. Estoppel and laches as to amendment and acceptance. A shareholder who is present and takes part in the proceedings to amend a charter to the extent of moving the adoption of such amendment and giving it his unqualified support is estopped from object

97 Wilson v. Tesson, 12 Ind. 285; Freehold Mut. Loan Ass'n v. Brown, 29 N. J. Eq. 121.

98 People v. Raymond, 194 N. Y. 189, 87 N. E. 90.

Where the transfer of property in endowment of a charitable corporation was directly induced by a promise of exemption from taxation which was acted upon, it will not be presumed that the legislature, in passing a general law operative in repeal of prior exemptions, intended to repeal any exemption awarded under such People v. Raymond,

circumstances.

194 N. Y. 189, 87 N. E. 90.
99 Public Service Corporation of
New Jersey
454, 62 Atl. 65.
v. De Grote, 70 N. J. Eq.

1 Morris & E. R. Co. v. Railroad

Taxation Com'r, 37 N. J. L. 228, aff'd 38 N. J. L. 472.

If in a special act incorporating a railroad company with the exclusive right to construct and operate a road along a certain route, the power to amend or repeal is reserved, the act is repealed, in so far as the exclusive right is concerned, by a subsequent act granting a right of way over the same route to another corporation. Union Branch R. Co. v. East Tennessee & G. R. Co., 14 Ga. 327.

A provision in the charter of an educational corporation prohibiting the sale of intoxicating liquors within a certain distance of the institution is repealed by an act giving to the mayor and common council of the city in which the institution is located the power to grant or refuse licenses to sell intoxicating liquors within the city limits. Dingham v. People, 51 Ill. 277,

ing to such amendment subsequently. And where a corporation contracts under the power conferred by an act amending its charter and the stockholders acquiesce, both it and they are estopped to set up the invalidity of the amendment in an action arising out of the contract. Thus it has been held that where a railroad company organized under a general law procured the passage of a special act amending its charter, and afterwards, without any objection on the part of the stockholders, entered into a contract under the powers conferred upon it by the special act, both the corporation and its stockholders were estopped to assert that the contracts were invalid on the ground that the special act was void. After acquiescing for seven years in the action of its officers in filing amended articles of incorporation rendering the corporation such under a new statutory enactment with the privileges thereby conferred, and being charged with the notice of the action of its officers by reason of the filing of the articles as provided by law, a corporation was not permitted to repudiate such action of the officers when suit was brought for the collection of the statutory organization tax.5

One who contracts with a corporation acting under an amended charter and by its amended name is estopped to set up the claim that the amendment was unconstitutional or that the amended charter has not been properly accepted by the corporation.

The doctrine of laches may also prevent objections to the validity of an amendment. Thus it was held, in one case, that neither the common nor the preferred stockholders could object to an amend

2 Casanas v. Audubon Hotel Co., 124 La. 786, 50 So. 714.

9 Where two corporations amended their charters for the express purpose of entering into a contract of partnership, and their separate properties were united for the joint business, new assets being acquired and new liabilities being incurred, each of such corporations was estopped from setting up that the contract was ultra vires. News-Register Co. v. Rockingham Pub. Co., 118 Va. 140, 86 S. E. 874.

Where a charter amendment reducing the capital stock was obtained and accepted, and all except two of the stockholders, of whom there were many, accepted the amendment and took reduced amounts of stock and

the corporation did business for about a year with the knowledge of the ronassenting stockholders, they could not sue and recover a dividend based on the amount of their unreduced stock, while all the other stockholders were paid dividends on the basis of the reduced amount of stock. Woodruff v. Columbus Inv. Co., 135 Ga. 215, 68 S. E. 1103.

4 Johnson v. Mercantile Trust & Deposit Co., 94 Ga. 324, 21 S. E. 576. See also Owen v. Purdy, 12 Ohio St. 73.

5 Licking Valley Bldg. Ass'n No. 3 v. Com., 28 Ky. L. Rep. 543, 89 S. W. 632.

6 Eppes v. Mississippi, G. & T. R. Co., 35 Ala. 33; Fell v. McHenry, 42 Pa. St. 41.

ment by which the stock of the corporation was rearranged, it appearing that after such rearrangement a new board of directors was elected, which board conducted the affairs of the corporation until it became bankrupt.7

$4355. Enjoining illegal amendments. If an unauthorized and illegal amendment is accepted by a corporation and is about to be acted upon, a stockholder who has not assented thereto or become estopped from complaining may bring an equity proceeding to enjoin or set aside any action by the corporation under such amendment. In such proceedings, the usual equity rules as to procedure govern. It has been held that an allegation that the acceptance of an amendment would change the fundamental character and purpose of the corporation, is a mere conclusion of law, and a bill seeking to enjoin the making of an amendment whereby capital stock will be increased and also seeking to have the corporation adjudged insolvent and praying for a receiver, has been held demurrable for multifariousness, since it contains two inconsistent causes of action.10 If an order of injunction is issued preventing amendments, a petition for mandamus to a public officer requiring him to issue certificates of amendments cannot be granted.11

In some states, matters such as these are within the jurisdiction of corporation commissions, and review by the courts is prevented.12

Sharood Shoe Corporation,

7 In re 192 Fed. 945.

8 Woodruff v. Columbus Inv. Co., 135 Ga. 215, 68 S. E. 1103.

9 Perkins v. Coffin, 84 Conn. 275, Ann. Cas. 1912 C 1188, 79 Atl. 1070. 10 Rodman v. Manganese Steel Co., 75 N. J. Eq. 295, 72 Atl. 963.

Petition of stockholder alleging increase of capital stock without assent of stockholder, which consent was necessary, held not subject to general demurrer and not subject to demurrer on account of multifariousness. Atlanta Steel Co. v. Mynahan, 138 Ga. 668, 75 S. E. 980. 11 Kuhn v. Electric Manufacturing

& Power Co., 92 S. C. 488, 75 S. E. 791.

12 Where a corporation is authorized to amend its charter so as to provide for the corporation engaging in a partnership and the incorporators proceed under one clause of the statute instead of another clause, the matter cannot be reviewed by the courts, since such matter is one of form and not of substance and is within the jurisdiction of the corporation commission, and its action thereon is final. News-Register Co. v. Rockingham Pub. Co., 118 Va. 140, 86 S. E. 874.