such a corporation is not a contract within the purview of the constitution of the United States. In those public corporations, there is, in reality, but one party, and the trustees *306 or governors of the corporation are merely trustees for the public. A private corporation, whether civil or eleemosynary, is a contract between the government and the corporators; and the legislature cannot repeal, impair, or alter the rights and privileges conferred by the charter, against the consent, and without the default of the corporation, judicially ascertained and declared.1 This great principle of constitutional law was settled in the case of Dartmouth College v. Woodward; (a) and it had been asserted and declared by the Supreme Court of the United States, in several other cases, antecedent to that decision. (b) But it has become quite the practice, in all the recent acts of incorporations for private purposes, for the legislature to reserve to themselves a power to alter, modify, or repeal the charter at pleasure;2 and though the validity of the alteration or repeal of a charter, in consequence of such a reservation, may not be legally questionable, (c) 3 yet it may become a matter of serious consideration in

(a) 4 Wheaton, 518.

(b) Fletcher v. Peck, 6 Cranch, 88. The State of New Jersey v. Wilson, 7 Idem. 164. Terret v. Taylor, 9 Idem. 43. The Town of Pawlet v. Clark, Ibid. 292. Grants of property and of franchises, coupled with an interest, to public or political corporations, are beyond legislative control, equally as in the case of property of private corporations. Story J., in Dartmouth College v. Woodward, 4 Wheaton, 697-700. Town of Pawlet v. Clark, 9 Cranch, 292. See, also, supra, p. 275. If a charter or act of incorporation be procured from the legislature, upon some fraudulent suggestion or concealment of a material fact, made by or with the consent or knowledge of the persons incorporated, it may be vacated or annulled upon scire facias, upon the relation of the attorney-general. N. Y. Revised Statutes, vol. ii. p. 579, sec. 13.

(c) Parsons C. J. 2 Mass. 146. Story J., 4 Wheaton, 708-712. McLaren v. Pennington, 1 Paige, 102.

1 In Toledo Bank v. Bond, 1 Ohio, 622, this doctrine was not acknowledged, and the charter of a corporation was declared to be a mere law, which the legislature might repeal or amend at pleasure. The assent of a corporation to a change in its charter may be implied from its action. Blandford v. Gibbs, 2 Cush. 39. Commonwealth v. Cullen, 13 Penn. 130. See, on the subject of legislative control over corporations, Thorpe v. R. & B. R. R. Co. 1 Wms. 140; R. R. Co. v. Harris, 27 Miss. 517. As to the obligation on the part of the corporation to accomplish the purposes for which it was chartered, see Y. & M. L. R. R. v. Winans, 17 How. U. S. 30, and cases cited.

2 For construction of such clauses and the results of legislative action upon them, see Suydam v. Moore, 8 Barb. 358; Miller v. New York & E. R. R. 21 Barb. (N. Y.) 513; E. & N. E. R. R. v. Casey, 26 Penn. 287.

s It is no defence to an action by the corporation against a subscriber for his subscription

many cases, how far the exercise of such a power could be consistent with justice or policy. If the charter be considered as a compact between the government and the individual corporators, such a reservation is of no force, unless it be made part and parcel of the contract. If a charter be granted, and accepted, with that reservation, there seems to be no ground to question the validity

and efficiency of the reservation; and yet it is easy to per*307 ceive that if such a clause, inserted as a formula in every charter and grant of the government, be sufficient to give the state an unlimited control, at its mere pleasure, of all its grants, however valuable the consideration upon which they may be founded, the great and salutary provision in the constitution of the United States, so far as concerns all grants from state governments, will become of no moment. These legislative reservations of a right of appeal ought to be under the guidance of extreme moderation and discretion. An absolute and unqualified repeal, at once, of a charter of incorporation of a money or trading institution, would be attended with most injurious and distressing consequences. According to the old settled law of the land, where there is no special statute provision to the contrary, upon the civil death of a corporation, all its real estate, remaining unsold, reverts back to the original grantor and his heirs. (a)

(a) Co. Litt. 13 b. 1 Blacks. Com. 484. So, where title to land is vested in an incorporated turnpike company, for the purpose of a road, and the road is abandoned, the land, said C. J. Nelson, reverts to the original owner. Hooker v. Utica Turnpike Company, 12 Wendell, 371. The decision in the case of State v. New Boston, 11 N. Hamp. 407, is to the same effect; and a turnpike road under a charter only gives an easement or right of way, subject to the toll. The right of soil does not pass, except as an easement. Shaw C. J., S. P., in 8 Metcalf, 266. The statute law of Massachusetts is to the same effect. Act of 1804, and Revised Statutes of 1836. But in New York, by statute of April 18th, 1838, ch..262, whenever a turnpike corporation becomes dissolved, or the road discontinued by the company, the road becomes a public highway. By the N. Y. Revised Statutes, vol. i. 3d edit. 712, it would seem, that only upon the dissolution of a turnpike corporation by the legislature, the rights and property of the corporation vest in the people. Though trustees of a charity under a will, and afterwards incorporated, are guilty of breaches of trust, it is held that the heirs of the donor have no resulting trust or beneficial interest accruing therefrom, and that they could not sustain an application in chancery to compel the trustees to execute the trust. Sanderson v. White, 18 Pick. 328.1

to the stock, that an act of the legislature, passed since the subscription has increased the responsibility of the stockholders. South Bay M. D. Co. v. Gray, 30 Maine (17 Shep.) 547. See Palmer v. Lawrence, 3 Sandf. (N. Y.) 161; Northern Railroad v. Miller, 10 Barb. (N. Y.) 260. 1 On the dissolution of a corporation holding lands acquired by application of the eminent

The debts due to and from the corporation are all extinguished." Neither the stockholders, nor the directors or trustees of the corporation, can recover those debts, or be charged with them, in their natural capacity. All the personal estate of the corporation vests in the people, as succeeding to this right and prerogative of the crown at common law. (b) A very guarded and moderate

(b) Edmunds v. Brown & Tillard, 1 Lev. 237. Co. Litt. 13 b. 3 Burr. 1868, arg. 1 Blacks. Com. 484. 2 Kyd on Corp. 516. State Bank v. The State, 1 Blackf. (Ind.) 267. Fox v. Horah, 1 Ired. Eq. 358. President of Port Gibson v. Moore, 13 S. & M. 157. In this case in N. Carolina the rigorous rule of the common law was declared by Mr. Justice Gaston in behalf of the Supreme Court, but he observed that, by the Revised Statutes of N. Carolina, of 1831, the law received very important alterations, and on the forfeiture or dissolution of a corporation, a receiver is to be appointed to take possession of the corporate property, and collect the debts for the benefit of creditors and stockholders. The rule of the common law has in fact become obsolete and odious. It never has been applied to insolvent or dissolved money corporations in England. The sound doctrine now is, as shown by statutes and judicial decisions, that the capital and debts of banking and other moneyed corporations constitute a trust fund and pledge for the payment of creditors and stockholders; and a court of equity will lay hold of the fund and see that it be duly collected and applied. The death of a corporation no more impairs the obligation of contracts than the death of a private person. Story J., in Wood v. Dummer, 3 Mason, 309. Lord Redesdale, in Adair v. Shaw, 1 Scho. & Lef. 261, 262. Mumma v. The Potomac County, 8 Peters U. S. 281. Buckner Ch., in Wright v. Petrie, 1 Smedes & Marsh. Ch. 319. Reed v. The Frankfort Bank, 23 Maine, 318. The act of the legislature of Mississippi, of July 26, 1843, making provision for proceeding against incorporated banks for violation of their franchises, declares that upon a judgment of forfeiture the debtors shall not thereby be released, but the court is to appoint trustees to take charge of the books and assets of the bank, and to sue and collect the debts, and sell the property of the bank, and apply the proceeds to the payment of the debts of the bank. This just and reasonable provision was sustained, as a constitutional provision, by the court of errors and appeals in Mississippi, in the case of Nevitt v. Bank of Port Gibson, (6 Smedes & Marsh. 513,) after a masterly consideration of the case. In the state of Louisiana, by statute of 1842, the legislature provided for the distribution among the creditors of the property of insolvent corporations whose charters had become forfeited; and this was held to be a constitutional exercise of legislative power. Mudge v. Commissioners, &c., 10 Rob. (Louis.) 460. The statute law of Georgia makes a permanent provision for the appropriation of the assets of insolvent banks, who shall thereby forfeit their charters to the payment of their debts. Hotchkiss's Codification of the Statute Law of Georgia, pp. 362-3. The stat

domain, of the state, the lands do not revert, but remain in the hands of the state to make any public use of which it may choose. Heyward v. Mayor, &c., of New York, 3 Seld. 314. E. & N. E. R. R. v. Casey, 26 Penn. 287. See, also, Curran v. Arkansas, 15 How. U. S. 304. Bacon v. Robertson, 18 How. U. S. 480. From these cases it appears that on the dissolution of a corporation its property is liable in equity, first to the payment of its debts and then to be distributed among the stockholders who have an equitable claim upon it, as it was originally contributed by them.

See Moultrie v. Smiley, 16 Geo. 289. Iron Works v. Smith, 4 Duer, 362. Robinson v Lane, 19 Geo. 337.

example of these legislative reservations annexed to a charter, is that contained in the Act of the legislature of New York of February 25th, 1822, ch. 50, where it is declared, by way of express proviso, that the legislature may, after the expiration of five years, alter and modify, and expunge the Act, upon condition, nevertheless, that no alteration or modification shall annul or

invalidate the contracts made by or with the corporation,

*308 and that the corporation may still continue a

corporation

so far as to collect and recover, and dispose of their estate, real and personal, and pay their debts, and divide the surplus. (a)

A corporation may also be dissolved when an integral part *309 of the corporation is gone, without whose existence *the functions of the corporation cannot be exercised, and when the corporation has no means of supplying that integral part, and has become incapable of acting. The incorporation becomes then virtually dead or extinguished. (a) But in the case of The King v. Pasmore, (b) in which this subject was most extensively and learnedly discussed, the K. B. seemed to consider such a dissolution not entirely absolute, but only a dissolution to certain purposes. (c) The king could interfere and grant a new charter, and

ute law of New Jersey, R. S. 1847, p. 138, recognizes a distribution of the stock on the dissolution of a corporation after payment of its debts. White v. Campbell, 5 Humph. (Tenn.) 38.

(a) By the New York Revised Statutes, vol. i. p. 600, sec. 9, upon the dissolution of a corporation, the directors or managers existing at the time (when no other persons are specially appointed for the purpose), are declared to be trustees for the creditors and stockholders, with power to settle the concerns of the corporation, pay the debts, and divide the surplus property among the stockholders. This is a just and wise provision, and gets rid altogether of the inequitable consequences of the rule of the common law. And in Indiana, also, whenever a corporation is dissolved, all its property vests in the state in trust to pay its debts and discharge its contracts, and the residue, if any, is to be paid over to the stockholders. Revised Statutes of Indiana, 1838, p. 149. In North Carolina, a similar provision is made as to the payment of debts and the distribution of the surplus when a corporation is dissolved. Revised Statutes of North Carolina, 1837, p. 120.

(b) 3 Term Rep. 199

(a) 1 Rol. Abr. 514, I. 1. (c) So, in the case of the Lehigh Bridge Company v. The Lehigh Coal Company, 4 Rawle, 1, the loss of an integral part of a corporation was held to work a dissolution for certain purposes only, and that an entire dissolution was the result of a permanent in

1 Owen v. Smith, 31 Barb. (N. Y.) 641. The creditors have an equitable lien on the assets in whosesoever hands they are found. Tinkham v. Borst, 31 Barb. (N. Y.) 407.

he could renovate the corporation either with the old or with new corporators. If renovated in the sense of that case, all the former rights would revive and attach on the new corporation, and, among others, a right to sue on a bond given to the old corporation. But if not renovated, then the dissolution becomes absolute, because the corporation has become incapable of acting. In the case of a new incorporation, upon the dissolution of an old one, the title to the lands belonging to the old corporation does not revive in the new corporation, except as against the state. In England, it would require an act of parliament to revive the title as against the original grantor, or his heirs; (d) but it would be at least questionable whether any statute with us could work such an entire renovation, because vested rights cannot be divested by statute. When a corporation has completely ceased to exist, there is no ground for the theory of a continuance of the former corporation under a new name or capacity. It becomes altogether a new institution, with newly created rights and privileges.

*

It is said that a corporation may be dissolved by a voluntary surrender of its franchises into the hands of government, as well as by involuntary forfeiture of them, through a total neglect of using them, or using them illegally and unjustly. (a) *310 But in the case of The King v. The City of London, Sir George Treby (afterwards Lord C. J.) very forcibly contended, that a corporation could not be dissolved by a voluntary surrender of its property, because a corporation might exist without property; and upon that argument he shook, if not destroyed, the authenticity of the note at the end of the case in Dyer, of The Archbishop of Dublin v. Bruerton, (b) in which it was stated that a religious corporation might be legally dissolved and determined by a surrender of the dean and chapter, even without the consent of the archbishop. So, also, in the case of The Corporation of Colchester v. Seaber, (c) the corporation consisted of a mayor, eleven aldermen, eighteen assistants, and eighteen common coun

capacity to restore its deficient part, and did not happen when the legitimate existence of the part was not indispensable to a valid election.