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cil; and though the mayor and aldermen were judicially ousted in 1740, and those offices continued vacant until 1763, when a new charter was granted and accepted, it was held by the K. B. that the corporation was not dissolved by all these proceedings, including the natural death of the mayor and aldermen, subsequent to their ouster. This case shows that a corporation possesses a strong and tenacious principle of vitality, and that a judgment of ouster against the mayor and aldermen, notwithstanding they were integral parts of the corporation, was not an ouster, though a judgment against the corporation itself might be. It was held, in argument in that case, that a corporation could not be dissolved but in three ways: 1. By abuse or misuser, and a consequent judicial forfeiture; 2. By surrender accepted on record; 3. By the death of all the members. It was admitted, on the other side, that the corporation in that case was not dissolved, though it had become incapable of enjoying and exercising its franchises; and the court held, that the loss of the magistracy did not dissolve the corporation. The better opinion would seem to be, that *311 a corporation aggregate may surrender, and in that way dissolve itself; but then the surrender must be accepted by government, and be made by some solemn act to render it complete. This is the general doctrine, (a) but in respect to the private corporations, which contain a provision rendering the individual members liable for corporate debts due at the time of dissolution, a more lax rule has been indulged. It was held, in the Court of Errors in New York, in Slee v. Bloom, (b) that the

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(a) Boston Glass Manufactory v. Langdon, 24 Pick. 49. Angell & Ames on Corporations, p. 656, 2d ed. In the case of the charter of Connecticut, where there had been for some time an involuntary nonuser of its privileges, by submission to the authority of Sir Edmund Andross, the ablest counsel in England, consisting of Mr. Ward, John (afterwards Lord Chancellor) Somers, and George (afterwards Lord C. J.) Treby, were of opinion, that the charter remained good and valid in law, inasmuch as there was no surrender duly made and enrolled, nor any judgment of record against it. See the opinion at large, in 1 Trumbull's Hist. of Connecticut, 407. Hutchinson's Hist. of Massachusetts, vol. i. p. 406.

(b) 19 Johns. 456. It was decided, in that case, that a by-law of a corporation, allowing the stockholders, on paying thirty per cent. on their shares, to forfeit them, was void as to creditors. See, to the same point, Hume v. Wynyaw, Carolina Law Journal, No. 2, p. 217.

1 Town v. Bank of R. Raisin, 2 Doug. (Mich.) 530.

trustees of a private corporation may do what would be equivalent to a surrender of their trust, by an intentional abandonment of their franchises, so as to warrant a court of justice to consider the corporation as in fact dissolved. But that case is not to be carried beyond the precise facts on which it rested. It ought only to be applied to a case where the debts due at the time of the dissolution are chargeable on the individual members, and then it becomes a safe precedent. It amounts only to this, that if a private corporation suffer all their property to be sacrificed, and the trustees actually relinquish their trust, and omit the annual election, and do no one act manifesting an intention to resume their corporate functions, the courts of justice may, for the sake of the remedy and in favor of creditors, who, in such case, have their remedy against the individual members, presume a virtual surrender of the corporate rights, and a dissolution of the corporation. This is the utmost extent to which the doctrine was *carried; and in such a case it is a safe and reasonable *312 doctrine. So, in Briggs v. Penniman, (a) where a manufacturing corporation, established under the general act of 22d March, 1811, (b) for twenty years, became insolvent within the time, and incompetent to act by the loss of all its funds, and under the provision that "for all debts which shall be due and owing by the company at the time of its dissolution, the persons then composing the company should be individually responsible to the extent of their respective shares of stock in the company, and no further," it was decided that the corporation was to be deemed dissolved for the purpose of the remedy by the creditors against the stockholders individually, and that the statute contemplated a dissolution as an event which might happen in this way at any time within the twenty years, and any mode of dissolution, in fact, was sufficient to afford this special remedy to the creditor. (c). But the old and well-established principle of law

(a) 1 Hopk. 300. S. C. 8 Cowen, 387.

(b) Laws of N. Y. sess. 34, ch. 67.

(c) The right of forfeiture of a stockholder's share to the company does not take away the common-law remedy by suit for non-payment of instalments due on his subscription. D & S. Canal Com. v. Sansom, 1 Binney, 70. Worcester T. Corporation

1 Great Northern Railway v. Kennedy, 4 Exch. 417. D. & N. R. R. v. Wilson, 22 Conn. 435. In New York, the Court of Appeals has recently decided, that where a corporation has

remains good as a general rule, that a corporation is not to be deemed dissolved by reason of any misuser or nonuser of its franchises, until the default has been judicially ascertained and 2 declared. (d) It was adjudged, in South Carolina, (e) that the

v. Willard, 5 Mass. 80. Goshen T. Company v. Hurtin, 9 Johns. 217. Gratz v. Redd, 4 B. Monr. 193. Hightower v. Thornton, 8 Geo. 486. Northern Railroad v. Miller, 10 Barb. (N. Y.) 260.

(d) Peter v. Kendal, 6 Barn. & Cressw. 703. Slee v. Bloom, 5 Johns. Ch. 379. 6 Cowen, 26, S. P. Story J., 9 Cranch, 51. 4 Wheaton, 698. The Atchafalya Bank v. Dawson, 13 Louis. 497, 506. It was declared, in this last case, that a cause of forfeiture of a corporation charter could not be taken advantage of or enforced except by a direct proceeding for that purpose by the government, notwithstanding the charter was to be ipso facto forfeited in the case alleged. In Wilde v. Jenkins, 4 Paige, 481, it was held, that an incorporated manufacturing society was not dissolved, though all its property and effects, together with its charter, were sold by the trustees and stockholders, and purchased by three partners with partnership funds, and who elected themselves trustees of the corporation. The stock of the corporation became partnership property, and the legal title in the corporate property was still in the corporation for the

(e) Smith v. Smith, 3 Desaus. 557.

forfeited a subscriber's stock for the non-payment of an instalment due, it cannot maintaiu an action for the recovery of any part of such subscription. Small v. The Herkimer M. & H. Co. 2 Comst. 330. By this decision, the previous decisions of the Supreme Court, in the same case, were overruled. 21 Wendell, 273. 2 Hill, 127; so, also, Allen v. Montgomery Railroad Co. 11 Ala. 437; but see Freeman v. Winchester, 10 Smedes & Marsh. 577. See, further, on the liability of a subscriber for his subscription. Banet v. Alton & S. R. Co. 13 Ill. 501. Klein v. Alton & S. R. Co. Ibid. 514. Ryder v. Alton & S. R. Co. Ibid. 516. C. & P. R. R. v. Bailey, 24 Vermont, 465. K. & P. R. R. v. Kendall, 31 Maine, 470. Pl. Rd. Co. v. Lapham, 18 Barb. (N.Y.) 312. Same v. Snediker, Ibid. 317. T. & B. R. R. Co. v. Warren, Ibid. 310. T. & R. R. R. v. Kerr, 17 Barb. (N. Y.) 581. Pl. Rd. Co. v. Payne, Ibid. 567. where the cases are reviewed and shown to differ in circumstances rather than in principle. Carr v. Lefevre, 27 Penn. 413. Mann v. Pentz, 3 Comst. 415. Hotel Co. v. Coyle, 35 Maine, 405. A call for subscription, payable by instalments, is valid. London & N. W. R. Co. v. M'Michael, 4 Eng. L. & Eq. 459. It is settled, by numerous cases, that where the number of shares of a corporation is fixed either by its charter or by its own vote, no assessment on the stock is valid till the whole is subscribed for. Salem Mill Corporation v. Ropes, 6 Pick. 23. Littleton Man. Co. v. Parker, 14 N. Hamp. 543. Stoneham Br. R. R. v. Gould, 2 Gray, 277. And if an act be passed after the subscriptions have been made, reducing the required capital to the amount subscribed, the subscribers are not thereby rendered liable for assessments. R. R. Co. v. Veasie, 39 Maine, 571. See, however, R. R. v. Jarvis, 34 Maine, 860. R. R. v. Johnson, 10 Foster, 390.

2 Therefore, a breach of a corporation's charter, in making a contract, cannot be set up as a defence by an individual in an action on such contract. Grand Gulf Bank v. Archer, 8 Sm. & Mar. 151. Neither can the fact that a corporation has forfeited its charter by a failure to comply with the statutory provisions and is not a corporation de jure. Mechanics' Building Association v. Stephens, 5 Duer (N. Y.) 676. And see Jones v. Dana, 24 Barb. (N. Y.) 395. Wright v. Shelby R. R. Co. 16 B. Mon. (Ky.) 4. But it has been held that a corporation cannot enforce a mortgage which it has obtained by a transfer, taken contrary to the express provisions of its charter. Green v. Seymour, 3 Sandf. Ch. 285.

officers of a corporation could not dissolve it without the assent of the great body of the society. (ƒ)

The subject of the forfeiture of corporate franchises by nonuser or misuser, was fully discussed in the case of The King v. Amery; (g) and it was held, that though a corporation may be dissolved, and its franchises lost, by nonuser or neglect, yet it was assumed, as an undeniable proposition, that the default was to be judicially determined in a suit instituted for the purpose. The ancient doubt was, whether a corporation could be dissolved at all for a breach of trust. It is now well settled that it may, but then it must be first called upon to answer. (h) No advantage can be

benefit of the co-partners. And in Russell v. M'Lellan, 14 Pick. 63, it was held, that though a corporation had been without officers for more than two years, and had done no corporate act in that time, it was not thereby dissolved. So, again, in the case of The State v. The Bank of South Carolina, it was adjudged in the court of general sessions at Charleston, in the summer of 1841, by Judge Butler, after an elaborate argument, and upon full consideration, that a suspension of specie payment by the bank was not per se such a nonuser or misuser of the franchises as to work a forfeiture of its charter. But in Planters' Bank of Mississippi v. The State, 7 S. & M. (Miss.) 163, it was adjudged, that the failure of a bank to redeem its notes in specie is a cause of forfeiture of its charter. It ceases to answer the ends of its institution, and the state may resume its grant.3

(f) In the case of Ward v. Sea Insurance Company, 7 Paige, 294, it was declared, that the directors of a corporation, even with the consent of the stockholders, were not authorized to discontinue the corporate business, and distribute the stock, unless specially authorized by statute or a decree in chancery. By the N. Y. Revised Statutes, vol. ii. 466, the majority of the directors or trustees of a corporation may, at any time, voluntarily apply by petition to the Court of Chancery for a decree dissolving the corporation; and the court, upon investigation, may decree a dissolution of it, if it appears that the corporation is insolvent, or that, under the circumstances, a dissolution would be beneficial to the stockholders, and not injurious to the public. Ibid. sec. 58-65. One or more receivers of the estate and effects of the corporation are to be appointed, with large and specific powers and duties, in respect to the settlement and distribution of the estates and effects. Ibid. 468-672.

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Canal Company v. Railroad Company, 4 Gill & Johns.

(h) Slee v. Bloom, 5 Johns. Ch. 380. Story J., in 9 Cranch, 51. All franchises, said Lord Holt, in the case of the City of London v. Vanacre, 12 Mod. 271, are granted on condition that they shall be duly executed according to the grant, and if they neglected to perform the terms, they may be repealed by scire facias.

* See Commonwealth v. Turnpike Association, 5 Cush. 509. Hurlbut v. Carter, 21 Barb.

221.

And a corporation has no right to take a surrender of its capital stock, unless upon the reissue of an equal amount with like security. Johnson v. Bush, 3 Barb. Ch. 207.

See, In the Matter of The Jackson Marine Ins. Co. 4 Sandf. Ch. 559. Mason v. Fearson,

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taken of any nonuser or misuser on the part of a corporation, by any defendant, in any collateral action. (i) In the great case of The quo warranto against the City of London, in the 34 *313 Charles II., () it was a point incidentally mooted, whether a corporation could surrender and dissolve itself by deed; and it was conceded that it might be dissolved, by refusal to act, so as not to have any members requisite to preserve its being. There are two modes of proceeding judicially to ascertain and enforce the forfeiture of a charter for default or abuse of power. The one is by scire facias; and that process is proper where there is a legal existing body, capable of acting, but who have abused their power. The other mode is by information in the nature of a quo warranto; which is in form a criminal, and in its nature a civil remedy; and that proceeding applies where there is a body corporate de facto only, but who take upon themselves to act, though, from some defect in their constitution, they cannot legally exercise their powers. (a) Both these modes of proceeding against corporations are at the instance and on behalf of the government. The state must be a party to the prosecution, for the judgment is that the parties be ousted, and the franchises seised into the hands of the government. (b) This remedy must

(i) Trustees of Vernon Society v. Hills, 6 Cowen, 23. All Saints' Church v. Lovett, 1 Hall (N. Y.) 191. Canal Company v. Railroad Company, 4 Gill & Johns. 1. Cooper v. Curtis, 30 Maine, 488.

(j) Howell's State Trials, vol. viii. p. 1039.

(a) Lord Kenyon and Ashhurst J., in Rex v. Pasmore, 3 Term Rep. 199. The caso against the City of London was by information in the nature of a quo warranto, charging the city with usurpation of its franchises, and requiring it to show by what warrant it claimed to exercise and enjoy its liberties, &c. So, also, in the greatly contested and elaborately discussed case of Thompson v. The People, 23 Wendell, 537, 591-594.

(b) Rex v. Staverton, Yelv. 190. King v. Ogden, 10 Barn. & Cress. 230, Bayley J. Commonwealth v. Union Insurance Company, 5 Mass. 230. Centre and K. T. Road v. M'Conaby, 16 Serg. & Rawle, 140. The judgment in such cases, according to the New York Revised Statutes, vol. ii. p. 585, sec. 49, is, that the corporation be ousted, and altogether excluded from its corporate rights and franchises, and be dissolved. In Indiana, it is held, that a judgment against a corporation, in the case of a forfeiture of its charter, is, that the franchises be seised into the hands of the state, and that when its franchises are seised by execution on the judgment, then, and not till then, the corporation is dissolved. State Bank v. The State, 1 Blackf. (Ind.) 267.

9 How. U. S. 249. In this last case, the very unqualified proposition is laid down, "that what a public corporation or officer is empowered to do for others, and it is beneficial to them to have done, the law holds he ought to do." Ibid. 259. See Hutson v. Mayor, &c., of N. Y. 5 Seld. 163.

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