§ 63. A Question for a Jury. The question of the acceptance of an act of incorporation is for the jury, in an action at law. This is analogous to the rule in the law of contracts, that whether there has been a verbal acceptance of a written proposal is a question for a jury; and to the rule in respect of dedications of land to public purposes, that, whether there has been an acceptance of the dedication is a question for a jury. If, however, the only evidence which is tendered to show an acceptance is a writing, the effect of such writing, as evidence of an acceptance, will be a mere question of interpretation, for the judge.* 1 Hammond v. Straus, 53 Md. 1. 2 1 Thomp. Tr., & 1114. s Ibid., § 1356. 3 4 1 Thomp. Tr., § 1065 et seq. 70. Amendments made in the exercise of the police power. 71. What amendments release non assenting subscribers. 72. View that majority binds minority except as to fundamental changes. 78. View that majority binds minority unless there is a total deviation from the original object. 74. What changes are material so as not to bind minorities. 75. Amendments authorizing consolidation or subdivision. 76. Other changes deemed fundamental. 77. Further holdings on this subject. 78. Amendments increasing the capital stock. 79. Illustrations. 80. When stockholder bound on principle of acquiescence, ratification or estoppel. 81. Effect of want of knowledge of the change on the part of a shareholder. 82. Other alterations immaterial and hence permissive. 88. Amendments changing denomination of shares. SECTION 84. View that subscription is made subject to legislative power to amend charter. 85. Materiality of amendment, question for court. 86. What body give assent. 87. When the action of the directors evidence of acceptance. 88. Illustration. 89. Effect of reservation of power to alter or repeal. 90. Whether this power is merely a reservation to state for public purposes. 91. Further of this subject. 92. Power to alter or repeal, reserved in a general law, applies to future special char ters. 93. Illustration. 94. Subsequent general laws operating as amendments of special charters. 95. Amendments authorizing a surrender of franchises. 96. When acceptance of amendment not necessary. 97. Evidence of acceptance of amendment by corporation. 98. Evidence of acceptance by stockholders. 99. View that assent of stockholder is to be presumed, and dissent proved. 10C. Instances under the foregoing rule. 101. Estoppel to deny acceptance of amendment. SECTION 102. View that objections can only be raised by quo warranto, etc. 103. Amendment by substitution of new charter. SECTION 104. Objection by third parties: contractors. 105. How minority are protected in England. § 66. Preliminary. The constitution of the United States provides that "no State shall pass any law impairing the obligation of contracts." 1 It was established by the Supreme Court of the United States, in the celebrated case of Dartmouth College v. Woodward,2 that the charter of a private corporation, when granted by the legislature and accepted by the grantees, becomes a contract between the State and the corporation, which can not be impaired by subsequent legislation, without the consent of the other contracting party. It is not intended in this chapter to enter upon a general discussion of the inviolability of corporate charters under this decision; that subject is reserved for future treatment.3 It will be necessary, however, to consider the subject in this chapter, in so far as it involves the question of the power of the legislature to grant amendments to corporate charters on the application of a majority of the members, or of the governing body, but without the concurrence of all the members, so as to bind the corporation or the dissenting members. § 67. Power of Legislature to amend Charters. - In the case of municipal or other public corporations, the charter does not constitute a contract between the State and the corporators within the meaning of the clause of the constitution of the United States above quoted. It follows that, in respect of public corporations, the power of the legislature to alter, modify or abrogate any corporate power or franchise conferred by previous charter is plenary, and no member will be heard to object thereto. But, by reason of this constitutional prohibition, it is regarded by most courts as beyond the power of the legislature 1 Const. U. S., Art. 1, § 10. 2 4 Wheat. (U. S.) 519; reversing s. c. 1 N. H. 111. Post, Ch. 117, Art. I., et seq. ♦ People v. Morris, 13 Wend. (N. Y.) 325; Cole v. East Greenwich Fire Engine Co., 12 R. I. 202; Louisville v. Louisville University, 15 B. Monr. (Ky.) 642; Head v. University, 19 Wall. (U. S.) 526. of a State to make fundamental changes in the charter of an existing private corporation, such as materially alter the nature of the corporation, or change, or enlarge its powers or purposes, without the consent of all the stockholders or members,1 unless the legislature has reserved the power to make such changes in the original charter, or unless such power is reserved to the legislature in the constitution of the State,2 or in some statute which is operative notwithstanding the silence of the charter. But if the power to alter or repeal is reserved in the incorporating act, or otherwise as above stated, the legislature may make such alterations or amendments as it may see fit, and the judicial courts will have no power to consider their propriety. } 1 Livingston v. Lynch, 4 Johns. Ch. 573; Natusch v. Irving, 2 Coop. Ch. (Tenn.) 358. 2 If the power is reserved in the constitution of the State, it need not be contained in the charter. Delaware Railroad Co. v. Tharp, 5 Harr. (Del.) 454. 3 Mowrey v. Indianapolis R. &c. Co., 4 Biss. (U. S.) 78; City of Covington v. Covington &c. Bridge Co., 10 Bush (Ky.), 69; Allen v. Buchanan, 9 Phil. (Pa.) 283; Indiana &c. Turnp. Road v. Phillips, Penr. & W. (Pa.) 184; State v. Heyward, 3 Rich L. (S. C.) 389; Winter v. Muscogee R. Co., 11 Ga. 438; New Orleans &c. R. Co. v. Harris, 27 Miss. 517; Fry v. Lexington &c. R. Co., 2 Metc. (Ky.) 314; Hamilton v. Keith, 5 Bush (Ky.), 458. The cases cited do not, all of them, express fully the doctrine of the text. It has been drawn on a comparison of many decisions. In some of the cases general expressions are found to the effect that an act of the legislature granting new franchises to an existing corporation upon specified conditions, is inoperative until it is acepted. Lyons v. Orange &c. R. Co., 33 Md. 18. It was said by Lord Holt, C. J., that although the king might make such a constitution as they themselves (meaning the corporation) might have done without him, but the new charter had been void if the corporation had refused it; but when they accept and put it in execution then it is good. Rex v. Larwood, Comb. 315, 316. 1 4 Miners' Bank v. United States, Greene (Iowa), 553; s. c. 1 Morr. (Iowa) 482; Hyatt v. McMahon, 25 Barb. (N. Y.) 457; State v. Granville &c. Society, 11 Ohio, 1; Sala v. New Orleans, 2 Woods (U. S.), 188; Lothrop v. Stedman, 42 Conn. 583; Gardner v. Hope Ins. Co., 9 R. I. 194; s. c. 11 Am. Rep. 238; Lothrop v. Stedman, 13 Blatch. (U. S.) 134; Joslyn v. Pacific Mail Steamship Co., 12 Abb. Pr. (N. s.) (N. Y.) 329; Com. v. Fayette Co. R. Co., 55 Pa. St. 452; Robinson v. Gardiner, 18 Gratt. (Va.) 509; Close v. Glenwood Cemetery, 107 U. S. 466 (charter granted by Congress). It is added in some cases that this rule is subject to the qualification that the power is not to be exercised in such a way as to violate the principles of natural justice. Sala v. New Orleans, 2 Woods (U. S.), 188; Lothrop v. Stedman, 13 Blatch. (U. S.) 134. § 68. Amendments in Furtherance of the Original Design. This rule does not extend so far as to prevent the legislature from enacting amendments to a charter, in furtherance of the original design, on the application of the corporation or of a majority of the members.1 The constitutionality of a statute, by which certain stockholders of a railroad company were required to waive their interest in a municipal subscription in aid of the railroad, has been upheld, on the ground that, without the aid of the subscription under the amended charter, the stock of such subscribers would be worthless, and that they could not lose, but must gain, by the provision complained of. The mere grant of auxiliary powers to enable the corporation the better to carry out the original design, does not constitute such a radical and fundamental change in the objects and purposes for which the original company was chartered, as places the amendment within the category of statutes impairing the obligation of contracts. Instead of impairing the obligation of the contract expressed in the charter, it aids and effectuates it. The same may be said of amendments removing restrictions, or releasing or discharging burdens to which the corporation is subject under an existing statute, such as an amendment empowering a religious corporation to sell for its own benefit its real estate, although its charter forbids such alienation; 5 or extending the time within which the corporation may complete its undertaking." § 69. Amendments Granting or Altering Remedies. - Nor does this constitutional inhibition extend so far as to disable the legislature of a State from altering an existing charter of a private corporation, so as merely to effect a change of remedies 1 State v. Accommodation Bank of La., 26 La. Ann. 288; Fry v. Lexington &c. R. Co., 2 Metc. (Ky.) 314; Winter v. Muscogee R. Co., 11 Ga. 438. 2 Shelby County v. Shelby Railroad Co., 5 Bush (Ky.), 225. 2 Sprigg v. Western U. Tel. Co., 46 Md. 67; Gifford v. New Jersey R. Co., 10 N. J. Eq. 171; Mayor of Wetumpka . Winter, 29 Ala. 651; Hyatt v. Mc Mahon, 25 Barb. (N. Y.) 457; Curry 4 People v. Grand &c. Plank Road Co., 10 Mich. 400. 5 Burton's Appeal, 57 Pa. St. 213. 6 Taggart v. Western Maryland R. Co., 24 Md. 563; s. c. 89 Am. Dec. 761, 771; Union Hotel Co. v. Hersee, 79 N. Y. 458. |