management of a trust fund, was passed without the knowledge or request of the corporation, and was never adopted by any direct vote; but the corporation, having elected certain officers, provided for by the act in addition, and such officers having exercised the powers thereby conferred on them for nearly ten years, it was held that these proceedings were equivalent to, or sufficient evidence of, a formal assent or adoption by the corporation.1 Previous to the passage of the Ohio general railroad act of February 11, 1848, a railroad company was chartered by a special act of the legislature, which empowered the directors to transact all the business of the company, but did not expressly authorize subscriptions to the capital stock in real estate. This privilege was conferred by § 14 of the act of 1848, upon all railroad corporations then existing that might accept the power so conferred. After the passage of that act, the directors entered on the records of the company a resolution that subscriptions to the capital stock might be made in real estate. The company then received real estate subscriptions to its stock, and sold and conveyed the same to bona fide purchasers with the knowledge of such subscribers, and without objection on their part, until many years after, when the stock had become worthless, and the enterprise for which the company was organized had been abandoned. It was held, that, in a suit by a subscriber against a purchaser from the company, to recover back the land conveyed by him to the company on such subscription, proof of the exercise of the privileges conferred by the act of 1848, upon the company, under a resolution of the parties to the suit, was sufficient evidence, as between them, that the company had accepted the powers conferred in that section, and was thereby authorized to take and convey land received on subscription to its capital stock.2 Where a corporation was organized under an act of the legislature passed in 1859; and an amendatory act, the acceptance of which was drawn in question, was shown to have been drawn up by the attorney of the corporation, and its passage procured upon the application of at least a portion of the directors; and it also appeared that the board of directors authorized the opening of books of subscription to the guarantee fund, provided for by the amendment, at different times after the subscription which was drawn in question; and, also, that, at various times, the by-laws of the company recognized this subscription by regulating the rate of interest to be paid on the same, and the date at which computation commenced; these acts were held to operate as an estoppel against the corporation, and to furnish evidence from which an acceptance of the amendment might be presumed.3 And this, although 1 Third School District in Blandford v. Gibbs, 2 Cush. (Mass.) 39. 2 Goodin v. Evans, 18 Ohio St. 150. 3 Sumrall v. Mut. Ins. Co., 40 Mo. 27. as already seen1 the directors of a corporation have no power, in the absence of statute, to do or consent to anything which changes the constituent character of the corporation, because their office is merely that of business managers. On a somewhat similar principle, where the charter of a railroad company contains a provision for obtaining title in case any person shall own any private right or interest in any of the streets or avenues over or upon which the railroad is authorized to be laid, by accepting such a charter, the grantees must be deemed to have conceded that the nature of the improvement calls for a new assessment of damages, or must have stipulated to make such an assessment in consequence of the benefits acquired by them under their act.2 § 101. Estoppel to Deny Acceptance of Amendment. As hereafter seen, the person who contracts with a corporation or with persons claiming to be a corporation, by its corporate name, becomes estopped to deny the corporate existence, when sued upon the contract. Upon a similar theory one who contracts with a corporation, acting under an amended charter and by its amended name, will not be heard to complain that the amendment has not been properly accepted by the corporation. This estoppel works against the corporation, as well as in its favor. If, therefore, a statute is passed creating new powers, and providing that any existing corporation may accept it, and that, on filing their acceptance, that part of their charter which is inconsistent with the act shall be repealed, and a corporation assumes to act under the statute and exercise the powers, though without filing the required acceptance, they cannot exonerate themselves from responsibility upon contracts made in the exercise of such powers, by objecting that they had not filed the evidence required by the statute to evince their decision to accept it. Although a corporation cannot vary from the object of its creation, and persons dealing with it must take notice of whatever is contained in the law of its organization, nevertheless, in cases in which a corporation acts within the range of its general authority, it may be bound, though failing to comply with some formality or regulation which should not have been neglected, but has been.5 1 Ante, § 86. * People v. Law, 34 Barb. (N. Y.) 494. See also Beals v. Benjamin, 29 How. Pr. (N. Y.) 109. 3 Post, & 518, and Ch. 184. Eppes v. Mississippi R. Co., 35 Ala. 33. 5 Zabriskie v. Cleveland &c. R. Where an amendment to a charter of a private corporation is enacted by the legislature, upon conditions which are to be accepted in full of all demands which the corporation has against the State, if the conditions are so accepted by the governing body, pursuant to the terms of the grant, by a formal instrument of acceptance, such acceptance will create a binding contract between the State and the corporation, which the corporation can not thereafter avoid or set aside, on the ground that it was executed by its governing body in ignorance of the real nature and extent of their rights against the State.1 § 102. View that Objection can only be raised by Quo Warranto, etc. Where the amendment is such that it does not substantially change the character or objects of the corporation, a member of the corporation, when sued upon his stock subscription, or, in case of a mutual fire insurance company, upon his premium note, cannot set up the amendment as a defense to the action; he cannot object to the legality of the amendment in this collateral way; he must do it, if at all, in a direct proceeding.2 The 103. Amendment by Substitution of New Charter. alteration of the charter may be as lawfully made by the substitution of a new charter as by an amendment of the old, provided such substituted charter be germane, and necessary to the objects and purposes for which the company was organized. It has been held that a statute which in form is a new charter of an existing corporation, which does not purport to be an amendment of the old charter, but which contains precisely the same title, and which embodies most of the provisions of the old charter with the addition of certain new provisions, is to be treated merely as an amendment of the old charter, the court, upon an examination of the terms of the new act, being of opinion that such was the legislative intent. pression, see Chubb v. Upton, 95 U. S. 665; ante, § 80. 3 Sprigg v. Western Tel. Co., 46 Md. 67. Hope Mut. Fire Ins. Co. v. Beckmann, 47 Mo. 93. § 104. Objections by Third Parties: Contractors.— If the legislature and the corporation concur in changing, repealing or surrendering the charter of the corporation, contractors with the corporation have no standing to object, provided their contracts are left intact and their legal remedies preserved.1 § 105. How Minority are protected in England.- In England, where in theory of law the Parliament is supreme, and not subject to any judicial checks whatever, the Court of Chancery has, by indirection, found a means to protect the minority of the shareholders of a company against changes in the contract afforded by the constating instruments, effected by Parliament on the petition of the majority, — by restraining the majority, on a bill in equity filed by the minority, from applying the funds of the corporation in procuring from Parliament the passage of an act changing its objects and purposes.2 Co., 7 Hare, 114; Lancashire &c. R. SECTION CHAPTER V. CHARTERS GRANTED BY THE COURTS. 110. Devolving the power of creating corporations on the courts. 111. Objects for which the courts may grant charters in Pennsylvania. 112. Proceedings to obtain such charters must be public. 113. Requisites of charter submitted to court under Pennsylvania statute. 114. Requisites of charter under Pennsylvania act of 1874. 115. Reasons for which charters have been refused. 116. Charters refused which contain an 117. Further of this subject. SECTION 119. Charters refused with power to 120. Charters refused for mutual mar- 122. Charters refused because not 123. Charters under § 1676 of Georgia Code. 124. Referring the application to an amicus curiæ. 125. No appeal from decree refusing. 126. Charters amended by the judicial courts. 127. What body assent to amendments by judicial courts. § 110. Devolving the power of creating Corporations on the Courts. In the absence of a provision in the constitution to that effect, the legislature of a State has no power to authorize the judicial courts to grant special charters of incorporation. The reason is that, where the constitution of the State vests the legislative power in the general assembly, it is not competent for that body to delegate it to another department of the government.1 The legislature may, however, even in the absence of a direct constitutional authorization, prescribe by general laws the conditions under which, and the purposes for which corporations may be organized, and may devolve upon the judicial department of the government the execution of those laws, by examining the charters and determining whether they are in compliance with law, and if so, passing a decree of incorporation. 1 State v. Armstrong, 3 Sneed (Tenn.), 634; Ex parte Chadwell, 59 Tenn. 98. |