were held to be inviolable contracts. The remedy, pointed out by Justice Story in his concurring opinion was, that the State might legally reserve to itself the right of amendment and repeal1. This suggestion was embodied in the Michigan Constitution of 1850, and, again, in the constitution of 190813. In both constitutions the right of amendment and repeal is reserved in broadest terms. This reservation is to be construed as though expressly written in the articles of association of each Michigan corporation formed since 185014. Reasonable exercise of the right of amendment or of repeal, even to the extent of depriving the corporation of its existence, does not impair the obligation of a contract, nor does it amount to taking away property without due process of law. It is simply the exercise of a contractual right, reserved to the State under the provisions of the organic law, and as such it is upheld15.

The courts will not inquire into the motives which lead the legislature to repeal a charter16. It is conclusively presumed that

V.

Union

12. Greenwood Freight R. R. Co., 105 U. S. 21, 26 L. ed. 961-965; Looker v. Maynard, 179 U. S. 46, 45 L. ed. 79-82.

13. The provision of the Constitution of 1850 (Art. XV, Sec. 1) was as follows: "All laws passed pursuant to this section may be amended, altered or repealed." The provision of the Constitution of 1908 (Art. XII, Sec. 1) is as follows: "All laws heretofore or hereafter passed by the legislature for the formation of, conferring rights. privileges, or franchises upon corporations, and all rights, privileges, or franchises conferred by such laws, may be amended, altered, repealed or abrogated."

14. Attorney General v. Looker, 111 Mich. 498-505. In this case Justice Moore, quoting from Parker v. Railroad Co., 109 Mass. 506, said: "Many cases have arisen in this court involving the construction and application of the power to amend or alter charters. reservation of power is broad and comprehensive. Whatever may be its limitation, it at least reserves to the legislature the right to make any reasonable amendments, regulating the mode in which the

The

franchise granted shall be used and enjoyed, which would not defeat or essentially impair the object of the grant, or take away any property or rights which have become vested under a legitimate exercise of the powers granted."

15. People v. Calder, 153 Mich. 724-730. Thus the fact that a corporation has bonds outstanding, the value of which will be diminished by the repeal of its charter, in no way interefers with the right of repeal. This is a risk assumed by the purchaser. The bonds are issued and received subject to the State's reserved power.-Id. See also Greenwood v. Union Freight R. R. Co., 105 U. S. 21, 26 L. ed. 961.

16. People v. Calder, 153 Mich. 724-730; People v. Gardner, 143 Mich. 104-108.

The courts decline to review the legislature's discretion. No matter how apparently impractical or unwise an act may be-no matter how clear the evidence that it has emanated from motives of personal greed or political bias-the courts are bound by it, and it is the law, unless violative of some constitutional principle. Flint etc.

the legislature has acted in good faith16. The State is under no obligation to give a corporation notice of a proposed amendment or repeal, when the bill for that purpose originates with the legislature1. When, however, such bill originates outside the legislature, notice should be given18. While, under its reserved power, the State may change a corporation's contractual capacity19, or even go so far as to end the corporate life, the power reserved can not be construed as conferring upon the legislature authority to violate the fundamental principles of constitutional government20. The legislature can not, by amendment, essentially change or divert the object of the grant21, nor can it by repeal deprive the corporation of vested property rights22. Any legislative attempt to pervert the reserved power

P. R. Co. v. Woodhull, 25 Mich. 99-102; People v. Mahaney, 13 Mich. 484-500.

17. People v. Calder, 153 Mich. 724; People v. Hurlbut, 24 Mich.

44-54.

18. C. L. 1897, Sec. 8569.

19. Bissel v. Heath, 98 Mich. 478-479.-In this case it was held that under the reserved right of amendment, the legislature may increase the liability of stockholders as to future contracts.

20. In Detroit V. Detroit & Howell P. R. Co., 43 Mich. 140147, Justice Cooley said: "But for the provision in the constitution of the United States which forbids impairing the obligation of contracts, the power to amend and repeal corporate charters would be ample without being expressly reserved. The reservation of the right leaves the State where any sovereignty would be if unrestrained by express constitutional limitations, and with the powers which it would then possess. might therefore do what it would be admissible for any constitutional government to do when not thus restrained, but it could not do what would be inconsistent with constitutional principles, and it can not be necessary at this day to enter upon a discussion in denial of the right of the government to take from either individuals or

It

corporations any property which they may have rightfully acquired. In the most arbitrary times such an act was recognized as pure tyranny, and it has been forbidden in England ever since Magna Charta, and in this country always.

21. Attorney General v. Looker, 111 Mich. 498-505.

22. Railroad Commissioner V. Grand Rapids & I. Ry. Co., 130 Mich. 248-250; Smith V. Lake Shore & M. S. Ry. Co., 114 Mich. 460; Attorney General v. Looker, 111 Mich. 498; East Saginaw Mfg. Co. v. Saginaw, 19 Mich. 258-295; Detroit v. Detroit & Howell P. R. Co., 43 Mich. 140-148. In the case last cited, mandamus was prayed to compel a corporation to remove a toll gate and vacate a portion of its road without compensation. The basis of the suit was that the company's right to occupy something more than two miles of road had been withdrawn by the State through amendment of the company's charter. In denying the State's right to make such an amendment, Justice Cooley said: "A statute which would have this effect would not be a statute to amend franchises, but a statute to confiscate property; it would not be a statute of regulation, but of spoilation." While vested rights in property can not be appropriated by the State, nor impaired, un

of amendment or repeal to these ends would be unconstitutional and void23.

§10. Validity of Enabling Act.

The legislature is the sole judge of the propriety of an enabling act, but the question of the act's validity is for the courts. An enabling act may be void because never lawfully adopted, or on account of some conflict between it and the Constitution of the State, or of the United States. Where an act conferring rights and franchises upon a corporation is attacked on the ground that it was improperly adopted by the legislature, all presumptions are with the legality of the act. If the legislature has, by subsequent amendment, or in any other manner, recognized the act as valid, and impliedly invited others to do so, the act will be sustained25.

Objection to the constitutionality of an act is most frequently founded upon the constitutional provision that, "No law shall embrace more than one object, which shall be expressed in its title"26. The fault may be that the act embraces more than one subject, or that the subject of the act is not properly expressed in its title, or that both of these defects exist concurrently.

der cover of an act, purporting to amend or repeal a charter, the power to take such property for public purposes, upon making due compensation to the owner may always be exercised under the State's power of eminent domain. Pingree v. Michigan Central R. R. Co., 118 Mich. 314-339.

23. Smith v. Lake Shore & M. S. R. Co., 114 Mich. 460-473.

24. Flint etc. P. R. Co. v. Woodhull, 25 Mich. 99-102; People v. Mahaney, 13 Mich. 484-500.

25. Attorney General v. Joy, 55 Mich. 94-106.

26. Const. 1850, Art. IV. Sec. 20; Const. 1908, Art. V, Sec. 21.

27. Grimm V. Secretary of State, 137 Mich. 134; Graham v. Muskegon County Clerk, 116 Mich. 571: Canal Street Gravel Road Co. v. Paas, 95 Mich. 372-379. In commenting upon the constitutional provision that "No law shall embrace more than one object, which shall be expressed in its title",

Justice Cooley said: "The history and purpose of this constitutional provision are too well understood to require any elucidation at our hands. The practice of bringing together into one bill subjects diverse in their nature, and having no necessary connection, with a view to combining in their favor the advocates of all, and thus secure the passage of several measures, no one of which could succeed upon its own merits, was one both corruptive of the legislator and dangerous to the State. It was scarcely more so, however, than another practice, also intended to be remedied by this provision, by which, through dexterous management, clauses were inserted in bills, of which the titles gave no intimation, and their passage secured through legislative bodies whose members were not generally aware of their intention and effect. There was no design. by this clause, to embarrass legis

The fact that rights have become vested through mistaken reliance upon an unconstitutional enabling act, lends the act no validity. The State waives nothing by failure to promptly intervene. But where imported rights would be overthrown, the unconstitutionality of the act must be clear and compelling before the courts will adjudge the legislation unconstitutional28.

§11. Effect of Unconstitutionality of Enabling Act.

There can be no corporation, either de jure or de facto, except by virtue of a valid law29. Where incorporation is attempted under void legislation, but for a lawful purpose, the members incur the liability of partners30. But where the attempted incorporation under a void law is for an unlawful purpose, partnership liability does not arise31. To hold otherwise would be to assert, that a partnership might be formed for an illegal purpose. Where a purported corporation turns out to be nonexistent for want of valid enabling legislation, contracts of all kinds made by or with the supposed corporation are absolutely

lation, or to make laws unnecessarily restrictive in their scope and operation, and thus multiply their number; but the framers of the constitution meant to put an end to legislation of the vicious character referred to, which was little less than a fraud upon the public, and to require that in every case the proposed measure should stand upon its own merits, and that the legislature should be fairly notified of its design when required to pass upon it.....

This purpose is fully accomplished when the law has but one general object, which is fairly indicated by its title."-People v. Mahaney, 13 Mich. 481-494: see also People v. State Ins. Co., 19 Mich. 392-398.

28. Attorney General v. Joy, 55 Mich 94. In sustaining the constitutionality of the "Train Railway Act". Justice Grant said: "Street railways have existed under this act for nearly thirty years. Millions of money have been invested in them. They have been extensively used by the people....

...In the many cases brought to this court involving the various

provisions of the act, its constitutionality was never raised, and is now for the first time doubted. If its constitutionality were doubtful, courts might well be justified in upholding the practical construction which has thus been adopted by the people."-Detroit City Ry. v. Mills, 85 Mich. 634-646.

29. Justice Champlin, in Mason v. Perkins, 73 Mich. 303-312, states this proposition as follows: "No corporation in this State can exist unless it be created by law, and every corporation, when called upon by the people to show by what authority it exercises the franchises and privileges of a corporation, must show a valid enactment of the legislature for its authority." See also Eaton v. Walker, 76 Mich. 579-590; Burton v. Schildbach, 45 Mich. 504-508; Green v. Graves, 1 Doug. (Mich.) 351.

30. Eaton v. Walker, 75 Mich. 579-590; Burton v. Schildbach, 45 Mich. 504-511.

31. State v. How, 1 Mich. 512513; Burton v. Schildbach, 45 Mich. 504-511.

void. There is no corporate party to be contracted with, and where there is no corporation there can be no corporators. No matter how formal, or how supported by valuable considerations no matter how fortified by fairness and good faith-such contracts are nullities because, there being no corporation, there is, upon one side of the apparent agreement, no contracting party32. Under such circumstances, equity will do justice, as far as may be, between the parties, by way of an accounting33, but equity can not inject vitality into void instruments; it can go no further than to merely determine the equitable rights and interests of the parties by decree34.

A corporation will not be permitted to deny the validity of its own being35. Where a corporation has a de jure or a de facto existence, the State, and no one other than the State, can attack the legality of its organization36. Stockholders, creditors and third parties who have recognized the purported corporation by dealings with it, are estopped to deny that it is lawfully organized37. But where, because of the unconstitutionality of the

32. Scheutzen Bund v. Agitations Verein, 44 Mich. 313; Burton v. Schildbach, 45 Mich. 504-510. 33. Burton V. Schildbach, 45 Mich. 504-511.

34. Hurlbut v. Britian, 2 Doug. (Mich.) 191; Burton v. Schildbach, 45 Mich. 504-513.

35. Shadford v. Detroit etc. Ry., 130 Mich. 300-304; Monroe Water Co. v. Frenchtown, 98 Mich. 431436.

36. Shadford v. Detroit, etc., Ry., 130 Mich. 300-305; Detroit etc. R. Co. v. Campbell, 140 Mich. 384394; Carson City Savings Bank v. Elevator Co., 90 Mich. 550-554; Swartwout v. Michigan Air Line R. Co., 24 Mich. 389-395; Wilcox v. Toledo & A. A. R. R., 43 Mich. 584-590: Meurer v. Detroit etc. Ass'n. 95 Mich. 451-455; Staver & Abbott Mfg. Co. v. Blake, 111 Mich. 282-288; Chicago & Grand Trunk Ry. Co., v. Miller, 91 Mich. 166-182; Jhons v. People, 25 Mich. 498-501; Toledo & A. A. R. Co., v. Johnson, 55 Mich. 456-460; Grand Rapids Bridge Co. v. Prange, 35 Mich. 399-402.

37. Shadford v. Detroit, etc. Ry.,

130 Mich. 300-305; Love v. Ramsey, 39 Mich. 47-50; Carson City Savings Bank v. Elevator Co., 90 Mich. 550-554; Eureka Iron & Steel Works v. Bresnahan, 60 Mich. 332337; Swartwout v. Mich Air Line R. Co., 24 Mich 389-395; Calkins v. Bump, 120 Mich. 335-342; International Fair etc. Ass'n v. Walker, 88 Mich. €2-82; Estey Mfg. Co. v. Runnels, 55 Mich. 130-133; Merchants & Manufacturers Bank v. Stone, 38 Mich. 779-782; Staver & Abbott Mfg. Co. v. Blake, 111 Mich. 282-288; Gow v. Collin & Parker Lumber Co., 109 Mich. 4551; American Mirror & Glass Beveling Co. v. Bulkley, 107 Mich. 477450; Stofflet v. Strome, 101 Mich. 197-199; Chicago & Grand Trunk Ry. Co. v. Miller, 91 Mich. 166-182; Monroe v. Ft. Wayne, J. & S. R. Co., 28 Mich. 271-275; Jhons v. People, 25 Mich. 498-501; Cahill v. Kalamazoo Mut. Ins. Co., 2 Doug. (Mich.) 123-133. Estoppels rest upon equity. Where there is no equity to be protected, no estoppel arises. Thus, where a merely colorable organization was formed for the premeditated purpose of