Case ID: mass_16/html/0206-01.html
Source: Caselaw Access Project
Author: {"author": "Parker, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Benjamin Foster and Another, Executors, &c. versus the President, Directors and Company of the Essex Bank.
    A banking company was incorporated for the term of twenty years. Before the term had expired, a law was made, whereby all corporations, then existing or thereafter to be' established, whose powers would expire at a given time, should be continued in existence as bodies corporate, for three years after the time limited by their charters, for the purpose of suing and being sued, settling and closing their concerns, and dividing their capital stock : but not for continuing the business for which they were established. It was held that the law was within the constitutional power of the legislature; and the said banting corporation were held to answer, after the expiration of their charter, to an action previously pending.
    Assumpsit for 50,000 dollars had and received by the defendants, to the use of Israel Foster, the plaintiff’s testator.
    The action was entered at the last April term, and at this term the following suggestion was filed, viz. “ And now William Prescott and Leverett Saltonstall, who were originally retained in this action by the Directors of the Essex Bank, suggest that, since the last term of the Court, the corporation of ‘ the President, Directors and Company of the Essex Bank ’ is dissolved by the expiration of the time limited for its duration, in the act of incorporation; which said act is dated the eighteenth day of June, in the year of our Lord one thousand seven hundred and ninetu-nine. Txr „
    William Prescott,
    Leverett Saltonstall.”
    [By the act incorporating the defendants , it was provided that the persons therein named, and their associates, successors and assigns, should be created and made * a corporation, [ * 246 ] by the name of, &c., and should “ so continue from the first day of July,1799, until the expiration of twenty years next following.” By an act passed on the 19th of June, 1819 , it is enacted, “ that all bodies corporate and politic, which now are, or hereafter may be established, and whose powers would expire, either by express limitation in their charters of incorporation, or otherwise, shall be, and they hereby are continued bodies corporate and politic, for the term of three years, from and after the day on which their powers would expire, as aforesaid, for the purposes of prosecuting and defending all suits, which now are, or may hereafter be instituted, and of enabling such bodies corporate and politic gradually to settle and close their concerns, and divide their capital stock; but not for the purpose of continuing the business for which such bodies corporate and politic have been, or may be established.”]
    The question arising out of the above suggestion was argued at Boston, March term, 1820 (the action having been continued nisi for argument and judgment), by Prescott and Saltonstall, for the defendants, and Pickering and Webster, for the plaintiffs.
    
      Saltonstall The question before the- Court is this: Does the late statute, for continuing all corporations three years for certain purposes, apply to this bank, and remove the objection, that the original charter has expired ? We contend that it does not.
    
      The circumstance of its being a general law, is of no importance to this question. If it is retrospective in its operation, or interferes with vested rights, it is void ; as much so, as if made for the particular case. In the case of Wales vs. Stetson 
      , Parsons, C. J., says, that “ rights legally vested, cannot be controlled or destroyed by any subsequent act, unless a power for that purpose be reserved in the act of incorporation.” This was said with reference to a [ * 247 ] general law. The New York bankrupt act * is a general law : but it was decided by the Supreme Court of the United States, in the case of Sturgis vs. Crowninshield 
      , that so far as it attempted to discharge the contract, on which that suit was instituted, it is a law impairing the obligation of contracts and void. And the same act was so holden by this Court in the case of Blanchard vs. Russell 
      .
    The act of June, 1819, is void and of no effect on the corporation of the Essex Bank, because it impairs the obligation of contracts. It is also void, as it violates vested rights. So far as it applies to corporations then existing, it is also retrospective, and therefore a void act of legislation. The remarks which apply to one of these principles, are almost equally applicable to the others; for a statute, which changes the nature and effect of an existing contract, violates them all.
    It is established by the case of Fletcher vs. Peck 
      , and the case of Dartmouth College 
      , that a grant by the government is a contract ; and that a charter of incorporation is a contract, within the clause of the constitution of the United States. Judge Washington says, “ the parties are the government, and the person for whose benefit the corporation is created.”
    It is settled by the case last referred to, that a law, which alters or violates any part or provision of a contract contained in an act of incorporation; is of no effect, but as entirely inoperative as it would be in the case of a money contract.
    Perhaps the true meaning of no part of the constitution was so long uncertain, as this restrictive clause on the state legislatures. So lately as the case of Lock, Adm., vs. Dame 
      , this Court say, “ this clause, as we all know, was provided against paper money, installment laws,” &c. If it is more extensive in its operation than was then supposed by many learned men, what is there to fear from a construction, however broad, in support of the inviolability of contracts ?
    [ * 248 ] * What, then, is the obligation of the contract between the government and the corporation of the Essex Bank ? On the part of the latter it is, to perform all the duties imposed on them by the act of incorporation. On the part of the government, the grantors, it is, that the corporators shall enjoy all the powers and privileges granted in the act, without any alteration, or the imposing of any new provision without their consent. The corporation was established for twenty years. They may not be compelled to continue for a longer or a shorter period ; and a law requiring either must equally impair, as it would equally vary, the original contract. A chai ter, or act of incorporation, being a grant, the party is not bound to accept it; and having accepted it, for the same reason, he is not bound to accept a new or additional grant.
    When a private corporation is created, it is subject to no other control, than what is expressly or impliedly reserved in the charter itself. Unless power be reserved for this purpose, the crown can not, by the mere power of its prerogative, alter or amend the charter, or divest the corporation of any of its franchises, or add to them 
      . It is not the magnitude or nature of the alteration which renders it void. Any alteration, which might subject the corporation to new conditions, is against the original contract, and the privileges therein secured to the grantees. “ Does not any alteration of a contract,” says Judge Washington, “however unimportant, even though it be manifestly for the interest of the party objecting to it, impair its obligation ? If the assent of all the parties to be bound by a contract be of its essence, how is it possible that a new contract, substituted for or ingrafted on another, without such assent, should not violate the old charter?”
    The act incorporating the defendants then contains an implied obligation on the part of the government, not to make any alteration in the terms of the charter, without the consent of the grantees therein named, or their successors ; * that they [ * 249 ] should not be compelled to contribute towards a greater stock than is limited by the act, ór to continue for a longer term than twenty years.
    Does, then, the late statute renew the corporation? We say that the legislature cannot continue a corporation, beyond the time limited in its charter, without the consent of the members. The existence of the Essex Bank, as a person known in law, depends essentially upon the assent of its members. The act of the legislature is also essential; but neither can be dispensed with. If these are not combined, the bank is a mere copartnership; and a suit cannot be maintained against them, without naming the partners individually. The General Court can no more make or continue a corporation without the assent of the members, than an inferior tribunal. They are not the supreme power, but derive all their authority from the constitution.
    “ It is a franchise for a number of persons to be incorporated as a body politic, with a power to maintain perpetual succession, and do other corporate acts, and each individual member of a corporation is said to have a franchise or freedom ” . That a charter is a contract with the grantees individually, is fully recognize d in the case of Dartmouth College before referred to. “ In every view of the case, if a consideration was necessary to make the charter a valid contract, a valuable consideration did exist as to the founder, the trustees, and the benefactors; and upon the soundest legal principles, the charter may be properly deemed as a several contract with each of these parties.”
    In the case of the Portland Bank vs. Apthorp 
      , it is said by the Court, that “ the effect of the charter was to give to the individuals who applied for it, and their successors, a right to act as a body corporate and politic in the management of their common funds, under the restrictions and regulations provided in the charter.” The same doctrine is laid down in Rex vs. Pass- [ * 250 ] more 
      , * and in Rex vs. Dr. Askew 
       ; and in the case of Ellis vs. Marshall 
      , the Court decide, that “ no person can be made a corporator against his consent.” For the same reason we say, he cannot be continued a corporator against his consent, when the charter expires. If a person is not bound to accept an original grant, how can he be obliged to accept an additional grant ? If all the corporators do not assent to the new grant, it follows that the second act, without such assent, is a new contract, and creates a new corporation.
    The original act of incorporation was a grant to certain individuals : upon their acceptance of which they were bound fo.r a limited time ; and whether they should continue a body politic be- and that time, is a question to which the individuals must again ce parties. The creation of a new corporation, after the death of the old one, makes another body . The petition of the corporation, therefore, for a continuance, is not sufficient. • The assent of the corporators should have been obtained; for to them the original grant was made. The renewal of the charter was not a subject upon which the corporation, as such, had a right to act. It was in the nature of a limited power, given by the corporators. The corporation may be considered as a trustee or agent for the individual corporators, for certain purposes and for a certain time. But the agent could hot subject the principals to a longer continuance of the power .
    But the renewal of the charter was not accepted by the corporation, by any act or vote. On the contrary, it was voted to dissolve the corporation, at the time limited in the original act.
    The necessity of the assent of the stockholders in the bank appears from the effect of this second act upon their property. The members of a corporation part with the absolute control of their property, and subject it to the control of others, viz. a majority of the corporators; and if they have assented thereto on certain terms, or for a * certain time, they cannot be [*251] compelled to assent on other terms, or for a longer time.
    The act of the stockholders, in placing their funds in the bank, may be considered as a bailment for twenty years. Can the bailment be continued at the pleasure of the bailee, without the consent of the bailor? The late act takes from individuals the control of their own property, longer than they had contracted for.
    The corporation was also a contract between the several corpora-tors, who agreed with each other to obtain an incorporation, and that the joint fund should be managed by a vote of the major part. By the terms of this agreement, the several partners had a right to withdraw their respective portions of the fund at the end of twenty years. The late act is in violation of this contract. [Mr. Saltonstall enlarged upon this point.]
    The act is also in violation of contracts between the corporation and strangers. It does not merely give a new remedy, to compel the performance of existing contracts, but gives to contracts a longer duration. It is an implied part of every contract with a corporation, that it must be enforced during the life of the parties, and must otherwise cease to exist. The recovery of debts is as much limited to the life of the corporation, as an action of trespass to the life of the trespasser, or a lease for years to the end of the term. A law therefore extending the liability of persons on such contracts beyond the existence of the corporation, impairs their obligation, by lengthening their duration. In the case of Sturgis vs. Crowninshield, the Court say, “ If, in a state where six years may be pleaded in bar to an action, a law should pass, declaring that contracts already in existence, not barred by the statute, should be within it, there could be little doubt of its unconstitutionality.” If then a law would be void, which restrained the existing rights of a creditor, and deprived him of his action, why should not one be void, which restricts the rights of a debtor, and deprives him of his defence ? The ¡ * 252 ] debtor has as much interest in the * right construction of the contract, as the creditor has. In the case of King vs. The Dedham Bank, it was decided that “ no act of the legislature can alter the nature and effect of an existing contract, to the prejudice of either party,” &c.
    The act in question is also retrospective as to the Essex Bank. Retrospective laws are repugnant to natural justice, and, strictly speaking, are no laws .
    If the act does not revive the corporation, the plaintiffs’ action must fail. An action cannot be maintained against a corporation, after the expiration of the time limited by the charter for its existence. The contract dies with the corporation, the artificial person. “ The debts of a corporation, either to or from it,” says Judge Blackstone, “are totally extinguished by a dissolution” . If a corporation bind themselves in a bond, and are afterwards dissolved, they shall not be bound in their natural capacities . The corporators cannot, as individuals, bind the corporation; neither can the corporation bind the individuals.
    There is no implied condition, that a charter of incorporation shall not expire until the debts are paid. On the contrary, the understanding is, that the remedy will be lost, unless enforced before the expiration of the term. In the case of Vose vs. Grant 
      , the Court say, “ a corporation may die, or become insolvent, like any other person. The time of its dissolution is known beforehand ; and this is an advantage to creditors, if they would make use of it.” If they do not make use of it, they must suffer by their loches; there is no hardship. In case of fraud, the Court intimate, that the individuals concerned would be personally liable.
    
      Pickering. The question at present before the Court is, whether the charter of the Essex Bank is now at an end to all intents and purposes, or has been continued in force, for certain purposes, by the law of June last, which was enacted before the expi [ * 253 ] ration of the twenty years * mentioned in the charter. And the decision of this question will rest principally, if not altogether, upon the validity of that act. The act is a general one, extending to all corporations, that then were, or thereafter might, be established, and -whose powers would expire, either by express limitation in their charters, or otherwise.
    The counsel for the defendants contend, that notwithstanding this act, the corporation is dissolved, and the action is at an end; because the act itself is unconstitutional and void ; it having passed without their assent, and being retrospective in its nature, and infringing rights secured to them by their charter.
    Before considering the questions now raised, we suggest that it is agreed by all our courts, that a law is not to be pronounced unconstitutional, except in a very clear case ; so that the judge (to use the language of the Supreme Court of the United States, in the case of Fletcher vs. Pede, cited for the defendants) “ feels a clear and strong conviction of their incompatibility with each other.” The same caution has been observed by our state courts in various instances ; as in this Court, in the case of Kendall vs. Payson 
      . This reserve on the part of our courts is founded, as they have observed, upon the respect always due to the legislative body of a state; who, it is to be presumed, would never intentionally violate the rights of the citizen. If, therefore, in the present case, the Court should merely be left in a state of doubt, they ought to declare the law to be constitutional and binding. Under this view of the duty of the Court, we shall submit our views of the question now raised.
    It is undoubtedly true, as a general rule, that laws should operate prospectively; but this, like all other general rules, admits of exceptions. And the code of the civil law, from which our law has borrowed the maxim, adds to it, nisi nominatim et de prceterito tempore et adhuc pendentibus negotiis cautum sit; which exception is given in a more extended form by Domat, who says,
    “ Unless for particular * reasons, the new laws indicate [ * 254 ] expressly that their provisions are to apply to the past; or unless, without such indication, they must serve as a rule to past things,” &c. Such is the language of the civil law, which is the basis of the different codes adopted on the continent of Europe; and it need hardly to be observed, that the same general rule has been incorporated into the English law. But in England, also, exceptions to this rule are recognized; and to such a length has the principle of the exceptions been carried, that, as every lawyer knows, it was not long ago a settled rule of construction in the courts of that country, that an act of parliament, which was to take effect from and after the passing of it, should operate from the first day of the session, let the act have been passed on what day it might during the session. This rule was declared by the Court of King’s Bench, in the case of Latless vs. Holmes 
      , to have been “ so long settled, that L could not have been shakenand the court refer to one case, ia which “ the life of a person,was affected” by the operation of it and it could only be abrogated, as Christian observes, by parliament . And if it should happen in this commonwealth, either by accident or any other cause, that a statute should be enacted without a date, the Court, as we conceive, must govern themselves by the same rigorous role.
    In our own state, and indeed through all the states of the Union, the same general principle of law is recognized, either by express constitutional provisions, or as a rule of the common law. In the constitution of this state, the principle is expressly recognized to a certain extent (that is, in regard to persons or personal rights) in the clause prohibiting ex post facto laws. For, as Judge Chase observes, in the case, of Calder & Ux. vs. Bull 
      , every ex post facto law is 'retrospective, but every retrospective law is not ex post facto. The reason why our own constitutional provision is limited to f * 255 ] ex post facto laws alone, and not * extended to retro spective ones also, will be presently considered.
    The eminent judge just mentioned, however, instead of carrying the prohibition against retrospective laws to the extent which will be necessary for the defendants in the present case, uses this quali tied language, when speaking of such laws. “ Every law, that takes away fights vested agreeably to existing laws, is retrospective, and is generally unjust, and may be oppressive; and it is a good general rule, (hat a law should have no retrospect. But there are cases in wn'ch laws may justly, and for the benefit of the community, and a.so of individuals, relate to a time antecedent to their commencement ; as statutes of oblivion or of pardon. They are certainly retrospective, and literally both concerning and after the facts committed. Every law, that is to have an operation before the making thereof, as to commence at an antecedent time, or to save from the statute of limitations, or to excuse acts which were unlawful and before committed, and the like, is retrospective. But such laws nay he proper or necessary, as the case may be.” The same view of this subject, as connected with the provision of the federal constitution, has been repeatedly taken by this Court .
    In conformity with the reasoning in the cases referred to, must have been the general understanding of those statesmen who framed our state constitution. The prohibition in that compact against retrospective laws is restricted to that class technically called ex post facto, and bills of attainder. The provision in the federal constitution is restricted in the same manner, and does not extend to all retrospective laws; for Paterson, J., says, in the case of Calder & Ux 
      vs. Bull, before cited, he had an ardent desire to have extended the provision in the United States constitution to retrospective, as well as to ex post facto laws.
    The convention, which framed the constitution of this commonwealth, were not a collection of mere abstracted * persons, who had no habits of society, and no common [ * 256 ] principles, which were, by tacit consent, to be the fundamental rules of their particular state of society. On the contrary, many things were assumed, as tacitly agreed to by every individual of the society. Each member brought with him the habits and principles derived from the colonial and provincial governments, which were themselves founded upon the common law of England. They well knew that, under the former government, it was the practice to pass laws of the kind in question, conformably to the principles of the common law; and' when they entered into the constitutional compact, they were presumed to do it subject to this right, which was tacitly yielded to the sovereign authority, of passing limitation acts, confirmatory and other laws, to such an extent as the public good might require; notwithstanding such laws might, in some degree, affect the rights of individuals considered in the abstract.
    So far, indeed, as government may be considered a contract, it must be interpreted as other contracts; and it is a familiar principle, that in all contracts many things are implied or taken for granted, without any express mention of them. The long acquiescence of parties to a contract, in respect to subjects which might originally appear questionable, is also very justly held to be evidence that those subjects were originally intended to be comprehended in the contract. Generally speaking, therefore, retrospective laws do in fact only provide for a class of cases, which must be presumed to be tacitly excepted from the rigorous operation of the general laws of a society.
    It being then undeniable that the general principle, which forbids the making of retrospective laws, admits of some exceptions, it will always be a question for the discretion of the legislature of a country, (under the restrictions of the express or implied compact of the government) how far it may be expedient to enact laws of that description. This is undoubtedly, in many rases, a question of great difficulty, and one which can never be decided in the * abstract; because different societies of men, where [ * 257 j the written constitution of a state is silent, will have more or fewer implied exceptions to the general principle, according to the habits, laws, and usages, which they may have derived from their ancestors. We may, however, in most cases safely infer that, where retrospective acts of various kinds have been long acquiesced in by á community, it must have been the tacit understanding of such society to permit those laws to be made. We therefore think it important to call to the recollection of the Court various instances of retrospective laws, passed in this state, and either acquiesced in, or expressly questioned and adjudged to be constitutional; and in this way we may arrive at a more satisfactory opinion, as to the extent to which such laws may be considered as permitted by the community composing our own commonwealth. These are of various kinds.
    1. Limitation acts, which have been already adverted to. The legislature has constantly exercised the right of enacting laws of this class, under the provincial and the state governments; as they have also of suspending limitation acts. This was done, as the Court observe, in the case of Holden vs. James, Adm. 
      , with respect to the statute of 1786, c. 52, for the limitation of personal actions; which, by the statute of 1790, c. 20, was suspended as to certain kinds of actions. And the reason given in the preamble of the suspending law is, that the operation of the said act for the limitation of personal actions, &c. may defeat of their just demands many creditors, &c. And by the statute of 1792, c. 82, the limitation act was still further suspended for similar reasons; all which reasons may be comprised in this, that the public good required it. Yet it might have been urged by debtors, whose obligations were thus opened again, that they had certain rights vested under the existing laws, and that the legislature had no authority thus to infringe those rights, by compelling them to pay debts which had been f * 258 ] cancelled by the laws of the * land. Just as, in the case at bar, the defendants contend that, by the terms of their charter, they were not to be held liable for any debts after its expiration, notwithstanding the statute for continuing the charters of corporations; a statute exactly analogous to the suspending acts already mentioned; except that it is, if any thing, less liable than those to the objection of inequality, because it gives both the debtor and creditor the advantage of further time ; whereas by the acts to suspend the statute of limitations, it was the creditor only who was to be benefited, while the debtor was subjected to positive loss. Now, whatever may be thought of statutes of limitation, and the acts for suspending them, theoretically considered, this Court has uniformly held them to be within the authority of the legislature. In the case of Holden vs. James, Adm., just referred to, they observe that “ there is no doubt the legislature may suspend a law, or the operation of a law, whenever they shall think it expedient.” After which the court put, as an example, the suspension of limitation acts. It is true that in that case the court held, that a general law could not be suspended, in favor of an individual, by a particular resolve of the legislature; but the suspending law must be a general one.
    2. Another instance, in which retrospective laws have been held to be constitutional by this Court, is that of the statute of 1785, c. 52, abolishing joint tenancies, which was considered in the case of Holbrook vs. Finney 
      , and was adjudged to have effect upon tnat ;ose, although enacted subsequently to the execution cf the deed hen in question; and Parsons, C. J., expressly says, “This statute has a retrospective effect, and comprehends this conveyance; and there seems to be no constitutional objection to the power of the legislature to alter a tenure, by substituting another tenure more beneficial to all the tenants.” Yet here, according to the principles contended for by the defendants, certain vested rights were infringed by the government, without the consent of the parties interested.
    * 3. Another well-known case of retrospective laws is [ * 259 ] that of the statute of 1808, c. 92, confirming the boundaries of gaol yards, previously assigned by courts of sessions, which was enacted, as is understood, in consequence of the decision in Bartlet vs. Taber 
      , where the court held, that private estates, not under the control of the sheriff, although within the gaol limits, were not to be considered as within the gaol yard, technically speaking. Notwithstanding the manifest retrospective force of this act, it was held in the case of Patterson vs. Philbrook 
       in this Court, that the entry of a prisoner, having the liberty of the yard, upon such private property, although it had happened before the passing of the act, was not to be considered an escape. The plaintiff in that case was accordingly deprived of his right of action, by a law passed while his suit was pending. The same opinion had been before given in the case of Walter vs. Bacon Al. already cited. To this statute may be added that which fixed a limitation of one year to suits upon bonds given for the liberty of the gaol yard; which was adjudged to be constitutional, in Locke vs. Dane & Al. 
      .
    4. Another class of retrospective laws, which have been held to be constitutional, are those respecting personal rights or privileges; such as the laws which have from time to time altered the exemptions from military duty. In the case of the Commonwealth vs. Bird 
      , one of the militia laws  was expressly objected to, on the ground that it deprived the respondent of an exemption to which he had a right by former laws. But the court overruled the objection. Another case within this principle, is that of graduates of Harvard College, who were originally exempted from militia duty, but have since been subjected to it. This last case has not perhaps come before this Court.
    5 Another instance is in the statute of 1805, c. 37, respecting divorces, which was brought under the consideration of [ * 260 J the court in West vs. West 
      . This act is *made to extend to cases of divorce that should be prosecuted after the passing of it, whether the facts, upon which the divorce should be decreed, were committed before or after that date ; and it was held to be constitutional, although it essentially diminished the rights of the husband, as to the property received by the intermarriage.
    6. The statutes giving remedies against corporations, by warrant of distress and other process. One of these  expressly relates to cases where judgments have been rendered against corporations, as well as to future cases; and the creditor has a right, by it, to seize the franchise and sell it. We are not indeed aware of any adjudication upon this act; but we presume it is as clearly within the power of the legislature, as the instances before mentioned.
    7. There is a large class of laws of a retrospective nature, respecting corporations of the kind now in question; as the statute prohibiting the banks already incorporated (except in Nantucket) from issuing bank notes under five dollars  ; although by their charters they were under no restriction of that kind:—The statute of 1808, c. 99, requiring the existing banks to use the stereotype plate, &c.:—The statute of 1809, c. 37, imposing a penalty of two per cent, a month upon banks that should refuse payment of their notes in specie. In the case of Brown vs. The Penobscot Bank 
      , the court held that this act was constitutional, and should take effect m that case, although that bank had its charter granted several years before:—The statute of 1812, c. 57, for continuing the charters of a certain class cf banks, which were about expiring, in order to enable them to close their concerns, &c. And although we are not aware of any express decision upon this act, yet in Vose vs. Grant 
       it was brought into discussion, and no intimation is given by the court of its being unconstitutional, but the contrary is assumed in the reasoning upon it:—The statute of 1812, c. 32, impos- | * 261 ] ing a tax upon banks, whether incorporated before *or subsequently to the act. This was decided to be co?isti-
    
      tutional in The Portland Bank vs. Apthorp, Treasurer, &c. In addition to these acts, we will cite but one or two others. By one, the real estate of all banks, now incorporated, or hereafter to be, &c. is made liable to the payment of their debts  ; and by another, these corporations are made liable to heavy penalties, if they neglect to make their semi-annual returns to the governor and council; and the act is'to apply to such as then were, or afterwards should be established .
    We may further ask, By what authority does the legislature (upon the defendants’ principles), in the insolvent laws, give a priority to the debts due to the commonwealth, whether contracted before or after those due to individuals, thereby infringing the strict rights of citizens ? If it is said, that parties, in making their contracts, are aware of this restriction, we answer, that the same reasoning w; 1 justify the retrospective limitation acts, suspending laws, &c.
    The late statute, extending the equity powers of this Court , is another example of a law that may operate retrospectively, and perhaps as strong an instance as any we have cited; to which we may add the statute exempting certain articles of property from attachment .
    From the preceding review of the opinions of eminent jurists, and of adjudged cases, it manifestly appears that there are, by the laws of all states, many cases in which the sovereign power may enact laws which theoretically speaking, are retrospective. And whence, it may be asked, does this arise ? From the necessary imperfections of human society. If society were so perfect as never to be in need of occasional remedial and equitable regulations, by means of retrospective laws, it would, perhaps, hardly need any laws.
    But we shall be asked, perhaps, if there is no limitation to this power of enacting retrospective laws. Unquestionably there is in all communities; by that tacit consent * which [ * 262 ] has before been mentioned; and to what particulars such consent is given, must be learned from the habits and principles of the particular people who compose any such community.
    A community of Frenchmen, for example, would be presumed, if *heir compact of government was silent, to agree that the age of minority should be twenty-five; and that alf lawsuits should he decided by a judge, instead of a jury; while, on the other hand, a community of Englishmen would be presumed to have agreed to limit the age of minority to twenty-one years; and that the tiial by jury should be a fundamental principle of their state. In like manner, associations of smaller kinds, such as the various learned professions, literary institutions, corporations for all the various and complex purposes of civilized society, presuppose a tacit consent to certain fundamental principles, which will differ according to the different habits of their members. When, therefore, it is once admitted that there are certain limitations of the abstract rights of men, it becomes a mere question of expediency with -the sovereign power of a state, to what extent such limitations shall be carried; subject only to this restriction, that the retrospective provisions of laws sha I be reasonable as respects the whole community.
    One well-settled distinction, however, in regard to retrospective .aws, appears to have been universally recognized by courts of justice • that the legislature may enact retrospective laws affecting the remedies, but not the rights of parties, as they are usually called. It may indeed be difficult, in many cases, to determine whether a law affects the one or the other; because every remedy is, in a certain sense, a right. But when the court shall have once arrived at the conclusion, that a law does unequivocally belong to the one or the other of these descriptions, they feel no hesitation in the opinion they ought to pronounce, as to its constitutionality.
    [ * 263 ] * Now, the statute at present under consideration is, as we conceive, a law respecting a remedy, and not the rights of the bank or the public. We say of the public, as well as of the bank; for by what rule of justice shall a bank be allowed to prolong its charter, and thus hold individuals liable (after the expi ration of the original grant) who had made their contracts with it, upon the supposition that the charter was to terminate at a day certain, and that they should have the legal advantage, if any, of such known period of its termination ? By what rule of justice shall this privilege be allowed to the corporation, and withheld from the individuals who have dealings with it? A debtor to the bank might adopt the language of these defendants, and say to the government, that they had no right to prolong this charter, and prevent his having the advantage of the legal bar to suits, which is now claimed by the corporation. The statute in question merely provides, that, all rights of action, both against and in favor of the several corporations in the 'commonwealth, shall remain undisturbed for three years; in other words, that the limitation of actions, for and against them, shall be suspended for that term of time. In the present case, too, it may be observed that the action was commenced long before the act was passed, and before the expiration of the charter took place; but perhaps the principle would have been the same, if it had not been thus commenced.
    Let us suppose that, instead of this form of remedy, the legislaturc had thought fit to make a law, that upon the expiration of the charter of any corporation, all the liabilities, and all their own rights of action, should be transferred to, and vested in, the last-appointed president and directors, as trustees, in the nature of an administration upon the estate of a deceased person; and that those trustees should, for three years, be liable to the suit of any person having demands against such corporation, and that all the property of the corporation should be held liable * for such [ * 264 ] demands:—can it be doubted that such a law would be constitutional ? Or suppose that the legislature should declare that hereafter actions should be brought against persons deceased by name, instead of their administrators, might not such a provision be constitutionally made ?
    But it is said, that the government has made a contract with these corporators, who are to enjoy their chartered rights undisturbed ; and that the present statute impairs this supposed contract, and is therefore unconstitutional and void. This leads to a brief consideration of the nature of this supposed contract, which in fact is nothing more than constituting the corporation a legal person, a subject of the state for certain purposes, chiefly of a public nature, or of public utility. That such is the nature of a charter is expressly laid down by this Court in the case of the Portland Bank vs. Apthorp, before cited, where they say, “ The object of the charter is to enable them in a body to conduct their business as an individual, to make contracts and to enforce them as such, avoiding the inconveniences of a copartnership. This is all that is asked for by the company, and all that is given by the charter.” Now, in making this grant, can it be supposed, for a moment, that the government intended to relinquish' ihat control, which it must possess over all its, subjects ? Would the government grant to these defendants an exemption from the gen eral laws, which the public good may require in respect to them, as well as other subjects or legal persons ? On the contrary, it must ever be presumed, that the government intended to reserve the necessary power of compelling corporations, like individuals, to do justice, to perform their engagements. It would be a flagrant breach of duty in the government to relinquish this power. It is very justly observed by the attorney-general in the case of the quo warranta against the city of London 
      , that “whenever the law introduces or allows any right upon trust, or for the benefit of the public, it implies a condition, *that the trust be [ * 265 ] discharged, and the ends of its creation complied with.
    This condition implied by law is of stricter obligation, than candi lions express: it shall bind even infants and femes covert.” And then cites in support of his position, 8 Co. 44, which is a case respecting offices; but, as he observed, so it is of all liberties and franchises, &c. Now, banks are one kind of public institutions, established for the real or supposed benefit of the public; and the government must have the power contended for, of regulating their acts in such a manner as the public good requires.
    So far, then, as the charter is a contract, it must be held to have been made subject to all those paramount rules of justice which are implied in all contracts; above all, that the bank shall conduct their affairs with honesty and due care; and, as a necessary consequence the bank agree to submit to all just and equitable remedies, for the non-performance of their duties.
    The nature of the contracts mentioned in the constitution of the United States, and the distinction between the obligation of a contract and the remedy to enforce it, are clearly laid down by the Supreme Court of the United States, in the case of Sturgis vs. Crowninshield, referred to by the counsel for the defendants, where the Court observed that the distinction “ exists in the nature of things. Without impairing the obligation of the contract, the rem edy may certainly be modified, as the wisdom of the nation shall direct,” &c. The same Court, in another case, further illustrate the nature of these chartered rights or contracts , and refer to the case of Young vs. The Bank of Alexandria, 4 Cranch, 384.
    It is said that the corporation have vested rights, as they are called, by force of this contract. What are those rights ? They are neither more nor less, than all such as are expressly mentioned, or tacitly understood, by the parties to such a contract: and when we attempt to ascertain them, we must again have recourse to the [ * 266 ] original * compact of the state with its subjects, agreeably to the view taken in the former part of the argument.
    It seems to have been taken for granted, that corporations are a kind of privileged subjects, who are not to be liable to the same obligations with the other subjects of the state. But this opinion is wholly unfounded; as appears by the reasoning in our own courts, already referred to, to which we might add also the authority of the civilians. Huber says, Jus quo universitates utuntur, est idem quad habent privati, &c.  ; and agreeably to this principle it is laid down, that corporations shall be answerable ex delicto, as well as ex conventione
    
    It may a.so be important, in a question of this nature, to consider the consequences of the doctrine, upon which the defendants must rest their case. A corporation may, if so disposed, accumulate the money of individuals in their vaults; their officers and servants may, as in the present instance, embezzle it; and then the corporation may dissolve itself, and leave nothing to satisfy the claims of parties thus defrauded. In short, it is impossible to estimate the mischiefs which will result to the public, if the legislature have not the power to impose such restrictions as we contend for, upon corporate bodies already existing, as well as future ones.
    Upon this view, therefore, of the question before the Court, the law under consideration, being a general one, and being intended only to continue corporations for the limited object of closing theii concerns, and of suing and being sued, for causes of action already existing, must be held to be merely remedial, and not affecting the rights of parties, technically speaking: consequently, according to the settled principles of our government, it must be adjudged to be within the constitutional powers of the legislature.
    
      Webster. To determine whether this act impairs any rights of the parties, it is necessary to ascertain what those rights were independently of the act in question. * The plain- [ * 367 ] tiffs must be taken to be creditors of the corporation.
    They have a claim with all prima facie evidence in its favor; and are therefore creditors as far as they can be before judgment. As creditors they have a right to payment out of the funds of the corporation. If the corporation should dissolve, leaving their demand unsatisfied, there can be no doubt that they would still have a right in equity, to follow the fund, and charge their debt upon it in the hands of those who should have possession of it.
    The plaintiffs thus having a right to be paid out of the corporate property, and the persons who have obtained possession of this property having no right to withhold it from them, what right is violated by this law ? It was obviously intended to enforce rights, not to violate them. It gives a remedy, new indeed, but reasonable and practicable, for a manifest existing right. It neither increases the debt, nor varies the contract between the parties. It merely holds the corporation answerable for its obligations, until it fulfils them ; and gives a new remedy to enforce their fulfilment. It is intended to enable the plaintiffs, and others in similar circumstances, to recover their money. Have they not a right to it? It is intended to compel those who hold the funds to pay the debts. Ought they not to be thus compelled ? It is therefore a law giving a new remedy for an existing right; against which there can be no objection.
    The statute is general, and governs other cases as well as the plaintiffs’. If it were a private act, applicable to a particular case only it might be thought a more questionable exercise of legislative power; because the true notion of law is, that it is a general and permanent rule of conduct. It has been the practice of the legislature of this commonwealth, for many years, to create corporations for a great variety of purposes, for limited periods. Many of these corporations are about expiring; and the single question, as far as the present case is concerned, is, whether the legislature [ * 268 ] may not, before they expire", * provide a mode, in which their concerns may be settled (equally for the benefit oi themselves and others), by the collection and payment of their debts
    There could be no objection to a provision by law, for the ap pointment of an administrator, eo nomine, of the effects of an expired corporation; or for making the president, or the president and directors last in office, trustees to collect and pay debts, for the benefit of all concerned. Instead of either of these modes, the legis lature has enacted that the corporate existence shall continue, so far only as shall be necessary to accomplish these purposes. It has in effect declared, that there shall still be a president and directors, with powers only to administer the remaining funds, and to collect and pay the debts, which were of the corporation.
    It is not easy to conceive what contract this violates. The government has never stipulated that this corporation should have, at any time, an exemption from its debts. There is no contract, in its charter or elsewhere, that if it expires leaving debts unpaid, the funds shall not be followed for the benefit of creditors, in any mode or form of remedy which the law may prescribe.
    All the cases cited by the counsel for the defendants are such, in which some vested right has been affected, or some new contract made, or attempted to be made, between the parties. The general principle of those cases is, most unquestionably, a sound one, and of great importance to be observed. But a distinction must be made between acts which affect existing rights, or impose new obligations,—and acts which give new remedies for existing rights, and enforce the performance of previous obligations.
    This statute is as strictly remedial, as the late statute giving further relief in equity  ; and yet no one doubts the propriety of applying the provisions of that statute, as a remedy to enforce the performance of contracts previously made. Perhaps it [ * 269 ] might have afforded a remedy in this * case; but it wou.d be liable to all the objections which have been urged against the present act; the whole amount of which objections is no more, than that a new remedy is given by law to enforce existing contracts.
    This statute is not retrospective in any just sense of that term. A retrospective law has been defined to be a law which takes away or impairs vested rights. But if it be the object and operation of this law to confirm and enforce rights, and to provide adequate and suitable remedies for the violation of them, it cannot be within the definition.
    The cases, which have been cited for the defendants, are not like this. In the Dartmouth College case, the legislature of New Hampshire, by a special act, undertook to abolish, in effect, a private corporation, and to give its property to others. The corporators were deprived of their own property, without forfeiture, without trial, without even the imputation of a fault. Fletcher vs. Peck was a case, in which the legislature of a state undertook to resume its own grant, and that after third persons had obtained an interest in the land granted. In the case of King vs. Dedham Bank, this Court held that an act of the legislature could not have the effect of altering a private contract, subsisting and unbroken between the parties at the passage of the law, by varying the terms, or imposing new duties on either party, in regard to the sum to be paid, or the place or time of payment. Or in other words, it could not enact that the parties had made a contract, which they never had made. The present case is like none of these. It is but a general provision, giving new remedies prospectively, for cases in which corporations might expire by the limitation of their charters, leaving their affairs unsettled.
    It is of no importance, whether the inducement of the legislature to pass the law grew out of an expected difficulty in regard to this particular corporation or riot. Inconvenience, felt or apprehended, is the ordinary occasion * of legislation. The [ * 270 ] statute is general, and its provisions seem to be beneficial to all parties, and to be within the proper exercise of legislative power.
    
      Prescott enforced the arguments of Saltonstall, and replied to those of the counsel for the plaintiffs. The opinion of the Court  upon this preliminary question was delivered at the same term, by
    
      
      
        Slat. 1799, c. 8
    
    
      
      
        Stat. 1819, c. 43.
    
    
      
       2 Mass. Rep. 146.
    
    
      
       4 Wheat. Rep. 208.
    
    
      
       13 Mass. Rep. 1. —See, also. 15 Mass. Rep. 447, King vs. Dedham Bank.
      
    
    
      
       6 Cranch, 87
    
    
      
       4 Wheat. 518.
    
    
      
       9 Mass. Rep. 360.
    
    
      
       4 Wheat. 675. See, also, Wales vs. Stetson, ubi supra.
    
    
      
       2 Black. Comm. 37.
    
    
      
       12 Mass. Rep 254.
    
    
      
       3 D. & E. 246.
    
    
      
       4 Burr. 2186.
    
    
      
       2 Mass. Rep. 269.
    
    
      
      
        Vin. Mr. Corporations, I. 6, 281.
    
    
      
       3 Mass. Rep. 378, Gray vs. Portland Bank.
      
    
    
      
       2 Gallison’s Rep. 134, Society, &c. vs. Wheeler. —7 Johns. 477, Dash vs. Van Kleeck. —8 Mass. Rep. 430, Call vs. Hagger & Al.
      
    
    
      
       1 Black. Comm. 484.
    
    
      
       1 Lev. 237.
    
    
      
       15 Mass. Rep. 520.
    
    
      
       5 Mass. Rep. 534
    
    
      
       3 D. & E. 460.
    
    
      
       1 Lev. 91. —1 Black. Comm. 70, note 4. —Stat. 33 Geo. 3, c. 13.
    
    
      
       3 Dall. 391. —See, also, 2 Dall. 304, Van Horne's Lessee vs. Dorrance
      
    
    
      
       8 Mass. Rep. 430, Call vs. Hagger & Al. —Ibid. 472, Walter vs Bacon Al
      
    
    
      
       11 Mass. 396.
    
    
      
       4 Mass. 566.
    
    
      
      6) 4 Mass. Rep. 361.
    
    
      
       9 Mass. Rep. 151.
    
    
      
       9 Mass. Rep. 360.
    
    
      
       12 Mass. Rep. 443.
    
    
      
      
        Stat. 1809, c. 107.
    
    
      
       2 Mass. Rep. 223.
    
    
      
      
        Stat. 1810, c. 131.
    
    
      
      
        Stat. 1799, c.32
    
    
      
       8 Mass. Rep. 445.
    
    
      
       15 Mass. Rep. 505.
    
    
      
      
        Stat. 1811, c. 105.
    
    
      
      
        Stat. 1812, c. 140.
    
    
      
      
        Stat. 1817, c. 87.
    
    
      
      
        Stat. 1805, c. 100
    
    
      
       3 Hargr. State Trials, 654
    
    
      
       4 Wheat. 225, Bank of Columbia vs. Okely.
      
    
    
      
      
        Huber. Pralect, part ii, lib. 3, lit. 4, § 3.
    
    
      
      
        Stat. 1817, c. 87.
    
    
      
      
        Putnam J., did not sit in this cause.
    
   Parker, C. J.

The question arising from the suggestion filed in this action, at the last term in Essex, is, whether the statute of 1819, c. 43, has the force of law with regard to this corporation; so that it is still in existence, for the purpose of suing and being sued, and for other purposes mentioned in the act.

Acts of a legislature, constitutionally organized, are to be presumed constitutional; and it is only when they manifestly infringe some of the provisions of the constitution, or violate the rights of the subject, that their operation and effect can be impeded by the judicial power Whenever this shall happen, as it may from inadvertence, or in times of political conflict, when the passions domineer over reason, it is the duty of every court to protect those rights, and to vindicate the constitution.

Thus, if the legislature were to enact, that A. B. was guilty of treason, and that he should suffer the penalty of death, it would be the sworn duty of the court, or of any member of it, to grant a habeas corpus, and discharge him. Or if they should enact, that his estate should be confiscated, or transferred, or taken for the use of the public without an equivalent, such acts would not be k ws; and they never could be executed, but by a court as corrupt, or as passionate, as the legislature which should have passed them.

So, if the legislature should attempt to destroy or impair the legal force of contracts, by declaring that those who were indebted should be discharged without paying their debts, or on paying a [ * 271 ] less sum than they owed, or in * something different from what was agreed ; such acts would be unconstitutional, although not expressly prohibited ; because, by the fundamental principles of legislation, the law or rule must operate prospectively only, unless in cases where the public safety and convenience require that errors and mistakes should be overruled ; the power to do which has been immemorially exercised, and we believe, within the constitutional power of the legislature. For it is doing no one wrong, to prevent his taking advantage of a mere error or mistake.

Now, if the act in question impairs the force and obligation of contracts, or injures private property, or disturbs any vested rights, we ought to declare it void, and we should be ready to do so. But we are to be satisfied that it has this character.

In the first place, we see no pretence for saying that it impairs the force of contracts. Certainly it has not that .effect on contracts made by or with the bank: but the very object of the statute is to enforce such contracts.

It is said, however, that the contract with the government was, that at the end of twenty years the corporation should be dissolved, and each member take his share out of the common fund. But it should be considered that, by the original charter, each member’s share was liable for all the debts of the bank; and that he would have no moral right to withdraw it, until all the debts of the bank were paid ; so that there was an equitable lien upon his share; and the legislature, we think, had a right, if it was not their duty, to provide the means of enforcing this moral obligation.

1 he law complained of is a general law, operating upon all bodies corporate; and it is convenient for them and the public, that then nower of suing and being sued should be continued beyond the period, within which they are empowered to make contracts, in order that their concerns may be properly adjusted.

*Nor do we think it an objection, that this additional [ * 272 ] term should be granted by an act made subsequent to the time when their charter was granted. A debtor to the bank could not object to a suit, on the ground that the original term of the charter had expired; for the very bringing of the suit would be an acceptance of the prolongation of the charter; and it would be absurd for him to say, that his debt was discharged, or that there were no means of recovering it, because he contracted with the corporation on a supposition that it would continue in being only a certain number of years. We think it equally incompetent for such corporation to deny its existence, against a statute of the govern ment, the object of which is to give a right of action on contracts, upon which they were legally and morally bound under their charter.

It is said that the members of such a corporation associated upon the faith that, after the time limited in their charter, they might separate, and take their shares of the stock. But it is to be answered that their stock is, in an equitable view, pledged for the payment of all debts due from the corporation; and that it would be fraudulent to withdraw the funds, knowing that there were debts to be paid, leaving no means of coercing the payment of those debts. What should be said of a banking company, which, just before its expiration, should divide all the stock, making no provision for the payment of its debts? Yet this might be done, if the legislature have no authority to establish, by law, a mode by which it should be compelled to fulfil its obligations. For it is certainly doubtful whether any means exist, under our laws, of pursuing the funds into the hands of individual corporators, and subjecting them to the claims of creditors. We see no violation of the rights of the corporators, no impairing of the obligation of contracts; for it can never be the right of any person to withhold a just debt from his creditor.

Upon the whole, we cannot discern any principle, by which it can be decided that this statute is void. It is not * retrospective in the proper sense of that term; for it [ * 273 ] provides for a future existence of the corporation, for limited and specific purposes. It does not infringe or interfere with any of the privileges secured by the charter, unless it be considered a privilege to be secured from the payment of debts, or the performance of contracts ; and this is a kind of privilege, which we imagine the constitution was not intended to protect. It does not impair the force or obligation of contracts; but, on the contrary, provides a .vay of enforcing them, both in favor of, and against the corporation.

Many statutes have been referred to in the argument, which are much more questionable, as to their constitutionality, than the one under consideration:—The statutes of limitation, operating upon contracts already in force:—The suspension of those statutes, after the debtor may have considered that he had a right to be discharged within a certain period:—The statutes made for curing defects in the proceedings of courts, towns, officers, &c., when the party to oe affected might be said to have a vested right to take advantage oí • the error. The truth is, there is no such thing as a vested right to do wrong; and a legislature, which, in its acts not expressly authorized by the constitution, limits itself to correcting mistakes, and tc providing remedies for the furtherance of justice, cannot be charged with violating its duty, or exceeding its authority.

It was an incumbent duty of the legislature, to provide that corporations should not avoid their obligations, by ceasing to exist; and the mode, adopted in the act in question, was certainly the most favorable. Had they provided that all corporations should cease to transact business, three years before the time, for which they were created, expired, in order that they might bring their affairs to a close, it might justly be said, that their privileges were taken away, and the grant of the government was impaired. But to [*274] provide for their continuance for such * purpose, three years beyond their term, is no breach of their privileges ; and is, in fact, nothing more than establishing a mode by which their business may be closed, and their contracts carried into execution. It is in the nature of an administration upon their estate, and is only doing, in a more convenient form, what a court of equity, with competent powers, might do, viz. making the common fund answerable for the debts, which were created on the credit of that fund.

The suggestion filed in the case cannot have the effect to impede the progress of the suit.