Nashville union and dispatch. [volume] (Nashville, Tenn.) 1866-1868, 1867-02-23

use Oi those Tor whom lt was purchased.
Ang. and Ames on Cor. p. 650-l. Dart
mouth College rs. Woodward, Wheaton,
463. Kents Com. p. 352. But if it be a
private corporation, whether civil or elee-
mosynary, which in the great case of Dart
month College rs. Woodward, has been
held to be an executed contract, and within
the meaning of the tenth section of article
first Of the constitution Of the United States.
The Legislature can do no more than pass
such amendments to the charter as are
merely ancillary to the main design of the
corporation. II cannot repeal, impair or
alter the rights and privileges conferred by
the charter against the consent, and with
out the default of the corporation, judicially
ascertained and declared. 2 Kent's Com.
352 Redheld on Railways, 956, sub. 7
and note. Also Stephens Is. Rutland and
Burlington Railway. Law Reporter, l54.
In such case, If the alterations proposed in
the charter of a private corporation, by
legislative enactment, are merely auxiliary
and not fundamental, they may be accepted
by a majority Of the corporators, and,
when so assented to, they are binding on
the whole but il is otherwise, az we have
already shown, when the alterations are
fundamental, radical and vital. The aC-
ceptsnce must then be unanimOus. 1t fol-
lows therefore, in either event, that the
acceptance Of the act of March lst, 1860, by
a majority Of the stockholders, did not dis
solve the corporation, or in any way prohib-
it from exercising all the franchises con-
ferred upon il by the charter of 1892, for the
remainder of the term. And so long as the
action of the corporation, in the admins
tration Of the trusts imposed upon it, was
limited to the scope Of the original charter,
Notwithstanding the acceptance of the act
of March !, 1860, the complainant could
have no Just grounds upon which to sustain
this bill. The organization, with all its
chartered privileges, to which he contribu-
ted his stock in contemplation of law, re-
manned unimpaired; and the courts of
equity at all times stood open to him,
through which, at any moment, he could
by Injunction have restrained the directory
or a majority Of the stockholders from any
violation of the original charter, or from
the misapplication of his capital stock, or
the legitimate profits arising therefrOm.
Dodge as. Woolsey, IS Howard, 33l-34l,
and authorities there cited.
But he complains Of no violation of the
charter, or practical departure from its
original purposes; no fraudulent apprO-
priatiOn of the stock, or misapplcatiOn of
the lawful dividends; but insists that the
old corporation has been suspended by a
new one, with provisions more onerous and
stringent than the DID, and that his stock,
subscribed to the former, has been converted
by the latter, and therefore he asks the
interposition of a court of equity, to enable
him TO withdraw his stock, with the divi-
dends that might have accrud upon it,
under a Just administration of the fran
chises of the old charter. How this can
lawfully be accomplished, even in the
absence of the direct denial Of the allega-
tion in the bill by all the defendants, we
are at a loss to understand. The stock of
a banking corporation is, by every princi-
pie of law rs well rs common sense, not the
absolute property of the individual share
holders 1t has uniformly been deemed a
pledge or trust fund, for the payment Of the
debts Of the bank. The public, as
well as the Legislature granting the
view it in no other light
For this reason, the charter in this case,
as well as most other Joint stock corpora
from personal responsibility, and substi-
tute this fund in its place. To it alone,
credit is almost universally given, as the
only means of the corporation for repay
ment During the existence of the corpo-
ration, it belongs solely to the corporation,
and may be applied under the restrictions
of the charter. The residmm, after meet
ing all demands upon it, and not the stock
itself, belongs tOthe shareholders; and this
can never be Justly ascertained, until the
business of the corporation is wound up,
and fair and equitable disposition of the
entire assets made among all the parties
entitled thereto, & Ames on Cor. p.
474 5, 6.
Under such circumstances, 4 Court of
Equity, would be slow to interpose in be-
half Of the complainant; and would not
do so, unless il was made clearly to appear,
that could pronounce a decree rendering
equal and impartial justice to all parties
equitably interested in the capital stock.
To allow one stockholder, during the eX-
istence of the corporation, to withdraw his
stock before the business Of the corporation
is wound up and its Liabilities ascertained
and discharged, would be to recognize the
right in all others who, from interest or
caprice, might feel themselves justified in
making a similar demand. Such doctrine
would present the strongest incentive to
fraud and perjury, and involve the corpora
ton itself in interminable dissensions and
litigation, which, in a failing or unsuccess-
ful business, would defeat the ends of all
Justice. Aud all this, when the appropri.
ate remedy by injunction is ample and
efIectual, in almost every imaginable case
arising between the corporation and the
stockholders. This remedy operates to
sustain the corporation not to dissolve it;
TO uphold the contract not violate it; to
protect the corporate funds and apply them
with fidelity TO the trust for which they are
held under the articles of the charter, and
not to,withdraw them during the existence
of the corporation, and turn them over 10
stockholders at the expense of the creditors
who have generously trusted their capital
10 the good faith of the institution.
Ia this view of the law, as applicable to
this case, we deem il unnecessary 10 enter
further upon the investigation Of the second
proposition. The principles of law already
declared We think conclusive Of the rights
of the parties, as presented in the pleadings.
l. The controlling equity, As alleged in
the BILL is denied in the answer and no
proof is offered to sustain the equity of
the bill.
>. None Of the essential franchises of
the corporation, granted by the original
charter in 1882, during the existence Cf the
term to which it was limited, could be
materially altered, changed, modified, or
repealed 10y any subsequent act of the
Legislature, without the unanimous con-
sent of the stockholders; and consequently
no essential right secured 70 the corpora
tors under the original charter could be
impaired by the acceptance of the act Of
March !, 1860, by any majority Of the
stockholders, however large.
g. The appropriate remedy of the COM
plainant, or other dissentient shareholder.
was 10 restrain the corporation from all
Illegal DEPARTURES from the essential arti-
Giles Of the constitution Of the corporation
by injunction, and not by bill for a con
version Of his stock, and an account for its
value At q given time, with the profits which
has accrued thereon brought before the
dissolution of the corporation by the limi-
tation of the charter, the default of It's Off
Gers, or some other lawful mode iudicialy
ascertained and declared, and all the trusts
imposed upon the capital stock ascerlained
and discharged