The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1888-03-29

E Eo" INV breach of duty or obligation
IHSor on Corporations, sec. ll5O
Snob being the rights and ooil
oLou no,ties under the contract, "haI
DapaItT, if any, is attached to me severn
breache, thereof set out IN the in!oI nta
tionY This being the second dlVIS'on e.. -
E ,,oa ohova. These would be, hfst'
. uC a. are provided in the acts OF lhc ou
: uCn at jo second, such as existed oy con
p .;tot;on,l or statutory provision anu,
So .Si,u onSh as obtain at common law anu
YIN ~ i,n S VITA either of the pre-
ceding. (Act of January ~ lo4o' ''
Statutes, 3l2S)
In this inquiry, penalties Whicn ia Ja.
derstand to mean the punishne;nv or
,onnceJ against an act or OMISSION OF
the character and amount OF compeHS"
tion IN he reodered therefor, are 10 oe
distinguished from remedies as tnay o cV;na
is used to apply to matters Oh Pi Lt, of
and procedure, in determining llsN''
parties litigant and enforcing SAM. d
The first enter into the contract anu
cannot be altered by the state by suo9e-
quent legislation to the detrimenV Vi 'n nf
other party, except in the exercise "
necessary police power, Wr'le '''0 "''
may be changed at any time. ill., :.
Returning to the ACT Of 1870 1her0
in it only one cause of forfeiture OF Uue
corporate franchise, and that Is Iahute
to construct (acts 1870 sec. l5), ana on!s
is changed and repealed by act OF 1919,
which contains in it no express CT use VI
forfeiture of the corporate existence
but instead provides forfeiture OF inc
land grant On the unconstructed Fo'u.
At the date of the passage OF neither VI
these acts was there anything III either
the constitution or statutes OF this STATE
fixing forfeiture of corporate rights iOr
any or all of the matters set out IN the III
! formation.
The common law on this subject Is well
stated by Justice Story, (In Terrett vs'Iay-
lor, Cranch, 81 and 52) as follows: "A
private corporation created by the legs
| Ieture, NAV lose its franchises BY mis-
user or non-user of them, and they may
be resumed by the government under d
judicial procedure upon QUO warranto 10
ascertain and enforce the forfeiture. rms
is the common law of the land, and Is a
tacit condition and next to TIE creation OF
any such corporation" And (See NOR on
Corporations, section 1914 ct seq and 3
Wood on Railways, page I7l3'
ut has been held in numerous cases
that if corporation has assumed the per
Torrance of duties for the benefit of the
public generally, it cannot neglect the
performance of these duties without IN
curing a forfeiture of its franchise"
(Morowitz on Corporations, sections lOl6.)
And in the same section, from which pre-
ceding is quoted the principal is applied
to railroad companies.
Other authorities might be cited, but
these suffice to show that at common law
either misuser or non-user, when carried
to such extent as to greatly impair the
powers of the corporation, and incaPacl-
tate it from dischargiug, with reasonable
proficiency, the duties incumbent on it, is
punishable by forfeiture of corporate ex'
istence, and that such penalty is part OF
the contract.
Under this general head may be grouped
all the charges preferred in the infOrma-
!, ton. AZ regards the failure to keep tht
: principal office of the corporation and it.
books, etc. in this state, in addition to thu
common law obligation so to do, there i:
. an express agreement to that effect in thC
charter TACT of 1870, section g. but no ex.
/, press penalty is annexed thereto.
: High authority can be found holding
| IN ,lU
, in this respect would forfeit the charter
but, in the view of this branch of the case
hereinafter expressed, that becomes i'm.
material. (MOrOwitz on Corporations
Sections 1888 and 1136; 80 American
} and England Railroad cases 44O.)
Again, it is a principal of the com
mon law, entering into this contract
THAT if corporation has received
grant of public aid to enable it to per.
form public service or to fulfill the pur
pose OF the grant, the state may revok
its grant for the breach of an implied
condition. But vested rights which hav
been created by the corporation" no
with it, with the express or implied con-
sent of the state before the revocation O
the grant cannot be impaired" (Morowit;
on Corporations, Section 1882 ard 1867
The forfeiture of the corporate ex,
lstence Is an extreme penalty which th,
policy OF this state does not favor, and {
light to which may be waived expressl,
or by legislative recognition. Gnterna.
tlonal and Great Northern Railroad Com.
pany vs.. State; 81 Texas 534. Morowit
on Corporations, Section 1915 and note.
1t should not be inflicted when there i
any other adequate remedy unless re-
qulred by positive provision of the con
stltutlon or statute.
For several of the matters comnlaine,
OF the legislature has provided remedie
other than forfeiture; to-wit: For viola
ton OF sections 5 and 6, article 10 of tn,
, constitution, the act of March 26, 1885,
provides perpetual injunction Acts 'S5
rage 66). For failing to keep Office II
thls state severe fines, flaws IS, pages &;
and 6o.l The enactment of these s1ocio
provisions would, it seems, be a waiver ~
the extreme penalty of forfeiture fo,
either OF these Offenses. The act of Inv
,, 1879 Law 70, page 49,, provides in nf
.eog that II IL shall come to the knovledg,
o or, Ine attorney general that any corpora
Iion IN this state has done or omitted Al,
act the performance or omission of whici
as between that corporation and tb
state Is ground for forfeiture or w,r,,s 9
surrender of its charter. or exercises
power not conferred by law, he shall in
S.''u,e quo Warranto, aud if the CORPORA
ION oe aGl1dged guilty, Judgment o
custer aud fine shall be entered.
Il must be borne in mind that III
act was passed after the charter, aud n
cause OF forfeiture not recognized by la
as sufficient at time of contract nnterir,