Court Opinion

ID: 6312463
Source: CourtListenerOpinion
Date Created: 2022-02-18 20:17:23.944294+00
Date Added: 2024-06-11T08:59:07.490761
License: Public Domain

The opinion of the Court was delivered by
Gibson, C. J.
It has long been settled by decision and practice, that the copy of the laws published annually by the authority of the legislature, is evidence of the statutes contained in it, whether they be public or private; and this disposes of the first bill of exceptions to evidence.
The second brings up the only material point in the cause; but the exception cannot be sustained. A grant of additional privi*160leges to a corporation, has certainly not been thought an invasion of the contract which exists between it and subscribers to its stock. It is alleged to be so, in this instance, because the grant of a privilege to raise the dams higher than was allowed by the original Act, might lead to a greater expenditure to compensate injuries to the riparian owners by flooding their lands, than was contemplated when the defendant became a stockholder. But what was there in the contract of subscription to forbid the acceptance of such a grant ? The contract remains unchanged by it, though its consequences may be varied: it was to pay so much the share, and so it is yet. But the constitutional restriction of the power of the states to enact laws which impair the obligation of a contract, has regard to direct, and not consequential invasions of it. Thus in Mason v. Haile, (12 Wheat. 370), it was considered that a state has a right to regulate or abolish imprisonment for debt as a part of the remedy for enforcing a debt, though by doing so it undoubtedly takes away one of-the incidental advantages of the contract which may have been in the view of the creditor when he entered into it. So also in Watson v. Mercer, (8 Peters 88), an Act to confirm a title imperfect under the recording laws, was held good. That Act, however, tended more properly to establish the obligation of a contract than to impair it; yet it certainly varied the consequences of the contract, such as it was. In The Providence Bank v. Billings, (4 Peters 514), the purpose of a corporation, however, was said to be no more than to give individuality, and a right of succession to a body of men, and not to exempt them from the burdens that were common to them at first; and hence it was held that a state may constitutionally tax the property of a bank previously incorporated by it, though such taxation undoubtedly affects the consequences of the subscriptions by decreasing the rate of the dividends. In like manner, it was held, in The Proprietors of the Charles River Bridge v. The Proprietors of the Warren Bridge, (11 Peters 420), that an Act to incorporate a company to erect a bridge so near the bridge of another incorporated company as injuriously to affect it, is within the legitimate power of a state, though such an exercise of it necessarily takes away a part of the fruits of the contract by reducing the amount of the tolls. Thus we see that the principle is emphatically applicable to a contract with a corporation, which, though technically a private one, has been created for a public object. Mr Justice Story remarked, in delivering the opinion of the court in Terrett v. Taylor, (9 Cra. 52), that in respect to public corporations which exist only for public purposes, such as counties, towns, cities, and the rest, the legislature may, under proper limitations, have a right to change, modify, enlarge, and restrain them, securing, however, the property for the use of those for whom, and at whose expense, it was originally purchased. Is not a corporation to improve the navigation of a river which is a part *161of the public domain, though it be authorized to demand tolls in compensation of its outlay, a public one ? If it be not, a bank of the United States for the fiscal purposes of the Federal Government, which has been authorized to discount notes and deal in exchange on its private account, would not be a public corporation, and it would consequently be beyond the constitutional power of Congress to grant such a bank a charter. In Irvin v. The Turnpike Company, (2 Penn. 466), it was ruled that the benefit which would incidentally result to the property of stockholders near the proposed route ¿f a turnpike-road does not enter into their contract of subscription as a part of its consideration; and that they engage in the enterprise necessarily subject to the power of the legislature to change the route for the public good, when the contrary has not been stipulated in the Act of incorporation. Now, an Act to incorporate a company for purposes of slack-water navigation, is as essentially of a public nature, as is an Act to incorporate a company for the purpose of making a turnpike-road. In this instance, then, what has the Legislature of Pennsylvania done ? It has not pretended to take away any corporate franchise, or to impinge upon any right before granted. That is not pretended. On the contrary, it has enlarged a corporate privilege. But the exercise of it, it is alleged, may plunge the company into an expense not originally contemplated. What of that? The defendant is not bound to contribute to it beyond the amount of his original subscription and as to that, his contract remains the same. But it is said that by taking off the limitation of the company’s expenditure, the Legislature has altered its power to incur responsibility for greater damages than it otherwise could have done. In that lies the fallacy. The Legislature has not made it incumbent on the company to use the additional privilege granted to it; but has left the use of it to its discretion. It may, in fact, never use it, and whether it shall do so, will depend on the volition of the defendant’s corporate agents, the president and managers, by whose acts he is necessarily to be bound as his own, even in the acceptance of a modification of the charter for the public good, provided it do not extend to a change of the structure of the association, as was attempted in the Indiana and Ebensburg Turnpike v. Phillips, (2 Penns. 184), where the original corporation was broken up, and the subscribers to its stock were apportioned according to an arbitrary line of demarcation as regarded their residence, and transferred to the one or the other of two distinct corporations erected on its ruins. To do that, was declared to be beyond the legislative power. On any other principle than that of Irvin v. The Turnpike, already quoted, no improvement in the plan of a public work once begun, could be made without cutting loose the corporators from their subscriptions, and resolving the corporation into its primitive elements. Such improvements or alterations are frequently made, and sub*162scriptions to the stock are consequently in subordination to the practice. At all events, it is sufficient for the argument that the constitutional restriction has been restrained by the ultimate tribunal to interference directly with the terms of the contract, and not merely with its incidents.
The mistake of the corporate name in giving notice of the call on the stockholders for their instalments, was immaterial. Notice of such a call is necessary only to subject them to the penalty of two per cent, a month for default of payment; not to found an action for the principal, which may be demanded on the foot of the call without notice of it. Here, the action is for the two instalments due, while a demand of the penalty is waived.
The plaintiff has sued by the original corporate name, which it bore at the date of the contract, and not by the name, modified by a supplemental Act, which it bore at the inception of the suit; but in the state of the case presented by the record, the variance is immaterial; for, to take advantage of it, it must be pleaded in abatement, as every other misnomer must. It was, indeed, said by Chief Justice Treby, in Britton v. Gradon, (1 Lord Raym. 119), that a judgment against a corporation by a wrong name, is void; on which it is remarked in Kyd on Corporations 285, that “ it is indeed true that in most of the cases where the question of misnomer of a corporation has been agitated, it has arisen on a special verdict; but I apprehend that where a corporation have taken no advantage of a variance from their name, either by plea or at the trial, they cannot arrest the judgment on that account.” Surely the rule must be the same where the corporation is plaintiff. It seems, however, that if the variance be apparent in the entry of the judgment, it may be error; as in Healings v. The Mayor, Commonalty and Citizens of London, (Cro. Car. 574), where the judgment was that the mayor, commonalty, and citizens should recover their debt and costs to the same mayor and commonalty adjudged, (omitting the word citizens) it was held to be error. But as there is no such discrepance in the record before us, which contains but one designation of the plaintiff throughout, there is no room in the case even for this sharp distinction; and the exception that the court ought not to have rendered judgment on the verdict, is not sustained.
Judgment affirmed.