a. Right of alteration, amendment and repeal of charters. Although the first general act governing corporations was passed in 1808,17 the first statute enabling corporations to organize under a general law was passed in 1851.18 Meanwhile, in 1830, an act was passed making the charters of all corporations granted after March 11, 1831, which contained no express provision limiting the duration of the corporation's existence, subject to alteration, amendment and repeal at the pleasure of the Legislature.19 Before this statute it was not customary to reserve any right of alteration, amendment or repeal.20 The object of inserting this provision was to avoid the consequences of the decision in the Dartmouth College case, to the effect that a charter, granted upon a valuable consideration, was a contract between the corporation and the State, which could not be constitutionally impaired at the pleasure of the Legislature.21 b. Effect of the reserved power. The reservation of the power of alteration, amendment and repeal was not unconstitutional as a reservation of a power, in its nature judicial,22 and was as potent and effective as if inserted in the special charters. 23 The reservation of this power has been continued down to the present time,24 and in 17 St. 1808, c. 65. 18 St. 1851, c. 133. 19 St. 1830, c. 81. 20 Middlesex Turnpike Corporation v. Swan, 10 Mass. 384; Proprietors of Mills v. Commonwealth, 164 Mass. 227, 41 N. E. Rep. 280. 21 Dartmouth College v. Woodward, 4 Wheat. 518. Cf. Montclair v. New York, etc., Ry. Co., 45 N. J. Eq. 436; Zabriskie v. Hackensack, etc., Ry. Co., 18 N. J. Eq. 178; Rockland Water Co. v. Camden, etc., Water Co., 80 Me. 544; Crease v. Babcock, 23 Pick. 334; Pierce v. Emery, 32 N. H. 484. 22 Crease v. Babcock, 23 Pick. 334. 23 Crease v. Babcock, 23 Pick. 334; Mass. General Hospital v. State Mutual Life Assurance Co., 4 Gray, 227, 234; Commissioners on Inland Fisheries v. Holyoke Water Power Co., 104 Mass. 446. 24 Rev. St., c. 44, § 23; Gen. St., c. 68, § 41; Pub. St., c. 105, § 3; R. L., c. 109, § 3; Attorney-General v. Old Colony Railroad, 160 Mass. 84, 35 BUS. COR. LAW- -3 case of any alteration or amendment, subscribers and stock holders are to be regarded as consenting to any changes lawfully made under the reserved power. 25 And where a corporation has been authorized by an amendment to change its enterprise, and a majority of the stockholders have voted to do so, a minority stockholder cannot maintain a bill in equity to have such new occupation enjoined, if the charter is subject to the reserve power. 26 c. Limitations upon the reserved power. The act of 1830 provided that no charter should be repealed unless for violation of charter or other default, where an express provision in the charter prescribed the period of corporate existence.27 But a mere condition making a charter void unless certain things are done within a given time, or giving the State a right of purchase in certain contingencies, does not make the corporate existence a limited one within the meaning of this provision.28 In addition to this express limitation, there is the implied limitation that the alterations or amendments must be reasonable. "The reservation of power is broad and comprehensive. Whatever may be its limitations, it at least reserves to the Legislature the right to make any reasonable amendments regulating the mode in which the franchise granted shall be used and enjoyed which do not defeat or essentially impair the object of the grant, or take away property or rights which have become vested under a legitimate exercise of the powers granted." 29 "The rule to be extracted is this, that where, N. E. Rep. 252; Revere Water Co. v. Winthrop, 192 Mass. 464. Cf. State v. Maine Central R. Co., 66 Me. 488. 25 Agricultural Branch R. R. Co. v. Winchester, 13 Allen, 33; South Bay Meadow Dam Co. v. Gray, 30 Me. 547. 26 Durfee v. Old Colony, etc., R. Co., 5 Allen, 230, 240. See Op. Atty.Gen., April 22, 1904. 27 St. 1830, c. 81. Cf. Huylar v. Cragin Cattle Co., 40 N. J. Eq. 392. 28 Roxbury v. Boston & Providence R. Co., 6 Cush. 424. 29 Parker v. Metropolitan R. Co., 109 Mass. 506, 508, per Morton, J.; under the power in a charter, rights have been acquired and become vested, no amendment or alteration of the charter can take away property or rights which have become vested under a legitimate exercise of the powers granted." 30 e. Instances of exercise of the reserved power. - Lawful exercise. Among the statutes making charter changes which have been sustained under this provision are the following: Authorizing a lease of a railroad to another and a change of termini.31 Compelling a railroad to erect a station house and to stop trains there.32 Authorizing another street railway to lay tracks through the same streets as the first railway, or to use the tracks of the latter, on making compensation for the wear of the track, but not for the diminution of profits or the value of the franchise.33 Compelling railroads to maintain a union station.34 Limiting the rates of ferry companies.35 Consolidating two railroad companies.36 Roxbury v. Boston & Providence R. Co., 6 Cush. 424; Commonwealth v. Essex Co., 13 Gray, 239; Fitchburg R. Co. v. Grand Junction R. Co., 4 Allen, 198; Commonwealth v. Eastern R. Co., 103 Mass. 254; Commissioners on Inland Fisheries v. Holyoke Water Power Co., 104 Mass. 446. Cf. Proprietors of Machias Boom v. Sullivan, 85 Me. 343; Proprietors of Machias Boom v. Holway, 89 Me. 236. 30 Commonwealth v. Essex Co., 13 Gray, 239, 253, per Shaw, C. J.; Watuppa Reservoir Co. v. Fall River, 147 Mass. 548, 569, 18 N. E. Rep. 465; Commonwealth v. New Bedford Bridge, 2 Gray, 239, 348; Commissioners on Inland Fisheries v. Holyoke Water Power Co., 104 Mass. 446, 451; Parker v. Metropolitan R. Co., 109 Mass. 506, 508; Binghamton Bridge, 3 Wall. (U. S.) 351; Holyoke Co. v. Lyman, 15 Wall. (U. S.) 500; Zabriskie v. Hackensack, etc., R. Co., 18 N. J. Eq. 178. 31 Durfee v. Old Colony, etc., R. Co., 5 Allen, 230. 32 Commonwealth v. Eastern R. Co., 103 Mass. 254. 33 Metropolitan R. Co. v. Highland Ry. Co., 118 Mass. 293; Worcester & Nashua R. Co. v. Railroad Commissioners, 118 Mass. 568; Thornton v. Marginal Freight Railway, 123 Mass. 32; Pennsylvania College Cases, 13 Wall. 190. 34 Worcester v. Norwich & Worcester R. Co., 109 Mass. 103. 35 Parker v. Metropolitan R. Co., 109 Mass. 506. 36 Hale v. Cheshire Railroad Co., 161 Mass. 443, 37 N. E. Rep. 307. See 2 Op. Atty.-Gen. 484. f. Unlawful exercise of the reserved power. - On the other hand, a corporation cannot be compelled to pay a proportion of all dividends on shares of non-resident owners into the public treasury.37 Nor can the Legislature alter the financial terms of a contract between the proprietors of a bridge and a city, which has been acted on so that interests are vested.38 Nor, where a fishway has been duly made to the satisfaction of the proper authorities, can the Legislature, in the exercise of its power to regulate fisheries, order different fishways to be made.39 g. Repeal of charter. When a corporation is once formed, it can be avoided only by the Legislature or at the suit of the Commonwealth, and not upon the application of private individuals. 40 "Upon the absolute repeal of a charter by the Legislature, acting within the limits of its constitutional authority, the corporation ceases to exist, and no judgment can afterwards be rendered against it in an action at law. But such repeal does not impair the obligation of contracts made by the corporation with other parties during its existence, or prevent its creditors or stockholders from asserting their rights against its property in a court of chancery, in accordance with the reasonable regulations of the Legislature, or with the general principles and practice in equity." 99 41 h. Attempt to organize under a repealed statute. Where the attempt is made to organize a corporation under a repealed statute, no incorporation is effected; but, if the pro 37 Oliver v. Washington Mills, 11 Allen, 268. 38 Central Bridge Corporation v. Lowell, 15 Gray, 106. 41 Thornton v. Marginal Freight Railway, 123 Mass. 32, citing Foster v. Essex Bank, 16 Mass. 245; Read v. Frankfort Bank, 23 Maine, 318; Merrill v. Suffolk Bank, 31 Maine, 57; Mumma v. Potomac Co., 8 Pet. (U. S.) 281; Curran v. Arkansas, 15 How. (U. S.) 304; Bacon v. Robertson, 18 How. (U. S.) 480; Lum v. Robertson, 6 Wall. (U. S.) 277. visions of law existing at the time the attempt is made are complied with, the corporation may be created in spite of the informality.12 § 3. Duties of the commissioner of corporations. "The commissioner of corporations shall examine the certificates and reports submitted to him under the provisions of this act, and make suitable indorsements upon such as conform to the requirements of law. He shall keep a record of the names of corporations which submit certificates to his inspection, of the date of inspection and of his certificates when given, and of the result in brief of his inspection. He shall report to the attorney-general instances of neglect or omission on the part of corporations to comply with the provisions of this act for the enforcement of the penalties therefor. If a vacancy exists or if the commissioner is absent from his office, the first clerk shall perform the duties of the commissioner, and legal process served upon said clerk shall have the same force and effect as if served upon the commissioner." 43 § 4. Corporate powers. "Every corporation which is subject to the provisions of this act shall have the following powers and privileges and shall be subject to the following liabilities: "(a) To have perpetual succession in its corporate name, unless a period for its duration is limited by special law. "(b) To sue or be sued in its corporate name, and to prosecute or defend to final judgment and execution or decree in any court of law or equity. "(c) To have a capital stock to such an amount as may be fixed in its agreement of association or articles of organization or of amendment as hereinafter provided. "(d) To have a corporate seal, which it may alter at pleasure. "(e) To elect all necessary officers, fix their compensation and define their duties. "(f) To hold, purchase, convey, mortgage or lease within or 42 2 Op. Atty.-Gen. 362. 43 St. 1903, c. 437, § 3; R. L., c. 110, § 1; St. 1900, c. 261; Pub. St., c. 106, § 1; St. 1879, c. 288, § 1; St. 1870, c. 224, § 61. Not cited to 193 Mass., incl. |