veyance of the property. If the conveyance was enjoined, that was an end of the matter. But the Vice-Chancellor discussed the power of the majority to make a surrender, and was of opinion (he was careful to say that he was merely stating his first impressions) that the majority had no such power.

But this opinion was not based on the ground that the majority of the members of a corporation did not, at common law, have power to surrender its charter. It was based solely on the ground that the provisions in the charter of that particular corporation were so framed that the majority had no such power. We may assume that his construction of those provisions was correct; but, even so, it is obvious that his decision has no bearing upon the question before us.

The English courts have had occasion to consider (a) corporations created by royal charter; (b) corporations created by special act of Parliament; and (c) corporations created under general laws passed by Parliament.8 Corporations created by royal charter are spoken of as corporations at common law; corporations created by special act or under general laws are spoken of as statutory corporations. It is doubtful if a corporation created by special act could be dissolved except by statute.10 The general laws permit

• This enumeration of the ways in which corporations may be created is not complete. Thus Blackstone says that there may be a corporation by prescription, "such as the city of London, and many others, which have existed as corporations, time whereof the memory of man runneth not to the contrary; and therefore are looked upon in law to be well created." COMMENTARIES, Book I, c. XVIII.

Thus too there is an ancient doctrine that some corporations exist by force of the common law alone - for example, church wardens were recognized by the courts as a legal unit for some purposes although they were uncharted. See BLACKSTONE, COMMENTARIES, Book I, c. XVIII; Conservators of River Tone v. Ash, 10 B. & C. 349, 383 (1829); Warren, Cases ON CORPORATIONS, 2 ed., p. 3, note. There is some danger of confusion in the use of the expression "corporation at common law." It might well be used to indicate corporations which exist by force of the common law alone. But the English courts (as is stated in the text) have come to use it to indicate chartered corporations, as distinguished from statutory corporations.

The consideration of the authorities as to corporations by prescription and corporations which exist by force of the common law alone yielded nothing of value for the purposes of this article; and mention of them is therefore made only in a note.

• See Riche v. Ashbury Railway Carriage Co., L. R. 9 Exch. 224, 264 (1874); British South Africa Co. v. De Beers Mines Ltd., [1910] 1 Ch. 354.

10 See LINDLEY, COMPANIES, 6 ed., 822. But cf. the general language used by Blackstone as to the ways in which "a" corporation may be dissolved.

ting the formation of corporations have express provisions giving the holders of three fourths of the shares of any corporation formed thereunder power to bring about its voluntary dissolution."1

The important fact for us from the English law is this: a chartered corporation, commonly called a corporation at the common law, had power to surrender its franchise to the Crown; and (in the absence of provisions to the contrary in the charter or by-laws or by statute) this power, like all other corporate powers, was vested by the common law in the members, and the decision of the majority of the members as to the exercise of this power bound the minority and was the decision of the corporation.

Since the Revolution corporations have been created in the United States only by the legislatures of the several jurisdictions.12 The executives have no power to grant charters of incorporation. We have nothing to correspond to the chartered corporations of England. Our corporations are statutory corporations (although, as a question of language, it is usual to speak of a special act by which a corporation is created as its charter). Until the middle of the eighteenth century general laws for the formation of corporations were rare. Therefore, in our early law, the courts had occasion to consider only corporations created by special act.

Did a corporation created by special act have capacity or power to dissolve itself by its voluntary action? It did not. The consent of the legislature which had created the corporation was a condition precedent to its dissolution. Thus a corporation was not dissolved, even if it ceased to do business, disposed of all its property, and notified the executive department of the government that the charter was surrendered.13

"This is a very rough summary. For the precise provisions, see Companies (Consolidation) Act, 1908, §§ 69, 182.

12 The only qualifications to be made to this statement are (1) that there are some traces in our law of the ancient doctrine that corporations may exist by force of the common law alone (see Terrett v. Taylor, 9 Cranch. (U. S.) 43, 46 (1815); The Governor v. Allen, 8 Humph. (Tenn.) 176 (1847)); and (2) that some judges, in what seems to the writer to be an unconscious revival of this doctrine, have held that a court might properly treat some associations as legal units, although there was no legislative authority therefor. See the opinion of O'Brien, J., in Hibbs v. Brown, 190 N. Y. 167, 184, 82 N. E. 1108 (1907). Neither of these qualifications is important for the purposes of this article.

"Revere v. Boston Copper Co., 15 Pick. (Mass.) 351 (1834). For further authori

If the legislature consented, that consent would be expressed by a statute. As a practical matter, if a corporation desired to be dissolved, it would procure the passage of a statute dissolving it. Until general laws permitting voluntary dissolution were passed, that was the only method by which corporations in this country could be voluntarily dissolved.

An act of Parliament dissolving a corporation is effective, without more. But with us, under the doctrine of the Dartmouth College case, it was not effective unless the corporation accepted the act (or the state had reserved power to repeal).

It is clear that a corporation created by special act had the capacity or power to accept a subsequent act by which it was dissolved. A corporation created by a legislature has such capacities or powers as the legislature intended it to have; and it may fairly be inferred that the legislature intended it to have power to accept acts which the legislature might subsequently pass respecting it.14

Therefore the question becomes: by what human beings was the corporate power to accept a repealing act to be exercised?

All that has been said above as to the power of a majority of the members of a chartered corporation to surrender its franchise is

ties that the consent of the legislature was necessary, see Enfield Toll Bridge Co. v. Connecticut River Co., 7 Conn. 28,145 (1828); Mechanics' Bank v. Heard, 37 Gå. 401 (1867); Economy Ass'n. v. Paris Ice Mfg. Co., 113 Ky. 246, 254, 68 S. W. 21 (1902); Curien v. Santini, 16 La. Ann. 27 (1861); Boston Glass Manufactory v. Langdon, 24 Pick. (Mass.) 49 (1834); Town v. Bank of River Raisin, 2 Doug. (Mich.) 530, 538 (1847); Campbell v. Mississippi Union Bank, 7 Miss. 625, 681 (1842); Lake Ontario Bank v. Onondaga Bank, 7 Hun (N. Y.) 549 (1876); Norris v. Smithville, 1 Swan (Tenn.) 164 (1851).

The cases of Slee v. Bloom, 19 Johns. (N. Y.) 456 (1821), and Penniman v. Briggs, 1 Hopk. (N. Y.) 300 (1824), are not contra to the text. They turned upon the interpretation of a statute, and held that, for the sake of the remedy given to creditors by that statute, a cessation of business and transfer of all property might be deemed to be what the legislature had in mind when it spoke of "dissolution."

14 Mobile & Ohio R. R. Co. v. State, 29 Ala. 573, 586 (1857); Mechanics' Bank v. Heard, 37 Ga. 401 (1867); Portland Co. v. Portland, 12 Mon. B. (Ky.) 77, 79; Revere v. Boston Copper Co., 15 Pick. (Mass.) 351, 360 (1834); Town v. Bank of River Raisin, 2 Doug. (Mich.) 530, 538 (1847); Wilson v. Proprietors of Central Bridge, 9 R. I. 590 (1870); Attorney-General v. Society, 10 Rich. Eq. (S. C.) 604, 608 (1859); Mumma v. The Potomac Company, 8 Pet. 281, 287 (1834).

Of course where a corporation petitions for an act dissolving it, and such act is passed, the corporation is bound thereby, quite as much as if a formal acceptance were made after the passage of the act.

here pertinent. The principle that, unless other provisions are made by statute or by the agreement of the members, all corporate powers are vested in the members, and that a decision of the majority binds the minority and is the decision of the corporation, is a principle as fundamental in the law of statutory corporations as in the law of chartered corporations.15

It follows that, at common law, a decision of a majority of the members of a corporation to accept an act dissolving it binds the minority and is the decision of the corporation.

Reference is made to the following authorities, which are stated in chronological order (except that cases in the same jurisdiction are grouped):

Smith v. Smith. 16 The legislature had incorporated a Grand Lodge of Masons and the subordinate lodges composing the same. The Grand Lodge assumed to surrender the charter. The court was of opinion that the Grand Lodge was only one of the component parts of the corporation, that the subordinate lodges were also component parts, and that as a majority of those lodges had not assented to the surrender, the surrender by the Grand Lodge was not a corporate act.

"Doubtless when the whole body of a corporation chooses to surrender its rights, it is at liberty to do so, and it will be valid; but a majority must concur who have an interest or a right (italics ours). The officers of a corporation, or an integral portion of it . . . are not the corporation, they have no right to make the surrender." 17

We are all familiar with the fact that to-day, by statute or agreement of the corporate members, the powers of a corporation are usually vested in directors (the successors of a managing committee from the members); but that, even where there are grants of powers to directors in very broad terms, the courts incline to hold that it was the intent to give directors only powers of ordinary management and that it was not the intent to take from the members the power to decide on "fundamental” matters. Chicago City Railway Co. v. Allerton.18 And doubtless the power voluntarily to dissolve the corporation would not be held to be in directors, unless there were

15 This principle is universally conceded, and the citation of authorities seems unnecessary.

16 3 Desaus. 557 (1813).

17 Pages 576-77.

18 18 Wall. 233 (1873).

very clear and express provisions to that effect. Jones v. Bank of Leadville.19

Now Smith v. Smith has been cited as authority for the proposition that a corporation cannot at common law be dissolved except by the unanimous consent of its members. But it is not an authority for that proposition, and, indeed, may fairly be cited as a dictum against it. When the court said that "the whole body" must consent, it referred to the body made up of all the lodges, grand and subordinate; it was simply deciding that the action of the Grand Lodge did not bind the other lodges. It was analogous to a decision that, not simply the stockholders who are directors, but the "whole body" of stockholders must decide whether there is to be a surrender. But if that "whole body" acted, the court shows plainly that it considered that a decision of a majority of its members would be the decision of the corporation.

In Town v. Bank of River Raisin,20 the court said that "a resolution to surrender by the great body of the corporation," assented to by the legislature, would dissolve the corporation.

Mobile & Ohio R. R. Co. v. State.21 The court decided that it was constitutional for a legislature to require a corporation, as a condition precedent to securing the extension of a loan from the state, to consent in advance to a forfeiture of its charter in case of default. It said, p. 586:

"The authorities do not sustain the proposition that there is no power in a corporation to consent to a destruction of the corporate life by forfeiture or surrender. It may be that such a consent could not be given by a majority of the corporators, and the authorities seem to go to that extent."

The court cited two cases for this statement. One case was Ward v. Society of Attornies, which we have already seen is, at most, only an authority that the majority may not surrender the charter if it appears from the provisions of the particular charter that they were not intended to have such power. The other case was New Orleans R. R. Co. v. Harris,22 in which the court decided that a stockholder in one corporation cannot be made a stockholder in

19 10 Colo. 464, 17 Pac. 272 (1887).

20 2 Doug. 530, 538 (1847).

21 Ala. 573 (1857).

29

22

27 Miss. 517 (1854).