« ForrigeFortsett »
the constitution and general law of the land, and the rights dependent thereon. Subject to these limitations, the power to make by-laws may be sustained and enforced by just and competent pecuniary penalties.*
*(9.) Of the power of removal. *297 The power of amotion, or disfranchisement of a member for a reasonable cause, is a power necessarily inci
• See the opinions of the judges in the case of the King v. Westwood, 7 Bing. Rep. 1; and the very elaborate opinion of the Ass. V. Ch. of NewYork, in Westervelt v. Corporation of the City of New-York, 2 Hoffman's Ch. Rep. and see Angell dj- Ames on Corporations, ch. 10.3d. edit., where this branch of the subject is treated, and with great and exhausting research. Every corporate body has a right at common law, and without statute, to make by-laws needful for the management of the business and property of the corporation, and to regulate the duties and conduct of its officers and agents. Savage, Ch. J., in The People v. Throop, 12 Wendell's JJ.183. Childv. Hudson Bay Company, 2 P. Wms. 209. In the case of the State of Louisiana, ex relat. Hatch, v. The City Bank of New-Orleans, decided on appeal to the supreme court of Louisiana, March, 1842, it was adjudged that a stockholder and director, without a resolution of the board, had no right to inspect the stock ledger, or transfer book containing the list of the stockholders. See Rex v. Bank of England, 2 B. d> Aid. 620. Rex v. Merchant's Taylor's Company, 2 B <J - Adolphus, 115, cited in support of the decision, and the case of the People v. Throop, in 12 Wend., was cited in support of the decision of the court below. But a corporation cannot by a by-law subject to forfeiture shares of stockholders for nonpayment of instalments, unless the power be expressly granted by the charter. Corporations cannot impose penalties and take redress into their own hands. Kirk v. Norvill, 1 Term Rep. 117. In the matter of the Long Island R. R. 19 Wendell, 37. How far and when it is in the power of a corporation to enforce by suit the payment of subscriptions for corporate stock, and make and recover assessments for the same, is fully considered and the cases critically examined, in Angell <J. Ames on Corporations, 3d. ed. ch. 15. In Tuttle v. Walton, 1 Kelly's Geo. R. 43, a by-law of a corporation creating a lien on the stock of the members, for their corporate debts is valid and binding between the corporators, and even as against a purchaser at execution of the stock, with notice of the lien, and when the lien was prior in time to the lien acquired under the judgment.
A certificate of corporate stock, is transferable by a blank endorsement, which may be filled up by the holder, by writing an assignment and power of attorney over the signature endorsed. Kortright v. Buffalo Commercial Bank, 20 Wendell, 91.
dent to every corporation. It was, however, the doctrine formerly, that no freeman of a corporation could be disfranchised by the act of the corporation itself. unless the charter expressly conferred the power, or it existed by prescription.* But Lord Ch. B. Hale held,b that every corporation might remove a member, for good cause; and in Lord Bruce's case,0 the K. B. declared the modern opinion to be, that a power of amotion was incident to a corporation. At last, in the case of The King v. Richardson^ the question was fully and at large discussed in the K. B.; and the court decided, that the power of amotion was incident, and necessary for the good order and government of corporate bodies, as much as the power of making by-laws. But this power of amotion, as the court held in that case, must be exercised for good cause; and it must be for some offence that has an immediate relation to the duties of the party as a corporator; for as to offences which have no immediate relation to his corporate trust, but which render a party infamous and unfit for any office, they must be established by indictment and trial at law, before the corporation can expel for such a cause. In the case of The Commonwealth v. St. Patricias Society* while it was admitted to be a tacit condition annexed to the corporate franchise that the members would not oppose or injure the interests of the corporate body: and that expulsion might follow a breach of the condition ; yet it was adjudged, that without an express
power in the charter, no member could be dis*298 franchised, unless he *had been guilty of some
offence which either affected the interests or good
• Bagg's case, 11 Co. 99. a. 2d resolution. See also Sty. Rep. 477. 480. 1 Lord Raym. 392. 2 Ibid. 1566.
b Tidderly's case, 1 Sid. Rep. 14.
• 2 Binney's Rep. 441. See also to S. P. Willcock on Mun. Corporations, 271.
government of the corporation, or was indictable by the law of the land, and of which he had been convicted. If there be no special provision on the subject in the charter, the power of removal of a member for just cause, resides in the whole body.* But a select body of the corporation may possess the power, not only when given by charter, but in consequence of a by-law made by the body at large ; for the body at large may delegate their powers to a select body, as the representative of the whole community.b
The cases do not distinguish clearly between disfranchisement and amotion. The former applies to members, and the latter only to officers; and if an officer be removed for good cause, he may still continue to be a member of the corporation.0 Disfranchisement is the greater power, and more formidable in its application; and in joint stock or monied corporations, no stockholder can be disfranchised, and thereby deprived of his property or interest in the general fund, by any act of the corporators, without at least an express authority for that purpose ;d and unless an officer be elected and declared to hold during pleasure, the power of amotion, as well as of disfranchisement, ought to be exercised in a just and reasonable manner, and upon due notice and opportunity to be heard."
* The King v. Lyme Regis, Doug. Rep. 149. Willcock on M. C. 246.
» Ibid. and 3 Burr. Rep. 1837.
« Angell <J- Ames on Corporations, 404. 3d ed.
d Ibid. 405. Bagg's case, 11 Co. 99.
• The Commonwealth v Penn. Beneficial Society, 2 Serg. $ Rawle, 141. But the power of disfranchisement and amotion is to be exercised by the corporation at large unless it be by charter expressly confided to a particular person or select body. Angell <J. Ames on Corporations, 423. 3d edit. In this last edition of Messrs. Angell 4} Ames, the cases in which the power of amotion or disfranchisement may be or be not exercised, are collected and reviewed. p. p. 408. 424. ch. 12. The acceptance of another incompatible office does not operate as an absolute avoidance of the former, in any case where the party could not divest himself (10.) Corporate powers strictly construed.
The modern doctrine is, to consider corporations as having such powers as are specifically granted by the act of incorporation, or as are necessary for the purpose of carrying into effect the powers expressly granted, *299 and as not *having any other. The supreme court of the United States declared this obvious doctrine,a and it has been repeated in the decisions of the state courts.b No rule of law comes with a more reasonable application, considering how lavishly charter privileges have bsen granted. As corporations are the mere creatures of law, established for special purposes, and derive all their powers from the acts creating them, it is: perfectly just and proper that they should be obliged
of that office by his own act, without the concurrence of another. King T. Patterson, 4 Barnw. «J- Aid. 1.
* Head Si. Aniory v. The Providence Insurance Company, 2 Crunch, 167. Marshall, Cli J., 4 Wheaton, 686. Beatty v. Lessee of Knowler, 4 Peters' V. S. R>.p. 163. Taney, Ch. J., in the case of the Bank of Augusta v. Earle, 13 Peters, 587. Runyon v. Coster, 14 lb. 122. Story, J., in the case of the Bank of the U. S. v. Dundridge, 12 Wheaton, 68.
b The People v. Utica Insurance Company, 15 Johns. Rep. 358. 383. 19 Id. 1 S. P. The N. Y. Fire Insurance Company v. Ely, 5 Conn. Rep. 560. N. Y. Firemen's Insurance Company v. Sturges, 2 Cowen's Rep. 664. 675. The N. R. Ins. Co. v. Lawrence, 3 Wendell, 482. Savage, Ch. J., N. R F. Ins. Co. v. Ely, 2 Cowen, 709. Life and Fire Ins. Co. v. Mechanic Fire Ins. Co., 7 Wendell, 31. First Parish in Sutton v. Cole, 3 Pick. Rrp. 232. The .State v. Stebbins, 1 Stewart's Ala. Rep. 299. Berlin v. New-Britain, 9 Conn. Rep. 180. Angell and Ames on Corporations, 239, 2d ed. The New-York Revised Statutes, vol. i. p. 600. sec. 3, have declared, that no corporation shall possess or exercise any corporate powers not expressly given by statute, or by ils charter, except such as shall be necessary to the exercise of the powers so enumerated and given. The cases of Sharp v. Speir, and Sharp v. Johnson, 4 Hill's N. Y. Rep. 76. 92, are samples of the very strict and even stringent construction of the powers and proceedings of municipal corporations, in respect to assessments, taxation, and sales of private property. By the New-York Revised Statutes, 3d ed. vol. 1. 893. 894, all associations for banking purposes and all bunking operations unauthorized by law, are prohibited under a penalty. The prohibition extends equally to foreign corporations exercising business of banking in this state.
strictly to show their authority for the business they assume, and be confined in their operations to the mode, and manner, and subject matter prescribed.* The modem language of the English courts is to the same effect ;b and, in a recent case,0 it was observed, that a corporation could not bind themselves for purposes foreign to those for which they were established. Where a corporation was crealed for purposes of trade, it resulted necessarily that they must have power to accept bills, and issue notes. But if a company be formed, not for the purposes of trade but for other purposes, as, for instance, to supply water, the nature of their business does not raise a necessary implication that they should have power to make notes, and issue bills; and it seemed to be doubted whether there must not be an express authority to enable them to do it. The acts of corporation agents are construed with equal strictness; audit is the doctrine, that though a deed be signed by the president and cashier of a corporation, and be sealed with its corporate seal; yet the courts may look beyond the seal, *and *300 if it be affixed without the authority of the directors, and that fact be made affirmatively to appear, the instrument is null and void.'1
« Corporate acts must not only be authorized by the charier, but thoso acts must be done by such officers or agents, and in such maimer as the charter authorizes. Taucy, Ch. J. in the liank of Augusta v. Lurle, 13 Peters, 587.
b Dublin Corporation v. Attorney-General, 9 B!igh, N. S. 3!)5. e Broughtou v. The Manchester Water Works Company, 3 Barnw. <J Aid. 1.
J The Mayor and Commonalty of Colciiccter v. I.owlnn, 1 Yen. Beames' Rep. 2>15. Tilghman, Ch. J., in the case of St. Mary's Church, 7 Sirg. d- Kawle, 530. Leggctt v. N. J. Man. and Banking Co.. in NcwJersey Chancery, April term, 1832. Every act of a public body acting under statute authority, which is lodivst an owner of his property fur nny pubtic purpose, without his consent, is (o be strictly 8<:d rigidly pursued. Van Winkle Railroad Company, 2 Green's N. J. Rep. 162. The Kin" v. Bngshaw. 7 Term Rep. 363. The Kin; v. Mayor of Liverpool. -1 Burr. 244. Rex v. Cooke, Cowp. 26. Weatervelt v. Corporation of New