corporation vests in the people, as succeeding to this right and prerogative of the crown, at common law. A very guarded and moderate example of these legislative reser

a Edmunds v. Brown & Sillard, 1 Lev. Rep. 237. Co. Litt. 13. b. 3 Burr. Rep. 1868, arg. 1 Blacks. Com. 484. 2 Kyd on Corp. 516. State Bank v. The State, 1 Blackford's Ind. Rep. 267. Fox v. Horah, 1 Iredell's Eq. Rep. 358. In this case in N. C. the rigorous rule of the common law was declared by Mr. Justice Gaston in behalf of the Supreme Court, but he observed that by the Revised Statutes of N. Carolina of 1831, the law received very important alterations, and on the forfeiture or dissolution of a corporation, a receiver is to be appointed to take possession of the corporate property and collect the debts for the benefit of creditors and stockholders. The rule of the common law has in fact become obsolete and odious. It never has been applied to insolvent or dissolved moneyed corporations in England. The sound doctrine now is as shown by statutes and judicial decisions, that the capital and debts of banking and other moneyed corporations constitute a trust fund and pledge for the payment of creditors and stockholders, and a court of equity will lay hold of the fund and see that it be duly collected and applied. The death of a corporation no more impairs the obligation of contracts than the death of a private person. Story J. in Wood v. Dummer, 3 Mason R. 309. Lord Redesdale in Adair v. Shaw, 1 Scho. & Lef. 261, 2. Mumna v. The Potomac County 8 Peter's R. 281. Buckner, Ch. in Wright v. Petrie, 1 Smedes & Marshall Ch. R. 319. Read v. The Frankfort Bank, 23 Maine R. 318. The act of the Legislature of Mississippi of July 26, 1843, making provision for proceeding against incorporated banks for violation of their franchises declares that upon a judgment of forfeiture the debtors shall not thereby be released, but the court is to appoint trustees to take charge of the books and assets of the bank, and to sue and collect the debts, and sell the property of the bank and apply the proceeds to the payment of the debts of the bank. This just and reasonable provision was sustained in a constitutional provision, by the court of errors and appeals of Mississippi, in the case of Nevill v. Bank of Port Gibson, in Jan. Term, 1846, after a masterly consideration of the case. In the State of Louisiana, by statute in 1842, the legislature provided for the distribution among the creditors of the property of insolvent corporations whose charters had become forfeited, and this was held to be a constitutional exercise of legislalative power. Mudge v. Commissioners &c. 10 Robinson, 460. The Statute Law of Georgia makes a permanent provision for the appropriation of the assets of insolvent banks, who shall thereby forfeit their charters, to the payment of their debts. Hotchkiss Codification of the Statute Law of Georgia, p. 362, 3. The Statute Law of New-Jersey, R. S. 1847. p. 138, recognizes a distribution of the stock on the dissolution of a corporation after payment of its debts. White v. Campbell, 5 Humphrey's Tenn. R. 38.

vations annexed to a charter, is that contained in the act of the legislature of New-York, of February 28th, 1822, c. 50, where it is declared, by way of express proviso, that the legislature may, after the expiration of five years alter and modify and expunge the act, upon condition, nevertheless, that no alteration or modification shall annul or invalidate the contracts made by or with the corporation, and that the corporation may still continue a "corporation, so far as to collect, and recover, and dispose of their estate, real and personal, and pay their debts, and divide the surplus.a

*308

A corporation may also be dissolved when an integral part of the corporation is gone, without whose ex*309 istence the functions of the corporation cannot be exercised, and when the corporation has no means of supplying that integral part, and has become incapable of acting. The incorporation becomes then virtually dead or extinguished. But in the case of The King v. Passmore, in which this subject was most extensively and learnedly discussed, the K. B. seemed to consider such a dissolution not entirely absolute, but only a dissolution to certain purposes. The king could interfere and grant

a

By the New-York Revised Statutes, vol. i. p. 600. sec. 9, upon the dissolution of a corporation, the directors or managers existing at the time (when no other persons are specially appointed for the purpose.) are declared to be trustees for the creditors and stockholders, with power to settle the concerns of the corporation, pay the debts, and divide the surplus property among the stockholders. This is a just and wise provision, and gets rid altogether of the inequitable consequences of the rule of the common law. And in Indiana, also, whenever a corporation is dissolved, all its property vests in the state in trust to pay its debts and discharge its contracts, and the residue, if any, is to be paid over to the stockholders. Revised Statutes of Indiana, 1838, p. 149. In North Carolina, a similar provision is made as to the payment of debts and the distribution of the surplus when a corporation is dissolved. Revised Statutes of North Carolina, 1837, p. 120.

b Rol. Abr. 514. 1. 1.

c3 Term Rep. 199.

d So, in the case of the Lehigh Bridge Company v. The Lehigh Coal Company, 4 Rawle's Rep. 1, the loss of an integral part of a corporation

a new charter, and he could renovate the corporation either with the old or with new corporators. If renovated in the sense of that case, all the former rights would revive and attach on the new corporation, and, among others, a right to sue on a bond given to the old corporation, But if not renovated, then the dissolution becomes absolute, because the corporation has become incapable of acting. In the case of a new incorporation, upon the dissolution of an old one, the title to the lands belonging to the old corporation does not revive in the new corporation except as against the state. In England, it would require an act of parliament to revive the title as against the original grantor, or his heirs ;a but it would be at least. questionable whether any statute with us could work such an entire renovation, because vested rights cannot be divested by statute. When a corporation has completely ceased to exist, there is no ground for the theory of a continuance of the former corporation under a new name or capacity. It becomes altogether a new institution, with newly created rights and privileges.

It is said, that a corporation may be dissolved by a voluntary surrender of its franchises into the hands of government, as well as by an involuntary forfeiture of them, through a total neglect of using them, or using them illegally and unjustly. But in the *310 case of The King v. The City of London, Sir George Treby (afterwards Lord Ch. J.) very forcibly contended, that a corporation could not be dissolved by a voluntary surrender of its property, because a corporation might exist without property; and upon that argument he shook, if not destroyed, the authenticity of the note at the end of the case in Dyer, of The Archbishop of Dub

was held to work a dissolution for certain purposes only, and that an entire dissolution was the result of a permanent incapacity to restore its deficient part, and did not happen when the legitimate existence of the part was not indispensable to a valid election.

1 Preston on Abstract of Titles, 273. 1 Woodd. Lec. 500. Salk. Rep. 191.

lin v. Bruerton,a in which it was stated, that a religious corporation might be legally dissolved and determined by a surrender of the dean and chapter, even without the consent of the archbishop. So, also, in the case of The Corporation of Colchester v. Seaber, the corporation consisted of a mayor, eleven aldermen, eighteen assistants, and eighteen common council; and though the mayor and aldermen were judicially ousted in 1740, and those offices continued vacant until 1763, when a new charter was granted and accepted, it was held by the K. B., that the corporation was not dissolved by all these proceedings, including the natural death of the mayor and aldermen, subsequent to their ouster. This case shows, that a corporation possesses a strong and tenacious principle of vitality, and that a judgment of ouster against the mayor and aldermen, notwithstanding they were integral parts of the corporation, was not an ouster, though a judgment against the corporation itself might be. It was held in argument in that case, that a corporation could not be dissolved but in three ways: 1. By abuse or misuser, and a consequent judicial forfeiture; 2. By surrender accepted on record; 3. By the death of all the members. It was admitted on the other side, that the corporation in that case was not dissolved, though it had become incapable of enjoying and exercising its franchises; and the court held, that the loss of the magistracy did not dissolve the corporation. The better opinion would seem to be that a corporation aggregate may *surrender, and in that way dissolve itself: but then the surrender must be accepted by government, and be made by some solemn act, to render it complete. This is the general doctrine, but in respect to the private cor

*311

■ 3 Dyer's Rep. 382. b.

3 Burr. Rep. 1866.

• Boston Glass Manufactory v. Langdon, 24 Pick. 49. Angell & Ames on Corporations, p. 656, 2d ed. In the case of the charter of Connecticut, where there had been for some time an involuntary nonuser of its privileges, by submission to the authority of Sir Edmund Andross, the ablest

a

porations, which contain a provision rendering the individual members liable for corporate debts due at the time of dissolution, a more lax rule has been indulged. It was held, in the court of errors of New-York, in Slee v. Bloom, that the trustees of a private corporation may do what would be equivalent to a surrender of their trust, by an intentional abandonment of their franchises, so as to warrant a court of justice to consider the corporation as in fact dissolved. But that case is not to be carried beyond the precise facts on which it rested. It ought only to be applied to a case where the debts due at the time of the dissolution are chargeable on the individual members, and then it becomes a safe precedent. It amounts only to this, that if a private corporation suffer all their property to be sacrificed, and the trustees actually relinquish their trust, and omit the annual election, and do no one act manifesting an intention to resume their corporate functions, the courts of justice may, for the sake of the remedy, and in favor of creditors, who, in such case, have their remedy against the individual members, presume a virtual surrender of the corporate rights, and a dissolution of the corporation. This is the utmost extent to which the doctrine was carried, and in *312 such a case it is a safe and reasonable doctrine. So, in Briggs v. Penniman,b where a manufacturing corporation established under the general act of 22d March, 1811, for twenty years, became insolvent within

counsel in England, consisting of Mr. Ward, John (afterwards Lord Chancellor) Somers, and George (afterwards Lord Ch. J.) Treby, were of opinion, that the charter remained good and valid in law, inasmuch as there was no surrender duly made and enrolled, nor any judgment of record against it. See the opinion at large, in 1 Trumbull's Hist. of Connecticut, 407. Hutchinson's Hist. of Massachusetts, vol. i. p. 406.

19 Johns. Rep. 456. It was decided, in that case, that a by-law of a corporation, allowing the stockholders, on paying 30 per cent. on their shares, to forfeit them, was void as to creditors. See, to the same point, Hume v. Wynyaw, Carolina Law Journal, No. 2. p. 217.

b1 Hopkins, 300. S. C. 8 Cowen, 387.

Laws of N. Y. sess. 34. ch. 67.