and the corporation may be brought within the operation of laws enacted after the granting of its charter, by accepting them as amendments to its charter.85 And as no one but the corporation or the stockholders can object to an act of the legislature on the ground that it impairs the obligation of the contract between the state and the corporation, and any objection on this ground is waived by the corporation if it accepts the act, such acceptance may be either express or it may be implied from the exercise of powers under it.86

III. RESERVATION OF POWER TO ALTER, AMEND OR REPEAL

§ 4299. In general. In granting charters or authorizing the creation of corporations under general laws, the state may expressly reserve the power to alter, amend or repeal such charter or such general laws.87

While this reserved right is in the interest of the state to modify or repeal its own contract with the corporation,88 it is in reality a continuing power of regulation and control in the interests of the public.89 "It was, no doubt, with a view to suggest a method by which the state legislatures could retain in a large measure this important power, without violating the provisions of the Federal Constitution, that Mr. Justice Story in his concurring opinion in the Dartmouth College case, suggested that when the legislature was enacting a charter for a corporation, a provision in the statute reserving to the legislature the right to amend or repeal it must be held to be a part of

85 Louisville & N. R. Co. v. State, 154 Ala. 156, 45 So. 296. See also State v. Montgomery Light Co., 102 Ala. 594, 15 So. 347; Pennsylvania R. Co. v. Duncan, 111 Pa. St. 352, 5 Atl. 742.

86 And see Phinney v. Sheppard & Enoch Pratt Hospital, 88 Md. 633, 42 Atl. 58; People v. Globe Mut. Life Ins. Co., 60 How. Pr. (N. Y.) 82; Monongahela Bridge Co. v. Pittsburgh & B. Ry. Co., 114 Pa. St. 478, 8 Atl. 233; Pennsylvania R. Co. v. Duncan, 111 Pa. St. 352, 5 Atl. 742.

It was held, however, that the fact that a turnpike company claiming under its charter exemption from legislation reducing its rates of toll below a certain figure, collected tolls at a reduced rate fixed by a statute in vio

lation of such exemption, was not a
recognition of right of the legislature
to amend or repeal its charter at will,
and did not waive its right to attack
the statute as unconstitutional. Cov-
ington & L. Turnpike Road Co. v.
Sandford, 164 U. S. 578, 41 L. Ed. 560.
87 Somerville v. St. Louis Mining &
Milling Co., 46 Mont. 268, L. R. A.
1915 B 811, 127 Pac. 464; Garey v. St.
Joe Min. Co., 32 Utah 497, 12 L. R. A.
(N. S.) 554, 91 Pac. 369.

88 State v. Railroad Commission of
Wisconsin, 140 Wis. 145, 121 N. W.
919.

89 Delaware, L. & W. R. Co. v. Board of Public Uilities Com'rs, 85 N. J. L. 28, 88 Atl. 849; State v. Railroad Commission of Wisconsin, 140 Wis. 145, 121 N. W. 919.

A

the contract itself, and the subsequent exercise of the right would be in accordance with the contract, and could not therefore, impair its obligation." 90

§ 4300. Constitutional and statutory provisions-In general. In a large number of states the people have adopted constitutional provisions which reserve to the state the power of amendment, alteration, or repeal of all charters granted to corporations.91 These constitu

tional provisions vary somewhat in their phraseology, and in some states it will be found that the power must not be exercised in such a manner as to work injustice to the corporators. But usually the power is not qualified, since the other provisions of the state and federal constitutions operate to limit the power and prevent the infringement of vested rights.92

In some of the states the constitutional provisions are supplemented by general laws which, similarly, reserve the power of amendment and repeal. And, in other states, the legislative enactments in the form of general laws are the means whereby this important power is reserved.93 These statutes will also be found to differ in their phrase

Montana. Power to alter, amend or repeal charters of corporations held reserved to state. (Const. art. XV, § 2; Civ. Code 1895, § 394; Rev. Codes, $3809; Compiled Statutes, c. 25, $466). Somerville v. St. Louis Mining & Milling Co., 46 Mont. 268, L. R. A. 1915 B 811, 127 Pac. 464.

New York. Power of amendment or repeal held reserved by both Constitution and statutes. Lord v. Equitable Life Assur. Soc. of United States, 194 N. Y. 212, 22 L. R. A. (N. S.) 420, 87 N. E. 443. Under the reservation of power in the Constitution, the state has the right to amend, modify or repeal the charter of any corporation. Bush v. New York Life Ins. Co., 135 App. Div. 447, 119 N. Y. Supp. 796. Legislature has the right at any time it sees fit to alter, suspend and repeal the charters of corporations (Rev. St. [1st ed.] pt. 1, c. 18, tit. 3, § 8; Const. art. VIII, § 1). Colby v. Equitable Trust Co., 124 App. Div. 262, 108 N. Y. Supp. 978; Lord v. Equitable Life Assur. Society, 109 App. Div. 252, 96 N. Y. Supp. 10, aff'g 47 Misc. 187, 94 N. Y. Supp. 65. The constitutional reservation (Const. art. VIII, § 1) applies to "general laws and special acts" only. Lord v. Equitable Life Assur. Society, 109 App. Div. 252, 96 N. Y. Supp. 10, aff'g 47 Misc. 187, 94 N. Y. Supp. 65.

North Carolina.

§ 1, provides that all general and special acts creating corporations may be altered or repealed. Yadkin River Power Co. v. Whitney Co., 150 N. C. 31, 63 S. E. 188.

Ohio. Ohio Const. of 1851. See also Ohio Const. art. XIII, §2, as amended September 3, 1912; GeigerJones Co. v. Turner, 230 Fed. 233.

Oregon. Under Ore. Const. art. XI, § 2, laws for the formation of corporations may be altered, amended or repealed. Portland Railway, Light & Power Co. v. Railroad Commission, 56 Ore. 468, 109 Pac. 273, 105 Pac. 709.

Pennsylvania. Under Const. art. XVI, § 10, the general assembly has the power to alter, revoke or annul charters. Manheim Borough v. Manheim Water Co., 229 Pa. 177, 78 Atl.

93.

Virginia. Const. § 158; Winfree v. Riverside Cotton Mills, 113 Va. 717, 75 S. E. 309.

Wisconsin. Charter held subject to alteration under power reserved in Constitution. State v. Chicago, M. & St. P. R. Co., 128 Wis. 449, 108 N. W. 594.

92 See §§ 4310, 4312, infra. 93 Alabama. Code 1907, § 3462; Avondale Land Co. v. Shook, 170 Ala. 379, 54 So. 268.

Connecticut.

Charter held subject to alteration, amendment or repeal at Const. art. VIII, the pleasure of the general assembly.

ology, but usually the power conferred is very extensive, being limited only by other constitutional provisions. Thus it will be found that the power may be exercised "in the discretion" or, "at the pleasure" of the legislature. Some statutes provide that the articles of incorporation shall be subject to amendment, alteration or repeal unless they contain a limitation to the contrary, in which case the charters of corporations without such limitation are subject to the reserved

power.94

A general statute which supplements a constitutional provision does not usually operate to confer any greater authority or power than is contained in the constitution.95

passage of special acts creating corporations or conferring corporate powers is prohibited by constitutional provisions in a large number of states,96 and in most cases corporations are created under general laws.97 But in some states charters are subject to amendment by special laws.98 And in the case of special charters the power to amend or repeal is generally reserved in the charter itself,99

Shiloh Turnpike Co. v.

Bates, 80 N. J. L. 171, 76 Atl. 448. York. Corporate charters under L. 1853, c. 463, as

New

issued

amended, concerning the organization of life insurance companies, are subjeet to amendment. Lord v. Equitable Life Assur. Soc. of United States, 194 N. Y. 212, 22 L. R. A. (N. S.) 420, 87 N. E. 443.

Under Laws 1806, c. 138 as to the incorporation of medical societies, the right to amend, alter or repeal was reserved. Ewald v. Medical Soc. of New York County, 144 N. Y. App. Div. 82, 128 N. Y. Supp. 886, rev'g

70 N. Y. Misc. 615, 130 N. Y. Supp. 1024.

94 Maine Rev. St. c. 46, § 23; State v. Bohemier, 96 Me. 257, 52 Atl. 648.

Act 1868, c. 597, incorporating the Maine Electric Medical Society, held subject to amendment, alteration or repeal, since Rev. St. c. 46, § 23 was in existence when such corporation was created, and there were no express limitations to the contrary in the charter of the corporation. State v. Bohemier, 96 Me. 257, 52 Atl. 648. 95 Code 1907, § 3462 confers no greater authority to amend a charter than is conferred by Const. art. XIV, §§ 1, 10. Avondale Land Co. v. Shook, 170 Ala. 379, 54 So. 268.

96 See Chap. 8, supra. See also Ensley v. Simpson, 166 Ala. 366, 52 So. 61; Const. art. XII, §2; Ozan Lumber Co. v. Biddie, 87 Ark. 587, 113 S. W. 796.

97 See Chap. 7, supra.

98 See 234, supra, and Howard v. Independent School Dist. No. 1 Nez Perce County, 17 Idaho 537, 106 Pac. 692.

99 A provision in the charter of a corporation that it shall not be al

§ 4301. Requirement of two-thirds vote of legislature. A constitutional provision requiring two-thirds of the members of the legislature to concur in an act altering or amending a charter does not enter into the contract between the state and a corporation chartered while such provision is in force, so as to prevent the charter from being altered or amended by a mere majority vote, as authorized by a later constitutional provision.1

§ 4302. Construction of statutes. In construing statutes to determine whether the reserved power of amendment and repeal exists, it has been held that the construction should be in accord with the broad purpose to remedy what was regarded as a great evil, as exposed by the Dartmouth College Case, and accordingly the tendency is to uphold the power.

A constitutional provision providing that corporations, other than banking, shall not be created by special act, should be so interpreted as to render it impossible for the general assembly by special law to alter an existing charter in such manner as, in effect, to make a new corporation.3

§ 4303. Reservation of power as part of contract. A reservation of the power to alter, amend or repeal becomes a part of the contract of every corporation, and of the contract of the stockholders of such

tered in any other manner than by an act of the legislature is an implied reservation by the legislature of the power to amend it. Pennsylvania College Cases, 13 Wall. (U. S.) 190, 20 L. Ed. 550.

1 In re Reciprocity Bank, 22 N. Y. 9. 2 New York Laws 1853, c. 463, § 11, providing that companies formed thereunder shall be subject to the provisions of the revised statutes, except as to "other matters" therein "otherwise specifically provided for," and sec. 20 providing that charters of companies created for the purposes named shall continue until repealed, did not operate so as to modify the revised statutes with respect to life insurance companies so that legislation touching the charters of such companies was prevented, except by repeal. Lord v. Equitable Life Assur. Soc. of United States, 194 N. Y. 212,

22 L. R. A. (N. S.) 420, 87 N. E. 443.

3 Marion Trust Co. v. Bennett, 169 Ind. 346, 124 Am. St. Rep. 228, 82 N. E. 782, holding that to give a close or literal interpretation to the word "create" would make it possible, after a corporation had been brought into existence under a valid law, so to fashion the organization as practically to bring upon the people of the state the evil of special privilege which it was designed to avoid. See also 234, supra.

4 St. Louis, I. M. & St. P. R. Co. v. Paul, 173 U. S. 404, 43 L. Ed. 746; Somerville v. St. Louis Mining & Milling Co., 46 Mont. 268, L. R. A. 1915 B 811, 127 Pac. 464; Garey v. St. Joe Min. Co., 32 Utah 497, 12 L. R. A. (N. S.) 554, 91 Pac. 369; Winfree v. Riverside Cotton Mills, 113 Va. 717, 75 S. E. 309.

This is true whether the corpora