Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/528

 § 499.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VIII. tract, or in those rules as modified by subsequent legislation and such other rules as the state changing the constitution of the corporation may make. 1 Consequently, the state by chang- ing the corporate constitution does not impair the obligation of this contract. 2 § 499. Although the state may change the legal relations arising solely from the contract of the corporators there! embodied in the corporate constitution, it by no power. means follows that the state may change any and all legal relations subsisting in respect of the corporate enterprise. The contract embodied in the constitution is an act which itself occasions legal relations among the parties to it ; and it is only the legal relations which arise solely from this contract as a contract that the state may change. The constitution of a corporation, besides embodying a contract between the corporators, contains rules of law which will mani- fest themselves in legal relations upon the doing of other and further acts in respect of the corporate enterprise ; and the legal relations which are not occasioned solely bv the contract embodied in the constitution, but which arise only upon the doing of other and further acts which bring the actors within the operation of that constitution regarded as law, the state cannot change. In respect of such acts, the state may only provide what legal relations they shall occasion in the future ; but the acts having been done, no constitutional legislation can alter the legal relations which they have occasioned. As Strong, J., said in the Sinking Fund Cases, 3 the power reserved by a legislature to alter and repeal the charter of a corpora- 1 Compare Supreme Commaudery v. Ainsworth, 71 Ala. 436, 450. 2 To the stock of a railroad corpo- ration, whose charter was subject to alteration and repeal, the city sub- scribed, having the right to appoint a certain number of the directors of the railroad. Individuals also sub- scribed, but did not pay their sub- scriptions. Some years later the legislature authorized the city to appoint a greater number of direc- tors; and the legislation was held constitutional under the reserved 508 power to alter and amend. Miller v. State, 15 Wall. 478; Bradley and Field, JJ., dissented on the ground that this was a modification of a con- tract outside of the charter. See also Close v. Glenwood Cemetery, 107 U. S. 466; Spring Valley Water Works v. San Francisco, 61 Cal. 3; Chincleclamouche Lumber Co. v. Commonwealth, 100 Pa. St. 438, 444. But, see, Enterprise Ditch Co. v. Moffett, 58 Neb. 642. 3 99 U. S. 700, 740.