Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/532

 § 502.] THE LAW OP PRIVATE CORPORATIONS. [CHAP. VIII. Further limits oil the re- served power. state reserves the right to alter and amend, the shareholders are individually liable for corporate debts, it is clear that the state cannot repeal this personal liability so as to affect the security of existing debts, without impairing the obligation of the contract between the creditor and the corporation; 1 and it hardly requires statement, that the state may repeal this per- son;! 1 liability as to debts not yet contracted. 2 § 502. The question arises whether there are no limits be- sides those already discussed on the power of the state to change the constitution of a corporation when it has reserved the ri^ht to do so. It has been pointed out, 3 that when the charter of a cor- poration embodies a contract between the corporation and the state, the state through such contract acquires certain rights and powers over such funds of the corporators as become cor- porate property, powers which it would have been unconstitu- tional for the state to exercise, had the corporators not accepted the charter. The rights thus acquired by the state may be summed up, as the right, in so far as the interests of the public are concerned, either to compel the corporation to fulfill the purposes of its incorporation, or, if the state sees fit, to forfeit the franchises of the corporation. When, however, a corpora- tion is formed under an enabling statute or accepts a charter, which the state reserves the right to alter or repeal, what is the limit to the right of the state to alter such statute, and then either compel the corporation to fulfill its altered objects of incorporation, or forfeit the franchises of the corporation for its failure to do so ? As we have seen, there is no contract in such a case between the state and the corporation, for the state agrees to nothing. The corporators, however, assume the duty towards the public to fulfill the purposes of their incorporation, as far as the public may be interested in the fulfillment of such 1 Hawthorne v. Calef, 2 Wall. 22; Corning v. McCullough, 1 N. Y. 47; Provident Savings Institution v. Jackson Skating Rink, f>2 Mo. 552; St. Louis Railway Supplies Co. v. Harbine, 2 Mo. App. 134 ; Grand Rapids Sav'gs Bank r. Warren, 52 Mich. 557; Nat. Commercial Bank v. 512 McDonnell, 92 Ala. 388; Barton Nat. IV k v. Atkins, 72 Vt. 33; Woodworth v. Bolles, 61 Kas. 569; but compare Woodliouse v. Commonwealth Insur- ance Co., 54 Pa. St. 307. 2 Compare Curran v. Arkansas, 15 How. 304, § 507. 3 § 456.