Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/538

 § 507.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VIII. liability of shareholders. 1 It would seem that questions directly between the state and shareholders could arise only when a shareholder is defending his interests against the action of gov- ernment agents seeking to carry into effect the provisions of some unconstitutional law. 2 The usual object and principal ef- fect of laws made by the state are not to create any relations be- tween the state and its citizens, but to affect relations among its citizens ; to enable them to acquire rights and incur liabilities in a manner different from that in which they could have, be- fore the passage of the law. 3 § 506. Likewise, very seldom would questions arise directly between the state and directors of a corporation. The state may compel directors to perform their duties in so far as a non-performance of them in any way prejudices the public interest ; 4 and directors could resist action by the agents of the state of an improper nature, and in so doing rest their defence on the nullity of the authority relied on by such agents. The state may create penalties for breaches of trust or failure to fulfill their duties on the part of directors ; and here again if the penalties were enforceable at the suit of those persons for whose protection they were created, the questions as to them would arise between those persons and the direct- ors. Penalties, moreover, cannot be constitutionally imposed for past transactions. 5 § 507. Finally, in regard to creditors of the corporation, questions as to the constitutionality of legislation in respect impairs the obligation of a contract. University v. North Carolina R. R. Co., 76 N. C. 103. JSee §§500, 501. 2 E. y., to restrain the collection of an illegal tax. See Delaware Railroad Tax, 18 Wall. 200. When a stockholder sues to re- strain the collection of an illegal tax (when the corporation refuses), a demurrer lies to his complaint un- less the corporation is made a party. Davenport u. Dows. IS Wall. 626. 3 But a question might arise in an entirely different way between the state or the United States, and a 518 corporation, and its shareholders. Thus a shareholder was indebted to his bank, and also to the United States. By its charter the bank had a lien on its stock for the payment of debts due it by shareholders, and insisted on this lien against the claim for priority of payment asserted on the part of the United States. The bank was sustained. Brent v. Bank of Washington, 10 Pet. 596. 4 E. g., by making given acts or omissions criminal. 5 Even when the state reserves the right to alter and repeal. White v. How, 3 McLean, 111.