Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/540

 § 507.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VIII. Similarly, in Curraii v. Arkansas 1 litigation arose directly between the state and the billholders of a bank of which the state incorporating the bank was the sole shareholder. 2 The state had withdrawn the funds of the bank by means of stat- utes at variance with the provisions of its charter ; and these statutes, with the action of the state officers in accordance with them, the Federal Supreme Court held to impair the obligation of the contract between the billholders and the bank, as well as that of the contract between the state and the billholders. Giving the opinion of the court, Justice Curtis said : " It is true that as the state was the sole stockholder in this bank, the charter cannot be deemed to be such a contract between the state and the corporation as is protected by the constitution of the United States. But it is a very different question whether that charter does not contain provisions, which, when acted upon by the state and by third persons, constitute in law a binding contract between them. . . . Now the charter of this bank provides that it shall have a capital stock of one million dollars to be raised by the sale of the bonds of the state, and also that certain other funds, that are specifically described, shall be deposited therein by the state, and constitute a part of the capital stock of the bank. . . . The bank received this money from the state as the fund to meet its engagements with third persons which the state, by the charter, expressly author- ized it to make for the profit of the state. Having thus set apart this fund in the hands of the bank, and invited the pub- lic to give credit to it, under an assurance that it had been placed there for the purpose of paying the liabilities of the bank, whenever such credit was given, a contract between the state and the creditor not to withdraw that fund to his injury at once arose." 3 v. Baltimore and Ohio R. Co., 3 R. How. 534; compare Chamberlain v. St. Paul, etc., R. R. Co., 92 U. S. 299. 1 15 How. 304. 2 A statute authorizing suits, against the state existed. 3 15 How. 313. Catron, Daniel, and Nelson, JJ., dissented. Com- 520 pare Forstall v. Consolidated Asso- ciation, 34 La. Ann. 770. When a state is a stockholder in a private corporation, it is bound by the pro- visions of the charter as an indi- vidual. Marshall v. Western N. C. R. It. Co., 92 N. C. 322.