made, the stockholders elect directors who appoint a president and cashier. The organization being completed, existence is given to the artificial being, and its agency commences. It is now in esse. but before this it was not. Vitality is given to it by the voluntary association and organization of its members. Had they remained passive the law could have had no effect.

In this case then, the grant of the franchise is not made to a person or persons in esse. The commissioners did not constitute the corporation, nor was the franchise in any form or degree vested in them.

This is the general mode in which corporations are created, and it has stood the test of time, and of legal scrutiny. No valid objection is perceived to it.

In regard to this objection the act under consideration rests upon the same ground as other and more special acts on the same subject. The franchise is not vested in either until the organization be completed, and this depends upon the voluntary association of individuals.

In a special act commissioners are named to open the books and receive subscriptions of stock; in the act under consideration the clerk and treasurer of each county are required to perform this duty. They are commissioners for this purpose; and, so far as the grant is concerned, if it be valid under one law it must be so under the other.

We come now to consider the objection, that an indefinite number of banking corporations are authorized by the general law, and this, it is supposed, is not only repugnant to the policy, but the express provision of the constitution.

It can not be said that this law violates any express provision of the constitution. The extent of the provision referred to is that no act of incorporation shall be passed, except by at least a majority of two-thirds of each branch of the legislature.

Now, this does not limit the number of corporations which shall be established, nor the number which may be created in one act. The act must be passed by a majority of two-thirds, and this is the only express restriction on the subject. If the range of legislative power be restricted beyond this, it must be done by construction.

There may be a wide distinction between the policy of a general and a special banking law, but this is not the question for judicial cognizance. Is there such a difference in principle, as to make the one constitutional and the other unconstitutional? This is the inquiry now to be made.

As it regards the power of the legislature, it is unquestionable, whether they establish one or fifty banking institutions. The same power which may establish one bank, under the constitution, may establish fifty.

In the general law, as above observed, commissioners are appointed, the county clerk and treasurer, to receive subscriptions of the stock the same as in a special act. And the mode of organization, under `both acts, is substantially the same.

The only difference seems to be that in the special act the number

of corporations is limited, whilst under the general act they are indefinite.

And here it is contended that the legislature have, in substance, conferred the power to form corporations by voluntary associations, without exercising that special scrutiny, in each case, as is required by the constitution.

But is this a sound and practical view of the case?

It may be admitted that it derives great force from the disastrous results which have been realized under this law; but these have nothing to do with the question of power under consideration. Suppose the results had been as beneficial as they have been injurious, how changed would have been the argument. But the question remains unaffected by the good or evil which resulted from the law.

The legislature, in the exercise of their discretion, seem to have concluded that, by requiring securities on real estate, and subjecting the directors to certain liabilities, it would be good policy to multiply the banking institutions of the state. And in order to avoid the charge of monopoly, which had been so liberally applied to banking incorporations by a general law, they held out to the community at large equal privileges in forming such associations. The act which thus sanctions an indefinite number of banks, depending upon voluntary associations, is passed by the requisite majority of two-thirds of both houses of the legislature.

Now, what is the practical operation of this law? It, in effect, declares that the clerk and treasurer of each county in the state shall be authorized to open books and receive subscriptions of stock, and when the associations, thus formed, shall become organized, they shall be in fact and in name bodies corporate and politic. The law acts as directly upon associations thus formed as if it had been passed expressly to incorporate each association. It is special to each. And the difference between a general and a special law of this character, in this respect, seems to be that the one is passed on the special application of a few individuals, whilst the other is enacted under the influence of a general policy. But the question of power is the

same.

May not the legislature determine the number of banks that shall be established? This will not be controverted. And if they may do this, may they not, under the constitution, pass an act, by a majority of two-thirds of each house, to establish voluntary associations without limiting their number?

Suppose the general law had limited the number of banks to be. established under it to ten, could their power to pass the law have been doubted? They throw around the institutions, thus to be organized, all the guards and checks which they deem necessary for the public interest. The law acts as directly and distinctly upon each association as if it had been the only one established under it. And, in passing the law, the legislature exercise the same scrutiny as if they were about to incorporate only one bank. Such a law would be within the letter and spirit of the constitution. And if the legislature

may do this, may they not fix on a greater number of banks than ten, or may they not, in the exercise of their discretion, authorize the establishment of an indefinite number? Whether the number shall be large or small is a question of policy and not of constitutional power. If a large or indefinite number of corporations may be created in the same act, under as salutary restrictions as the creation of one, is the policy of the constitution disregarded?

It is contended that the general law throws off the restraints imposed by the constitution. But is this so? There is not a restriction in the exercise of corporate powers, which can be imposed by a special law, that may not be imposed under a general law. And the power of the legislature acts as directly in the one case as in the other. In the general law, then, there is no disregard of the restraints of the constitution. Having the power to establish more than one corporation in the same act, the legislature may establish many, or an indefinite number.

The number, whether indefinite or limited, does not render the law repugnant to the constitution. If it has been passed by the constitutional majority, it is within the restriction.

By the thirty-sixth section of this law the legislature reserve "the power to alter or amend the act, and to dissolve any association to be incorporated under its provisions, by a vote of two-thirds of each house."

Here is a power not usually reserved in granting franchises. And it would seem that, so far as the policy of the law may be considered, this reservation of power gives to the legislature as salutary a control over these grants, for the public good, as would have been exercised in acting on special applications for charters. And the presumption is, that if the general law had not passed, the number of banks, under special laws, would have been as great, and the consequences not less disastrous.

The evil is not to be found in the constitution, or in the construction of the constitution, but in the elements of which the government is composed. The true remedy is found in the sober reflection, experience and intelligence of the community.

Demurrers withdrawn, and leave to plead, etc.

Sec. 57a. Same.

WHIPPLE, J., IN GREEN v. GRAVES,

1844, 1 Douglass (Mich.) Reports, p. 351 (on pp. 363-367), says upon substantially the same facts as in Falconer v. Campbell, supra, p. 287, in regard to the policy of the general banking law of Michi

gan:

Let me now advert to some of those "circumstances extrinsic of the act," for the purpose of discovering the reason or "cause of the act.” The constitution of Michigan was formed in 1835. All who are

familiar with the history of that period will bear testimony to the fact that a strong public feeling existed against corporations, and especially in respect to those possessing banking powers. It may be said to have been the absorbing question of the day. The community were alarmed at the vast increase of corporations. They feared the power which such institutions were capable of wielding. The belief was entertained that this power had actually been wielded for bad purposes. It was argued that all corporations were, in a greater or less degree, monopolies, and hence the prejudices of the community were arrayed against them. It was alleged that, notwithstanding the gross corruptions and fraudulent conduct of banking corporations, they could not be reached, or be made amenable to justice and the violated laws of the country. It was boldly charged that bribery and corruption had been resorted to for the purpose of procuring or perpetuating charters. Regarded as contracts between the state and the company, they could not ordinarily be affected by legislative interference. Immunity was offered to the persons and property of the corporators, not invested in the corporate stock. Such were some of the circumstances under which the provision was incorporated into our constitution, circumstances well calculated to challenge the attention of the convention, and induce that body to devise new guards by which the community might be protected against the evils growing out of legislation in respect to corporations. But the object they had in view could not be achieved, unless some statutory check was imposed, by which to prevent the multiplication of corporations. This was the crying evil; for, in proportion as they increased, in just that proportion would the evils to which I have adverted increase also.

Chancellor Kent, who was a member of the convention that revised the constitution of New York in 1821, says that the convention "endeavored to check the improvident increase of corporations, by requiring the assent of two-thirds of the members elected to each branch of the legislature, to every bill for creating, continuing, altering or renewing any body politic or corporate." 2 Kent's Com. 271. Mr. King, who was also a member of the convention, and chairman of the committee on the legislative department, in reporting the section embodied in the constitution referred to by Chancellor Kent, remarked that "the committee looked upon the multiplication of corporations as an evil," and that "they ought not to be increased, but should be diminished as far as could be done consistently with the preservation of vested rights." If such were "the extrinsic circumstances," and the reasons which induced the convention that framed our constitution to impose the restriction, is it not indisputable that we can give full effect to the intention of the framers of the constitution, and of the people by whom it was ratified, only by insisting upon such a construction as the words themselves justify; and that to affirm the general banking law of this state constitutional would be warranting an interpretation at war both with the letter and spirit of that instrument? Indeed, Chief Justice. Nelson, in the case of Thomas v. Dakin, admits that the intention of the framers of the constitution of New York would be best ful

filled by the construction contended for by the defendant. If such be the case, and the letter of the clause in question not only warrants, but demands a literal construction, I know of no power less potent than that of the people competent to change, alter, or modify the clause. We are the mere creatures of the constitution, bound by the highest motives to preserve it unimpaired, as it came from the hands of those by whom it was ordained and established. We do not sit here to make constitutions and laws, but to expound them. Who that is familiar with the opinions of the convention, or has consulted the journal of its proceedings upon the subject of corporations, can hesitate as to the true construction of the clause relating to this subject? Those opinions were hostile to the multiplication of corporations. Not only is this manifest from the clause itself, which requires a vote of two-thirds of each house to pass an act of incorporation, but the journal shows that the clause was unanimously adopted. That member would have been regarded as insane who should have offered a separate proposition, or a proviso to the clause as it now stands, granting to the legislature a power to pass a general law, for the erection of moneyed corporations, at the will of any twelve inhabitants of the state.

And yet it has been gravely argued that, notwithstanding the inhibition in the constitution, that law can be sustained which violates its letter and spirit; that law which gave birth in twelve short months to some forty banks, with an aggregate capital of nearly $4,000,000, while there were in existence eighteen chartered banks, with an aggregate capital of over $2,000,000; that law whose history was blackened with frauds and perjuries; under the operation of which individual and state credit staggered and at last fell; a law which brought odium and reproach upon the state within a year after its enactment. I have not been unmindful of the fact that the policy of the act was attempted to be vindicated, upon the ground that, under the system of creating private corporations, which prevailed before the adoption of the constitution, but comparatively a small number of the community could participate in the rights, privileges and profits of banking; whereas under the general law, the many might have privileges which before were enjoyed by the few; and hence the doctrine of equal rights and equal privileges, so much cherished by the people, was respected. In other words, that the law struck a death blow at the monopoly which previously existed. This reasoning is plausible; but is it sound? All corporations are, to a certain extent, monopolies. In the language of Mr. Justice McLean, in the case of Beaty v. Knowles, 4 Pet. 168, the "exercise of the corporate franchise is restrictive of individual rights." If so, it is difficult to sustain the construction contended for by the plaintiff, on the ground of policy; for in proportion as corporations are created, in the same proportion are the rights of individuals restricted; so that, although more individuals would, under the general banking law, become members of banking corporations, yet the consequences would be an increase of institutions admitted to be monopolies and restrictive of individual rights. The