chises of the respective corporations. A charter of a corporation is a contract of a two-fold character; it is, 1st, a contract between the State and the corporation; and, 2 lly, between the corporation and the stockholders. The State cannot pass a law impairing the obligations of that contract, neither can a majority of the stockholders, however powerful or however numerous, do anything which materially affects the contract existing between the corporation and the stockholders. One stockholder can arrest their action as well as a thousand. Judge DAVIS, in the case of Clearwater v. Meredith, 1 Wallace 40, in illustrating this subject, says: "When any person takes stock in a railroad corporation, he has entered into a contract with the company, that his interests shall be subject to the direction and control of the proper authorities of the corporation, to accomplish the object for which the company was organized. He does not agree that the improvements to which he subscribed should be changed in its purposes and character, at the will and pleasure of a majority of the stockholders, so that new responsibilities, and, it may be, new hazards are added to the orginal undertaking. He may be very willing to embark in one enterprise, and unwilling to engage in another--to assist in building a short line railway, and averse to risking his money in one having a longer line of transit." There cannot be a more wholesome exercise of power on the part of courts than to keep these corporations within the limits which the legislature has seen fit to prescribe for them. One of the greatest dangers to which this country is exposed, is the growing Spirit of monopolies. It stops at nothing in order to accomplish its purposes. It uses money to corrupt individuals, to corrupt legislatures, and to open a pathway to the polls. To contend against any railroad company requires immense resources and great fortitude and courage. Said the late Lord Chancellor of England, in deciding the case of Coleman v. the Eastern Counties R. Co.: "There is no project, however wild, which the shareholders, or the persons liable in respect of these companies, have not acquiesced in, from one cause or another, either from cupidity and the hope of gaining extraordinary profits beyond their first anticipations, or from terror of enteriny into a contest with persons so. powerful." The contest between an individual and a great corporation is, indeed, most unequal. But, powerful as they are, the law is more powerful. Our only hope is in the judiciary. Without a firm administration of justice, all will be lost, and this government will crumble to pieces by the corroding and corrupting influences of money, without the aid of a traitor or the assault of a single enemy. The object of this discussion is to establish, by the settled principles of law, the illegality of one corporation seizing upon the revenues, rights, privileges and franchises of another, by a coup d'etat, and appropriating them to their own use without the consent of all who are interested in them. If it can be done, then the powers of eminent domain are no longer restricted to the State, but society becomes subject to the will of the strongest. Said Judge SELDEN, of New York, in the case of Bissell v. Mich. South. R. R. Co., 22 N. Y. 258, in one of the ablest opinions ever rendered, in this or any other country, upon the public policy of confining corporations to their charter powers: "This question has not, until lately, attracted much attention. But the recent rapid multiplication of these artificial bodies, and the extensive powers and privileges conferred upon them, have made it a question of importance. It has, within a few years past, been repeatedly presented to the courts, both in this country and in England, and with one unvarying result. I can not, myself, regard it, therefore, in any just sense, open to discussion. If questions, which have been over and over again considered, and over and over again decided, are to be treated as still unsettled, then are we without any stable foundation of law or justice. The evils attendant upon setting legal principles afloat upon a sea of uncertainty and doubt, and causing them to depend upon the fluctuations of individual opinion are too obvious to need enumeration. Confidence in courts is only to be retained by their exhibiting stability in their own decisions, and a becoming respect for those of other tribunals. It has been so often and so uniformly decided, that corporations are not bound by contracts which are clearly ultra vires, that, to hold the contrary now, would take the legal profession by surprise, and introduce more or less confusion into this important branch of the law." The action of corporate authorities has sometimes been likened to that of sovereignties, where the governing classes are everything, and the individual nothing; but, in this country, an individual has just as much right to establish rules for the government of his conduct, under the law, as corporations have for theirs; consequently, courts do not base their decisions on the equality or inequality of interests, but on the law of the case. If corporations or their managers see fit to depart from the law, and undertake to deal with the interests of stockholders as if they had no rights whatever, they must not complain if they should be held to the strictest accountability. Immutable as the principles are, which govern and control this subject, there has not, heretofore, been any attempt to collect the cases, or systematize the principles by which it is governed, or to determine the powers of directors over the stockholders. The utility of their application was never more fitly illustrated than by the case here presented; and with a view to aid in re-establishing those principles, this brief is submitted. Chicago, May 15, 1865. TABLE OF CONTENTS. It is an aphorism in law, that a corporation is the mere CREATURe OF THE STATUTE, and has No power whatever, except those that Rules of Construction of Corporate Charters. 1. No corporate powers are ever created by implication, or ex- 2. Effect of clause in a charter of a corporation declaring the act VI. Rights of Shareholders. The shares of stock owned by the complainants in this case, represent-1st, Property, 2d, Rights and Privileges of which he cannot be divested, except by his own consent, and in the exercise of which rights the law will protect him. Page 84-96. VII. When the majority of stockholders in a corporation can bind the minority. Page 97-103. VIII. Rights of the minority stockholders in corporations. Page 103 122. IX. The jurisdiction of a court of equity, in cases àrising between the members of a corporation and the corporation itself. Any individual shareholder can enjoin a corporation of which he is a member, from misapplying its funds, or from exceeding its powers. Page 123–143. X. The rights, privileges and franchises of a corporation are created by the sovereign power of a state, and are in fact, a part and parcel of it; and, on grounds of public policy, therefore, they cannot be bought and sold, or bartered away like goods and chattels. Page 143-149. XI. Acts which are ultra vires. Page 149-158. XII. Directors of corporations are trustees for ALL the stockholders, and are subject to all the duties, obligations and liabilities of trustees. Page 158-165. XIII. The "consolidation" in question was a sale-the vendor being the G. & C. U. R. R. Co., and the vendee being the C. & N. W. |