Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/567

CHAP. IX.] CORPORATION AND SHAREHOLDERS. [§ 534. R. R. Co. v. Dudley: 1 " The change is not fundamental. The new powers conferred are identical in kind with those origi- nally given. They are enlarged merely, the general objects and purposes of the corporation remaining still the same. It may be admitted that under this reserved power to alter and repeal, the legislature would have no right to change the fun- damental character of the corporation and convert it into a different legal being, for instance, a banking corporation, with- out absolving those who did not choose to be bound." § 531. With like effect Durfee v. Old Colony, etc., R. R. Co., 3 holds that a shareholder in a corporation, the charter of which is subject to alteration and repeal, cannot maintain a bill in equity to restrain the corporation from engaging in a new enterprise in addition to that contemplated in the charter, but of the same kind, if the new enterprise is sanctioned by express legislation, and by a vote of the majority of share- holders. In this case the "new enterprise" was a consider- able extension of the railroad. Giving the opinion of the court, Chief Justice Bigelow said : — " Whatever may be the authority which is [by a reservation of the right to alter, amend, or repeal] retained by the legisla- ture to modify or change the charters of corporations without or against their consent, there would seem to be no reason to doubt that, with the concurrence of the corporation manifested in the mode pointed out by law, the legislature may make any alteration in, or addition to the power and authority conferred by the original act of incorporation, and not foreign to the purposes and objects for which it was enacted, and which it was designed to accomplish, which may seem to be expedient or necessary. No breach of contract would be thereby occa- sioned. Such action would be in precise accordance with the terms on which the grant of the franchise was made. . . . The stockholder cannot say that he became a member of the corporation on the faith of an agreement made by the legisla- ture with the corporation, that the original act of incorporation should undergo no change, except with his assent. . . . The real contract into which the stockholder enters is, that he agrees to become a member of an artificial body, which is 1 14 N. Y. 348. I 2 5 A ii e n, 230. 547