242
THE GREEN BAG
with the state and as a contract between the shareholders, and holds that it was the viola tion of the latter contract which should have been the ground for the decision in the Dart mouth College case. The decision, however, was put on the other ground. Since the adop tion of the reserved power to amend was ad mittedly for the purpose of avoiding that de cision it should be construed as authorizing only amendments affecting the contract be tween the state and the company just as any contracting party might reserve such a right in his contract. The contract between the shareholders exists independently of and is not created by the state and should not be altered either directly or by permission to a majority of stockholders. He admits that this contention is not sup ported by the cases. "Whatever may have been the intention of the reserved power clauses, the state has not the constitutional power to reserve to itself a right to alter or repeal the contract of the corporators any more than it could reserve such a power over the contracts of partners, of unincorporated associations, or of private contracts in general. Although it may be admitted that the state, without thereby re leasing dissenting stockholders, can make im material changes, yet this power derives no additional force from the reserved power clauses, but exists independently of them. The state cannot gain power over a con tract over which it otherwise would have none merely because such contract is, by an acci dent of history and legal procedure, formally embodied in an instrument over which, in a different aspect, the state can legally reserve rights of amendment or repeal. "If these contentions be correct, almost the entire law on the subject of the control of the states over corporations must be rewritten. It is of importance that it should be so re written, for it is submitted that the law, as it now stands, is illogical and historically in correct, and, further, that under it no invest ments in the stock of any corporations can safely be made, for the entire organization and purpose of a corporation may at any time be changed by legislative enactment notwithstand ing the protests of minority stockholders. Even policy, therefore, does not dictate in this
case the necessity of fallacious reasoning. There is no apparent reason why the states should have any more power to annul or alter corporators' contracts inter se than to revoke or amend any other contracts. If the people of the United States think differently, they may find means to accomplish their desire, but it is submitted that those means are to be found only in an amendment to the Fed eral Constitution limiting in this respect the impotence of the states to impair the obliga tion of contracts. It is not believed that any such amendment would be desirable, but that, on the contrary, it would be in the highest degree impolitic." CONSTITUTIONAL LAW (Limitations. Jury Trial, Philippines) "TitE Attorney-General for the Philippine Archipelago," Lebbeus R. Wilpley, contrib utes to the March Yale Law Journal (V. xiv, p. 266) an article on "The Legal Status of the Philippines — As Fixed by the Recent De cision of the Supreme Court in the Jury Trial Cases." "It was manifest from the beginning that all of the guaranties of the Constitution could not be extended to these peoples, at least for some time to come, and that, according to traditional standards, they were and would for a long period be unfitted for statehood. The cold fact was that we had come into pos session of territory unfitted for statehood which had to be administered by govern mental machinery unequipped for coloniza tion. Two questions arose: one of a purely political character to be determined by the people — the other involving a proposition of law to be determined by the Supreme Court. The general public, who were interested mainly in the political aspect of the matter, included in their considerations many questions of law. And it is correct to say that the question of political expediency obtruded itself upon the attention of the courts and the lawyers in the consideration of the purely legal phase. Nor was this strange. "The case presented the question whether in the absence of a statute of Congress ex pressly conferring the right, trial by jury is a necessary incident of judicial procedure in the
