Rose v. Turnpike Co. , 3 Watts 46 ( 1834 )

The .opinion of the Court was delivered by

Sergeant, J.

The principle seems to be settled in England, that a corporation is dissolved when an integral part is gone and the remaining parts are incapable of restoring it, or of doing any corporate act. The question seems chiefly to have arisen in relation to municipal corporations composed of mayor, aldermen and burgesses, instituted for the government of towns in their judicial concerns, police, or trade. When these corporations have fallen into such a state, by the loss of an integral part, that they are incapacitated from continuing their succession, or accomplishing the purposes for which they were created, the crown has treated them as dissolved, and granted a new charter. To prevent the occurrence of a dissolution, when the mayor or head officer was an integral part, and there was a failure to elect, the statute 11 Geo. 1, c. 4 was passed, providing for an election on another day.

Our corporations bear little resembance to the English municipal corporations either in design or constitution. The present, like many of our incorporations for civil purposes, either by special act of assembly, or under the act of 1791, is not a corporation composed of several integral parts. The stockholders constitute the company, and the managers and officers are their agents, necessary for the conduct and management of the affairs of the company, but not essential to its existence as such, nor forming an integral part. The corporation exists per se, so far as is requisite to the maintenance of perpetual succession, and holding and preserving its franchises. The non existence of the managers does not imply the non existence of the corporation. The latter is dormant during that time; its functions are suspended for want of the means of action: but the capacity to. restore its functionaries by means of elections remains.

The total dissolution of a body politic, its political death and resolution into its original elements, would be attended with such momentous consequences, that it ought not lightly to happen. Not only would it affect its property, rights and responsibilities, but the beneficial purposes for which it was created would be frustrated, and the community, as well as individuals holding stock, be injured. No class of corporations would be exempt. Whether religious, charitable, or literary; whether for turnpikes, bridges, banks, insurances, canals, railroads, or any other purpose, all must be embraced within the rule; and if, by accident, inadvertence or design, there is one omission to elect managers'on the day appointed, or the election made is void, the whole edifice of the corporation falls into ruins, and can only be reconstructed by legislative interference; even then perhaps after a lapse of time, and with some doubts as to its power to revest former rights, and to restore its identity. I see no reason why the company may not retain all their rights, powers and privileges, though there be a suspension of the power of action; nor why this power of action, though dormant for a time,' may not be revived by a new election of the managers and officers competent to carry on its affairs, conformably to the directions of the charter. That may be done on the day appointed by the act, it not being required that the managers, officers, or any other persons should preside at, or do any act in reference to the election, which is conducted entirely under the control of the stockholders.

In the case of Phillips v. Wickham, in the court of chancery in New York, it was decided that a quasi corporation of the owners of certain drowned lands, created by act of the legislature, were not extinguished'by the omission to elect their commissioners, who were annual officers, at the time designated by the act, but that at the period of the next annual election they might meet and choose commissioners for the ensuing year. 1 Paige’s New York Ch. Rep. 590. See also Angell and Ames on Corp. 506.^(a) It follows from these principles that there was no dissolution of this corporation, and that the elections of 1830, 1831 and 1832 were good, whatever may have been the character of the prior elections. It becomes therefore unnet cessary to advert to the questions of the right of the officer selected to hold over, or of the effect of acts done by officers defacto, or of the right of the defendant to avail himself of such a defence, which have suggested themselves in the course of the present case.

On the other point however we think there was error in the charge of the court. If a party sue for a debt, and, for want of evidence, judgment be rendered for the defendant,Jt is conclusive against the plaintiff. Here the plaintiffs sued for part of their present claim; a judgment was rendered for the defendant because it did not appear that the company had made a call for the sums due. It is said that no call was in fact made, and therefore as the money was not due, the judgment is not a bar. But the case stated admits that the suit was for 22 dollars 50 cents, the amount of defendant’s stock called for up to that time. And the record of the magistrate is, that judgment was given for the defendant, “ it not appearing that a call had been made.” This judgment became absolutely the discontinuance after the appeal, and was a bar to so much of the plaintiff’s present demand as was embraced within it.

Judgment reversed, and a venire de novo awarded.

(a) The same principle is settled in the Lehigh Bridge Company The Lehigh Navigation Company, 4 Rawle 9.