People v. President & Directors of the Manhattan Co.

9 Wend. 351

• Court: New York Supreme Court
• Decided: October 15, 1832
• Status: Published

Opinion

By the Court,

Sutherland, J.

The replications appear to me to be bad for some of the causes specially assigned in the demurrer. 1. The citizens who were willing and desirous to agree for and take the water, should some or one of them have been named in the replications. The allegation is, that a great number of citizens have, at all times since the passing of the act incorporating the defendants, been willing and desirous to agree for and take the water, but that the company have not furnished or continued a supply for the use of all such citizens, &c. If the allegations were true in point of fact, and could be proved, the attorney general must have known, or have had it in his power to ascertain the names of the individuals who were thus desirous to agree; and it is all important to the defendants that they should be informed who they are, in order that they might come to the trial prepared to controvert or explain the fact. Although the general rule in pleading is, that wherever a subject comprehends multiplicity of matters to avoid prolixity, generality of pleading is allowed, yet it is subject to a qualification equally general, that where there is any thing specific in the subject, though consisting of a number of acts or particulars, they must be particularly enumerated. This is the rule laid down by Buller, J. in Janson v. Stuart, 1 T. R. 753, and he illustrates it by the case of a covenant by A. to enfeoff of all his lands, where the covenantor in shewing performance must state them all. So, if a person be bound to pay all the legaciesinawill, he must specify them all and aver payment of each; and the reason is, because all the facts are within.the knowledge of the party. Cro. Eliz. 749. This doctrine was very fully considered by this court in the case of Van Ness v. Hamilton, and others, 19 Johns. R. 349, and by the court of king’s bench, in Janson v. Stuart, above referí ed to. Janson v. Stuart was an action for a libel, in which the plaintiff was charged with being a notorious swindler. The defendant pleaded by way of jurisdiction that the plaintiff had been illegally, fraudulently and dishonestly concerned and connected with, and was one of a gang of swindlers and common informers, and also, had been guilty of deceiving and defrauding divers persons with whom he had had dealings, &c. To this plea the plaintiff demurred specially, and it was held, bad on account of its want of particularity. Ashurst, J. says, the plea is bad on account of its generality. The substance of the libel is, that the plaintiff was a common swindler, and that he, in concert with others, defrauded divers persons. When the defendant took upon himself to justify generally the charge of swindling, he must have been prepared with the facts which constitute the charge, in order to maintain his plea; and he ought to state those facts specifically, to give the plaintiff an opportunity of denying them, for he cannot come to trial prepared to justify his whole life. If the defendant can support his charge that the plaintiff had defrauded divers persons, it must be known to him whom he has defrauded, and he must call them as witnesses to prove the particular acts of fraud. If he cannot substantiate his charge, he ought not to have made it. Buller, J. is equally explicit. He says, the question is whether the defendant is at liberty to charge the plaintiff with swindling, without shewing any instances ofit. It is contrary, he observes,to every rule of pleading; for, wherever one person charges "another with fraud, he must know the particular instances on which his charge is founded, and therefore ought to disclose them, and then lays down the general rule of pleading, where the subject comprehends multiplicity of matters, as it has already been stated. Van Ness v. Hamilton and others, was also the case of a libel, in which the defendants’ pleas of justification were held bad on special demurrer for want of particularity. It is unnecessary to state the pleadings or the opinion of the court in that ease. Judge Spencer, who delivered the opinion, expresses his unqualified approbation of the case of Janson v. Stuart. He states the opinions of Judges Buller and Ashurst at length, and says that he has found no case impugning the principles there laid down. This is a case of a penal character, in which a forfeiture of most valuable and important franchises is sought to be established, and in which at least as great certainty and strictness in pleading will be required as in a civil action for a libel. Comyn's Dig. tit. Pleadings, C. 76. 1 Ld. Raym. 107, 478. 1 Salk. 139. Vent. 78. 2 Mass. R. 444. 4 id. 471. But this is not a case, I apprehend, to which the principle that a short mode of pleading will be tolerated where particulars will tend to prolixity, is at all applicable. For the culpable neglect or omission of the defendants to supply a single individual with water, would effectually produce a forfeiture as the omission to supply a hundred. But the second replication is supposed by the attorney general to stand on a better footing in this respect than the first. It is said that they have never furnished any quantity whatever of pure and wholesome water, and that the demurrer admits it. It is answered, and I think correctly, that this is not its just construction. It alleges that the defendants have not furnished a supply,or any quantity of water for the use of all who were-desirous to take it. If there is a single individual who was desirous to take the water and has not been supplied, it satisfies the averment. It may therefore be said in judgment of" law to admit a supply to most of the citizens who wished it, and is liable to all the objections which have been stated to the first replication on the ground of its generality.

I think the plaintiffs were bound to aver a requels, on the part of those citizens who wished a supply of water, to the defendants to furnish it, or an offer on their part to pay for it, or that the defendants had notice of their alleged willingness or desire to agree for it. It was said in argument, that request or notice on the part of those who wished to be supplied was no part of the condition, and that it was not therefore necessary to be averred in stating the breach. The condition or proviso was, that the defendants should furnish a supply of pure and wholesome water, sufficient for the use of all such citizens as should agree to take it on the terms to be demanded by the said corporation. It was to be furnished to such citizens only as should agree to take it. Notice and request are both substantially and necessarily involved in the very act of agreeing or making a contract for a supply of the water. The citizens were to seek the’ corporation, not the corporation the citizens, for the purpose of agreeing. It appears, to me, therefore, that notice or request from those who wished to be supplied, is of the very essence of the condition. How could the defendants supply water to those of whose wish, to take it they were ignorant. Great strictness is required in assigning a breach of a condition, for the purpose of producing a forfeiture. The general rule is, that the breach in such cases must be in the very words of the condition. Admitting, however, that that is not in all cases indispensable, it must at least be according to its full legal effect and spirit. I think it is defective in this case in the particulars which have been adverted to.

Neither replication contains an allegation of a material fact, on which issue could be taken, and are both bad on that account. They allege that the defendants have not furnished a supply of water sufficient for the use of all such citizens as were willing and desious to agree for and take the same. The issue, if one had been taken, would have been upon the willingness or desire of the citizens to agree to take the water. This would have been an issue upon an emotion or affection of the mind, which is not traversable or susceptible of trial. Comyn’s Dig. tit. Pleader, G. 7. Laws on Plead. 207. In Van Ness v. Hamilton, 19 Johns. R. 372, already referred to, this point is expressly adjudged. The 7th plea in that case alleged that the plaintiff exerted the influence of his talents and station to procure the passage of the act incorporating the Bank of America, under and with the hope and expectation of being compensated and rewarded for his services, &c. Judge Spencer says this allegation is bad, because it is impossible to take issue on the fact, for it is not susceptible of trial. The plea states no fact on which that hope or expectation could be founded ; and, instead therefore of a trial of fact, the inquiry would be into the secret operations of the mind and thoughts of the plaintiff; and he adds that such a plea is without a precedent. So in the case at bar, no fact or act is alleged from which the willingness or desire of any citizen to take the water could be inferred. It is a naked allegation of an abstract uncommunicated desire. In these respects the replications appear to me to be defective, and the demurrer to be well taken.

The statute in relation to double pleading, &c. does not apply to criminal cases; it is an enabling statute, and does not take away a previous right which always existed in such cases. 2 R. S. 356, § 27. 6 Cowen, 196, 217. This is in the nature of a criminal case, and the attorney general had a right to set up several distinct causes of forfeiture in distinct pleas or replications; but if he had not, the remedy is not by demurrer, but by motion to the court to strike out one of the pleas. This cause of demurrer is therefore unfounded.

Having thus disposed of the special grounds of demurrer to the plaintiffs’ replication, we will proceed to the consideration of the defendants’ plea, upon which the main question s in the cause arise. It is contended on behalf of the plaintiffs that this plea is bad in substance ; that it shows no subsisting right or title in the defendants to be a corporation; or if they are a corporation, that they have banking powers. I. Are the defendants shown by the plea to be a subsisting corporation ? It is said on behalf of the people that the plea is defective in this respect, because it does not set forth the proviso contained in the 7th section of the original act of incorporation, and aver a performance of the condition. That proviso is as follows: “ Provided, that said company shall, within ten years from the passing of this' act,‘furnish and continue a supply of pure and wholesome water, ■ sufficient for the use of all such .citizens dwelling in said city, as shall agree to take it on the terms to be demanded by the said company | in default whereof, the said corporation shall be dissolved.” By the act of the 25th March, 1808, the time for fulfilling this condition was extended for ten years. To this it is answered, 1. That it was only necessary for the defendants to set forth enough, prima facie, to show title, and if any thing existed to defeat it, it was for the plaintiffs to show it. Such undoubtedly is the general rule of pleading. Mr. Chitty, 1 Chitty’s Pl. 301, 2, says, that in declaring on a contract, any proviso or condition which goes merely in defeasance of it need not be stated, for this ought to come from the other side; but if such proviso or condition constitute a condition precedent, then it must be stated by the plaintiff. Saunders, 1 Saund. 234, n. 2, lays down the rule in the same manner. He says, the plaintiff need not declare upon any more of the deed than the covenant, although there be a proviso or condition, which goes in defeasance of the covenant, for this ought to come from the other side, 1 Leo, 88; and Ashurst, J. in Hotham v. The East India Company, 1 T. R. 645, states the rule in nearly the same language used by Mr. Chitty. Vide also 2 Saund. 62, b, note 5. The rule is equally applicable to a right or title set up by way of plea, as to a right asserted in a declaration. It is a general rule of pleading, founded in reason and convenience, and applies to the course of proceeding in a case like that now before the court, as well as to a suit for the enforcement of a mere contract. I believe it was not contended, and it certainly cannot be successfully, that a compliance with the proviso in this case was a condition prece- ■ dent to the original rightful existence an'd organization of the defendants as a corporation. The first enacting clause of the act creates and declares the individuals therein named, and their associates, a body politic and corporate in presentí, while, by the very terms of the proviso, they were to have ten years thereafter to furnish the water. Neither their existence nor their general powers as a corporation, were in abeyance during that period. They had a right immediately to exercise any of the powers conferred upon them by their charter. The proviso was strictly a defeasance, and not a condition precedent; and it was not necessary, therefore, for the defendants to notice it in their plea., Perhaps the counsel meant to contend, that as the defendants were called upon by the information to shew by what authority they now claim and exercise the franchise of being a corporation, they were bound to aver every thing necessary to shew a present right; and as the period limited by the proviso had long before elapsed, it was incumbent upon them, among other things, to shew that they had performed that condition. It seems to me to be a satifactory answer to this argument to say, that the corporation having been shewn to have been legally created and organised, is in judgment of law supposed to continue to exist until the contrary is shewn, and to have performed all its duties, and among others, the duty of supplying the city of New-York with pure and wholesome water.

But, independently of the considerations which have already been stated in answer to the objection, founded upon the alleged forfeiture for a failure to perform the condition of the proviso, the defendants contend, that conceding that they had subjected themselves to a forfeiture on that ground, the plea shows a valid dispensation and waiver by the legislature of such forfeiture,in the various acts which they have since passed, recognizing the continued existence of the corporation. By the original act of 1799, the proviso was to be complied within ten years; in 1808, the time was extended for ten years more; which of course expired in 1818. If not complied then, it could not be at all. The forfeiture, or (he right of the state to enforce the forfeiture, was then complete, and . . the argument is, that as they have since, m repeated instaneeg jn soiemn and formal acts of the legislature, recognized the defendants as an existing corporation, they are now es-topped from setting up the forfeiture. The doctrine upon which this argument is founded is a familiar one in the law. It is most frequently applied in cases between landlord and tenant, where the lessor seeks to enforce a forfeiture for a condition broken. Lord Coke, 1 Inst. 211, b, § 341, thus. states the doctrine: “ If the condition be broken for non-payment of the rent, yet if the lessor bringeth an assize for the rent due at that time, he shall never enter for the condition broken, because he affirmeth the rent to have continuance, and thereby waiveth the condition; and so if the feoffor had distrained for the rent, for non-payment whereof the condition was broken, he shall never enter for the condition broken; and if he accept a rent due at a day after,, he shall not enter for the condition broken, because he thereby affirmeth the lease to have a continuance.” In Woodfall’s Land, and Ten. 203, it is said the law will always lean against forfeitures, and as courts adhere strictly to the precise words of the condition, in order to prevent a forfeiture, so, where a forfeiture has manifestly been committed, they will not allow the lessor to take advantage of it, if they find he has afterwards done any act that amounts to a waiver of it, as by acceptance of rent due after the forfeiture incurred, or action brought to recover the same ; but the forfeiture must be known to the lessor at the time, in order to render his acceptance of rent, or any other .act, a waiver. The books are full of cases in which this principle has been recognized and applied. Jackson, ex dem. Norton, v. Sheldon, 5 Cowen, 448. 1 H. Black. 311. 6 T. R. 220. Adams on Ej. 160. 1 Saund. 287, n. 16. 1 Ball & Beat. 554. 3 T. R. 151. 3 Coke, Pennant’s case, p. 64. Cro. Car. 234. Goodright v. Davis, Cowp. 803. In this last case, Lord Mansfield applied the rule, and observed, that forfeitures are not favored in law; and where the forfeiture is once waived, the court wi]| not assist it. It is proper to observe, however, that the rule does not apply to those cases in which, by the terms of the contract, the estate, upon the failure of the tenant to perform the condition, absolutely determines, for where the estate is ipso facto void by the condition, no acceptance of rent after-wards can give it continuance; otherwise, of an estate or lease voidable by entry. Coke Litt. 215, a. Woodfall, 204. 3 Coke, 64. It will be remarked that this doctrine does not stand upon any advantage accrued to the lessor, or injury sustained by the lessee, from the act which is held to be a waiver. It is a technical doctrine introduced and applied by courts for the purpose of defeating forfeitures. They will not therefore permit a lessor or landlord to say that his lessee has forfeited his estate, when his own acts show that since such forfeiture he has admitted the continuance of his estate, or the relation of landlord and tenant still to subsist. The rule and principle upon which it is founded appear to me to be entirely applicable to the case at bar.

As to the fact that various acts of the legislature passed since 1818 (as set out in the plea) do recognize the subsequent and continued existence of the defendants as a corporation, there can be no dispute. Thus the act of the 21st of April, 1818, directing a portion of the public funds to be deposited with the defendants, upon the condition of their making a loan to the state of $1,000,000, and the acts of March 27th, 1821, and of December 3d, 1827, in which such deposits are spoken of and recognized, and directed to be continued by the comptroller, if the said bank shall pay a rate of interest for such deposits equal to that paid by the banks in Albany upon the state deposits. The state would hardly direct its funds to be deposited with a dissolved corporation, or enter into a contract with it for the payment of interest. A stronger or more direct recognition of it as an existing corporation could scarcely have been made.

The only remaining questions upon this branch of the case, then, are, 1. Whether the state is to be deemed to have had notice of the failure of the corporation to fulfil the condition of the proviso when these acts of recognition or waiver took place; and 2, Whether, by a failure to perform the condition, the corporation was ipso facto absolutely dissolved, so as to' fender the doctrine of waiver inapplicable to the case. It will be recollected that by the act of the 25th March, 1808, the stock of the company was increased, and the state reserved to itself the right to subscribe 1000 shares in such stock; and the plea avers that on the 25th April, 1809, the state did subscribe to and become proprietor of 1000 shares of said stock, and has hitherto continued to hold the same, and to receive semi-annual dividends thereon, and to vote in the annual choice and election of directors of the company. Since 1809, therefore, the state has been one of the corporators, participating in the direction and control of the company, sharing its profits, and to the extent of its interest, subject to equal responsibility with the rest of the stockholders. It cannot, I think, under such circumstances, be permitted to set up its ignorance of the existence of a cause of forfeiture, if any in fact existed, in order to defeat the legal effect of its own subsequent acts.

2. The failure of the defendants (admitting them to have failed) to perform the condition of the proviso did not ipso facto produce a dissolution of the corporation, or an absolute and instantaneous destruction of its corporate existence. The act declares that in default, of fulfilling the condition, the said corporation shall be dissolved; that is, in the regular, legal manner; upon the institution and prosecution of the established course of proceedings in such cases, it shall be cause "of forfeiture or dissolution. It would not, I apprehend, be competent for a debtor of the company, when sued, to set up by way of defence that the corporation was dissolved, unless such dissolution had been established by the judgment of this court.» Bank of Niagara v. Johnson, 8 Wendell, 645. That is a matter to be judicially tried and determined, and not to be inquired into collaterally. Where the corporation expires by lapse of time, it may be otherwise, and in such case only. The right of the defendants, therefore, - to exercise the liberty, privilege and franchise of being a body politic and corporate is sufficiently established by the plea.

We proceed, then, in the last place, to consider whether, admitting them to be a corporation, they are shown to possess banking powers. The right to bank is claimed, 1. Under the original act of incorporation of the 2d April, 1799; 2, Under the act supplementary thereto, passed the 25th March, 1808; and 3. Under the various acts of the legislature subsequently passed, as set forth in the plea, recognizing the defendants as a hanking corporation. By the Sth.'section of the original act of incorporation, 2 R. L. of 1801, p. 374, it - is provided that it shall be lawful for said company to employ all such surplus capital as may belong or accrue to said company in the purchase of public or other stock or in any other monied transaction or operation, not inconsistent with the constitution and laws of this state, of of the United States, for the sole benefit of tho said company. This was before the restraining act, (which was not passed until 1804,) and when there was no other law, either of this state or of the United States, rendering banking, either by individuals or corporations, illegal. That the business of banking, both in tiie strict and popular signification of the term, and whether considered in the aggregate or in the detail is a monied' transaction or operation, is too clear to admit of discussion. 9 Mass. R. 54, 15 Johns. R. 390. 2 Cowen, 710. The terms here employed by the legislature are broad and comprehensive ; and if the power of banking caa be conferred in general terms, without using the word itself or enumerating the particulars in which it consists, they would seem necessarily to embrace it, unless they are qualified and restrained by other parts of the charter, which will be hereafter considered. The right to cany on banking operations was certainly less clearly conferred by the act incorporating the Utica Insurance Company than by this act; and yet Ch. J. Thompson held, 15 Johns. R. 381, that, independently of the restraining act, that charter contained all the power necessary to carry on banking business; butt he, with a majority of the court, held that the restraining act did apply to the case, and that on that ground the company had no right to bank. Judge Spencer thought the restraining act did not apply, and that the power of banking was clearly conferred by the terms of the charter. Banking powers have been defined by this court to consist in the rigiht of issuing negotiable notes, discounting notes, and receivin g deposits. 15 Johns. R. 390, per Spencer, J. 2 Cowen. 710, per Savage, Ch. J. In the case last referred to, it is also correctly said, that previoug to ^e restraing acts, there was no power possessed by a bank not also allowed to individuals and private associations. They could in common issue notes, discount notes, . . , and receive deposits, lhe only difference was, that the former were not liable beyond their corporate property, while the latter were accountable in their persons and to the full extent of their private estates. Corporations, however, differ from individuals and private associations in this: that while the latter may do every thing which they are not prohibited from doing by the general law, the former can do nothing except what they are authorized to do by their charters. Ch. J. Thompson, in The People v. The Utica Ins. Co., 15 Johns. R. 382, says, “ Incorporated companies have no rights except such as are specially granted, and those that are necessary to carry into effect the powers so granted. Many powers and capacities are tacitly annexed to a corporation duly created, but they are such only as are necessary to carry into effect the purposes for which it was established. The specification of certain powers operates as a restraint to such objects only, and is an implied prohibition of the exercise of other and distinct powers.” In The New-York Firemen Ins. Co. v. Ely, 2 Cowen, 709, Ch. J. Savage says, “ A corporation is merely a political institution; it can have no other capacities than such as are necessary to carry into effect the purposes for which it was established. It is a creature of the legislature, and can have no powers but such as are given to it by its creator, either at the time of its creation or subsequently, or such powders as are incidental to those granted"” 1 Kyd on Corp. 13, 70. Broughton v. Manchester Water Works, 3 Barn. & Ald. 9, 12. This is now the well established doctrine, both in this court and in England.

The rules to be applied in the construction of statutes are well summed up by Judge Thompson in The People v. The Utica Ins. Co., 15 Johns. R. 380. Such construction ought to be put upon a statute as will best answer the intention which the makers had in view; and this intention is sometimes to be collected from the cause or necessity of making the statute, and sometimes from other circumstances; and whenever such intention can be discovered, it ought to be followed with reason and discretion in the construction of the statute, although such construction seem contrary to the letter of the statute. Where the words are obscure or doubtful, the intention of the legislature is to be resorted to in order to find the meaning of the words. A thing which is within the intention of the makers of a statute, is as much within the statute as if it were within the letter; and a thing which is within the letter of the statute is not within the statute unless it be within the intention of the makers ; and such construction ought to be put upon a statute as will suffer it to be eluded. Bac. Abr. Stat. 1, 5, 10, and authorities there cited. The predominant intention of the legislature in incorporating the Manhattan Company was undoubtedly to procure for the city of New-York a supply of pure and wholesome water. The act is accordingly entitled, “ An act for supplying the city of New-York with pure and wholesome water,” and eight out of the ten sections of which it is composed contain provisions directed exclusively to the accomplishment of that object. That object being, as the legislature supposed, secured, they then proceed in the 8th section to give the company authority to dispose of what might remain of their capital, or be subsequently added to it by the profits of their main business. They may employ such surplus capital as may belong or accrue to them, in the purchase of public or other stock, or in any other monied transactions or operations not inconsistent with the constitution and laws of this state, or of the United States, No argument against the banking powers of this company can therefore be drawn from the fact that the creation of a bank was not the main purpose of the act of incorporation. That is conceded; but the question which we are now considering is whether, admitting the main object to have been accomplished, the defendants had not a right to employ what was left of their capital in banking operations ; and in this point of view the 8th section is to be construed in the same manner as though it formed a separate and distinct act by itself. But I deem it unnecessary to enlarge upon this branch of the case. The discounting of notes is certainly most emphatically a monied operation; and if any doubt existed as to the power of the corporation to make negotiable paper, it was removed by the 6th section of the act of 1808, 5 Laws of N. Y. 295, Web. & Sk. ed. in which it is expressly given ; and although the act of receiving deposits may not, per se, separate and distinct from the other acts, be so clearly a monied transaction, it may very properly be considered as embraced with them under that general term.

It was said by the counsel for the plaintiffs that the additional power conferred upon the company by the 6th section of the act of 1808, was conditional, not. absolute ; depending upon the circumstance of their selling and transferring to the corporation of New-York the right and duty of supplying the city with water. It is true that it was the principal object of that act to authorize such transfer, and that many of its provisions had an exclusive reference to it. But several of the sections were entirely unconditional, extending the right, and imposing additional obligations upon the company. Thus the 8th section extended the time for fulfilling the condition of the proviso in the original act, for ten years. The 10th section increased the capital stock of the company 1000 shares, and gave the state a right to become a stockholder in the company to that amount. It is not denied that these sections were absolute and unqualified ; although the sale to the corporation of New-York never took place, the state immediately subscribed 1000 shares in the stock of the company, and from that time to the present has continued to hold it, and the pleadings in this case admit that the defendants had until 1818 to comply with the proviso of the original act. There is nothing conditional in the terms of the 6th section. It delares that the bills obligatory and of credit, under the seal of the said corporation, and all bills or notes which may be issued by order of said company, &c. shall be assignable and negotiable, &c.; not in the event of the arrangement between the company and the corporation being consummated, but absolutely and unconditionally. The suggestion that this provision was intended to apply simply to the bonds and notes which the company might have occasion to issue in the course of its transactions as a water company, appears to me entirely unfounded. By the original act the duration of the corporation was unlimited. By the 9th section of the act of 1808, it was provided, that in case the sale authorized by the act was made, the duration of the Manhattan Company should be limited to 30 years from and after the completion of such sale. If it had no powers, either under the original or supplementary act, except as a water company, why prolong its existence for 30 years ? In the event of its transferring all the rights and duties which belonged to it in that character, why add 1000 shares to its stock, and authorize the state to become a stockholder to that amount ? Why provide, as is done by the 5th section, that if the said sale and transfer were completed,!! should be lawful for the company to employ the whole of its capital in like manner as they were authorized by the original act to employ their, surplus capital ? The whole act clearly demonstrates the perfect understanding of the legislature, that the defendants, after they should have transferred to the corporation of New-York the right to supply the city with water, were still to remain an efficient corporation, with a capital of more than two millions of dollars, and engaged in operations of so profitable a character that it was desirable for the state to become interested in its stock; and that those operations were to be carried on under the power conferred by the original charter to employ their surplus capital in any monied operations not prohibited by law. The inference from this act is irresistible to my mind, that it was perfectly understood by the legislature that the defendants were then employing such portion of their capital as was not invested in their water works in banking operations, and that no doubt was entertained of their right so to employ it; and so far from manifesting any disapprobation of such proceeding, one of the principal effects of the act was to authorize and enable them to employ the whole, instead of a portion of their capital in that manner.

The subsequent acts of the legislature, set forth in the plea, repeatedly speak of this company as a bank, and direct the officers of the government to open and keep accounts with it as such, and to deposit a portion of the public money in its vaults; and every legislature since must have known that the funds of the state were thus deposited. Admitting the right of tjje defendants to bank under their original charter to be doubtful, these acts being in pari materia, relating to the same subject matter, may be considered as a legislative construction of the original act, and as removing all doubt of ^he rjght of the defendants to employ their surplus capital in banking. I deem it unnecessary, therefore, to discuss the question whether these various acts of the legislature, in which they speak of and recognize the defendants as a banking corporation, would of themselves have conferred banking powers, "admitting them not to have been conferred by the original act of incorporation and the act of 1808.

But it is contended, that admitting the defendants to have the right, under any or all of the acts which have been referred to, to employ their surplus capital in banking, the plea in this case is bad, 1. Because the claim is not confined to the surplus, but extends to the employment of the whole capital of the company in that manner ; and 2. Because it does not show that the defendants have any surplus capital after accomplishing the main object for which the corporation was created, and that the plea neither shows that that object was accomplished, nor that any attempt was ever made to carry it into effect. I think the true construction of the plea, when taken as a whole, is a claim to use only the surplus capital of the company in banking operations. After setting out the original act of incorporation, and the various acts subsequently passed, the plea concludes thus : wherefore, the said president, &c. say that from the time of the passing of the said first mentioned act, hitherto they have been a body politic and corporate, and are and claim to be entitled to do all lawful acts, &c. and to use the privilege and franchise of being a body politic, &c, “and to employ the surplus capital belonging to said company in the purchase of public or other stock, or in any other monied transactions, &c. and to employ a part of the effects of the said company, and be interested in a fund employed for the purpose of receiving deposits, issuing notes and making discounts, &c. by employing therein the surplus capital belonging or accruing to said company ; and also the liberty and franchise of keeping an office for the purpose of receiving deposits, discounting bills, and issuing bills, promissory notes, &e. for the purpose of loaning them and putting them in circulation as money, and of receiving deposits and carrying on banking operations, such as are usually carried on by incorporated banks. It is evident, I think, that the pleader intended to claim only the right of using the surplus capital of the company in the various operations here specified, and that such, at all events, must be the construction upon general demurrer. To the objection that the plea does not show thát the defendants have or ever had any surplus capital, after accomplishing the main object of the creation of the corporation, inasmuch as it does not aver or show in any manner that such object ever was accomplished, it is answered, 1. That the corporation had a right immediately to call in the whole capital of S3,000,000, and to employ in monied operations such portions of it as were not immediately required in their preparation and arrangements for bringing the water; and that the portion thus employed, would be surplus capital within the meaning of the act; that they could therefore have surplus capital before the main object of their incorporation was accomplished, and such accomplishment therefore need not be averred; and 2. It is said that this being a public act, (of the contents and construction of which the court are bound to take notice,) if surplus funds in the act mean capital remaining after the supply of water for the city was completed, then such is its meaning in the plea. But it is farther contended, that if the plea is bad in this respect, it is cured by the replication which directs the issue to a different point. Comyn’s Dig. tit. Pleader, E. 37, C. 85, and cases there put. 1 Chitty's Plead. 261, 401, n. k. 2 Saund. 74, b. These answers appear to me satisfactory to dispose of the objection. Although it is the paramount duty of the corporation to supply the city of N. York with pure and wholesome water, and if they neglect or fail to do it, (without justifiable cause,) they will forfeit their charter, yet the complete fulfilment of that duty is not, strictly speaking, a condition precedent to the existence of surplus funds in their hands, or their right to employ them in monied operations. I see nothing in their charter to prevent their calling in their whole capital whenever the directors may think proper; and it might well be, that but a portion of it could be judicially expended for some time in the preparations for bringing water. What might remain thus unemployed, I am inclined to think, wou^ *3e surpl'us capital, within the meaning of the act. The restraining acts do not affect the powers or rights of this corporation. This company, it will be recollected, was incorporated on the 2d day of April, 1799, and the first restraining act was passed the 11th of April, 1804. 3 Web. ed. of Laws, 611. 2 R. L. of 1813, 234, § 2. The Manhattan Company had then been in operation between four and five years; and although the fact may not explicitly appear on the face of this record, it is believed it had from its first organization issued notes and carried on all the ordinary operations of a bank. With the full knowledge of this fact, the legislature, in the restraining act of 1804, used no terms except such as were clearly prospective and future in their operation. The act provides that after the passing thereof, no person, unauthorized by law, shall subscribe to or become a member of any association, institution or company, or proprietor of any bank or fund for the purpose of issuing notes, receiving deposits, &c.; and if any person unauthorized by law as aforesaid, shall hereafter subscribe or become a member as aforesaid, he shall forfeit and pay the sum of $1000; and all the acts here prohibited had long anterior to this been performed by the stockholders and proprietors of this company. There was nothing therefore in its terms which interfered with or prohibited the continuance of their accustomed business; but to guard against possible misapprehension upon this subject, the legislature at the same session passed an act expressly declaring “ that nothing in the restraining act contained, should be deemed or construed in any manner or way to affect the incorporation in the city of New-York, created by virtue of an act entitled an act for supplying the city of New-York with pure and wholesome water.” This provision is to be found in an act incorporating the Columbian Friendly Union Society in the city and county of Albany, which appears to have passed the 10 th of April, 1804, the day before the passing of the restraining act. The latter act, however, must have first passed the two houses of the legislature. They were probably both sent to the executive at the same time, and the apparent incongruity is undoubtedly owing to his having signed and returned the former bill one day before the latter. It was asserted by counsel, and the assertion is believed to bo correct, that this saving clause in the act of 180 4 has never been expressly repealed. The restraining act of 1804 was, with other provisions in relation to banks, formed into an act in the revision of the laws of 1813, 2 R. L. 234; and the repealing act of that session, 2 R. L. 556, provides that all acts and parts of acts theretofore passed, which came within the purview or operation of any of the acts passed during the (then) present session of the legislature, commonly called the revised acts, shall be repealed, &c. saving all rights, &c.; and whether the saving clause, before referred, to, would or would not, upon the established principles applicable to the construction of statutes, be considered as falling within the purview of the restraining act of 1813, and therefore repealed, it is deemed unnecessary to consider ; as whatever might be the conclusion upon that point, it is not perceived that it would vary or affect the rights of the defendants. The restraining act of 1818, Laws of 1818, p. 242, 3, was more comprehensive in its terms than the act of 1804. It declared it to be unlawful for any person, association of persons, or body corporate, from and after the first day of August (then) next, to keep an office of deposit for the purpose of discounting promissory notes, or for carrying on any kind of banking business or operations which incorporated banks are authorized by law to carry on, or issue any bills or promissory notes as .private bankers, unless thereunto specially authorized by law ; but it contained a proviso, that nothing in said act should be deemed or construed to abridge, enlarge or in any way affect any rights theretofore granted by law to any incorporated company. If the charter of the defendants gave them the right to carry on banking operations, (as I have endeavored to show it did, in a previous part of this opinion,) then whatever might be the construction of the enacting clause of this act, that right is expressly saved by the proviso.

Without bestowing, therefore, any further attention upon the act of 1804 or the act of 1818,1 pass to the consideration of the act of 1827, 1 R. S. 712. This act brings together and consolidates all the previous statutory provisions in relation to banks, and adds to them several new ones.

The first section embraces substantially the restraining act of 1804, and the sixth section the restraining act of 1818, w¡t|1 exception of the proviso. It is as follows: “ No person, association of persons or body corporate, except suck bodies corporate as are expressly authorized by. law, shall keep any office for the purpose of receiving deposits, or discounting notes or bills,” &c. &c.; and that title of the revised statutes which defines and regulates the general powers, privileges and liabilities of corporations, 1 R. S. 600, contains the following general provision: “ No corporation created or to be created, and not expressly incorporated for banking purposes, shall by any implication or construction be deemed to possess the power of discounting bills, notes or other evidences of debt, of receiving deposits, or buying gold and silver, bullion or foreign coins, of buying and selling bills of exchange, or of issuing bills, notes or other evidences of debt upon loan, or for circulation as money.” I am persuaded these provisions were never intended to apply to pre-existing corporations, not affected by the previous restraining acts. There is an ample field for their operation without giving them such a construction. I have no doubt that the proviso in the restraining act of 1818, saving the rights of existing corporations, was omitted by the revisors and the legislature in the act of 1827, simply because it was deemed entirely useless, and upon the principle which was generally pursued in that revision of the laws, of adopting the clearest and most perspicuous language, and omitting all words and expressions which had no effect upon the legal operation and construction of the acts. Nothing has been considered better settled than that the rights and privileges conferred by these acts of incorporation or charters, were held by the sacred obligation of a contract between the public and those on whom they were conferred; and that any attempt on the part of the legislature to repeal, or to alter or modify any of their essential provisions, would be unconstitutional, as interfering with vested rights, and violating the obligation of a contract. I am not aware that there has ever been any difference of opinion upon this subject among enlightened men, whether lawyers or not. The doctrine has been sanctioned again and again in the supreme court of the United States} and in most of the state courts of the union. It seemed to be supposed by one of the counsel for the people that this doctrine was applicable only to those powers which were expressly conferred by a charter, (in relation to which he freely admitted it,) but that it was not true in relation to implied powers, which were not necessary to the existence of the corporation. It may be, and undoubtedly frequently is difficult precisely and satisfactorily to determine the nature and extent of the powers, intended to be conferred by the general and comprehensive terms, sometimes employed in a charter after the enumeration of specific powers; but when that difficulty is surmounted, and those powers are ascertained by the application of those legal rules, which regulate and control the construction of such instruments, it strikes me as a legal anomaly to contend that they are held by a different and less sacred tenure, than those powers which are expressly given. Corporations are the creatures of the legislature. It gives or withholds such powers as it pleases; but whatever it gives, either expressly or according to the legal construction of the terms employed by it, it has not the constitutional right to withdraw or essentially to modify or.impair, although it may, to a certain extent, undoubtedly regulate the manner, in which such powers are to be exercised. To what extent such control may be exerted either by the general law or by special legislative provision, without the violation of the rights of a corporation, it is unnecessary now to consider. • The absolute prohibition of the exercise of so important a power as that of carrying on banking operations, is certainly not a legitimate regulation of the exercise of such power. The legislature, fully aware of these principles, have, in most of the charters which have recently been granted, expressly reserved the power to alter, modify or repeal them. Their right to control such corporations in any manner that they may deem expedient, cannot be questioned. The provisions of the R. S. which we have been considering, may undoubtedly properly operate upon such corporations, and render it unlawful for them to carry on banking operations, unless their charters give them such powers in express terms. That those provisions, so far as they are retrospective, were designed principally to apply to such cases, I entertain no doubt. There may also be other cases in which no legal objection to their application would exist.