Proprietors of the Union Locks & Canals v. Towne

1 N.H. 44

• Court: Superior Court of New Hampshire
• Decided: April 15, 1817
• Status: Published

Opinion

Woodbury, J.,

delivered the opinion of the court.

*

This is a dispute between a private corporation and one of its members. A recurrence to the nature of the liabilities of members to their own corporation will, we apprehend, divest the case of many of its difficulties. Every individual owner of shares, whether a petitioner, an associate, or purchaser, expects and indeed stipulates with the other owners, as a corporate body, to pay them his proportion of tbe expense, which a majority may please to incur in the premotion of tbe particular object of the corporation. By acquiring an interest in the corporation, therefore, he enters into an obligation with it in the nature of a special contract, the terms of which contract are limited by the specific provisions, rights and liabilities detailed in the act of incorporation.

To make a valid change in this private contract as in any other, the assent of both parties is indispensable. The corporation on one part can assent by a vote of the majority: the individual, on the other part, by his own personal act. However the corporation, then, may be bound by the assent to the additional acts, this defendant, in his individual capacity, having never consented to either of them, is under no obligations to the plaintiffs, except what he incurred by becoming a member under the first act. Consequently the assessments sued for, if raised to advance objects essentially different, or the same objects in methods essentially different from those originally contemplated, are not made in conformity to the defendant’s special contract with the corporation ; and this action, sustainable on that contract alone, cannot be supported. For the purpose of settling this point, we shall assume another, which was contested, as to the defendant’s membership, and regard him as having made a valid purchase of one share under the act of December 23, 1808. What then were the obligations imposed on him by that purchase ? They were, that he should pay all assessments raised for the objects, and under the restrictions contained in said act, and not that he should be liable for money assessed towards other and more extended objects, or under different and fewer restrictions. If the present action, therefore, be for money raised under the circumstances last supposed, whatever may have been the expediency of its intended appropriation, the defendant can legally exonerate himself from its payment: because not assessed in conformity to his original obligation. Notwithstanding the laudable object and great utility of the additional acts, still, if they effected a material change, he is able to say non hmc in federa veni. On examining the declaration, we perceive that none of the assessments were made before June 23, 1809. Consequently if, the act of that date created essential alterations, nothing can be recovered in this suit. But if no such alterations were produced till the act of December 12, 1812, accepted August 4, 1813, then the verdict will be correct after deducting two assessments raised subsequent to that period. That the acceptance of this last act, for locking CromwelVs falls, effected a material change in the original corporation, we entertain no doubt. It was, in fact, uniting two distinct corporations. After that acceptance, the money assessed would be raised, not only for the purposes first contemplated, but for constructing a- canal in a certain part of the river, wholly without the boundaries included in the first act. Neither the letter nor spirit of the defendant’s contract could extend to the payment of money raised for an object which was not originally within the contemplation and power of the parties. The cases of the Middlesex Turnpike Corporation vs. Lock, 8 Mass. Rep. 268, and the same vs. Swan, 10 Mass. Rep. 384, are very analogous. But the act of June 23, 1809, does not vary the boundaries of the canal ; and the changes introduced by it are not, therefore, nominally the same with those created by the other. We apprehend, however, that on principle it effects such alterations from the original charter as are equally material with those produced by the law of December 23, 1812. It enables the corporation to repay itself for all expenses incurred, by a toll unlimited in amount and duration, instead of one for forty years, and not exceeding twelve per cent, on the capital invested. It also authorizes them to purchase one hundred instead of six acres of land. The original contract, by the defendant, with the corporation, was to pay all assessments a majority would think it expedient to raise, for improving the navigation of the river within certain limits, and for purchasing not moré than six acres of land, towards the promotion of that object; when they must raise those assessments under the restricted right of being repaid only by a specified toll for a definite time.

But the money for which this action is brought was assessed for some other objects and under some different circumstances ; for purchasing one hundred, instead of six acres of land, and under a right to be repaid by an indefinite toll for an indefinite time, instead of one limited in its amount and continuance. It is impossible to state the case, without perceiving a variation from the contract originally made, and a variation, too, which reaches the gravamen, or essence of the contract. Many a cautious man would be willing to hazard the assessments which might be made on a share under the restrictions of the first act, who would never risk those which his more wealthy, or more adventurous associates might make under the indulgencies of the second one. A. proof of the correctness of this suggestion results from the procurement of the second act, before much expense was actually incurred, and also from the large number and great amount of assessments made immediately after it was adopted.

In a case like the present, we should not hesitate to give a liberal and enlarged construction to the obligation of the parties. Had the original act failed in consequence of the first meeting under it having been unseasonably or informally warned, or in consequence of an omission of some provision, usual and indispensable to the transaction of business, an additional act, curing such difficulties, might be presumed to feceive the assent of all who adopted the original act. But we think that an assent to amendments extending the objects, or increasing the powers, or enlarging the liabilities of the corporation, is not to be presumed, but must be expressly shewn.

Let the verdict, therefore, be set aside, and the

Plaintiffs nonsuited.

Richard son, C, J., baring been of counsel for tbe plaintiffs, did not sit.