made subject to the powers and restrictions conferred by another railroad act passed at the same session (chap. 242) by which the legislature expressly reserved the right to "alter, modify, or repeal" the act. The corporation was therefore in existence, exercising its franchises under this reserved power, when the Constitution of 1846 was adopted, containing the general provision authorizing the amendment of corporate charters. Discussing the reserved power to alter the charter, which the court deemed a contract between the corporation and the state, it was said that it must have been understood between the parties that "the sovereign power of the state might change the fundamental law at any time. And it would necessarily become a part of the contract that any future legislature might alter the charter of the company, provided that it did not violate any provision of the Constitution in force at the time of the alteration.

The charter of the company remained precisely the same immediately after the adoption of the Constitution as it was immediately before. It was never intended that all charters, so far as regarded the instruments of external control to which they were subject, should remain the same as before." See also Fort Plain Bridge Co. v. Smith (1864) 30 N. Y. 44.

The clause in this section authorizing the creation of corporations by special act "where, in the judgment of the legislature, the objects of the corporation cannot be attained under general laws," is construed in Mosier v. Hilton (1853) 15 Barb. 657, where it is said that the courts have no power to review the discretion or judgment of the legislature, exercised through a special charter; nor is the power of the legislature affected by the fact that it has enacted a general law authorizing the formation of corporations. The legislature may change its opinion or judgment, and the courts cannot inquire into the motive or reason of the change.

The same rule is declared in United States Trust Co. v. Brady (1855) 20 Barb. 119; People v. Bowen (1860) 21 N. Y. 517; Re Prospect Park & C. I. R. Co. (1876) 67 N. Y. 372; Sandham v. Nye (1894) 9 Misc. 541, 30 N. Y. Supp. 552; Berwind-White Coal Min. Co. v. Ewart (1895) 11 Misc. 490, 32 N. Y. Supp. 716, 90 Hun, 60, 35 N. Y. Supp. 573; Re Kingston Taxpayers (1870) 40 How. Pr. 444

The act of 1867, chap. 59, modifying a previous statute concerning subscriptions by the city of Rochester to the stock of a railroad company, and authorizing the city to appoint a specified number of directors, was valid. The previous statute did not create a contract fixing the number of directors, and depriving the legislature of VOL. IV. CONST. HIST.-43.

authority to increase or reduce the number. Miller v. New York (1872) 15 Wall. 478, 21 L. ed. 98.

In People ex rel. Kimball v. Boston & A. R. Co. (1877) 70 N. Y. 569, the court, discussing the authority of the legislature over corporations created by it, say that, "under this reserved power, the legislature may impose upon railroad corporations such additional restrictions and burdens as the public good requires."

Various questions affecting the power of the legislature over corporations, relating chiefly to the enactment of private or local bills, are considered in Re New York Elev. R. Co. (1877) 70 N. Y. 327, but without special reference to the original creation of corporations. Atty. Gen. v. North America L. Ins. Co. (1880) 82 N. Y. 172, holds that the act of 1866, chap. 576, conferring certain powers on this company, did not violate the constitutional provision against special charters. "The act did not create a corporation, but simply regulated a corporation previously in existence." Re New York Cable R. Co. (1886) 40 Hun, 1.

See Pratt Institute v. New York (1904) 99 App. Div. 525, 91 N. Y. Supp. 136, as to repeal of tax exemption; also Hinckley v. Schwarzschild & S. Co. (1904) 45 Misc. 176, 91 N. Y. Supp. 893, as to statutes regulating the issue of preferred stock.

Dues

§ 2. [Dues of corporations, how secured.] from corporations shall be secured by such individual liability of the corporators and other means as may be prescribed by law.

[Const. 1846, art. 8, § 12.]

See note to § I.

"The Constitution plainly designed to abolish the former mode or system of creating corporations, and to adopt an entire new system, under which, by general and uniform rules, the individual liability of corporators for all debts of their respective corporations should be regulated and prescribed." Rochester v. Barnes (1858) 26 Barb. 657.

The public policy expressed by this section "plainly had reference to outside creditors of a corporation, dealing with and trusting it, and generally ignorant of its precise financial condition. It could have no relation to the directors of a corporation, who manage its

affairs and can generally know its condition, who create the debts and can generally protect themselves, if creditors, before disaster overtakes them." McDowall v. Sheehan (1891) 129 N. Y. 200, 29 N. E. 299.

83. [Corporation defined.]-The term "corporations" as used in this article shall be construed to include all associations and joint-stock companies having any of the powers or privileges of corporations not possessed by individuals or partnerships. And all corporations shall have the right to sue and shall be subject to be sued in all courts in like cases as natural persons.

[Const. 1846, art. 8, § 3.]

The provision relating to suits by and against corporations "is an enabling, and not a restrictive, provision, and it permits corporations to be parties to suits in justices' courts, contrary to the rule which formerly prevailed." This liability is now declared by various statutes. United States Trust Co. v. United States F. Ins. Co. (Empire City Bank) (1858) 18 N. Y. 199.

Considering the provision relative to actions against corporations, the court, in Gray v. Brooklyn (1869) 2 Abb. App. Dec. 267, say: "It was no part of the intention of that provision to render corporations liable upon all causes of action, the same as natural persons were, but merely to provide that actions might be maintained against them the same as they could against natural persons, provided the legal causes for doing so were found to exist. It was to confer the capacity of being sued, not to define the cases in which suits might be maintained against them." The court sustained the act of 1862, chap. 63, prohibiting actions against the city of Brooklyn for damages caused by the misfeasance or nonfeasance of its officers, and requiring proceedings in such cases to be taken by mandatory process against the city, or by action against the officer. See also Van Vranken v. Schenectady (1884) 31 Hun, 516, prohibiting actions for injuries caused by defective sidewalks, except under prescribed conditions. McNally v. Cohoes (1891) 127 N. Y. 350, 27 N. E. 1043; Smith v. Rochester (1892) 46 N. Y. S. R. 727, 19 N. Y. Supp. 459.

The legislature had no power, as attempted by the act of 1867, chap. 489, to limit the right to equitable relief by way of injunction

against the West Side & Yonkers Patent Railway Company to the supreme court, and interdict the New York common pleas and other courts from exercising the power of a court of equity. This is a violation of the constitutional provision relating to suits against corporations, which may be sued in all courts in like cases as natural persons. Story v. New York Elev. R. Co. (1877) 3 Abb. N. C. 478, Robinson, J. This case appears in (1882) 90 N. Y. 122, 43 Am. Rep. 146, where the judgments of the lower courts are reversed, but without considering this point.

In Kennedy v. Queens County (1900) 47 App. Div. 250, 62 N. Y. Supp. 276, the court had occasion to consider actions against a county, and said that, prior to the county law (1892, chap. 686) which, for the first time, declared a county to be a municipal corporation, actions against a county were brought against the board of supervisors, and this rule was applied notwithstanding the provision of the foregoing section relative to actions by and against corporations. The court observes that it follows "as a necessary deduction that the courts of this state did not consider a county to be a corporation" within the meaning of this section.

The authority conferred on corporations to sue in all courts in like cases as natural persons does not give them the right to sue in all kinds of actions, "but only in those which relate to their corporate rights, just as the citizen is confined to actions in which he has a real interest." A board of education of a union free school district cannot maintain an action to test the validity of a statute changing the district and transferring a part of its territory to another district. Its corporate powers and territorial limits are subject to legislative control, "and it can have no standing in the courts of this state except for the purpose of protecting and maintaining its corporate powers and in carrying out the objects for which it was created." Board of Education v. Board of Education (1902) 76 App. Div. 355, 78 N. Y. Supp. 522.

§ 4. [Banking corporations.]—The legislature shall, by general law, conform all charters of savings banks, or institutions for savings, to a uniformity of powers, rights, and liabilities, and all charters hereafter granted for such corporations shall be made to conform to such general law, and to such amendments as may be made thereto. And no such corporation shall have any capital stock nor shall

the trustees thereof, or any of them, have any interest whatever, direct or indirect, in the profits of such corporation; and no director or trustee of any such bank or institution shall be interested in any loan or use of any money or property of such bank or institution for savings. The legislature shall have no power to pass any act granting any special charter for banking purposes; but corporations or associations may be formed for such purposes under general laws.

[Const. 1846, art. 8, § 4; Am. 1874.]

See note to § 1 for reference to historical sketch.

The term "banking," as used in this section, means "that business which might be carried on by banking associations under the law to authorize the business of banking, passed April 18, 1838." By various subsequent amendments to the statute the meaning of the term has become fixed by legislative usage. The United States Trust Company is not a corporation created for banking purposes, and a special charter was therefore constitutional. United States Trust Co. v. Brady (1855) 20 Barb. 119. See also Pardee v. Fish (1875) 60 N. Y. 265, 19 Am. Rep. 176, involving the status of the People's Safe Deposit Company of the city of New York, incorporated by special act in 1868, chap. 816, and which act was held to be constitutional.

The provision requiring banks to be organized under general laws does not prevent the legislature from enacting a statute to remedy defects in the organization of a bank under such a general law. "The institution may be said to have the power and the rights of a bank doing business de facto, while its rights were imperfect de jure." Syracuse City Bank v. Davis (1853) 16 Barb. 188.

In New York State Loan & T. Co. v. Helmer (1879) 77 N. Y. 64, it was held that the plaintiff company had no power to discount

notes.

§ 5. [ Specie payments not to be suspended. ]-The legislature shall have no power to pass any law sanctioning in any manner, directly or indirectly, the suspension of spe