Harris v. Nesbit

GIBBONS, J. “The subject of the forfeiture of corporate franchises by non-user or mis-userf* says Chancellor Kent, “ was fully discussed in the case of The King v. Amery, 2 Term R. 515 ; and it was held, that, though a corporation may be dissolved, and its franchises -lost, by non-user or neglect, yet it Avas assumed as an undeniable proposition, that the default Ayas to be judicially determined in a suit instituted for the purpose. The ancient doubt was, whether a corporation could be dissolved, at all, for a breach of trust. It is iioav well settled, that it may; but then it must be first called upon to answer. No advantage can be taken of any non-user or mis-user on the part of a corporation, by any defendant in airy collateral action.' In the great case of The quo warranto against the city of London, in the 34th Charles II, it Avas a- point incidentally mooted, whether' a corporation could surrender and dissolve itself by deed;, and it was conceded, that it might be dissolved [401] by refusal to act, so as to have any members requisite to preserve its being. There are two modes of proceeding judicially to ascertain and enforce the forfeiture of a charter for default or abuse of power. The one is by scire facias ; and that process is proper, where there is a legal existing body, capable of acting, but who have abused their power. The other mode is by information in the nature of a quo warranto ; which is in form a criminal, and in its nature a civil remedy; and that proceeding applies where there is a body corporate de facto only, but who take upon themselves to act, though, from some defect in their constitution, they cannot legally exercise their powers. Both these modes of proceeding against corporations are at the instance, and on behalf of the Government. The State must be a party to the prosecution ; for the judgment is, that the parties be ousted, and the franchises seized into the hands of the Government. This remedy must be pursued at law, and there only : a court of chancery never deals with the question of forfeiture.” — 2 Kent’s Com. 312. Assuming the doctrine of the text above quoted to be correct, (and we have not a doubt that it is so,) the question presented by the record before us is easily solved. Waiving the question, as to whether the term “ town,” as employed by the statute, (Clay’s Digest 514 § 29,) means unincorporated town, or merely a village, if it be true that, when an act of incorporation is once passed in favor of a town, it must be considered as incorporated until said act of incorporation or charter is withdrawn, or declared forfeited by judicial action, then it follows necessarily, that the town of Cedar Bluff is an incorporated town, for all the purposes of this suit. We have no doubt that any place, or collection of houses, incorporated as a town by act of the Legislature, falls within the meaning of the statute. In fact, the argument of the complainants’ counsel concedes this. It is conceded, that an act of incorporation was passed by the Legislature of Alabama, and that Cedar Bluff was once an incorporated town. Having once had this character, it will retain it, until the charter is forfeited by judicial decision directly upon the question. It cannot be declared forfeited, for the first time, in a collateral manner, as would have been the caso if the Chancellor had proceeded to consider that question in the present suit. [402] For all the purposes of this record, the town of Cedar Bluff is an incorporated town ; and as above remarked, we do not now feel called upon, in the present case, to decide as to the precise meaning of the word “ town,” as used in the statute above cited. We have but to add, that the decree of the court below is affirmed, with costs. Ligón, J., not sitting.