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In 1773 and 1781, acts were passed by Parliament regulating the government of the East India Company, and greatly abridging its power. But the great controversy on the subject of how far Parliament could control its action — and indeed the case which is the highest authority upon the question of the unalterableness of charters — arose in 1783 upon Mr. Fox's bill to abolish the company. Mr. Webster endeavors to distinguish between that case and this, on the following grounds :
“ 1st. That the charter in question was a charter of political power; 2d. That there was a great and overruling state necessity justifying the violation of the charter; 3d. That the charter had been abused and justly for. feited. The bill affecting this charter did not pass. Its history is well known. The act which afterwards did pass, passed with the assent of the corporation.” 1
To this we answer, 1st. That the charter of the East India Company was originally and still continued to be a charter of commercial privileges, and only became incidentally a charter of political power. It was always a stock corporation governed by its stockholders. 2d. That if necessity can ever justify the revocation or amendment of a charter, that is conceding the whole case. 3d. That although it was asserted that the charter had been abused and justly forfeited, it was not pretended that there had been any such abuse as would have supported proceedings for annulling it in the Court of King's Bench. The bill at that time did not pass, it is true ; but it is one of the most notorious facts in English history that it was defeated, not because it deprived the East India Company of their chartered franchises, but because it got mixed up with bitter party controversies in England, and also because the body to whom the power of the East India Company was to be transferred by the bill, was considered objectionable. Burke and Fox fully maintained the plenary power of Parliament over the charter, and although Pitt opposed it, he barely touched upon this branch of the subject; and the opposition to the bill on the ground that it was a violation of the chartered rights of the company, was left to technical lawyers like Kenyon and Scott. It is likewise true that the bill that passed in 1784 passed with the assent of the company, in the same sense in which it is true that France in 1871 consented to
14 Wheat. 558, 559; 5 Webster's Works, 469.
the cession of Alsace and Lorraine. The company knew that their only choice was between Mr. Pitt's bill and Mr. Fox's. But in 1858, Parliament did abolish the East India Company, and deprive it of all its franchises five years after it had renewed the charter for twenty years, and when there was no pretence that the privileges had, even in a political point of view, been abused. In the course of the long debates on the subject, no one questioned that, if necessary, it was a legitimate exercise of legislative power. Burke's doctrine, therefore, may now be assumed to be the settled principle of the constitution applicable to corporate franchises, and we shall accordingly make a long quotation from his speech.
“As to the first of these objections; I must observe that the phrase of the chartered rights of men,' is full of affectation ; and very unusual in the discussion of privileges conferred by charters of the present description. But it is not difficult to discover what end that ambiguous mode of expression, so often reiterated, is meant to answer.
“The rights of men, that is to say, the natural rights of mankind, are indeed sacred things ; and if any public measure is proved mischievously to affect them, the objection ought to be fatal to that measure, even if no charter at all could be set up against it. If these natural rights are further affirmed and declared by express covenants, if they are clearly defined and secured against chicane, against power and authority, by written instruments and positive engagements, they are in a still better condition ; they partake not only of the sanctity of the object so secured, but of that solemn public faith itself which secures an object of such importance. Indeed this formal recognition, by the sovereign power, of an original right in the subject can never be subverted, but by rooting up the holding, radical principles of government, and even of society itself. The charters which we call by distinction great, are public instruments of this nature; I mean the charters of King John and King Henry the Third. The things secured by these instruments may, without any deceitful ambiguity, be very fitly called the chartered rights of men.
“ These charters have made the very name of the charter dear to the heart of every Englishman. But, sir, there may be, and there are charters, not only different in nature, but formed on principles the very reverse of those of the great charter. Of this kind is the charter of the East India Company. Magna Charta is a charter to restrain power, and to destroy monopoly: the East India charter is a charter to establish monopoly, and to create power. Political power and commercial monopoly are not the rights of men ; and the rights to them derived from charters, it is fallacious and sophistical to call the chartered rights of men. These chartered rights (to speak of such charters and of their effects in terms of the greatest possible moderation) do at least suspend the natural rights of mankind at large ; and in their very frame and constitution are liable to fall into a direct violation of them."
“I therefore freely admit to the East India Company their claim to exclude their fellow-subjects from the commerce of half the globe. I admit their claim to administer an annual territorial revenue of seven millions sterling; to command an army of sixty thousand men ; and to dispose (under the control of a sovereign, imperial discretion, and with the due observance of the natural and local law) of the lives and fortunes of thirty millions of their fellow-creatures. All this they possess by charter, and by acts of Parliament (in my opinion), without a shadow of controversy.
“ Those who carry the rights and claims of the company the furthest, do not contend for more than this; and all this I freely grant. But granting all this, they must grant to me, in my turn, that all political power which is set over men, and that all privilege claimed or exercised in exclusion of them, being wholly artificial, and for so much a derogation from the natural equality of mankind at large, ought to be some way or other exercised ultimately for their benefit.
“ If this is true with regard to every species of political dominion, and every description of commercial privilege, none of which can be original, self-derived rights, or grants for the mere private benefit of the holders, then such rights, or privileges, or whatever else you choose to call them, are all in the strictest sense a trust ; and it is of the very essence of every trust to be rendered accountable, and even totally to cease, when it substantially varies from the purposes for which alone it could have a lawful existence.
“ This I conceive, sir, to be true of trusts of power vested in the highest hands, and of such as seem to hold of no human creature. But about the application of this principle to subordinate, derivative trusts, I do not seo how a controversy can be maintained. To whom, then, would I make the East India Company accountable? Why, to Parliament, to be sure ; to Parliament, from which their trust was derived ; to Parliament, which alone is capable of comprehending the magnitude of its object, and its abuse, and alone capable of an effective legislative remedy.” 1
But to all this it will be urged, as it was urged at the argument of the Dartmouth College case, and in the opinion of the Chief Justice, that the power of the British Parliament is omnipotent. Mr. Webster says, –
1 2 Burke's Works (Bohn's ed.), 176, 177, 178.
“ The legislature of New Hampshire has no more power over the rights of the plaintiffs than existed somewhere, in some department of government, before the Revolution. The British Parliament could not have annulled or revoked this grant as an act of ordinary legislation. If it had done it at all, it could only have been in virtue of that sovereign power, called omnipotent, which does not belong to any legislature in the United States.” 1
Chief Justice Marshall says, –
“ According to the theory of the British constitution, their Parliament is omnipotent. To annul corporate rights might give a shock to public opinion, which that government has chosen to avoid ; but its power is not questioned.” 2
We answer, what we have said before, that unless there was a contract here irrevocable or unalterable even by Parliament, — unless it was understood at the time the charter was granted that there was no department of government which could revoke or amend it without a violation of public faith, — the power of the State of New Hampshire (for it is not a question of the power of the legislature only) over the charter and over the college was as plenary and omnipotent as the power of the British Parliament would have been. But beyond this, we contend that the power exercised by Parliament over charters of corporations is not a violent exercise of unrestrained authority, but the exercise of an ordinary legislative power, recognized by all the best constitutional authorities. Whatever may be the shortcomings of Parliament, there is no legislature on the globe which, in all its legislation, has treated “the holy bounds of property ” with a deeper or, we might say, a more superstitious reverence. In the opinion of many English reformers, the respect paid to these is too great. There are certain constitutional limitations which, however weak may be the nature of the restraints that they impose upon it, no Parliament ever presumes to disregard ; and one of these is the sacredness of property and of vested rights. If Parliament violates these, it violates the constitution, although the law may be binding 3 The English constitution bears the resemblance to ours that the common law bears to a code. The confidence that it will not be violated is analogous to the security we
1 4 Wheat. 559 ; 5 Webster's Works, 469. 2 4 Wheat. 643. 8 Brougham's British Constitution, 285, 286.
have that judges, in adjudicating upon private rights, will recognize and give effect to the established principles of law, although if the judges violated them, the judgment in the case would be just as binding between the parties. If, therefore, the British constitution recognized in 1769 the right of Parliament to amend and even to revoke charters granted by the King, it did so because corporate franchises from their nature could not become private property; and that right descended to the State of New Hampshire, the inheritor and present possessor of all sovereign authority within her borders, excepting what is taken away by the Federal Constitution.
All the language of the English courts in regard to charters being contracts, unalterable and irrevocable by the executive branch of the government, unless with the consent of the corporation, applies to municipal corporations as well as to eleemosynary and trading corporations. This is clear from the leading case of the King v. Pasmore, cited by Mr. Webster and Judge Story, which was a case of an information of quo warranto against the defendant for exercising the office of mayor of a borough. Mr. Webster further argued that —
“ A grant of corporate powers and privileges is as much a contract as a grant of land. What proves all charters of this sort to be contracts is, that they must be accepted to give them force and effect.” 3
This, however, holds true, not only of municipal corporations at common law, but of all public offices. A man cannot be made a judge or the mayor of a city or borough, without his consent ; yet since Butler v. Pennsylvania, it is well settled that an appointment to such an office creates no contract.3
Chief Justice Marshall admitted that there must be some difference between different classes of corporations in this respect. Not only, however, is no such difference recognized at common law, but the nature of the franchise given to all corporations is the same. The difference with which Parliament treats municipal, eleemosynary, and trading corporations, is one of degree, and not of principle. The franchise of all is a political privilege
1 3 T. R. 199, 240, 246.
3 10 How. 402. Mr. Luther Martin, when Attorney-General of Maryland, brought & writ of assise sur novel disseisin to recover the office of a judge, which he contended had been unconstitutionally abolished. Whittington v. Polk, 1 Har. & Johns. 256.