Opinion
1921.
The enactment, without the consent of the Second Society of Universalists in the Town of Boston, incorporated by St. 1816, c. 96, of a statute suspending the charter and all corporate powers of that corporation "for misuse of said charter and all said powers" and providing for the appointment by the Governor of a receiver of its property during the suspension of the charter; for an opportunity, at the expiration of one year from the taking effect of the act, for any of the members of the corporation and such others as may join with them to satisfy the Governor and Council that they propose in the future to exercise in good faith and not to misuse the corporate powers of the society, whereupon, if certificate of such satisfaction is made, the charter and corporate powers shall thereby revive; for final repeal of the charter within a specified time if no such certificate is made, and in such event for administration by the receiver of the property of the society according to law and under the direction of the court, would be an impairment of the obligation of contracts and in violation of art. 1, § 10 of the Federal Constitution.
The enactment upon the petition and with the approval of the Second Society of Universalists in the Town of Boston of St. 1896, c. 99, and Spec. St. 1918, c. 168, which merely enlarged certain powers of that corporation and did not purport otherwise to affect in any particular the original charter rights of the society, which remained unimpaired and in full force, did not render its charter subject to amendment, alteration or repeal under the Constitution or the general laws of this Commonwealth.
It is not competent for the General Court, if, upon investigation, it finds that the charter of the Second Society of Universalists in the Town of Boston has been misused, to declare it forfeited or suspended for that reason.
By enacting the statute above described, the Legislature would be exercising judicial power in violation of art. 30 of the Declaration of Rights of the Constitution of the Commonwealth.
A forfeiture of the franchise to be a corporation (in the absence of an express reservation of that power to the General Court as a limitation of the charter) can be effected against the protest of the corporation only by a judgment of a court of competent jurisdiction in a proceeding in behalf of the Commonwealth.
The Second Society of Universalists in the Town of Boston has a constitutional right to a judicial trial and determination as to any alleged misuse or violation of its charter, and the enactment of the statute, above described, would impair that right.
If the statute above described were enacted without the assent of the corporation, it would be unconstitutional.
THE following order was passed by the Senate on April 12, 1921, and was transmitted to the Justices of the Supreme Judicial Court on April 15, 1921.
WHEREAS, There is pending before the Senate a bill entitled "An Act to suspend the charter and all corporate powers of the Second Society of Universalists in the Town of Boston," printed as Senate Bill, No. 368, a copy of which is hereto annexed, and
WHEREAS, Doubt exists as to the constitutionality thereof if enacted into law, therefore be it
ORDERED, That the Senate require the opinions of the Honorable the Justices of the Supreme Judicial Court upon the following important questions of law: —
1. In view of the fact that the charter of the said corporation was granted by the Legislature by Chapter 96 of the Acts of 1816, would the enactment of said bill, without the consent of said corporation, violate the Federal Constitution as an impairment of the obligation of a contract or in any other respect?
2. If the grant of such charter in the year 1816 constituted a contract within the protection of the Federal Constitution, did the enactment of Chapter 99 of the Acts of 1896 or Chapter 168 of the Special Acts of 1918, upon the petition or with the approval of said society, render the said charter subject to amendment, alteration or repeal under the Constitution or the General Laws of the Commonwealth?
3. If the grant of such charter constituted a contract within the protection of the Federal Constitution, is it competent for the General Court if, upon investigation, it finds that the charter has been misused, to declare the charter forfeited or suspended for that reason?
4. By enacting said bill, would the Legislature be exercising judicial power in violation of Article XXX of the Declaration of Rights of the Constitution of the Commonwealth, or of any other provision thereof?
5. If it is competent for the General Court to suspend or revoke the charter and corporate powers of said society, may the Governor be authorized to appoint a receiver to take charge of all its property and assets, and dispose of the same as provided in sections two, three and four of said bill?
6. Has said society a constitutional right to a judicial trial and determination as to any alleged misuse or violation of its charter which the enactment of said bill would impair?
7. If enacted into law, would said bill be constitutional without the assent of the said corporation?
The provisions of Senate Bill No. 368, a copy of which was annexed to the order, are described in the opinion.
On April 26, 1921, the Justices returned the following answers to the questions propounded in the order:
To the Honorable the Senate of the Commonwealth of Massachusetts:
The Justices of the Supreme Judicial Court have considered the questions of the order of April 12, 1921, copy whereof is hereto annexed, and respectfully answer as follows:
The bill to which the questions refer provides (1) for a suspension of the charter and all corporate powers of the Second Society of Universalists in the Town of Boston, "for misuse of said charter and all said powers;" (2) for the appointment by the Governor of the Commonwealth of a receiver to take possession of and administer all the property and assets of the corporation during the period of suspension of its charter; (3) for an opportunity at the expiration of one year from the taking effect of the act, for any of the members of the corporation and such others as may join with them to satisfy the Governor and Council that they propose in the future to exercise in good faith and not misuse the corporate powers of the society, whereupon, if certificate of such satisfaction is made, the charter and corporate powers shall thereby revive; (4) for final repeal of the charter within a specified time if no such certificate is made; and (5) if no such certificate be made, for administration by the receiver of the property of the society according to law and under the direction of the court.
The Second Society of Universalists in the Town of Boston was incorporated by St. 1816, c. 96, as a religious society "with all the privileges, powers and immunities" of other religious societies in the Commonwealth and the right to purchase, hold and dispose of real and personal estate for its use, with other usual provisions. There is in this act no retention by the General Court of the right of suspension or repeal. There was at that time no law reserving to the legislative department of government the right to amend, to alter or to repeal charters. The first general act to that effect was St. 1830, c. 81, which took effect on March 11, 1831.
The grant of the charter to be a charitable and religious corporation constituted a contract between the Commonwealth and the society. It was in substance an invitation by the Commonwealth to the incorporators and those interested in the purposes for which the society was organized, to exercise the intelligence, to render the service, to make the sacrifices and to contribute the money necessary for the promotion of its aims. When accepted and acted upon the charter created an obligation on the part of the Commonwealth to permit the continuance of corporate existence in accordance with the grant. It was an agreement protected by art. 1, § 10, of the Constitution of the United States, wherein the people of America have declared that "No State shall . . . pass any . . . law impairing the obligation of contracts." It is manifest that the proposed bill transgresses corporate rights secured to the society by the charter. Such an act would be void because contrary to the Constitution. Dartmouth College v. Woodward, 4 Wheat. 518. "Legislation, in violation of chartered rights, is not only contrary to the Constitution of the United States, but is at war with the first principles of a just and well-ordered government." Opinion of the Justices, 9 Cush. 604, 610. It follows that subsequent legislation, whether general or special in character, impairing the obligation of such a charter is beyond the power of the Legislature.
We answer the first question, Yes.
The title of the society to certain real estate was confirmed by St. 1896, c. 99, and the amount of property to be held by it was increased, by Spec. St. 1918, c. 168, which also provided that it might sell, mortgage, lease or otherwise dispose of any property held by it, and that all its property and income should be used for the religious purposes set forth in its charter and for charitable and educational purposes. These two statutes were not acts of incorporation. They merely enlarged certain powers of the society respecting its property. They do not purport otherwise to affect in any particular the original charter rights of the society, which remained unimpaired and in full force. The fact that these two statutes were enacted upon the petition or with the approval of the society does not limit in any degree the rights acquired by the charter of incorporation.
We answer the second question, No.
The decision of the question whether a charter has been so misused that it ought to be forfeited or suspended is judicial and not legislative or governmental in its nature. Jackson v. Phillips, 14 Allen, 539, 576. Attorney General v. New York, New Haven, Hartford Railroad, 197 Mass. 194, 196. Attorney General v. Methuen, 236 Mass. 564. Since the act of incorporation of the society constituted a contract, it is not a legislative function to determine whether that contract has been broken. Such action would be the taking of property without due process of law. Crease v. Babcock, 23 Pick. 334, 340, 341. That is a question which under art. 30 of the Declaration of Rights of the Constitution of the Commonwealth can be decided only by the courts. It is not necessary to advert to other objections to legislative action of that nature.
We answer the third question, No, and the fourth question, Yes.
The fifth question is based upon the assumption that the General Court may suspend or revoke the charter and corporate powers of the society. Since in our opinion that cannot be done, this question by its own terms does not call for an answer.
The act of incorporation having been a compact between the Commonwealth and the society, the question whether the latter has complied with the conditions, obligations and duties resting on it is one for judicial cognizance. The society has a constitutional right to have its alleged misuse or violation of its charter determined by the courts. A forfeiture of the franchise to be a corporation (in the absence of express reservation of that power to the General Court as a limitation of the charter) can be effected against the protest of the corporation only by a judgment of a court of competent jurisdiction on a proceeding in behalf of the State. Judicial proceedings to that and are familiar. Commonwealth v. Tenth Massachusetts Turnpike Corp. 11 Cush. 171. Heard v. Talbot, 7 Gray, 113, 119, 120. Folger v. Columbian Ins. Co. 99 Mass. 267, 274. Attorney General v. Salem, 103 Mass. 138. Briggs v. Cape Cod Ship Canal Co. 137 Mass. 71, 72. Campbell v. Talbot, 132 Mass. 174, 177. We answer the sixth question, Yes.
The reasons already stated require us to answer the seventh question, No.
ARTHUR P. RUGG. HENRY K. BRALEY. CHARLES A. De COURCY. JOHN C. CROSBY. EDWARD P. PIERCE. JAMES B. CARROLL. CHARLES F. JENNEY.