Briggs v. Cape Cod Ship Canal Company

• Decision Date: 15 March 1884
• Citation: 137 Mass. 71
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: Jedediah Briggs & others v. Cape Cod Ship Canal Company & another

137 Mass. 71

Jedediah Briggs & others v. Cape Cod Ship Canal Company & another

Supreme Court of Massachusetts

March 15, 1884

Suffolk.

Demurrer sustained; bill dismissed.

M Williams & C. A. Williams, for the plaintiffs.

R Olney & S.W. McCall, for the defendants.

Colburn J. Devens & C. Allen JJ., absent.

OPINION

Colburn, J.

The plaintiffs allege, in this bill in equity, that they are the owners in fee of a tract of land in Sandwich, which the defendant corporation, established by the St. of 1883, c. 259, has included in the location of its canal, and has actually taken possession of and is now using for the purpose of constructing its canal.

Section 3 of the act of incorporation provides that, if at least $ 25,000 is not expended in the actual construction of the canal within four months from the passage of the act, "this corporation shall thereupon cease to exist;" and § 19 provides that, if $ 200,000 is not deposited by the company with the treasurer of the Commonwealth, for certain purposes, within four months from the passage of the act, "this corporation shall thereupon cease to exist."

The bill alleges that neither of these provisions has been complied with, and the first prayer of the bill is, "that the defendant corporation may be declared to have ceased to exist."

It is too well settled to admit of discussion, that a corporation can be judicially determined to have ceased to exist only in a suit to which the Commonwealth is a party. The act of incorporation is a contract between the Commonwealth and the corporation; whether the corporation has complied with the conditions is a question of fact to be judicially determined. The Commonwealth may waive a strict compliance with the terms of the act, and may elect whether it will insist upon a forfeiture, if there has been a breach of condition. Commonwealth v. Union Ins. Co. 5 Mass. 230. Boston Glass Manufactory v. Langdon, 24 Pick. 49. Heard v. Talbot, 7 Gray 113. Folger v. Columbian Ins. Co. 99 Mass. 267, 274. Rice v. National Bank of the Commonwealth, 126 Mass. 300. Angell & Ames on Corp. § 777.

Section 19 of the act provides that the "company may locate, but shall not begin to construct, said canal, or take any land or property therefor, until it shall have deposited two hundred thousand dollars with the treasurer of the Commonwealth," as security for certain purposes, and, among others, as security for the payment of damages for taking land; and the bill alleges that this deposit has not been made. It appears by the allegations of the bill, that, instead of depositing money, the company deposited with the treasurer four and a half per cent bonds of the United States, of the par value of $ 200,000 and of the market value of $ 230,000, which the treasurer accepted as a compliance with the provisions of § 19 of the act; and the plaintiffs contend that this was not a compliance with the provisions of that section.

The bonds are at least as good security, so far as the plaintiffs have any interest in the deposit, as money. The whole or any part of them can be sold at any time, without delay, at their full market value, and converted into money, if any payment from the deposit should be required. The case of Haggerty v. Foster, 103 Mass. 17, upon which the plaintiffs rely, cannot be regarded as supporting their claim. In that case, Foster, who proposed to become a special partner in a firm, had $ 2000 in United States bonds as a special deposit, subject to his order, in a bank; and, as a contribution of $ 2000 to the capital of the firm, he authorized one of the general partners to take these bonds, sell them, and apply the proceeds to his contribution to the capital; but the partner did not take possession of the bonds, or, so far as appeared, notify the bank of the transaction, until more than a month after the partnership was formed, during which time the legal title to the bonds remained in Foster. A majority of the court held that this transaction was not a contribution of $ 2000 "in actual cash payment as capital" at the time the partnership was formed, within the requirement of the Gen. Sts. c. 55, § 2. The requirements of the section we are considering are much less strict than those of the statute to which this decision relates. Section 19 does not require an "actual cash" deposit, or indeed, in terms, a deposit in money, though undoubtedly money or its full equivalent was intended.

We are of opinion that the deposit of the bonds was equivalent to the deposit of money, when accepted as such by the treasurer, so far as any rights of the plaintiffs can be affected; and that they have no ground of complaint on this account.

By the terms of § 1, the corporation was established "with all the privileges and subject to all the liabilities...