Revere v. Boston Copper Co. , 32 Mass. 351 ( 1834 )

Shaw. C. J.

delivered the opinion of the Court. This case comes before the Court upon an agreed statement of facts, and the question is, whether upon the case stated the plaintiff is entitled to recover.

The defendant corporation was established by the legislature, in February 1825, and about a month after its incorporation, made the contract, on which the question arises.

That agreement was made on March 15, 1825, and the cause depends upon its construction. It purports to be a mutual agreement between the corporation on the one part, and the plaintiff and another individual on the other part.

It is contended by the defendants, that by the proceedings stated in the case, this corporation was dissolved and determined, and so by the limitation in the contract itself, the term for which the plaintiff was engaged had ceased.

Without determining whether such a voluntary dissolution of the corporation was the event contemplated by the parties in the clause alluded to, we are of opinion, that by the acts disclosed, this corporation was not dissolved.

By a reference to the act of incorporation, St. 1824, c. 61, amended as to the name by St. 1825, c. 124, it appears, that the company was not incorporated for any determinate time, and was therefore, in its nature, perpetual. We think such a corporation cannot dissolve itself, and terminate its own existence, at its own will, by a bare notice to the executive department of the government.

It may be asked then, what could have been contemplated by the clause in the contract, limiting the term of the plaintiff’s engagement, to the time for which the corporation was established ; or how a corporation not limited in its duration can be dissolved and terminated. I suppose no reasonable doubt can exist, that the power to create, by the consent of parties, may, with the like consent, dissolve a corporation. An act of incorporation is deemed to be a contract, between its members and the sovereign, formed by the consent of both parties ; and it is conformable to the spirit of the law of contract, that, with the like consent, it may be abrogated and discharged, and therefore it would be competent for the legisture, by a formal act, to accept such a surrender, and thereupon dissolve the corporation. This would afford a security to the public and to all those who might have an interest in the concerns of such corporation, that no dissolution would be sanctioned by the legislature, which would in its consequences impair their rights.

But there is another circumstance which may be deemed sufficient to give a meaning and effect to this part of the agreement.

Although this act of incorporation had no provision limiting its duration to any certain time, yet it was made subject in all respects to the provisions of the general act regulating manufacturing corporations, St. 1808, c. 65, § 7, by which it is provided, that the legislature shall have power, at any time afterwards, to modify or wholly repeal any act of incorporation, thereafterwards to be made. This provision is therefore substantially embodied into the act of incorporation and made part of it. In consequence of this provision, the act was in effect held at the pleasure of the legislature, and had they passed an act, repealing it after a certain time, the period thus limited would determine the time for which it was incorporated, and fix a linrt to the term of the plaintiff’s engagement. But as no such act was passed, and no act was done which in our opinion would dissolve the corporation, the time for which the plaintiff engaged, has not been limited or fixed by the clause in question. The question then recurs, upon the construction and legal effect of this contract.

The first and fundamental rule in the construction of a contract, is to ascertain the meaning and intent of the parties ; and the second is, to look at every clause and word of the instrument in which they have imbodied their contract, to ascertain that meaning.

The engagement of the plaintiff to perform services, being for the time for which the corporation was established, when applied to a corporation, constituted as already stated, is 'for an indefinite time, determinable by the dissolution of the corporation in a mode fixed by law. The stipulation of the corporation is, to pay the salaries to the plaintiff and the other individual, so long as they shall continue to perform their part of this agreement. This, without any further provision, must render the contract determinable by the death of the plaintiff, or by any failure to perform his part of the contract. But this is not left to inference. The next and last clause provides, that in case of the death or refusal to perform the agreement of the said Revere, or other individual, the corporation is to be discharged from all obligation except to the survivor or party continuing to perform. This clause, to my mind, carries a necessary implication, that until the death of the plaintiff or his refusal to perform his agreement, the corporation is not discharged, but the obligation to pay continues, and further, that upon the death or refusal to perform of one, the obligation of the corporation is to continue as to the other. This makes it essentially a contract with each, for life. For although this term is not used, yet a contract with a corporation, which is in its nature perpetual, but determinable by some contingent event, is a contract for an indefinite time, and a stipulation by the corporation to pay so long as the other party shall perform, with a proviso, that by the death of the party contracting to perform services, the corporation shall be discharged, is in legal effect a contract for life. Such, it appears to the Court, was the contract in the present case.

In opposition to this view, it is contended, in the able argument for the defendants, that this could not have been the meaning and intent of the parties, because it would be unequal ; in case of the ill success of the contemplated en terprise, injurious and ruinous to the company ; and as the obvious intent and expectation of the company, of whom th,e plaintiff was one, was to carry on a useful, and successful, and profitable business, the contract must be taken to have been made with the necessary limitation, that if the business proved unprofitable, the defendants must be at liberty to bring it to a close, that should terminate their obligation to employ and pay the plaintiff for services. They contend, that the parties contemplated, not the legal dissolution of the corporation, but the termination of its business existence, and this they had a right to determine, whenever they should find the enterprise unsuccessful, after a full and fair trial, and should in good faith for that cause judge it expedient to bring its business to a close.

These views would certainly deserve great consideration, and a more thorough investigation, if the terms of the contract were doubtful or ambiguous, and if it were open to construction. But if the terms of the contract are plain and perspicuous, it is not enough to say, that the parties could not have intended what their language has plainly expressed. The bargain may have been hasty or improvident, or one of which we cannot see the reasons or ground. Still, if such was the contract, and entered into fairly, it is not for a court of law to vary or alter it, or change its legal effect, upon vague notions of improvidence or inequality, or on account of its being founded upon expectations which have not been realized. But, although in the result it may have proved unprofitable to the corporation, the Court cannot perceive that it was unequal as between the parties. It is to be presumed, that the plaintiff had skill and experience in his business, and was so considered by the company. They require him to stipulate, that he will devote the whole of his time, skill, and attention to their business for his life, and will engage in no other business. The Court are not informed, what business the plaintiff and Blake were in before, what good will or run of custom, or profitable concern, they gave up and n efffp‘ brought to the corporation by this agreement, or what offers or expectations they might have had from rival companies. Whatever they were, they were relinquished for ever by this contract. The corporation secured to themselves the exclusive benefit of the services of these individuals ; and, although it may not have been beneficial to the corporation, it may have deprived the plaintiff and his associate of profitable engagements elsewhere.

One other ground of defence suggested, but I think not very confidently urged, by the defendants’ counsel, is, that the plaintiff himself was one of the corporation, and as such was bound by its acts ; and that when a majority of the corporation voted to dissolve and wind up the business of the com pony, he was bound by it, though he individually dissented.

But we think it clear, that this argument cannot be sustained. So far as his rights, duties, and obligations as a corporator were concerned, no doubt he is bound by the acts of a majority, but no further. Here he claims, not as a corporator, but upon a contract, in which he is one party and the corporation the other. One of the main purposes and principal effects of incorporation is, to create a separate person in law, capable of acting and contracting in a separate capacity ; and such conventional person and body politic has a legal existence, independent of that of all its members, and therefore may as well contract with one of its own members, as with other persons. It follows, as a necessary consequence, that such contracts must be construed and carried into effect in the same manner as contracts between other parties, and that the votes and acts of the corporation can have no effect to deprive the plaintiff of rights, which he claims, not as a corporator, but as a contractor with the corporation.

As the damages are not assessed, it may be proper to say a few words upon that subject. We consider the true effect of this agreement to be this, to employ the plaintiff and to pay him an annual salary during such employment; and the action is brought for a breach of that promise. The defendants have broken up their establishment, and given the plaintiff formal notice, that they have no further occasion for his services. This discharges the plaintiff from his obligation tc serve them and to engage "n no other business, and puts him in a condition to engage in any other employment at his pleasure. This being in violation of the defendants’ con tract with the plaintiff, to employ and pay him, gives him a claim for damages. The measure of his damages is an indemnity for the loss he has sustained by reason of not being thus employed and paid, and the damages are to be assessed on that principle.