Henley v. Myers,
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215 U.S. 373 (1910)
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U.S. Supreme Court
Henley v. Myers, 215 U.S. 373 (1910)
Henley v. Myers
Submitted December 10, 1909
Decided January 3, 1910
215 U.S. 373
The state creating a corporation may determine how transfers of its stock shall be made and evidenced, and a change in the law imposing no restraint upon the transfer, but only affecting the method of procedure, does not impair the obligation of the charter contract within the meaning of the contract clause of the federal Constitution, and so held that the corporation law of Kansas of 1899 is not void as to stockholders who purchased stock prior thereto and sold it thereafter, because it required a statement of the transfer of stock to be filed in the office of the Secretary of State in order to relieve the transferor of stockholder's liability, the act not depriving him of any defense that might be made at the time the stock was acquired.
Methods of procedure in actions on contract that do not affect substantial rights of parties are within the control of the state, and the obligation of a stockholder's contract is not impaired within the meaning of the contract clause of the federal Constitution by substituting for individual actions for statutory liability a suit in equity by the receiver of the insolvent corporation, and so held as to the corporation law of Kansas of 1899 amending prior laws to that effect.
In becoming a stockholder of a corporation, one does not acquire as against the state a vested right in any particular mode of procedure for enforcement of liability, but it is assumed that parties make their contracts with reference to the existence of the power in the state to regulate such procedure.
The facts are stated in the opinion.