Mumma v. Potomac Company,
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33 U.S. 281 (1834)
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U.S. Supreme Court
Mumma v. Potomac Company, 33 U.S. 8 Pet. 281 281 (1834)
Mumma v. Potomac Company
33 U.S. (8 Pet.) 281
The thirteenth section of the Act of Virginia of January, 1824, incorporating the Chesapeake & Ohio Canal Company, declares that upon such surrender and acceptance,
"the charter of the Potomac Company shall be, and the same is hereby vacated and annulled, and all the powers and rights thereby granted to the Potomac Company shall be vested in the company hereby incorporated."
By this provision, the Potomac Company ceased to exist, and a scire facias on a judgment obtained against the company before it was so determined cannot be maintained.
There is no pretense to say that a scire facias can be maintained and a judgment had thereon against a dead corporation, any more than against a dead man.
The dissolution of the corporation under the acts of Virginia and Maryland (even supposing the act of confirmation of Congress out of the way) cannot in any just sense be considered, within the clause of the Constitution of the United States on this subject, an impairing of the obligation of the contracts of the company by those states, any more than the death of a private person may be said to impair the obligation of his contracts. The obligation of those contracts survives, and the creditors may enforce their claims against any property belonging to the corporation which has not passed into the hands of bona fide purchasers, but is still held in trust for the company, or for the stockholders thereof, at the time of its dissolution in any mode permitted by the local laws.
A corporation, by the very terms and nature of its political existence, is subject to dissolution by a surrender of its corporate franchise and by a forfeiture of them for willful misuser and nonuser. Every creditor must be presumed to understand the nature and incidents of such a body politic and to contract with reference to them. And it would be a doctrine new in the law that the existence of a private contract of the corporation should force upon it a perpetuity of existence contrary to public policy and the nature and objects of its charter.
At a Circuit Court of the District of Columbia held at Washington City, on the first Monday of June, 1818, Jacob Mumma, the plaintiff in error, recovered a judgment against the Potomac Company, the defendants in error, for the sum of $5,000. No steps were taken to enforce the payment of the judgment, nor any further proceedings had in relation thereto, until 18 April, 1828, on which
day a writ of scire facias was issued from the clerk's office of said court against the said Potomac Company to revive said judgment, which case was continued by consent of parties from term to term until December term of said court in the year 1830, at which term the following plea and statement were filed by the consent of parties.
"The attorneys, upon the record of the said defendants, now here suggest and show to the court that since the rendition and record of said judgment, the said Potomac Company, in due pursuance and execution of the provisions of the charter of the Chesapeake & Ohio Canal Company, enacted by the States of Maryland and Virginia and by the Congress of the United States, has duly signified its assent to said charter, &c., and has duly surrendered its charter and conveyed in due form of law to the said Chesapeake & Ohio Canal Company all the property, rights, and privileges by it owned, possessed, and enjoyed under the same, which surrender and transfer from said Potomac Company have been duly accepted by the Chesapeake & Ohio Canal Company, as appears by the corporate acts and proceedings of said company, and final deed of surrender from the said Potomac Company, dated 15 August, 1828, duly executed and recorded in the several counties of the States of Virginia and Maryland and the District of Columbia wherein said Potomac Company held any lands and wherein the canals and works of said company were situated, which said corporate acts and proceedings the said attorneys here bring into court, &c., whereby the said attorneys say the charter of said Potomac Company became and is vacated and annulled, and the company and the corporate franchises of the same are extinct,"
Whereupon the following statement and agreement were entered into and signed by the counsel for both parties and made a part of the record.
"The truth of the above suggestion is admitted, and it is agreed to be submitted to the Court whether, under such circumstances, any judgment can be rendered against the Potomac Company upon this scire facias reviving the judgment in said writ mentioned, and that reference for the said corporate acts and proceedings, and the deed in the above suggestion
mentioned, be had to the printed collection of acts, &c., printed and published by authority of the president and directors of the Chesapeake & Ohio Canal Company in 1828."
The circuit court gave judgment for the defendants, and the plaintiff prosecuted this writ of error.