Coombes v. Franklin

I dissent. I think that the reserved power to alter and repeal laws concerning corporations, expressed in article XII, section 11, of the California Constitution, has been given too wide a scope by this decision. I am by no means convinced that in its reference to "laws now in force" and "laws that may be hereafter passed pursuant to this section" it was intended to apply to another section of the Constitution, such as section 3 of article XII, involved herein. It is true that a self-executing provision of the Constitution may have the force and effect of a statutory *Page 169 enactment; but it is not so clear that another provision of a Constitution is a law "hereafter passed pursuant" to a prior section.

Furthermore, while the right to alter or repeal such a provision as article XII, section 3, is undeniable, it does not necessarily follow that a contractual right gained under it falls with the repeal. We have heretofore unequivocally held, and the majority opinion concedes, that the right given to the creditors by said section is a contractual right. When a cause of action based upon it arises, I do not think it is going too far to say that the right is vested, and if so, it becomes entitled to the protection of the due process clause. (See Western Union Tel.Co. v. Hopkins, 160 Cal. 106 [116 P. 557].) The analogy of stockholders' liability cannot be ignored, and the cases which have held such liability unaffected by repeals are very persuasive. (See Harrison v. Remington Paper Co., 140 Fed. 385 [5 Ann. Cas. 314, 3 L.R.A. (N.S.) 954, 72 C.C.A. 405];Bernheimer v. Converse, 206 U.S. 516 [51 L.Ed. 1163, 27 Sup. Ct. Rep. 755, see, also, Rose's U.S. Notes]; Thompson on Corporations, 3d ed., pp. 462, 465.)

The order dismissing the appeal was, in my judgment, erroneous.