Ranney emphatically rejected these contentions. The principle of equal rights, he declared, “lies at the foundation of our institutions,” and he would not sacrifice principle to expediency. (Ranney conceded, though, that in his amendment he had limited liability in cases of public improvements to double the shareholders’ stake “more from the suggestions of others, than the dictates of my own understanding.”) Moreover, no such sacrifice was necessary. Fear of unlimited liability had never prevented men from engaging in enterprises they thought would produce a profit; if a road was worth building, it would be built and pay for itself (1:405).
When Ranney’s amendment finally came to a vote, the committee of the whole accepted the first part, which established minimum shareholder liability at twice the amount of stock subscribed, by a vote of 43 to 33. However, the delegates overwhelmingly rejected the portion that subjected to unlimited liability the shareholders of corporations other than those created to construct public improvements. Just before the vote was taken, Whig Benjamin Stanton noted that the standing committee had considered the matter and had been unable clearly to establish a principle by which to distinguish the different types of corporations. The amendment as adopted by the committee of the whole remained in the constitution (1:429).18
Besides trying to increase shareholder liability, Ranney sought to limit corporate privilege by enabling the General Assembly not just to repeal general incorporation laws but to revoke any corporate charter obtained under such laws. The committee of the whole agreed to the principle. Section 35 of the proposed legislative article prohibited the General Assembly from passing retroactive laws. The committee of the whole, with Ranney’s support, amended the section to allow the lawmakers to amend or repeal any corporate charter granted by any previous General Assembly (1:363, 282; 2:165).
Stanton found it incongruous that a provision forbidding the enactment of retroactive laws allowed the legislature to amend or repeal legally obtained corporate charters. Moreover, he believed that a charter constituted a contract between the incorporators and the state and that a repeal would violate the constitutional prohibition against impairing the obligations of contract. To protect rights that had vested under law before the passage of a repealing act, the convention, on Stanton’s motion, amended Section 35 to say that upon repeal, “the title to property and credits legally acquired under any former law, shall not be affected by such repeal” (2:165–66).
The question now before the delegates was whether to adopt the latest version of Section 35 as part of the report of the committee on the legislature. A motion to reconsider the vote on Stanton’s amendment passed, whereupon Elijah Vance moved to amend Stanton’s amendment to read that on repeal of a corporate charter, “the property or credits legally acquired by any corporation, or holder of a franchise, shall rest in the individual [corporators], subject to the liability of the corporation.” In the ensuing debate delegates argued over whether a corporate franchise was property, a contract, both, or neither. Ranney characterized charters as property—and property, he noted, could be seized by the state in case of public necessity, provided the state compensated the owner. Adverting to the U.S. Supreme Court’s decision in the Charles River Bridge case, Ranney declared that the right of the state was “paramount to every private right.” He voted against Vance’s amendment to Stanton’s amendment, then against Stanton’s amendment, and then, finally, in favor of the amendment (as amended by Vance and Stanton) made by the committee of the whole. He came out on the short end of three close votes. In other words, the attempt to give the General Assembly the explicit power to repeal corporate charters had failed (2:167, 169, 173–75).
But the fight was not yet over. Three days later Samuel Humphreville returned to Section 35, moving that it be amended to give the General Assembly the authority to repeal any corporate charter upon “just and equitable terms,” as determined by the lawmakers. Ranney moved to add language to specify that the right of repeal applied to existing as well as future charters. His purpose, he said, was to guard against court decisions, “founded in error,” holding corporate charters to be contracts that enjoyed constitutional protection from impairment by the legislature. The chief such erroneous decision was Dartmouth College v. Woodward, rendered by the United States Supreme Court in 1819. In the face of arguments that the Supreme Court had already decided the issue, Ranney’s amendment to Humphreville’s amendment passed. But the convention then rejected Humphreville’s amendment by a two-vote margin (2:185, 188–89, 191, 210).
Proponents of the right of repeal kept trying. Vance sought to amend Section 35 to provide that all acts granting corporate franchises could be amended or repealed “upon such terms and conditions pertaining to the inviolability of private property, as is provided in other cases in this Constitution”—in other words, upon payment of compensation as in cases of eminent domain. Ranney favored a declaration of the General Assembly’s power to repeal corporate charters, a power he believed the legislature possessed even without such a declaration, but he objected to the compensation requirement. Vance’s amendment, said Ranney, would require the state to pay a corporation for its franchise regardless of how much harm the corporation had caused to the community. (There followed a testy exchange between Ranney on one side and Archbold and Lucius Case on the other as to whether Ranney’s position was that of “the highwayman.”) Ranney then discoursed on the distinction between corporate franchises and property, throwing in along the way further remarks on the dangers of corporations and the injustice of “exclusive privileges.” The state, he said, was bound to protect the natural right to acquire and enjoy property, but it could not create property. A corporate franchise was nothing more than a privilege granted by the legislature to operate in association as an artificial person. The legislature could give it or take it away as the public good required (2:242, 249, 250–51).
After protracted arguments on the legal nature of corporate franchises, on the debaters’ political partisanship and fidelity to party principle, and on the allegedly biased newspaper reports of the proceedings, the convention decided to recommit the report on the legislative department, along with pending amendments, to the standing committee (2:286–87).
Ranney’s latest arguments over the right of repeal involved him in a paradox and a contradiction. In debates on other issues he had expressed deep distrust of the legislature. Now he insisted that the General Assembly, the “people’s representatives,” could be trusted to do right in determining whether the public good required the repeal of a corporate charter. Stanbery made a point of the apparent conflict (2:251, 264). But Ranney was not inconsistent in this instance. He sincerely opposed the concentration of power in the General Assembly, but he opposed concentrated power in private hands as well. For all its shortcomings, the legislature could still serve as a counterweight to associated wealth.
Ranney’s insistence that a corporate franchise was not property, however, flatly contradicted his prior statements. The subject came up again during debate over the second report of the committee on the legislative department. In that report the controversial section on corporate franchises, Section 33, read: “The General Assembly shall have no power to pass retroactive laws, or laws impairing the obligation of contracts, provided, however that acts of incorporation, or corporate franchises, privileges or immunities, whether granted by a general or special law, shall never be deemed contracts or irrepealable” (2:319).
The debate resumed with all its former fury. Tempers flared. On February 5 Case declared that any lawyer who, after reading Blackstone, could assert that a franchise was not property was “unfit to belong to the profession.” Case quoted “a very eminent lawyer” to the effect that any attorney who made such an argument “must be either a fool or a knave.” Although Case claimed not to endorse such language, and went on to quote Ranney and other Democrats who had stated during the debates that franchises were indeed property, his meaning could not be missed (2:487–88).
Ranney