U.S. Supreme Court
Dodge v. Woolsey, 59 U.S. 18 How. 331 331 (1885)
Dodge v. Woolsey
59 U.S. (18 How.) 331
A stockholder in a corporation has a remedy in chancery against the directors, to prevent them from doing acts which would amount to a violation of the charter or to prevent any misapplication of their capital or profits which might lessen the value of the shares, if the acts intended to be done amount to what is called in law a breach of trust or duty.
So also a stockholder has a remedy against individuals, in whatever character they profess to act, if the subject of complaint is an imputed violation of a corporate franchise or the denial of a right growing out of it for which there is not an adequate remedy at law.
Therefore where the directors of a bank refused to take the proper measures to resist the collection of a tax which they themselves believed to have been imposed upon them in violation of their charter, this refusal amounted to what is termed in law a breach of trust, a stockholder had a right to file a bill in chancery asking for such a remedy as the case might require.
If the stockholder be a resident of another state than that in which the bank and persons attempting to violate its charter or commit a breach of trust or duty have their domicile, he may file his bill in the courts of the United States. He has this right under the Constitution and laws of the United States.
The rights and duties of this Court examined and explained as an ultimate tribunal to determine whether laws enacted by Congress, or by state legislatures or decisions of state courts are in conflict with the Constitution of the United States.
Where the State of Ohio chartered a bank in 1845, in which charter was stipulated the amount of tax which the bank should pay, in lieu of all taxes to which said company or the stockholders thereof, on account of stock owned therein, would otherwise be subject; and in 1852, the legislature passed an act levying taxes upon the bank to a greater amount and founded upon a different principle. This act is in conflict with the Constitution of the United States, as impairing the obligation of a contract, and therefore void.
The fact, that the people of the state had, in 1851, adopted a new constitution, in which it was declared that taxes should be imposed upon banks in the mode which the act of 1852 purported to carry out, cannot release the state from the obligations and duties imposed -- upon it by the Constitution of the United States.
The case of Piqua Branch of the State Bank of Ohio v. Knoop, 16 How. 369, again affirmed.
The circumstances of the case are fully stated in the opinion of the Court. chanroblesvirtualawlibrary