No corporation shall be created, nor shall its charter be extended, altered, or amended by special act, except corporations for charitable, educational, penal, or reformatory purposes that are to be and remain under the patronage and control of the State; but the General Assembly shall provide by general laws for the chartering, organization, and powers of all corporations, and for the amending, extending, and forfeiture of all charters, except those above permitted by special act. All such general acts may be altered from time to time or repealed. The General Assembly may at any time by special act repeal the charter of any corporation.
History Note. - The provisions of this section are similar to those of Art. VIII, § 1, Const. 1868, as amended in 1916.
Legal Periodicals. - See 12 N.C.L. Rev. 296 (1934).
For article on local legislation in the General Assembly, discussing this section, see 45 N.C.L. Rev. 340 (1967).
For a comment on the acquisition, abandonment, and preservation of rail corridors in North Carolina, see 75 N.C.L. Rev. 1989 (1997).
CASE NOTES
Editor's Note. - Most of the cases cited below were decided under former Art. VIII, § 1, Const. 1868, as amended.
Purpose of Section. - The purpose and effect of this section is to enable the State to control, modify or repeal corporate powers, thus avoiding the effect of the doctrine announced in Trustees of Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518, 4 L. Ed. 629 (1819); Elizabeth City Water & Power Co. v. City of Elizabeth City, 188 N.C. 278, 124 S.E. 611 (1924). See also, Atlantic & N.C.R.R. v. Dortch, 124 N.C. 663, 33 S.E. 1014 (1899).
Effect of Section. - Except for purposes of absolute repeal, which is retained throughout as essential to the proper exercise and enforcement of the police powers of government, and except, also, in the instances expressly designated, this section withdraws from the General Assembly any and all power by special enactments to create, extend, alter, or amend the charter of all private business corporations, and all quasi-public corporations, such as railroads, incorporated turnpike or toll roads, bridge companies, and the like, and also those corporations which while having at times and to some extent powers appertaining to government are in fact and in truth business corporations for the purpose principally of promoting private interest. Watts v. Lenoir & Blowing Rock, Tpk. Co., 181 N.C. 129, 106 S.E. 497 (1921).
Only "Special Acts" are Prohibited. - This section only prohibits the enactment of a special act, and an act which relates to all municipal corporations of a county, including cities, towns, townships, and school districts, is not a special act within its meaning and intent. Kornegay v. City of Goldsboro, 180 N.C. 441, 105 S.E. 187 (1920).
And Prohibition of Special Acts Applies Only to Private Corporations. - The provisions of this section prohibiting the legislature from creating a corporation or extending, altering or amending its charter by special act has been held to apply only to private or business corporations; and where the legislature by special act amending the charter of a city authorizes it to purchase electricity and resell it to its inhabitants and those within a three-mile zone of the city, the power to sell to such individuals and corporations does not detract from the public service or destroy the public character of the municipality, and where the same power is given the city by general statute also, the exercise of the power thus conferred will not be enjoined. Holmes v. City of Fayetteville, 197 N.C. 740, 150 S.E. 624 (1929), appeal dismissed, 281 U.S. 700, 50 S. Ct. 353, 74 L. Ed. 1126 (1930).
The prohibition contained in this section refers only to private or business corporations, and does not refer to public or quasi-public corporations acting as governmental agencies. Mills v. Board of Comm'rs, 175 N.C. 215, 95 S.E. 481 (1918); Dickson v. Brewer, 180 N.C. 403, 104 S.E. 887 (1920). See Webb v. Port Comm'n, 205 N.C. 663, 172 S.E. 377 (1934); In re Annexation Ordinances, 253 N.C. 637, 117 S.E.2d 795 (1961).
Authority over Public Corporations, etc. - This Article and N.C. Const., Art. VII give the legislature complete authority to create, control, and dissolve cities, towns, and other public corporations or governmental agencies. State ex rel. East Lenoir San. Dist. v. City of Lenoir, 249 N.C. 96, 105 S.E.2d 411 (1958).
Legislature May Create Corporation for Public Purpose. - The legislative power as to State and political and administrative subdivisions thereof is restrained only by the limitations imposed by the State Constitution and the Constitution of the United States, and there is no constitutional limitation on the power of the General Assembly to create a corporation for a public purpose. Brumley v. Baxter, 225 N.C. 691, 36 S.E.2d 281, 162 A.L.R. 930 (1945).
Commission created as an agency of the State to provide port facilities for the commerce of the State in the public interest, and not for private gain, is a public corporation, and the legislature is not prohibited from creating such corporation by this section, nor is the act creating it a special act within the meaning of this section, and the commission may lawfully exercise all powers conferred upon it in order to perform its duties as prescribed by the act. Webb v. Port Comm'n, 205 N.C. 663, 172 S.E. 377 (1934).
Right of Alteration a Part of Every Charter. - The provisions of this section, affecting the organization of corporations, and specifically providing that all such laws may be altered from time to time or repealed, enters into every charter taken out or corporation formed thereunder, and any such corporation may not complain when a statutory repeal or amendment has been made, on the ground that it works a hardship on it or impairs the value of its property, unless vested rights have been acquired by it which have been impaired or destroyed by the repealing or amendatory act complained of. State v. Cantwell, 142 N.C. 604, 55 S.E. 820 (1906); Yadkin River Power Co. v. Whitney Co., 150 N.C. 31, 63 S.E. 188 (1908), appeal dismissed, 214 U.S. 503, 29 S. Ct. 702, 53 L. Ed. 1061 (1909); Elizabeth City Water & Power Co. v. City of Elizabeth City, 188 N.C. 278, 124 S.E. 611 (1924).
Power to Extinguish Corporations. - The General Assembly may, at its discretion, abolish municipal as well as other corporations, because they are all alike creatures of its will, and exist only at its pleasure. Ward v. Elizabeth City, 121 N.C. 1, 27 S.E. 993 (1897).
Effect of Dissolution. - Upon the dissolution or extinction of a corporation under this section for any cause, real property conveyed to it in fee does not revert to the original grantors or their heirs, and its personal property does not escheat to the State; and this is so whether or not the duration of the corporation was limited by its charter or general statute. Wilson v. Leary, 120 N.C. 90, 26 S.E. 630 (1897), overruling Fox v. Horah, 36 N.C. 358 (1841).
Where the legislature deprived board of township trustees of its existence as a municipal corporation, the right to sue and be sued were likewise extinguished, and hence it could not thereafter be a party to a suit. Wallace v. Board of Trustees, 84 N.C. 164 (1881).
Cited in Sides v. Cabarrus Mem. Hosp., 22 N.C. App. 117, 205 S.E.2d 784 (1974); In re City of Durham Annexation Ordinance Numbered 5991 for Area A, 69 N.C. App. 77, 316 S.E.2d 649 (1984).