, 1874-05-16

the Company to f1 its own rates the COMPANY
is guilty OF oppression aud the State exercises
the right it bad expressly reserved, snd alters
this provision by fixing the rates to 10 charged.
And now it is said that for the Steteto do what
it has expressly reserved the right to do III vio-
la&ion OF the understanding or contract bstween
tho State and the Company.
The Constitution expressly provides that all
charters or nets OF incorporation granted by the
Legislature " mnJ 10 altered or repealed by tho
Legislature At any tina after their PASSAGE" 1t
ia well settled that this provision enters into
every rallroed-charter as perfectly az though ITS
language were embodied therein and henue the
power Of tho Legislature to elrer and charter is
undoubted. But alter it how? To what e1-
tent ? To what cnd? In What particular? Tho
Constitution aavs it may bo altered. Whoever
c!ni1ns a Limitation upon this power to sitter a
charter. or to except certain things out OF the
power. has the burton OF establishing the lien-
itation or exception. The Constitution gives the
Legislature the power to alter charter,
WITHOUT LIMITATION Or EXCEPTION,
and oven to repeal 1t altogether AR. Curtis says
Charters to amended altered By the cxerciss
of Legislative power and If tbs act in question: when
but lsses beyond the field of egGatiou, then it
10 deemed to be authorized by this article Of the
And ny o,,aioa ts, that It ts not within the field OF
legislation under Sny Alntic.u Constitution, TO FIX
and pr.scrib. for the future what prices Rhal be de-
1uandcd, either for commodities, for personal
service, OF foE 4 union Of tosh-
But suppose the Legislature had. In the act Of
Incorporation, embedded the precise provisions
OF this statute. Will it be pretended that such
pr. v1siens would be void, u not being ieeit-
imata exercise ofleglslatIva power? This cnnnot
. he nlalntained for tuomant. But how il this
case different when the Legislature subsequently
docs the same thing under power e1p1 essv re-
served by the Constitution to alter the charter ]?
Under this Unlimited power Of alienation: the
Legislature may certainly enacs anything which
could originally have been included In the char
ter Aua who will be bold enough to say that
tho Legislature. in granting privilege, mar not
prescribe the extent to which it might be en-
loved : In granting monopoly OF the carrying
business from 4 to B. may noE tbs Legislature
prescribe tho mode and manuer OF its exercise
After D franchise has been granted upon con-
ditions, can the company clam the franchise
freed from the conditions !? ALI this would be
absurd yet it is precisely what results from the
above quotation.
But the proposition an contending for doea
not rest upon reason merely: it has been
TWICE DECLARED BIT TIE sUrEEME COURT OF TIE
UNITED STATES.
in nel-cunsiderad cases. and no opinion Of coun-
Sci can shake it.
In Sherman rs. Smith. E50ck. 5s7, tho case
vas this 4 bunk had becu organized under the
General Banking law, which provided that thu
stockholders should not be individually liable,
unless by their own agreement, bus reserved to
to the State tho night to 's alter or repeal" the
act subsequently an act WAS passed so altering
tie law as to mako stockholders personally
liable 4 more radical chauKe-ons more COM
plo1ely changing tie character OF the CORPORA
tiou--cannot he imagined. But the Court held
j.. cay:
Sow, ths 32d section, which reservedto the legsla
turo the power to aT T eat the act, by necessary
construction reserved The poner to esr r.pca! u!
K1G1i,fy prescLed the aet. Tee articles Of 1ssocta
ton arc dependant upon and becon. part Of the aw
alteration sepcc4 ths aa,as any other n7t @ tht
yc'ierdt sgstem-
Tnis decision was rada in 1861. IN 1879 the
subject camo again before tus Supreme Court,
III Miller Us. The State, 15 Wallace, 47B, and 1ss
fully 1rx,,ol by very able counsel. IAs Court,
after reviewing all the authorities, from the
Dartmouth College case down. affirmed the doc
trlne Of Sherman Us. Smith, in very long op1n-
ion, which eettles the question,
FOR THIS GENERATION AT LEAST.
In the Dartmouth ColleEo casa, !, Wheaton,
712. G. j. MARSHALL. speaking Of the power OF
the Legislature TO alter the charter OF cnrpo-
ration without the consent OF the corporation.
kays: "jf us LEGISLATURE mean tc claim such an
authority, 1t must be T-eSe5'red in tue grant,
clearly implying thas whe1e tho reservation is
made. such power may be exercised.
In lfaer Us. The Stale. Ii Wallace, 497. tbs
Court eays that The reservation is equally valid
aao efec,ual, II it exists in the Constitution Of
uas State. or in prior general Law, as it ls when
embodied in ths cllaEter itself.
Again, in OAco1r's cnse before referred to. 16
Wallace, 094. IN which tho Court held that rail-
roads in WiBconEln ere public highways, tflB
Court, in stating tl1e grounds upon which TINT
coaclueiou res:ed, employ the followng amphatc
language:
Thst the Legislature Of Wisconsin may alter or re-
peal the charter granted to the sbeboygan L Fond du
Lac Railroad Company, is certain. Ihis is a power
reserved bJ the Constitution. The RAILROAD oAS
THEREFORE BE coSInoLLED AID nEGu1AfkD Br TILE
STATE IT'S Use CAN nE DEEnEp; IT'S TOLLS AND
anf1cT tHfrAS T3rY {u
work made by the authority Of tho 6tate subject to
ia regulation, snd having for its object increase
Of public convenience to be regarded a. ordinary
private property
This is net the language Of retained conusel.'
It is the deliberate judgment OF
TIE HIGHEST AND LAST COURT
having jurisdiction TO detornllna this question.
But again. Mr. CURTIS s1ys:
But there ia another objscton to this law which 10
my nlnd is Of itself decisive Under the power to
alter, Gmend, or repeal clarter, Legislature may
charge. or II some instances perhaps destroy, con-
ttactz into which the State has entered bJ the granting
OF charters. But this uat bs limited by the uoltf-
cation destructon Of the contracts Of the State.
It as nsver been extended and, consistently with tina
Constitution Of tbs United States, It caunot bs
tended, to contracts maao by the corporation under
authority Of law with bona dds creditors who have
aud take security by mortgage thereon. ANY law at
State which takes Eway property relied on By credit
orr xhen aey t 'rss s enss Or neonsy n
remedy which such creditors have had, imp2lIs the
obligation Of their contracts. =.
And again, after saying that this company had
executed q mortgage, and that bonds secured
the1e eby had been sold, ho adds;
When they took thess mortgages, thsy had right to
rrcsune. aud unquest on.hly did presume, that tho
property nortgage would ba employed bg tho railway
CORPORATION fu= reasonable raes Of compensation IN
tr.asactins their business. THIS Just and reasonable
expectation cannot, in my opinion be disappointed
and the rights acquired by the mortgages Disregard
el through act OF tAa Legislature, in efec. COM
.auding tho road to tran:act its business on zach
te1ns that the bondhodara canuot possibly receive
auy part either Of tAs principal h,sarest 0f tna
bonds. .
This is
THE MOST nEHARk4nLE DOCTRINE
over maintained by erl:nent counsel L is, in
substance, that tho railroad company, by exc
cutting mortgage, has clothed its mortgagee
with powers it never possessed itseH,-po.ers
denied to it By the Constellation OF the btete
which created the corporation mortsagor. It ia
well settled that any pe1son dealing with a cor
roratiou must take notice Of the laW of it's crea-
ttion. and all constitutional and statutory provl-
sioiis bich limit and restrict the powers of tho
corporation; and that no one can be bona fdo
holder Of what the corporation IS incapable Of
granting
ANGEL and Ames, On corporations, Say:
Persons out NJ the State, we'll ~ in IT, are bound
r. L. II 1Sf&3 Ing