The Kenosha telegraph. [volume] (Kenosha, Wis.) 1860-1888, 1874-05-28
NUMBER

law, which to my mind is of itself decisiv
Under the power to alter, amend or 7,
peal charter, a Legislature may chang
or in some instances perhaps destroy, COZ
tracts into which the state has entered b
the granting of charters. But this mu
be limited 10 the modification O destru
ton OF The contracts of the state. It h
never been extended and consistent
with the constitution ofthe United State
it cannot be extended to contracts mao
0y the corporation unler authority of Ia
with bona tide credit tors who have lei
their money to constr uct and equip tL
railroad and take Sc curity by mortgaa
thereon. ANY law of state which TAXI
away property relied or by creditors whe
they loaned their mouey or the securit
on which they gave credit, or which SER
ously impairs the remedy which sue
creditors have had, impairs the obligatio
OF their contracts"
And again, after saying that this con
pany had executed Q mortgage, and Il,
bonds secured thereby had been sold, b
adds: ...
"When they took these mortgages tle
had right to presume, and unquestions
bly, did presume that the property NOR
gagged would be employed by the raIlwa
corporation tor reasonable rates of con
pensation in transacting their bushes
This just and reasonable expectation car
not in my opinion be disappointed an
the rights acquired by the mortgageesdi
regarded, through an act of the Legisls
ture, in effect commanding the road (
transact its business on such terms th
the bondholders cannot possibly receiv
any part either of the interest or prime;
pal of tie bonds"
This isthe most remarkable doctr1r
ever maintained by eminent counsel.
is. in substance, that the railroad con
pauY. ny executing mortgage, ht
clothed its mortgages with powers
never possessed itself, powers denied to
by the constitution of the State whic
created the corporation mortgagor. 1t
well settled that any person dealing wit
a corporation must take notice of the lay
Of its creation, and all constitutions! an
statutory provisions which Limit and RI
strict the powers of the corporation; an
that no enc can be a bona tide holder
what the incorporation is incapable
granting.
ANGEL and AMEs, On corporations SAY
persons out of the State as we'll as i
1t. are bound to take notice of public Law
limiting the powers of corporations.
The State authorized the railr DAD COL
pany to mortgage its property and fran
chises, whattver they were and as the
were, with all the privileges and all th
infrmities belonging to them. When tt
mortgages accepted their mortgage, an
purchased the bonds secured by it, the
knew they were dealing with corpors
ton created by the laws of Wisconsin
and they were bound to take notice tia
the constitution of the S ate authorize
the legislature to alter or absolutely IT
peal the charter of the corporation. I'll
were also bound to take notice that b
the general railroad law of the St ate it ]
expressly provided that the purchaser o
a railroad. at a mortgage foreclosure sale
shall take the place of the mortgage
company, enjoy the same rights, and b.
subject to the same liabilities
If the doctrine commended for by MI
CURTIS should prevail, it would follow
that this provision of the Constitution O.
Wisconsin had been repealed by mort
gage executed By railroad compsny,and
that the mortgage had moi
only deprived the company Of its prop
erty and franchises covered by the mort
gage, bnt had stripped the Legislature
q power conferred upon it and its success
sors forever by the Constitution of tht
State.
Bat suppose that the legislature had
not only authorized the company to mort,
gage its property and franchises,as it did
but had gone further, as it did not, and
had expressly provided that. in case the
should make and execute a
mortgage upon its property and fran
,hises. the charter of the company should