Watertown republican. [volume] (Watertown, Wis.) 1860-1906, 1874-05-20
opinion, which settles the question for this
generation at least.

generation al least.
In the Dartmouth College case, 4 Whoa.
ton, 7l2, c. J. Marshall, speaking OF the
power of the Legislature to alter the char.
ter of . corporation, without the con sent OF
the corporation, says: s'If the Leqi,lature
mean to claim such an authority, It must be
reservea in the grant" Clearly implying
that where the reservation is made. such
power may be exercised.
In Miller vs. The State, Is Wallace, 497
the court say that, 'ths reservation il
equally valid and effectual, il 1t exists in
the Con'titution of the State, or in prior
general law" as it is when embodied in
the charter itself.
Again in Olcotts case before referred
to, 10 Wallace 694, in which the court
held that railroads in Wisconsin are pub
lie highways, the court. in sta ing tho
grounds upon which that conclusion rest
ed, employed the folio wing emphatic Ian
guage: .,0. ..
That the Legislature of Wisconsin may
alter or repeal the charter granted to the She
boygan & Fond du Lac Railroad company is
certain. This is power reserved by the con-
stitution. The RAILROAD CAN THEREFORE, DE
CONTROLLED AND REGULATED BY THE STATE.
1rs USE CAN BE DEFINED; ITS TOLLS AND RATES
FOR TRANSPORTATION MAY BE LIMITED. Is Il
work made by the authority Of the State,
subject to its regulation, and having for its
object an increase Of public convenience. TO
be regarded as ordinary private property 2"
This is not The language of retained
counsel 1t is the deliberate Judgment of
the highest and last court having iurisdic-
ton to determine this question. But
again, Mr. Curtis says:
But tLere Is another objection to this law,
which to my mind is Of itself decisive. I'm
der the power to alter, amend or repeal a
charter, legislature may change. OF in some
instances perhaps destroy, contracts into
which the state has entered by the granting
of charters. But this must be limited to tn .
modification or destruction Of the contracts
of the state. 1t has never been extended and
consistently with tie constitution of the
United States, it cannot be extended to con-
tracts made by the corporation under author
ity of law with bona ide creditors who have
len their money to construct and equip the
railroad and take security by mortgage
thereon. Any law of state which takes
away property relied on b, creditors when
they loaned their money or tho security on
which they gave credit, or which eerously
impairs the remedy which such creditors hav
had. impairs the obligation of their con-
tracts"
And again, after saying that this Goa
pany had executed . mortgage, and that
bonds secured thereby had been sold, he
adds:
"When they took these mortgages they
bad right to presume, and unquestionably
did presume that the property mortgaycd
would be employed by the railway corpora
ton for reasonable rates Of com onsation in
transacting their business. This Just and
reasonable expectation cannot in my opinion
be disappointed and the rights acquired by
the mortgages disregardsd, through an act
Of tho Legislature, in effect comma nding tho
road to transact its business on such terms
that the bondholders cannot possibly receive
any part either OF the interest or principal of
the bonds"
This il the most remarkable doctrine
ever maintained by eminent counsel. 1t
is, in substance, that the railroad COM
pany, by executing mortgage, has
clothed its mortgage with powers it
never possessed itself, powers denied 10 it
by the constitution OF tho State which
created the corporation mortgagor. It is
well settled that any person dealing with
q corporation must take notice Of the law
of its creation, and ell constitutional and
statutory provisions which limit and re-
strict the powers of the corporation and
that no one can be q bona .fde holder OF
what the corporation is incapable of
granting. Angel and Ames, on corpora
tons, say:
Persons out Of the State, as we'll US in j.,
are bound TO take notice Of public laws linn
iting the powers Of corpoIstions."
Inc State authorized the railroad COM
pany to mortgage its property and fran
chises, whatever they were and as they
were, with all the privileges and all the
iu6rmi,ies belonging TO them. When the
mortgages accepted their mortgage, and
purcha sed the bonds secured by it, they
knew they were dealing with a corpora
tion created by the laws of Wisconsin, and
they were bound to take notice that the
constitution Of the State authorized the
Legislature to alter or absolutely repeal the
charter of the corporation. They were
also bound to take notice that by the gen
eral railroad law of the State it is ex-
pressly provided that the purchaser of a
railroad, at a mortgage foreclosure sale,
shall take the place of the mortgagor com
pany, enjoy the same rights, and be sub
ject TO the same liabilities
If the doctrine coptended for by Mr..
Curtis should prevail, it would follow that
this provision Of the constitution of Wis
consin had been repealed by mortgage
executed by a railroad company, and thai
the mortgage had not only deprived the
company CT its property and franchises
covered by the mortgage, but had stripped
the legislature of power conferred upon
it and its successors forever by the consli-
tuition OF the State
But suppose that the Legislature had
not only authorized the company to mort
gage its property and fran chises, as it did,
but had gone further, as it did not, and
had expressly provided that, in case the
company should make and execute
mortgage upon its property and fran
chises, the charter Of the company should
never be altered or repealed. Will any
lawyer seriously maintain that such a
law would he valid? Can the Constitution
OF Wisconsin be repealed by the joint &C
ton of the iegisla ure and railroad COM
pany? Can one legislature bind its sue
cessors not to exercise power expressly
conferred by the Constitution I? This doc
trine would permit any railroad company
to evade legislative control by contract,
for a mOrtrape is a c0ntractl not evan