Case Name: The State of Ohio, on relation of the Attorney-General, v. John Sherman, Kent Jarvis, R. R. Springer, and others
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1872-12
Citations: 22 Ohio St. 411
Docket Number: 
Parties: The State of Ohio, on relation of the Attorney-General, v. John Sherman, Kent Jarvis, R. R. Springer, and others.
Judges: West, J., having been of counsel, did not sit in this case.
Reporter: Ohio State Reports, New Service
Volume: 22
Pages: 411–435

Head Matter:
The State of Ohio, on relation of the Attorney-General, v. John Sherman, Kent Jarvis, R. R. Springer, and others.
I. Where, in a proceeding in quo warranto, certain named persons, and. others said to he too numerous to he brought upon the record, were charged with usurping the franchise of being a corporation; and the defendants named plead that they were the directors of the corpora tion, without denying that they were corporators therein, and averred the legal existence of the corporation : Held, that in the absence of allegations or proof to the contrary, the defendants are to be regarded as claiming to be members of the corporation.
'2. The legislature has no power, under the present constitution of Ohio, to create corporations without securing the individual liability of their stockholders, at least to the minimum amount required by the constitution ; and if the act of incorporation does not secure this, either by express provision, or by requiring from the corporators or stockholders such acts, of organization or otherwise, as will subject them to the constitutional provision, the act will be unconstitutional and void.
.3. Where a corporation, in pursuance of an act of the legislature, transfers or convoys its franchise to he a corporation to others, the transaction, in legal effect, is a surrender or abandonment of its charter by the corporation, and a grant by the legislature of a similar charter to the transferees or purchasers; and the charter so granted is subject to all the provisions of the constitution existing at the time it is so granted.
•4. The act of April i, 1863, authorizing the purchasers of the property of a railroad company to acquire the franchise to he a corporation by deed irom the company, is a general law within the meaning of article 13, section 2, of the constitution.
-5. But a deed made by such company to a corporation of another state, which corporation had become the assignee of property sold as contemplated in said act, without any new organization, or taking of stock, under the deed, or as a corporation of Ohio, does not constitute the foreign corporation, or its members, an Ohio corporation, and in so far as said act may assume to create them such, it is unconstitutional, for the reason that it does not secure the individual liability of the stockholders.
8. Under the present laws of Ohio, foreign railroad corporations, whose roads lie partly within this state, are accorded the right to own, operate, and maintain their roads in Ohio, in the same manner as domestic railroad companies.
Proceeding in the nature of quo warranto.
This is a proceeding under section 12 of the attorney-general’s act (S. & C. 89), instituted by direction of the house of representatives, against the above-named defendants and their associates, said to be too numerous to •be brought upon the record, charging them with usurpation and unlawful exercise of certain franchises and authority, and asking a judgment of ouster.
The information charges that the defendants “ are acting- and assuming to act as a corporation within the state of Ohio, without being legally authorized so to do ; that they are ass uning to exercise, and are exercising within said, state, certain franchises and authority not warranted by law; and that for the space of one year last passed, they have-used, and still do use, without any grant, warrant, or charter,, the liberties, privileges, and franchises following, to wit-That of being a body corporate and politic in fact, law, and name, by the name of the “ Pittsburg, Et. Wayne and Chicago Railway Company,” and by the same name to-plead and be impleaded with, answer and be answered unto, and to have and use a corporate seal; also that of building, owning, and operating a line of railroad within said state, and of condemning and appropriating private property for-the same and the use thereof; also, that of being a common carrier of passengers and freight within and across said state, and of charging and receiving a reward therefor; also,, that of contracting and being contracted with, and of exercising all the rights, powers, and privileges conferred upon incorporated railroad companies, by an act of the general assembly of the State of Ohio, passed March 19, 1869,„ entitled “ an act to amend section 24 of an act to provide for the creation and regulation of incorporated companies in the State of Ohio, passed May 1, 1852.” All of which liberties, privileges, franchises, and authority, it is-charged, the defendants have usurped, and do still usurp,, upon the State of Ohio, and have exercised and are still-assuming to exercise in said state, without being legally authorized so to do, and without any warrant, grant, or-authority of law, to the great damage and prejudice of the-state.
To this information the defendants plead, that they are. now, and have been continuously for a period of more than one year prior to the filing of said information, directors of the Pittsburg, Et. Wayne and Chicago Railway Company,, duly and legally elected and qualified as such, and that said railway company is now and has been continuously for all. tbe time aforesaid, a railroad corporation and body politic, duly and legally incorporated under and by virtue of the laws of the states of Pennsylvania, Ohio, Indiana and Illinois, and by the name aforesaid, and owning a continuous railway extending from Pittsburg, Pennsylvania, across the States of Ohio and Indiana to Chicago, Illinois. The defendants further aver that said Pittsburg, Ft. Wayne and Chicago Railway Company still continues to be, and is, a body politic and corporate, in fact and name; and that before and after the filing of the said information, it has been so recognized and treated by the legislature of said State of Ohio and by the various departments and officers, of the state government of said State of Ohio; and that, by reason thereof, it is entitled to do all lawful acts, and to enjoy all the rights, privileges, franchises, and immunities allowed to railroad corporations, or conferred on them by the laws aforesaid, or by the law of the land. The plea concludes, denying that the defendants have usurped said liberties, privileges, and franchises upon the State of Ohio, in manner and form as alleged in the information.
To this plea a replication is filed, taking issue upon all its material averments, and the cause is submitted to the court upon an agreed statement of facts, of which the following is all that is deemed material to be here stated.
The Ohio and Pennsylvania Railroad Company was duly incorporated and organized as a railroad corporation of the State of Ohio, by an act of the general assembly of the State ■of Ohio, passed February 24, 1848. 46 Ohio Laws, 261.
The provisions of this act of incorporation were adopted and affirmed, and authority given to said Ohio and Penney .vania Railroad Company to construct and maintain its railroad, and to exercise all its powers, privileges, and franchises, within the State of Pennsylvania, by an act of the general assembly of that state, approved April 11, 1848.
The railroad of said Ohio and Pennsylvania Railroad Company was constructed and operated between the city of Pittsburg, in the State of Pennsylvania, and the village of Crestliue, in the State of Ohio, in all respects in con formity with its act of incorporation and said act of Pennsylvania.
The Ohio and Indiana Railroad Company was duly incorporated and organized as a railroad corporation of tfie State of Ohio, by an act of the general assembly of that state, passed March 20, 1850. 48 Ohio Laws, 297.
The provisions of this act of incorporation were adopted and affirmed, and authority given to said Ohio and Indiana Railroad Company to construct and operate its railroad, and exercise its powers, privileges, and franchises within the State of Indiana, by an act of the general assembly of that state, approved January 15, 1851.
The railroad of said Ohio and'Indiana Railroad Company was constructed and operated between the village of Crestline, in the State of Ohio, and the city of Port Wayne, in the State of Indiana, in all respects in conformity with its act of incorporation and said act of Indiana.
The Port Wayne and Chicago Railroad Company was duly incorporated and organized as a railroad corporation of the state of Indiana, by and under the provisions of an act of the general assembly of that state, entitled “an act to provide for the incorporation of railroad companies,” approved May 11, 1852. The certificate of incorporation of said company was filed with the secretary of state of Indiana, and the corporate existence of said company began, on the 22d day of September, 1852.
This company was authorized to construct, operate, and maintain its railroad, and exercise its powers, privileges, and franchises within the State of Illinois, by an act of the general assembly of the State of Illinois, approved February 5, 1853.
The railroad of said Port Wayne and Chicago Railroad Company was constructed and operated between the city of Port Wayne, in the State of Indiana, and the city of Chicago, in the State of Illinois, in all respects in conformity with the law under which it became incorporated, and said law of Illinois. •
On the 6th. day of May, 1856, the boards of directors of' the three aforementioned companies adopted certain articles of consolidation, which were subsequently, in the months of Jane and July, 1856, ratified and affirmed by a majority of more than two-thirds of all the stockholders of each of the aforementioned companies. The proceedings-in said act of consolidation were regularly taken, and in conformity with the laws of the several states in which said-railroads were situated, especially in .conformity with an act of the general assembly of the State of Ohio, passed April 10, and took effect May 1, 1856, entitled an “an act to-authorize a consolidation of railroad companies in this state with railroad companies of states adjoining in certain cases, and to authorize railroad companies in this state to extend their railroads into adjoining states.” A certificate-of the incorporation of said consolidated company, under the name of Pittsburg, Port Wayne and Chicago Railroad Company, and under the provisions of the last-mentioned act, was filed in the office of the secretary of the State of Ohio; and the alleged corporate existence of said consolidated company as a railroad corporation of the State of Ohio began on the 1st day of August, 1856.
The Pittsburg, Port Wayne and Chicago Railroad Company failing to redeem or to pay the interest on its-bonds, as by the terms of the articles of consolidation it was bound to do, in December, 1859, judicial proceedings to foreclose said mortgages and sell said railroad, were instituted in the United States Circuit Court, for the Northern District of Ohio, against said Pittsburg, Port Wayne and Chicago Railroad Company, and said other oiiginal companies and others, and proceedings auxiliary thereto were-concurrently instituted in the United States Circuit Courts in the proper districts of Pennsylvania, Indiana, and Illinois. Subsequently, in 1861, decrees of sale and confirmation of sale were rendered in said several Circuit Courts,, said proceedings being in all respects conformable to law. Whereby, in October, 1861, said railroad and all the property and franchises embraced in said aforementioned mort gages were deeded to, and so far as the same lawfully might be, became vested in Lanier, Tilden, Thompson, Meyer, and Ilanna, the purchasers at the judicial sale aforesaid.
While the judicial proceedings aforesaid were still pending, and before a decree of sale had been taken, the stockholders and various classes of creditor’s of the aforementioned companies entered upon atvagreement and plan of reorganization of said railroad company, by the terms of which said Lanier, Tilden, Thompson, Meyer, and Hanna were to become the purchasers, and did become the purchasers, so far as they lawfully might, of said railroad and' the property and franchises connected therewith, as agents- and trustees for said creditors and stockholders, and took deeds for the same, from the master commissioners appointed by said Circuit Courts, and from the Pittsburg, Port Wayne and Chicago Railroad Company, agreeably to the decrees of said several Circuit Courts, which deeds conveyed to, and completely, so far as they lawfully might,, vested in Lanier and his associate purchasers all the property and franchises which were mortgaged by the said original and consolidated companies. It is agreed that said agreement was not filed in the Circuit Court of the Northern District of Ohio.
On the 26th day of February, 1862, the persons having' acquired said property and franchises by said sale, became duly incorporated as a railroad company, under the laws-of each oí the States of Pennsylvania, Indiana, and Illinois,, under the name of the Pittsburg, Fort Wayne and Chicago Railway Company.
On the 2d day of March, 1862, Lanier and his associates-conveyed to the Pittsburg, Fort Wayne and Chicago Railway Company, by sufficient deed of conveyance, all the property and franchises pertaining to said Pittsburg, Fort-Wayne and Chicago Railroad Company, which they had. purchased at the judicial sale aforesaid.
The Pittsburg, Fort Wayne and Chicago Railway Company operated said railroad within the State of Ohio from the time it acquired the same until the 31st day of Decem !ber, 1863, claiming to do so under and by virtue of section 7 of an act of tbe general assembly of the State of Ohio, passed April 14, 1861, entitled “ an act to regulate the sale of railroads and the reorganization of the same.”
On the 31st day of December, 1863, the Pittsburg, Fort Wayne and Chicago Railroad Company duly executed and delivered to the Pittsburg, Fort Wayne and Chicago Railway Company a deed in due form, purporting to convey the franchise to be a corporation in conformity with the provisions of an act of the general assembly of the ■State of Ohio, passed April 4, 1863, entitled “ an act supplementary to an act, entitled an £ act to provide for the •creation and regulation of incorporated companies in the ■State of Ohio.’”
On the 1st day of July, 1869, the Pittsburg, Fort Wayne and Chicago Railway Company leased its entire road, branches, audequipments to the Pennsylvania Railroad Company, for a period of 999 years, from and after said July 1, 1869, agreeably to and in full conformity with the provisions of an act of the general assembly of the State of Ohio, passed March 19, 1869, entitled ££ an act to amend section 24 of an act entitled an act £ to provide for the creation and regulation of incorporated companies in the State of Ohio.’”
It is admitted that all proceedings under the various ■statutes and judicial proceedings aforementioned, whether relating to incorporation, organization, or reorganization, .as well as all deeds, or other instruments' in writing in any way relating to either, or any, of the aforementioned transactions, have been regular and in themselves in due form, ■except as hereinbefore qualified.
It is also agreed that no question shall be raised touching the election and qualifications of the defendants as directors of said company, if said company have or had a corporate existence.
W. II. West, for the relator:
1. A corporation can not be created by prescription in Ohio, nor by legislative enactment. Griffin v. Clinton Line Extension R. R. Co., 1 West. L. Monthly, 31; Const., art. 13, secs. 1, 2.
What the general assembly can not create by direct enactment, can not be established by legislative or departmental recognition.
2. The form of the information is not misconceived. . An information against a corporation, eo nomine, or against individuals for intruding into the offices or usurping the franchises of a particular corporation, would estop the relator from denying the existence of the corporation. The State, ex rel. Attorney-General, v. C. G. L. & C. Co., 18 Ohio St. 262.
3. The title set up in the plea must be sustained, or judgment of ouster must be entered. Cole on Quo Warranto, 212, citing Rex v. Leigh, 4 Burr. 2143, and other authorities there collected. The judgment to be entered is provided for by sections 15 and 17, quo warranto act. S. & C. 1268.
4. The consolidation act of 1856, S. & C. 327, is a violation of article 3, section 26, of the constitution.
Corporations can be formed only under laws of a general nature, which shall hace a uniform operation throughout the state. See Atkinson v. M. & C. R. R. Co., 15 Ohio St. 35; State v. Cincinnati, 20 Ohio St. 35.
The act invades private rights, and impairs the corporate contract. The dissenting stockholder is deprived of his property without compensation assessed by a jury. His rights existed before the statute — hence the act is ex post facto. On quo warranto, this is not a collateral issue.
5. Even if valid, no more than two corporations are by it authorized to consolidate.
6. A corporation existing by virtue of the joint legislation of two separate sovereign states, is a thing impossible in law. Wheeler v. O. 7 M. R. R. Co., 1 Black (U. S.), 295; Racine & Miss. R. R. Co. v. Farmers’ L. & T. Co., 1 Amer. Corp. Cases, 441.
7. In forming a corporation, all the statutory conditions must exist and be complied with. A. ^ O. JR. R. Co. v. Sul livant, 5 Ohio, 276; Griffiin’s case, 1 West. Law Review, 1.-The same rule applies to consolidations.
8. The áct of April 4, 1863 (S. & S. 131), purporting to authorize a conveyance of the corporate entity, is obnoxious to all the constitutional objections above made against the act of 1856.
9. The deed purported to be executed by the corporation,, which the law does not authorize to be done.
10. The transfer by deed “ of the franchise to be a corporation ” is an impossibility. Whether other franchises are or are not alienable, that of corporate existence, from its very nature, is not. Alienation and conveyance necessarily imply a complete severance and separation between, the subject alienated and the person or being from which it is alienated- — between that which is conveyed and that to which it before belonged.
A corporation without a corporator is an absurdity.
But if alienation and conveyance of the naked franchise-to be a corporation be possible, what is its effect upon the alienee? Does it constitute him a corporation ?
Whom the law declares may, they only can be and act as a corporate body. Those conditions must exist which the law declares as precedent to the exercise of corporate powers by them. 1 W. L. Monthly, 31; A. & O. R. R. Co. v. Sullivant, 5 Ohio St. 276.
The franchise to be a corporation belongs to the corporators. Coe v. C. P. & I. R. R. Co., 10 Ohio St. 372. The latter is therefore essential to the former. Without corporators, legal corporate entity can not exist.
A railroad corporation, in the absence of statutory authority, can not be or become a corporator of another and distinct railroad corporation.
The conveyance in this ease is made, not to natural persons, who alone are competent to be corporators, but to a legal entity — to a corporation as such which can not be a corporator.
B. P. Pavvey and Laubie &; Brooks, for defendants :
Our defense is twofold: First, being the directors of a railroad company incorporated in another state, and owning a railroad that was partly within and partly without the state, the defendants hadan undoubted right to operate and maintain that portion within this state, under section 7 of the reorganization act of April 7, 1861, S. & S. 27. Bank of Augusta v. Earl, 13 Peters, 519; American Bible Society v. Marshall, 15 Ohio St. 541. And second, that the foreign corporation just named, became a corporation of this state by the purchase, from the Pittsburg, Fort "Wayne and -Chicago Railroad Company, of the franchise to be a coU poration, and the deed made in pursuance thereof, under the act of April 4,1863. S.&S.131. This road was owned by natural persons, Lanier and others. The grantors were invested with all the power of natural persons to dispose of what they had legally acquired, and the grantee was expressly •authorized to become the purchaser of this very property.
If the Pittsburg, Fort Wayne and Chicago Railway -Company is a corporation of this state, and the defendants its directors, it can not be pretended that any misuser or .-abuse of its franchises can be adjudged in this proceeding, to which the corporation is no party and entitled to no hearing. Such a case is fully provided for in the 4th subdivision of section 8 of the quo warranto act (S. &C. 1267), and the judgment to be rendered is, that the “ corporation be ousted from the continuance of such offense.” S. & 'C. 1271.
The officers and stockholders of the railroad company, having invested their money in accordance with acts passed by the Ohio legislature, the state is estopped from urging that said acts are unconstitutional.
Upon the question, as to the constitutionality of the statutes of 1856 and 1863, we refer to Cricket v. The State, 18 Ohio St. 9; Welker v. Potter, 18 Ohio St. 87; Walker v. Cincinnati, 21 Ohio St. 21.
A joint act of incorporation is not only a contract with ábe company, but a contract between the states that are parties to it. Brockett v. O. & P. R. R. Co., 2 Har. 241; C & P. R. R. Co. v. Speer, 56 Penn. St. 332; Merrick v. Vansantvoord, 34 N. Y. 213; P. W. & B. R. R. Co. v. Maryland, 10 How. 276; Harris v. R. R. Co., 12 Wal. 65; Sprague v. Hartford, etc., R. R. Co., 5 R. I. 233; State v. Northern R. R. Co., 18 Md. 193; Bishop v. Brainard, 28 Conn. 289; Lord v. Bigelow, 8 Vt. 445; County of Allegheny v. C. & P. R. R. Co., 51 Penn. St. 228.
While a corporation exists either de facto or de jure, it may appoint the proper officers to transact its business, and invest them with perfect authority to act in its name ; and no proceeding against them alone can invalidate their title, or work a forfeiture of the corporation, and much less can a deed made by the corporation, whether conveying real or personal property, or, under the authority of law, its franchises, be thus collaterally assailed. Eaton v. Aspinwall, 19 N. Y. 119; Buffalo and Allegheny R. R. Co. v. Carey, 26 N. Y. 75; Tarbell v. Page, 24 Ill. 197, and 14 Ind. 499.
The acts of 1851 and 1856 construed together, and the-act of 1856 construed alone, gave authority for consolidation. That the effect of such consolidation is the creation of a new corporation, with powers and privileges such as belonged to the original companies, has been frequently decided. McMahon v. Morrison, 16 Ind. 172; Robertson v. City of Rockford, 21 Ill. 451; Clearwater v. Meredith, 1 Wal. 25.
In Railroad Co. v. Harris, 12 Wal. 65, the Supreme Court of the United States define the difference between creating-a corporation de novo, bestowing corporate life and- faculty upon persons similarly endowed by another state, and-simply enabling a foreign corporation to exercise its powers..
If, in exercising the right of consolidation, the particular methods are not adopted, and in the order prescribed,, if all parties, whose rights are affected by consolidation, are satisfied, and wrong is done to no one, the public is not injured, and its sovereignty is not invaded. Commonwealth v. Central Passenger Railway, 52 Penn. St. 506.
We hardly deem it necessary to suggest that, as the leg islature is riot restricted as to materials out of which corporations may be formed, they may be formed as well of pre-existing corporations, by consolidation, as of individuals. Phila., Wil. & Bal. R. R. Co. v. Maryland, 10 How. 376; Bishop v. Brainard, 28 Conn. 289; McMahon v. Morrison, 16 Ind. 17.
The acts of April 10,1856, and of April 4,1863, are general acts. Each conferred powers upon a class of corporations. Cricket v. The State, 18 Ohio St. 9; Welker v. Potter, 18 Ohio St. 87; State v. Cincinnati, 20 Ohio St. 18; Walker v. Cincinnati, 21 Ohio St. 21.
If that act invades private property, it can only be declared void at the instance of a party injured. McCray v. Junction R. R. Co., 9 Ind. 358; 12 La. An. 364; Coldwater v. Meredith, 1 Wal. 40.
The state having exercised tax and police powers against, the company, and the courts and various departments of state having recognized it as a corporation, the state is estopped from denying its existence as such corporation. State v. Granville Alex. Soc., 11 Ohio, 16; 4 Peters, 501; 9 Wend, 380.
Much more so, when, by positive enactment, it has declared that when the secretary of state shall have received and filed the certificate of consolidation, public officers and private citizens may treat it as a corporation, invest in its stock and bonds, and rely on the validity of its corporate existence. Commonwealth v. A. & G. W. R. W. Co., 53 Penn. St. 9.
The franchise of a corporation may be so.ld and transferred when such positive po~wer is given. Coe v. C. P. & I. R. R. Co., 10 Ohio St. 387, 390; Smith v. Chesapeake and, Ohio Canal Co., 14 Peters, 45; Hall v. Sullivan R. R. Co., 22 Law Rep. 138, 140; Susquehanna Canal Co. v. Bonham, 9 Watts & Serg. 27; Arthur v. Commercial and Railroad Bank of Vicksburg, 9 Smedes & Marsh. 394; Delaware Division Canal Co. v. Commonwealth, 50 Penn. St. 399; Stewart v. Jones, 40 Mo. 140.
The judicial sale of the road did not destroy the cor porate franchise. Coe v. C. P. & I. R. R. Co., 10 Ohio St. 372; Atkinson v. M. & C. R. R. Co., 15 Ohio St. 35.
F. B. Pond, Attorney-General, in reply:
The defendants are not a foreign corporation if their corporate existence is in any degree dependent on the laws of this state. They are not a domestic corporation if their corporate existence is in any degree dependent on foreign laws. But they plead a corporate existence which they aver to be dependent on both domestic and foreign law. They therefore do not show either a domestic or a foreign corporation.
It is asserted.that a foreign corporation authorized thereto 'by the law of its creation, may acquire, hold, and operate a railroad in any foreign state, unless restrained by positive affirmative prohibition. This might have been true possibly in the absence of our state policy, as embodied in the constitution, and in the enabling legislation of the state. Such would seem to be the effect of the American Bible Society decision, in 15 Ohio St. 541. The whole railroad policy of the state, since 1852, has been to subject and subordinate the powei’s of railroad corporations to the positive enactments of legislation.
The suggestion that the act of 1861 recognized the power of foreign corporations to acquire railroads in this state is not warranted. That legislation does not assume to recognize such power as existing independent of domestic grant. The part of road owned by the foreign corporation, as mentioned in that act, need not be situate in this state. A continuous line of road might be in two states. And that •legislation was intended to apply to existing facts, not to create the facts. It does not empower a foreign corporation to acquire or purchase a railroad here.
Estoppel can not be pleaded in vindication of violated law, and usurped sovereignty, though under the color of legislation.
In a direct proceeding by the sovereign requiring a showing by what de jure acts and contracts de facto are author ized, neither user, nor prescription, nor de facto assumption will avail.
Two corporations under one management, does not make them one corporation. Only the management and capital •of the corporations were consolidated, not the-enti1iesthemselves, jnst as the capital and government of individuals may be consolidated, not the individuals themselves.
The cases cited from 14 Peters, 9 Watts & Serg., and 9 •Smead & Marsh., do not establish the transferability of corporate existence.
Terms employed in a constitution must be interpreted with .reference to the law and facts existing at the time of its adoption. When the present constitution was adopted, corporate existence was not and never had been alienable, -and had ever been deemed inalienable by any power. Hence the legislature can not create transferable corporate existence or authorize its transfer.
Even if the deed of 18G3 could transfer the corporate franchise, it assumed to convey the franchise to be the Pitts-burg, Eort Wayne and Chicago Railroad Company; the -defendants plead that they are directors of the Pittsburg, Eort Wayne and Chicago Railway Company: hence that -deed can avail them nothing in this case.
The appeal of the defendant’s counsel to the mercy of the court, comes with an unsavory odor from a company •of gentlemen who decline to accept the very liberal legislation of 1861. An adverse judgment would leave them in full possession of all the rights and powers they might 'have enjoyed under that statúte.
Their existence as a foreign corporation is not destroyed. Their power as such to use, enjoy, and occupy their road, and make profits therefrom, is not impaired. It simply subjects and subordinates them to the absolute authority of Ohio legislation, which no corporate body, domestic or foreign, should ever be permitted to transcend.

Opinion:
Welch, C. J.
This proceeding, as we understand the case, is not merely against the three defendants named upon the record, but against all the officers, stockholders,, and other individuals claiming to constitute the Pittsburg, Fort Wayne and Chicago Railway Company. And we understand the information as charging the defendants, not only with usurping and unlawfully exercising the franchise of being a corporation under and by virtue of the laws of Ohio, and, as such, unlawfully exercising and using the various liberties and franchises mentioned in the information, but also with usurping the franchise of being a foreign corporation, and, as such foreign corporation, unlawfully exercising and using the same liberties and franchises-within this state.
The plea interposed stands in the names of the three defendants named upon the record. In this the persons so named say that they are directors of the corporation ; and they assert its legal existence, and its full right to use the franchises in question. But they neither admit nor deny the charge that they assume to be members of the corporation, otherwise than by admitting that they assume to act as its directors. Under this state of pleading, and in the-absence of evidence to the contrary, we must regard the directors as claiming to be members of the corporation,,, and consider their plea as a plea on behalf of all the-defendants.
The claim set up by the defendants is, that they are " a corporation " created and existing under and by virtue of "the laws of the States of Ohio, Pennsylvania, Indiana, and Illinois," and, as such, authorized by said laws to exercise and use all the said franchises and privileges. By7 this-w7e do not understand, as the counsel for the state seem to do, that the defendants claim to be incorporated' by the-joint legis'ation of the states named, but that they claim to be a single organization of individuals, under the name of the Pittsburg, Fort Wayne, and Chicago Mailway Company, to whom these states have severally granted similar corporate powers and franchises, and they therefore claim to have in Ohio all the rights and powers, both of a domestic and of a foreign corporation, and as either, or both, the- right to exercise and enjoy the franchises and privileges which they arc charged with so usurping — namely, the franchises and privileges of owning, operating, and maintaining their railroad in Ohio.
If the defendants are a corporation created by the laws of Ohio, it is admitted that they have all the rights and powers in question. It seems also to be admitted in the agreed statement, and in the argument of counsel, though the contrary would appear to be asserted in the information, that the defendants are a foreign corporation — at least a corporation of the State of Pennsylvania. The-questions to be decided, therefore, are :
1. Is the Pittsburg, Eort Wayne and Chicago Railway-Company a corporation of Ohio? 2. If not such corporation, has it the right and power, as a foreign corporation, to own, operate, and maintain its road in Ohio, and for that purpose to use and enjoy the privileges and franchises specified in the information ? We will consider these two-questions in their order.
I. Are the defendants an Ohio corporation?
Their claim is, that the consolidated company, the Pitts-burg, Fort Wayne and Chicago Railroad Company, was an Ohio corporation, and that its chartei', " its franchise to be," or right of existence, has passed to, or become vested in the defendants, by virtue of the deed made under the act of April 4, 1868. Unless this act, and the deed made under it, are sufficient and effectual so to transfer or vest the charter of the consolidated conqpany, it is quite unnecessary to inquire whether that company was, or is, a legal corporation of Ohio, and we are saved the necessity of considering the various questions made and argued by counsel, touching the legality of the consolidation, and of the proceedings preliminary and antecedent thereto.
Assuming, then, for the present, what I believe to be the fact, that the Pittsburg, Fort Wayne and Chicago Railroad Company was an Ohio corporation, did its charter pass to or vest in the defendants, by virtue of the deed and act of 1868, and thus constitute the defendants, or rather thus constitute the Pittsburg, Eort Wayne and Chicago Railway Company, an Ohio corporation?
That a corporation can, when authorized by law so to do, transfer, sel!, or convey its charter or franchise to be a corporation, and thus vest it in others, seems to be quite well settled by judicial decisions. And we have no objections to make to this proposition of law, except it may be to the form of stating it. The real transaction in all such eases of transfer, sale, or conveyance, in legal effect, is nothing more or less, and nothing other, than a surrender or abandonment of the old charter by the corporators, and a grant de novo of a similar charter to the so-called transferees or purchasers. To look upon it in any other light, and to regard the transaction as a literal transfer or sale of the charter, is to be deceived, we think, by a mere figure or form of speech. The vital part of the transaction, and that without which it would be a nullity, is the law under which the transfer is made. The statute authorizing the transfer and declaring its effect, is the grant of a new charter, couched in few words, and to take effect upon condition of the surrender or abandonment of the old charter; •and the deed of transfer is to be regarded as mere evidence of the surrender or abandonment. According to our understanding of the eases cited by counsel for the defendants, in support of the doctrine of the transferability of such •charters, this is the view entertained, wherever the courts have spoken directly of the legal effect of such conveyances. And such seems to be the view taken by counsel themselves. Eor they say, among other things: "If the corporators ('of the old company') 'saw fit, nobody would -question their right to dissolve the old corporation and surrender their franchise to the state, and no question could be made of the right of the state, by a general law, to provide for conferring it upon the purchasers of their property." And the counsel add: "That is what, in effect, is done by this act," the act of 1868. We agree to this propo•sition of counsel, with a single proviso. We think, with them, that " that is what, in effect, is done," provided anything is constitutionally and effectually done.
In other words, the legislature of Ohio, by the act of 1863, have granted to the defendants a charter of incorporation, similar to that held by the Pittsburg, Fort Wayne and Chicago Railroad Company, provided the legislature, at the date of the act, had constitutional power to grant such-a charter, and provided the requirements of the act have-been complied with by the parties. It matters not if we regard the charter granted as identical with the one surrendered — a something which really passes from the old or defunct corporation into the hands of the legislature, and thence to the new organization. There must be at the time-constitutional power in the legislature, not only to receive-but also to reissue the charter. It must pass through legislative hands, before it can take life in a new organization. It comes into their hands the work and offspring of the old constitution, but it goes out again, if at all, as the work and offspring of the new one, and subject to all its-requirements and limitations.
By the present constitution of Ohio, the power of the-legislature to grant charters of incorporation is subjected to important limitations, which did not exist under the constitution of 1802. One of these is, that the grant must be made by a general law; another is that the charter must be subject to alteration and revocation by the legislature; and a third is, that the grant must be made in some such form as will subject the stockholders to individual liability, to-at least a certain extent, for the debts of the corporation. The claim upon the part of the state is, that the act of April 4, 1863, is in violation of these several provisions of' the constitution; or, if the act will admit of a construction consistent with these provisions, then the claim is that the provisions and requirements of the act, taken in their proper and constitutional sense, have not been conformed to - by the parties.
We have no hesitation in holding that the act of 1863 is not liable to the objection that it is a " special act." It is a. "general law," in our judgment, within the meaning of article 1, section 2, of the constitution. In so holding we merely repeat, in substance, what has been heretofore decided by this court in Cricket v. The State, 18 Ohio St. 9; Welker v. Potter, 18 Ohio St. 87.
The objection, that if the defendants did thus acquire a charter under the act of 1863, that charter would not be subject to alteration or repeal, has, in effect, been answered in what is said above. If the charter thus acquired is to be regarded in law as identical with the charter of the reorganized company, and not as a new charter issuing directly from the legislature; and if, in like manner, the charter of the reorganized company is to be regarded not as a legislative graut made to it, but as a grant directly from the original companies so consolidated, then it may be true that the charter would be unalterable and irrevocable, and the act of 1863 be unconstitutional on that ground. But, as we have already said, such is not the law of the case; and the charter, if so vested, would remain, as other charters granted under the present constitution, liable to amendment and repeal by the legislature.
But the trouble in defendants' case arises when we attempt to reconcile their claim that the}7 are an Ohio corporation under the act of 1863, with the third-named limitation in the constitution — the limitation in regard to individual liability. Under the present constitution the legislature are powerless to grant a charter to any such corporation, unless the grant is made in a form that will secure the individual liability of its stockholders for the debts of the corporation, at least to the amount of their stock over and above their subscription. This liability may be secured by an express provision in the act of incorporation. Where it is to exceed the amount of the stock, it must be secured in that form. In the absence of any such provision in the act of incorporation, I presume this provision of'the constitution would enter into, and form .part of the act of incorporation, and to that extent execute itself. In either case, however, the act of incorporation, the grant of the charter, must be in some such form as will secure this liability. It must require of the individuals availing themselves of its provisions some acts as such, under and in pursuance of it, as will subject them individually to its provisions, or to this provision of the constitution in regard to liability. If it fails to do this, it is simply unconstitutional and void.
The act of 1863, under which the defendants claim title, contains no provision imposing liability upon individuals who may become stockholders under it. Whether the act, properly interpreted, does or does not require of the persons becoming incorporated under its provisions, acts or proceedings which will secure their individual liability as stockholders, is totally immaterial to the present ease. Because, if it is to be interpreted as requiring such acts — namely, an organization of individuals under the act, such as is required by the act of April 11, 1861; a deed to be made to, and accepted by them, or a taking of stock by them in the company thus organized — then the defendants have put a wrong interpretation upon the act, and have failed to comply with its provisions. On the other hand, if they have rightly interpreted the act, then the act itself is unconstitutional and void, for the want of adequate provisions to secure the individual liability of stockholders becoming incorporated under its provisions. I presume it is not claimed on behalf of defendants that they have done any act, by way of organization, the taking of stock, or the acceptance of the deed made under the act of 1863, which subjects them, as individuals, to any liability whatever beyond that'incurred by becoming members of the foreign company. They never organized under the Ohio acttheir organization was complete before it was passed. They took no stock under the Ohio act; their stock had already been taken under the Pennsylvania act. Nor was the deed made to, or accepted by them; it was made to, and accepted by the corporation, of which they were members. As such corporation it had no power, by any act whatever, to pledge the individual liability of its stockholders. - The powers of a corporation are limited to-the common property and common interests of the organization. Over these, and within the scope and purpose of its organization, a majority of its members, acting through and by its officers and agents, can exercise dominion and control, and bind its individual members. Beyond this-common fund, and outside this scope, the corporation, as such, is powerless to bind its individual members. In some cases it has been found very difficult to determine the exact line between what may be done by a majority of the corporators, thus acting by and through common agents, and what can only be effected by the individual consent of each and all; but no difficulty of the kind can occur in solving questions of individual liability. There the line is distinctly drawn and marked. The contract by which he becomes' such member fixes the boundary between the interests of the stockholder and those which are embarked in the common enterprise, and thus subjected to the common control. And this contract, be it express or implied, must be interpreted in the light of the law as it existed at the time, and under which the organization is had. The private interests and rights of the stockholder, not by this contract, or some subsequent individual act of his, placed in the common fund, or subjected to the corporate control, are as completely outside the reach and power of the corporation as-are the property and rights of strangers.
The element of individual liability must be ingrafted upon the stock by the law under which the organization, is had, or the stock is taken, and by virtue of that organization or taking, or else by some subsequent individual assent of the stockholder; otherwise he stands liable for no more than the amount which, by his contract with the company, he has agreed to contribute to the common fund.
In this view of the case, it plainly follows, that the defendants have not become members of an Ohio corporation, created under the present constitution of the state, for the reason that they have never subjected themselves to the individual liability which it imposes on stockholders, and which it makes an indispensable element in the creation of all such corporations. Either the defendants have misinterpreted the act of 1863, and wholly failed to conform to its provisions, or, if they have rightly interpreted it, as authorizing the bestowment of a charter upon a foreign corporation, without securing any individual liability of its stockholders, then the act itself is unconstitutional aud void. In either alternative the defendants are no legal corporation of Ohio. It is unnecessary, therefore, to inquire whether their charter as a corporation of Pennsylvania, gives them authority, as such corporation, to accept an additional charter from another state; or whether, if they have such authority, it is competent for another State, not having a constitution like ours, thus to grant them a second charter — that is, to make the grant directly to the corporation, eo nomine, and not to the individuals composing it. If we concede both the authority to accept a second and foreign charter, and the general power of another state in this manner to make the grant, it is enough for the present case to say, that the power in question has been denied to the legislature of Ohio by her present constitution.
II. The second general question involved is, whether the defendants, as a foreign corporation, have the right, by the present laws of Ohio, to enjoy, exercise, and use the franchises and privileges specified in the information, other than that of being an Ohio corporation. That is to say, has the Pittsburg, Fort Wayne and Chicago Railway Company, under the present laws of Ohio, accorded to it the right to own, operate, and maintain its road in and through the state, including the right to condemn and appropriate private property to its use, the right of being a common carrier for reward, and the right to lease its road under the act of March 19, 1869? We answer this question in the affirmative; and we need, perhaps, add but little more. In American Bible Society v. Marshall, 15 Ohio St. 541, this court held, that a foreign corporation might purchase and own real estate in Ohio, when not forbidden by express legislation, or the general policy of the law. The ownership of such property implies its use by the owner, and the nature of the use is to be determined by the nature of the property itself. There is not only no law of Ohio prohibiting the ownership and use of railroads in the state by foreign corporations, and no public policy of the state to be contravened thereby, but there is abundant legislation directly to the contrary. The legislation brought in review by this agreed statement in this case, abundantly shows that the policy of the state has been, and is, not only to permit, but to invite and encourage such ownership and use, and to place foreign companies, in this respect, on a .perfectly equal footing with domestic companies. It would be strange were it otherwise. To invite their co-operation, in works of great public concern, and then discriminate against them, in point of right to use and enjoy their property in the state, would not only be unjust to them, but unwise for the state. If any discrimination does exist, it is in regard to the power of condemning and appropriating private property to the use of the roads. In this case we find what we construe to be an express grant of that power. The Pennsylvania act incorporating the defendants gives them power to condemn and appropriate private property; and by section 7 of our act of April 11,1861, it is provided, that "'a corporation of another state possessing part of a railroad which is partly in such other state, and partly within this state, may exercise and enjoy within this state all its powers, privileges, faculties, and franchises, for the purpose of said railroad and its business, not inconsistent with the laws of this state and the provisions of said act." This provision clearly gives the right to condemn and appropriate private property in Ohio, to all railroad corporations of other states, which have the power of condemnation and appropriation given them in their charters of incorporation, and whose roads lie partly within this state.
It follows that a judgment of ouster will be entered against the defendants as to the franchise of being a corporation of Ohio, and a judgment in their favor as to the other franchises and privileges which they are so charged with usurping.
Judgment accordingly
West, J., having been of counsel, did not sit in this case.