Court Opinion

ID: 6601553
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:08:07.356283+00
Date Added: 2024-06-11T15:58:02.057335
License: Public Domain

Cole and Lyon, Justices,
concurring, an order was made by the court, on the 15th day of September, in accordance with the foregoing opinion. Afterwards the attorney general moved to vacate so much of said order as excepted from the injunction *597thereby directed to issue, the railroad of the Chicago, Milwaukee & St. Paul Railway Company extending from Milwaukee to Prairie du Ohien. The substance of the affidavits used at the hearing of this motion is stated in the opinion, infra.
I. C. Sloan, Assistant Attorney General, for the motion.

John W. Cary, contra,

argued that the action of the commissioners named in the act of 1847, in calling a meeting in pursuance of the charter, meeting and organizing by the election of a president and secretary, directing books to be opened for subscriptions to the capital stock of the company, opening said books, and procuring an amendment to the charter by which they were declared a railroad company, was an acceptance of the charter, by which it became a valid contract and irrepeala-ble. An acceptance of a charter is presumed when the grant is beneficial; and certainly any act showing an intention to act under the charter is sufficient. But in this case there was a regular organization, and the commissioners became a legal body capable of acting. Grant on Corp., 13-18.; A. & A. on Corp., §§ 81-83; State v. Dawson, 16 Ind., 40. 2. That the act of March 11, 1848, recognized and declared this organized body a company by the name of the “Milwaukee & Wauke-sha Railroad Company.” After such declaration and recognition, the state cannot question their organization as a corporation. The Black River & Utica R. R. Go. v. Barnard, 31 Barb., 258: 9 Wend., 380; 3 Corns., 470. 3. That, admitting the company not to have been declared or recognized as a corporation by the charter and its amendment in 1848, a.n'd that there had been no acceptance or organization under it until the constitution took effect, still the charter was not repealed, nor its provisions in any manner amended or affected by the constitution. There is nothing in that instrument which purports to amend or affect this or any other charter. Sec. 1, art. XI, is prospective only. It prohibited the passage thereafter of special laws for the creation of corporations, unless the legislature should think that the object of such corporations could not be obtained under general laws. The last clause of the section reserving the right to repeal and alter is expressly limited to general laws or special acts “ enacted under the provisions of this section.” The charter of the road in question was not enacted under the provisions of that section, and is not subject to its provisions. State of Ohio v. Boosa, 11 Ohio St., 16 : Citizens' Bank v. Wright, 6 id., 318; Statutes of Ohio, 1849-50, 284'. This court has already held the same doctrine as to the amendment of 1871 — that its application is restricted not only to future legislation, but to such legislation affecting new corporations, and that it does not apply to existing corporations. 4. That the state, in all subsequent acts amending this charter, has recognized the corporation as formed and existing under the territorial charter of 1847. 5. That § 15 of the “ act concerning corporations,” found on p. 148, Terr. Stats, of 1839, which provided that acts of incorporation thereafter passed should “ at all times be subject to amendment, alteration or repeal at the pleasure of the legislature,” has no bearing upon the question at issue, because it was repealed by the statutes of 1849, ch. 157. The repeal of that statute left the law the same as if it never existed. -Potter’s Dwarris, 160 ; Sedgw. Con. & Stat. Law, 129, 430. Since such repeal the charter stands as if that provision of the general law had been incorporated into the charter, and had been subsequently stricken out. It stands as an unqualified grant of the territorial legislature, without any reserved power. It is not the case of the repeal of one statute and the enactment of the same statute by the repea ling-act or by a simultaneous act; for no similar statute has ever been enacted by the state legislature, and the clause of the constitution relied upon has no relation to acts of the territorial legislature. 6. That section 20 of the charter of 1847, which provides that “ in case of violation by the company of any of the provisions of this act, the legislature of the territory or state of Wisconsin may resume all and singular the rights hereby granted to said company,” operated as a repeal prc ■tanto of § 15, p. 148 of the territorial statutes of 1839. Mayor ■etc. of Baltimore v. R. R. Oo., 1 Abb. (U. S.), 9.
The motion was granted, and the following opinion filed, on •the 29th day of September:
Ryan, 0. J.
In passing upon the principal motion of the •attorney general for an injunction against the defendant, we •excepted from the writ then allowed, the railroad of the defendant from Milwaukee to Prairie du Ghien, built under the ■territorial charter of 1847-1848. There was then no evidence before us of the time when the Milwaukee & Waukesha Railroad Company was organized under that charter. But we held that, in the circumstances, and especially because there seemed ■to be a recognition of the corporation as organized in the territorial act of 1848, there was a presumption that the' charter was accepted and the corporation organized before the adoption •of the state constitution. But there was sufficient doubt of the actual fact to induce us to give leave to the attorney gen•eral to renew his motion so as to include that road in the injunction, if he should be so advised.
He has accordingly made this motion, and in support of it he produces a certified copy of the statement of subscription .and payment of capital stock, required by sec. 2 of the charter of February 11, 1847, dated April 5, 1849, and filed, as the section .'required, with the treasurer of Milwaukee county, in the same month ; and also an affidavit of the election of the first board • of directors, May 10, 1849.
This is conclusive of the fact that the charter was accepted .and the corporation organized many months after the adoption ■ of the constitution and the admission of the state into the Union by congress. It would have saved great trouble had . the attorney general presented the fact on the first motion.
It is true that the defendant has filed an affidavit showing .that, as early as November, 1847, and from thence till the or*600ganization of the corporation in 1849, action was taken bj the commissioners appointed by the charter to receive subscriptions to the capital stock of the proposed corporation, who elected a president and secretary, and opened books of subscription to the stock, and caused application to be made to the territorial legislature for the supplementary act of March 11, 1848, all tending towards the organization of 1849. The affidavit states-that by' April 5, 1849, the necessary subscriptions and' payments were made, but it does not state that aDy subscription was made before the establishment of the state government.
We do not think that these statements touch the conclusion to which we have come. The proceedings led up to the acceptance of the charter, but could not, by the terms of the-charter, operate as an acceptance of it. Even if it had appeared-that there were subscriptions to the stock before the-territory had become -a state, such subscriptions, short of $100,000, required by the charter, could give no right to the subscribers to accept the charter. The terms of the charter expressly exclude such a right. The charter prescribes the-conditions of acceptance. It gives no such right - to the com- ‘ missioners. They were only officers of the territory to fulfill a given function. And it gives no such right to the subscribers, until they should have subscribed the entire capital stock and made certain payments towards it. Then, and then only, the-charter confers on them the right of acceptance, in the manner which it provides; that is, by filing the very certificate of April 5, 1849. On and by the domg of that, the charter declares that the subscribers should be created a corporation. And thereupon an election of directors should be had, until which the commissioners should act as directors. There may be some doubt when the corporation actually came in esse, whether on the filing of the statement or on the election. Putnam v. Sweet,. 1 Chandler, 286. That question is not material here. It is very certain that, by the terms of the charter, it was accepted by the making or the filing of the statement, and not before.
*601"We have been referred by the defendant’s counsel to some authorities holding that acceptance of a charter applied for, or beneficial to the corporators, may be presumed; and that, in similar cases, slight acts of the corporators looking towards acceptance are sufficient to establish it. But these authorities relate to charters naming the corporators and declaring them incorporated, without preliminary steps, ipso facto, by force of the charter. These rules have no application to charters not naming the corporators, and prescribing conditions and formalities by which indeterminate persons may become incorporated. We take the distinction to be correctly stated by Angelí & Ames, § 83: “ A corporation created by statute which requires certain acts to be done before it can be considered in esse, must show such acts to have been done, to establish its existence ; but this rule does not apply to corporations declared such by the act of incorporation.”
Such a charter is held to be a contract between the political body granting it, and the corporators under it. The territory of Wisconsin proffered such a contract by the charter in question. So proffered, it remained a mere proposal, in fieri, until accepted according to its terms. Who could accept it? Not the commissioners, as we have seen. Only the subscribers. When could they accept it? Only upon subscription of the full amount of capital stock. How could they accept it ? By making and filing the statement of subscription. And the commissioners could do no act, at any time, tending to prove acceptance, because they had no right to accept. And the subscribers could do no act tending to prove acceptance, before subscription of the whole capital stock; because, until then, they had no right to accept. Such evidences of acceptance as the defendant relies on, must be accompanied by a present right to accept, or they go for nothing.
The territorial charter remained a naked, unaccepted proposition until April 5, 1849, long after the territory had ceased and the state was in existence.
*602The defendant, however, insisted that, be this as it might, the territorial act of March 11, 1818, recognized the corporation as organized ; and that therefore it is not competent for the state now to question its organization prior to the passage of that act. The act of 1848 does prima facie imply such a recognition ; but as we said in passing on the former motion, that is not conclusive. That is a matter on which the legislature might well be misled or misinformed. And, even if the act declared in terms that the corporation had then been organized, we cannot see how such a declaration could prevail over the manifest fact, that the corporation was not organized for upwards of a year after. Bat the act contains no such declaration. It is entitled an act supplementary to the original charter, and gives new powers to the corporation authorized by the original charter, giving them throughout to the corporation so authorized, by its corporate name. Without the fact of the subsequent organization, that seems to imply present organization of the corporation. But the language of the act may well go upon either theory, that the legislature understood that the corporation was not organized, or that it was misled into a belief that it was. The use of the corporate name throughout the act does not necessarily imply that the corporation was already in esse. It is quite consistent with the truth that it was still only in posse. And the fact, now appearing, does away with a different presumption of fact, as we held it would do in our former opinion.
Some cases were cited to show that legislative recognition in a subsequent statute of a corporation de facto, will cure irregularities in its organization and waive forfeitures incurred. People v. Manhattan Co., 9 Wend., 351; Railroad Co. v. Barnard, 31 Barb., 258. We do not perceive the application of these eases to aid the view of the defendant. The principle on which they rest appears to us to go the other way. Such recognition has relation to a corporation in esse, waiving irregularity and forfeiture. An act of the legislature relating to a corporation, not creating or authorizing one, may well have the effect of *603condonation, but not of creation. It goes by way of confirmation or release ; and there must be a corporation de facto to be confirmed or to be released. Here there was no corporation de facto to confirm or to release. The inherent trouble of the defendant’s position is, that it goes to contradict an admitted fact, and to give life to a corporation a year or so before it was born.
The attorney general having established the fact, as we now hold it to be established, we signified our intention to confine the further discussion of this motion to the legal effect of the fact on the question of the right of the state to alter or repeal the charter. Two other points were discussed, however, which we shall briefly notice.
It was urged, against the views we had before expressed, that the state statutes authorizing the mortgage of the road built under the territorial charter, and authorizing the purchasers on foreclosure to organize anew with the territorial franchises, operated as a grant from the state of the franchises of the territorial charter. We cannot think so, for the reasons assigned in our former opinion. The franchise is quasi property ; and by whomsoever held, under whatsoever chain of title, is derived from the territorial charter, not from the state statutes. The state statutes did not create it, and do not grant it. They simply authorized the sale and purchase, and the organization by the purchasers of a new corporation, to hold the old franchise, under the old grant. The state statutes are merely enabling acts, conferring no franchise, but only authorizing the transfer of the title to existing franchises. If one purchase under a statute enabling a person, otherwise incompetent, to convey, or enabling a corporation, before unauthorized, to convey, he surely does not take his title from the state; hé takes his title by authority of the state, but he takes it from his grantor. The title of the Milwaukee & Prairie duOhien Company to the franchise was derived from the territorial charter, though so derived and held by permission of the state. The question turns on the title of the vendor, not on the license given to him to *604convey; on the title to the thing purchased, not on the license to the purchaser to hold it. The authority given to the purchasers to organize a corporation to operate the railroad, is very similar to authority given to an alien to hold real estate. Both take the authority from the state, but not the title. All these state enabling acts might be repealed without impairing the franchises of the territorial charter, however the repeal might affect the title to them. We have no doubt of this position ; and we think that it is fairly recognized in Vilas v. Milwaukee & P. du C. R. R. Co., 17 Wis., 497.
It was suggested with much ingenuity that, as the territory was the creature of the United States, the state upon its organization succeeded to the sovereign rights of the United States in the territory, as well those reserved by the United States as those delegated to the territorial government; full sovereignty subject only to the federal constitution; and that, as the organic act of congress reserved to that body the right to annul all acts of the territorial legislature, the state succeeded to that right. We cannot think so. Waiving all question of the sovereign rights of the United States over the territory, the state came into the union “ on an equal footing with the original states in all respects whatever.” The United States derive their powers from the states, not the states theirs from the United States. And though Wisconsin became a constituent of the United States ‘as one born out of due time,’ it is none the less an equal constituent with the original states. On its establishment, it took no governmental rights or powers from the United States, as a state. As a member of the union, it took, in common with all the other states, such rights as the federal constitution confers on the original states, as members-of the union. The sovereignty and rights of sovereignty of this state came from no organized power. They are inherent in and are derived from its people. The power of congress over territorial legislation was an incident to the territorial condition, and lapsed, with the territorial government, when the state *605came into being. The state, ip-so facto, assumed all political authority within its boundaries, not limited or surrendered by the constitution of the United States. And the source of all legislative authority within its bounds must now be found in the state and federal constitutions, and nowhere else.
On the argument of the principal motion, it was not suggested at the bar, and it wholly escaped our attention, that a general act concerning corporations in the territorial revision of 1839 reserved to the territorial legislature power to amend, alter-or repeal all subsequent' acts of incorporation. This act remained in force until the first state revision in 1849, when it, with' many others, was repealed; the repeal to take effect January 1, 1850; with a saving clause, that the repeal should not affect any right accrued under any of the statutes so repealed.
The attorney general has now called our attention to this act. And it was argued that the reserved right to amend, alter or repeal the territorial charter, entered into and became a. part of the contract of the charter, when accepted; and thus became a right accrued, which was not affected by the repeal; that the repeal could not take effect as to the territorial charter, so long as the charter itself remained unrepealed; the reserved power continuing so far to exist, by force of the charter itself, as a contract. These are nice questions, not necessary to the disposition of this motion, and on which we shall therefore not express an opinion.
If the territorial charter be a contract, as is held, it became such only upon acceptance by the corporators. Before that, as already seen, it rested in proposition, to ripen into a contract upon acceptance in the manner which it provided. And being so accepted after the territory had ceased to exist, it never became a contract between the territory and the corporation. The state constitution, as already observed, continued in force all territorial acts not repugnant to it. The charter thus became a statute of the state. And its acceptance, after the organization of the state, so far as it is a contract, makes it mani*606festly a contract with the state. There was then no other public authority or political body with which the corporators could contract. It is either not a contract, or it is a contract with the state.
The state adopted the charter, then a mere statute, not a contract, so far only as it was not repugnant to the constitution. With the reserved power of the territorial act of 1839 entering into it and forming part of it, as a proposition, it was in no way repugnant to the constitution. Without that power, it manifestly was. It is true that the language of sec. 1, art. XI, is expressly prospective. But it is prospective not only as to acts of incorporation, but also as to the formation of corporations. “All general and special acts enacted under the provisions of this section may be altered or repealed and, “corporations may be formed,” etc. The whole section, taken together, signifies clearly, not only that no charters should be passed, but also that no corporations should be formed, not subject to the reserved power. It seems to us quite plain that a territorial charter, not subject to the reserved power, and not yet accepted, was “a law in force in the territory, repugnant to this constitution.” Art. XIY, sec. 2. And the position that its acceptance from the state, after the adoption of the constitution, was an acceptance subject to the reserved power in the territorial act of 1839, and in sec. 1, art. XI of the constitution, is certainly a very strong one. There is high authority for going even further. After saying that a private corporation may forfeit its franchises by misuser or nonuser, Mr. Justice StoiíT says: “ This is the common law of the land, and is a tacit condition annexed to the creation of every such corporation. Upon a change of government, too, it may be admitted that such exclusive privileges attached to a private corporation as are inconsistent with the new government, may be abolished.” Terrell v. Taylor, 9 Cranch, 43. A fortiori may this be said of a, charter passed before and accepted after a change of government. There is indeed some conflict between these views and *607those expressed in State v. Roosa, 11 Ohio St., 16. But we shall not comment on that case, or pursue this consideration further, because we shall not rest our decision wholly on it, as there appears to us to he safer and clearer ground for it to stand upon.
It was quite competent for the state constitution to have repealed all laws of the territory which had not ripened into contracts, under the rule in Dartmouth College v. Woodward, 4 Wheat., 518. So was it competent for it to adopt them. So, also, to adopt them sub modo; This last is what the constitution did. Sec. 1, art. XIY, provides that all rights, actions, contracts, etc., as well of individuals as of corporations, shall continue and be as valid as if no change from territorial to state government had taken place. This provision is in favor of rights.and contracts, and is properly absolute. It might have applied to the territorial charter, if then accepted. Sec. 2 provides that all laws then in force in the territory, not repugnant to the constitution, should remain in force, until they should expire by their own limitation or be altered or repealed by the legislature. This provision has relation to public policy, and is properly subject to absolute legislative control. The distinction is a just one, and is very marked and manifest.
It may be that the territorial laws would have survived the change, without this constitutional provision, as the laws of conquered countries are said to survive conquest. Even in that case, they would have been subject to repeal. But the territorial laws actually survived the change by force of no such principle, but by the express provision of the constitution. That instrument expressly continued them in force, until altered or repealed by the legistature, and no longer. The effect is to render subject to subsequent alteration or repeal, all territorial laws which were then subject to alteration or repeal. This makes all such laws expressly subject to alteration or repeal, the identical words of the reserved power in sec. 1, art. XI. And this use here of the very words used *608there, and the provision for laws expiring by their own. limitation, raise a very strong presumption that sec. 2, art. XIY, has special relation to corporate charters. For there was probably no statute of the territory which would expire by its own limitation, except such charters. Indeed the whole provision for alteration or repeal is nugatory, except so far as it has relation to charter contracts within the Dartmouth College rule; for all other laws would be subject to repeal without any provision for it. The provision was probably intended to take the place of the reserved power in the territorial R. S. of 1839, which, being so replaced, was accordingly repealed in the first state revision in 1849.
We therefore hold that the unaccepted territorial charter of the Milwaukee & Waukesha Railroad Company, till then suR ject to alteration or repeal by the territorial legislature, was continued in force by sec. 2, art. XIY of the constitution, subject to alteration or repeal by the state legislature, just as a charter granted by the state ; and all the positions of our former opinion in regard to state charters apply equally to the territorial charters of 1847-1848.
The present motion of the attorney general must therefore be granted.
By the Oourt. — So ordered.