him. True, the fundamental laws were adopted by the board of directors, and provided for their own amendment by the board; but, as amendment was prohibited by the articles of incorporation, it is clear that the board could not give itself power of amendment.

rights.

Appellant's contention that a board of directors has inherent power to make by-laws is answered by what has already been said. If its powers are limited by the articles 2. SAME: vested of incorporation, that limitation is valid and binding, and under its inherent power it cannot destroy the rights of either its members or of third persons. It may regulate or control the exercise of these rights, perhaps; but it cannot destroy them. By-laws of a business corporation are primarily for its internal government and management, and cannot be adopted for the purpose of changing the nature of the business, or of depriving members of their fundamental rights. These by-laws, so-called, which fixed defendant's rights and liabilities to its members, were and are of necessity fundamental laws, no matter what they may be called, and in this case it so happens that they are called "fundamental laws." If these were not fundamental laws, we do not know to what the articles of incorporation refer. Power to change these was expressly prohibited in the articles of incorporation. Citation of authorities is hardly necessary in support of these propositions; but we may refer to the following as more or less in point: Sieverts v. Association, 95 Iowa, 710; North Co. v. Bishop, 103 Wis. 492 (79 N. W. 785, 45 L. R. A. 174); Ireland v. Globe Co., 19 R. I. 180 (32 Atl. 921, 29 L. R. A. 429, 61 Am. St. Rep. 756); State v. Ferguson, 33 N. H. 424; Morawetz on Corp. section 499.

One other point may be noticed. The fundamental laws provide that they cannot be amended, except by a twothirds vote of the members of the board. It does not appear that the substitute or proposed amendment received the necessary two-thirds vote. This

3. BY-LAWS:

amendment.

in itself would be fatal to appellant's contention; but, aside from this, the change in the fundamental laws was not so made as to affect plaintiff's right to recover under the terms of his certificate and the fundamental laws as they existed when that certificate was issued.

The judgment allowing plaintiff the amount promised in his benefit certificate is correct, and it is affirmed.

WATERLOO AND CEDAR FALLS RAPID TRANSIT Co., Appellant, V. THE BOARD OF SUPERVISORS OF BLACKHAWK Co. ET AL., Appellees.

Taxation: STREET AND INTERURBAN RAILWAYS. Where the same company owns and operates a street railway in each of two neighboring cities and also a connecting interurban line, the cars of which are run over portions of the tracks of the street railways and the properties are otherwise used in common, the entire system constitutes an interurban railway for the purpose of taxation and will be assessed as a whole by the Executive Council.

Appeal from Blackhawk District Court.- HON. FRANKLIN C. PLATT, Judge.

WEDNESDAY, JULY 11, 1906.

SUIT in equity to enjoin defendants from enforcing the collection of taxes levied by the executive council of the state upon plaintiff's street railway in the cities of Waterloo and Cedar Falls. A demurrer to the petition was sustained, and plaintiff appeals.- Affirmed.

Chas E. Pickett, for appellant.

S. T. Mears and A. B. Lovejoy, for appellees.

DEEMER, J.- This case involves a construction of sections 2033a, 2033b, and 2033c, of the Supplement to the Code of 1897, which so far as material read as follows:

Section 2033a. Any railway operated upon the streets of a city or town by electric or other power than steam, which extends beyond the limits of such city or town to another city, town, or village, or any railway operated by electric or other power than steam, extending from one city, town, or village, to another city, town, or village, shall be known as an interurban railway, and shall be a work of internal improvement.

Sec. 2033b. The words railway, railway company, railway corporation, railroad, railroad company, and railroad corporation, as used in the Code and acts of the General Assembly, now in force or hereafter enacted, are hereby declared to apply to, and include, all interurban railways, and all companies or corporations constructing, owning or operating such interurban street railways, and all provisions of the Code, and acts of the General Assembly, now in force or hereafter enacted, affecting railways, railway companies, railway corporations, railroads, railroad companies, and railroad corporations, are hereby declared to affect and apply in full force and effect to all interurban railways, and to all interurban railway companies or railway corporations constructing, owning or operating such interurban railways.

Sec. 2033c. Any interurban railway shall, within the corporate limits of any city or town, of any city acting under a special charter, upon such streets as it shall use for transporting passengers, mail, baggage, and such parcels, packages, and freight as it may carry in its passenger or combined baggage cars only, be deemed a street railway, and be subject to the laws governing street railways.

Material to our injury are the following facts taken from the petition. In 1855 the Waterloo Street Railway Company constructed a street railway in the city of Waterloo. The cars were propelled by animal power. It was operated as such railway until 1896, when plaintiff having acquired the franchise and property equipped it as an electric street railway, the city having, by appropriate ordinances, granted it the right to do so. Several years prior to 1897, the Cedar

Falls & Northern Railway Company built a street railway in the city of Cedar Falls. Upon this system the cars were propelled by gasoline engines. In 1897 plaintiff acquired the franchise and property of that corporation, and the city, having granted it the right, equipped it as an electric street railway. In 1898 plaintiff built an interurban line between. Waterloo and Cedar Falls, a distance of about six miles. At the time of the construction of the interurban line from Waterloo to Cedar Falls, the plaintiff, for the purpose of equipping its interurban system separate and independent from its local street railway system in Waterloo, constructed a line known as the "Mulberry Street Line" for the exclusive use of its interurban cars, so that in coming into the city of Waterloo the interurban cars are required to pass over only three blocks of plaintiff's local system before reaching the said Mulberry Street line, and after leaving the said Mulberry Street line only about two blocks over the local line in reaching its terminals. In 1901 plaintiff built an interurban line between Waterloo and the village of Denver, in Bremer county. The interurban cars from this line pass over one block of plaintiff's local lines before reaching the Mulberry Street line, and about two blocks after leaving it in reaching its terminals. The three blocks of local line thus used by the Denver interurban cars are the same as those used by the Cedar Falls interurban cars. For the further purpose of equipping its interurban lines distinct and independent from its local street railway lines, plaintiff constructed a belt line from a point outside of the residence district of the city, and of the then city limits, around a portion of the city, entering the city over the right of way of the Chicago & Great Western Railway, for the purpose of transporting all of its in and outgoing freight thereover, so that none of its freight would pass over its lines in the city of Waterloo. The total length of plaintiff's local street railway lines in Waterloo traversed by all of its interurban cars at the time of the assessment complained of was one thousand

nine hundred and forty-four feet, and in the city of Cedar Falls, two thousand nine hundred and ninety-five feet. Plaintiff has, and operates, in Waterloo and Cedar Falls fifty thousand two hundred and thirty-nine feet, or about nine and one-half miles of street railway which are not touched or traversed by its interurban cars. On these plaintiff runs passenger cars such as are ordinarily used for city passenger service. On the interurban lines it runs what are ordinarily known as "interuban cars"; that is to say, cars larger in all respects and differently constructed than cars used exclusively for city passenger service. The local lines in Waterloo and Cedar Falls are used and operated strictly and solely for local street railway purposes without reference to the interurban system of the plaintiff, and independent of plaintiff's interurban lines, and are operated just as they had been before the construction of the interurban lines. These local lines do not extend beyond the limits of either of said cities, but are entirely within the corporate limits, and are run and operated under ordinances granting plaintiff the right to construct street railway systems in said cities. Plaintiff keeps a separate and distinct record of the business done on its local street-car system and its interurban lines, and the same are managed and treated by plaintiff as separate and distinct systems. The only connection, if such it may be called, according to plaintiff's petition, between plaintiff's local street railway systems as aforesaid and its interurban lines, is that transfers are given to passengers coming into the city of Waterloo or the city of Cedar Falls, by which a passenger can be transferred to a local line, and be carried to his destination, and transfers are given passengers on the local system who desire to be transferred to the interurban lines, and carried as aforesaid to the city limits.

It is contended that the local street railway systems are not a part of the interurban system, that the same are not subject to assessment by the executive council, but should be listed and assessed in the assessment district where situated,