be formed under general laws, but shall not be created by special act, except for municipal purposes, and in cases where, in the judgment of the legislature, the objects of the corporation cannot be attained under general laws, and reserves the power to alter or repeal from time to time all general laws and special acts passed in pursuance of such provision; a special act may be passed taxing the receipts of a corporation.13 The legislature may also by special act impose restrictions or other burdens upon a railroad; 14 but it cannot deprive a corporation of its property or annul or interfere with its contracts with third persons; 15 and it is also held that the charter of a corporation cannot be amended thereunder. 16 In a case in the Federal Supreme Court it appeared that the constitution of New York, made in 1826, ordained that "corporations may be formed under general laws, but shall not be created by special act except in certain cases;" and also "that all general laws and special acts, passed pursuant to this section, may be altered from time to time or repealed." A statute of New York, passed in 1828, enacted, "that the charter of every corporation that shall be thereafter granted by the legislature shall be subject to alteration, suspension and repeal, in the discretion of the legislature." In this state of things, a general railroad law was passed in 1850, authorizing the formation of railroad corporations with thirteen directors. The formation of a company under this general law being subsequently contemplated, with a capital of $800,000, to build a road fifty miles long, the legislature authorized the city of Rochester to subscribe $300,000 to it, and enacted that if the company accepted the

13

Mayor v. Twenty-Third St. R. Co., 113 N. Y. 311, 22 N. Y. St. R. 958, 21 N. E. 60, aff'g 48 Hun, 552, 16 N. Y. St. R. 137, 1 N. Y. Supp. 295.

"People, Kimball, v. Boston & Albany R. Co., 70 N. Y. 569. Examine Barnes v. Arnold, 45 N. Y. App. Div. 314.

Co., 113 N. Y. 311, 22 N. Y. St. R. 958, 21 N. E. 60, aff'g 48 Hun, 552, 16 N. Y. St. R. 137, 1 N. Y. Supp. 295; People v. O'Brien, 111 N. Y. 1, 19 N. Y. St. R. 173, 18 N. E. 692, rev'g 45 Hun, 519, 10 N. Y. St. R. 596, 27 W. D. 365; People, Gage, v. Lohnas, 54 Hun, 604.

16 Lord v. Equitable Life Assu". "Mayor v. Twenty-Third St. R. Soc., 94 N. Y. Supp. 65, 47 Misc. 187.

subscription, the city should appoint one director for every $75,000 subscribed by it, that is to say, should appoint four directors out of the thirteen contemplated; the other stockholders, of course, appointing the remaining nine. The company did accept the subscription, and the stockholders other than the city subscribed $677,500, but paid up only, $255,000. Then the enterprise for all but eighteen miles of the road was abandoned. The city had paid its $300,000 subscribed. In 1867 the legislature passed another act giving the city power to appoint one director for every $42,855.57 of stock owned by the city; in other words, establishing the same ratio that existed among the subscribers for the stock at the time the original subscription was made. The effect was to give the city seven directors and to leave the other stockholders but six. These last stockholders regarding the act of 1850 as making a contract that they should have nine directors and the city but four, and that the act of 1867 violated that contract, elected their old nine. It was held, on a quo warranto, that the act of 1867 did not, in view of the state constitution and the act of 1828 making charters subject to alteration, suspension and repeal, make such a contract, and that the act of 1867 was constitutional.17 If the life of a corporation is by special charter to continue for sixty years and is not subject to alteration or amendment until after the period of thirty years except in case of a violation of the charter, the expiration of the period of thirty years limits the time before which any amendment or alteration of the charter can be made, even though a general law adopted by the special charter would have permitted an alteration before that period had elapsed; this especially applies where the legislature had not attempted to forfeit or alter said charter within the thirty years.18 If the constitution provides for the alteration or repeal of all general laws and special acts, a railroad corporation whether incorporated under either law is subject to the constitutional provision and cannot claim an impairment of the obli

17 Miller v. State, 15 Wall. (82 U. S.) 478, 21 L. ed. 98.

18 Tripp v. Pontiac & L. Plank Road Co., 66 Mich. 1, 32 N. W. 907.

gation of contract in case of an alteration or repeal of its charter.19

§ 325. Reservation of Right to Repeal-Exemption from Legislative Repeal-Impairment of Obligation of Contracts. Statutory reservations of the right to repeal, unlike similar constitutional provisions, are only binding on a succeeding legislature so far as it chooses to conform to them; and, if it so intends, an irrepealable legislative contract maybe made. It is, therefore, in every case a question whether the legislature making the contract intended that the former provision for repeal or amendment should by implication become a part of the new contract.20 In a Federal case it appeared that on February 14, 1856, the legislature of Kentucky enacted: "That all charters and grants of and to corporations or amendments thereof, shall be subject to amendment or repeal at the will of the legislature, unless a contrary intent be therein expressed." By an act passed January 22, 1869, amending the charter of a gas company which was subject to that provision in the act of 1856, it was enacted: "That said gas company shall have the exclusive privilege of erecting and establishing gas works in the city of Louisville during the continuance of this charter, and of vending coal gas lights, and supplying the city and citizens with gas by means of public works," etc.; it was held that the latter act contained a clear expression of the legislative intent, that the company should continue to enjoy the franchise then possessed by it for the term named in that act without being subject to have its charter in that respect amended or repealed at the will of the legislature."1 The rule, that a special statutory exemption does not pass to a new corporation succeeding others by consolidation or purchase in the absence of express direction to that effect in the statute, is applicable where the constituent companies are

19 Matthews v. Board of Corporation Commrs. of N. C., 97 Fed. 400. 20 New Jersey v. Yard, 95 U. S. 104, 24 L. ed. 352.

21 Louisville Gas Co. v. Citizens' Gas Co., 115 U. S. 683, 29 L. ed. 510, 6 Sup. Ct. 265.

held and operated by one of them, under authority of the legislature. And where a contract which is claimed to have been impaired was made with one of several corporations merged into the complainant, and concededly affects only the property and franchises originally belonging to such constituent company, divisional relief cannot be granted affecting only such property, when the bill is not framed in that aspect but prays for a suspension of the impairing ordinance as to all of complainant's property.22

326. Exemption from Execution-Corporation Grantee of Municipal Waterworks-Obligation of Contract.23_Where a municipality which owned waterworks conveyed them to a corporation, formed for the purpose of maintaining and enlarging them, and received therefor shares of stock, which the statute authorizing the conveyance declared should not be liable for the debts of the city, but should be reserved for the benefit of the holders of the bonds that had been issued by the city to raise the means wherewith to construct the works, such statute does not, by thus exempting those shares from seizure, impair the obligation of any contract, as they merely represent the city's ownership in the waterworks which was, before the enactment of the statute, exempt from seizure and sale under execution.24

§ 327. Exemption-Eminent Domain-Future Legislation-Obligation of Contract.25-There exists no such contract between the State and a railroad company as exempts the latter from the operation of a state constitutional provision, requiring that corporations invested with the privilege of taking private property for public use shall make compensation for property injured or destroyed by the construction or en

22 People's Gas Light & Coke Co. v. Chicago, 194 U. S. 1, 48 L. ed. 851, 24 Sup. Ct. 520.

23 See § 20, herein as to an exemption being a franchise.

24 New Orleans v. Morris, 105 U. S.

600, 26 L. ed. 1184. See Myers v. Moran, 99 N. Y. Supp. 269, 113 App. Div. 427.

25 See § 20, herein, as to an exemption being a franchise.

largement of their works, highways or improvements, where neither the charter of the company nor supplementary acts of the legislature contain such a contract; nor does the constitutional provision, as applied to the company, in respect to cases afterward arising, impair the obligation of any contract between it and the State. Since there was in such case no prior contract with the company exempting it from liability from future legislation in respect to the subject-matter involved, the company took its original charter subject to the general law of the State, and to such changes as might be made in that general law, and subject to future constitutional provisions and future general legislation. Exemption from future general legislation either by a constitutional provision or by an act of the legislature, cannot be admitted to exist, unless it is expressly given, or unless it follows by an implication equally clear with express words.26

§ 328. Reservation of Power to Amend Charters-Supplementary Charter. A statute of a State, which declares that all charters of corporations granted after its passage may be altered, amended or repealed by the legislature, does not necessarily apply to supplements to an existing charter which were enacted subsequently to the statute. Nor does a provision which declares that "this supplement, and the charter to which it is a supplement, may be altered or amended by the legislature," apply to a contract with the corporation made in a supplement thereafter passed.27

§ 329. Obligation of Contract-Mortgaged Franchise or Property - Purchaser - Reorganization of Corporation. Where a new corporation is organized to operate a road, by a mortgagee, who has purchased the franchise to take tolls, the legislature has no power over the franchise so purchased

"Pennsylvania R. R. Co. v. Miller, 132 U. S. 75, 10 Sup. Ct. 34, 33 L. ed. 267, cited on the last point in Pearsall v. Great Northern Ry. Co., 161 U. S. 646, 40 L. ed. 838, 16 Sup. Ct. 705.

27 New Jersey v. Yard, 95 U. S. 104, 24 L. ed. 352. Examine Phoenix v. Trustees of Columbia College, 84 N. Y. Supp. 897, 87 App. Div. 438.