even though the new corporation's charter is made subject to legislative changes. 28 But provisions in the railway law of Michigan of 1873, for the creation of a new corporation upon the reorganization of a railroad by the purchaser at a foreclosure sale, are held not to constitute a contract within the impairment clause of the Constitution of the United States." So the authority conferred by acts of the legislature of New York 30 upon purchasers at a foreclosure sale of a railroad, to organize a corporation to receive and hold the purchased property, creates no contract with the State. The imposition under the provisions of the act of the legislature of New York of 1886,31 of a tax upon a corporation so organized after the passage of that act by purchasers who purchased at a foreclosure sale made before its passage, for the privilege of becoming a corporation, violates no contract of the State and is no violation of the Constitution of the United States.32 A provision in an act for the reorganization of an embarrassed corporation, which provides that all holders of its mortgage bonds who do not, within a given time named in the act, expressly dissent from the plan of reorganization, shall be deemed to have assented to it, and which provides for reasonable notice to all bondholders, does not impair the obligation of a contract, and is valid.33 § 330. Obligation of Contract-Franchises Expiring at Different Times-Extension of Franchise-Reservation of Power to Amend or Repeal.-Ordinances granting an extension to a consolidated street railway corporation, possessing franchises expiring at different times, on conditions involving great expense to the corporation and resulting in substantial benefits to the public as to transfers for single fares and re 28 Ball v. Rutland R. Co. (C. C.), p. 547, as amended by act June 2, 93 Fed. 513. 1876, chap. 446, p. 480. 29 Grand Rapids & Ind. Ry. Co. v. Osborn, 193 U. S. 17, 48 L. ed. 598, 24 Sup. Ct. 310. 30 Act May 11, 1874, chap. 430, 31 Act April 16, 1886, chap. 143. 32 Schurz v. Cook, 148 U. S. 397, 13 Sup. Ct. 645, 37 L. ed. 498. 33 Gilfillan v. Union Canal Co., 109 U. S. 401, 27 L. ed. 977. lating to the entire system as well as the extensions granted, and provided that the right granted terminate with the then existing grants of the main line at a specified date later than that of termination of some of the franchises, amount, on the acceptance by the company and compliance with the conditions, to a contract within the protection of the impairment clause of the constitution extending the various franchises to that date; the period, in this case of four years, not being an unreasonable one in view of the substantial benefits accruing to the public.34 Under another decision it appeared that the Citizens' Street Railway Company of Indianapolis was organized in 1864 under an act of the legislature of Indiana of 1861, authorizing such a company to be “a body politic and corporation in perpetuity." January 18, 1864, the common council of that city passed an ordinance authorizing the company to lay tracks upon designated streets, and providing that "the right to operate said railways shall extend to the full time of thirty years," during which time the city authorities were not to extend to other companies privileges which would impair or destroy the rights so granted. In April, 1880, the common council amended the original grant "so as to read thirty-seven years where the same now reads thirty years." The company, desiring to issue bonds to run for a longer period than the thirty years, had, for that purpose, petitioned the common council for an extension to forty-five years. The city government was willing to extend to thirty-seven years, and this was accepted by the company as a compromise. On the 23d of April, 1888, the road and franchises were sold and conveyed to the Citizens' Street Railroad Company, which sale and transfer were duly approved by the city government. December 18, 1889, a further ordinance authorized the use of electric power by the company, and provided how it should be applied. In accordance with its provisions the company, at great expense, built a power house, and changed its plant to an electric system. In April, 1893, the city council, claim34 Cleveland v. Cleveland Electric 854, 26 Sup. Ct. 513, aff'g 135 Fed. Ry. Co., 201 U. S. 529, 50 L. ed. 368. ing that the rights of the company would expire in thirty years from January 18, 1864, granted to another corporation called the City Railway Company the right to lay tracks to be operated by electricity in a large number of streets then occupied by the tracks of the Citizens' Street Railroad Company, whereupon a bill was filed in the Circuit Court of the United States by the street railway company, to enjoin it from interrupting or disturbing the railroad company in the maintenance and operation of its car system, alleging that the action of the city council sought to impair, annul and destroy the obligation of the city's contract with the plaintiff. It was held that the Circuit Court had jurisdiction, although both parties were corporations and citizens of Indiana; that the right of repeal reserved to the legislature in the act of 1861 was not delegated to the city government; that the circumstances connected with the passage of the amended ordinance of April 7, 1880, operated to estop the city from denying that the charter was extended to thirty-seven years; that the continued operation of the road was a sufficient consideration for the extension of the franchise; that the citizens' company had a valid contract with the city which would not expire until January 18, 1901, and that the contract of April 24, 1893, with the City Railway Company was invalid. But no opinion was expressed whether complainant was entitled to a perpetual franchise from the city.35 In another case, however, it is determined that where the legislature grants to a city comprehensive power to contract with street railroad companies with regard to the use of its streets and length of time, not exceeding twenty-five years, for which such franchise may be granted, the action of the city council of such city, and the acceptance by a street railway company of various ordinances adopted by the council do not amount to a contract between the city and the company extending the time of the franchise, and a 35 City Ry. Co. v. Citizens' Street R. R. Co., 166 U. S. 557, 41 L. ed. 1114, 17 Sup. Ct. 653. Examine Blair v. City of Chicago, 201 U. S. 400, 50 L. ed. 801, 26 Sup. Ct. 427, rev'g Govin v. City of Chicago, 132 Fed. 848. later ordinance affecting that franchise after its expiration as originally granted is not void under the impairment clause of the Federal Constitution.36 But even though an ordinance extending a franchise may be construed as a contract it is still subject to the control of the legislature if the constitution of the State then in force provides that no irrevocable or uncontrollable grant of privileges shall be made and that all privileges granted by the legislature, or under its authority, shall be subject to its control; nor is the legislature deprived of this control because the contract was not made by it but by a municipal corporation, as the latter is for such purpose merely an agency of the State.37 If a statute reserves the power to amend or repeal charters or grants, unless a contrary intent therein is plainly expressed such provision embraces extensions of original charters or grants as well as those granted after such enactment.38 § 331. Obligation of Contract not Impaired-Consolidation of Corporations-Reservation of Power to Alter or Repeal.-In the Pennsylvania College Cases" it appeared that the legislature of Pennsylvania chartered a college "at Cannonsburg," by name of the Jefferson College, "in Cannonsburg," giving to it a constitution and declaring that the same should "be and remain the inviolable constitution of the said college forever" and should not be "altered or alterable by an 37 San Antonio Traction Co. v. Altgelt, 200 U. S. 304, 50 L. ed. 491, 26 Sup. Ct. 261. 38 Northern Bank of Kentucky v. Stone, 88 Fed. 413, aff'd Stone v. Bank of Kentucky, 174 U. S. 799, 43 L. ed. 1187, 19 Sup. Ct. 881, by a divided court, and cited in Bank of Kentucky v. Kentucky, 207 U. S. 258, 266, 267, which holds that a judgment against a county of Ken tucky and the members of the state board of valuation restraining the collection of taxes of that county as impairing the obligation of a contract created by a law of the State and within the protection of the Federal Constitution is not, because such state officers were parties, res judicata to the validity of taxes imposed by another county, nor is such other county privy to the judg ment. 39 13 Wall. (80 U. S.) 190, 20 L. ed. 550. ordinance or law of the said trustees or in any other manner than by an act of the legislature" of Pennsylvania. The college becoming in need of funds put into operation a plan of endowment whereby in virtue of different specific sums named, different sorts of scholarships were created; one, ex. gr., by which on paying $400 a subscriber became entitled to a perpetual scholarship, capable of being sold or bequeathed; and another by which on payment of $1,200 he became entitled to a perpetual scholarship, entitling a student to tuition, room rent and boarding; this sort of scholarship being capable, by the terms of the subscription, of being disposed of as other property. But nothing was specified in this plan as to where this education, under the scholarships, was to be. On payment of the different subscriptions, certificates were issued by the college, certifying that A. B. had paid $- --, which entitled him "to a scholarship as specified in plan of endowment adopted by the trustees of Jefferson College, Cannonsburg," etc. An act of the legislature, in 1865, by consent of the trustees of the college at Cannonsburg and of the trustees of another college at Washington, Pennsylvania, seven miles from Cannonsburg, created a new corporation, consolidating the two corporations, vesting the funds of each in the new one, and in their separate form making them to cease, but providing that all the several liabilities of each, including the scholarships, should be assumed and discharged without diminution or abatement by the new corporation. Notwithstanding the act of assembly, the collegiate buildings, etc., of Jefferson College were left at Cannonsburg, and certain parts of the collegiate course were still pursued there; the residue being pursued at Washington College, Washington. Subsequently, in 1869— the then existing constitution of Pennsylvania (one adopted in 1857, allowing the legislature of the State "to alter, revoke, or annul any charter of incorporation thereafter granted, whenever in their opinion it may be injurious to the citi* * in such manner, however, that no injustice shall be done to the corporators") being in force-a supplement to this act of 1865 was passed, "closely uniting" the zens * |