used in the charter of railroads and other simi- | learning was created, which was put comlar corporations. pletely at the mercy of the state legislature. It was not the case of an amendment in an unimportant particular-the taking away of a nonessential feature of the charter, but a radical and destructive change of the governing body-a transfer of its power to the executive of the state, and virtually a reincorporation upon a wholly different basis.

1. The whole doctrine of vested rights as applied to the charters of corporations is based upon Dartmouth College v. Woodward, 17 U. S. 4 Wheat. 518 [4: 629], in which the broad proposition was laid down that such charters were contracts within the meaning of the Constitution, and hence that an act of the state legislature altering a charter in any material respect was unconstitutional and void. The doctrine of this case has been subjected to more or less criticism by the courts and the profession, but has been reaffirmed and applied so often as to have become firmly established as a canon of American jurisprudence. The precise point decided was this: By the original charter from the Crown, granted in the year 1769, twelve persons therein named were in corporated by the name of "The Trustees of Dartmouth College," and there was granted to them and their successors the usual corporate privileges and powers, among which was authority to govern the college, and fill all vacancies which might be created in their own body. By an act of the legislature of New Hampshire passed in 1816, the charter was amended, the number of trustees increased to twenty-one, the appointment of the additional members vested in the executive of the state, and a board of overseers, consisting of twenty-five persons, created with power to in spect and control the most important acts of the trustees. The president of the Senate, the speaker of the House of Representatives of New Hampshire, and the governor and lieutenant governor of Vermont, for the time being, were to be members ex officio; and the board was to be completed by the governor and council of New Hampshire, who were also empowered to fill all vacancies which might occur. A majority of the trustees of the college refused to accept this amended charter, and brought suit for the corporate property, which was in possession of a person holding by authority of the acts of the legislature.

Subsequent cases have settled the law that, wherever property rights have been acquired by virtue of a corporate charter, such rights, so far as they are necessary to the full and complete enjoyment of the main object of the grant, are contracts, and beyond the reach of destructive legislation. Even before the Dartmouth College Case was decided, it was held by this court that grants of land made by the Crown to colonial churches were irrevocable, and that property purchased by or devised to them, prior to the adoption of the Constitution, could not be diverted to other purposes by the states which succeeded to the sovereign power of the colonies. Terret v. Taylor, 13 U. S. 9 Cranch, 43 [3: 650]; Paulet v. Clark, 13 U. S. 9 Cranch, *292 [3: 735]: Society [662 for Propagation of Gospel v. New Haven, 21 U. S. 8 Wheat. 464 [5: 662].

Indeed, the sanctity of charters vesting in grantees the title to lands or other property has been vindicated in a large number of cases. Davis v. Gray, 83 U. S. 16 Wall. 203 [21: 447]; Fletcher v. Peck, 10 U. S. 6 Cranch, 87, 137 3: 162, 178]; Moore v. Robbins, 96 Ú. S. 530 [24: 848]; Ünited States v. Schurz, 102 U. S. 378 [26: 167]: Noble v. Union River Loyging R. Co. 147 U. S. 165 (37: 123].

This court has had, perhaps, more frequent occasion to assert the inviolability of corporate charters in cases respecting the power of taxation than in any other, and in a long series of decisions has held that a clause imposing certain taxes in lieu of all other taxes, or of all taxes to which the company or stockholders therein would be subject, is impaired by legislation raising the rate of taxation, or imposing taxes The opinion contained an exhaustive discus- other than those specified in the charter. Thus, 661] sion of the whole *subject of corporate in Pigua Branch of State Bank v. Knoop, 57 rights and their impairment by state legislation, U. S. 16 How. 369 [14: 977], it was held that and probably contributed as much as any he where, by a general banking law, it was proever delivered to the great reputation of Chief vided that a certain percentage of dividends Justice Marshall. The proposed legislation of should be set off for the use of the state, and the state was fundamental in its character. On should be in lieu of all taxes to which the the part of the Crown it was expressly stipu- company or stockholders therein would otherlated that the corporation thus constituted wise be subjected, this was a contract fixing should continue forever, and that the number permanently the amount of taxation, and that of trustees should consist of twelve and no legislation could not thereafter increase it. In more. By the act of the legislature the trus this connection it was said by Mr. Justice Mctees were increased to twenty one, the appoint- Lean: "Every valuable privilege given by the ment of the additional number given to the ex-charter, and which conduced to an acceptance ecutive of the state, and a board of overseers, of it and an organization under it, is a con twenty-one out of twenty five of whom were tract which cannot be changed by the legislaalso appointed by the executive of the state, ture where the power to do so is not reserved was created and invested with power to in- in the charter. The rate of discount, the duraspect and control the most important acts of tion of the charter, the specific tax agreed to the trustees. Thus, said Mr. Chief Justice be paid, and other provisions essentially conMarshall, the whole power of governing the nected with the franchise and necessary to college is transferred from trustees, appointed the business of the bank, cannot without its according to the will of the founder, expressed consent become a subject for legislative acin the charter, to the executive of New Hamption." To the same effect are New Jersey v. shire." If this legislation was valid, Dart- Wilson, 11 U. S. 7 Cranch, 164 [3: 303]; Gormouth College, as it was originally incorpo-don v. Appeal Tax Court, 44 U. S. 3 How. 133 rated, ceased to exist, and a new institution of [11: 529]; Dodge v. Woolsey, 59 U. S. 18 How.

the grantee by operation of law, or the exercise of the power granted was so far necessary to the full enjoyment of the main object of the charter that persons subscribing to the stock might be presumed to take into consideration, and be influenced in their subscriptions, by the fact that the corporation was endowed with those privileges during the continuance of the charter.

631 [15: 401]; Jefferson Branch Bank v. Skelly, 36 U. S. 1 Black, 436 [17: 173]; McGehee v. Mathis, 71 U. S. 4 Wall. 143 [18: 314]: Home of the Friendless v. Rouse, 75 U. S. 8 Wall. 430 [19: 495]; Wilmington & W. R. Co. v. Reid, 80 U. S. 13 Wall. 264 [20: 568]; Humphrey v. Peques, 83 U. S. 16 Wall. 244 [21: 3261; Farrington v. Tennessee, 95 U. S. 679 [24: 558]; 663] *New Jersey v. Yard, 95 U. S. 104 [24: 352]; St. Anna's Asylum v. New Orleans, 105 U. S. 362 [26: 1128]. If, however, the charter contained a reservation of an unlimited power to alter, amend, or repeal, the legislature may take away an immunity from taxation. Tomlinson v. Jessup, 82 U. S. 15 Wall. 454 [21: 204]. Within the same principle are grants of an exclusive right to supply gas or water to av. Hyde Park, 97 U. S. 659, 666 [24: 1036, municipality or to occupy its streets for railway purposes. New Orleans Gaslight Co. v. Louis iana Light & H. P. & Mfg. Co. 115 U. S. 650 [29: 517]: New Orleans Waterworks Co. v. Rivers, 115 U. S. 674 (29: 525]; Louisville Gas Co. v. Citizens' Gaslight Co. 115 U. S. 683 [29: 510]: St. Tammany Waterworks Co. v. New Orleans Waterworks Co. 120 U. S. 64 [30: 563): Boston & L. R. Corp. v. Salem & L. R. C. 2 Gray. 1.

So, if a company be chartered with power to construct and maintain a turnpike, erect tollgates, and collect tolls, such franchise is protected by the Constitution. St. Clair County Turnp. Co. v. Illinois, 96 U. S. 63 [24: 651]; Monongahela Nav. Co. v. United States, 148 U. S. 312 [37: 465].

2. Such limitations, however, upon the power of the legislature, must be construed in subservience to the general rule that grants by the state are to be construed strictly against the grantees, and that nothing will be presumed to pass except it be expressed in clear and unambiguous language. As was said by Mr. Justice Swayne in Northwestern Fertilizing Co. 1038]: "The rule of construction in this class of cases is that it shall be most strongly against the corporation. Every reasonable doubt is to be resolved adversely. Nothing is to be taken as conceded but what is given in unmistak able terms, or by an implication equally clear. The affirmative must be shown. Silence is negation, and doubt is fatal to the claim. This doctrine is vital to the public welfare. It is axiomatic in the jurisprudence of this court."

Hence, an exclusive right to enjoy a certain franchise is never presumed, and unless the charter contain words of exclusion, it is no impairment of the grant to permit another to do the same thing, although the value of the franchise to the first grantee may be wholly destroyed. This principle was laid down at If it be provided in the charter of a bank an early day in the case of Charles River that the bills and notes of the institution shall Bridge Proprs. v. Warren Bridge Proprs. 36 U. be received in payment of taxes or of debts S. 11 Pet. 420 [9: 773], and has been steadily due to the state, such undertaking on the adhered to ever since. Washington & B. Turnp. part of the state constitutes a contract between Co. v. Maryland, 70 U. S. 3 Wall. 210 [18: the state and holders of the notes which the 180]; Providence Bank v. Billings, 29 U. S. 4 state is not at liberty to break, although notes Pet. 514 [7: 939]; Pennsylvania R. Co. v. Milissued after the repeal of the act are not within ler, 132 U. S. 75 [33: 267]. If, however, there the contract and may be refused. Woodruff v. be an exclusive provision, as, for instance, in the Trapnall,51 C. S. 10 How. 190 [13: 283]; Paup charter of *a bridge company that it shall (665 v. Drew, 51 U. S. 10 How. 218 [13: 394]; Fur- not be lawful for any person to erect another man v. Nichol, 75 U. S. 8 Wali. 44 [19: 370]: | bridge within a certain distance of the bridge Keith v. Clark, 97 U. S. 454 [24: 1071]; An-authorized, this constitutes an inviolable contoni v. Greenhow, 107 U. S. 769 [27: 468]; tract Chenango Bridge Co. v. Binghamton Poindexter v. Greenhow ("Virginia Coupon Cases") 114 U. S. 270 [29: 185]. And in Planters' Bank v. Sharp, 47 U. S. 6 How. 301 [12: 447], where a bank was chartered with the usual powers to receive money on deposit, discount bills of exchange and notes, and to make loans, and in the course of its business the bank discounted and held promissory notes; and the legislature then passed a law declaring that it should not be lawful for any bank to transfer, by indorsement or otherwise. any note, bill receivable, or other evidence of debt, it was held that the statute conflicted with the Constitution and was void. It was said in this case that a power to dispose of its 664]notes, as well as other property, may well be regarded as an incident to its business as a bank to discount notes which are required to be in their terms assignable, as well as an incident to its right of holding them and other property, when no express limitation is imposed upon the power to transfer them."

in

In each of the above cases, however, the title to property had either become vested

Bridge Co. ("The Binghamton Bridge") 70 U. S. 3 Wall. 51 [18: 137]. But even in such cases, if the second charter be for a similar franchise, but to be excrcised in a substantially different manner, the exclusive right conferred by the first charter is held not to be violated; as, for instance, if the first charter be for an ordinary bridge, and the second for a railway viaduct, impossible for man or beast to cross, except in railway cars. Proprietors of Bridges v. Hoboken Land & Imp. Co. 68 U. S. 1 Wall. 116 [17: 571]. So, if the first franchise be for the sole privilege of supplying a city with water from a designated source, it is not impaired by a grant to another party of the privilege to supply it with water from a different source. Stein v. Bienville Water Supply Co. 141 U. S. 67 [35: 622].

Upon a similar principle it was held in Tucker v. Ferguson, 89 U. S. 22 Wall. 527 [22: 805], that a tax upon lands owned by a railway company, and not used nor necessary in working the road and in the exercise of its franchise, was not unlawful, though the charter had pro

Nor does it follow, from the fact that the contract evidenced by the charter cannot be impaired, that the power of the legislature over such charter is wholly taken away, since stattes which operate only to regulate the manner in which the franchises are to be exercised, and which do not interfere substantially with the enjoyment of the main object of the grant, are not open to the objection of impairing the

contract.

vided for a certain tax upon the railroad com- | scription is actually made the contract is unexpany and had enacted that such tax should ecuted. Aspinwall v. Daviess County Comrs. be in lieu of all other taxes to be imposed 63 U. S. 22 How. 364 [16: 296]; Wadsworth v. within the state. See also West Wisconsin R. Eau Claire County Supers. 102 U. S. 534 [26: Co. v. Trempealeau County Supers. 93 U. S. 222]; Norton v. Brownsville Taxing Dist. 129 595 [23: 814]. U. S. 479 [32: 774]; Concord v. Portsmouth Sav. Bank, 92 U. S. 625 [23: 628]; Falconer v. Buffalo & J. R. Co. 69 N. Y. 491; Covington & L. R. Co. v. Kenton County Court, 12 B. Mon. 144; Wilson v. Polk County, 112 Mo. 136. *The contract protected by this clause [667 must also be founded upon a good consideration. If it be a mere nude pact, a bare promise to allow a certain thing to be done, it will be construed as a revocable license. Thus, in Christ Church v. Philadelphia County, 65 U. S. 24 How. 300 [16: 602], the legislature of Pennsylvania enacted that the property of Christ Church Hospital, so long as the same should continue to belong to the same hospital, should be and remain free from taxation. In 1851 they enacted that all property then exempted from taxation, other than that which was in the actual use and occupation of such associa tion, should thereafter be subject to taxation. It was held that the original concession of the legislature exempting the property from taxation was spontaneous, and no service or duty or other remunerative consideration was imposed upon the corporation, and hence that it was in the nature of a privilege or license, which might be revoked at the pleasure of the sovereign.

A familiar instance of this class of legislation is that enacted under what is known as the police power. In virtue of this the state may prescribe regulations contributing to the com fort, safety, and health of passengers, the protection of the public at highway crossings or elsewhere, the security of owners of adjacent property, by requiring the track to be fenced, and such appliances to be annexed to the engines as shall prevent the communication of 666] fire to neighboring buildings. Cooley, Const. L. 321. This power, as was said by Mr. Justice Miller in Butchers' Benev. Asso. v. Cres cent City, L. S. L. & S. H. Co. (“SlaughterHouse Cases") 83 U. S. 16 Wall. 36, 62 [21:394, 404], is and must be, from its very nature, in capable of any very exact definition or limita tion. Upon it depends the security of social order, the life and health of the citizen, the comfort of an existence in a thickly populated community, the enjoyment of private and Social life, and the beneficial use of property." The following cases show to what extent and for what purposes this power may be exercised: Butchers Bener. Asso. v. Crescent City, L. S. L. & S. II. Co. (Slaughter-House Cases") 83 U. S. 16 Wall. 62 [21: 404]; Northwestern Fertilizing Co. v. Hyde Park, 97 U. S. 659 [24: 1036]: Boston Beer Co. v. Massachusetts, 97 U. S. 25 [24: 989]; Patterson v. Kentucky, 97 U. S. 501 [24: 1116]: Barbier v. Connolly, 113 U. S. 27 (28: 923]; Charlotte, C. & A. R. Co. v. Gibbes, 142 U. S. 386 [35: 1052]; Lawton v. Steele, 152 U. S. 133 [38: 385]; Eagle Ins. Co. v. Ohio, 153 U. S. 446 [38: 779]. And so important is this power, and so necessary to the public safety and health, that it cannot be bargained away by the legislature; and hence it has been held that charters for purposes inconsistent with a due regard for the public health or public morals may be abrogated in the interests of a more enlightened public opinion. Stone v. Mississippi, 101 U. S. 814 [25: 1079]; Phalen v. Virginia, 49 U. S. 8 How. 163, 168 [12: 1030, 1032].

In obedience to the same principle it has always been held that the legislature may repeal laws authorizing municipal subscriptions to railways, though such laws were in existence at the time the railway was chartered, and may be supposed to have influenced the promoters and stockholders of the road in undertaking its construction. And even if there has been a public vote in favor of such subscription, such vote does not itself form a contract with the railway company protected by the Constitution, the court holding that until the sub161 U. S. U. S., Book 40.

In St. Clair County Turnp. Co. v. Illinois, 96 U. S. 63 [24: 651], the original charter of the company gave it the right, in consideration of building a turnpike, to erect toll-gates and exact toll for twenty-five years from the date of the charter. In 1861, when the term of the charter had more than half expired, the state gave the company a new and additional privi lege of using a certain bridge and dyke and of erecting a tollgate thereon. The only consid eration required was that the company should keep them in repair. No term was expressed for the enjoyment of the privileges, and no conditions were imposed for resuming or revoking it on the part of the state. It was held that it could not be presumed to have been intended as a perpetual grant, since the company itself had but a limited period of existence, and that a law resuming possession of the bridge and dyke by subjecting them to the control and management of the city of East St. Louis was not a law impairing the obligation of the contract.

In Philadelphia & G. F. Pass. R. Co.'s Appeal, 102 Pa. 123, it was also held that a supplement to a charter which merely conferred upon the corporation a new right (as an exclusive right o use and occupy certain streets), or enlarged an *old one, without imposing any addition-[668 al burden upon it, was a mere license or promise by the state, and might be revoked at pleasure. It is without consideration to support it and cannot bind a subsequent legislature."

"

traffic, so that each road might enjoy the ben- | amended act of 1865, it is probable that this efit of billing its passengers and freight to arrangement might be lawfully made; and the points on the other road not reached by it, it question is whether an unexecuted power to would be difficult to foresee any objection to make such arrangement is a "vested right" it. But the fact that one half of the capital within the meaning of § 17 of the original act. stock of the reorganized company is to be It is possible that, if this arrangement had turned over to the shareholders of the Great been actually made and carried into effect, beNorthern, which is, in turn, to guarantee the fore the acts forbidding the consolidation of payment of the reorganized bonds, is evidence parallel or competing lines had been passed, of the most cogent character to show that the rights of the parties thereto would have nothing less than a purchase of a controlling become vested, and could not become impaired interest, and practically the absolute control of by any subsequent act of the legislature. But the Northern Pacific, is contemplated by the the real question before us is whether a bare arrangement. With half of its capital stock unexecuted power to consolidate with other already in its hands, the purchase of enough corporations, a power which, if it exists as to make a majority would follow almost as a claimed by the defendant, would authorize it matter of course, and the mastership of the to absorb by successive and gradual accretions Northern Pacific would be assured. the entire railway system of the country, is not, so long as it remains unexecuted, within the control of and subject to revocation by the *legislature, at least so far as it applies [673 to parallel or competing lines.

A vested right is defined by Fearne, in his work upon Contingent Remainders, as “an immediate fixed right of present or future enjoyment;" and by Chancellor Kent as an “imfixed right of future enjoyment." 4 Kent, Com. 202. It is said. by Mr. Justice Cooley that "rights are vested, in contradistinction to being expectant or contingent. They are vested when the right to enjoyment, present or prospective, has become the property of some particular person or persons as a present interest. They are expectant when they depend upon the continued existence of the present condition of things until the happening of some future event. They are contingent when they are only to come into existence on an event or condition which may not happen or be performed until some other event may prevent their vesting." Cooley, Const. L. 332.

That the transfer of stock is to be made, not directly to the company, but to the suareholders, is immaterial, since it may be assumed that they would cast their votes in the interests of the company. Either the stock so transferred becomes virtually the property of the Great Northern, or there is no consideration for its guaranty of the principal and interest of the consolidated bonds. But as, by the agree-mediate right of present enjoyment, or a present ment, the guaranty by the defendant of the Northern Pacific bonds is assumed to be in consideration of a transfer to its stockholders of one half the capital stock of the reorganized company, it would inevitably follow that this stock would be held for the benefit of the company. There is, however, in addition to that, an alternative provision that the transfer may be made to a trustee for the use of the stock holders, who would of course act as their agent and represent them as a body, and in fact stand as the company under another name. Doubtless these stockholders could lawfully acquire by individual purchases a majority or even the whole of the stock of the reorganized 672] *company, and thus possibly obtain its ultimate control; but the companies would still remain separate corporations with no interests, as such, in common. This, though possible, would not be altogether feasible, and would require considerable time for its accomplishment. In a few years the two companies might, by sales of the stock so acquired, become com pletely dissevered, and the interests of the Stockholders of each company thus become antagonistic. Under the proposed arrangement, however, the Northern Pacific as a company, in return for a guaranty which the individual stockholders could not give, turns over to a trustee for the entire body of stock holders of the Great Northern one half of its stock, with the almost certainty of the latter securing the complete control, and probably the ultimate amalgamation, of the two com- But where the charter authorizes the companies. If such amalgamation were thus ef pany in sweeping terms to do certain things fected, it would in all probability be final. We which are necessary to the main object of the think the proposed arrangement is a plain vio-grant, and not directly and immediately within lation of the acts of the state legislature passed in 1874 and 1881, prohibiting railroad corporations from consolidating with, leasing, or purchasing, or in any other way becoming the owner of or controlling, any other railroad corporation, or the stock, franchises, or rights of property thereof, having a parallel or com peting line.

Under the broad powers conferred by the

As applied to railroad corporations, it may reasonably be contended that the term extends to all rights of property acquired by executed contracts, as well as to all such rights as are necessary to the full and complete enjoyment of the original grant, or of property legally acquired subsequent to such grant. If, for example, the legislature should authorize the construction of a certain railroad, and by a subsequent act should take away the power to raise funds for the construction of the road in the usual manner by a mortgage, or the power to purchase rolling stock or equipments, such acts might perhaps be treated as so far destructive of the original grant as to render it valueless, although there might in neither case be an express repeal of any of its provisions. Sala v. New Orleans, 2 Woods, 188.

the contemplation of the parties thereto, the power so conferred, so long as it is unexecuted, is within the control of the legislature and may be treated as a license, and may be revoked [674 if a possible exercise of such power is found to conflict with the interests of the public. As applicable to the case under consideration, we think it was competent for the legislature to declare that the power it had conferred upon