pal corporation charged with a trust in favor of an individual, private corporation, or charity, the interest which the cestui que trust has under the grant may sustain it against legislative revocation; a vested equitable interest being property in the same sense and entitled to the same protection as a legal.1 Those charters of incorporation, however, which are granted, not as a part of the machinery of the government, but for the private benefit or purposes of the corporators, stand upon a not private property or a vested right which when once conferred upon a municipality by legislative act cannot be subsequently modified or repealed. The grant of such power is not a contract. Williamson v. New Jersey, 130 U. S. 189; Richmond v. Richmond, &c. R. R. Co., 21 Gratt. 604, 611. See post 355, note, 2. In People v. Power, 25 Ill. 187, 191, Breese, J., in speaking of a law which provided that three-fourths of the taxes collected in the county of Sangamon, with certain deductions, should be paid over to the city of Springfield, which is situated therein, says: "While private corporations are regarded as contracts which the legislature cannot constitutionally impair, as the trustee of the public interests it has the exclusive and unrestrained control over public corporations; and as it may create, so it may modify or destroy, as public exigency requires or the public interests demand. Coles v. Madison County, Breese, 115. Their whole capacities, powers, and duties are derived from the legislature, and subordinate to that power. If, then, the legislature can destroy a county, they can destroy any of its parts, and take from it any one of its powers. The revenues of a county are not the property of the county, in the sense in which revenue of a private person or corporation is regarded. The whole State has an interest in the revenue of a county; and for the public good the legislature must have the power to direct its application. The power conferred upon a county to raise a revenue by taxation is a political power, and its application when collected must necessarily be within the control of the legislature for political purposes. This act of the legislature nowhere proposes to take from the county of Sangamon, and give to the city of Springfield, any property belonging to the county, or revenues collected for the use of the county. But if it did it would not be objectionable. But, on the contrary, it proposes alone to appropriate the revenue which may be collected by the county, by taxes levied on property both in the city and county, in certain proportions ratably to the city and county." It is held in People v. Ingersoll, 58 N. Y. 1, that the franchise to levy taxes by a county for county purposes was not exercised by the county as agent for the State, but as principal. And see Bush v. Shipman, 5 Ill. 186; Richland County v. Lawrence County, 12 Ill. 1; Sangamon Co. v. Springfield, 63 Ill. 66; Borough of Dunmore's Appeal, 52 Pa. St. 374; Guilford v. Supervisors of Chenango, 18 Barb. 615, and 13 N. Y. 143; ante, pp. 288-294, and cases cited. 1 See Town of Pawlet v. Clark, 9 Cranch, 292, and Terrett v. Taylor, 9 Cranch, 43. The municipal corporation holding property or rights in trust might even be abolished without affecting the grant; but the Court of Chancery might be empowered to appoint a new trustee to take charge of the property, and to execute the trust. Montpelier v. East Montpelier, 29 Vt. 12. Power to repeal a charter cannot be exercised so as to injure creditors already entitled to payment. Morris v. State, 62 Tex. 728. A municipal corporation, like the State, may enter into contracts by legislative action. Where, for example, a village by ordinance grants to a railroad company permission to use the streets of the village for its road-bed, on condition of grading and gravelling them at its own expense, the ordinance when accepted constitutes a contract from which neither party can withdraw. Cincinnati, &c. R. R. Co. v. Carthage, 36 Ohio St. 631. See also Hovelman v. Kansas City Ry. Co., 79 Mo. 632; Coast Line Ry. Co. v. Savannah, 30 Fed. Rep. 646; Los Angeles v. Water Co., 61 Cal. 65; Chicago, Mun., &c. Co. v. Lake, 22 N. E. Rep. 616 (Ill.). different footing, and are held to be contracts between the legislature and the corporators, having for their consideration the liabilities and duties which the corporators assume by accepting them; and the grant of the franchise can no more be resumed by the legislature, or its benefits diminished or impaired without the consent of the grantees, than any other grant of property or valuable thing, unless the right to do so is reserved in the charter itself. As the power to grant unamendable and irrepealable 1 Dartmouth College v. Woodward, 4 Wheat. 518; Trustees of Vincennes University v. Indiana, 14 How. 268; Planters' Bank v. Sharp, 6 How. 301; Piqua Bank v. Knoop, 16 How. 369; Binghamton Bridge Case, 3 Wall. 51; Norris v. Trustees of Abingdon Academy, 7 G. & J. 7; Grammar School v. Burt, 11 Vt. 632; Brown v. Hummel, 6 Pa. St. 86; State v. Heyward, 3 Rich. 389; People v. Manhattan Co., 9 Wend. 351; Commonwealth r. Cullen, 13 Pa. St. 132; Commercial Bank of Natchez v. State, 14 Miss. 599; Backus v. Lebanon, 11 N. H. 19; Michigan State Bank v. Hastings, 1 Doug. (Mich.) 225; Bridge Co. v. Hoboken Co., 13 N. J. Eq. 81; Miners' Bank v. United States, 1 Greene (Iowa), 553; Edwards v. Jagers, 19 Ind. 407; State v. Noyes, 47 Me. 189; Bruffet v. G. W. R. R. Co., 25 Ill. 353; People v. Jackson & Michigan Plank Road Co., 9 Mich. 285; Bank of the State v. Bank of Cape Fear, 13 Ired. 75; Mills v. Williams, 11 Ired. 558; Hawthorne v. Calef, 2 Wall. 10; Wales v. Stetson, 2 Mass. 143; Nichols v. Bertram, 3 Pick. 342; King v. Dedham Bank, 15 Mass. 447; State v. Tombeckbee Bank, 2 Stew. 30; Central Bridge v. Lowell, 15 Gray, 106; Bank of the Dominion v. McVeigh, 20 Gratt. 457; Sloan v. Pacific R. R. Co., 61 Mo. 24; State v. Richmond, &c. R. R. Co., 73 N. C. 527; Turnpike Co. v. Davidson Co., 3 Tenn. Ch. 397; Detroit v. Plank Road Co., 43 Mich. 140; Penn. R. R. Co. v. Baltimore, &c. R. R. Co., 60 Md. 263; Com. v. Erie & W. Tr. Co., 107 Pa. St. 112; Houston & T. C. Ry. Co. v. Texas & P. Ry. Co., 70 Tex. 649. The mere passage of an act of incorporation, however, does not make the contract; and it may be repealed prior to a full acceptance by the corporators. Mississippi Society v. Musgrove, 44 Miss. 820; s. c. 7 Am. Rep. 723. Or amended, Cincinnati, H. & I. R. R. Co. v. Clifford, 113 Ind. 460. See, further, Chinclecla mouche L. & B. Co. v. Com., 100 Pa. St. 438. After the adoption of a constitutional amendment allowing amendment and repeal of charters, a corporation, previously chartered, accepted acts of the legislature. Held that its charter thereby became subject to alteration under the amendment, and that it was affected by a constitutional amendment passed thereafter. Penn. R. R. Co. v. Duncan, 111 Pa. St. 352. In affirming this decision it is held that the corporation took its charter subject to changes in the constitution aud general laws of the State. Penn. R. R. Co. v. Miller, 132 U. S. 75. An act, passed after the granting of a charter, allowing the corporation in a proper case to be wound up, is valid. A corporation is subject to such reasonable regulation as the legislature may prescribe short of a material interference with its privileges. Chicago Life Ins. Co. v. Needles, 113 U. S. 574. The provision in a railroad charter prescribing the manner in which it may take lands for its purposes, only gives a remedy which may be altered. Mississippi R. R. Co. v. McDonald, 12 Heisk. 54. Giving the right of cumulative voting to stockholders in a corporation with an irrepealable charter, which provides that each share shall have one vote, is a violation of contract. State v. Greer, 78 Mo. 188. It is under the protection of the decision in the Dartmouth College Case that the most enormous and threatening powers in our country have been created; some of the great and wealthy corpora tions actually having greater influence in the country at large, and upon the legis lation of the country, than the States to which they owe their corporate existence. Every privilege granted or right conferred -no matter by what means or on what pretence being made inviolable by the Constitution, the government is frequently found stripped of its authority in very im charters is one readily susceptible of being greatly abused, to the prejudice of important public interests, and has been greatly abused in the past, the people in a majority of the States, in framing or amending their constitutions, have prudently guarded against it by reserving the right to alter, amend, or repeal all laws that may be passed, conferring corporate powers. These provisions give protection from the time of their adoption, but the improvident grants theretofore made are beyond their reach.1 In portant particulars, by unwise, careless, or corrupt legislation; and a clause of the federal Constitution, whose purpose was to preclude the repudiation of debts and just contracts,protects and perpetuates the evil. And as to the right to regulate charges for transportation of persons and property, see post, 734. In Mills v. Williams, 11 Ired. 558, 561, Pearson, J., states the difference between the acts of incorporation of public and private corporations as follows: "The substantial distinction is this: Some corporations are created by the mere will of the legislature, there being no other party interested or concerned. To this party a portion of the power of the legislature is delegated, to be exercised for the general good, and subject at all times to be modified, changed, or annulled. Other corporations are the result of contract. The legislature is not the only party interested; for, although it has a public purpose to be accomplished, it chooses to do it by the instrumentality of a second party. These two parties make a contract. The legislature, for and in consideration of certain labor and outlay of money, confers upon the party of the second part the privilege of being a corporation, with certain powers and capacities. The expectation of benefit to the public is the moving consideration on one side; that of expected remuneration for the outlay is the consideration on the other. It is a contract, and therefore cannot be modified, changed, or annulled, without the consent of both parties." An incorporated academy, whose endowment comes exclusively from the public, is a public corporation. Dart v. Houston, 22 Ga. 506. Compare State v. Adams, 44 Mo. 570. 1 Respecting the power to amend or repeal corporate grants, some troublesome questions are likely to arise which have only as yet been hinted at in the decided cases. Corporations usually acquire property under their grants; and any property or any rights which become vested under a legitimate exercise of the powers granted, no legislative act can take away. Commonwealth v. Essex Co., 13 Gray, 239; Railroad Co. v. Maine, 96 U. S. 499; Sinking Fund Cases, 99 U. S. 700; AttorneyGeneral v. Railroad Companies, 35 Wis. 425; Detroit v. Detroit & Howell P. R. Co., 43 Mich. 140. See post, 710, 711. But a legislature may grant to another corporation the franchises of an existing one, and may authorize the taking of its property upon compensation made. Greenwood v. Freight Co., 105 U. S. 13. A new constitution may allow water rates to be fixed by a public board, although the company had under the law of its organization the right of representation upon the board. Spring Valley Water Works v. Schottler, 110 U. S. 347. In many cases the property itself becomes valueless unless its employment in the manner contemplated in the corporate grant may be continued; as in the case, for instance, of railroad property; and whatever individual owners of such property might do without corporate powers, it must be competent for the stockholders to do after their franchises are taken away. Without speculating on the difficulties likely to arise, reference is made to the following cases, in which the reserved power to alter or repeal corporate grants has been considered or touched upon: Worcester . Norwich, &c. R. R. Co., 109 Mass. 103: Railroad Commissioners v. Portland, &c. R. R. Co., 63 Me. 269; s. c. 18 Am. Rep. 208; State v. Maine Cent. R. R. Co., 66 Me. 488; Ames v. Lake Superior R. R. Co., 21 Minn. 201; Sprigg v. Telegraph Co., 46 Md. 67 ; State v. Com'rs of R. R. Taxation, 37 N. J. 228; State v. Mayor of Newark, 35 N. J. 157; West Wis. R. R. Co. v. Supervisors, many States the constitutions also prohibit special charters, and all corporations are formed by the voluntary association of individuals under general laws.1 Perhaps the most interesting question which arises in this discussion is, whether it is competent for the legislature to so bind up its own hands by a grant as to preclude it from exercising for the future any of the essential attributes of sovereignty in regard to any of the subjects within its jurisdiction; whether, for instance, it can agree that it will not exercise the power of taxation, or the police power of the State, or the right of eminent domain, as to certain specified property or persons; and whether, if it shall undertake to do so, the agreement is not void on the general principle that the legislature cannot diminish the power of its successors by irrepealable legislation, and that any other rule might cripple and eventually destroy the government itself. If the legislature has power to do this, it is certainly a very dangerous power, exceedingly liable to abuse, and may possibly come in time to make the constitutional provision in question as prolific of evil as it ever has been, or is likely to be, of good. So far as the power of taxation is concerned, it has been so often decided by the Supreme Court of the United States, though not without remonstrance on the part of State courts,2 that an 35 Wis. 257; Union Improvement Co. v. Commonwealth, 69 Pa. St. 140; Ill. Cent. R. R. Co. v. People, 95 Ill. 313; s. c. 1 Am. & Eng. R. R. Cas. 188; Rodemacher v. Milwaukee, &c. R. R. Co., 41 Iowa, 297; s. c. 20 Am. Rep. 592; Gorman v. Pacific R. R. Co., 26 Mo. 441; Gardner r. Hope Ins. Co., 9 R. I. 194; s. c. 11 Am. Rep. 238; Yeaton r. Bank of Old Dom., 21 Gratt. 593; Tomlinson v. Jessup, 15 Wall. 454; Tomlinson v. Branch, 15 Wall. 460; Miller v. State, 15 Wall. 478; Holyoke Co. v. Lyman, 15 Wall. 500; Detroit v. Detroit & H. P. R. Co., 43 Mich. 140; Ashuelot R. R. Co. v. Elliott, 58 N. H. 451. Where no power to amend a charter has been reserved, amendments may nevertheless be made with the consent of the corporation, but the corporation cannot bind its shareholders by the acceptance of amendments which effect fundamental changes in its character or purpose. See Gray . Navigation Co., 2 W. & S. 156; 8. c. 37 Am. Dec. 500; Stevens v. Rutland, &c. R. R. Co., 29 Vt. 545. 1 Where corporations are thus formed, the articles of association, taken in con nection with the General Statute under which they are entered into, constitute the charter. 2 Mechanics' & Traders' Bank v. Debolt, 1 Ohio St. 591; Toledo Bank v. Bond, 1 Ohio St. 622; Knoop v. Piqua Bank, 1 Ohio St. 603; Milan & R. Plank Road Co. v. Husted, 3 Ohio St. 578; Piscataqua Bridge v. N. H. Bridge, 7 N. H. 35; Brewster v. Hough, 10 N. H. 138; Backus v. Lebanon, 11 N. H. 19; Thorpe v. R. & B. R. R. Co., 27 Vt. 140; Brainard v. Colchester, 31 Conn. 407; Mott v. Pennsylvania R. R. Co., 30 Pa. St. 9; East Saginaw Salt Manuf. Co. v. East Saginaw, 19 Mich. 259; West Wis. R. Co. v. Supervisor of Trempeleau Co., 35 Wis. 257, 265; Attorney-General v. Chicago, &c. R. R. Co., 35 Wis. 425, 572. See also the dissenting opinion of Mr. Justice Miller, in Washington University v. Rouse, 8 Wall. 439, 441, in which the Chief Justice and Justice Field concurred. Also Raleigh, &c. R. R. Co. v. Reid, 64 N. C. 155. That one legislature cannot deprive another of the right to amend a charter by delegating to a city power to grant corporate rights, see State v. Hilbert, 72 Wis. 184. agreement by a State, for a consideration received or supposed to be received, that certain property, rights, or franchises shall be exempt from taxation, or be taxed only at a certain agreed rate, is a contract protected by the Constitution, that the question can no longer be considered an open one.1 In any case, however, there must be a consideration, so that the State can be supposed to have received a beneficial equivalent; for it is conceded on all sides that, if the exemption is made as a privilege only, it may be revoked at any time.2 And it is but reasonable that the exemption be construed with strictness.3 1 New Jersey v. Wilson, 7 Cranch, 164; Gordon v. Appeal Tax Court, 3 How. 133; Piqua Bank v. Knoop, 16 How. 369; Ohio Life & Trust Co. v. Debolt, 16 How. 416; Dodge v. Woolsey, 18 How. 331; Mechanics' & Traders' Bank v. Debolt, 18 How. 380; Mechanics' & Traders' Bank v. Thomas, 18 How. 384; McGee v. Mathis, 4 Wall. 143; Home of the Friendless v. Rouse, 8 Wall. 430; Washington University v. Rouse, 8 Wall. 439; Wilmington R. R. Co. v. Reid, 13 Wall. 264; Raleigh & Gaston R. R. Co. v. Reid, 13 Wall. 269; Humphrey v. Pegues, 16 Wall. 244; Pacific R. R. Co. v. Maguire, 20 Wall. 36; New Jersey v. Yard, 95 U. S. 104; Farrington v. Tennessee, 95 U. S. 679; University v. Illinois, 99 U. S. 309; New Orleans v. Houston, 119 U. S. 265. See also Atwater v. Woodbridge, 6 Conn. 223; Osborne v. Humphrey, 7 Conn. 335; Parker v. Redfield, 10 Conn. 490; Landon v. Litchfield, 11 Conn. 251; Herrick v. Randolph, 13 Vt. 525; Armington v. Barnet, 15 Vt. 745; O'Donnell v. Bailey, 24 Miss. 386; St. Paul, &c. R. R. Co. v. Parcher, 14 Minn. 297; Grand Gulf R. R. Co. v. Buck, 53 Miss. 246; Central R. R. Co. v. State, 54 Ga. 401; St. Louis, &c. R. R. Co. v. Loftin, 30 Ark. 693; Prop'rs Mt. Auburn Cem. v. Cambridge, 22 N. E. Rep. 66 (Mass.), where an exemption from all public taxes was held to cover a sewer assessment. 2 Christ Church v. Philadelphia, 24 How. 300; Brainard v. Colchester, 31 Conn. 407. See also Commonwealth v. Bird, 12 Mass. 442; Dale v. The Governor, 3 Stew. 387; Com'rs Calhoun Co. v. Woodstock Iron Co., 82 Ala. 151. If an exemption from taxation exists in any case, it must be the result of a deliberate intention to relinquish this prerogative of sovereignty, distinctly manifested. Easton Bank v. Commonwealth, 10 Pa. St. 450; Providence Bank v. Billings, 4 Pet. 514; Christ Church v. Philadelphia, 24 How. 300; Gilman v. Sheboygan, 2 Black, 510; Louisville & N. R. R. Co. v. Palmes, 109 U. S. 244; Memphis Gaslight Co. v. Shelby Co., 109 U. S. 398; Chicago, B. & K. C. Ry. Co. v. Guffey, 120 U. S. 569; State v. Hilbert, 72 Wis. 184; Herrick v. Randolph, 13 Vt. 525; East Saginaw Salt Manuf. Co. v. East Saginaw, 19 Mich. 259; s. c. in error, 13 Wall. 373; People v. Roper, 35 N. Y. 629; People v. Commissioners of Taxes, 47 N. Y. 501; People v. Davenport, 91 N. Y. 574; Lord v. Litchfield, 36 Conn. 116; s. c. 4 Am. Rep. 41; Erie Railway Co. v. Commonwealth, 66 Pa. St. 84; s. c. 5 Am. Rep. 351; Bradley v. McAtee, 7 Bush, 667; s. c. 3 Am. Rep. 309; North Missouri R. R. Co. v. Maguire, 49 Mo. 490; s. c. 8 Am. Rep. 141; Illinois Cent. R. R. Co. v. Irvin, 72 Ill. 452. Upon the reorganization of a corporation which had enjoyed an exemption, it passes, if all the " privileges" of the old pass to the new; not, if the "rights and franchises " alone pass. Memphis & L. R. R. R. Co. v. R. R. Com'rs, 112 U. S. 609; St. Louis Iron M. & S. Ry. Co. v. Berry, 113 U. S. 465; Tennessee v. Whitworth, 117 U. S. 139. See Detroit St. Ry. Co. v. Guthard, 51 Mich. 180. 8 See Cooley on Taxation, 146, and cases cited. Hoge v. Railroad Co., 99 U. S. 348; Railway Co. v. Philadelphia, 101 U. S. 528; Vicksburg, S. & P. R. R. Co. v. Dennis, 116 U. S. 665; Chicago, B. & K. C. Ry. Co. v. Guffey, 120 U. S. 569; Yazoo & M. R. R. Co. v. Thomas, 132 U. S. 174. |