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to the corporation other franchises, privileges, and exemptions; in so far as it does so it can revoke such grants, because they form parts of the contract existing between the state and the corporation, and the state has reserved to itself the power to annul or amend the whole or any part of such contract. Thus if the state has exempted the corporation from taxation by the state, such exemption may be repealed under the reserved power. Not only the franchise to exist as a corporation, but also the other franchises of the corporation, may be resumed by the state-the franchises to carry on the particular business in which the corporation is engaged; for example, to run a railroad,25 or a ferry,2 or to lay pipes and mains in the public streets of a city and supply the inhabitants with gas, or to transact a banking business, or to collect tolls on a highway.29 The power of eminent

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it is held that the legislature can repeal the charter, and there is then a presumption that the condition had occurred and that the repeal was valid, but the fact is subject to judicial review, the burden of proof being on the corporation to prove that the repeal was unjustified. Erie and Northeast R. R. Co. v. Cascy, 26 Pa. St. 287 (1856); Commonwealth v. Pittsburg and Connellsville R. R. Co., 58 Pa. St. 26 (1868); Mayor of Baltimore v. Connellsville and S. Penn. R. R. Co., 1 Abb. (U. S.) 9 (1865); Myrick v. Brawley, 33 Minn. 377 (1885). In Massachusetts it is held that the question as to the happening of the contingency is in the first instance for the legislature, but quære as to whether their decision, though prima facic, is conclusive. Crease v. Babcock, 40 Mass. 334 (1839).

"R. R. Co. v. Georgia, 98 U. S. 359 (1878); Tomlinson v. Jessup, 15 Wall. 454 (1872); Iron City Bank v. City of Pittsburg, 37 Pa. St. 340 (1860); State v. Commissioner of Railroad Taxation, 37 N. J. L. 228 (1874); Deposit Bank of Owensboro v. Daviess County, 102 Ky. 174 (1897).

Commonwealth v. Pittsburg and Connellsville R. R. Co., 58 Pa St. 26 (1868); Henderson v. Central Passenger Railway Co., 21 Fed Rep. 358 (1884).

Town of East Hartford v. The Hartford Bridge Co., 10 How. (U. S.) 511 (1850).

Hamilton Gas-Light and Coke Co. v. Hamilton City, 146 U. S. 258 (1892).

"State of Ohio v. Granville Alexandrian Society, 11 Ohio, 1 (1841). "Zimmerman v. Perkiomen and Reading Turnpike Road Co., 81%%% Pa. St. 96 (1873); Snell v. City of Chicago, 133 III. 413 (1890). Contra: Rochester and Charlotte Turnpike Road Co. v. Joel, 41 App. Div. Rep. (N. Y.) 43 (1899). In that case a turnpike company was authorized to exact certain tolls; the right to alter, amend, or repeal the charter was reserved to the state. By a later act the legislature prohibited the company from charging a toll for bicycles, the effect of which amendment was to reduce the earning capacity of the company about twenty-five per cent. The court held that this act was uncon

domain may be recalled. The state by the act of incorporation gives to the stockholders a limitation of their personal liability; therefore this gift may be rescinded, and stockholders, as to future transactions of the corporation, may be made personally liable, or liable to a greater extent than they were before.32 And where the state has granted a franchise with the promise that it shall be exclusive, it may, nevertheless, recall or restrict this promise and limit the exclusiveness of the franchise granted.3

Just as the legislature may recall in toto the franchises and privileges which the state has granted to the corporation, so it may recall them upon failure to comply with any condition which it may stipulate as the sine qua non of their continua

stitutional, being a taking of the company's vested property rights, since such a franchise to take tolls was as much a vested right of property as the ownership of tangible property. It is difficult to understand this decision. The franchise to take tolls is in law a property right, but it was a right derived from the state and therefore could be taken away by the state, that being the very purpose of the reservation of the right to alter or repeal the charter. See discussion of similar cases infra.

Adirondack Railway Co. v. New York, 176 U. S. 335 (1899). "Anderson v. Commonwealth, 18 Gratt. (Va.) 295 (1868); Sherman Smith, Black (U. S.), 587 (1861); McGowan v. McDonald, 111 Cal 57 (1896);_Bissell v. Heath, 98 Mich. 472 (1894).

Guliver v. Roelle, 100 Ill. 141 (1881); Weidinger v. Spruance, 101 iii. 278 (1881); Williams v. Nall, 55 S. W. Rep. (Ky.) 706 (1900). So also the liability of the stockholders may be reduced. BerwindWhite Coal-Mining Co. v. Ewart, 32 N. Y. Supp. 716 (1895). In Gardner v. Hope Insurance Co., 9 R. I. 194 (1869), an act, passed under the reserved power to alter the charter, provided that whenever the capital stock of any insurance company should be diminished by losses, the stockholders might assess such further sum as was necessary to fill up the capital stock to its original amount upon the several stockholders in proportion to the amount of stock owned by each. Such an assessment was made and sustained by the court. The legislature, having admittedly the power to increase the liability of the stockholders, can delegate this power to a majority of the stockholders of the company, and give such majority the power to bind all the stockholders, although an attempt will be made later to show that the reserved power clause was intended to reserve to the state a power over the corporation, and not to enable it to vest such a power in a number of the stockholders of the company as against the other stockholders.

"Perrin v. Oliver, 1 Minn. 202 (1854); West End and Atlanta Street R. R. Co. v. Atlanta Street R. R. Co., 49 Ga. 151 (1873); IVslmington City Railway Co. v. Wilmington and Brandywine Springs Railway Co., 46 Atl. Rep. (Del.) 12 (1900); Wilmington City Railway Co. v. People's Railway Co., 47 Atl. Rep. (Del.) 245 (1900).

tion. That is to say, it may impose burdens upon the corporation, submission to which is the price of the continued enjoyment of its franchises. Or it may attach restrictions to the exercise of any specific privilege given to the corporation by the state. Thus in Pennsylvania R. R. Co. v. Duncan. 111 Pa. St. 352 (1886), a constitutional provision was upheld, requiring railroad companies, in thereafter exercising their right of eminent domain, to pay for injuries caused by the construction of the railroad, although before then the railroad companies had to pay merely for land actually taken and occupied by them." In Wilson v. Tesson, 12 Ind. 285 (1859), an act of the legislature was sustained which provided that banking corporations could continue to do business only if they paid all their circulating notes in coin upon demand. In Yates v. The People, 207 III. 316 (1904), the court sanctioned an act providing that the charters of all insurance companies which ceased for the period of one year to transact the business for which they were organized should be deemed and held extinct in all respects as if they had expired by their own limitation. In Railway Company v. Philadelphia, 101 U. S. 528 (1879), it was stated that the legislature could raise the license fee for the running of cars by a street railway company. A similar principle was laid down in Mayor of New York v. The Twenty-third Street Railway Co., 113 N. Y. 311 (1889), the court saying, per Mr. Justice Earl: "It (the legislature) may take away its (the company's) franchise to be a corporation, and may regulate the exercise of its corporate powers. As it has the power utterly to deprive the corporation of its franchises to be a corporation, it may prescribe the conditions and terms. upon which it may live and exercise such franchise. It may enlarge or limit its powers, and it may increase or limit its

34 The force of this decision is weakened by the fact that in a later opinion in the same case in 129 Pa. St. 181 (1889), and in the affirming opinion in Pennsylvania R. R. Co. v. Miller, 132 U. S. 75 (1889), the decision was placed on the ground that the charter of the railroad company was silent upon the point whether such consequential injuries must be paid for, and therefore there never was any contract between the state and the corporation that the latter should always be exempt from Such liability. But the principle laid down in the original opinion is unquestioned authority.

burdens." In Macon and Birmingham R. R. Co. v. Gibson, 85 Ga. 1 (1890), the state of Georgia chartered a railroad company to run a railroad from Macon to the Alabama state line by whatever route the company might, at its pleasure. select. Subsequently, under the reserved power to amend or repeal the charter, the legislature passed an act providing that if the company ran its road within five miles of Thomaston, it must run into and through the corporate limits of that town. This act was sustained as a valid limiting condition attached to the franchise granted. Of course, the corporation need not accept these conditions, nor need it accept any amendments whatever to its charter. The state cannot coinpel it to remain in business under terms which it regards as too onerous to accept, and it always has the right to wind up its affairs and dissolve.35 But if it wishes to continue its corporate existence it must submit to the conditions imposed upon such continued existence by the state.

These, then, are the limits within which the state properly may exercise its reserved power so far as its own relations with the corporation are concerned. It is contended, for reasons already set forth, that the state cannot regulate such property and rights of the corporation as are not given to the corporation by virtue of the act of incorporation itself. It cannot confiscate property and thus violate the fourteenth amendment. It has no greater control over the property of corporations than it has over the similar property of individual citizens. "If the state had given the stockholders the right of way and other real estate, and the money and chattels now belonging to them, and had reserved a right to revoke the gift, the question of retaking that property under the charter could be raised and discussed," say the Justices of the Supreme Court of New Hampshire in answer to a question of the legislature as to the latter's right to force the Concord R. R. Co. to sell its property to the state;

Yeaton v. Bank of Old Dominion, 21 Gratt. (Va.) 593 (1872). This is upon the same principle that the state cannot force a man to become or remain a member of a corporation against his will. Bagg's Case, Rolle Rep_224 (1616); Oliver v. Collins, Brownlow and G. Rep. 100 (1609); Rex. v. Larwood, Comberbach, 315 (1694); Ellis v. Marshall, 2 Mass. 269 (1807).

"

"But the charter did not give them any of the state's realty, money, or chattels, and an amendment or repeal of the charter cannot revoke a gift that has not been made.” 30 "Whatever power is dependent solely upon the grant of the charter, and which could not be exercised by unincorporated private persons under the general laws of the state, is abrogated by the repeal of the law which granted these special rights," says the Supreme Court, per Mr. Justice Miller, in Greenwood v. Freight Co., 105 U. S. 13 (1881); but “personal and real property acquired by the corporation during its lawful existence, rights of contract, or choses in action so acquired, and which do not in their nature depend upon the general powers conferred by the charter, are not destroyed by such a repeal; and the courts may, if the legislature does not provide some special remedy, enforce such rights by the means within their power.' "The reservation applies only to the contract of incorporation, to the corporate existence, franchises, and privileges granted by the state," says Mr. Justice Field in his dissenting opinion in Spring Valley Water Works v. Schottler, 110 U. S. 347 (1883). "With respect to everything else, it gives no power that the state would not have had without it. Necessarily it cannot apply to that which the state never possessed or created, and therefore could not grant. It leaves the corporation, its business and property, exactly where they would have been had the Supreme Court held, in the Dartmouth College Case, that charters are not contracts within the constitutional prohibition against legislative impairment. It accomplished nothing more; and any doctrine going beyond this would be subversive of the security by which the property of corporations is held, and in the end would destroy the security of all private rights."

In the Matter of the Petition of the New York Cable Railway Co., 40 Hun. (N. Y.) 1 (1886), in holding that the legislature might repeal the right of the petitioners to acquire the consent of the municipal authorities and property owners to the construction of its railway, the court, per

"Opinion of the Justices, 66 N. H. 629 (1891).