year after it was granted. Under these circumstances, the Court held that the clause of reservation was not a condition repugnant to the grant, but simply a limitation, and that the exercise of the power to alter, amend, or repeal, by virtue of it, legally and constitutionally belonged to the Legislature, and that the Court could not presume that it had been illegally or unconstitutionally exercised.

(1)

The case of Crease v. Babcock, holds the same doctrine very strongly. The case of Miners' Bank v. United States, (2) carried the right to repeal to the furthest extent, probably to an extent not warranted. In the charter, the Legislature reserved to itself a right to repeal simply in the case of misuse or abuse of the corporate powers. The charter was repealed for alleged misuse or abuse, and the case was brought before the Court, as to whether the Legislature was the sole judge as to the misuse or abuse that would be sufficient to justify a repeal. It was held, that "if the corporation have suffered from the undue exercise of a reserved power, they have only to censure themselves for the folly of accepting the grant upon the terms specified, that the members of the Legislature were the sole judges of the abuse or misuse; and that they could repeal the act of incorporation, without the interposition of a judicial tribunal.”

In repealing, the Legislature cannot impair the obligations of the contracts made with third parties. (3)

I have said that this power of repeal must not be exercised so as to deprive the corporation of vested property, or rights of property legally acquired. This is a general proposition; but it may be then asked is not the taking away the franchise a deprivation of property? That depends on the view we take of a franchise. That a franchise is a species of property, must be admitted; it is a valuable right; it can be, in certain cases, levied on in an execution under our laws. The Supreme Court of Vermont defined

(1) 23 Pick. 334.

(2) 1 Greene (Iowa), 553. This case carries the legislative power to an extreme limit. In State v. Noyes, 47 Maine, 189, it was held, that whether there had been an abuse of the franchise or privileges, was a question to be decided by the Court, and not by the Legislature. The charter in this case, as in the other, gave the right to repeal in case of abuse, and not the right generally.

(3) Houston v. Jefferson College, 63 Penn. St., 428; Commonwealth v. Essex Co., 13 Gray, 239; Miller v. State, 15 Wall. 498.

the essential franchise of a railroad corporation to be "the privilege of operating the road, and taking fare and freight." But suppose it is property, cannot the Legislature revoke it without compensating the corporators? Was it not under this express understanding it was conferred and accepted, and under this reservation held? From the interpretation given to the clause in all the decisions, there can be no doubt of the right to revoke it. It may certainly work a hardship to do so; it may be considered inexpedient and impolitic in some cases, but this has nothing to do with the right.

It is on the extent to which the power to "alter or amend" can be exercised, that the cases differ, some construing the reservation strictly against the legislative power, the utmost possible scope being given to corporate immunity; others allowing to the State the greatest liberty, uncontrolled by the judicial power, subject only to its own discretion; while others, admitting the legislative right, endeavor to place it under some limitations, and acknowledge an interference by the judicial power where such right is abused.

The cases restricting the legislative power are such as Allen v. McKeen,(2) Sage v. Dillard, and Miller v. New York and Erie R. R. Co. Allen v. McKeen was decided by Judge Story in 1833, who approached it with the strong bias in favor of extending protection to corporate rights which had been impressed on his mind by the discussion. of the Dartmouth College case. The case arose from an action brought by the President of Bowdoin College against the Treasurer, for the amount of his salary. The original charter, granted in 1794, reserved the power to "grant further powers to, or alter, limit, annul or restrain any of the powers of this act, vested in the said corporation, as shall be judged necessary to promote the best interests of the College."

Subsequently, by an Act passed in 1830, it was declared that the President, etc., of the corporation, should retain

(1) Thorpe v. Rutland & Burlington R. R., 27 Vt. 140, 152, per Redfield, C. J.

(2) 1 Sumner, 266.

(3) 15 B. Mon. 340.

their corporate powers, subject, however, to be altered, restrained or extended by the Legislature, etc., as shall .... be judged necessary to promote the best interest of said institution." Judge Story held that, under the first reservation, the legislative authority was confined to "enlarging, altering, annulling, or restraining of the powers of the corporation; it could not interfere with its property or extinguish its corporate existence; it could not remove its trustees or overseers, though it might abridge as well as enlarge its powers. Under the second reservation, he held that the power to annul was not reversed by the words "alter, limit, restrain or extend;" that these words did not extend the legislative power to the charter generally, but only to the powers and privileges conferred by it.

The case of Sage v. Dillard, decided in 1854, in its facts was somewhat similar to the last case. The institution was incorporated in 1840, and power was reserved in the charter to alter, amend or repeal it, whenever the Legislature might deem it expedient. In 1848 an Act was passed increasing the number of trustees, and providing for their qualifications. This additional act the Board refused to accept. The Court held that the Legislature might repeal or destroy, but that the power to repeal or destroy did not imply a right to "cripple or to maim," and held that the acceptance by the trustees was a necessary implication, before any alteration could go into effect."

In Miller v. New York & Erie R. R. Co., it was decided that the power to alter, modify or repeal charters, did not authorize the Legislature to compel a railroad company to cause a new highway to be taken across their line, at their own cost, there being no provision touching new highways in their charter. This was put on the ground that it was taking property without compensation, and a doubt was expressed, whether the Legislature had a right to repeal a

(1) See Fry v. Lexington, etc., R. R. Co., 2 Met. (Ky.) 314.

In Yeaton v. Bank of the Old Dominion, 21 Gratt. 593, similar views were expressed. It is there held, the power of a Legislature to "repeal, alter, or modify" the charter of a private corporation, under an express reservation therein, is limited. While the charter may be repealed or destroyed at pleasure, it cannot be modified without the consent of the corporation. But if the corporation refuses to accept statutory modification, it must cease to transact business in a corporate capacity.

corporate charter, unless forfeited by the abuse or neglect of the managers.

Another class of cases hold that the Legislature is untrammelled in the exercise of its reserved powers, and it can alter or repeal at its discretion, without judicial control. This is the extreme doctrine on the other side.(1)

The doctrine that the Legislature can summarily interfere was held strongly by the Supreme Court of Pennsylvania, in cases arising out of what were known as the Erie Railroad troubles.(2) The rule of construction to be applied to acts of incorporation as against the grantees, was plainly and emphatically laid down by Black, J., in the opinion of the Court: In a private deed, an exception, as large as the grant, is void, because private deeds are construed most strongly against the grantor. But a grant of privileges by the State, to a body of adventurers, must be construed precisely the other way,-in favor of the public and against the grantees. A prohibition, exception, or reservation in a charter, must therefore stand in full force, though it destroy or make nugatory all the powers given to the company." On this principle, certain points were concurred in by all the court. It was agreed that no statute was unconstitutional, merely because it was against public policy, or inconsistent with rules of law or principles of equity; that an act of the Legislature, granting corporate rights which are accepted, is a contract; that a clause of reservation. is a part of the contract; and a law passed in pursuance thereof, is not a law impairing its obligations; and that charters containing an unconditional right of repeal, could be repealed without recourse to process in a court of justice. And Black, J., further says: "If the power to alter, amend, or repeal be reserved, its exercise is merely carrying out the contract according to its terms; and the State is using her own rights, not forfeiting those of the corporation."

Now the great danger of this doctrine is, that it may be extended to such a degree as to cripple a corporation, and,

(1) For this view, see Crease v. Babcock, 23 Pick. 334; State v. Curran, 7 Eng., (Ark.) 321; Suydam v. Moore, 8 Barb., 358; Northern R.R. Co. v. Miller, 10 Barb. 260.

(2) Erie & N. E. R.R. Co. v. Casey, 26 Penn. St. 287; Com'th v. Erie & N. E. R.R. Co., 27 Penn. St. 339.

(3) 27 Penn. St. 355.

under the form of amendment or alteration, property may be confiscated, and taken without "the due process of law." All admit there is a power, under the general reservation, to "alter or amend"; but how far this power extends is where the opinions differ. Has it a limit? Can the courts. be invoked to say whether the Legislature properly transcends its power or not? It would seem, from some of the cases cited, that the Legislature alone is to judge how far its power can be extended, and what is expedient under the reserved rights. But this doctrine can never be sanctioned. "Power to legislate, founded on such a reservation", says Mr. Justice Clifford, "is certainly not without limit; but it may safely be affirmed, that it reserves to the Legislature the authority to make any alteration or amendment in a charter granted subject to it, that all will not defeat or substantially impair the object of the grant, or any rights which have vested under it, which the Legislature may deem necessary to secure either the object of the grant, or any other public right not expressly granted away by the charter.”(1) And in delivering the judgment of the Court in Commonwealth v. Essex Co., (2) Shaw, C. J. suggested the following as the rule of limitation of legislative power to amend or alter: "That where, under a power in a charter, rights have been acquired and become vested, no amendment or alteration of the charter can take away the property or rights which have become vested under the legitimate exercise of the powers granted."

The same doctrine was held in Durfee v. Old Colony & Fall River R.R. Co.,3) where it was laid down that "the limit to this power will be found when any attempt is made to abrogate any contract made by the corporation under their charter, or deprive them of any vested property, or rights of property legally acquired."

It seems to me that the doctrine of these cases, expressing the limits of the legislative power, is put on the most reasonable grounds of right and justice, that it is the safest to adopt, as giving a legitimate exercise of power to the State under the reserved rights, and as giving an adequate protection to property invested; securing it from the hasty (1) Holyoke Company v. Lyman, 15 Wall. 522. (2) 13 Gray, 239.

(3) 5 Allen, 230.