the reach of the legislative act under consideration, for two reasons: 1. The sale of the Chicago, St. Paul and Fond du Lac road, which is a part of the Chicago and Northwestern road in 1859, under a deed of trust and the authority of the legislature, vested the title to the road in certain persons as purchasers, with a right to operate it. Their subsequent incorporation conferred no additional right to operate it, and the alteration or repeal of the charter can not impair the right to operate it which they acquired by their purchase, and held as natural persons.

2. The legislature of Wisconsin has entered into a contract with a corporation of Illinois, by which the Illinois corporation has acquired rights in that road, which the act in question impairs, in violation of the tenth section of the first article of the Federal Constitution.

On the 10th day of March, 1855, the legislature of Wisconsin passed an act authorizing the Rock River Valley Union R. R, Company to consolidate its stock and franchises with the stock and franchises of the Illinois and Wisconsin R. R. Company, which was a company existing under a charter granted by the State of Illinois. This act is set forth with the bill as Exhibit 6. The company to be formed by this consolidation was to have one board of directors, and take a new name. The legislature of Illinois passed a similar act in regard to the Illinois and Wisconsin company. (Exhibit 7, of bill.)

By virtue of these two acts the companies consolidated, and took the name of the Chicago, St. Paul and Fond du Lac Railroad Company. This consolidated company issued bonds, and executed a mortgage. In 1859 the legislature of Wisconsin and Illinois passed each an act providing that, if this road should be sold, the purchasers might incorporate themselves by filing a certificate in the office of the Secretary of State, specifying the name of the new corporation, and the number and names of the directors. (Exhibits 8 and 9 of bill.)

The road was sold at Janesville, in Wisconsin, on the 2d of June, 1859.

There was not a separate sale of the portion situated in each State, but a sale of the consolidated road, as one road, extending from Chicago, in Illinois, to Fond du Lac, in Wisconsin. The purchasers, four days after the sale, incorporated themselves, by virtue of the acts above referred to, under the name of the Chicago and Northwestern Railway Company.

These facts appear in the bill.

The purchasers of the Chicago, St. Paul and Fond du Lac road were, then, from the 2d to the 6th of June, 1859, the owners, as natural persons, of the road-bed, the rolling stock, and the right to operate the road as common carriers, and necessarily to charge a reasonable compensation for services thus rendered. Was that right subject to be taken away or modified by the legislature, except in the same way and to the same degree that natural persons exercising the vocation of a common carrier could be controlled? 19 R R C-APP. (Doc. 15)

Clearly not. The 11th article of the constitution of Wisconsin, which reserves power over charters, is as follows:

"Corporations without banking powers or privileges may be formed under general laws, but shall not be created by special act, except for municipal purposes, and cases where, in the judgment of the legislature, the objects of the corporation can not be obtained under general laws. All general laws, or special acts enacted under the provisions of this section, may be altered or repealed by the legislature at any time after its passage."

It will be observed that this clause does not reserve power to the State to repeal or alter all franchises. It simply reserves the power to repeal or alter all general or special laws by which corporations shall be created. A franchise granted to a natural person, or to several natural persons, to be exercised by them in their natural capacity, would be, when accepted and acted upon by them, a contract with the State, which the legislature could neither repeal nor modify by virtue of its reserved powers over charters of incorporation. Such a contract would be protected by the provision of the Federal Constitution.

On the 14th day of March, 1859, as already stated, the legislature of Wisconsin passed an act, authorizing the persons who should become the purchasers of the Chicago, St. Paul and Fond du Lac road, at the anticipated sale under the deed of trust, to become incorporated, by filing a certificate with the Secretary of State, setting forth the name of the new incorporation and the number and names of the directors. But it was not made obligatory upon the purchasers to become a corporation. It was left entirely optional with them. Suppose they had not done so. They could have continued to operate the road as natural persons. The State could not have prevented it, because it had authorized and even invited them to buy the road. Having done that, it could not have forbidden. them to use it. If such a case had arisen, this court would have said the State had entered into an implied contract with those purchasers that, if they would buy the road, they should have the right to operate it either as natural persons or as a corporation, as they might elect. The State retained its constitutional right to repeal or alter the charter of the Chicago, St. Paul and Fond du Lac Company, which still had a legal existence, but that would not have affected the right of the purchasers of the road, as natural persons, to operate it, with the inseparable right to demand a reasonable compensation for the services rendered as common carriers. This right would have inhered in the ownership and use of the property, and would also have existed under the implied contract with the State, growing out of the sale under the authority of the State, and the purchase on the faith of such authority.

With this right, then, vested in the purchasers of this road-a right indefeasible by the State-what was the effect of their becomincorporated in conformity with the act of March 14, 1859? (Exhibit 8 of the bill.) They received no charter of incorporation granting or defining their franchises. What did they do to become incorporated? They simply filed a certificate with the Secretary

of State, "specifying the name of said corporation, the number of the directors, and the names of the directors, for the first year.' this is the language of the act. What did they acquire by the act of incorporation? Only a corporate name, and the right to operate the road in a corporate capacity. This was all. What, then, can the State take away under the reserved power to repeal charters? It can take away the corporate name, and the right to do business in a corporate capacity. There would then remain the right to operate the road as natural persons. What can the State do, under the power to alter? It can alter the name assumed by the corporation, and alter the law of corporate business, or the rules of law by which corporations are governed. But beyond that the State can not affect this corporation under the power of altering and re pealing charters, because there is nothing in the charter of this cor-poration, as then granted, beyond a name, and the power of doing business in a corporate capacity. Perhaps other grants of power have since been made that may be resumed, but we are speaking of what was given to the purchasers of the road when they became a corporation, and of what would remain if they should cease to be a corporation.

As we have said, during the four days that the purchasers under the deed of trust held this road-namely, from the 2 day of June, 1859, when they bought it, to the 6 of June, 1859, when they filed their certificate of incorporation-they owned the road and rolling stock as natural persons. They also, by their purchase, acquired the right to operate the road. When a railroad is sold under a deed of trust, conveying the property and franchises, and executed by authority of the legislature, the property and all the franchises necessary to its use pass to the purchasers. But the franchise of being a corporation does not pass. The original corporation remains in existence. It has lost its property, and the franchises belonging to the property; but its own existence remains. The franchise of being a corporation belongs to the stockholders, and not to the corporation, and that is not sold. But the franchises belonging to the corporation, as such, have passed to the purchasers, so far as may be necessary for operating the road.

In the case of Coe vs. The Columbus, Piqua & Ind. R. R. Co., 10 Ohio, 386, the effect of such a sale is very elaborately discussed, and the court says:

"After an act of disposition, which separate the franchise to maintain a railroad and make a profit from its use, and the franchise of being a corporation, though a judgment of dissolution may be authorized, yet, until there be such judgment, the rights of the corporators, and of third persons, may require that the corporation be considered as still existing. When that judgement is had, those rights would be protected.'

The court, in its opinion, also quotes the following language, as sued by Curtis J., in Hall vs. The Sullivan R. R. Co., 22 Law Reporter, 138:

"The franchise to be a corporation is, therefore, not a subject of seal and transfer, unless the law, by some positive provision, has

made it so, and pointed out the modes in which such sale and transfer may be effected. But the franchise to build, own and manage a railroad, and to take tolls thereon, are not necessarily corporate rights. They are capable of existing in, and being enjoyed by, natural persons, and there is nothing in their nature inconsistent with their being assignable."

In the case of Atkinson vs. The M. & C. R. R. Co., 15 Ohio, 36 the court, in speaking of a railway company whose property and franchise had been sold under a mortgage, used this language:

"Although it may be divested of its property, together with the franchise of operating and making profit from the use of its road, its corporate existence survives the wreck, and endures until the State sees fit to terminate it by a proper proceeding."

In this case the court held that a special act, passed prior to the sale of the road, which provided that the charter should go to the purchasers, was really inoperative for that purpose, because it was creating a new corporation by a special act, which was forbidden by the constitution.

It is clear, from these authorities, that the purchasers, at the sale on the 2d of June, 1859, did not acquire the charter. The deed of trust, under which the sale had been made, conveyed only the property and franchises, and that was all the law authorized the company to convey. The franchises belonging to the corporation, so far as necessary to operate the road, passed by the sale. The franchise of being a corporation, which did not belong to the corporation, but to the stockholders, did not pass. The purchasers then held the road as natural persons, with such franchises as were necessary to its operation, and under the act of the Wisconsin legislature above cited, which invited them to buy, an implied contract had arisen between the State on one side, and the purchasers and their successors on the other, that they might hold, own and use this road for its proper purposes, with the same rights they would have had if they had originally built it as natural persons; in which event there would have been no pretense that the State could exercise, in regard to them, a species of legislative power existing only by virtue of the reservation in the constitution, and existing only in regard to the charters of corporations.

That an implied contract, to the effect we have stated, arose between the State and the purchasers at the sale, is well illustrated by a very important case, decided by this court. Curran vs. State of Arkansas, 15 Howard, 534.

The State of Arkansas had incorporated a State bank, in which it was itself the owner of all the stock. The bank was therefore a public corporation. The bank became insolvent, and the State having sold its own bonds to create the capital of the bank, and claiming therefore, to be a creditor, undertook, by an act of the legislature, to appropriate all the assets of the bank to itself. A private creditor filed his bill to reach the assets, and this court, through Mr. Justice Curtis, thus spoke in reference to the implied contract, arising between the State and the creditors of the bank, as to the

proceeds of the sale of the State bonds, which had formed the capital of the bank.

"The bank received the money from the State as the fund to meet its engagements with third persons, which the State, by the charter, expressly authorized it to make for the profit of the State. Having thus set apart this fund in the hands of the bank, and invited the public to give credit to it, under an assurance that it had been placed there for the purpose of paying the liabilities of the bank, whenever such credit was given, a contract between the State and the creditor not to withdraw that fund, to his injury, at once. arose. That the charter, followed by the deposit of the capital stock, amounted to an assurance, held out to the public by the State, that any one who should trust the bank might rely on that capital for payment, we can not doubt. And when a third person acted on this assurance, and parted with his property on the faith of it, the transaction had all the elements of a binding contract, and the State could not withdraw the fund, or any part of it, without impairing its obligation."

In that case the court would not permit the State to violate a contract implied from the circumstances. Certainly the implication in favor of the purchasers of the road, and against the State, in the present case, is far stronger. The State invited purchasers to buy a railway, the continued operation of which was of great importance to the State. Certain persons bought the road, and brought it into successful operation, and thereby added millions to the value of property in the State. The State can not now take from the purchasers the benefit of the purchase; and when it seeks to do so, it violates the Constitution of the United States, not less than did the act of the State of Arkansas.

2. There is another view which we submit is decisive against the application of this act to the Chicago and Northwestern Railway Company. It is this:

The power to pass this act rests solely upon the provision in the Wisconsin constitution, authorizing the legislature to create corporations, and to repeal or alter all general or special laws creating them.

Now this gives no authority to rescind or alter a contract entered into between the State of Wisconsin on the one side, and a natural person, or a corporation created by another State, on the other. That any State has a right to make such a contract, unless forbidden by its constitution, there can be no doubt.

As we have already shown to the court, the Chicago and Northwestern Railway Compay was in part formed by the consolidation of the Rock River Valley Union Railroad Company of Wisconsin, and the Illinois and Wisconsin Railroad Company of Illinois, under the authority of the legislature of each State. The act of the Wisconsin legislature was passed March 10, 1855, and is Exhibit 6 of this bill.

At the end of the second section of this act, it is provided that the said corporation, thus formed by consolidation, "shall have all the rights, privileges, and franchises conferred on the said compa