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claimed by the State, if it exists, may be used to destroy the value of the franchise they have granted to the corporation. The argument must receive the same answer, and the fact that the power has already been exercised so as to destroy the value of the franchise cannot in any degree affect the principle. The existence of the power does not and cannot depend upon the circumstance of its having been exercised or not."

If a State can thus destroy the value of corporate property acquired under franchises which are grated unconditionally and are in the nature of a contract, there would seem to be no room for doubting that it may do so in any case where the power to alter or repeal the franchise is expressly reserved.

This doctrine is re-affirmed in Turnpike Co. vs. the State, 3 Wal., 210. The court say, p. 213:

"No exclusive privileges had been conferred upon it, (Turnpike Co.,) either in express terms or by necessary implication; and hence, whatever may have been the general injurous effects and consequences to the company from the construction and operation of the rival road, they were simply misfortunes which may excite our sympathy but are not the subject of legal redress."

The principle deducible from these cases, as applicable to the one at the bar, is, that if a legislative power exist, no matter how injurously its exercise may affect the value of property, no claim for compensation for such injuries can be made except where the property is actually taken for the public use; such lossses are simply misfortunes which may excite the sympathy of courts, "but are not the subject of legal redress."


The bondholders and mortgagees of the company have no greater rights, or immunity from legislative control, than the corporation itself, and the existence of such obligations in no way impairs or defeats the power of the legislature to alter or repeal the corporate franchises.

None of the cases cited for the complainants sustains the doctrine contended for.

Bronson vs. Kensie, 1 How., 311, holds that the law known as the stay-law of Illinois, giving mortgagors a year after sale to redeem, and forbidding a sale of the mortgaged premises at less than twothirds of the appraised value, unconstitutional as impairing the obligation of the contract.

McCracken vs. Hayward, 2 How., 608, is a decision on the same law in respect to execution sales, and is to the same effect as the case last above cited.

Curran vs. Arkansas, 15 How., 305. The State, having chartered a bank and invested it with capital and power to issue banknotes, afterwards withdrew the funds and appropriated them to State use; held that as against the creditors of the bank such act was invalid. Opinion by Curtis, J., in which he expressly recognizes the right of the State to repeal the charter, but holds the prop

erty of the bank to be a trust fund for the payment of its debts, and that the State could not appropriate such property to its own use, as against the equitable lien of the creditors.

In Hawthorne rs. Calf., 2 Wal., 10, the State of Maine incorporated a railroad company. The charter provided that the shares of stockholders should be liable for the debts of the corporation, and, in case of deficiency, the shareholders should be liable to the creditors in amount equal to their respective shares. There was no reservation of power to alter or repeal the charter. A few months after the debt to Hawthorne was contracted, the legislature repealed the individual liability clause. Held, that the provision of the charter making the stockholders liable to the creditors of the corporation became incorporated into the contract, and the legislature could not destroy it. Citing Woodruff vs. Trapual, 10 How., 190 and Curran vs. Arkansas, supra.

These were all cases where by act of the legislature it was attempted to put the property of the corporation beyond the reach of the creditors, who had an equitable lien upon it, or to destroy contracts under which rights had vested where there was no reserved power.

The case of Miller rs. Erie R. R. Co., 21 Barbour, 513, which was cited by complainants counsel on this point in the court below, (and which is cited in 15 Wal., 498,) was overruled by the court of appeals in the Albany N. R. R. Co. vs. Bradwell, 24 N. Y., 357.

On the other hand, the rule of law is well settled in this court that creditors and stockholders have no rights superior to the corporation itself as against legislative inferences.

In Muma rs. The Potomac Co., 8 Pet., 281, the court say, page 287:

"A corporation by the very terms and nature of its political existence, is subject to a dissolution by a surrender of its corporate franchises, and by a forfeiture of them for willful misuser or non user. Every creditor must be presumed to understand the nature and incidents of such a body politic, and to contract with reference to them. And it would be a doctrine new in the law that the existence of a private contract of the corporation should force upon it a perpetuity of existence contrary to public policy and the nature and objects of its charter."

In Pennsylvania College cases, 13, Wall., supra. Jefferson College had issued a large number of contracts for scholarships, for the purpose of raising an endowment fund. Such contracts were outstanding to a large amount at the time of the passage of the act, altering the charter of the college, and a claim was made, on the part of the holders of these contracts for scholarships that the act of the legislature_altering the charter impaired the obligation of such contracts. In answer to this claim the court say, page 218:

"Persons making contracts with a private corporation, know that the legislature, even without the assent of the corporation, may amend, alter, or modify their charters in all cases where the power to do so is reserved in the charter, or in any antecedent general law, in operation at the time the charter was granted, and they

also know that such amendments, alterations and modifications may, as a general rule, be made by the legislature, with the asssent of the corporation, even in cases where the charter is unconditional in its terms, and there is no general law of the State containing any such reservation. Such contracts made between individuals and the corporations do not vary, or in any manner change or modify the relation between the State and the corporation, in respect of the right of the State to alter, modify, or amend such a charter, as the power to pass such laws depend upon the assent of the corporation or upon some reservation made at the time, as evidenced by some pre-existing general law or by an express provision incorporated into the charter."

This clear and just exposition of the relation which creditors bear to the corporations and to the legislative power of the State which creates them, renders it unnecessary to protract discussion on this point.

It would be a remarkable condition of things if it were held, that under this reserved power the legislature could alter at pleasure the franchises of a corporation solong as it kept out of debt; but by contracting debts the corporation could suspend the power, and by thus keeping in debt wholly defeat its operation.

The acts of the legislature limiting the tolls and charges of the complainant, is not an encroachment on the power of Congress to regulate commerce among the several States.

No discrimination is made between freights carried for citizens of the State, or persons not citizens thereof.

It would seem that the statement of this proposition was sufficicent proof of it.

It has never been intimated anywhere, that the power which railway companies exercise to fix their rates of charges and tolls, was an invasion of the power of Congress, to regulate commerce among the States. How is it any more objectionable for the State to reserve that power to itself, either in granting a charter, or by a subsequent alteration of it, than it is to confer it on the corporation itself. The power to fix and limit the charges of railroad corporations, must reside some where, either in the State, or the corporation, and its exercise by the one is no more a regulation of commerce among the States, than by the other.

It is very justly said, in the case of the State Freight Tax, 15 Wal., 277:

We concede the right and power of the State to tax the francnises of its corporations; and the right of the owners of artificial nighways, whether such owners be the State or grantees of franchises from the State to exact what they please for the use of their ways. The right is an attribute of ownership.”

Here it is complained that the cost of transportation is being cheapened instead of increased.

The contract of a railroad company which provides that all grain passed over its road should be handled by an elevator company at a fixed price for fifteen years, although it may increase the cost of transportation of grain, is not an infringement of the power of Con

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gress to regulate commerce. Railroad Company vs. Richmond, 19 Wal., 584.

But this question may be regarded as settled by the decision of this court in Railroad Company vs. Maryland, 21 Wal., 456. The court say, p. 471:

"This unlimited right of the State to charge, or to authorize others to charge toll, freight, or fare for transportation on its roads, canals, and railroads, arises from the simple fact that they are its own works or constructed under its authority. It gives them being.— It has a right to exact compensation for their use. It has a discretion as to the amount of that compensation. That discretion is a legislative-a severeign-discretion, and in its very nature is unrestricted and uncontrolled. The security of the public against any abuse of this discretion, resides in the responsibility to the public of those who, for the time being, are officially invested with it. In this respect it is like all other legislative power, when not controlled by specific constitutional provisions, and the courts cannot presume that it will be exercised detrimentally."

The other minor questions, such as that chapter 273 was repealed by other acts, were rightfully disposed of by the circuit court, and are not, we think, worthy of serious argument here.

Att'y-General and Sol'r for Def'ts.


Of Counsel.



These causes are presented to the court on appeal from decrees of the circuit court of the United States for the western district of Wisconsin, dismissing the bills upon demurrer filed thereto, July 8, 1874. The bill, in the case first entitled, was filed by Piek, an alien, by Taylor and Pierson, citizens of the State of New York, and by the Farmers' loan and Trust Company, and the Union Trust Company. corporations of said State, against the appellees, citizens of the State of Wisconsin, to restrain the acceptance of the Northwestern Railway Company, and the enforcement by the appellees, of the provisions of an act of the legislature of Wisconsin, approved March 11, 1874, and printed on pages 17 to 21 of record 459, upon the ground that said act is in violation of the constitution of that State and of the United States, and is, therefore, for these and other causes void.

The bill, in the case secondly above entitled, was filed by complainants therein, stockholders of said company; a portion of the stock owned by Waite Talcott being delivered to him on his surrender of stock by him owned in the Galena and Chicago Union Railroad Company at the time of its consolidation with the Chicago and Northwestern, as stated in their bill. (Record, 482, pages 3-15.) With this exception, the two bills are substantially the same; and the cases will, with the permission of the court, be argued as one cause; the record in the case first entitled being that hereinafter referred to.

The appellants, Piek, Pierson, and Taylor, are owners of certain bonds issued by said railway company, secured by several mortgages executed by it upon their property and franchises severally to the Farmers' Loan and Trust Company, by which there was conveyed unto them, as trustees, for the benefit of such bondholders, the the property, tolls, income and corporate franchises, of said railway company, at the times and for the purposes in said record stated, from pages 7 to 14. Copies of these mortgages will be found commencing respectively at pages 51, 61, and 85, of the record.

It is insisted, by the appellants, that the act of Wisconsin of March 11, 1874, was repealed by that of March 12, 1874. printed at pages 75, 6 and 7 of the record, and that if not thus repealed, it is void, as conflicting with that provision of the constitution of that

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