statute, but a construction, according to the foregoing rule, would render the whole provision meaningless and ineffectual, and it appears clearly, from either extrinsic or intrinsic circumstances, that it was the intention of the legislature, not to · abrogate the former provision, but to add to it a new clause, effect will be given to such intention, rather than to the literal terms of the act.1 § 39. The legislative discretion not to be questioned judicially.— When the power to amend or repeal corporate charters has been reserved to the State, it is to be exercised by the legislature, and its action in this respect can not be questioned by the courts nor its motives impugned. And if there be a proviso that certain conditions shall be fulfilled, with a reservation of power to repeal in case they are not performed, there may be a repeal without a previous judicial declaration of failure of the conditions. It is said that the conditional N. C. 100, s. c. 69 N. Y. 608. See also 9 Abb. N. C. 117; N. Y. Corporation Laws, (Banks Bros.' Ed., 1886) 12. 1 In re Rochester Water Commissioners, 66 N. Y. 413; N. Y. Corporation Laws, (Banks Bros.' Ed. 1886) 12. For additional principles and illustrations of these rules, see also Whipple v. Christian, 80 N. Y. 523, affirming s. c. 15 Hun, 321; Ely v. Holton, 15 N. Y. 595; Moore v. Mansert, 49 N. Y. 332, affirming 5 Lans. 153; Pier v. George, 17 Hun, 207; s. c. 20 Hun, 210, s. c. 86 N. Y. 613; People v. Lucas, 25 Hun, 610; In re Hudson City Sav. Inst., 5 Hun, 612; Calhoun v. Delhi &c. Co., 28 Hun, 379; People v. Davenport, 91 N. Y. 574; N. Y. Corporation Laws, (Banks Bros.' Ed., 1886) 13. .. 2 Spring Valley Water Works v. Schottler, 110 U. S. 347; Lothrop v. Stedman, (1875) 13 Blatchf. 134; Sinking Fund Cases, (1878) 99 U. S. 700, 720; Northern R. Co. v. Miller, (1851) 10 Barb. 260; In re Elevated R. Co., (1877) 70 N. Y. 327, 851. In Massachusetts, the reserved power of amendment and repeal may be exercised "at the pleasure of the legislature." Mass. Gen. Stat. ch. 68, § 41. "This expression, 'the pleasure of the legislature,' is significant, and is not found in many of the similar statutes in other States. That body need give no reason for its action in the matter. The validity of such action does not depend on the necessity for it, or on the soundness of the reasons which prompted it." Greenwood v. Union Freight R. Co., (1881) 105 U. S. 13, 17, per Miller, J. 3 Myrick v. Brawley, 33 Minn. 377; Oakland R. Co. v. Oakland &c. R. Co., 45 Cal. 365; Kennedy v. Strongs, 14 Johns. 129; New York &c. R. Co. v. Boston &c. R. Co., 36 Conn. 196. Thus the charter of a banking corporation which provides “that if the corporation shall fail to go into operation, or shall abuse or misuse their privileges under this charter, reservation in the charter becomes binding upon the corporation as soon as the same is accepted, and that the corporation is estopped to question the power of the legislature to determine the happening of the contingency, although otherwise the question would have been judicial in its nature. So, also, where the continued existence of the corporation is made to depend upon compliance with the requirements of the act under which it came into being, its non-compliance terminates the corporate existence ipso facto. There is an important it shall be in the power of the legislative assembly at any time to annul, vacate, and make void this charter," may be repealed by the legislature without any judicial proceeding or prior notice to the corporation. Miners' Bank v. United States, Morris, 482, s. c. 43 Am. Dec. 115. 1 Crease v. Babcock, 23 Pick. 334; Carey v. Giles, 9 Ga. 253; Lothrop v. Stedman, 42 Conn. 584; Miners' Bank v. United States, 1 Greene, (Iowa) 553; De Camp v. Eveland, 19 Barb. 81. 2 In re Brooklyn &c. R. Co. 72 N. Y. 245, s. c. 75 N. Y. 335, s. c. 81 N. Y. 69; In re Kings County Elevated Ry. Co., 41 Hun, 426; Brooklyn S. T. Co. v. City of Brooklyn, 78 N. Y. 524, 529; Green v. Green, 34 Ill. 320. See, however, infra, § 49. "A failure to finish the road and put it in full operation within the time specified renders void the act of incorporation, in so far as it applies to the unfinished portion," but the statute limiting the time within which the conditions imposed must be performed should definitely fix such time. Toledo &c. R. Co. v. Johnson, 49 Mich. 148, 151. In like manner, a license from a municipal government may be conditioned upon its acceptance within a certain time. Thus the consent of a city council to the occupancy of a street by a railway company is a mere li cense, and until the company has availed itself of the license, no contractual obligation or relation arises which requires a judicial declaration of forfeiture. Until the license is accepted and used, no right vests in the railway company, and it may be revoked by the city council; and after the time within which it may be availed of expires, the license lapses and no revocation is needed to terminate the same. The railway company or licensee can not thereafter occupy the street, or build its road thereon without a new permission from the city authorities. Atchison Street Ry. Co. v. Nave, 38 Kan. 744, s. c. 5 Am. St. Rep., 800, citing Galveston City Ry. Co. v. Galveston C. & S. Ry. Co., (1885) 63 Tex. 529; City of Detroit v. City Ry. Co., 37 Mich. 558. It is held that § 502 of the Civil Code of California does not declare that a failure to comply with the provisions which require the construction to be commenced within one year, shall of itself work a forfeiture, but that a failure to comply with that provision together with the provision which requires that it shall be completed within three years may work a forfeiture. It is optional, however, with the authorities granting the right of way whether the forfeiture shall be total or partial. Omnibus R. Co. v. Baldwin, 57 Cal. 160. distinction between an express reservation to the legislature of the power to repeal the charter of a corporation conditioned upon non-user or misuser of its franchises, and that implied condition annexed to all franchises by which they are subjected to forfeiture for non-user or misuser, the exercise of the power in the former case being wholly a matter of legislative discretion,1 the enforcement of the penalty in the latter case being a matter for judicial determination." § 40. Limitations upon the reserved power. The reserved power of amendment and repeal can not be arbitrarily exercised. The power of the State in this respect is subject to the provision of the federal constitution prohibiting the taking of private property "without due process of law." Certain corporate franchises have been uniformly regarded as indestructible by legislative action and as constituting property in the highest sense of the word, which can not be taken from corporate shareholders and creditors, without provision for compensation. Sheer oppression and wrong can not be wrought under the guise of amendment. 1 Spring Valley Water Works v. Schottler, 110 U. S. 347; Greenwood v. Union Freight R. Co., (1881) 105 U. S. 13; Sinking Fund Cases, (1878) 99 U. S. 700, 720; Lothrop v. Stedman, (1875) 13 Blatchf. 134; In re Elevated R. Co., (1877) 70 N. Y. 327, 351; De Camp v. Eveland, 19 Barb. 81; Northern R. Co. v. Miller, (1851) 10 Barb. 260; Kennedy v. Strongs, 14 Johns. 129; Carey v. Giles, 9 Ga. 253; New York &c. R. Co. v. Boston &c. R. Co., 36 Conn. 196; Myrick v. Brawley, 33 Minn. 377; Miners' Bank v. United States, 1 Greene, (Iowa) 553, s. c. 43 Am. Dec. 115; Crease v. Babcock, 23 Pick. 334. Contra, Erie & Northeast R. Co. v. Casey, (1856) 26 Pa. St. 287; Mayor &c. of Baltimore v. Pittsburgh & C. R. Co., (1865) 1 Abb. U. S. 9; Flint &c. Plank Road Co. v. Woodhull, 25 Mich. 99; State v. Noyes, 47 Me. 189, s. c. 43 Am. Dec. 119; these cases holding that All amendments must be when the power of repeal has been 2 See cases cited infra, § 47. People v. O'Brien, (1888) 5 Ry. & Corp. L. J. 27, s. c. 111 N. Y. 1, holding that where a street railway company is dissolved by act of legislature, its right to lay tracks and run cars on the streets of the city and to make traffic contracts with other companies, survives for the benefit of its creditors and shareholders. 4 Shields v. Ohio, (1877) 95 U. S. 375; Sinking Fund Cases, (1878) 99 U. S. 700; Spring Valley Water Works v. Board of Supervisors of San Fran cisco, (1841) 61 Cal. 3. See "Rise and Probable Decline of Private Corporations in America," a paper by Andrew Allison before the American Bar Association, (1884) 7 Am. Bar made in good faith; they must be reasonable, and consistent with the scope and object of the act of incorporation.1 An amendment must not defeat or substantially impair the object of the grant, or any rights of property vested under it, nor deprive the incorporators of control of the corporate property, nor divest or impair the rights of the shareholders as between themselves, nor alter the relation between the corporation and subscribers to its stock, nor work injustice to the incorporators or to the corporate creditors. The legislature "can Assoc. Rep. 241, 252, and cases there of individuals engaged in similar reviewed. business." County of San Mateo v. Southern Pacific R. Co., 8 Sawy. 238, 279. 1 Shields v. Ohio, (1877) 95 U. S. 375. 2 Where the object of an act incorporating the board of education, appointed by a church conference for an incorporated college under control of the conference, was to effectuate a contract between the board of education and the stockholders of the institution, though the power to amend or repeal is reserved, the leg islature can not exercise that power to the prejudice of vested rights. Bryan v. Board of Education, (Ky. 1890) 7 Ry. & Corp. L. J. 389. See also, Close v. Glenwood Cemetery, (1882) 107 U. S. 466; Shields v. Ohio, 95 U. S. 319; Greenwood v. Union Freight R. Co., (1881) 105 U. S. 19; Miller v. New York, (1872) 15 Wall. 478; Mayor &c. of Worcester v. Norwich & W. R. Co., (1871) 109 Mass. 103. The constitutions of Tennessee, Oregon and Georgia declare that the power of amendment and repeal , shall not be so exercised as to impair or destroy vested corporate rights. See Stimson's American Statutory Law, § 443. 3 Orr v. Bracken County, (1884) 81 Ky. 593. "The property of the corporation acquired in the exercise of its functions is held independently of such reserved power, and the State can only exercise over it the control which it exercises over the property 4 City of Knoxville v. Knoxville & O. R. Co., (1884) 22 Fed. Rep. 758, where it was said: "It was not competent for the legislature to do more in this respect than to waive the public rights. It could not divest or impair the rights of the shareholders, as between themselves, as guarantied by the company's charter, without their consent. It was upon the faith of the stipulations contained in said charter that the shareholders subscribed to the capital stock, and thereby made themselves members of the corporation." 5 Kenosha R. & R. I. R. Co. v. Marsh, (1862) 17 Wis. 13; Troy & R. R. Co. v. Kerr, (1854) 17 Barb. 581. "The power of amendment was never reserved with reference to any question between the corporation and its stock subscribers, but solely with reference to questions between the corporation and the State where the latter desired to make compulsory amendments against the will of the former." All the State "can do is to grant it the power, and then it is for the corporation to accept or not, as it pleases." Kenosha, Rockford & Rock Island R. Co. v. Marsh, (1862) 17 Wis. 13. 6 Stimson's American Statutory repeal or suspend the charter, it can alter or modify it, it can take away the charter, but it can not impose a new one and oblige the stockholders to accept it. The power to alter and modify does not give power to make any substantial additions to the work." 1 41. Of the consent of the corporation-The power of the majority.— Within the limits mentioned in the foregoing section, the legislature may exercise the reserved power of amendment without the consent of the corporation. When, however, an amendment exceeds those limits and alters the contract relations between the incorporators themselves, or between them and other parties; or when the charter is not subject to the reserved power of amendment, the consent of the corporation is requisite to render the legislative action complete and effective. Ordinarily the assent of the corporation to a proposed amendment can not be validly given by the directors, but is to be expressed by the stockholders themselves. If the amendment be for the benefit of the corporation, or merely auxiliary to the original purposes for which Law, § 443, citing the constitutions of Georgia, Alabama, Arkansas, Pennsylvania and Colorado. People v. O'Brien, (1888) 111 N. Y. 1, s. c. 5 Ry. & Corp. L. J. 27, 30, where it was held that under the reserved power of repeal, the franchises and property of a corporation can not be taken from its stockholders and creditors and transferred to other persons or corporations, without provision for compensation. 1 Zabriskie v. Hackensack & N. Y. R. Co., (1867) 18 N. J. Eq. 178. 2 Bishop v. Brainerd, 28 Conn. 289; Cross v. Peach Bottom Ry. Co., (1879) 97 Pa. St. 392, where the court said: "The legislative reservation is in the nature of police power, designed for the protection of the public welfare, and where such protection becomes necessary, the law-making power may act without consulting either the interests or will of the company; and in such case it may well be that not only the company, but its stockholders must submit. . . . The reservation . . . was only intended to enable the legislature to act without the consent and against the will of the corporation." 3 Wells v. Central R. Co., (1886) 41 N. J. Eq. 5; Illinois River R. Co. v. Zimmer, (1858) 20 Ill. 65; Marlborough Manuf. Co. v. Smith, 2 Conn. 579; Brown v. Fairmount Mine Co., 10 Phila. 32. Cf. Blatchford v. Ross, 5 Abb. Pr. (N. S.) 434. Contra, Venner v. Atchison &c. R. Co., (1886) 28 Fed. Rep. 581. |