"the legislature can prescribe what shall or shall not be the subject of execution," proceeds to say: "We agree that the franchise cannot be sold. It is intangible and vested in an artificial being, of a particular organization, suited in the view of the legislature to the most proper and beneficial use of the franchise, and therefore it cannot be assigned to a person natural or artificial, to which the legislature has not committed its exercise and emolument," and he adds: "We regret sincerely that it has hitherto escaped the attention of these companies and of the legislature that some act was necessary, in order that such sales, when unavoidable, might be made with the least loss to the debtors and with the greatest advantage to the creditors and purchasers, by providing for keeping up the franchise with the estate."

The correctness of the general proposition that the property, real and personal, of corporations formed for the prosecution of objects of personal benefit, as that belonging to individuals, may be seized and by sale appropriated to the payment of its debts, does not admit of question. Between them the law makes no distinction, as has been repeatedly decided. Maryland v. Bank, 6 Gill. & John. 205; Ev. L., etc., v. Buf. Hyd. Association, 64 N. Y. 561; Queen v. Vict. Park Co., 41 E. C. L. R. 544. But so far as the opinion, except by force of the statute, extends the liability to the estate of corporations created for public purposes, indispensable to the exercise of the conferred franchise and to the performance of correlative duties, it is not in harmony with adjudications elsewhere of the highest authority, and we are not disposed to enlarge the sphere of its operation. Some of the cases on the subject will be noticed.

In Ammant v. President, etc., Turnpike Co., 13 Serg. & Rawle, 210, the plaintiff bought at execution sale "all the right, title, interest, and claim" of the company "of, in, and to ten miles of its road," with specified limits, and it was held that he acquired no property by his purchase, Tilghman, Ch. J., declaring that "the inconvenience would be excessive if the right of the company could be cut up into an indefinite number of small parts and invested in individuals," and that the turnpike company "alone were confided in, and they alone looked to for a faithful performance of the important duties incumbent upon them.

In Gue v. Tide Water Canal, 24 How. (U. S.) 257, execution had been levied "on a house and lot, sundry canal boats, a wharf, and sundry other lots," and an injunction asked to restrain the sale. Taney, Ch. J., delivering the opinion, uses this language: "The property seized by the marshal is of itself of scarcely any

value apart from the franchise of taking toll with which it is connected in the hands of the company, and if sold under this fieri facias without the franchise, would bring scarcely anything, but would yet, as it is essential to the working of the canal, render the property of the company in the franchise, now so valuable and productive, utterly valueless," and he adds: "It would be against the principles of equity to allow a single creditor to destroy a fund to which other creditors had a right to look for payment, and equally against the principles of equity to permit him to destroy the value of the property of the stockholders by dissevering from the franchise property which was essential to its useful existence."

In Coe v. R. R. Co., 10 Ohio, 372, the rule is thus laid down: "When power is given to acquire an interest in real estate, for the single and exclusive purpose of the exercise of a franchise, and particularly when to acquire such interest there is a delegation of the power of eminent domain, the interest cannot be separated from the use to which alone it can be applied, and if the franchise cannot be conveyed, neither can the interest in real estate, with which it is connected.

A very forcible and clear view of the subject is presented by Woodward, J., in R. R. Co. v. Colwell, 39 Penn. 337: "Lands bought and not dedicated to corporate purposes are bound by the lien of judgments and are liable to be levied in execution and sold by the sheriff in the same manner and with the same effect as the lands of any other debtor. As to land which has been appropriated to corporate objects, and is necessary for the full enjoyment and exercise of any franchise of the company, whether acquired by purchase or by exercise of the delegated power of eminent domain, the company hold it entirely exempt from levy and sale, and this on no ground of prerogative or corporate immunity, for the company can no more alien or transfer such land by their own act than can a creditor by legal process, but the exemption rests on the public interests involved in the corporation. For the sake of the public, whatever is essential to the corporate functions shall be retained by the corporation. A railroad company could scarcely accomplish the end of its being after the ground on which its rails rest had been sold to a stranger."

"The road, with all its appurtenances," remarks Sharswood, J., in the more recent case of Youngman v. R. R. Co., 65 Penn. 278, "being necessary to the exercise of the franchise granted by the sale, could not be levied on and sold under execution on a judgment against the corporation."

The distinction between corporate property which can and cannot be reached by a fieri facias is well defined and strongly presented in the opinion of Thompson, Ch. J., in a case determined in 1868 (Foster v. Fowler, 60 Penn. 27), in which, after discriminating between "those corporations that are agencies of the public, directly affecting it, and those which only affect it indirectly, by adding to its property in developing its natural resources or in improving its mental or moral qualities," he says: "Of the former are corporations for the building of bridges, turnpike roads, railroads, canals, and the like. The public is directly interested in the results to be produced by such corporations, in the facilities afforded to travel and the movements of trade and commerce. It is well settled that this use is not to be disturbed by the seizure of any part of their property essential to their active operations by creditors. They must recover their debts by sequestering their earnings, allowing them to progress with their undertaking to accommodate the public. This direct benefit to and accommodation of the public clearly distinguish this class of companies from the second class namely, private corporations or those in which the public is but indirectly interested, such as mining and manufacturing, coal and iron companies, libraries, literary societies, schools, and the like."

In our researches we have met with a single case (Arthur v. Bank, 9 Sme. & Mar., Miss. 394) recognizing the authority and approving the decision in State v. Rives, and in opposition to the current of judicial opinion.

The general words of the statute which to some extent influenced that decision may, without violence to their meaning, admit of a narrower scope and be restricted to the property of private corporations and to that of public corporations, which may be replaced and is not indispensable to the exercise of their necessary functions and the discharge of public duties, upon the distinction taken in the cases cited. But we are not required to question the correctness of the construction which so widely extends the application of the law. It has since been amended in accordance with the suggestion of the chief justice and the very remedy pointed out has been given. The franchises of a class of corporations, to which that then under consideration belongs, with all the corporate property, may now be reached and its profits applied to the satisfaction of the claims of creditors. To the section, remaining substantially unchanged, has been added the following: "And if the judgment or decree be against a railroad or other corporation authorized to receive fare or tolls, the franchise of such corpora

tion, with all the rights and privileges thereof, so far as relates to the receiving of fare or tolls, and also all other corporate property, real and personal, may be taken on execution and sold under rules regulating the sale of real estate." Rev. Code, c. 26, § 9. The amendments further provide for the manner of selling and that the sheriff shall "deliver to the purchaser possession of all the corporate property connected with the franchise belonging to such corporation in whatever county the same may be situated." S$ 10, 11.

In furtherance of the same policy of preserving intact the corporate privileges bestowed for the public benefit, it has been enacted that purchasers of the property at a mortgage sale shall ipso facto become a body corporate and "succeed to all such franchises, rights, and privileges, and perform all such duties" as the preceding corporation possessed, except that they shall not incur liability for its obligations. Bat. Rev., c. 26, §§ 46 and 47.

It will be observed that the subjection of the franchise to execution is confined to such corporations as may "receive fare or tolls," leaving all others to the operation of the pre-existing law, and both acts look to the continued association of the property with the franchise. Thus the public interests remain unaffected by proceedings that result in a change of ownership merely and a transfer of public duties from one to another party. This legislation springing out of the decision in Rives' case, and intended to obviate the inconveniences of a disruption of the company and the loss of those facilities for travel and transportation which it had afforded, must, we think, be deemed an expression of the legislative will to substitute the new in place of the former remedy. It secures to creditors all their just rights, yet in subordination to the higher public demand for an unobstructed road and without wrong to those from whom the land has been taken and appropriated to its use. It must therefore be declared that the plaintiff acquired no estate in the land by virtue of the sale and sheriff deed. It is unnecessary to pass upon the other defense. According to the case agreed, a non-suit must be entered and it is so ordered.

Error. Reversed.

(d) Effect of Dissolution of Corporation on Creditor's Rights.

JACOB MUMMA, PLAINTIFF IN ERROR, V. THE POTOMAC CO. 8 Peters (33 U. S.) 281 (1834).

STORY, J. This is a writ of error to the Circuit Court of the District of Columbia for the county of Washington. The case presented on the record is, shortly, this:

The plaintiff in error, Mumma, in June, 1818, recovered a judgment against the Potomac Co. for the sum of $5,000. No steps were taken to enforce the payment of the judgment, nor any further proceedings had in relation thereto, until the 18th day of April, 1828, on which day a writ of scire facias was issued from the clerk's office of said court against the said Potomac Co. to revive said judgment, which case was continued by consent of parties from term to term until December term of said court, in the year 1830, at which term the following plea and statement were filed by consent of parties: "The attorneys upon the record of the said defendants now here suggest and show to the court that since the rendition and record of said judgment the said Potomac Co., in due pursuance and execution of the provisions of the charter of the Chesapeake & Ohio Canal Co., enacted by the States of Maryland and Virginia and by the Congress of the United States, have duly signified their assent to said charter, etc., and have duly surrendered their charter and conveyed in due form of law to the said Chesapeake & Ohio Canal Co. all the property, rights, and privileges by them owned, possessed and enjoyed under the same, which surrender and transfer from said Potomac Co. have been duly accepted by the Chesapeake & Ohio Canal Co. as appears by the corporate acts and proceedings of said company, and final deed of surrender from the said Potomac Co., dated on the 15th day of August, 1828, duly executed and recorded in the several counties of the states of Virginia and Maryland, and the District of Columbia, wherein said Potomac Co. held any lands, and wherein the canals and works of said company were situated; which said corporate acts and proceedings the said attorneys here bring into court, etc., whereby the said attorneys say the charter of the said Potomac Co. became and is vacated and annulled, and the company and the corporate franchises of the same are extinct," etc.

Whereupon the following statement and agreement were entered into and signed by the counsel for both parties, and made a part of the record.