Exemption from taxation, effect of transfer. 1896, Pearsall v. R. Co., 161 U. S. 646; infra, p. 1413; 1894, Keokuk R. Co. v. Missouri, 152 U. S. 301; 1888, Railroad Company v. Commw., 87 Ky. 661; 1884, Railroad Co. v. Berry, 44 Ark. 17.

Sec. 27. (4) When a franchise is offered by the state and accepted by those to whom it is offered, it is in the nature of a grant or executed contract.

1789, BULLER, J., in King v. Passmore, 3 T. R. 246. "And I do not know how to reason on this point better than in the manner urged by one of the relator's counsel, who considered the grant of incorporation to be a compact between the crown and a certain number of subjects, the latter of whom undertake, in consideration of the privileges which are bestowed, to exert themselves for the good government of the place. Now, if those persons have so far violated their trust by negligence or misconduct that they are no longer capable of governing the place, there is an end of the compact. The ground of the charter was the government of the place, and when that can not be carried on, I see no reason why the crown can not grant another charter to a different set of persons."

Note. See also: 1694, Philips v. Bury, 1 Ld. Raym. 5, s. c. 2 T. R. 346; 1815, Terrett v. Taylor, 9 Cranch (U. S.) 43,

Sec. 28. Same.

WALES, TREASURER, ETC., v. STETSON.1

1806. IN THE SUPREME JUDICIAL COURT OF MASSACHUSEtts. 2 Mass. 143-146, 3 Am. Dec. 39.

The

The declaration was in trespass and contained two counts. first was for passing the turnpike gate without payment of the legal toll; and the second was for cutting down the gate.

The parties submitted the cause to the court on a statement of facts, in substance as follows:

That the corporation was duly authorized by law to make the road, and, when made and approved by the court of sessions for the county of Norfolk, to erect a gate thereon, near the dwelling-house of Joseph Hunt; that the road was so made and approved; that by the act of incorporation, "If any person shall cut, break down, or otherwise injure or destroy the said turnpike gate, or shall forcibly pass, or attempt to pass, by force without first paying the legal toll at such gate, such person shall forfeit and pay a fine not exceeding $50, nor less than $5, to be recovered by the treasurer of said corporation, to their use in an action of trespass.'

That the gate was erected on a part of the turnpike road where was before an ancient public highway; that it was near the house of Joseph Hunt, but that it might have been placed nearer to the said house, and in a part of the turnpike road which was not before a public highway.

That said Stetson did, on the twenty-ninth day of March, 1806, 1 Arguments omitted.

forcibly pass the said gate without payment of toll, and in the evening of said day did cut down said gate.

If, upon these facts, the court are of opinion that the corporation had a right by law to erect said gate at the place where it was erected, then the defendant agrees to be defaulted; if otherwise the plaintiff is to become nonsuit.

The opinion of the court was delivered by PARSONS, C. J. After considering the several points made in this cause by the counsel, we are satisfied that the question submitted must be decided according to the legal construction of the act incorporating the proprietors of this turnpike. We are not prepared to deny a right in the general court to discontinue by statute a public highway. It is an easement common to all the citizens, who are represented in the legislature. The authorizing of the erection of bridges over navigable waters is, in fact, an exercise of a similar right. We are also satisfied that the rights legally vested in this, or in any corporation, can not be controlled or destroyed by any subsequent statute, unless a power for that purpose be reserved to the legislature in the act of incorporation.

In the consideration of the provisions of any statute, they ought to receive such a reasonable construction, if the words and subject-matter will admit of it, as that the existing rights of the public, or of individuals, be not infringed. And we are of opinion that this act of incorporation reasonably admits such construction. The corporation had a right to make the turnpike over such parts of the old road as lay in their way. This affects no existing rights, as the easement remains. But before we construe the statute as giving an authority to obstruct a former highway by erecting a gate thereon, it should appear that such construction is necessary to give a reasonable effect to the statute. In this case no such necessity appears; but from the case as stated it appears that the corporation might have exercised their right to erect a gate, and to receive the toll, as empowered by the statute, without impeding the travel on the old highway. The statute authorizes the corporation to erect a gate on the turnpike road near the dwelling-house of Joseph Hunt; and it is agreed in the case that a gate might have been erected on the turnpike, and near the dwelling-house of J. Hunt, and not upon any part of the old highway. This gate being on the old highway is a public nuisance, and the defendant had a right to abate it. Let the plaintiff be called.

Note. 1853, State Bank of Ohio v. Knoop, 16 How. (U. S.) 369; 1854, Thorpe v. Rutland & Bur. R. Co., 27 Vt. 140; 1819,, Dartmouth College v. Woodward, 4 Wheat. (U. S.) 518, infra, p. 708; 1857, Nichols v. Somerset, etc., R. Co., 43 Me. 356; 1805, Trustees v. Foy, 1 Murphy (N. C.) 58, 3 Am. Dec. 672, supra, p. 34; 1855, Dodge v. Woolsey, 18 How. (U. S.) 331, supra, p. 88; 1867, Zabriskie v. Hackensack, etc., R. Co., 18 N. J. Eq. 178, 90 Am. Dec. 617, infra, p. 1466; 1850, Commonwealth v. Cullen, 13 Pa. St. 133, 53 Am. Dec. 450, infra, p. 417; 1862, Durfee v. Old Colony R. Co., 5 Allen (Mass.) 230, infra, p. 1462; 1872, Yeaton v. Bank of Old Dominion, 21 Grattan (Va.) 593, infra, p. 750; 1872, Tomlinson v. Jessup, 15 Wallace (U. S.) 454, infra, p. 754; 1864, Hawthorne v. Calef, 2 Wallace (U. S.) 10, infra, p. 752; 1856, White Mountain R. Co. v. Eastman, 34 N. H. 124, infra, p. 758. Compare, 1809, Currie v. Mut. Ass. Soc., 4 Henning & Munf. (Va.) 315.

Sec. 29. (5) These franchises are property, and can not be taken without cause, but may be forfeited for misuser or nonuser.

1691. HOLT, J., in King v. Mayor of London, Show. 280. "I. am of the opinion that a corporation may be forfeited, if the trust be broken, and the end for which it is instituted be perverted."

HIGGINS ET AL. v. DOWNWARD.1

1888. IN THE Court of ERRORS AND APPEALS OF DELAWARE. 8 Hous. (Del.) 227-257, 40 Am. St. Rep. 141.

SAULSBURY, Chancellor. "A corporation is an artificial being, invisible, intangible and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence. These are such as are supposed best calculated to effect the object for which it was created. Among the most important are immortality, and, if the expression may be allowed, individuality; properties by which a perpetual succession of many persons are considered as the same, and may act as the single individual. They enable a corporation to manage its own affairs, and to hold property without the perplexing intricacies, the hazardous and endless necessity of perpetual conveyance for the purpose of transmitting it from hand to-hand. It is chiefly for the purpose of clothing bodies of men in succession with these qualities and capacities that corporations were invented and are in use." Chief Justice Marshall's opinion in the case of College v. Woodward, 4 Wheat. 626. A franchise is a certain privilege conferred by grant from the government, and vested in individuals. Corporations or bodies politic are the most usual franchises known to our law. Bouv. Law Dict., 545. By section 17, article 2, of the constitution of this state, it is declared that "no act of incorporation, except for the renewal of existing corporations, shall be hereafter enacted without the concurrence of twothirds of each branch of the legislature, and without a reserved power of revocation by the legislature; and no act of incorporation which may be hereafter enacted shall continue in force for a longer period than twenty years without the re-enactment of the legislature, unless it be an incorporation for public improvement."

The Wilmington and Reading Railroad Company was a private corporation for public improvement, and therefore its existence was not limited to the period of twenty years under this provision of the constitution. There was no time fixed by positive provision in the charter of the Wilmington and Reading Railroad Company when the corporation should cease to exist. Had there been, the corporation, in the absence of a renewal of its charter before that period, would 1 Facts sufficiently stated in the opinion of the court. Arguments, and opinion of Comegys, J., concurring, omitted.

have become dissolved without either a representative or the possibility of one, as no provision is made by our laws for a representative in such a case; and at the instance of its dissolution the debts due to it would have become extinguished, not the right to or the remedy for the debts suspended, merely, but the debt itself annihilated. Bank v. Lockwood's Adm'r, 2 Har. (Del.) 14. A judgment, being No. 181 to the November term, 1869, was recovered by the Wilmington and Reading Railroad Company, a corporation then existing under the laws of Delaware and Pennsylvania, against the defendants. A fi. fa. was issued, being No. 224 to the November term, 1870, on this judgment, and levy made on goods and chattels. Subsequent executions were issued on this judgment, the last being an alias vend. exp., No. 92, to September term, 1887. On May 29, 1886, the judgment was marked for the use of the Wilmington and Northern Railroad Company, by the direction of the attorney of the plaintiff, and the judgment was afterwards, on June 12, 1886, marked for the use of John C. Higgins by direction of the president of the Wilmington and Northern Railroad Company. The defendants allege that at or about the year 1877 the Wilmington and Reading Railroad Company had ceased to have any legal existence as a corporation, or any right to perform or do any act whatever, and that the said judgment which had been recovered by it became void and of no effect.

The sixth reason assigned for setting aside the sheriff's sale is that the transfers or assignments alleged to have been made by indorsements on the record, and by and through which the said John C. Higgins claims title thereto, were illegal, unauthorized and void, and ineffectual to vest in said John C. Higgins any right or title whatever. This reason, so far as it relates to the authority of the attorney directing the judgment to be marked to the use of the Wilmington. and Northern Railroad Company is not before us, exceptions thereto having, for the sake of expediting the hearing of the questions reserved, been abandoned, so that the real and only question before us is, was the Wilmington and Reading Railroad Company dissolved by the act in relation thereto passed February 22, 1877? Or, in other words, did the legislature, by passing that act, revoke the charter of the Wilmington and Reading Railroad Company? On the 3d of March, 1868, the Wilmington and Reading Railroad Company executed a mortgage upon its road, etc., for the payment of money. suit was afterward instituted in the United States Circuit Court for the foreclosure of this mortgage. The final decree in the case was made April 25, 1876, directing the sale by the trustees of the railroad and property. The sale was made under the decree November 4, 1876. The deed made by the trustees to the purchasers conveyed "the railroad of the Wilmington and Reading Railroad Company, extending from a point on the Philadelphia and Reading Railroad at or near Birdsboro, in the county of Berks, state of Pennsylvania, to the city of Wilmington, in the state of Delaware, with all the rights, privileges, immunities and franchises of the said Wilmington and Reading Railroad Company, under any and all grants of the state of Pennsyl

A

vania, but exclusive of the franchises granted by the state of Delaware." These franchises granted by the state of Delaware were not included in the mortgage for which foreclosure was decreed, and, of course, were not included, but excluded, by the decree of foreclosure. They were not sold by the trustees to the purchasers of said road. Of course, therefore, the purchasers of said Wilmington and Reading Railroad did not by such sale become entitled to said franchises granted by the state of Delaware.

On the 22d of February, 1877, the legislature of Delaware passed an act to incorporate the purchasers of the Wilmington and Reading Railroad. This act, after reciting in its preamble that the railroad of the Wilmington and Reading Railroad Company, with its appurtenances, was sold in pursuance of a mortgage executed by said company under authority of laws of this state, and that it was necessary to the proper enjoyment of the rights acquired by said sale that the purchaser should be incorporated with authority to consolidate with any company organized or to be organized under the laws of the state of Pennsylvania, operating such portion of the road so sold as is situated within the state of Pennsylvania, incorporated the persons purchasing the said Wilmington and Reading Railroad, under a decree of the circuit court of the United States for the eastern district of Pennsylvania, a body politic and corporate, by the name of the "Wilmington and Northern Railroad Company." By this act the company were vested with all the right, title, interest, property, possession, claim and demand at law or in equity of, in and to such railroad, to wit, the railroad of the Wilmington and Reading Railroad Company, with its appurtenances, and with all the rights, powers, immunities, privileges and franchises of the corporation as whose property the same was sold, and which may have been granted thereto or conferred thereupon by any act or acts of assembly whatsoever in force at time of such sale. These franchises, granted by the state of Delaware, not being included in the mortgage executed by the Wilmington and Reading Railroad Company, and consequently not sold under the decree of foreclosure thereof made by the circuit court of the United States for the eastern district of Pennsylvania, the purchasers at such sale acquired no title thereto, and no property therein. If they acquired any such title or property it could only have been under and by virtue of the act to incorporate the purchasers of the Wilmington and Reading Railroad. before referred to. This act purported to vest such purchasers, among other things, with the privileges and franchises of the corporation as whose property the same was sold, and which may have been granted thereto or conferred thereupon by any act or acts of assembly whatever in force at time of such sale.

The condition of a corporation whose charter has expired is not the same as that of a corporation which has failed to elect its officers, and, as the consequence of that failure, is rendered inactive. The life of the one is out of it by its own constitution, and not from a failure to do what its charter enabled them to do, to give them active being; the other was entitled by its charter to a continued active life,