demanded the serious attention and consideration of lawmakers. And while valuable services have been rendered to the public by this class of organizations, which have stimulated their formation by numerous special acts, it came at last to be perceived that they were attended by many evils in their operation as well as much good, and that the hasty manner in which they were created by the legislatures, sometimes with exclusive privileges, often without due consideration and under the influence of improper motives, frequently led to bad results.

Whether it was this consideration, or mainly the desire to fix some more uniform rule by which the rights and powers of private corpora tions, or those of pecuniary profit, should come into existence, it is certain that not many years ago state constitutions which were formed or remodeled came to have in them a provision like that which is now to be found in the constitution of the state of Oregon, art. 11, § 2:

"Corporations may be formed under general laws, but shall not be created by special laws, except for municipal purposes. All laws passed pursuant to this section may be altered, amended, or repealed, but not so as to impair or destroy any vested corporate rights.'

Outside of the powers conferred and privileges granted to those organizations by the statutes under which they exist, they are in all the states of the Union, which, like Oregon, have the common law as the foundation of their jurisprudenee, governed by that common law; and it is the established doctrine of this court, and, with some exceptions, of the states in which that common law prevails, as well as of Great Britain, from which it is derived, that such a corporation can exercise no power or authority which is not granted to it by the charter under which it exists or by some other act of the legislature which granted that charter.

[After citing and discussing Thomas v. R. Co., 101 U. S. 71; The Asbury R. C. & I. Co. v. Richie, L. R. 7 H. L. 653; The East Anglian R. Co. v. Eastern Counties R., 11 C. B. 775; Green Bay & M. R. Co., 107 U. S. 98; Pennsylvania R. Co. v. St. Louis, etc., R. Co.. 118 U. S. 290, 309, proceeds: ]

It may be considered that this is the law of the state of Oregon, except as it has been altered or modified by its constitution and statutes. We are here met with an embarrassment arising out of the circumstance that neither the plaintiff nor the defendant in the present case profess to exercise its powers under any special charter conferred on it by the legislature of Oregon. That state, in accordance with the principle laid down in its constitution, to which we have already referred, passed general laws for the formation of private corporations. See laws of Oregon (Deady's Comp.) ch. 8. Under title 1, § 1, reads as follows:

"Whenever three or more persons shall desire to incorporate them selves for the purposes of engaging in any lawful enterprise, business, pursuit or occupation, they may do so in the manner provided in this act."

Provision is then made for the manner in which these persons shall constitute themselves a corporation, by filing articles of association,

acknowledged before a proper officer, in the office of the secretary of state and in that of the clerk of the county where the business is to be carried on. What these articles shall contain is specified with some particularity. But title 2 of this same chapter is more important in regard to the matter at issue, because it relates, among other things, to corporations which are organized for the construction of railroads. The mode of their formation is the same as that of those

coming under title 1, but the declaration of the powers which may be exercised by railroad corporations may become important in the consideration of the present case.

By the act of the legislature of October 21, 1878, Session Laws, 95, it is provided "that any foreign corporation incorporated for the purpose of constructing, or constructing and operating, or for the purposes of, or with the power of, acquiring and operating any railway, shall, on compliance with the laws of this state, for the regulation of foreign corporations transacting business therein, have the same rights, powers and privileges" as a domestic corporation. formed for such purpose, and no more.

When we have found, therefore, what powers were conferred by the laws of Oregon on the defendant corporation in this case we shall also have determined that the powers of the plaintiff corporation were no greater with regard to the same subject-matter, so far as the statutes are concerned, except as it may be shown that other powers are given by some express statute.

It may also be conceded, at the outset of the argument, that the memorandum made under the companies act of 1862 by the plaintiff, and the articles of association made under the laws of Oregon by the defendant, both contain declarations of the powers of these companies and of each of them to buy or sell or lease railroads. The only question, therefore, to be considered is whether this declaration of power is authorized by the laws of Oregon.

It is argued that the articles of association, under the Oregon law, and the memorandum of association, under the companies act of Great Britain, are themselves the equivalent of an act of incorporation by the legislature, and that whatever is found as a grant of power, or description of the purpose of the company, set forth in such articles. or memorandum, is tantamount to a legislative act. A phrase in the opinion of the court, in Thomas v. Railroad Co., supra, is cited as supporting this proposition, namely: "The memorandum of association, as Lord Cairns said, stands in place of a legislative charter." But what was meant, both by Lord Cairns and by this court, was that anything not claimed, granted or described in such instrument in relation to the powers and business of the corporation could not be held to be a part of them by construction; in other words, that its powers could not exceed those enumerated therein. It was necessarily implied in such a remark that anything in such articles of memorandum not warranted by the statutes in question, authorizing the formation of corporate bodies, was void for want of authority.

Of course, any authority for the exercise of corporate powers, de-.

rived from the laws of Oregon, must be in accord with the constitution of that state and its statutes upon that subject. The constitutional provisions, above quoted, that corporations shall not be created by special laws, but may be formed under general laws, implies that no private corporation could be created thereafter until such general law had been enacted, and that it thereupon became the fundamental law of the state in regard to all corporations formed under it. It is idle to say, therefore, that any corporation could assume to itself powers of action by the mere declaration in its articles or memorandum that it possessed them.

We have examined with much care the two statutes already referred to concerning incorporation, enacted in accordance with that constitutional provision, and do not find any express authority for a railroad company to lease its road for an indefinite period or for it to take such a lease; nor are we able to find any general language in those statutes, or either of them, in relation to the powers that may be conferred upon corporations which justifies a departure from the principles laid down in Thomas v. Railroad Co.

It is to be remembered that where a statute making a grant of property, or of powers, or of franchises to a private individual, or a private corporation becomes the subject of construction as regards the extent of the grant, the universal rule is that in doubtful points the construction shall be against the grantee and in favor of the government or the general public. As was said in the case of Charles River Bridge v. Warren Bridge, 11 Pet. 420: "In this court the principle is recognized that in grants by the public nothing passes by implica tion." See, also, Dubuque and Pacific Railroad Co. v. Litchfield, 23 How. 66; Turnpike Co. v. Illinois, 96 U. S. 63.

Therefore if the articles of association of these two corporations, instead of being the mere adoption by the corporators themselves of the declaration of their own purposes and powers, had been an act of the legislature of Oregon conferring such powers on the corporations, they would be subject to the rule above stated and to rigid construction in regard to powers granted. How much more, then, should this rule be applied, and with how much more reason should a court, called upon to determine the powers granted by these articles of association, construe them rigidly, with the stronger leaning in doubtful cases in favor of the public and against the private corporation.

We have to consider, when such articles become the subject of construction, that they are, in a sense, ex parte; their formation and execution-what shall be put into them as well as what shall be left out -do not take place under the supervision of any official authority whatever. They are the production of private citizens, gotten up in the interest of the parties who propose to become corporators, and stimulated by their zeal for the personal advantage of the parties concerned rather than the general good.

These articles, when signed by the corporators, acknowledged before any justice of the peace or notary public, and filed in the office of the secretary of state and the clerk of the proper county, become com

plete and operative. They are, so far as framed in accordance with law, a substitute for legislation, put in the place of the will of the people of the state, formerly expressed by acts of the legislature. Neither the officer who takes such acknowledgment, nor those who file the articles, have any power of criticism or rejection. The duty of the first is to certify to the fact, and of the second to simply mark them filed as public documents, in their respective offices.

These articles, which necessarily assume, by the sole action of the corporators, enormous powers, many of which have been heretofore considered of a public character, sometimes affecting the interests of the public very largely and very seriously, do not commend themselves to the judicial mind as a class of instruments requiring or justifying any very liberal construction. Where the question is whether they conform to the authority given by statute in regard to corporate organizations, it is always to be determined upon just construction of the powers granted therein, with a due regard for all the other laws of the state upon that subject, and the rule stated above.

It is not urged with much apparent confidence that there is anything in the general provision of the laws of Oregon, in relation to the formation of private corporations, which are to be found in ch. 8, titles 1 and 2, Deady's Comp., which by express terms authorizes a corporation to include within the powers enumerated in its articles of association that of making such a lease as the one which is the subject of the action. Arguments based upon these laws are founded upon the implication that building railroads is, within the meaning of §1 of title 1, a "lawful enterprise, business, pursuit or occupation;" and the further inference that the power of leasing a railroad, either as a lessor or a lessee, is one which is incident and proper to the pursuit of the lawful business of constructing and operating a railroad. The same argument is drawn from the general fact that title 2 recognizes the authority of corporations organized for the construction of railroads, macadamized roads, plank roads, clay roads, canals or bridges, to appropriate lands for their necessary uses by the exercise of the right of eminent domain, in the manner pointed out.

The language of the statute of New Jersey (quoted in Thomas v. Railroad Co., supra), under which it was urged that the railroad company had authority to make the lease in controversy, was quite as general and as liberal in its description of the powers which that corporation was authorized to exercise as anything to be found in the Oregon statutes. In fact, in the authority which was given to that company in regard to making contracts for the transportation of passengers and freight, and the doing of a general railroad business with other corporations and private persons, it approaches nearer the power to make leases than anything which is to be found in the laws of Oregon; yet this court held that although it was a direct authority from the legislature itself, and not subject to the restrictive criticisms above subjected, the lease made in that case was ultra vires, and without authority on the part of the company.

Another important consideration to be observed, peculiarly applica

28. WIL CAS.

ble to the acts of corporations formed by the corporators themselves, declaring what business they are about to pursue, and the powers which they propose to exercise in carrying it on, is, that while the thing to be done may be lawful in a general way, there are and must be limitations upon the means by which it is to be done or the purpose carried out, which the articles of incorporation can not remove or violate. A company might be authorized by its articles to establish a large manufactory in a particular locality, and might be held to be a valid incorporation with sufficient powers to prosecute the business described; but such articles, although mentioning the particular place, would not empower the company, in the exercise of the power thus conferred, to carry on a business injurious to the health or comfort of those living in that vicinity.

Instances might be multiplied in which powers described in general terms as belonging to the objects of the parties who thus become incorporated would be valid, but the corporation, in carrying out this general purpose, would not be authorized to exercise the powers necessary for so doing in any mode which the law of the state would not justify in any private person or any unincorporated body. The manner in which these powers shall be exercised, and their subjection to the restraint of the general laws of the state and its general principles of public policy are not in any sense enlarged by inserting in the articles of association the authority to depart therefrom.

[The rest of the opinion considering other points raised, viz., the effect of the words "successors and assigns" in a proviso making a specific grant to the corporation—a provision in a general law authorizing a navigation company to construct a railroad where portage was necessary, but forbidding the lease of the same, and a provision in a general corporation act authorizing a corporation to dissolve itself and dispose of its property-and holding that none of them impliedly authorized the giving or taking of a lease by a railroad company, is omitted.]

Judgment below reversed.

Note. The charter under general laws, consists of the provisions of the general incorporation law, and the articles of association. 1856, The Eastern Plank R. Co. v. Vaughan, 14 N. Y. 4 Kern.) 546; 1866, Society for Visitation of Sick v. Commw., 52 Pa. St. 125, 91 Am. Dec. 139; 1869, Van Etten v. Eaton, 19 Mich. 187; 1876, Abbott v. Omaha Smelting Co., 4 Neb. 416: 1882, Grangers' Life and Health Ins. Co. v. Kemper, 73 Ala. 325; 1883, Heck v. McEwen, 12 Lea (Tenn.) 97; 1889, People v. Chicago Gas Trust Co., 130 III. 268, 17 Am. St. Rep. 319; 1891, Ellerman v. Chicago Jct., etc., Co., 49 N. J. Eq. 217; 1892, Cronin v. Potters' Co-op. Co., 29 W. L. B. (Ohio) 52; 1893, Republican Mountain Silver Mines v. Brown, 58 Fed. Rep. 644, 7 C. C. A. 412, 19 U. S. App. 203, 24 L. R. A. 776; 1895, Lincoln Shoe Mfg. Co. v. Sheldon, 44 Neb. 279, 62 N. W. Rep. 480; 1896, Knights of Pythias v. Weller, 93 Va. 605; 1898, North, etc., R. Co. v. Utah, etc., R. Co., 16 Utah 246, 40 L. R. A. 851, 52 Pac. Rep. 168. Provisions in the articles inconsistent with the general law will be considered void or surplusage. 1856, The Eastern Plank Road Co. v. Vaughan, 14 N. Y. 546; 1883, Heck v. McEwen, 12 Lea (Tenn.) 97; 1889, People v. Chicago Gas T. Co., 130 Ill. 268, 17 Am. St. Rep. 319; 1893, Republican M. S. M. v. Brown, 58 Fed. Rep. 644, 19 U. S. App. 203, 24 L. R. A. 776. But perhaps in some cases additional powers consistent with the general law may be pro