strued, and such a grant will not be implied but must be conferred in express terms.63 And a municipal ordinance granting to a private Corporation the right to construct and maintain waterworks for a certain time does not grant an exclusive franchise, and does not preVent the city from afterwards establishing a competing system.64 An inviolable grant of an exclusive franchise to construct and maintain a bridge over a river at a certain point, or within a specified distance thereof, and to collect tolls for using it, cannot be impaired by a subsequent grant to another corporation of the right to construct and maintain a toll bridge, but the right is not infringed by the construction and maintenance of an ordinary railroad bridge,65 or a ferry.66 The existence of a contract between the state and a corporation does not prevent the state from taking the property of such corporation under the power of eminent domain. All of the property of corporations, including franchises, may be taken by the state for a public use, or by another corporation under authority from the state, upon Wash. 517, 47 L. R. A. 214, 58 Pac. 773. In Capitol City Light & Fuel Co. v. Tallahassee, 42 Fla. 462, 28 So. 810, it was held that where a city, by ordinance, grants the exclusive use of its streets to a corporation for erecting poles, wires, etc., for an electric light plant, with a provision that the company shall not be required to furnish light until it can make a certain profit on its investment, the ordinance does not constitute a contract, the obligation of which is protected from impairment by the Constitution, until the company has begun preparations for, or made expenditures towards, erecting a plant; and that, after it has failed for ten years to take any steps towards erecting a plant, the legislature may authorize the city to construct and operate a plant. 65 Bridge Proprietors v. Hoboken Co., 1 Wall. (U. S.) 116, 17 L. Ed. 571; Mohawk Bridge Co. v. Utica & S. R. Co., 6 Paige (N. Y.) 554. 66 Parrot v. Lawrence, 2 Dill 332, Fed. Cas. No. 10,772. making just compensation.67 For example, an ordinary railroad company, or a street railroad company, may be authorized to take or use the road of another corporation on making due compensation.68 And a bridge constructed and owned by a corporation may be condemned and taken as part of a public highway. If the charter of a corporation gives it the power to receive subscriptions to its capital stock from municipal corporations, and a consideration is given, the power cannot be taken away by subsequent legislation. Nor can the legislature impair the rights of the corporation under such a subscription after it has been made. It has been held, however, that where no consideration has been given for a grant of such power in the charter of a corporation and there has been no attempt to exercise the power, the grant is not a contract between the corporation and the state, and may be restricted or wit' rawn.70 67 United States. Greenwood V. Union Freight R. Co., 105 U. S. 13, 26 L. Ed. 961; West River Bridge Co. v. Dix, 6 How. 507, 12 L. Ed. 535. Illinois. Village of Hyde Park v. Oakwoods Cemetery Ass'n, 119 Ill 141, 7 N. E. 627. Massachusetts. Eastern R. Co. v. Boston & M. R. R., 111 Mass. 125, 15 Am. Rep. 13. New Hampshire. Opinion of Justices, 66 N. H. 629, 33 Atl. 1076; Backus v. Lebanon, 11 N. H. 19, 35 Am. Dec. 466. Pennsylvania. In re Pittsburgh Junct. R. Co.'s Appeal, 122 Pa. St. 511, 9 Am. St. Rep. 128, 6 Atl. 564. See, generally, § 1504, supra. 68 Greenwood v. Union Freight R. Co., 105 U. S. 13, 26 L. Ed. 961. See also § 1504, supra. 69 West River Bridge Co. v. Dix, 6 How. (U. S.) 507, 12 L. Ed. 535. When the public good requires a right of way free to all, the property and franchises of a toll road company may be taken under the power of eminent domain, upon making just compensation for the purpose of a free public highway. And the right to thus exercise the power of eminent domain is not affected by the fact that the charter of the company permits the state within a certain time, and upon certain conditions, to purchase its property. Backus v. Lebanon, 11 N. H. 19, 35 Am. Dec. 466. 70 United States. Pearsall v. Great Northern R. Co., 161 U. S. 646, 666, 40 L. Ed. 838; Norton v. Commissioners Taxing Dist. of Brownsville, 129 U. S. 479, 32 L. Ed. 774; Wadsworth v. Board Sup'rs Eau Claire Co., 102 U. S. 534, 26 L. Ed. 221; Town of Concord v. Portsmouth Sav. Bank, 92 U. S. 625, 23 L. Ed. 628; Aspinwall v. Daviess County Com'rs, 22 How. 364, 16 L. Ed. 296. Kentucky. Covington & L. R. Co. v. Kenton County Court, 12 B. Mon. 144. Missouri. Wilson v. Polk County, 112 Mo. 126, 20 S. W. 469. New York. Falconer v. Buffalo & J. R. Co., 69 N. Y. 491, aff'd 103 U. S. 821, 26 L. Ed. 471. North Carolina. Board Com'rs Wilkes Co. v. Call, 123 N. C. 308, 44 L. R. A. 252, 31 S. E. 481. The fact that the inhabitants of a municipality have voted to subscribe is immaterial, for such a vote is not a subscription. See the cases above cited. If a quasi public corporation is given the charter right to fix the amount of its rates, charges or tolls, the legislature cannot subsequently impair such contract right by limiting or reducing the charges, unless the power to alter or amend the charter has been reserved.72 In some 1173 § 4297. Legislation changing or affecting remedies. states, constitutional provisions exist prohibiting laws impairing the obligations of contracts, "or depriving a party of any remedy for enforcing a contract which existed when the contract was made." But, in the absence of a specific constitutional provision referring to remedies, it is usually held that the provision against impairing the obligations of contracts does not prohibit laws changing or affect It is not necessary to show that the income of the corporation is thereby reduced. Los Angeles v. Los Angeles City Water Co., 177 U. S. 558, 44 L. Ed. 886. Where the charter of a turnpike company gives it the right to charge tolls for vehicles, including bicycles, the legislature cannot constitutionally prohibit it from charging tolls for bicycles. Rochester & C. Turnpike Road Co. v. Joel, 41 N. Y. App. Div. 43, 58 N. Y. Supp. 346. A provision in the charter of a railroad company giving it the right to fix the rate of certain fares on its road within certain limits constitutes a contract between the state and the corporation, and the corporate franchise which passes by a sale (under legislative authority) of the company's property and franchises to another company, is no more subject to impairment by the legislature after the transfer than before. Ball v. Rutland R. Co., 93 Fed. 513. 72 See § 4335, infra; Beardsley v. New York, L. E. & W. R. Co., 17 N. Y. Misc. 256, 40 N. Y. Supp. 1077, aff'd 15 N. Y. App. Div. 251, 44 N. Y. Supp. 175. 73 See Western Nat. Bank of New York v. Reckless, 96 Fed. 70. ing remedies. This results from the rule of policy that the legislative control of this matter must remain absolute, and it would be improper for one legislature to divest itself of its power in such a manner as to bind subsequent legislatures and prevent legislation affecting the forms of administering justice. In addition, there is a well-grounded distinction between the rights arising out of contracts and the remedies for enforcing such rights.74 Accordingly, statutes prescribing a different form of action than is prescribed in the charter of a corporation or general law or changing the rules of pleading or of serving process are not objectionable as impairing the obligations of contracts. There is no objection to a change in such matters unless the change operates to take away the remedy.75 To enlarge the remedies of creditors against either the corporation or its stockholders impairs the obligation of no contract,76 and the legislature may change the remedy for enforcing the liability of stockholders on unpaid subscriptions or their statutory liability to creditors,77 if such change does not increase the stockholders' liability, or impair the creditors' rights.78 In addition, it has been held that statutes affecting remedies for an accounting or for an injunction by requiring such proceedings to be instituted by the attorney general are constitutional,79 and the 74 Bank of Columbia v. Oakley, 4 Wheat. (U. S.) 235, 4 L. Ed. 559. "There is a difference," said Chief Justice Marshall, "between those rights on which the validity of the transactions of the corporation depends, which must adhere to those transactions everywhere, and those peculiar remedies which may be bestowed on it. The first are of general obligation; the last, from their nature, can only be exercised in those courts which the power making the grant can regulate." Young v. Bank of Alexandria, 4 Cranch (U. S.) 384, 2 L. Ed. 665. 75 Cairo & F. R. Co. v. Hecht, 95 U. S. 168, 24 L. Ed. 423, aff'g 29 Ark. 661. See also Carey v. Giles, 9 Ga. 253; Chicago Life Ins. Co. v. Auditor of Public Accounts, 101 Ill. 82, aff'd 113 U. S. 574, 28 L. Ed. 1084. 76 Converse v. Etna Nat. Bank, 79 Conn. 163, 7 Ann. Cas. 75, 64 Atl. 341. 77 United States. Hill v. Merchants' Mut. Ins. Co., 134 U. S. 515, 33 L. Ed. 994, aff'g 86 Mo. 466, 12 Mo. App. 148. Illinois. Smith v. Bryan, 34 Ill. 364. Massachusetts. Com. v. Cochituate Minnesota. Ellsworth Mfg. Co. v. New York. Persons v. Gardiner, 42 78 Evans v. Nellis, 101 Fed. 920. legislature may change the remedy prescribed by the charter of a turnpike company for compelling it to keep its road in repair,80 or it may repeal a provision in the charter of a railroad company requiring the owner of stock killed by the negligence of the company to sue for damages within six months.81 A statute extending the period of existence of a corporation for the purpose of settling and winding up its affairs and distributing its assets merely provides a remedy for the enforcement of rights which would be recognized and enforced by a court of equity, and such a statute cannot be held to impair the obligations of contracts, either of the corporation, stockholders or creditors.82 But the legislature cannot constitutionally extend the existence of a corporation so that it may continue in business, unless it has reserved the power to alter and amend the corporate charter or unless the extension is consented to by the stockholders.83 § 4298. Waiver of objection as to impairment of contract obligation. The inviolability of the charter of a corporation from impairment by legislative action, in the absence of the reserved power to alter, amend or repeal, may be bargained away by the corporation,84 an insurance company and its policyholders, not only because it furnishes a sufficient remedy to compel the company to perform the agreements contained in its policies, but also because it is remedial merely. Swan v. Mutual Reserve Fund Life Ass'n, 155 N. Y. 9, 49 N. E. 258, aff'g 20 N. Y. App. Div. 255, 46 N. Y. Supp. 841. This case was distinguished in a later case in the Appellate Division, and it was held that a statute providing that no proceedings should be brought or order made for an accounting, or enjoining or interfering with the prosecution of the business of any insurance company, or applying for a receiver, except on application of the attorney general, was unconstitutional in SO far as it denied to a policyholder in a mutual insurance company, who became such before the passage of the law, the right to sue for his share of the net surplus of the company under his policy. "While it may be con ceded," said Judge Woodward, "that the legislature has a right to protect its creatures against equitable actions by individual policyholders calculated to embarrass the affairs of the corporation, and to interfere with the higher rights of the policyholders as a whole, it cannot be successfully maintained that the legislature is acting within its constitutional sphere in attempting to make the right of an individual to bring an action upon a contract to depend upon the whim or caprice of a public official." Greeff v. Equitable Life Assur. Society, 40 N. Y. App. Div. 180, 57 N. Y. Supp. 871. 80 Williamsport & H. Turnpike Co. v. Startzman, 86 Md. 363, 38 Atl. 777. 81 Louisville & N. R. Co. v. Williams, 103 Ky. 375, 45 S. W. 229. 82 Thornton v. Marginal Freight Ry. Co., 123 Mass. 32; Foster v. Essex Bank, 16 Mass. 245, 8 Am. Dec. 135. 83 See § 4340, infra. 84 Louisville & N. R. Co. v. State, 154 Ala. 156, 45 So. 296. |