a stockholder in the road, filed a bill to restrain the state officers from levying a tax on the property of the road. The court held that the reservation of the power, to alter, contained in the law of 1841 affected the entire relation between the state and corporation, and placed under legislative control all rights, privileges and immunities derived by the charter from the state, and Mr. Justice Field, in delivering the opinion of the court, uses this language: "It is true that the charter of the company, when accepted by the corporators, constituted a contract between them and the state, and that the amendment, when accepted, formed a part of the contract from that date, and was of the same obligatory character, and it may be equally true, as stated by counsel, that the exemption from taxation added greatly to the value of the stock of the company and induced the plaintiff to purchase the shares held by him, but these considerations cannot be allowed any weight in determining the validity of the subsequent taxation. The power reserved in the state by the law of 1841, authorized any change in the contract as it originally existed, or as subsequently modified, or its entire revocation. The original corporators or subsequent stockholders took their interests with knowleege of the existence of this power and of the possibilty of its exercise at any time in the discretion of the legislature."

The case of Miller v. State, 15 Wall., p. 478, was where a railroad company was organized under the general laws of the state of New York, whose constitution had a similar clause to our own, as to alteration and repeal. By the original charter of the company a capital of $800,000 was provided for, to build a road fifty miles in length. The city of Rochester was authorized by law to subscribe for $300,000 of the capital stock, and was to have the right, by the act of the legislature, to appoint four out of the thirteen directors of the company. All but 18 miles of the road was abandoned, and the legislature afterwards passed an act, authorizing the city of Rochester to appoint seven directors, that being a majority of the whole number, and this last act was assailed as impairing the obligations of contracts. The courts of New York held the act constitutional, and the Supreme Court of the United States affirmed the decision, citing and approving the language above quoted from 13 Wallace.

These cases have been cited with some particularity of detail, because they construe and apply this reservation of power to a variety of cases, and seem to cover and meet, to a great degree, all the objections which have been urged against the validity of the law under consideration. Other similar cases might be added, and the elementary writers cited as being in accord with the doctrine of these decisions, but the opinion of Chancellor Kent will only be given as expressed in his Commentaries. Vol. 2, page 396, he says: "and though the validity of the alteration or repeal of a charter in consequence of such a reservation may not be legally questionable, yet it may become a matter of serious consideration in many cases, how far the exercise of such a power could be consistent with justice or policy. If a charter be granted and accepted with that reservation, there seems to be no ground to question the validity and efficiency of the reservation.”

To this should perhaps be added the case of Olcott v. Supervisors of Fond du Lac County, 16 Wall., p. 694, which, while not turning on the construction or effect of the reserved power of alteration or repeal, yet is referred to in this emphatic language: "That the legislature of Wisconsin may alter or repeal the charter granted to the Sheboygan & Fond du Lac Railroad Company is certain. This is a power reserved by the constitution. The railroad can therefore be controlled and regulated by the state, its use can be defined, its tolls and rates for transportation may be limited"-precisely what chapter 273 undertakes to do, and which the supreme court of the United States declares may be done, and done under and by virtue of the constitutional reservation.

It is, I understand, conceded by all who have given opinions hostile to this legislation, that, by virtue of the constitutional reservation, all acts of incorporation may be absolutely repealed, and the corporations created by them dissolved. If the legislature can thus wholly destroy every corporation it has created, and compel a total surrender of all franchises and privileges, and of all power to transact business, except such as may be necessary to convert its property into money and wind up its affairs, it seems difficult to

urge any valid reason against legislation which merely limits the corporate power and restricts the privilege of charging higher rates for transportation than the legislature may deem just and equitable. But it is now claimed by those who propose to disregard the law of 1874, that, although the power reserved in the constitution to alter all acts creating corporations is in terms unlimited, this reserved power is still subject to certain latent limitations which it is the duty of the courts to recognize and define; that among the latent limitations one is to be found or created which prevents the legislature from reducing the charges for transporting passengers and freight below a reasonable compensation.

The result of this doctrine would be practically to repeal the constitution of the state, so far as this clause is concerned, and to restore to corporations in this vital particular that exemption from legislative control secured to them by the Dartmouth College decision, and to guard against which the clause was incorporated into the constitution of the state.

The power to alter is given, by the constitution, just as clearly as the power to repeal, and it is difficult to see why a limitation cannot as well be applied to the one as to the other. If the state may take away the franchise entirely, why may it not so regulate and control its exercise as to further the public purpose for which it was bestowed. Ordinarily the greater includes the less; here the lesser power is given in express terms. The legislature may "alter," and this word must be given some signification different in sense or in degree from the power to repeal. It cannot be said to apply to the right of taxation and police regulation, for these are inherent in the state, applicable alike to individuals and corporations, in no way dependent on the clause of the constitution referred to. It must mean that the legislature may in its discretion, instead of taking the extreme and severe measure of repeal, exercise the lesser and milder right, and impose such restrictions and conditious upon the conduct of the affairs of the corporation, and so limit its charges as will best promote the object of its creation and prevent the abuse of the powers and privileges granted to it.

The corporations cannot justly complain of this. They have accepted their charters subject to this express reservation, and having so accepted, they hold them upon the faith of the state only, taking care to deserve its favor or com. mand its justice by the manner in which they exercise the power conferred. If a wrong is done or a mistake made in the exercise of the reserved power, the aggrieved party must resort to the legislature for redress. This was the agreement created by the acceptance of the charter and the application for relief must be made to the tribunal selected by the contracting parties. The courts cannot interfere, for, says Chancellor Kent, "the legality of the reservation cannot be questioned." ~ Should the legislature refuse or fail to correct the wrong, no worse results could ensue to the corporation than would have followed from absolute repeal. But it is hardly to be supposed that the legis lature would fail to respond to any application founded in justice. The people cannot fail to appreciate the necessity of railroads to the business and industrial interests of the state and to the convenience and prosperity of all its citizens. They do not desire any unwilling or uncompensated service from the railroads, nor will they consent that the state should be placed in a condition of servitude to the corporations/"

But if this limitation, that the rates fixed by the legislature must be reasonable, exist at all, it arises, not from the reservation of its construction, but rather out of the common law rule that in the absence of any legislative enanctment on the subject, common carriers are bound to carry all freight and passengers which are offered at reasonable rates, and cannot discriminate unjustly between shippers. In my judgment it is impracticable to apply this common law rule to railroad corporations, as a substitute for legislative control and regulation.

The use of railroads has increased the business of transporting freight and passengers to immense proportions: it has brought about great and radical changes in the commerce and business of the country; it has created new and diverted old channels of trade, built cities and formed states. The gigantic corporations controlling the railroads of the country, with their great wealth and influence are practically placed beyond the reach of the common law obligation, and this warrants the position that legislative control ought to be

and is put in the place of this common law liability of common carriers. Besides, a suit by the individual to enforce the common law liability settles nothing. No general rule can be established in a single suit, while such a suit would involve an inquiry and determination of the cost of the road and its equipment, the operating expenses, the amount and character of the business, and the whole detail of th: condition, management and relative cost of everything connected with the road. When this is done the reasonableness of the charge in every other instance remains open to be litigated at such an expenditure of time and money as to deter individuals from entering such a field of hopeless litigation.

I am led to the conclusion that the better view is, that the judgment of the legislature is by the reservation of power, and the necessities of the case, the measure of the reasonableness of the regulation imposed. The corporation certainly cannot arbitrarily determine the question, and on the assumption that the rates are unreasonable disregard the law. The legislative act is conclusive that the rate is reasonable. The exercise of the power is of itself an assertion of its justice and of its necessity. The railroads cannot question it; the courts may not review it, for by the agreement of the parties in accepting the charters under the reservation, the whole subject is withdrawn from the domain of judicial decision and remains only a matter for the legislative conscience.

And so with the objection that the provisions of this law assume control of the property of the corporation, and deprives them of its use without making any compensaiion, and is, therefore, in conflict with the constitution of the state and of the United States.

As these corporations have no natural existence, but are created wholly by legislative enactments, their power to act, in every particular, is derived from the state; their capacity to make contracts, acquire and use property, and to charge for its use comes from the state, and is granted on such terms and to such extent as the legislature may prescribe; the power of the state to grant is given by the constitution and coupled with this power is found in the same fundamental law, the authority to alter the act of incorporation as the legis lature may think the public interests demand. The rights and privileges conferred cannot be separated from the restrictions and duties imposed. The power to take toll cannot be distinguished from the duty to take only such as the legislature shall establish. It is difficult to see how restricting these tolls within certain limits which the legislature deems just, is any more depriving the corporations of their property than it would be to repeal their charters and thus deprive them of the power of charging any rates at all, and this latter power may confessedly be exercised without making compensation. Whether the state can compel the companies to operate their roads for such compensation as it chooses to prescribe, is another and different question, not involved in this discussion. The only inquiry, while companies are violating the law by charging higher rates than it allows is, as to the power of the legislature to prohibit them from charging above certain fixed rates.

If it shall be made to appear that the companies cannot operate their roads except at a loss under the rates fixed by the law, the remedy is not in an attitude of open hostility to the law, but in an application to the legislattre for its modification. As suggested in relation to the other objection, this is the forum which the constitution has provided for the determination of that question, and in accepting the charters, the companies assented to be governed and bound by the legislative sense of justice. This sense of justice will undoubtedly coincide with the mutual interest of the people and of the railroad companies. These interests demand, with a force almost equal to the provisions of positive law, that remunerative rates shall be allowed for the services of these corporations; but as a mere question of legal right, full power has been reserved by the constitution, in the language of Olcott v. Supervisors, supra, to alter or repeal the charters of these corporations, and the roads can therefore be controlled and regulated by the state; their use can be defined and their tolls and rates for transportation limited.

But it is also claimed that the reserved power to interfere is confined to contracts made by the state with the corporation, and can have no application to such as are made by the companies with bona fide creditors. The latter are said to be within the protection of the constitution of the United

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States, which prohibits the passage of any law impairing the obligation of contracts.

The views already expressed apply somewhat to this objection, but the direct and obvious answer is that the creditor contracts with the corporation precisely as the corporation contracts with the state, and both must take notice of, and are bound by the conditions and reservations in the charter.

The courts will read the contract with the creditor, as if the legislative conditions were printed therein in full. The charter is granted by the state and accepted by the corporation, and the creditor contracts with it subject to the power of the grantor to alter or impair the obligation. No right can vest, for it is agreed by both the grantee and the creditor that none shall vest. The creditor makes his investment cum onere, and cannot complain that the alteration of the charter impairs his obligation, because by its terms it admits of the very alteration imposed. It may be folly for the creditor to invest, in view of this possible interference, but he assents to the terms and takes the risk of just such interference. The creditor gains no right which the company did not possess, and the state surrenders none of the power it had reserved. A mortgagee stands in no different relation in this respect, than any other creditor. The extent of the mortgage lien is to be measured by the interest of the mortgagor in the property to which the lien attaches, and the courts will not by construction so enlarge the lien as to relive it from the burdens or restrictions to which it is subject, much less will they give to the mortgage such sancity and force as to repeal a fundamental law of the state, or essentially change its meaning and intent.

The examination of these questions and the principles governing them might be further extended, but it seems hardly necessary. The conclusion reached is that said chapter 273 is not obnoxious to any of the objections urged against it, but is à constitutional enactment, and as such entitled to obedience.

A. SCOTT SLOAN.
Attorney General.

APPLICATION OF THE ATTORNEY GENERAL.

THE STATE OF WISCONSIN VS. THE CHICAGO AND NORTHWESTERN RAILWAY CO.,

In Quo Warranto.

To the Supreme Court of the state of Wisconsin.

The Attorney General of the state of Wisconsin respectfully shows that the Chicago and Northwestern Railway Company is a corporation other than municipal, duly created and organized by the laws of the state of Wisconsin, that the said company on the first day of January 1874, owned and operated about five hundred and sixty six miles of railroad within the said state of Wisconsin, and ever since that time has used, managed and operated the same in the transportation of freight and passengers upon its said railroad.

And your petitioner further shows, that the legislature of the state of Wisconsin at its annual session in the year 1874, duly passed an act entitled an act relating to Railroads, express and telegraph companies in the state of Wisconsin, approved March 11, 1874, and being chapter 273 of the laws of said year 1874, that said act was duly published on the 28th day of April 1874, and took effect on that day.

That in and by the provisions of said act among other things all the rail. roads of the state, were divided into casses; all freights thereafter transported upon said ra:lroads or any part thereof were classified, and the compensation 2-R. R.-App.

to be charged and received by said railroads, for the transportation of freights and passengers over their respective roads fixed and limited as therein prescribed.

And your petitioner further shows upon information and belief that the clasification of said railroad, and freights, and the rates of compensation for the transportation of freight and passengers upon said roads, as fixed and established by said chapter 273 are just and reasonable and within the proper exercise of the legislative power.

And your petitioner further shows, that the said Chicago & Northwestern Railway Company, on the 29th day of April, 1874, filed in the office of the governor of the state of Wisconsin a communication, in writing, signed by the president, Albert Keep, in which, among other things, it announced that compliance with said act would be ruinous to said company, and intimated its purpose to disregard the provisions of said chapter 273 so far as the same attempts to fix rates of compensation for freights and passengers, and to manage and operate its railroads within the state of Wisconsin without regard to its requirements.

And your petitioner further shows, on information and belief, that the said Chicago & Northwestern Railway Company has adopted and issued a tariff of rates for freight between local stations on their road within the state, and a tariff of rates for freight and passengers transported over its road within said state of Wisconsin, and a classification of freight; all of which are in disregard of the rates and classifications fixed by said chapter 273, and contrary to the requirements of said chapter.

That said railroad company has also issued to their agents and servants instructions to charge, demand and receive of all persons passing over their road, or shipping freight thereon, the rates and compensation set forth and adopted in the several tariffs and schedules so issued by said company.

And your petitioner further shows, that the classification, rates and compensation so adopted by said company, are different and higher and greater than those fixed and authorized by said chapter 273, and are in no respect in conformity therewith, but are unjust, unreasonable and oppressive.

And your petitioner further shows, on information and belief, and so charges the iact to be, that the said Chicago & Northwestern Railway Company has, ever since the 29th day of April, 1874, used and operated its said road within the state of Wisconsin in entire disregard of the provisions of said chapter 273, and is daily and habitually charging and receiving greater and higher rates of compensation for the transportation of freight and passengers upon their said road within this state than are fixed, established and allowed by said chapter 273, and that said rates and compensation are so charged and received by said railroad company as aforesaid for carrying freights which does not come from beyond the boundaries of the state, and to be carried across or through the same.

And your petitioner further shows that on the ninth day of May, 1874, the said Chicago and Northwestern Railway Company charged and received of E. B. Dean, of the city of Madison, the sum of one dollar and five cents for a ticket over its road from Madison to Merrimac in the state of Wisconsin, the distance being twenty-six miles, and on the same day charged and received of the said Dean the sum of $1.05 for carrying him over their road from Merrimac to Madison, aforesaid, which said sums were higher and greater than the sum and rate fixed for said service by said chapter 273, and were unreasonable and extortionate.

And your petitioner further shows that on the eighth day of May, 1874, the said railway company charged and received of Andrew R. Mosher, of the city of Madison, the sum of one dollar and ninety cents for a ticket over its road from Madison to Beloit in the state of Wisconsin; that the distance between said places is forty-seven miles; that said Mosher applied to the agent of said company at Madison to check his trunk to Beloit, and that said agent refused until he purchased a ticket, and that on applying for such ticket the said sum of $1.90 was demanded and received by said agent, and that said Mosher paid the same under protest; that said sum so charged and received was a greater and higher sum than that fixed and allowed by said chapter 273, and was unreasonable and extortionate, and that the refusal of said company to check his baggage was unjust and unreasonable, and was