it has been held that the statutory or constitutional provisions cannot be evaded by a declaration, in the application for amendment, stipulating that the charter is to be amended in no other respect.30

When corporations are consolidated, and a new corporation is created as of the time of the consolidation, this new corporation is subject to a statutory or constitutional reservation of the power to amend or repeal charters in force at the time of the consolidation, though there may have been no such power as to the original corporations.31 It has also been held that a constitutional or statutory provision that all charters and grants of or to corporations or amendments thereof shall be subject to amendment or repeal at the will of the legislature, unless a contrary intent is expressed, applies not only to subsequent grants of original charters but also to extensions of pre-existing charters, for, while an extension of a charter merely continues the old corporation by giving it additional life, the giving of additional life to a corporation, beyond the period limited in its charter is a new grant and, in a sense, a new charter.32

A statute merely extending the charter of a corporation, without any new conditions except that the extension shall be formally accepted by the corporation, shows no intention that the extended charter shall not be subject to amendment or repeal under such a provision.33

But an existing corporation is not brought within the state's reserved power by other private business transactions. Thus, it has been held that a constitutional provision making the reserved right to amend or repeal applicable to all corporations accepting any rights or privileges thereafter granted by any general or special act does not render a corporation subject to such reserved right where it merely purchased another railroad in which the state had an interest,34 or accepted rights under city ordinances relating to the laying of switches and spurs.35 In that case the contention that the corporation's exemption from taxation, under its original charter, had been

action was the opening of the charter. Perkins v. Coffin, 84 Conn. 275, 79 Atl. 1070.

30 Winfree V. Riverside Cotton Mills, 113 Va. 717, 75 8. E. 309.

31 Atlantic & G. R. Co. v. Georgia, 98 U. S. 359, 25 L. Ed. 185; Shields v. Ohio, 95 U. S. 319, 24 L. Ed. 357. 32 Northern Bank of Kentucky v. Stone, 88 Fed. 413, 420; Deposit Bank of Owensboro v. Daviess County, 102

Ky. 174, 44 L. R. A. 825, 39 S. W. 1030, overruling Franklin County Court v. Deposit Bank of Frankfort, 87 Ky. 370, 9 S. W. 212.

33 Northern Bank of Kentucky v. Stone, 88 Fed. 413.

34 State v. Baltimore & O. R. Co., 127 Md. 434, 96 Atl. 636.

35 State v. Baltimore & O. R. Co., 127 Md. 434, 96 Atl. 636.

surrendered and that the corporation was thereby brought within the operation of general tax laws subsequently enacted, was denied.36

§ 4308. Extent of reserved power-In general. It is well recognized that the reserved power of alteration, amendment and repeal is not without limitation,37 but in determining the extent of this power, a question is presented which is involved and confusing, and which has been the subject of considerable diversity of opinion. In referring to the question, it was said in one case: "Few questions have vexed the courts and text-writers more than the one arising over the construction to be given the reservation which the states make respecting corporations organized under their respective laws.'' 38 The power itself is briefly and easily stated, but in its exercise a mass of implied powers is involved. Also, the amendments involved may extend from mere changes in the corporate name, its place of business, the number of directors and the like, which are of interest principally to the stockholders of the corporation, to amendments involving the relations of corporations with the public, enacted by the various legislatures to promote the public welfare. And herc the exercise of the power of amendment becomes closely allied to the exercise of the police power, whereby corporations as well as individuals are subject to regulations for the promotion of the public welfare. As was well said in one case: "The distinction between the powers which the legislature may exercise where there is an express reservation in the charter and those which may be exercised under the general police power where there is no reservation is not very clearly drawn. In those cases where a reservation is present the subsequent legislation has usually been sustained because of such reservation, and where no reservation is found, the subsequent

37 Berea College v. Kentucky, 211 U. S. 45, 53 L. Ed. 81; Larabee v. Dolley, 175. Fed. 365; Arkansas Stave Co. v. State, 94 Ark. 27, 27 L. R. A. (N. S.) 255, 140 Am. St. Rep. 103, 125 S. W. 1001; Ozan Lumber Co. v. Biddie, 87 Ark. 587, 113 S. W. 796; Garey v. St. Joe Min. Co., 32 Utah 497, 12 L. R. A. (N. S.) 554, 91 Pac. 369.

38 Somerville v. St. Louis Mining & Milling Co., 46 Mont. 268, L. R. A. 1915 B 811, 127 Pac. 464.

legislation is sustained, if at all, under the general police power, which, as we have already seen, is always reserved." 39

When legislative enactments amending charters are adopted, or are about to be adopted, there are two essential factors involved. There is the regulative character of the act, derived from the already existing grant, and, in addition, the promotion of the public welfare, derived from the presumed purpose of all legislative action. Also, corporations are in a class by themselves and may be dealt with differently from natural persons when their charters are held at the will of the legislature, although they are entitled to the protection of both the state and federal constitutions.41

Amendments may be effected by the corporators or stockholders themselves, and in some states by the courts, and by legislative enactments in the form of general laws.2 The difference in the kind of amendments which would naturally be adopted in such circumstances is obvious, and it is also apparent that the power exercised in each of these cases is not unlimited.

In most cases the language whereby the power of amendment or repeal is conferred or reserved would seem to indicate that it was unlimited. But in some states the language is such that the power is limited, and it may happen that the power can be exercised only on the happening of certain conditions.43

Even where the power would seem to be unlimited, various other constitutional provisions operate to impose specific restrictions, and the corporation cannot be deprived of its property without due process or just compensation, and vested rights or contractual obligations cannot be impaired. Furthermore, there are certain well-established principles which prevent the impairment of the object of the grant and require the reserved power to be exercised reasonably and in good faith. In this analysis it is the purpose to deal with these latter general restrictions first, distinguishing also the power of repeal from that of alteration and amendment, and then showing the effect of the restrictions by particular alterations or amendments. The amendments by the corporations themselves, as well as the manner of amending, will then be considered in detail.

39 Venner v. Chicago City Ry. Co., 246 Ill. 170, 138 Am. St. Rep. 229, 20 Ann. Cas. 607, 92 N. E. 643, rev'g 152 Ill. App. 398.

40 Delaware, L. & W. R. Co. V. Board of Public Utilities Com'rs, 85 N. J. L. 28, 88 Atl. 849.

41 State v. Jackson Cotton Oi! Co., 95 Miss. 6, 48 So. 300.

42 See § 4341, infra.
43 See § 4310 et seq., infra.

§-4309. Conditional power. In some cases the power to alter, amend or repeal is reserved on certain conditions, and accordingly is limited in its exercise as affected by such conditions. Thus, if the legislature reserves the right to amend on the unanimous petition of the president and directors, the unanimous consent of the president and directors is necessary, and if it provides that the charter shall not be amended without the concurrence of the city council and the directors of the company, such concurrence is a condition of the power to amend.45

§ 4310. - Impairment of vested rights. A reservation of the power to alter, amend or repeal the charter of a corporation gives the legislature no right to destroy or impair the vested rights of the corporation, or its stockholders or creditors, and property

44 Rogers v. Nashville, C. & St. L. Ry. Co., 91 Fed. 299, holding, however, that an amendment by a general law is valid without such petition where the amendment is afterwards accepted by the unanimous vote of the president and directors.

45 Louisville Gas Co. v. Citizens' Gaslight Co., 115 U. S. 683, 29 L. Ed.

510.

46 United States. Berea College v. Kentucky, 211 U. S. 45, 53 L. Ed. 81;

Fair

Haven & W. R. Co. v. New Haven, 203 U. S. 379, 51 L. Ed. 237; Shields v. Ohio, 95 U. S. 319, 24 L. Ed. 357. See also Geiger-Jones Co. v. Turner, 230 Fed. 233.

Connecticut. Town of Southington V. Southington Water Co., 80 Conu. 646, 13 Ann. Cas. 411, 69 Atl. 1023. Georgia. Macon & B. R. Co. v. Gibson, 85 Ga. 1, 21 Am. St. Rep. 135, 11 S. E. 442.

Illinois.

Venner v. Chicago City

Ry. Co., 246 Ill. 170, 138 Am. St. Rep.
229, 20 Ann. Cas. 607, 92 N. E. 643,
rev'g 152 Ill. App. 398.
Kentucky. Sage v. Dillard, 15 B.

Mon. 340.

Massachusetts. Com. v. Essex Co., 13 Gray 239.

Michigan. Detroit v. Detroit & H. Plank-Road Co., 43 Mich. 140, 5 N. W.

275.

New Hampshire. Ashuelot R. Co. v. Elliot, 58 N. H. 451, 52 N. H. 387.

New York. New York Cent. & H. River R. Co. v. Williams, 199 N. Y. 108, 35 L. R. A. (N. S.) 549, 139 Am. St. Rep. 850, 92 N. E. 404; Skaneateles Water Works Co. V. Village of Skaneateles, 161 N. Y. 154, 46 L. R. A. 687, 55 N. E. 562, Colby v. Equitable Trust Co., 124 App. Div. 262, 108 N. Y. Supp. 978; Rochester & C. Turnpike Road Co. v. Joel, 41 App. Div. 43, 58 N. Y. Supp. 346; Miller v. New York & E. R. Co., 21 Barb. 513.

Oregon. Portland Railway, Light & Power Co. v. Railroad Commission, 56 Ore. 468, 109 Pac. 273, 105 Pac. 709.

Pennsylvania. Erie & N. E. R. Co. v. Casey, 26 Pa. St. 287, 1 Grant's Cas. 274.

Utah. Garey v. St. Joe Min. Co., 32 Utah 497, 12 L. R. A. (N. S.) 554, 91 Pac. 369.

Wisconsin. State v. Railroad Commission of Wisconsin, 140 Wis. 145, 121 N. W. 919.

47 Lothrop v. Stedman, 42 Conn. 583; Oldtown & L. R. Co. v. Veazie, 39 Me. 571; People v. O'Brien, 111 N. Y. 1, 2 L. R. A. 255, 7 Am. St. Rep. 684, 18 N. E. 692, rev'g 45 Hun 519; Bond v. Atlantic Terra Cotta Co., 137 N. Y. App. Div. 671, 122 N. Y. Supp. 425.

already acquired, or the proceeds of contracts previously made, cannot be taken away.48 The power to supervise and regulate business does not signify authority so to burden such business as in practical effect to destroy it.49

§ 4311. — Illustrations of vested rights. Under its reserved power, the state cannot take the property of one corporation and turn it over to another.50 And the property or franchises of a railroad company cannot be taken for a public use under the power of eminent domain without making due compensation for everything taken, including the right of way. The reserved power does not authorize the confiscation of property.51 It has also been held, in accordance with this principle, that the legislature cannot, under such reservation, deprive a railroad company or other corporation of a vested right to redeem its property from a mortgage.52 Nor can the legis lature, on repealing the charter of a corporation, take away or impair the rights of stockholders and creditors with respect to a distribution. of its property.53 A reservation of the power to repeal the charter of a railroad company gives the legislature the power to repeal the charter and thereby dissolve the corporation, but it gives it no power to deprive the stockholders of the property rights acquired in pursuance of the charter, or to impair the obligation of contracts made

48 St. Louis, I. M. & St. P. R. Co. v. Paul, 173 U. S. 404, 43 L. Ed. 746; Com. v. Boston & N. St. R. Co., 212 Mass. 82, 98 N. E. 1075; New York Cent. & H. River R. Co. v. Williams, 199 N. Y. 108, 139 Am. St. Rep. 850, 35 L. R. A. (N. S.) 549, 92 N. E. 404; Lord v. Equitable Life Assur. Soc. of United States, 194 N. Y. 212, 22 L. R. A. (N. S.) 420, 87 N. E. 443; Colby v. Equitable Trust Co., 124 N. Y. App. Div. 262, 108 N. Y. Supp. 978; Ware Shoals Mfg. Co. v. Jones, 78 S. C. 211, 58 S. E. 811.

Alterations or amendments depriving a corporation or its stockholders or creditors of vested rights of property without due process of law are not authorized. Shields v. Ohio, 95 U. S. 319, 24 L. Ed. 357; Com. v. Essex Co., 13 Gray (Mass.) 239; Detroit v. Detroit & H. Plank-Road Co., 43 Mich. 140, 5 N. W. 275.

49 Geiger-Jones Co. v. Turner, 230 Fed. 233.

50 Ohio v. Neff, 52 Ohio St. 375, 28 L. R. A. 409, 40 N. E. 720 (property of private eleemosynary corporation).

Wisconsin Laws of 1903, p. 341, c. 229, enacted during the life of a mutual insurance company, providing for reorganization of such company and the distribution of its assets or the bestowal thereof upon another without the consent of all of its members, held unconstitutional. Huber v. Martin, 127 Wis. 412, 3 L. R. A. (N. S.) 653, 115 Am. St. Rep. 1023, 7 Ann. Cas. 400, 105 N. W. 1031, 1035. 51 Opinion of Justices, 66 N. H. 629, 33 Atl. 1076.

52 Ashuelot R. Co. v. Elliot, 58 N. H. 451, 52 N. H. 387.

53 Lothrop v. Stedman, 42 Conn. 583.