reconcile the doctrine of the case with the well established principle that no greater title to a thing can be transferred than was promised by the transferrer or with the maxim applicable to all grants, that the incident follows the principle. But purely personal franchises, such as the right of banking and doing insurance business are dependent upon continued existence of the corporation for their lawful exercise and necessarily expire with the extinction of the corporate life, unless special provision is otherwise made.1 But the power

to repeal the charter of a corporation cannot upon any legal principle include the power to repeal what is in its nature irrepealable, or to undo what has been lawfully done under power lawfully conferred."

§ 1053. Of the relation created by a grant of franchises in connection with the reservation.-Since it has become

1 People v. B. F. & C. I. R. R. Co., 89 N. Y. 84; People v. Metz, 50 Id. 61. The legislature has unlimited power to amend a charter granted under such a reservation, provided the amendment does not go beyond regulation, supervision, and control of the corporation. McIVER, J., dissenting. Charlotte, C. & A. R. Co. v. Gibbes, 27 S. C. 385; 4 S. E. 49. It has been held that at common law real estate acquired for the use of a canal company could not be sold on execution against the corporation separate from its franchise so as to destroy or impair the value of such franchise. Gue v. Tide Water Canal Co., 24 How.

257.

2 People v. O'Brien, 111 N.Y. 1, see also New Orleans R. R. Co. v. Delaware, 114 U. S. 501; People v. Oakland Co., 1 Doug. (Mich.) 286-8; Langdon v. Mayor, etc., 93 N. Y. 129; Morgan v. Louisiana, 93 U. S. 223; Adams v. B.H. & E. R. R. Co., 4 Bank R. 99; E. B. F. R. R. Co. v. Hubbard, 10 Allen, 459, note; Sweat v. B. H. & E. R. R. Co., 5 Bank R. 243; R. R. Co. v. James, 6 Wall. 740; W. R. Bridge Co. v. Shepherd, 21 How. 112; Memphis, etc., R. R. Co. v. Commrs., 112 U. S. 629; Commrs. v. Essex Co., 13 Gray, 237, 253; Fletcher v. Peck, 6 Cranch, 47; People v. Sturtevant, 9 N. Y. 273; Milhan v. Sharp, 27 Id. 607; Mumma v. Potomac Co., 8 Pet. 281; R. W. & O. R R. Co. v. O. S. R. R. Co., 16 Hun, 445; Compare Greenwood v. Freight Co., 105 U. S. 13; People v. Globe M. L. Ins. Co., 91 N. Y. 174; E. & N. E. R. R. Co. v. Case, 26 Pa. St. 287, 301; Bailey v. Platte & Denver Canal & Milling Co., 12 Colo. 230. The supreme court of the United States in the case of Church of Latter Day Saints v. United States, 136 U. S., upheld the reserved power of congress not only in direct antagonism to the case of People v. O'Brien, supra, but beyond all precedent. Infra, sec. and note.

customary to make reservations as an offset to the result of the doctrine of a contract between the state and the corporation, every phase of the controversy and of the decision out of which the doctrine originated have been re-examined and carefully scrutinized. In order to understand the subject now under consideration it is important to consider whether a grant of a corporate franchise standing alone constitutes a contract.

The principal ground upon which rested the affirmation that it does, was, that it was in the nature of an executed gift accompanied by investiture of something of value which by reason of that value became irrevocable.

The common law definition of a franchise was "a freedom, a liberty." Another and more correct definition would be that it is a public privilege. A permission to travel temporarily over private lands is a franchise within the common law definition and may be employed for illustration. It is not property, however, nor is it assignable; nor can it, without a valuable consideration to support it, be made the foundation of an action. But if the privilege be granted in writing for a definite specified period or so long as the party shall keep a bridge in repair, the privilege granted becomes of some appreciable value. Now at the time of executing the grant the grantor may insert in it a provision that it shall be subject to cancellation or alteration whenever he sees fit to exercise that power.

When he cancels it, the thing granted, the privilege, reverts to him by operation of law. It is not cancelled nor affected, nor has it lost any part of its value. Its entire legal value to the grantee while enjoyed by him is derived from the terms of the writing. But the grantor instead of cancelling the instrument may prefer to alter it; and the question arises how far he may do so and still hold the grantee bound by his covenant to

maintain the bridge. It is evident that he could not require a different bridge to be repaired than that agreed upon nor one at a different place, or a ditch to be dug instead of, or in addition to, the maintenance of the bridge.

He might, however, make slight alterations in the service to be performed, or in the manner of enjoying the right of way not involving material inconvenience or a substantial reduction of the value of the privilege.

§ 1054. To what extent franchise is property.--A corporate franchise in the hands of the citizen is property in the same sense and in no other. Separated from the permission of the state that it may be exercised in a certain manner and for the accomplishment of certain objects, it is destitute of value to the corporators. The repeal of a charter then is not a repeal of the franchise; it is an abrogation of the contract by the terms of which the franchise became vested in the grantees, which being at an end, the franchise reverts to the state by operation of law.

An alteration, if unimportant, does not divest the franchise; but if radical, it is equivalent to a resumption of the franchise and the offer of the same upon different terms or of another accompanied by a new and different proposition.1

The contract then between the state and the corporators is independent of the thing granted and consists of the terms and stipulations which accompany the grant.

§ 1055. Meaning of terms.—Whether the power to repeal includes the power to alter seems never to have been directly passed upon, though it may undoubtedly

1 Penn. R. Co. v. Bowers, 124 Pa. St. 183.

be made effective for that purpose. The power to revoke all the powers of a corporation certainly implies the power to revoke part of them. Special privileges and immunities, such for instance as exemption from taxation,' and the power to exact such compensation in the way of tolls "as it may deem reasonable," 2 be withdrawn under such general reservation.

may

But the right to withdraw such privileges as these is not derived from the reservation. As has been seen they are a part of the general legislative power of the state, which cannot be irrevocably granted away except by explicit language. Suppose, however, the state under such a reservation after having authorized a corporation by its charter to purchase and hold real estate should repeal the power to purchase in the future. Such repeal would be in reality an alteration and at the same time a repeal of the original charter, and the substitution of a new one in its place with the same effect upon the contracts of the members, with the corporation and upon inter se rights.

§ 1056. Manner of the reservation. It is wholly immaterial as respects its effect upon corporations subsequently formed whether the reservation of power to amend, alter or repeal be made in a constitution, general law or special act of incorporation.

1 State v. Maine Central R. R. Co., 66 Me. 488; Tomlinson v. Jessup, 15 Wall. 454; Railroad Co. v. Maine, 96 U. S. 507.

2 Parker v. Metropolitan R. R. Co., 109 Mass. 506; Shields v. Ohio, 95 U. S. 319; s. c. 26 Ohio St. 86; Stone v. Wisconsin, 94 U. S. 181. See Hamilton v. Keith, 5 Bush, 458.

8 To amend literally signifies an improvement or the removal of a defect and implies an alteration; but an alteration has a different meaning from an amendment. Whether an alteration is an amendment has a relative dependence. A law making an alteration in a charter may amend the body of municipal laws while it diminishes the enjoyment or value of the franchises and property of a corporation.

These mere matters of definition, however, would be of little practical value in most cases as the three powers are usually reserved connectively.

The reservation in a state constitution or general law is a rule of construction applicable to each charter thereafter granted. The incorporators accept it subject to the condition inserted in it by virtue of such general law, and it must be read as if the reservation were contained in it. A repeal of the law or omission of such provision from an amended constitution does not have the effect of expunging this condition incorporated into charters while it was in force. Existing charters have the same legal effect and are subject to be repealed, altered and amended just as if it had continued in operation. A corporate charter cannot be repealed or amended by any statute which does not directly refer to it. But while a general law remains unrepealed its provisions may be dispensed with in particular instances, provided there are no constitutional prohibitions against special legislation; and it may become a question of construction whether in granting a charter by special act the legislature intended to exempt the corporation to be formed under it from the operation of the general law or to repeal the general law so far as its terms applied to that particular case.*

§ 1057. Reservation becomes a condition of the grant.— But where without such general law or constitutional provision a charter is granted with a reservation of

1 Holyoke Co. v. Lyman, 15 Wall. 500, 522; Commonwealth v. Fayette County R. R. Co., 55 Pa. St. 452; Chesapeake, etc., Ry. Co. v. Miller, 114 U. S. 176, 189; Tomlinson v. Jessup, Id. 457; Miller v. State, Id. 478; Railroad Co. v. Georgia, 98 U. S. 365; Henderson v. Central, etc., Ry. Co., 21 Fed. Rep. 358; Mobile, etc., Ry. Co. v. Steiner, 61 Ala. 559; State v. Person, 32 N. J. Law, 134; Massachusetts, etc., Hospital v. State Mut., etc., Asso. Co., 4 Gray, 227; Suydam v. Moore, 8 Barb. 358; Re Oliver Lee & Co.'s Bank, 21 N. Y. 9; Griffin v. Kentucky Ins. Co., 3 Bush, 592.

2 Beer Co. v. Massachusetts, 97 U. S. 31.

City of Gr. Rapids v. G. R. Hydr. Co. (Mich.), 33 N. W. 749.

4 Louisville Gas Co. v. Citizens' Gas Co., 115 U. S. 684, 697; New Jersey v. Yard, 95 U. S. Ill., Commonwealth v. Essex Co., 13 Gray, 239.