stitutions that all charters of private incorporation granted by the legislature shall be subject to amendment or repeal at the legislative will. A provision of this nature is a limitation upon the power of the legislature in granting charters; and while it cannot affect any that are in existence when it takes effect, it attaches the quality of modification and repealability to any afterwards granted, and all who accept them do so with full notice of the fact. The charters are still contracts, but contracts with a reserved right on the part of the state to amend or terminate them. The rule would be the same if the charter were granted while a general law of the state was in force which declared that all grants of the kind should be subject to the legislative power of alteration and repeal; for the grantees would accept their franchises with notice of and qualified by such a declaration.2

Contracts of a state, like the contracts of individuals, may be modified to any extent, subject to constitutional provisions, if any, having a bearing upon the right, by the mutual consent of the parties thereto; which, in the case of a charter of private incorporation, would be the state on the one side and the corporators on the other. The state consents to the modification when it adopts legislation which will have that effect,3 and the corporation when it accepts such legislation.

1 Tomlinson v. Jessup, 15 Wall., 454; Miller v. State, 15 Wall., 478; Penn. Col. Cases, 13 Wall., 190; Holyoke Co. v. Lyman, 15 Wall., 500; Parmley v. Railroad Co., 3 Dill., 25; Hewitt v. New York, etc., R. Co., 12 Blatch., 452; State v. Miller, 30 N. J., 368; Same v. Same, 31 N. J., 521; State v. Newark, 35 N. J., 157; Commonwealth v. Fayette Co. R. Co., 55 Pa. St., 452; Iron City Bank v. Pittsburgh, 37 Pa. St., 340; Union Improvement Co. v. Commonwealth, 69 Pa. St., 140; West Wis. R. Co. v. Supervisors, 35 Wis., 257; S. C. in error, 93 U. S., 595; Atlantic, etc., R. Co. v. State, 55 Ga., 312; New Orleans v. Metropolitan, etc., Co., 27 La. An., 648.

Although a charter exempting railroad property from taxation contain a clause reserving the right to the legislature to alter and repeal, until such right is exercised by the legislature, taxation is forbidden. Petersburg R. R. Co. v. Commissioners, 81 N. C., 487.

2 Miller v. State, 15 Wall., 478; Railroad Co. v. Maine, 96 U. S., 499.

3 Railroad Co. v. Commissioners, 87 N. C., 414.

4 Macon, etc., R. Co. v. Goldsmith, 62 Ga., 463; Petersburgh v. Railroad Co., 29 Grat., 773; State v. Commissioners, etc., 37 N. J., 240.

When a corporate charter is subject to legislative amendment, it may be so amended as to make stockholders personally liable for taxes. Anderson' v. Commonwealth, 18 Grat., 295. A provision in a charter, that it might be

A different rule prevails in the case of charters of municipal incorporation. These are not contracts, but regulations of government; and if they contain provisions respecting taxation, such provisions, like everything else in the charter, are subject to change, as the legislative judgment may change respecting questions of policy and expediency, or as changing circumstances may seem to require.'

The Constitution a Law. The constitution of a state is, in the strictest sense, a law: the fundamental and organic law. And the state being disabled to pass any law impairing the obligation of contracts, it can no more do so by incorporating provisions in its constitution that might have that effect, than by laws enacted by the legislature.2

State Repudiation. The contracts of a state respecting taxation, though their obligation cannot constitutionally be impaired, may nevertheless in some cases be subject to repudiation from the impossibility of finding a remedy for its prevention. The difficulty springs from the fact that the state, as a sovereignty, is subject to suits only as it may have consented to be; and therefore, if a remedy can only be found in a suit at law or in equity, it may not be found at all, because the state may not have consented to such a suit. By the constitution of the United States, the federal judicial power, in its application to the states as political entities, is practically limited to suits between states, and to other suits in which states may be plaintiffs; it does not extend to suits brought against states by

amended or repealed, but that this should not alter the corporate rights, held not to preclude a change in respect to taxation. Detroit Railway Co. v. Guthard, 51 Mich., 180.

A contract in a charter as to taxation is not repealed by a subsequent inconsistent constitutional provision. University v. People, 99 U. S., 309; Scotland County v. Railroad Co., 65 Mo., 123. See Appeal Tax Court v. Cemetery Co., 50 Md., 432.

1 See Dartmouth College v. Woodward, 4 Wheat., 518; Merriwether v. Garrett, 103 U. S., 472; Story on Const., 5th ed., 337; Cooley, Const. Lim., 5th ed., 231.

2 Dodge v. Woolsey, 18 How., 331; Railroad Co. v. McClure, 10 Wall., 511; Gunn v. Barry, 15 Wall., 610; White v. Hart, 13 Wall., 646; Pacific R. Co. v. Maguire, 20 Wall., 36; Marsh v. Burroughs, 1 Woods, 463; Keith v. Clark, 97 U. S., 454; University v. People, 99 U. S., 309.

citizens of other states, or by their own citizens, or citizens or subjects of foreign states.1 Therefore, if an individual is holder of a demand against one of the states of the Union, which for any reason it sees fit not to perform or recognize, he is entirely without remedy, except as the state may furnish one by its own laws. His own state cannot, for the purpose of obtaining justice for him, take an assignment of his demand and bring suit upon it in his interest, since this would be mere evasion of a constitutional inhibition. The consequence is, that even if a state issues securities which it expressly agrees to receive in payment for taxes, but afterwards it determined not to receive them, there is commonly no remedy. Mandamus will not lie to compel the state officers to receive the obligations in payment of taxes, since the suit against them would be in legal effect a suit against the state itself; the collector cannot be enjoined at the suit of the creditor from refusing to receive the obligations, nor is he liable in an action on the case for his refusal.5

6

Nevertheless, any legislative enactment calculated and designed to impair the obligation of the state contract is to be treated everywhere as void in law; and if the case is such that the state, through its officers, is compelled to resort to affirmative proceedings in order to give the void enactment effect, the party proceeded against may defend his rights as he might in any other case of attempted wrong. The same remedies are open to him as in other cases; for the officer who assumes to act against him, being without warrant of law for his action, must stand before the law as an individual wrong-doer, and cannot claim that a suit against him as a tort-feasor is a suit against the state which has tried, but ineffectually, to give him authority to do what he has attempted. Where, therefore, the terms of an act under which state securities are issued are such that the coupons to the same are receivable for taxes,

1 Const., art. 3, § 2; Amendment 11.

2 New Hampshire v. Louisiana, 108 U. S., 76; New York v. Same, Ibid.

3 Antoni v. Greenhow, 107 U. S., 769. See Louisiana v. Jummel, 107 U.

S., 711; Elliott v. Wiltz, Ibid.

Marye v. Parsons, 114 U. S., 325.

5 Carter v. Greenhow, 114 U. S., 317.

Hartman v. Greenhow, 102 U. S., 672; Poindexter v. Greenhow, 114 U. S., 270.

and it is made the duty of collectors to receive them when tendered, if afterwards the state forbids their reception, and a collector refuses a tender and proceeds to enforce the tax by distraint of goods, the tax payer may bring suit for the goods seized, as he might in any case of wrongful dispossession, and proof of the tender of the coupons will be held an effectual answer to any attempted justification by the officer of the seizure.' Thus indirectly, in such a case, would the contract of the state be enforced.

Municipal Repudiation. It is customary, as will be shown. hereafter, for the state to permit the municipalities to vote and levy the taxes for their own local purposes, and to determine what the amount of these shall be, within limits prescribed by the state to prevent oppression, and also to determine the purposes to which the sums raised shall be appropriated. A municipal debt is in many cases the first step in taxation; the levy of taxes being the only means whereby the debt can be paid. It sometimes happens that a municipality is found to have contracted indebtedness to an extent that is felt to be extremely burdensome; and then a local sentiment may spring up in favor of refusing to raise the necessary taxes for its payment. The purpose may be either to avoid the payment altogether or to postpone it for a time, or perhaps to force a compromise with creditors and an abatement. Whatever may be the purpose, the refusal to levy taxes to meet municipal obligations according to their terms is a public wrong; and as the state has ample power to remedy it, its honor is concerned in taking the necessary steps for that purpose. The most prompt and effectual remedy may be found to be the levy of a tax to provide for the indebtedness under a law specially adapted to the purpose, and by means of agencies appointed by the state. The power of the state to adopt this course is unquestionable. But if the existing law, or any law that should be adopted for the purpose, required the municipality itself to levy the tax, its officers might be compelled by mandamus to do so.3 It is only 1 Poindexter v. Greenhow, 114 U. S., 270; White v. Same, 114 U. S., 307; Chaffin v. Taylor, 114 U. S., 309; Allen v. Railroad Co., 114 U. S., 311. 2 Dunovan v. Green, 57 Ill., 63. And see post, ch. XXI.

3 Whiteley v. Lansing, 27 Mich., 131; Morgan v. Commonwealth, 55 Pa. St., 456; Robinson v. Supervisors, 43 Cal., 353; Nelson v. St. Martins, 111 U. S., 716. And see post, ch. XXIII.

necessary for this purpose that the amount of the demand shall be conclusively fixed and determined, and that the time has arrived when it has become the duty of the municipality to provide for it; and if the amount has been fixed by judg ment, the court which has rendered the judgment has jurisdic tion by mandamus to compel the levy of a tax for its payment.* By one or the other of these remedies, therefore, it is supposed municipal creditors will secure payment of all just demands.

It is possible, however, that the state itself may so far sympathize with a debtor municipality as to be disposed to aid it in its obstructive methods to prevent collection; and it may seek to do this by so limiting the municipal power to tax that it shall be impossible for it to pay its debts by taxes raised within the legal limit. Where such obstruction has been attempted, however, it has been judicially determined that the limitation of the power to tax under such circumstances was an impairment of the obligation of contracts, and therefore inoperative. The argument shortly stated is, that the state, in conferring upon its municipalities the power to contract debts and to levy taxes for their satisfaction, impliedly contracts with those who become creditors in reliance upon the power, that such power shall not, while their demands remain unpaid, be so limited, impaired or hampered as to preclude the municipality providing for and satisfying such demands according to their terms. Any subsequent legislation, therefore, which could have such injurious effect upon the interests of creditors, and deprive them of the resource of taxation which they had a constitutional right to rely on, will be treated as inoperative and void, and a levy of taxes may be compelled, as it might have been if no such legislation had been attempted.3 And where

1 Nelson v. St. Martins, 111 U. S., 716; Dayton v. Rounds, 27 Mich., 82; State v. New Orleans, 34 La. An., 477.

2 See United States v. Mobile, 4 Woods, 537; post, ch. XXIII.

535,

3 The leading case on this subject is Von Hoffman v. Quincy, 4 Wall., followed in Galena v. Amy, 5 Wall., 705; Riggs v. Johnson Co., 6 Wall., 166; Rees v. Watertown, 19 Wall., 109; United States v. Jefferson Co., 5 Dill., 310; S. C., 1 McCrary, 356; United States v. New Orleans, 2 Woods, 230; Sibley v. Mobile, 3 Woods, 535; Brodie v. McCabe, 33 Ark., 690.

See to the same effect, Saloy v. New Orleans, 33 La. An., 79; State v. Shreveport, 33 La. An., 1179; in which it was held that the municipality might complain of the diminution of its power to tax which would preclude payment of its contracts, even if the creditors did not. It is immaterial