compelled to act by a mandamus issued from either a state or Federal court. Suppose that all of the appropriate municipal officers resign, or that none are elected. If the state legislature acquiesces in this and the state law has provided no remedy for such an emergency the bondholders are for the time being helpless. In one such case they made application to a Federal court to levy the taxes itself and direct a marshal to make up the assessment rolls and collect the taxes required by the obligation of their contract. The Federal court refused to do this, and in a later case gave its reason as follows:

"The power we are here asked to exercise is the very delicate one of taxation. The power must be derived from the legislature of the state. So far as the present case is concerned, the state has delegated the power to the levee commissioners. If that body has ceased to exist, the remedy is in the legislature either to assess the tax by special statute or to vest the power in some other tribunal. It certainly is not vested in any Federal court. It is not only not one of the inherent powers of the court to levy and collect taxes, but it is an invasion by the judiciary of the Federal government of the legislative functions of the state government" (16).

§ 234. Same: Abolition of indebted municipality. Even a repudiating municipality finds it inconvenient to continue permanently without the services of officers authorized to levy taxes, so that other methods of evading its creditors have been sought. Sometimes the state leg

(16) Heine v. Levee Commissioners, 19 Wall., 655, 660-61.

islature has repealed the charter of the indebted municipality, seeking to destroy its corporate existence. Usually when this has been done one or more new municipal corporations have been formed from the territory of the original municipality, or its territory has been annexed to other municipalities. In such cases it has been held that the municipalities that succeeded to the territory, property, and jurisdiction of the old one, also acquired its existing tax laws and became liable to enforce them over the old territory of the former municipality just as the latter could have been compelled to (17).

If a municipaltiy were abolished and its government, or the taxing power thereof, were assumed directly by the legislature, probably the bondholders could not get relief from the courts, as it would not be possible for the latter to order the legislature to levy the necessary taxes as they could order the appropriate municipal officers to do (18).

§ 235. Valid changes in remedies. While what will constitute the complete performance of a contract by the party bound may not be altered at all by a subsequent law, the remedy provided by the state for non-performance may be altered to any extent, provided only that it be substantially as efficacious as was the original one. Courts, process, forms of action may be changed, new rules of evidence or practice may be used, new modes of execution may be substituted, or the time necessary to bar the suit under the statute of limitations may be

altered; in short, any change of procedure or remedy is valid if it is as adequate as the old one.

In what respects a new remedy may be held less efficacious than an old one is well illustrated by a case from Virginia. The state had issued certain bonds, the coupons of which, due semi-annually, were made receivable for state taxes. Direct repudiation of the bonds being impossible on account of this latter provision, Virginia passed a number of laws designed to hamper the use of the coupons for taxes. Expert evidence of the genuineness of the coupons was forbidden to be received; no coupon could be used for taxes unless the bond from which it was cut was produced with proof that it was cut therefrom; and all coupons were required to be used for taxes, if at all, within one year from their maturity. All these provisions were held substantially to impair the coupon holders' remedies and therefore to be invalid. Regarding the shortening of the period for the limitations of actions, the court said:

"The passage of a new statute of limitations, giving a shorter time for the bringing of actions than existed before, even as applied to actions which had accrued, does not necessarily affect the remedy to such an extent as to impair the obligation of the contract within the meaning of the Constitution, provided a reasonable time is given for the bringing of such actions" (19).

§ 236. Special charter privileges as contracts. Corporate charters sometimes contain special privileges or exemptions other than merely that of capacity for corpo

(19) McGahey v. Virginia, 135 U. S., 662.

rate existence. A charter may contain an exemption from taxation, or from state regulation of rates, or from certain kinds of competition. If any of these privileges are placed in a corporate charter, are they also irrepealable? In a long series of cases such privileges have also been declared by the United States Supreme Court to be contracts that cannot be impaired by subsequent state legislatures. As regards a charter exemption from taxation, this was held in 1853 in the case of State Bank of Ohio v. Knoop (20). A charter grant of an exclusive right to bridge a river within a distance of two miles upon either side of the proposed bridge was upheld in 1865, against a later authorization of a competing bridge within the prohibited distance; so also exclusive rights to supply gas and water to cities have been upheld (21). Likewise charter agreements that particular rates may be charged by public service corporations, without subsequent reduction by the state, have been enforced (22).

§ 237. Qualifications of this doctrine. Manifestly, if the state or a municipality acting under state authority could thus deprive itself by contract of such important governmental powers as those of taxation, rate regulation, and the encouragement of competition, the door was open for great abuses in a country where municipal

(20) 16 How., 369.

(21) The Binghamton Bridge, 3 Wall., 51; New Orleans Gas Co. v. Louisiana Light Co., 115 U. S., 650; New Orleans Waterworks Co. v. Rivers, 115 U. S., 674.

(22) Los Angeles v. Los Angeles Water Co., 177 U. S., 558 (water rates); Detroit v. Detroit Street Railway Co., 184 U. S., 368 (street car fares).

and legislative bodies are so commonly improvident and not infrequently corrupt as in America. Side by side with this doctrine of charter contracts have grown up two other doctrines that have greatly qualified the other and greatly limited the likelihood of its abuse. The first of these is that the terms of every special privilege granted by the state must be strictly construed, so that the grantee takes nothing in derogation of public rights unless so clearly expressed that no other interpretation is reasonably possible. The second qualification is that, in respect to certain very important governmental powers, the legislature cannot even by express contract tie its hands for the future. In short, a government cannot by contract abrogate its power of governing.

§ 238. Strict construction of special privileges. The great case of Charles River Bridge v. Warren Bridge (23) has always been regarded as the leading case upon the strict construction of corporate charters. In 1785 Massachusetts chartered a company to build a toll bridge over the Charles River, the charter being extended for a period of seventy years, when the bridge was to belong to the state. In 1828 Massachusetts incorporated another company to build a second toll bridge across the Charles a few rods from the former bridge, with a provision that it should become a free bridge in six years. The original bridge company asked an injunction against its rival upon the ground that the grant of a charter to build a bridge and collect tolls included an implied contract that the state should not thereafter make

(23) 11 Peters, 420.