B 475232

ARTES
1837
SCIENTIA
VERITAS
LIBRARY
OF THE
UNIVERSITY OF MICHIGAN
PLURIBUS UNUM
TUEBUA
SI-QUAERIS PENINSULAM AMOENAMI
CIRCUMSPICE
PAZARLARZADJAJAJAJA RADARARLANAR
UNANANUHAMINIMIZ
HD
2779
Az
FET
ECONOMIC LEGISLATION OF ALL THE STATES
THE LAW
OF
INCORPORATED COMPANIES
OPERATING UNDER MUNICIPAL FRANCHISES
SUCH AS
ILLUMINATING GAS COMPANIES, FUEL GAS COMPANIES,
ELECTRIC CENTRAL STATION COMPANIES, TELE-
PHONE COMPANIES, STREET RAILWAY
COMPANIES, WATER COM-
PANIES, ETC
PRECEDED BY A SUGGESTIVE DISCUSSION OF THE ECONOMIC PRINCIPLES
INVOLVED IN THE OPERATION, CONTROL, AND SERVICE
OF SUCH COMPANIES
BY
ALLEN RIPLEY FOOTE
AUTHOR OF "ECONOMIC VALUE OF ELECTRIC LIGHT AND POWER"
CHARLES E. EVERETT, A.M., LL.B
EDITING ATTORNEY
WITH A RESIDENT ATTORNEY IN EACH STATE AS CO-EDITOR
VOL. II
CINCINNATI
ROBERT CLARKE & CO
1893
COPYRIGHT, 1892,
BY ALLEN RIPLEY FOOTE
NEBRASKA.¹
EDITED BY FRANK IRVINE, ATT'Y, OMAHA, Neb.
SUBDIVISION I.-HISTORICAL.
The law of Nebraska relating to corporations operating
under municipal franchises is the growth of a few years,
and has not yet reached such a state as to indicate any
very well defined policy.
Under the territorial government (1854 to 1867), cities
and villages as well as private corporations, were largely
created by special acts of the legislature. These cities.
and villages had not generally, at the time of the admis-
sion of the state, reached a point calling for the services
rendered by the institutions under consideration, and
neither by the general law nor in these special enactments
were such institutions contemplated. Most of the early
charters to towns contained a general grant of power to
license and regulate drays, hacks, and omnibuses, and,
had the occasion arisen, this grant would probably have
¹ Unless otherwise stated, references to the constitution are to that of
1875. Several compilations of the statutes have been made under legis-
lative authority, the Revised Statutes in 1866, the General Statutes in
1873, and the Compiled Statutes in 1881. The Compiled Statutes alone
remain in general use, new editions, embracing later legislation, being
issued in 1885, 1887, 1889, and 1891. Citations herein are made to the
last edition of the Compiled Statutes simply by chapter and section, thus
facilitating reference to the earlier editions. The session laws are re-
ferred to as “Laws" of the respective years. In case of amendments,
the citations are made to the latest amendatory act, the constitutional
requirement that amending acts shall recite the act amended making
reference back very easy. Since the above went to press a compilation
of the statutes styled "Consolidated Statutes," by J. E. Cobbey, Esq.,
has appeared. It is superior in arrangement and indexing to the former
compilations. As to state reports, see Appendix “A.”
(1289)
VOL. II-1
1290
ECONOMIC LEGISLATION.
:
been held to embrace the right to license and regulate
street railways.¹
2
In 1856, a general incorporation act for private business
corporations was passed, which, without essential change,
except by additions thereto, remains in force; and in 1864,
"an act to create and regulate corporations "3 was passed,
which, together with the former act, forms the framework
of the present law. In 1856, a general incorporation act
for towns was also enacted, but neither of these early laws
makes any reference to such corporations as are here con-
sidered.
•
4
A feature of the territorial legislation worthy of remark
is the frequent granting of exclusive franchises to ferry
companies, and the fact that town charters frequently in-
vested the town with authority to grant ferry licenses, in
some cases guarding against perpetual, and in others
against exclusive grants.
6
The constitution of 1875, still in force, forbids the grant-
ing by special act of any exclusive privileges, immunities,
or franchises whatsoever," or the creation of any corpora-
tion except by general law, and provides for the repeal of
existing charters containing exclusive franchises unless or-
ganization has taken place or the franchises operated upon
within sixty days after the taking effect of the constitu-
tion.7.
8
In 1861, by special act, a company was incorporated to
supply water to Nemaha City, and in 1866, a company to
supply Omaha with gas. In 1867, the Omaha Horse
Railway Company was incorporated and granted the ex-
clusive right for fifty years to erect and operate horse rail-
ways within the city of Omaha. These acts are very lib-
¹ Allerton v. Chicago, 6 Fed. Rep. 555.
3 Laws, 1864, p. 93.
5 Const., Art. III, sec. 15.
7 Const., Art. XIII, sec. 6.
2 Laws, 1856, pt. 1, ch. 3.
* Laws, 1856, pt. 1, ch. 4.
& Laws, 1860-1, p. 219; Laws, 1866, p. 721.
Const., Art. XIII, sec. 1.
⁹ Laws, 1867, p. 76; O. H. Ry. Co. v. Cable Tramway Co., 30 Fed. Rep.
324.
NEBRASKA.
1291
eral in their terms, and mark the first attention paid by
the legislature to the particular interests herein considered.
Just when the subject began to be a matter of legislative
attention, Nebraska became a state, and special grants and
acts gave way to general legislation, which has grown
with the state, but has indicated development rather than
change of policy. The law as it exists now is substan-
tially that which has prevailed since the admission of the
state, with such additions as the growth of towns has
given rise to.
It may be stated, by way of summary, that the territory
had no settled policy; but that the needs of a newly set-
tled community influenced the legislature toward liberal
grants, coupled with exclusive privileges and few re-
straints, upon the corporations created, either by distinct
limitations or by provisions for municipal control or regu-
lation. The state has not favored exclusive grants, and,
while liberal in some respects, has been disposed by gen-
eral legislation to limit the powers and franchises of cor-
porations.
SUBDIVISION II.—FRANCHISE COMPANIES.
Incorporation, how obtained.-No corporation, except
those public corporations which are under the patrouage
or control of the state, can be created, nor its charter ex-
tended, changed, or amended by special law, "but the
legislature shall provide by general laws for the organiza-
tion of all corporations hereinafter to be created." 1
The essential steps in the creation of a corporation are:
Organization; adoption of articles of incorporation; filing
said articles for record; and publication of notice of in-
corporation. No certificate of incorporation is issued.
Articles of incorporation.-Every corporation, pre-
vious to the commencement of any business except its own
organization, must adopt and have recorded articles of in-
¹ Const., Art. XIII, sec. 1.
1292
ECONOMIC LEGISLATION.
2
corporation,' which should be signed by the corporators
and acknowledged in the same manner as deeds. The
general incorporation act, together with the articles of in-
corporation, constitutes the charter of the company. The
articles should, therefore, contain all the provisions re-
quired to be stated in the printed notice, and also all other
provisions which it is desired to make a part of the funda-
mental law of the corporation.
Must show what.-There is only one statutory require-
ment as to the contents of the articles except in the case
of street railway companies. This is that they "shall fix
the highest amount of indebtedness or liability to which
the corporation shall at any time be subject, which must
in no case" (except in regard to certain corporations not
within the range of this discussion) exceed two-thirds of
the capital stock.³
The requirements as to the notice to be published de-
mand, however, the establishment of certain points before
publication, and it is therefore implied that all these points
shall be covered by the articles of incorporation. It is
customary to follow these requirements in drawing the
articles.
Street railway companies must also designate the ter-
mini and streets through which they propose to op-
erate.
Publication of.-Within four months from the filing of
articles in the county clerk's office, a notice must be pub-
lished "in some newspaper near the principal place of
business for four weeks." This requires a publication in
every issue of the paper selected during that period.
notice must contain the name of the corporation; the
principal place of transacting its business; the general na-
ture of the business to be transacted; the amount of cap-
1 Ch. 16, sec. 126.
3 Ch. 16, sec. 128; Laws,
* Ch. 72, Art. VII, sec. 3;
Ch. 16, sec. 130.
Livesey v. Omaha Hotel Co., 5 Neb. 50.
1887, p. 336.
Laws, 1887, p. 135, sec. 3.
6 Lawson v. Gibson, 18 Neb. 137.
The
NEBRASKA.
1293
i
ital stock authorized and the time and conditions on which
it is to be paid in; the time of commencement and ter-
mination of the corporation; the highest amount of in-
debtedness or liability to which the corporation is at any
time to subject itself; and by what officers the affairs of
the corporation are to be conducted.¹
Filing. All corporations must file their articles for
record in the office of the county clerk of the county or
counties in which the business is to be transacted; i. e.,
where the principal office or offices or places of conduct-
ing business are located.
Street railway companies are also required to file arti-
cles of incorporation in the office of the clerk of that
county in which the city where it purposes to operate is
located.³
3
Certain corporations are also required to file their arti-
cles for record in the office of the secretary of state:
Among these are corporations for the construction of
works of "internal improvement."
¹ Ch. 16, sec. 131; Laws, 1856, pt. 1, ch. 3, sec. 8.
2 Ch. 16, sec. 126.
3 Ch. 72, art. 7; Laws, 1877, p. 135.
4 Chap. 16, sec. 137; Laws, 1856, pt. 1, ch. 3, sec. 5.
It is probable that some franchise companies may fall within this des-
ignation as construed by the supreme court. It was first said that ben-
efit to the public was the test, as contra-distinguished from an interest
owned by the public. (U. P. Ry. v. Colfax Co., 4 Neb. 450.) It was
afterward said that the phrase is applied to improvements of highways,
channels of travel and commerce, and that the test is "the use for
which it is designed. If it is for public use, subject to control and reg-
ulation of the legislature, it would seem to come within the meaning
of the words.' (Traver v. Merrick Co., 14 Neb. 327.) But a distinction
was drawn between works for the development of the state's natural re-
sources and those which do not take advantage of and develop such re-
sources. A water grist mill has therefore been held to be a work of in-
ternal improvement, while a steam grist mill has been held not to be.
(Traver v. Merrick Co., supra; State v. Adams Co., 15 Neb. 568; State v.
Clay Co., 20 Neb. 452.) With such an unsatisfactory expression of the
law, it is always safer to record the articles in the office of the secretary
of state as well as in the county clerk's, in view of the reserved rights
of regulation and control which exist as outlined under "AMENDMENTS,
1294
ECONOMIC LEGISLATION.
Commencing business.-Corporations may commence
business immediately upon filing their articles in the
county clerk's office, and the incorporation will be valid
if other requisites are complied with within four months.¹
The want of legal organization is no defense to an ac-
tion brought against persons acting as a corporation; nor
in an action against such persons upon a contract made
with them as a corporation; nor in an action for an injury
to their property held in that capacity.2
Fees. No fees are required beyond those paid for re-
cording the articles; seventy-five cents for the first two
hundred words, and one cent for each ten words there-
after, to the county clerk; and in case the articles are re-
corded in the secretary of state's office, one dollar for fil-
ing and ten cents per hundred words for recording.
5
4
Amendments, repeals, etc.-The constitution provides
that charters can not be changed, amended, or extended
by special law, and the right to amend or repeal all gen-
eral incorporation laws is reserved. Whether this clause
can be construed so as to affect corporate franchises ac-
quired before amendment is doubtful, although unless it
were so intended the reason of its insertion is not plain.
It would require no such special reservation to enable the
legislature to amend the act so far as it affected corpora-
tions thereafter to be formed. Unless the clause is to be
so construed the contractual rights of corporations, in-
cluding their franchises, are subject to the general rules.
of law.
A change may be made by the company in any of the
REPEALS, ETC.," below. It is imperative to do so where the company
seeks to take advantage of and improve any natural source of power or
supply. The notice may be filed in the secretary's office any time.
within four months from filing in the county clerk's. (Ch. 16, sec. 132;
Laws, 1856, pt. 1, ch. 3, sec. 10.)
1 Ch. 16, sec. 132; Abbott v. Omaha Smelting Co., 4 Neb. 416.
2 Ch. 16, sec. 144.
³ Ch. 28, sec. 13.
5 Const., Art. XIII, sec. 1.
4
Ch. 83, art. 2, sec. 3.
NEBRASKA.
1295
essential limitations by amending the articles of incor-
poration and recording and publishing such change as re-
quired originally.'
Duration of charter. The published notice, as shown
above, must state the time of commencing and the termi-
nation of the corporate existence.²
3
Objects. The power to incorporate is for the purpose.
of transacting any "lawful business." The general na-
ture of the business only need be stated in the notice,
but care should be taken to state the object with reason-
able certainty. A change may be made in any of the es-
sential limitations by amending the articles of incorpora-
tion, and recording and publishing such change as re-
quired originally. A change in methods of service not
clearly within the object as originally stated should be
accomplished in the manner above designated, by amend-
ment of the articles.
Officers; meetings; voting; quorum, etc.-A cor-
poration may be governed by such officers as its corpo-
rators may designate, The statutes, however, make fre-
quent reference to a board of directors, and the creation
of such a body is every-where implied. The number may
be as desired. The articles and notice of incorporation.
must, however, specify what officers shall conduct the
affairs of the company.*
The term of office and dates of elections are also sub-
ject to regulation by the articles; but if there has been a
failure to elect officers at the time designated a meeting.
may be called thereafter and an election held, the officers
then chosen to hold office until the next regular election."
No statutory provisions exist for removing officers or
declaring offices vacant, nor has the supreme court ever
been called upon to decide such questions.
¹ Ch. 16, sec. 133.
3 Ch. 16, sec. 123.
2 Ch. 16, sec. 31; Laws, 1856, pt. 1, ch. 3, sec. 8.
5 Ch. 16, sec. 59; Laws, 1869, p. 20.
Ch. 16, sec. 131.
• As to directors, etc., of consolidated street railway companies, see p.
"
1301.
1296
ECONOMIC LEGISLATION.
As to the manner of voting, the constitution requires
the legislature to provide that in all elections for directors
or managers every stockholder shall have the right to
vote in person or by proxy for the number of shares owned
by him for as many persons as there are directors or
managers to be elected, or to cumulate said shares and
give one candidate as many votes as the number of di-
rectors multiplied by the number of his shares shall
equal, or to distribute them upon the same principle
among as many candidates as he shall think fit, and such
directors or manager shall not be elected in any other man-
ner. This would seem to give the legislature the selec-
tion of the method, in all cases allowing a vote for each
share of stock, but making cumulative voting optional at
the will of the legislature. The legislature has never
acted upon this injunction of the constitution, and in the
absence of such action the ordinary method prevails in
practice and is doubtless correct in law, i. e., a direct vote
for each share without the power of cumulation.
Capital stock.-The capital stock of any corporation.
may be such as the articles provide, and the time and man-
ner of payment therefor are as therein prescribed. But,
unless otherwise provided for in the articles, the whole
of the authorized capital must be subscribed before com-
mencing operations, and before an action will lie upon
any subscription unless there be a waiver of this con-
dition.2
Increase and decrease of.-Capital stock may be increased
by amendment of articles, recording, and publication. It
may be decreased by the board of directors with the writ-
ten consent of the persons in whose name a majority of
the shares of the stock stand on the books of the company.
The nominal value of the shares may be reduced and
2
¹ Const., Art. XIII, sec. 5.
Livesey v. Hotel Co., 5 Neb. 50; Hale v. Sanborn, 16 Neb. 1.
NEBRASKA.
1297
certificates issued therefor, but the rights of creditors may
not be impaired by such reduction.¹
Bonds, debts, etc.-Indebtedness for corporate pur-
poses to the amount of two-thirds of the capital stock
(presumably two-thirds of that subscribed) is authorized,
if so high an amount is provided by the articles.2 There
is no restriction against issuing bonds as a part or the
whole of this indebtedness, or the securing of indebted-
ness by mortgage or otherwise upon the property of the
corporation. In the case of street railways, by a recent
enactment,³ companies may mortgage and execute deeds
of trust upon their railway and property in whole or in
part, including real estate and personal property and
franchises, to secure money borrowed for the construction
and equipment of their roads, and may issue bonds in
sums not less than one thousand dollars, make said mort-
gages or deeds of trust payable to bearer or otherwise,
negotiable by delivery, bearing not to exceed seven per
cent interest, and convertible into capital stock at the
option of the holder; and may sell the same at such rates
and prices as they may deem proper. If sold below par
the bonds are still valid, and they may be made payable
within or without the state.
Corporations are also required to give notice annually
of the amount of all existing debts as shown below.
Liability of stockholders.-Stockholders are not in
general liable beyond the amount of their unpaid sub-
scriptions. A failure to substantially comply with all the
requisites of organization, as above stated, subjects the
stockholders to individual liability for corporate debts.*
In case of failure to give the annual notice as to in-
debtedness, as shown below, the stockholders are declared
individually liable, jointly and severally, for all debts then
existing or contracted before the giving of notice. A
¹ Ch. 16, sec. 56.
2 See "ARTICLES," above.
3 Ch. 72, art. 7, sec. 11; Laws, 1889, p. 398.
4 Ch. 16, sec. 139.
5 Ch. 16, sec. 136.
1298
ECONOMIC LEGISLATION.
stockholder may compel the publication of such notice by
mandamus, but whether the provision renders stock-
holders liable for debts created before the default occurred,
quaere.¹ In the case of corporations created after April 6,
1891, a failure to publish the notice of indebtedness or to
substantially comply with the requisites of organization sub-
jects stockholders to individual liability only after the as-
sets of the corporation are exhausted, and to the extent of
unpaid stock subscriptions, and a sum in addition thereto
equal to the amount of stock owned by such stockholders.2
Liability of officers and directors.-No statutory pro-
visions exist and the common law prevails.
Reports. Every corporation must give notice annually
in some newspaper printed in the county or counties in
which the business is transacted, and if none is there
printed, then in the nearest paper in the state, of the
amount of all existing debts of the corporation, which
notice must be signed by the president and a majority of
the directors.³´
Another statute, sufficiently general in its terms to ap-
ply to all corporations, requires publication in some news-
paper in general circulation in the county where the prin-
cipal office is located, of an annual exhibit, verified by
oath by the "president, secretary, and clerk," showing a
full, fair, and detailed statement of the condition of the
company."
4
No other reports or accountings are required of any
franchise companies, except for purposes of taxation, fully
stated below.
Taxation.-Under the provisions of the constitution
the legislature must provide such revenue as may be
needful by levying a tax by valuation so that every
person or corporation shall pay a tax in proportion to
the value of his, her, or its property or franchises gen-
erally, the value to be ascertained in such manner as the
2 Laws, 1891, ch. 13.
Ch. 16, sec. 54; Laws, 1864, p. 93, sec. 41.
1 Smith v. Steele, 8 Neb. 115.
3 Ch. 16, sec. 136.
NEBRASKA.
1299
legislature shall direct.¹ Municipal corporations may be
vested with authority to assess and collect taxes, but such
taxes must be uniform with respect to persons and prop-
erty within the jurisdiction of the body imposing the
same.2
It will thus be seen that the basis of taxation is uni-
formly according to property valuation, no distinction be-
ing made between individuals and corporations; but all
franchises may be assessed as property.
The theory of assessment is to reach the fair cash value.3
In practice, however, the valuation is a small proportion
of the cash value, often not more than one-tenth.
The word tax includes special taxes, special assessments,
costs, interest, and penalties.*
The levies for state, county, and municipal purposes are
made upon the same assessment, and the same rules apply
to each class of taxes.
The following property is assessable and taxable: All
real and personal property; all moneys, credits, bonds, or
stocks, and other investments, and the shares of stock
of incorporated companies; the capital stock of com-
panies and associations incorporated under the laws of the
state.5
In listing credits, there may be deducted all bona fide
debts founded upon actual consideration, including those
arising from suretyship where the surety believes he
is bound and will be compelled to pay, but a debt arising
from an unpaid subscription to capital stock is not within
the exception.'
6
The president or "proper agent or officer" must list
the property of corporations. The capital stock and
franchises of a corporation must be listed and taxed in
the county, precinct, township, city, or village where the
¹ Const., Art. IX, sec. 1.
3 Ch. 77, secs. 4, 5.
5 Ch. 77, sec. 1; Laws, 1879, p. 276.
7 Ch. 77, sec. 28.
2 Const., Art. IX, sec. 6.
* Ch. 77, sec. 182.
• Ch. 77, sec. 27.
8 Ch. 77, sec. 7.
1300
ECONOMIC LEGISLATION.
principal office or place of business is located in the state.
If there be no principal office in the state, then at the place
where business is transacted.' Gas mains and pipes laid
in streets or alleys are held as personal property, and so
assessed and taxed where laid. No provision exists as to
water mains.
Gas, street railway, and all other companies incorpo-
rated under the laws of the state, except insurance com-
panies, are also required to list and deliver to the assessor
a sworn statement of the amount of their capital stock,
setting forth particularly the name and location of the
company; the amount of stock authorized and number of
shares; amount paid up; market value, or if there be none,
the actual value of the shares; amount of indebtedness, ex-
cluding current expenses and amount paid for purchase or
improvement of property; and the assessed valuation of all
real and personal property (which is to be listed and as-
sessed like other property). The aggregate amount of
such indebtedness and assessed valuation of property is to
be deducted from the value of the stock, and the remain-
der to be assessed as stock.³
When any corporation fails or neglects to pay any tax
when it becomes delinquent, it is lawful for the county
treasurer to notify any agent or officer of the company in
the county that the tax is delinquent, and of the amount
due, and notify him to pay over any moneys of the cor-
poration in his hands or that may thereafter come into his
hands to the amount of the tax. A failure on the part of
such officer or agent to comply with this notice is a mis-
demeanor punishable by fine from $50 to $500.*
Of stock in hands of holders.-Stockholders are required
to list their stocks for assessment when the stock itself is
not assessed in the state.5
Exemptions from.-Whether a city may by contract ex-
1 Ch. 77, sec. 8.
Ch. 77, sec. 143.
2 Ch. 77, sec. 15.
5 Ch. 77, sec. 7.
³ Ch. 77, sec. 32.
t
}
NEBRASKA.
1301
empt a gas company from taxation for municipal pur-
poses, in payment or part payment for gas furnished the
city, has been doubted.¹
Consolidation of companies.—Street railway compa-
nies whose roads are located so as to constitute connected
or continuous routes of travel or transportation may con-
solidate, or one such company may aid the other by sub-
scription to stock or otherwise, for the purpose of connec-
tion between the lines; and any company may lease or.
purchase any part or all of the railway of another com-
pany, or its stock or franchises. Such companies whose
lines are connected, forming continuous routes of travel,
"may perfect any arrangement for their common benefit,
to assist or promote the object for which they were
created."
>> 2
A consolidation may be effected by the boards of direc-
tors entering into an agreement under the corporate seals,
prescribing the terms and conditions, the number of di-
rectors, to be not less than seven nor more than eleven,
the time and place of holding the first election, the num-
ber of shares in the new corporation, and the amount of
each, the manner of converting the old stock into stock
of the new corporation, of compensating stockholders
who refuse to convert their stock, and other necessary de-
tails. A duplicate of this agreement is to be filed with
the secretary of state and county clerk, and must be ac-
companied by the written consent of two-thirds of the
stock of each of the constituent companies, acknowledged
before a notary in the same manner as deeds. Upon the
election of the first board of directors, all the rights, fran-
chises, and property of the old companies are deemed
transferred to the new, without deed or transfer. But
such consolidation does not impair any existing right of
reversion, or the rights or liens of creditors, and the old
¹ Nebraska City v. Gas Co., 9 Neb. 339.
2 Ch. 72, art. 7, secs. 6-10; Laws, 1889, p. 398.
1
1302
ECONOMIC LEGISLATION.
corporations continue so far as may be necessary to enforce
such rights.¹
Dissolution and forfeiture.-Dissolution may be ef-
fected by consent of two-thirds of all the members en-
tered on the records of the corporation, unless the articles
provide a different rule.2
3
Corporate powers cease unless organization be effected
within one year after incorporation ;³ and repeated acts of
mis-user or non-user are a ground of forfeiture of fran-
chises generally. In general, violations of the require-
ments of the corporation act are made a ground of for-
feiture upon information filed for that purpose."
4
SUBDIVISION III.-FRANCHISES.
How obtained.-Generally, franchises are granted by
the municipal authorities by ordinance. The power of
granting franchises is now vested in the governing bodies
of cities and villages (councils and boards of trustees re-
spectively), the general acts under which municipalities
are incorporated investing these bodies with such power,
either by special or general grants hereinafter cited; but
in the case of street railways, a vote of the people is re-
quired to confer a franchise, the legislature being forbid-
den to pass any general law granting the right to construct
and operate a street railway within any city, town, or in-
corporated village, without first requiring the consent of a
majority of the electors thereof."
After filing the articles of incorporation, as already in-
dicated, an election is held to gain the required consent
of the electors, the mayor being required, upon request
of the council, to give ten days' notice by newspaper pub-
lication of such election, stating the proposed termini of
the railway and the streets to be traversed; the vote is
canvassed by the council at its next meeting after the
1 Ch. 72, art. 7, secs. 6-10; Laws, 1889, p. 398.
3 Ch. 16, sec. 129.
5 Ch. 16, sec. 142.
2 Ch. 16, sec. 134.
'State v. C. B. & N. F. Co., 11 Neb. 354.
6 Const., Art. XIII, sec. 2.
NEBRASKA.
1303
election, and if a majority of the votes is in favor of the
proposition, the council requires the city clerk to certify
the result; this certificate the chief officer of the company
is required to cause to be recorded in the county clerk's
office, in the same book in which the articles of associa-
tion are recorded, and it then becomes prima facie evi-
dence of the result, and the company may thereupon con-
struct and operate the road, subject to such rules and
regulations as may be established by ordinance.' It has
been held that a majority vote of all the electors voting
at the election is necessary to confer the franchise, and
not simply a majority of the votes cast upon the propo-
sition.2
Powers of municipalities as to.-The provisions as
to franchises differ with the class of municipalities and
the nature of the franchise.
3
Classification of municipalities.-Special or local laws in-
corporating cities, towns, and villages, or changing or
amending their charters, are prohibited. The general
laws which incorporate such municipalities now provide
for the following classes: Cities of the metropolitan class,
being those containing 80,000 inhabitants and upward
(Omaha); cities of the first class, being those having less
than 100,000 and more than 25,000 (Lincoln); cities of
the first class having more than 8,000 and less than
25,000; cities of the second class; villages.' The last
two classes are provided for by the same general acts, and
are treated by the legislature as if they formed a single
class.
6
¹ Ch. 72, art. 7; Laws, 1877, p. 135.
5
2 State v. Bechel, 22 Neb. 158. In this case the court was unanimously
of the opinion stated, but a decision of that question was not necessary.
3 Const., Art. III, sec. 15.
Ch. 12a; Laws, 1887, p. 105; Laws, 1889, p. 88.
5 Ch. 13a; Laws, 1889, p. 151; Laws, 1891, ch. 8.
Ch. 13a, art. 2; Laws, 1889, p. 249.
7 Laws, 1879, p. 193; Laws, 1881, p. 168; Laws, 1883, p. 117; Laws,
1885, p. 162; Laws, 1887, p. 291; Laws, 1889, p. 350.
1304
ECONOMIC LEGISLATION.
Lighting companies.—A general power to provide for the
lighting of streets has always existed in the different city
charters. Gas lighting in Omaha was begun under a
special act incorporating a company for that purpose.'
The effect of this legislation and contracts made in pur-
suance thereof became the subject of litigation between
the city and the company, but a settlement was made and
no decision reached.
Franchises for gas and electric lighting companies are
founded principally upon the necessity of lighting streets,
and are incident to the exercise of that function of the
municipality. In the larger cities, power is given to exer-
cise by ordinance a very strict regulation of the use of
these franchises, while in the smaller cities and villages
any such power must be exercised by virtue of the general
power of control of the streets, or by the provisions of the
contracts which such cities are authorized to make for the
erection and maintenance of the works.
In metropolitan cities, the mayor and council are vested
with power "to regulate and provide for the lighting of
streets, laying down gas pipes, and erection of lamp-posts,
electric towers, and other apparatus,
and to pro-
hibit or regulate the erection of telegraph, telephone, or
electric wire poles in the public grounds, streets, or alleys,
and the placing of wires thereon.'
2
In cities of the first class of both grades, the mayor and
council are empowered "to make contracts with and au-
thorize any person, company, or association to erect gas-
works, electric, or other light works in said city."
993
Cities of the second class and villages are empowered in
like manner to make contracts for the erection of gas-
works, and cities of the second class having over five
1
4
¹ Laws, 1866, p. 721.
2 Ch. 12a, sec. 50; Laws, 1887, p. 105, sec. 50; Laws, 1889, p. 89, sec. 50.
3 Ch. 13a; Laws, 1889, p. 151, sec. 67, sub. 13, 14; ch. 13a, art. 2;
Laws, 1889, p. 250, sec. 68, sub. 15, 16.
¹ Ch. 14, art. 1, sec. 69, sub. 14; Laws, 1887, p. 291.
1
NEBRASKA.
1305
:
1
thousand inhabitants may make such contracts for electric
lighting. No authority by statute exists for granting
franchises for electric light works in cities of less than five
thousand or in villages, but the supreme court has recog-
nized their power by ordinance to grant to companies the
right to construct their lines and operate them through
and along the streets.²
Fuel gas companies.-There has been no legislation on
the subject of fuel gas companies, but such companies
have been in fact incorporated, and the right to lay their
mains in the streets has been conferred by ordinance, the
council presumably acting under the general power of su-
pervision and control of streets.
Electric power companies.—Electric power companies are
not provided for by law, unless by the general powers
cited below to regulate or prohibit the erection or mainte-
nance of electric wires and poles.
Telephone companies.-The right" to prohibit or regulate
the erection of telegraph, telephone, or electric wire poles
in the public grounds, streets, or alleys, and the placing
of wires thereon," is given to the mayor and council of
metropolitan cities.³ Cities of the second class and vil-
lages are not vested with any special powers upon the
subject, but the supreme court has recognized their power
by ordinance to grant to telephone companies the right to
construct their lines and operate them through and along
the streets.2
Street railway companies.-As shown above (see "How
OBTAINED"), the franchises of street railway compa-
nies are obtained by vote of the electors of the municipal-
ity, but the construction and operation of the road is sub-
ject to such rules and regulations as may be established
1 ¹ Laws, 1891, ch. 11.
Neb. Tel. Co. v. York Gas & Elec. L. Co., 27 Neb. 284.
'Ch. 12a, sec. 50; Laws, 1887, p. 105, sec. 50; Laws, 1889, p. 89,
sec. 50.
VOL. II-2
1306
ECONOMIC LEGISLATION.
by ordinance,' and cities generally are empowered to pro-
vide for and regulate the laying of tracks.²
Water companies.-Statutory provisions as to water-
works in metropolitan cities are very meager. The mayor
and council may "provide by contract for the construction
and maintenance or leasing of water-works, or any main
or line thereof, or settling basins therefor." 3
In cities of the first class of both grades, after author-
izing the construction of water-works by the city, as
shown below (SUBDIVISION IV), the charters provide that,
“in case such aid shall not be voted," or "in case the sys-
tem of water-works shall prove inadequate for the needs
of the city, both public and private," then the mayor and
council may contract with individuals or corporations to
construct and maintain a system, with a reservation to the
city of the right to purchase the works after ten years
upon the payment of any amount to be determined from
the contract, not exceeding the cost of the works; but no
such contract can be made unless authorized by a majority
vote of the legal voters at a special election called for the
purpose.*
In cities of the second class and villages, the municipal
authorities may make contracts with and authorize any
person, company, or corporation to erect and maintain a
system of water-works."
It will be observed that water-works franchises are ob-
tained by contract in each class of cities; in the larger
cities, great latitude is allowed the mayor and council in
fixing the terms of the contract, but in the smaller towns
1 Ch. 72, art. 7; Laws, 1877, p. 135.
² Ch. 12a, secs. 46, 47; Laws, 1887, p. 105, secs. 46, 47; chap. 13a, art.
1, sec. 67, sub. 15, 16; Laws, 1889, p. 151, sec. 67, sub. 15, 16; ch. 13a,
art. 2, sec. 68, sub. 17, 18; Laws, 1889, p. 249, sec. 68, sub. 17, 18.
3 Ch. 12a, sec. 61; Laws, 1887, p. 105, sec. 61.
* Ch. 13a, art. 1, secs. 84, 86; Laws, 1889, p. 151, secs. 84, 86; ch. 13a,
art. 2, secs. 83-86; Laws, 1889, p. 250, secs. 83-86.
5 Ch. 14, sec. 69, sub. 15; Laws, 1887, p. 291, sec. 69, sub. 15.
NEBRASKA.
1307
the right "to supervise and control" can not be waived.
It would seem that in first class cities a franchise can not
be granted until the people refuse to authorize the bor-
rowing of money to enable the city itself to build the
works.
Limitations.-The limitations on the power to grant
franchises have been fully stated under the preceding par-
agraphs of this subdivision.
Duration of franchises; renewal of.-The only stat-
utory limitations upon the length of time for which a
franchise may be granted is in the case of cities of the
second class and villages, in the case of water-works and
gas-works, the term for which such franchises can be given
being limited for water-works to twenty-five years,' and
for gas-works, twenty-one years. In cities of the first
class of both grades franchises for water-works may be.
granted for twenty years.3
2
Refusal to grant a franchise.—It may be said that the
granting of a franchise is in all cases discretionary with
the legislative power of the municipality. Even in the
case of street railways, where the electors are called upon.
to determine the question, the mayor is only required to
call an election upon request of the council, and there is
nothing to indicate that the council could be compelled.
to make such a request. The mayor and council may in
all cases refuse to grant a franchise, or to take steps to-
ward its grant by the people.
Conflicting grants.-The granting of franchises to two
or more companies, the user of one impeding or prevent-
ing that of the other, has given rise to a great deal of
litigation. The only case reaching the court of last re-
sort is that of the Nebraska Telephone Co. v. York Gas
1 Ch. 14, sec. 69, sub. 15; Laws, 1887, p. 291, sec. 69, sub. 15.
2 Ch. 14, sec. 69, sub. 14.
3 Ch. 13a, art. I, secs. 84, 86; Laws, 1889, p. 151, secs. 84, 86; Ch. 13a,
art. 2, secs. 83-86; Laws, 1889, p. 250, secs. 83-86.
1308
ECONOMIC LEGISLATION.
& Electric Light Co.' The opinion does not lay down
any general rules for determining such questions, but the
decision is based chiefly upon priority of occupancy of the
particular streets or parts of streets. There have been
many cases in the lower courts involving conflicting claims
of street railways to the use of certain streets. These
have been injunction suits practically settled by the allow-
ance or dissolution of the injunction, and consolidation
of the companies has generally terminated the litigation.
As a result of these cases it may be stated that user, to
the extent at least of a bona fide beginning of construc-
tion, evidencing an intention to use a street, is necessary
to complete the franchise, for the purpose at least of pre-
venting another company from occupying the same street.
In some cases one company has been allowed to build on
a street upon its permitting the other to use its tracks for
a reasonable compensation. It is difficult to see upon
what principle the latter result has been reached.
2
The case of the Omaha Horse Railway Co. v. The Cable
Tramway Co. is interesting, in as much as the plaintiff
therein sought to enjoin the defendant from constructing
its road, upon the ground that the plaintiff, incorporated
by special act before the adoption of the state constitu-
tion, enjoyed an exclusive franchise for street railways.
The act gave it the exclusive right to build and operate
"horse railways" within the city of Omaha. The court
held that this could not be extended by construction to
street railways not operated by horses, although a horse
railway was the only street railway known at the time of
the grant. The defendant was permitted to build upon
the same streets occupied by the plaintiff, but required to
compensate plaintiff for all damages suffered by rendering
its cars difficult of access by passengers upon such streets,
but not for damages arising from competition created.
Perpetual and exclusive franchises.-The constitution
1 27 Neb. 284.
230 Fed. Rep. 324; 32 Ib. 727; 33 Ib. 689.
NEBRASKA.
1309
•
forbids the legislature to pass any special law granting to
any corporation, association, or individual, any special or
exclusive privileges, immunities, or franchises whatever."
And all existing grants of exclusive privileges were re-
pealed unless taken advantage of within sixty days from
the taking effect of the constitution.2 The policy of
of the state has been opposed to all exclusive franchises,
but it will be observed that the legislature has empowered
cities in some cases by contract to grant exclusive privi-
leges for a limited period; and in some other cases the
exclusive character of such franchises may be inferred
from the language of the statute. This can not be said.
to be opposed to the constitution, for the provision is made.
by general law applicable to all cities of the class. It is
doubtful, however, if in any case a grant of a perpetual
exclusive franchise could be sustained.
Cities of the second class and villages are empowered
to make contracts granting the exclusive privileges of
furnishing gas to light the streets, lanes and alleys for any
length of time not exceeding twenty-one years,³ but the
right to grant such franchises is abolished in cities having
over 5,000 inhabitants."
Cities of the first class of both grades are permitted to
contract and grant franchises for the construction and
maintenance of systems of water-works for any time not
exceeding twenty years.5 And in cities of the second
class and villages, the authorities may grant the exclusive
privilege of erecting and maintaining a system of water-
works for the term not exceeding twenty-five years.
6
Charges for franchises.-There is no inhibition of ex-
acting a consideration for franchises, but the legislature
¹ Const., Art. III, sec. 15.
2 Const., Art. XI, sec. 6.
3 Ch. 14, art. 1, sec. 69, sub. 15; Laws, 1887, p. 291.
* Laws, 1891, ch. 11.
5 Ch. 13a, secs. 84, 86; Laws, 1889, p. 151, secs. 84, 86; Ch. 13a, art. 2,
secs. 83-86; Laws, 1889, p. 250, secs. 83-86.
• Ch. 14, sec. 69, sub. 15; Laws, 1887, p. 291, sec. 69, sub. 15.
1310
ECONOMIC LEGISLATION.
has not touched the subject in any manner, except to pro-
vide, in an act authorizing the construction of viaducts
over railways in cities, at the expense of the railways, that
the city, with the consent of such railways, may permit
street railway companies to use the viaduct upon such
terms and compensation as may be agreed upon, the rev-
enue so derived to constitute a fund to keep the viaduct
in repair.¹
It is especially provided that metropolitan cities have
power "to tax, license, and regulate telephone
interests or business.
192
Methods of construction.-In the metropolitan cities
the mayor and council are vested with power "to regu-
late and provide for the lighting of streets, laying down
gas pipes, and erection of lamp posts, electric towers, and
other apparatus, and to prohibit or regulate the erection
of telegraph, telephone, or electric wire poles in the pub-
lic grounds, streets, or alleys, and the placing of wires
thereon, and to require the removal and placing under
ground of any or all telegraph, telephone, or electric
wires."3 Special authority is also granted to require, pre-
paratory to improving streets, the making of gas and
water connections under such regulations and at such dis-
tances as may be prescribed by ordinance. The right to
regulate the erection of poles and wires has also been ex-
ercised by the passage of ordinances for that purpose.
In cities of the first class of both grades, power is
granted to regulate street lighting, the laying of gas pipes,
and to require the removal of poles, etc., substantially as
in the case of metropolitan cities.5
¹ Ch. 12a, sec. 48; ch. 13a, art. 2, sec. 115; Laws, 1885, p. 109; Laws,
Laws, 1889, p. 249, sec. 115.
1887, p. 105, sec. 48;
2 Ch. 12a, sec. 49;
105, sec. 65.
3 Ch. 12a, sec. 50;
Laws, 1889, p. 89, sec. 49, amending Laws, 1887, p.,
Laws, 1887, p. 105, sec. 50, amended 1889, p. 89.
♦ Ch. 12a, sec. 72; Laws, 1889, p. 105, sec. 72; Laws, 1891, ch. 7
5 Ch. 13a, sec. 68, sub. 14; Laws, 1889, ch. 15, sec. 68, sub. 16.
·
NEBRASKA.
1311
In the case of cities of the second class and villages,
no power is granted to regulate the laying of pipes, and
there is no reference to electric lighting; the latter is pro-
vided for by a separate act,' authorizing the city or village
to erect such works. The right to regulate the erection
of poles and wires, and to compel the placing under-
ground of wires, is conferred by the statutes providing for
lighting companies.
Cities of the first class of both grades may require the
removal and placing underground of telegraph, electric,
and telephone wires.2
Street railway companies, after obtaining their fran-
chises, as shown above, may construct and operate their
road subject to such rules and regulations as may be
established by ordinance.3
In cities of all grades, street railway companies are re-
quired to pave at their own cost between and to one foot
beyond the outer rails, at the same time that the street is
paved, and of the same materials and character, unless
otherwise ordered by the board of public works. In case
of their refusal or neglect, the city is empowered to levy
a special tax upon the property of the company to pay
the cost, such tax to be enforced by distress and sale or
by judgment and execution. The tax may be made pay-
able in installments like other paving taxes upon the
written application of the company, but such application.
is a waiver of all objections to the validity of the tax.*
The companies are, by the same act, required to lay flat
rails upon paved streets, and in metropolitan cities the
rails used must be approved by the board of public works.
The companies must keep their tracks in repair, and are
¹ Laws, 1889, p. 350.
2 Laws, 1889, p. 151, sec. 67, sub. 14; Laws, 1889, p. 250, sec. 68, sub. 16.
3 Ch. 72, art. 7; Laws, 1877, p. 135.
* Ch. 12a, sec. 70; 13a, sec. 78; 13a, art. 2, sec. 78; Laws, 1889, p. 89,
sec. 15 et seq.; Laws, 1889, p. 151, sec. 78 et seq.; Laws, 1889, p. 249, sec.
'76 et seq.
!
1312
ECONOMIC LEGISLATION.
rendered liable for their failure to do so and for obstruct-
ing the streets, and the city exempted from liability for
injuries resulting from such failure. Metropolitan cities.
are especially empowered to provide for and regulate the
laying of tracks. For other cities substantially similar
provisions exist.2
1
Regulations as to service. In metropolitan cities the
mayor and council are vested with power "to regulate the
sale and use of gas and electric lights, and fix and deter-
mine the price of gas, the charge of electric light, and the
rent of gas meters within the city, and regulate the in-
spection thereof.” ³
3
Gas lighting in Omaha was begun under a special act
incorporating a company for that purpose. The effect of
this legislation and contracts made in pursuance thereof
became the subject of litigation between the city and the
company, but a settlement was made and no decision
reached. The city has exercised the power to regulate
the price of gas, the existing company in fact yielding to
it, but denying the right to compel a reduction.
Power is granted to cities of the first class of both sub-
divisions to regulate street lighting and sale and use of
gas, electric, and other lights, the charge therefor, and the
rent of meters, substantially as in metropolitan cities." No
power is granted to cities of the second class and villages
to regulate prices for gas, and there is no reference to
electric light.
Metropolitan cities are empowered "to regulate tele-
phone service and the use of telephones within the city,
and to fix and determine the charges for telephones and
¹ Ch. 12a, secs. 46, 47; Laws, 1887, p. 105, secs. 46, 47.
2 Ch. 13a, arts. 1, 2; Laws, 1889, p. 151, sec. 67, subs. 15, 16; Laws,
1889, p. 249, sec. 68, sub. 17, 18.
3 Ch. 12a, sec. 50; Laws, 1887, p. 105, sec. 50, as amended, Laws, 1889,
p. 89.
* Laws, 1866, p, 721.
5 Ch. 13a, sec. 68, sub. 14; Laws, 1889, ch. 15, sec. 68, sub. 16.
Laws, 1889, p. 350.
N
NEBRASKA.
1313
telephone service connection.¹ Cities of the first class of
both grades have no power to regulate charges for service
in the case of telephone companies.
2
Metropolitan cities are empowered to provide for and
regulate the passage of street railways, prescribe the time
and manner of running cars, require them to be heated
and lighted, and to fix the fare to be charged. For other
cities substantially similar provisions exist, but the word
"time" in the above connection is omitted, and there are
several verbal changes.3
In cities of the second class and villages, municipal au-
thorities may make contracts for water supply under such
regulations as to price, supply, aud meter rent as the coun-
cil (in cities), or board of trustees (in villages), may from
time to time prescribe by ordinance. The right to super-
vise and control can not be waived or set aside.* It will
be observed that water-works franchises are obtained
by contract in each class of cities, and that in the larger
cities great latitude is allowed the mayor and council in
fixing the terms of the contract, whereas in the smaller
towns the right to regulate prices and supply from time to
time, and to "supervise and control" can not be waived.
Discrimination.-There can be no doubt that all fran-
chise companies are required to render service to all citi-
zens without discrimination, a tender of compliance with
reasonable rules of the company being the only prerequisite
to the enforcement of this right. Whether or how far a
company could be compelled to extend its mains, pipes, or
wires to reach citizens, presents a question of interest, but
one which has not been decided.
5
Whether a water company, under ordinances and con-
¹ Ch. 12a, sec. 50; Laws, 1887, p. 105, sec. 50.
' Ch. 12a, secs. 46, 47; Laws, 1887, p. 105, secs. 46, 47.
3 Ch. 13a, arts. 1, 2; Laws, 1889, p. 151, sec. 67, subs. 15, 16; Laws,
1889, p. 249, sec. 68, subs. 17, 18.
Ch. 14, sec. 61, sub. 15; Laws, 1887, p. 291, sec. 69, sub. 15.
• Webster Telephone Case, 17 Neb. 126.
•
1314
ECONOMIC LEGISLATION.
tracts requiring it to furnish water to the inhabitants of
the city, could be compelled to supply water upon prem-
ises of the United States, within the city boundaries but
ceded by the state to the federal government, has been
doubted, but not decided.¹
State and municipal aid.-No municipality may be-
come a subscriber to the capital stock, or owner of such
stock, or any portion or interest therein, of any railroad
or private corporation or association. But donations to
railroads and "other works of internal improvement" are
authorized, to the amount of ten per cent of the assessed
valuation. A vote of the electors is necessary to author-
ize any such aid, and this limit of ten per cent may be in-
creased five per cent by a two-thirds vote."
4
3
This authority has been liberally exercised in the case
of railways and bridges, but, as already stated, the phrase
"internal improvement" has received no satisfactory con-
struction, and its application to the functions of franchise
companies would be in most cases open to question. Aid
could not be granted to companies under any other pro-
vision.
5
Public service. In metropolitan cities, the mayor and
council are vested with power "to regulate and provide
for the lighting of streets," and in cities of the first class
of both subdivisions the mayor and council are empow-
ered to enter into contracts granting companies "the priv-
ilege of furnishing light for the streets, lanes, and alleys
of said city for any length of time not exceeding five years."
Cities of the second class and villages are empowered in
like manner to make contracts granting the exclusive
privilege of furnishing gas to light the streets, lanes, and
¹ U. S. v. American W. W. Co., 37 Fed. Rep. 747.
2 Const., Art. XII, sec. 1.
3 Const., Art. XIV, sec. 2.
* See note 4, page 1293, as to the phrase "internal improvements."
5 Ch. 12, sec. 50; Laws, 1887, p. 105, sec. 50, amended Laws, 1889, p. 98.
6 Ch. 13a; Laws, 1889, p. 151, sec. 67, subs. 13, 14; ch. 13a, art. 2; Laws,
1889, p. 250, sec. 68, subs. 15, 16.
NEBRASKA.
1315
?
alleys for any length of time not exceeding twenty-one
years,' but cities of second class, having over five thou-
sand inhabitants, are no longer empowered to grant ex-
clusive franchises.2
Alteration, amendment, etc., of franchises.-With
respect to municipal franchises, as defined in this work, it
may be stated that they can only be extended, impaired,
or amended by consent of the corporation and by the au-
thority vested with the power of granting such franchises.
Where a vote of the people is required to grant a fran-
chise originally, it can be extended or amended only by
such vote.
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
Historical.-Nebraska has been drifting in the direc-
tion of municipal ownership. The early statutes, in the
days of special legislation, conferred franchises upon indi-
viduals or companies for many purposes. The later legis-
lation, while not usually forbidding the granting of fran-
chises to companies, has been tending more and more
toward the rendition of service by the municipalities.
themselves. For instance, in cities of the first class a
franchise may only be granted to a water company after
the people have refused to vote bonds for the erection
of water-works. The legislature has recently provided
for the erection of electric light works in second-class
cities and villages. While this act does not deprive the
municipality of the right to contract with a company
for the purpose, it does not specially provide for that
course, and the omission is significant.
3
4
The right to purchase plants was reserved in one or
¹ Ch. 14, art. 1, sec. 69, sub. 14; Laws, 1887, p. 291.
2 Laws, 1891, ch. 11.
3 Ch. 13a, art. 1, secs. 84, 86; Laws, 1889, p. 151, secs. 84, 86; Ch. 13a,
art. 2, secs. 83-86; Laws, 1889, p. 250, secs. 83-86.
4
* Laws, 1889, p. 350.
!
1316
ECONOMIC LEGISLATION.
*
two special charters, and is expressly reserved by statute
in case of water-works in certain cities, as shown below.
Power of municipalities to erect or purchase such
industries.—Municipalities have no authority to erect gas
works, unless such right is included in the duty imposed
upon all classes of cities to provide for the lighting of the
streets.¹
2
Cities of the second class have power to establish and
maintain a system of electric lights, and the council may
levy a tax not exceeding five mills in any one year for es-
tablishing, extending, and maintaining such system. This
act contemplates the furnishing of lights to individuals, as
well as the lighting of streets. And by the same act, if
the amount so raised be insufficient to establish the sys-
tem, bonds maturing in twenty years, but payable after
ten years, and bearing not more than seven per cent inter-
est, may be issued. But the aggregate of such bonds
must not exceed two and one-half per cent of the assessed
valuation. As a further condition for the issue of such
bonds, the proposition to issue the same must be submitted
to the electors after twenty days' notice in a newspaper
published in the city, and a majority of the electors must
vote in favor of such issue. An annual tax of not more
than two mills may thereafter be levied to maintain, ope-
rate, and extend the works. All contracts for the erec-
tion of such works must be let to the lowest responsible
bidder, upon not less than twenty days' notice of the
terms and conditions by newspaper publication, as before.
No member of the council or mayor can be, directly or
indirectly, interested in such contract; and any or all bids
may be rejected. A bond with sureties, to be approved
by the mayor and council, and in any sum deemed suffi-
cient, may be required for the performance of the con-
3
¹ Ch. 12a, sec. 50; ch. 13a, sec. 67, sub. 14; ch. 13a, art. 2, sec. 68, sub.
16; ch. 14, sec. 39, sub. 6.
2 Ch. 14, sec. 138; Laws, 1889, p. 350.
3 Ch. 14, sec. 139; Laws, 1889, p. 350.
NEBRASKA.
1317
tract. Where there is a water commissioner, he is ex
officio light commissioner; elsewhere a light commissioner
must be appointed. He has general management and con-
trol of the system, collects the income therefrom, and
makes semi-annual reports of the condition and needs of
the system, its income and expenses. The council must
fix by ordinance the rates to be charged.¹
Metropolitan cities may erect, construct, and maintain
water-works, either within or without the corporate lim-
its, making all needful rules and regulations concerning
the use of water, and do all acts necessary for the con-
struction, completion, and control of the same, including
the exercise of the right of eminent domain.²
3
In cities of the first class of both grades, the right to
purchase the water-works of private companies is re-
served, at the expiration of ten years, upon the payment
of an amount to be determined at the time of granting
the franchise, but not to exceed the cost of the works.³
In such cities money may also be borrowed, and the credit
and property of the city pledged to the amount of
$100,000, for constructing and maintaining water-works,
upon a vote of the people first had for that purpose.
After such vote, works may be erected, the right of emi-
nent domain exercised, and all needful rules and regula-
tions established. The bonds issued bear not more than
six per cent interest, and can not be sold at less than par,
and are redeemable after ten years. The expenses of con-
struction must be met by a tax not exceeding one mill for
every twenty thousand dollars so issued. The proceeds
of the tax, together with the income of the works, must
be first applied to current expenses and interest, the re-
¹ Ch. 14, secs. 140, 141, 142; Laws, 1889, p. 350.
2 Ch. 12a, sec. 61; Laws, 1887, p. 105, sec. 61.
? Ch. 13a, art. 1, secs. 84, 86; Laws, 1889. p. 151, secs. 84, 86; ch. 13a,
art. 2, secs. 83-86; Laws, 1889, p. 250, secs. 83-86.
* Extended to $200,000, in addition to all bonds issued before April 9,
1891; Laws, 1891, ch. 8.
1318
ECONOMIC LEGISLATION.
mainder to extensions and to a sinking fund to meet the
bonds. The works are under the management of a water
commissioner, with similar functions to the light commis-
sioner already mentioned.'
In the second grade of first class cities, the system to be
adopted must be first determined, an estimate of the cost
procured from the city engineer, and the plans and esti-
mate placed in the hands of the city clerk, subject to
public inspection, and no other system can be adopted
without a vote of the people. By a vote of the people,
after construction, the works may be extended at a cost
of not more than ten thousand dollars a year.2
In second class cities and villages a similar power ex-
ists, the limit of taxation being seven mills on the dollar
each year, the bonds being due in twenty years and paya-
ble after five years, with seven per cent interest, and not
exceeding in the aggregate $125,000.3 The expense of
constructing and locating reservoirs, hydrants, and mains,
may be met by special assessment upon the property bene-
fitted.*
Economic results.-The state has not gone so far as to
expressly authorize municipalities to enter into industrial
pursuits beyond those connected with lighting the streets
and providing a water supply. No satisfactory statistics
can be obtained showing the economical results of accept-
ing the benefit of these provisions. They have not been
adopted except within a very few years, and no undertak-
ing within the writer's knowledge has so far progressed
as to justify a statement as to the economical results.
Both electric lighting and the supplying of water have
been undertaken by a number of smaller towns. The re-
sult of their ventures will be awaited with interest.
¹ Ch. 13a, secs. 84-90; Laws, 1889, p. 151, secs. 84-90; ch. 13a, art. 2,
secs. 83-91; Laws, 1889, p. 250, secs. 83-91.
2 Ch. 13a, art. 2, sec. 84; Laws, 1889, p. 250, sec. 84.
Laws, 1891, ch. 12.
* Ch. 14, sec. 69, sub. 15; Laws, 1887, p. 291, sec. 69, sub. 15.
1
NEVADA."
EDITED BY SArdis summerfield, Att'y, CARSON CITY, nevada.
SUBDIVISION I.-HISTORICAL.
Nevada was a portion of the Mexican domain until it
was acquired by the United States in 1848 by virtue of the
treaty of Guadalupe Hidalgo. In 1850, congress defined the
boundaries of Utah, and included therein the territory now
embraced in Nevada. In 1854, the territorial legislature
of Utah passed an act creating the county of Carson,
which was practically identical in boundary with the pres-
ent State of Nevada. In 1861, congress organized the
county of Carson under the name of the Territory of
Nevada. Until shortly previous to this time, only a few
explorers and prospectors had roamed over the territory,
and no settlements had been made. Mineral discoveries
led to settlement, and the necessities of government to
congressional organization and provision for local legisla-
tion.
By the organization act, the legislative power and au-
thority of the territory was vested in a governor, ap-
pointed by the president, and in a legislative assembly
consisting of an elective council and house of representa-
tives. The restrictions upon the legislature enumerated
in the organization act were few, and consisted chiefly in
a denial of the right to pass laws interfering with the
primary disposal of the soil, a prohibition of discriminat-
1 References to the constitution are to that of 1864. References to the
statutes are to the General Statutes of Nevada by section simply. The
session laws are referred to as Laws" of the respective years. As to
state reports, see Appendix "A."
(1319)
1320
ECONOMIC LEGISLATION.
ing methods of taxation of property, and of the invasion
of vested rights in property. It further provided that the
legislative authority of the territory should extend to all
rightful subjects of legislation consistent with the consti-
tution of the United States and the provisions of the or-
ganization act. The legislature was practically unre-
strained by any superior authority from granting any kind
of a franchise that suited its pleasure.
In 1861, the first legislative assembly of Nevada was
convened by authority of the organization act. Discov-
eries of rich mineral deposits in various parts of the ter-
ritory and the formation of mining towns made the con-
struction of roads an imperative necessity. No law gov-
erning the construction of roads and highways, or the
public funds with which to build them, existed, and the
territorial legislature of 1861 and of 1862 was kept busy
granting toll-road franchises to almost every one who
asked for them. During these two years, no fewer than
fifty toll-road franchises were granted, and all by special
enactment. The duration of these franchises varied from
ten years to constructive perpetuities. None of these
charters were close, but all contained reservations of a
legislative right to alter their conditions. They desig-
nated a capricious schedule of tolls, subject to change by
any succeeding legislature, and provided generally for the
payment of two per centum of the gross receipts from tolls
into the treasury of the territory. They all contained
provisions to the effect that when the grantees failed to
keep the toll-roads in a good condition for travel, the
franchise should be declared to be forfeited by any court
of competent jurisdiction.
A large number of these franchises were of speculative
inception for toll-roads between points which never devel-
oped into places of any importance, and the roads were
never constructed. Many have been purchased by the
counties and the roads made free highways. Others have
been abandoned by reason of the failure of the mines at
NEVADA.
1321
their termini, and some have been declared forfeited by
the courts because of the failure of the grantees to comply
with the conditions of the charters in the maintenance of
the roads. At the present time, there are very few toll-
roads in the state, and it is believed that the franchises of
all of them would be declared forfeited by the courts if the
proper proceedings were taken.
During these same years, 1861 and 1862, several fran-
chises were granted to individuals, associations, and com-
panies to furnish mining towns with water. These towns
soon declined and were deserted, and the franchises now
exist only as legislative records.
In 1864, the present constitution of the State of Nevada
was adopted. It was modeled closely after that of Cali-
fornia, only such changes being made as were required by
a different local status, and none involving general princi-
ples of constitutional law.
The constitution of Nevada as adopted in 1864 has
never been amended in any particular affecting either the
granting of corporate or other franchises or the rights,
privileges, and incidents appertaining to them.
It provides that "corporations may be formed under
general laws; and all such laws may, from time to time,
be altered or repealed;" prohibits the legislature from
passing any special act in any manner relating to corporate
powers, except for municipal purposes;¹ declares that “the
state shall not donate or loan money or its credit, subscribe
to or be interested in the stock of any company, associa-
tion, or corporation, except corporations formed for educa-
tional or charitable purposes," and that “
» 2 and that “no county, city,
town, or other municipal corporation shall become a stock-
holder in any joint stock company, corporation, or asso-
ciation whatever, or loan its credit in aid of any such com-
pany, corporation, or association, except railroad com-
panies." 3
' Const., Art. VIII, sec. 1.
3 Const., Art. VIII, sec. 10.
2 Const., Art. VIII, sec. 9.
་
VOL. II-3
1322
ECONOMIC LEGISLATION.
The power of the legislature to grant perpetuities, ex-
cept for eleemosynary purposes, is also expressly denied.¹
As will be seen from the constitutional provisions quoted,
the wisdom of granting perpetual franchises such as had
been granted in toll-road charters, was questioned and the
authority to do so was denied. The section prohibiting the
legislature from passing acts of a special nature relating
to corporate powers, in effect, bars franchises purporting
to confer exclusive privileges upon grantees. With these
exceptions the legislature of this state is as free to grant
any kind of franchises as was the territorial legislature.
In 1865, a general act was passed by the legislature reg-
ulating the formation of corporations for carrying on nearly
every kind of business.2 This act is analogous to the joint
stock acts of other states, and has been amended only in a
few unimportant particulars. It was passed in order to
give force and effect to the constitutional provision re-
quiring all corporations to be formed under general laws.
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation, how obtained. The constitution of the
state prohibits the legislature from passing special acts in
any manner relating to corporate powers, and provides that
all corporations may be formed under the general laws of
the state. The laws passed in pursuance of these provisions
authorize the formation of corporations, among other
things, for manufacturing, mechanical, chemical, and
transportation business, and for engaging in any other
species of trade, business, or commerce, foreign or do-
mestic.2
3
Articles of incorporation.-Any three or more persons
desiring to form a corporation may do so by executing and
acknowledging a certificate or articles of incorporation.
The execution and acknowledgment of such articles must
1 Const., Art. XV, sec. 4.
Const., Art. VIII, sec. 1.
2 Sec. 802, et seq.
NEVADA.
1323
2
1
be made by all the corporators. But not less than ten
persons may secure a railroad or street railway franchise
whenever stock to the amount of $1,000 per mile of the
proposed railroad has been subscribed and ten per cent of
such subscription has been paid to the treasurer appointed
by the stockholders.2
Must show what.-The articles of incorporation must
state the corporate name of the company; the objects for
which it is formed; the amount of its capital stock; the
number of shares of the same; the time of its existence
which can not exceed fifty years; the names and number
of trustees who are to manage the concerns of the com-
pany for the first six months; the name of the city and
town or county in which the principal place of business is
to be located.¹
The articles of incorporation of railroad and street
railway companies must set forth the name of the corpora-
tion; the number of years of its existence, which can not
exceed fifty; the amount of the capital stock and an ac-
curate description of the road.3
Filing. The articles or certificate of incorporation must
bę filed with the clerk of the county where the principal
place of business is to be located and recorded by him. A
certified copy thereof under the hand and seal of the
county clerk must be filed in the office of the secretary of
state.*
The articles of association of railroad and street railway
companies must be filed in the office of the secretary of
state.5
1 Sec. 803.
2 Sec. 834, et seq. There has never been a street railway constructed
in the state nor a street railway corporation organized under the laws
of the state. Sec. 893 provides that corporations for constructing, run-
ning, operating, and maintaining street railways, may be formed under
the same general laws governing the formation of railroad corporations.
This provision of law is not mandatory in terms, but is construed to be
so in effect.
3 Secs. 834, 893. * Laws, 1887, p. 126, sec. 2. 5 Sec. 834 et seq; sec. 893.
1324
ECONOMIC LEGISLATION.
Fees. The clerk's fees are thirty cents per folio for
recording and making certified copies. The fee of the
secretary of state is five dollars.2
Amendments, repeals, etc.-The constitution provides
that all general laws for the formation of corporations may
from time to time be 'altered or repealed. A change in
the objects of the incorporation can be accomplished, only
by a re-incorporation in the same manner as the original
incorporation.
Duration of charter.-Corporate existence is limited
to a period not to exceed fifty years and the articles must
state the term thereof.
4
Objects. The original certificate is generally made
broad enough to cover any kind of business which the cor-
porators contemplate and in many instances the objects
are stated so vaguely, that the real business which the cor-
poration contemplates is a matter of conjecture.
Powers. The general powers of a corporation in this
state are to sue and to be sued; to make and to use a com-
mon seal; to appoint officers, prescribe their duties and fix
their pay; to require security from its officers and to re-
move them from office; to purchase, hold and convey
property; to make and enforce by-laws; and to manage
and control its business.5
The power of a corporation is lodged in its board of
trustees, but a corporation can not be bound by the acts
of its directors or trustees unless the acts are done in pur-
suance of some object embraced by its charter, or of some
power conferred upon it by law."
Officers; meetings; voting; quorum, etc.-A board
of trustees, not less than three in number, who must be
stockholders in the corporation, must be elected annually
by the stockholders at such time and place and in such
1
Laws, 1887, p. 126, sec. 2.
3 Const. Art. VIII, sec. 1.
5 Sec. 805.
2 Sec. 1798.
* Secs. 803, 834, 893.
6 Ricord v. C. P. R. R. Co., 15 Nev. 167.
NEVADA.
1325
manner and upon the notice required in the by-laws. All
elections must be by ballot and every stockholder has the
right to vote in person or by proxy. A stockholder may
vote his number of shares for as many persons as there are
trustees to be elected or he may cumulate his shares by
giving one candidate for trustee as many votes as equal
his number of shares multiplied by the number of trustees,
or he may distribute his votes as he pleases amongst the
candidates on the same principle.'
Officers other than the trustees are elected in accordance
with the provisions of the by-laws. In the event of a
failure to elect at the time fixed in the by-laws the old
officers hold over.
As to the removal of officers the statute provides that
on petition of stockholders owning a majority of the stock,
verified by the signers, to the effect that they are the
owners of the number of shares designated in the petition,
it is the duty of the district judge to issue a notice for a
meeting of the stockholders in not less than five nor more
than ten days from the first publication of the notice. At
the time appointed the judge must select a secretary of the
meeting and proceed to hear the proofs of those claiming
to be stockholders and only those proving a right to vote,
or their proxies, can be allowed to take part in the pro-
ceedings.¹ If at the appointed time not more than one-
half of the shares issued are represented by their owners
or proxies, the meeting must be dissolved. If a majority
of the stock is represented a vote must be taken on the
removal of the officers and the 'result declared by the
judge. If the vote is in favor of a removal the vacancies
must be at once filled by ballot and the judge must issue
certificates of election which are valid until the succeeding
annual election of officers as provided in the by-laws.
The judge must then make an order requiring all books,
papers, property and effects of the corporation to be
¹ Sec. 806.
1326
ECONOMIC LEGISLATION.
delivered to the newly elected officers and must cause the
order to be filed by the clerk of his court. Any disobe-
dience of the order by the removed officers or by any one
else is punishable as a contempt of court.¹
Capital stock.-The per centum of stock which must
be paid in antecedent to the incorporation of railroad and
street railway companies has already been stated.² There
is no express provision of law requiring corporations to
have any certain per centum of paid in stock.
Corporations are limited to the issuance of the number
of shares of stock named in their charters or certificates of
incorporation. The time and the expediency of its issue
is left to the sole judgment of the trustees.³
When a corporation has issued stock to the full number
of shares which by its charter or certificate of incorpo-
ration it is authorized to issue, no court can rightfully
direct the issuance of other shares of stock unless some of
the shares issued were void. A court of equity by proper
decree can correct mistakes in the issuance of stock but
not so as to make stock void in the hands of an innocent
purchaser nor by ordering the issuance of more stock of the
corporation than it is entitled to issue by law."
Stockholders are liable to the corporation for the entire
amount of their stock subscription, at the time, and in the
manner and amounts prescribed by the by-laws. In the
absence of by-laws, the trustees have the right to demand
and receive such payments on the subscribed stock as they
may deem proper. This is usually done by levying assess-
ments. Notice of assessments must be given by four weeks
publication in a newspaper. In case of default in paying
assessments a sufficient number of shares belonging to the
delinquent stockholder may be sold by the trustees to pay
the assessment and cost of notice and sale. Such sale can
be made legally, only after four weeks published notice, at
2 Sec. 815. See note 4, "ARTICLES OF INCORPORATION.
Smith v. N. Am. Mining Co., 1 Nev. 423.
¹ Sec. 806.
3 Sec. 825.
4
NEVADA.
1327
the office of the corporation and at public auction to the
highest bidder.¹
Increase and decrease of.-Any corporation may diminish
its capital stock, to any amount which it deems adequate
to accomplish the objects of the corporation. Should the
debts of the corporation exceed the amount to which the
capital stock is proposed to be reduced the excess of debt.
must be paid before the capital stock is reduced.¹
When it is proposed to increase or diminish the capital
stock, a notice of the meeting of the stockholders must be
given by a majority of the trustees and the notice must be
published for eight weeks in a newspaper of the county where
the principal place of business is located. The notice must
specify the time and place of the meeting and the amount
to which it is proposed to increase or diminish the capital
stock.2
A two-thirds vote of all of the stock is required for
an increase or diminution. If the vote is favorable to
the proposition a certificate of the proceedings, showing the
amount of the capital actually paid in, the total debts and
liabilities of the corporation and the amount to which the
capital stock has been increased or diminished, must be
signed and verified by the chairman and secretary of the
meeting and certified to by a majority of the trustees and
filed as required in case of original certificates, or state-
ments of incorporation.2
Transfer of.-Stock certificates are considered to be per-
sonal property and may be transferred by indorsement and
delivery. While such transfers are good as between the
parties to the transfer, yet to be valid against the world
the transfer must be entered on the books of the corpo-
ration in such a manner as to show the names of the
parties, by and to whom transferred, the number of the
shares and the date of the transfer.3
Bonds, debts, etc.-The total amount of the debts of
¹ Sec. 811.
2 Sec. 821.
3 Sec. 810.
1328
ECONOMIC LEGISLATION.
a corporation can not at any time exceed the amount of
capital stock paid in.¹
Liability of stockholders.-The liability of stockholders
to the creditors of the corporation is not fixed by statute
but by the common law and extends to the amount of the
subscribed stock.2
2
The unpaid subscription to the capital stock of a corpo-
ration is a trust fund for the benefit of the general
creditors of the corporation and a stockholder who is also
a creditor of the corporation can not offset his unpaid sub-
scription against the general indebtedness of the corpora-
tion. When the indebtedness of the corporation to a stock-
holder is collaterally secured the stockholder must pay the
amount of his unpaid subscription and surrender his collat-
eral security before he can participate in the fund ratably
with the other creditors. When subscriptions to the capital
stock of a corporation are payable on call of the trustees,
it is not necessary that a creditor of the corporation, before
instituting suit to compel the payment of such subscription,
make an effort to compel the corporation to make the call.²
A stockholder in a corporation can not be held on garnish-
ment for his unpaid subscription, when no call or assess-
ment for the same has been made by the corporation and
the money is not owing in the statutory sense of being
subject to garnishment without such call.³
2
In the case of Ross v. Bank of Gold Hill, 20 Nev. 191,
a stockholder paid two hundred dollars and received a cer-
tificate to the effect that on the payment of the balance
due and return of the certificate properly indorsed, he
should be entitled to receive twenty shares of the stock of
the corporation. The stock was of the par value of one
hundred dollars per share. The balance was never paid
and suit was brought by a creditor of the corporation to
enforce its payment. The stockholder claimed that his
¹ Sec. 815.
3 McKelvey v. Crockett, 18 Nev. 238.
2 Thompson v. Lake, 19 Nev. 103.
NEVADA.
1329
certificate was in the nature of an option to pay the balance
and receive the stock or to forfeit the amount paid, but the
supreme court held him to be a stockholder and enforced
payment of the balance.
Liability of officers and directors.-If at any time.
the amount of debts of a corporation exceed the capital
stock the trustees present when the excess debt was in-
curred who did not cause their dissent to be placed at large
on the minutes of the board are personally and individually
responsible to the corporation for such debts, and, in the
event of the dissolution of the corporation, to the creditors
thereof for the full amount of such excess debt.'
Reports. Railroad and street railway corporations are
required to report annually, under oaths of the president
or acting superintendent, secretary and treasurer, on or
before the thirtieth day of June of each year, to the
secretary of state, the amount of capital stock and amount
paid in thereon; amount paid for roadway, construction
of the road, cost of buildings, engines and cars used in the
state; amount and nature of indebtedness of the corpora-
tion and amount owing to it; amount of entire income of
the corporation; tons of freight transported; amount of
the current expenses of the road; number and amount of
dividends and when paid; number of engine houses, shops,
engines and cars; net amount of profits. This report must.
cover the entire preceding year and must be filed in the
office of the secretary of state by the first day of Septem-
ber under a penalty of five hundred dollars per day for
each day thereafter until the same is filed. Other fran-
chise companies are required to report on demand of the
county assessor an itemized schedule of all the property
belonging to the corporation.
Taxation.-All houses, buildings, fences, ditches,
structures, erections, railroads, street railways, toll roads,
¹ Sec. 815.
2 Laws, 1889, p. 117, sec. 1; See note 4, "ARTICLES OF INCORPORATION."
*
1330
ECONOMIC LEGISLATION.
bridges and improvements belonging to any corporation
(except mining corporations) or person are assessable as
real estate. The capital stock of any corporation (except
mining corporations) is assessable as personal property.¹
Besides this, corporations as well as individuals engaged in
nearly any kind of business are liable for a county license.
tax based upon the monthly volume of business transacted.
This license tax varies from fifty dollars per month to
three dollars and seventy-five cents per month. A munici-
pal license tax may also be levied and collected.
Dissolution and forfeiture.-A corporation may be
dissolved by presenting to the district judge a petition ac-
companied by a certificate of the proper officers setting
forth that at a meeting of the stockholders called for that
purpose, it was decided by a majority vote of the stock-
holders to disincorporate. The clerk of the court must
publish notice of the application for eight weeks. At the
time and place specified in the notice, the judge must hear
the application and if satisfied that the corporation has
taken the necessary preliminary steps, that the necessary
vote has been obtained for that purpose and that all claims
against the corporation have been satisfied, he must enter
an order declaring the corporation dissolved.²
SUBDIVISION III.-FRANCHISES.
How obtained.-Under the general statutes any person
or persons may secure telegraph franchises (there are no
provisions of law as to telephone companies), by filing a
certificate properly acknowledged before a notary public
in the office of the county recorder and secretary of state
respectively. The certificate must contain the name of the
telegraph line and of the places constituting its termini.
The filing of such certificate together with a plat of
the route of such telegraph line imparts constructive
notice to all persons and per se confers a franchise sub-
Laws, 1891, p. 136, sec. 6.
2 Sec. 823.
NEVADA.
1331
ject to the condition that work must be commenced
on the line within thirty days after the filing of the cer-
tificate and must be continued with reasonable dispatch
until completed.¹
Not less than ten persons may secure a railroad or street
railway franchise after incorporation and the subscription
of stock to the amount of one thousand dollars per mile
and the payment of ten per cent. of such subscription to
the treasurer appointed by the stockholders."
Gas companies are given the highway franchise to lay
pipes, excavate streets for such purpose and to reopen ex-
cavations for the examination and repair of pipes, pro-
vided, that no street shall be obstructed to an unnecessary
degree or for an unnecessary time.³
Highway franchises, other than as above enumerated, can
be obtained only from the legislature by ordinary grant or
enactment. This is accomplished by bill the same as upon
any other subject of legislation and subject to the same
legislative course. Franchise bills in this state should
designate the grantees by name although such grantees
are frequently not the real parties in interest. The high-
way franchise may be granted for all kinds of uses but the
grantees are limited to such use as will not obstruct or im-
pede public travel.¹
Municipal consent is not required to secure a highway
franchise nor for the exercise of such franchise. The
statute confers such franchises and the exercise thereof
subject to the conditions that the exercise of franchise
rights must not obstruct, impede or endanger public
travel.
Limitation. The legislature is not restricted in grant-
ing franchises, except by the constitutional guarantees of
personal and property rights and the denial of the right to
grant perpetuities or exclusive privileges.
¹Secs. 425 et seq.; 915 et seq.
2 Sec. 834 et seq.; See note 4, "ARTICLES OF INCORPORATION.'
3 Sec. 1072.
* Sec. 445.
1332
ECONOMIC LEGISLATION.
}
Whenever there is "any ambiguity in the terms of the
grant of a franchise it must operate against the grantee
and in favor of the public." This doctrine has been closely
adhered to and is now unquestioned.
1
2
Condemnation of property.-The franchises secured
by telegraph, railroad and street railway companies, when
they invade the rights of private property, can only be
made operative by payment of damages estimated on the
basis of statutory appraisment or condemnation. All fran-
chise companies which are common carriers, telegraph,
tramway, etc., companies, have the right of eminent
domain.
Refusal to grant a franchise. The legislature being
the only competent authority to grant franchises, it neces-
sarily follows that it is the sole judge of the policy and
expediency of granting them and that it can not be com-
pelled to grant them any more than it can be compelled to
pass a bill.
Perpetual and exclusive franchises.-The constitution
expressly denies to the legislature the power to grant per-
petuities, except for eleemosynary purposes.3 Any act of
the legislature attempting to grant a special franchise
privilege to one corporation that can not be enjoyed by
any other is unconstitutional.*
In the case of Lake v. V. & T. R. R. Co., 7 Nev. 294, an
act of the territorial legislature passed in 1862 granted to
L. a toll road franchise for ten years with a right to build
a bridge across the Truckee river at a certain point and to
collect toll from travelers crossing the bridge. One section
of the act prohibited any person from constructing or
maintaining a bridge across the river within one mile of
L's bridge. The V. & T. R. R. Co. commenced the con-
struction of a railroad bridge within one mile of the L.
¹ Lake v. V. & T. R. R. Co., 7 Nev. 294.
2 See note 4, "ARTICLES OF INCORPORATION."
3 Const. Art. XV, sec. 4.
Keith v. Toll Road Co., 10 Nev. 155.
NEVADA.
1333
bridge, and L. by injunction undertook to prevent the con-
struction of the railroad bridge on the ground of an in-
fringement of his franchise rights. The supreme court in
an exhaustive decision held that the bridge of the railroad
company was not such a bridge as was prohibited by the
franchise act and denied the injunction.
Charges for franchises.-Franchises secured direct.
from the legislature by special enactment are necessarily
without charge, except such as may be designated in the
act. Telegraph companies.
companies availing themselves of
the benefits of the laws of the state are required to dis-
patch messages sent by the state on public business free of
charge.¹
Regulations as to service.-The legislature by stat-
ute 2 has reserved the right, whenever it deems proper, to
change the rates of fare and freight on all railroads and
street railways³ which are not inter-state roads.
Telegraph companies are permitted by law' to establish
their rates of charges for services but such rates must be legi-
bly printed and posted in each office of the line; no higher
rate must be charged any person than those so published
and messages must be dispatched in the order in which
they are received. Telegraph companies availing them-
selves of the privileges of the laws of Nevada must give
preference to official dispatches for the detection and cap-
ture of criminals.¹
4
Safety of life and property.-Companies operating
under franchises are subject to reasonable regulations.
conserving the public safety and convenience. Railroad
and street railway 3 companies are required to grade their
tracks over highway crossings so as to best secure the
safety of the traveling public; to ring a bell eighty rods
¹ Sec. 919. There are no provisions of law specially applying to tele-
phone companies.
4
2 Sec. 918.
* Sec. 941.
3 See note 4, "ARTICLES OF INCORPORATION."
5 Sec. 853.
1334
ECONOMIC LEGISLATION.
before each highway intersection' and to place freight
cars only in front of passenger coaches in mixed trains.2
Ditch and telegraph companies and all persons legally
using a highway franchise do so subject to the general
highway law prohibiting any obstruction of the highway
or such injury of the same as will render travel thereon
dangerous.
"3
State and municipal aid.-The constitution provides
that “the state shall not donate or loan money or it credit,
subscribe to or be interested in the stock of any company,
association or corporation, except corporations formed for
educational or charitable purposes," and that "no county,
city, town or other municipal corporation shall become a
stockholder in any joint stock company, corporation or
association whatever, or loan its credit in aid of any such
company, corporation or association, except railroad com-
panies."
"24
Municipalities in this state have never attempted to
violate or evade this provision of the organic law. Public
funds or credit have never been loaned to railroad corpo-
rations in this state by municipal corporations, except by
counties, and then only under enabling acts passed by the
legislature. In Gibson v. Mason, 5 Nev. 284, it was held
by the supreme court that to allow a county to loan its
credit to a railroad corporation is virtually allowing a do-
nation, because the right to loan its credit must involve
the right to pay any liabilities which may be incurred by
that means.
5
6
A late act of the legislature permits counties to issue
twenty-five year bonds in aid of a railroad corpora-
tion and provides that the bonds, principal and inter-
est, shall be paid only from the taxes paid by such
corporations which taxes must be set aside as a sinking
1 Sec. 875.
2 Sec. 881.
• Const., Art. VIII, sec. 10.
³ Const., Art. VIII, sec. 9.
5 Laws, 1891, p. 73, sec. 1, et seq.
* See note 4, "ARTICLES OF INCORPORATION," supra.
NEVADA.
1335
fund for the payment of the interest and the redemption of
the bonds.
Alteration, amendment, etc., of franchise.-A charter
being a contract of which the state as the grantor is one
party, as long as the grantees comply fairly with the con-
ditions of the charter, neither the legislature nor any
municipality has any right to change any provision of the
charter detrimental to the rights of the grantees or in-
volving any of their substantial rights. It is conceived
that an act changing the provisions of a charter under
such conditions, unless authorized by the terms of the
charter itself, would violate a provision of the Federal con-
stitution and would also be depriving persons of their
property without due process of law contrary to the
constitution of the state. It would be destructive of
vested rights, and such action has never been attempted in
this state.
See also under "AMENDMENTS, REPEALS, ETC."
Forfeiture of franchises.-All franchises granted di-
rectly by the legislature or secured under the operation of
the general laws of the state are deemed to be forfeited
upon the failure, neglect or refusal of the grantees to
fairly comply with the requirements of the charter or
of the general law by virtue of which the franchises are
obtained. The method of having the forfeiture legally
decreed is by filing an information in the nature of quo
warranto.
While the general rule is that franchise grantees
must prove a good title thereto and the state need prove
nothing, yet when it is admitted that the grantees once
had a good title and the proceedings claim a forfeiture on
the ground of abandonment, the onus of proof is on the
state.¹
¹State v. Haskell, 14 Nev. 209.
1336
ECONOMIC LEGISLATION.
!
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
No municipal corporation in this state has ever owned
or operated an industrial enterprise on public account
or otherwise.
Municipalities have the right to own and operate water
works, gas works, electric light works, etc., when such
right and power are specifically conferred by legislative
enactment.
1
NEW HAMPSHIRE.'
EDITED BY OLIVER E. BRANCH, ATT'Y, MANCHESTER, N. H.
SUBDIVISION I.-HISTORICAL.
New Hampshire adopted a temporary constitution Jan-
uary 5, 1776. This was the first written constitution
adopted by any of the states. A new constitution went
into effect in 1784, and was amended in 1793; further
amendments were made to this in 1852, 1877, and 1889.
None of these changes, however, materially affected the
powers or policy of the state toward corporations.
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation; how obtained.-Corporations may be
formed under special acts of the legislature, or under the
general law.2
Although the right of the legislature to create corpora-
tions is not in terms granted to it by the constitution, yet
that right has so long and so often been claimed and ex-
ercised by it without question, that its validity can hardly
be doubted. It may be considered settled that the legis-
lature has not only the sole power to grant a charter of
incorporation, but that this power is practically unlimited.
It may exercise that power or refuse to exercise it as it
pleases, and its action can not be questioned except in
cases where it has bestowed franchise privileges which the
court would say were detrimental to the public welfare.
As to powers of the legislature relative to granting
¹ References to the statutes are to the Public Statutes of New Hamp-
shire, by chapter and section simply. The session laws are referred to as
Laws" of the respective years. As to state reports, see Appendix “A."
* Chap. 147. See Petition of Mt. Washington Road Co., 35 N. H. 135;
Greely v. Concord R. R., 17 N. H. 48.
(1337)
2
VOL. II-4
1338
ECONOMIC LEGISLATION.
special charters, etc., see SUBDIVISION III, "How OB-
TAINED."
The formalities for obtaining special charters are the
same as for the passage of any other legislation.
Articles of incorporation.-Under the general law,
five or more persons of lawful age may, by written agree-
ment, associate for carrying on any lawful business except
banking, life insurance, the making of contracts for the
payment of money at a fixed date or upon the happening
of some contingency, and the construction and mainte-
nance of railroads. The articles must be signed, and the
post-office address of each signer added; they are not re-
quired to be sealed or acknowledged.¹
Must show what.-The articles of agreement must state
the name of the corporation, the place of business, the
object for which it is established, and the amount of stock
to be paid in, which must not be less than one thousand
nor more than one million dollars, and may be divided
into shares of not less than twenty-five nor more than
five hundred dollars each.2
Filing. This written agreement or articles of incorpo-
ration must be recorded in the office of the clerk of the
town in which the principal business is to be done, and in
the office of the secretary of state; and when so recorded,
and the charter fee, if any required by law, has been paid
to the state treasurer, the incorporators become a corpora-
tion, having all the rights and privileges and subject to
all the debts and liabilities of corporations of a similar
nature.¹
Fees. Before a private act of incorporation can be
valid, there must be paid into the state treasury by the
proprietors, if it is a street railway, the sum of one-twen-
tieth of one per cent upon the largest amount of its au-
thorized capital. If it be any other corporation referred
to herein, it must pay the sum of fifty dollars for its act
1 Ch. 147.
2 Ch. 147, sec. 6.
NEW HAMPSHIRE.
1339
of incorporation, and twenty-five dollars for any supple-
mentary act.¹ These fees must be paid within thirty days
after the expiration of the session at which the act is
passed.2
Corporations organized under the general law are ex-
empted from the above fees, and are required to pay only
the usual fees for recording their agreements in the office
of the town clerk and secretary of state. The fees are
seventeen cents per folio, and fifty cents for certificate of
filing.
Commencing business.-Any three of the five grantees
named in the charter, unless otherwise provided therein,
may call the first meeting by notice in hand to all the
members, or by leaving the same at the abode of each, or by
mailing seven days before the day of meeting; or the first
meeting may be held by the members assembled volunta-
rily, or at a time and place agreed upon.3 At the first
meeting a temporary clerk is chosen by ballot and sworn,
by-laws adopted, and officers elected in accordance there-
with. The temporary clerk holds office and acts as clerk
until a permanent clerk is chosen and qualified.*
Corporations specially chartered must be organized
within three years from the passage of the act; if not, the
charter is void.5
Amendments; repeals, etc.-The statute provides that
"the legislature may at any time alter, amend, or repeal
the charter
of any corporation whenever the
public good so requires the same, but the remedy against
such corporation, its members or officers, for any liability
previously incurred, shall not be impaired thereby.
This statute has been in force since 1843, so that in ab-
sence of express exemption from its provisions, all corpo-
rations, whether created by special enactment or organized
under the general law, are subject to its provisions. The
objects for which a corporation is formed may be changed
1 Ch. 14, sec. 1.
Ch. 148, sec. 5.
2 Ch. 14, sec. 7.
5 Ch. 149, sec. 2.
3 Ch. 148, sec. 3.
6 Ch. 148, sec. 19.
1340
ECONOMIC LEGISLATION.
by act of the legislature, provided it does not work a fun-
damental change in the business which the corporators
undertook to do under their original charter, in which
case the unanimous consent of all the stockholders must
be had.¹ 1
By the corporation.-In corporations formed under the
general law, changes may be made by a vote of the stock-
holders recorded in the office of the town clerk and secre-
tary of state. The consent of all stockholders would be
necessary, however, if the change were fundamental.
Under the decision in Downing v. Mount Washington
Road Company, 40 N. H. 230, changes by a corporation.
in its method of doing business that go beyond those
usually adopted without question by corporations of a
similar character, would be held to be outside the powers
granted, unless specifically included; so that a gas com-
pany, for example, could not furnish electric light or
power, nor could a horse railroad company use electric
motors. Such changes would be considered, under the
decisions referred to, as altering the objects for which the
corporation was chartered, and could be made only by
unanimous consent of all stockholders under an act of
the legislature.
Duration of charter.—All corporations have perpetual
succession, unless incorporated for a limited time.2
Objects. There is no special requirement as to the
statement of the objects of corporations. All special acts
do state them, and if they did not would probably be
vetoed or amended. See under AMENDMENTS, REPEALS,
ETC.," above.
•
Powers.-Corporations may make contracts necessary
and proper for the transaction of their authorized busi-
ness, and no other; they may purchase, hold, and convey
real and personal estate necessary and proper for the
transaction of their business, not exceeding the amount
1 Dow v. Northern Railroad (not yet reported).
2 Ch. 148, sec. 3.
NEW HAMPSHIRE.
1341
authorized by their charter or by statute, and no other.'
They may admit associates, and remove them for just
cause, and may change their seals.2
By-laws.-Corporations may adopt by-laws not repug-
nant to the laws of the state, to provide for the election
and removal of members, to prescribe the time and places
of their meetings and the manner of calling and conduct-
ing them, to regulate the number of officers, their powers,
duties, mode of choosing them, and their tenure of office,
and any others necessary and suitable to promote the ob-
jects of the corporation.³
Officers; meetings; voting; quorum, etc.-Every cor-
poration must have a clerk. He must be, and continue to
be, an inhabitant of the state, keep his office therein; he
holds his office one year and until his successor is chosen
and qualified; when his office becomes vacant by death
or otherwise, his successor must forthwith be appointed by
the president or by a majority of the directors.*
5
The directors must be chosen annually by the stock-
holders and hold office for one year and until others are
chosen and qualified in their stead. There can not be less
than three, unless otherwise provided, and at least one
must be a resident of the state, if there are any stock-
holders residing in the state. One must be elected presi-
dent of the corporation, as the by-laws may prescribe.5
Stockholders may give one vote for each share of stock
they own, not exceeding one-eighth part of the whole
number of shares. Any person holding stock as execu-
tor, administrator, guardian or trustee, and any person who
has pledged his stock as collateral security may vote thereon
as stockholder. Except in railroad corporations (which in-
cludes street railway companies), any person not a stock-
holder may vote as proxy for one stockholder only, named
¹ Ch. 148, secs. 7, 8.
4 Ch. 148, sec. 10.
¹ Ch. 149, sec 21.
2 Ch. 148, sec. 3.
5 Ch. 149, sec. 4.
3 Ch. 148, sec. 6.
6 Ch. 149, sec. 19.
#
1342
ECONOMIC LEGISLATION.
2
in the proxy, and at one meeting only. No stock
can be voted on until all assessments due and payable are
paid. Voting by proxy is not lawful in railroad (in-
cluding street railways) corporations, except by women
and men who are unable to attend the meeting by rea-
son of sickness, infirmity or old age. No person may
vote as proxy on shares exceeding in par value $5,000,
nor on shares more than are sufficient with the shares
owned and voted on by himself to amount to $5,000 par
value, and no stockholder can authorize more than one
person to vote on his shares by proxy at the same
meeting.3
Books.-Books of record must be kept by the clerk
of all votes and proceedings of the corporation and of
all papers required to be recorded in his office, which
are open to the inspection of every member and stock-
holder.¹
Capital stock. The articles of incorporation of com-
panies organized under the general law must state the
amount of stock to be paid in, which amount must not
be less than one thousand nor more than one million
dollars, divided into shares of not less than $25 nor more
than $500 each.6
5
That the legislature may, by special act of incorpora-
tion, fix the capital at any amount can not be doubted,
but every dividend-paying corporation must, at its first
meeting, fix the limit of stock to be issued within the
maximum amount, and the number and amount of
shares. If the amount of the capital stock of a corpora-
tion is not fixed by its charter, it must be at its first meet-
ing; also, the number of shares and their par value,
which can not be less than twenty-five dollars."
7
There are no requirements in this state as to the pay-
ment of any part of the capital at the time the corpora-
1 Ch. 149, secs. 22, 23.
• Ch. 148, secs. 11, 12.
7 Ch. 149, sec. 5.
2 Ch. 149, sec. 24,
Ch. 157. sec. 6.
• Ch. 149, sec. 6.
3 Ch. 149, sec. 25.
• Ch. 147.
NEW HAMPSHIRE.
1343
tion is formed. Assessments may be made at the first
or other meetings called for the purpose, and must be
paid to the treasurer within such time as the directors
may determine. Neglect to pay assessments for thirty days
after the time appointed, is ground for sale of shares at
auction to pay assessments. No note or other obligation.
given by stockholders can be considered as payment
of any part of the capital stock. There are no statutory
provisions that stock must be paid for in cash. It may
be exchanged for its equivalent in property bona fide
transferred.
2
Corporations are forbidden to sell or dispose of capi-
tal stock at less than par, except in cases of sales at auc-
tion for non-payment of assessments.³ Shares must be
numbered and the certificates be signed by the treasurer
and such other officers as the by-laws prescribe. But no
certificate can be issued until fully paid for.*
The treasurer and directors, within thirty days after the
whole amount of stock has been paid in, must make a cer-
tificate under oath stating that the amount has been fully
paid in, and file it with the city or town clerk where the
corporation has its principal place of business."
5
Increase and decrease of.—The capital stock and number
of shares may be reduced or increased within the limit al-
lowed by law, at any meeting called for that purpose.
The capital stock of corporations organized under special
act of the legislature can not be increased beyond the
amount fixed by the charter, except by amendment of the
charter.6 Whether unanimous consent of all stockhold-
ers is necessary, quære. The number of shares may be in-
creased or diminished by the unanimous vote of all the
shares represented at a meeting called for that purpose, or
by the written agreement of all stockholders filed with the
clerk, and thereby change the par value; but this can not
³ Ch. 149, sec. 9.
1 Ch. 149, secs. 16, 17.
+ Ch. 149, sec. 10.
' Ch. 150, sec. 9.
5 Ch. 150, sec. 14.
6 Ch. 149, sec. 6.
1344
ECONOMIC LEGISLATION.
E
change the amount of capital stock, nor may the par value
of shares be fixed at less than fifty dollars.'
Transfer of.-Shares may be transferred by indorsement
or by deed under seal, and the transferee is entitled to a
new certificate, if no liens exist upon the stock against its
former owner.2 The delivery of a stock certificate to a
bona fide purchaser or pledgee for value, with a written
transfer or deed of the same, or a power of attorney to
sell, assign and transfer the same, signed by the owner, is
a sufficient delivery to transfer the title as against all par-
ties except the corporation; but no such transfer affects
the right of the corporation to treat the stockholders of
record as the stockholders in fact, until the old certificate
is surrendered and a new certificate is issued to the person
entitled thereto.3 Any person reported as a stockholder in
the returns of the corporation, as shown below (see “RE-
PORTS"), is deemed a stockholder until he files with the
town clerk a certificate of the transfer of all of his stock,
signed by the treasurer or clerk, which certificate he may
have upon demand.*
Preferred stock.-A corporation may divide its stock
into different classes of shares, giving such preferences as
to dividends to any class as it sees fit; but the duties and
liabilities of its stockholders to creditors of the corpora-
tion and to the state can not be affected thereby.5
Bonds, debts, etc.-Notes, bonds and obligations are
issued under such regulations as are prescribed by the
by-laws or the vote of stockholders. Corporations may
not incur liabilities exceeding one-half the value of their
property. Debts in excess of the amount authorized by
ştatute are binding upon the corporation, and the doctrine
of ultra vires does not apply if contracted by plaintiff in
good faith without knowledge."
6
In very many special acts of incorporation provision is
1 Ch. 149, sec. 7.
* Ch. 150, sec. 11.
¹ Ch. 149, sec. 13.
³ Ch. 149, sec. 14.
5 Ch. 149, sec. 8.
7 Company v. Carney, 54 N. H. 297.
• Ch. 150, sec. 4.
NEW HAMPSHIRE.
1345
made for issuing bonds, borrowing money, mortgaging the
property, etc. And where no specific authority has been
granted to borrow money or issue bonds, it would be im-
plied, since those are powers which have been conferred
upon corporations of a similar character by special enact-
ment.
Notes of a corporation signed by its officers, acting within
the scope of their authority given for any of the legitimate
purposes for which it was incorporated, are binding. So a
corporation authorized to construct a railroad has power
to borrow money as one of the implied means necessary
and proper to carry into effect its specific powers, and to
give its note therefor. Nor is this power restricted by the
amount of stock authorized by charter. The power of a
corporation to sell and convey its property, and to borrow
money and make contracts implies the power to mortgage
its property, real and personal, to secure the payments of
its debts. But, in the absence of legislative authority, a
railroad corporation can not convey its franchise or right
of way. Such a conveyance, however, would be voidable
only, and is good as against every one but the state, which
may, if it choose, ratify by subsequent statute. It is be-
2
¹ The Winnepesaukee Gas and Electric Light Co. was authorized to
borrow money to defray expenses of its works, not exceeding one-half
of the cost, and to issue the notes, bonds or other obligation of the cor-
poration therefor, and to mortgage all its estate to secure the same
(Laws, 1887, ch. 244, sec. 5). The Exeter Electric Light and Power
Company was authorized to issue bonds secured by mortgage upon its
property to trustees to the amount of thirty thousand dollars (Laws,
1887, ch. 246, sec. 4). The Littleton Street Railway Company was au-
thorized to issue bonds by mortgage to an amount not exceeding one-
half of the stock fixed by the corporation, which might be increased
from time to time, as the capital stock was increased, and to borrow
money for construction not exceeding two-thirds of the cost (Laws, 1887,
ch. 231, secs. 17, 18). The Berlin Aqueduct Company was authorized
to issue bonds and other obligations, secured by mortgage of its fran-
chise and other property, to carry out the purpose for which it was cre-
ated (Laws, 1888, ch. 243, sec. 2).
2 Richards v. Railroad, 44 N. H. 135, 136; Pierce v. Emery, 32 N. H.
503.
1346
ECONOMIC LEGISLATION.
lieved that these provisions would be held to apply also to
street railway companies.
Liability of stockholders.-Any stockholder who un-
lawfully receives any loan from the corporation, or any
sum unlawfully withdrawn or refunded from the capital
stock thereof, or who knowingly receives any dividend
unlawfully made, is liable to the extent of the amount so
received, individually, for any debt of the corporation then
existing or afterward contracted until the same is repaid
or is paid to creditors.¹
Every stockholder, except in banks and railroads (includ-
ing street railways), is liable for all debts and contracts
until the whole amount of capital has been paid in and
the certificate of that fact, signed by the treasurer and a
majority of the directors, has been recorded in the office
of the town clerk, and not afterward, except in cases
specified above.¹ Stockholders in railroads (including
street railways) are liable to the amount of the par value
of their stock, and not otherwise.¹
Any stockholder who has paid voluntarily any debt or
liability after demand, which he was legally holden to pay,
may have contribution against the other stockholders; but
no director, officer, or stockholder, who advised or con-
sented to a violation of the statutes respecting the debts of
a corporation can have contribution against the stockhold-
ers who did not advise or consent. And a stockholder
who has paid his corporation the full amount of his
shares is not liable on assessment made for other purposes
than the payments of debts.3
2
4
The sole remedy to enforce a debt against a stockholder
is by a bill in equity, which may be filed within sixty days
after demand upon the corporation. Upon demand it is
the duty of officers and stockholders to pay the debt out
of the funds on hand, or to expose for attachment suffi-
1 Ch. 150, sec. 7.
³ Lancaster Starch Co. v. Moore, 62 N. H. 671.
* Ch. 150, secs. 1, 2.
2 Ch. 150, sec. 21.
NEW HAMPSHIRE.
1347
cient unincumbered personal property to satisfy the debt
and cost of suit. When property is so exposed no suit
can be maintained against the stockholders. If the debt
is not paid on demand, or property so exposed, a meeting
of the stockholders must be called to provide means for
its payment by assessments upon themselves, or otherwise,
within sixty days after demand.¹
But assessments can be made to pay only such debts as
the stockholders are individually liable for. Otherwise
they would be liable beyond the limit established by
statute.¹
Liability of officers and directors.-Neglect to file
the certificate of payment of capital stock, as shown above,
renders the treasurer and directors liable for all debts con-
tracted after the expiration of thirty days and before the
certificate is filed.2
If any corporation, except banks and insurance compa-
nies, by vote of its officers, loans money to a stockholder,
makes a dividend, or refunds any part of the capital so
that the remaining property of the corporation is insuf-
ficient to pay its debts, or contracts debts or incurs liabil-
ities in excess of the amount authorized, the directors of
such corporation are individually liable to the amount of
such loan, dividend, sum refunded or withdrawn, or excess
of debts and liabilities, for all the debts and contracts then
existing or contracted while they remain in office.³. A di-
rector who is absent from the meeting at the time the acts
were done in violation of the law, or who did not advise
or consent thereto, or who, being present, filed objections
in writing with the clerk, is exempt from such liabilities;*
and it has been held that a special act of the legislature
authorizing the corporation to contract debts to such an
amount as, in addition to the means derived from their
stock, would be sufficient for the construction and equip-
Company . Carney, 54 N. H. 317.
3 Ch. 150, secs. 1, 2, 3, 5.
2 Ch. 150, sec. 14.
• Ch. 150, sec. 6.
1348
ECONOMIC LEGISLATION.
ment of the road, relieves the directors from the liability
created by the statutes, above referred to, for debts of the
corporation exceeding one-half the capital stock and other
property and assets.¹
2
If any corporation fails to make the return to the town
clerk and secretary of state, as shown below (see "RE-
PORTS"), the treasurer and directors thereof become indi-
vidually liable for all debts and contracts then existing or
which are contracted until such report is made. A false
report renders all officers who signed it, knowing it to be
so, or without due inquiry, liable for all debts contracted
while they were in office. The treasurer of a railroad
(including street railways), and the clerk of any other div-
idend-paying corporation, failing to file the list of stock-
holders, as shown below, is punishable by a fine of fifty dol-
lars. Willful omission or neglect to make the return
required, or to furnish stockholders with the certificate of
transfer required, is punishable by a fine not exceeding
$5,000, or imprisonment not exceeding three years, or
both.5
4
Any officer who has paid any debt or liability for which
he is made liable by the foregoing provisions may recover
the amount of the company, but not of the stockholders
individually.º
Reports. Every corporation, except banks and rail-
roads, must make a return in writing, signed and sworn
to by a majority of the directors and its treasurer, to the
secretary of state and the town clerk annually on the first
of May, of the amount of the assessments voted and ac-
tually paid in, the amount of debts due to and from it,
and the value of all its property and assets as existing on
the first of May.2
The treasurer of a railroad (including street railway)
and the clerk of any other corporation, except banks, must
'Niagara Bridge Works v. Jose, 59 N. H. 81.
Ch. 150, secs. 10-12.
3 Ch. 150, sec. 19.
• Ch. 150, sec. 22.
2 Ch. 150, sec. 16.
Ch, 150, sec. 13.
NEW HAMPSHIRE.
1349
file with the town clerk annually in May, until the capital
is all paid in, a list, under oath, of the names and resi-
dences of all its stockholders."
The directors and other officers of all corporations doing
business in this state must transmit, to the librarian of the
state library, copies of all printed reports made by them in
relation to the affairs of the corporation immediately after
the same are published.²
Taxation.—The taxable property of corporations is
taxed in the town in which it is located, except where pro-
vision is otherwise made.3
Buildings, mills, machinery and aqueducts, any portion
of the water of which is sold or rented, are taxed as real es-
tate.¹ The real estate of railroads not used for the ordinary
and usual purpose of operating the roads or for which no
part of the capital was expended, so it is not included in the
special assessment hereafter referred to, is taxed as real
estate.5
6
Taxes are assessed by the selectmen of towns and the
assessors for town, county and state purposes, upon their
appraisal of the property at its full, true, money value.
All taxes, except against railroads (including street rail-
ways), telegraph and telephone companies, are paid to the
collectors of towns and cities and are distributed for town,
city, county and state purposes.
Railroads (including street railways) must pay the state
an annual tax upon the actual value of the road, rolling
stock and equipment at a rate as nearly equal as may be
to the average rate of taxation upon other property
throughout the state' in lieu of all taxes. The state board
of equalization determines the value and the rate of taxa-
tion of railroads." The tax must be paid to the state
treasurer in October of each year, and is by him distrib-
uted to the towns and cities, according to law. Tele-
1 Ch. 150, sec. 10.
Ch. 54, sec. 3.
7 Ch. 63, sec. 1.
10 Ch. 63, sec. 13.
10
2 Ch. 148, sec. 20.
5 Ch. 54, sec. 6.
8 Ch. 63, sec. 12.
3 Ch. 55, sec. 9.
6 Ch. 57, sec. 1.
9 Ch. 62, sec. 3.
P4
1350
ECONOMIC LEGISLATION.
1
phone and telegraph companies are required to pay an an-
nual tax upon the value of their property the same as rail-
road companies. The property is appraised by the state
board of equalization. The tax must be paid into the
state treasury on or before October 15th, and, unless paid
then, the property may be sold at tax sale and 10 per cent
added with interest.' It follows, therefore, that the stock
of telephone companies is not taxed to the owners under
chapter 54, section 5, General Laws, supra.2
Stock in hands of holders.-Stock in all other corpora-
tions, except manufacturing corporations, is taxed to the
general owner in the town in which he resides. If non-
resident, to the corporation.3 In appraising its value a
deduction must be made on account of the value of any
real estate of the corporation which is otherwise taxed.*
Bonds are taxed as money on hand or at interest.5
Consolidation of companies.-Corporations may be
consolidated by authority from the legislature and unani-
mous consent of the stockholders. Provision must be
made in the act for dissenting stockholders, and for ap-
praising the value of their property rights, and compensat-
ing them therefor. Since the decision above referred to,
the general railroad law has been amended so as to con-
form to it in cases of lease or consolidation."
See also under " CONSOLIDATION OF FRANCHISES."
Dissolution; forfeiture.-The supreme court has gen-
eral powers in equity, upon petition of stockholders
holding one-fourth of the stock of any corporation, or,
if there are no stockholders, one-fourth of the members
thereof, to decree the dissolution of the corporation, or
such other relief as may be just; and to make such final
and interlocutory orders, judgments, and decrees for wind-
ing up its affairs, the payment of its debts, and the
1 Ch. 63, secs. 3, 9.
3 Ch. 55, sec. 7.
2 Tel. Co. v. State, 63 N. H. 167.
* Ch. 57 sec. 1.
6 Dow v. Northern Railroad (not yet reported).
5 Ch. 54, sec. 7.
7 Ch. 155.
NEW HAMPSHIRE.
1351
distribution of the assets, as justice may require.¹ A
copy of the final decree of dissolution must be filed in the
office of the secretary of state forthwith, and when filed
the corporate existence of the corporation is terminated.2
The records of a corporation so dissolved must be lodged
with the secretary of state within thirty days, and be kept
as public records.3
4
The state alone can enforce a forfeiture of the charter
of a corporation, and the question of forfeiture can not
be raised in an action brought by the corporation. But
the forfeiture may be waived by the state, and if acts
of the legislature recognize the continued existence of
the corporation after forfeiture, such recognition is a
waiver.5
Foreign corporations.-Manufacturing corporations
not established by the laws of this state, doing business in
this state, are authorized and empowered to acquire, hold
and convey real and personal property, and must conform
to the laws of the state as to returns and taxation, the
same as domestic corporations. Foreign corporations may
sue in this state. And they may be sued by service upon
any authorized agent, or without service, if they appear
generally. They may take and hold land in this state if
they have power to take and hold it in the state where they
are organized.'
8
SUBDIVISION III.-FRANCHISES.
How obtained. The supreme power of the State of
New Hampshire is vested in the senate and house of rep-
resentatives. The senate and house of representatives
¹ Ch. 147, sec. 10; ch. 148, sec. 21.
3 Ch. 147, sec. 12.
2 Ch. 147, sec. 11.
• State v. Carr, 5 N. H. 376; Fisk v. Norcross, 23 N. H. 171,
5 State v. Turnpike Co., 15 N. H. 58.
' Lumbard v. Aldrich, 8 N. H. 31.
Ch. 148, sec. 21.
Libbey v. Higdon, 9 N. H. 394; March . Eastern R., 40 N. H. 549.
⁹ Const., Part 2, Art. II.
i
1352
ECONOMIC LEGISLATION.
constitute the general court.¹ "Full power and authority
is given and granted said general court to make, ordain
and establish all manner of wholesome and reasonable or-
ders, laws, statutes, ordinances, directions and instructions,
either with penalties or without, so the same be not re-
pugnant or contrary to the constitution, as they may
judge, for the benefit and welfare of the state, and for the
governing and ordering thereof." 2
"The legislative power of this state extends to every
proper object of legislation, and is limited only by our
constitution and by the fundamental principles of all gov-
ernment and the unalienable rights of mankind."3
In State v. Noyes, 30 N. H. 279, it was said: "It would
take strong reasons to satisfy us that it could have been
the design of the framers of our constitution to take from
the legislature a power which has been exercised in Eu-
rope by governments of all classes from the earliest his-
tory.
The legislature are vested with the power
to make, ordain and establish all manner of wholesome
and reasonable laws in the most broad and general terms,
and their power can hardly be held to be limited in cases
where such power has been constantly exercised in all
former times unless by provisions distinctly indicating
such design." In this case the question of the power of
the legislature to confer franchises was not under consid-
eration; but as that power is one which, from an early
day, has been exercised by the English sovereigns and the
English parliament, under the rule announced in this de-
cision, the power of the legislature in respect to grants of
franchises seems well settled.
The power to grant corporate franchises has never been
given to any town or city in this state; nor has that power.
ever been exercised by them. It being a strict legislative
power, it rests in the legislature exclusively, and can not
1
¹ Const., Art. III.
2 Const., Art. V.
³ Trustees of Dartmouth College v. Woodward, 1 N. H. 114.
NEW HAMPSHIRE.
1353
>
66
be delegated. "Legislative power can be delegated to
towns only in local town affairs. By the constitution
legislative power is vested not in the towns, but in the sen-
ate and house of representatives. And without a well es-
tablished ground of exception, the senate and house are
as incapable of delegating their legislative powers as the
governor and council are of delegating the power to par-
don or the court of delegating the power of deciding the
constitutional question raised in these cases."2 It, there-
fore, follows that the creation, regulation and control of
corporations operating in towns or other municipalities
are matters which belong to the legislature exclusively,
except so far as town and city authorities exercise over
their operations such police supervision as they may exer-
cise over the conduct of natural persons.
All grants to use the highways are made by the legisla-
ture; but usually in the case of street railways, they are
subject to the directions of the selectmen or mayor and
aldermen, as to the manner of the use. So in the case of
telephone and electric lighting companies, the selectmen
of towns and the mayor and aldermen of cities may grant
or refuse the license to erect poles and may revoke the
license; the same law applies to telegraph companies.³
All telegraph, telephone, or electric lighting companies
are authorized generally to erect necessary poles and
structures, and to stretch wires over, along, and across
any public highway, or lay the same under the surface of
the same; but they must not impede public travel, nor the
access to and from or the use of lands and buildings ad-
joining. Such poles and structures may not be erected
or wires stretched on, over, or across the lands or build-
ings of any individual or corporation without their con-
sent. Application must be made to the mayor and alder-
men of cities, and selectmen of towns, to locate the route
of the lines of companies desiring to erect poles and
2 State v. Hayes, 60 N. H. 329.
Ch. 80, secs. 1-6.
4
Bowles v. Landaff, 59 N. H. 192.
Pub. Stat. ch. 80.
VOL. II-5 •
1354
ECONOMIC LEGISLATION.
stretch wires, and to grant license therefor upon such
terms as the public good may require.' If the selectmen
shall neglect or refuse to make return of the petition after
thirty days, the petitioner may appeal to the supreme
court, as in appeal from laying out of highways.2
Powers of municipalities as to.-A New Hampshire
town is a municipal corporation established for the gen-
eral purposes of government, with limited legislative pow-
ers; a legislative corporation established as a part of the
country,³ and empowered to hold property, and invested
with many powers to enable them to answer the purposes
of their operation. Towns have the power of local legis-
lation, that is, the power to pass ordinances and by-laws
in such terms and with such provisions, in the classes of
cases to which the power extends, as they may think
proper. The incorporated cities of the state are by stat-
ute given all the rights, immunities, and privileges, and
are subject to all the duties incumbent upon or appertain-
ing to the town corporations to which they succeed; and all
provisions of statutes relating to towns apply to cities.
It will thus be seen that the legislative powers of towns
and of cities are the same, unless those of cities are modi-
fied or enlarged by special enactment; and in respect to
the extent and scope of those powers, it may be said that in
general they include matters of police regulation, the
maintenance of their local institutions and the customary
local convenience of the people."
The mayor and aldermen of cities, and the selectmen
of towns, have the power to grant the license, as shown
above, to telegraph, telephone, and electric light and
power companies.8
¹ Laws, 1881, ch. 54, sec. 3.
3 State v. Hayes, 60 N. H. 332.
Bristol v. New Chester, 3 N. H. 532.
2 Ch. 80, sec. 9.
5 State v. Hayes, 60 N. H. 320; State v. Noyes, 30 N. H. 279.
6 Ch. 45, secs. 1, 2.
Edgerly v. Concord, 62 N. H. 18.
8 Ch. 80.
NEW HAMPSHIRE.
1355
:
Municipalities have no powers as to water, gas, street
railway, and other franchise companies, unless specially
provided in the act of incorporation, but usually the man-
ner in which the franchise is to be used is left with the
town or city government.'
Special damages; property owners' rights.—The
poles, wires, structures, etc., of telegraph, telephone, and
electric light companies may not be erected on, over, or
across the lands or buildings of individuals or corporations.
without their consent.2
Damages caused by the erection of the fixtures, lines,
etc., of telegraph, telephone, and electric light companies
are assessed by the mayor and aldermen of cities and the
selectmen of towns, upon application of the person ag-
grieved, after notice and hearing of all parties interested.³
If either party is aggrieved by the award, or if the
award is not paid within thirty days, they may apply to
the supreme court for relief, and like proceedings are then
had as in case of appeals from the laying out of highways
and the assessment of damages therefor. The same pro-
ceedings are had when wires are to be laid under the sur-
face of any highway, or when any person interested or
affected shall petition therefor."
Condemnation of property.-The twelfth article of
the bill of rights gives power to take the franchise or other
property of corporations or individuals for public uses, by
making just compensation therefor, but not otherwise."
As to powers of municipalities to appropriate, see under
SUBDIVISION IV.
Duration of franchise; renewal of.-In the case of
telegraph, telephone, and electric companies, the munici-
pal authorities have the right to fix the duration of the
¹ See act to incorporate Dover Street Railway, Laws, 1881, ch. 251.
2 Ch. 80, sec. 5.
5 Ch. 54, sec. 7.
³ Ch. 80, sec. 6.
Ch. 80, sec. 9.
Piscataqua Bridge v. New Hampshire Bridge, 7 N. H. 35; Crosby v,
Hanover, 36 N. H. 404; Greely v. Concord R. R., 17 N. H. 48; Petition
of Mt. Washington Road Co., 35 N. H. 135.
1356
ECONOMIC LEGISLATION.
licenses under which their fixtures are erected, and may
revoke such licenses when the public good requires it.'
Refusal to grant.-See under "PERPETUAL AND EXCLU-
SIVE FRANCHISES."
Conflicting grants.-It has been held that the grant of
a bridge charter within the limits of a grant for a ferry, is
not a void act; and the extinguishment of the ferry after-
ward will not authorize the grant of another bridge char-
ter within the limits of the first, without making compen-
sation. But it seems that the legislature may lawfully
grant the right to erect a bridge within the limits of a
grant for a ferry without making compensation, if the
locus in quo occupied by the ferry is not taken, and the
party is left to his exclusive right to the ferry as before."
Perpetual and exclusive franchises.-In the case of
the Piscataqua Bridge Co. v. New Hampshire Bridge Co.,
7 N. H. 35, the question was raised whether the state
could grant an exclusive franchise. Referring to article
5 of the constitution, the court said: "There is certainly
no express provision of the constitution authorizing in so
many words a grant of this character. It is equally cer-
tain that there is no express prohibition of such an act."
After careful consideration, it was held that the legislature
might grant any exclusive franchises, and that a subse-
quent legislature could not take away or encroach upon
the privileges embodied in such franchise, except under
the right of eminent domain. The doctrine laid down in
this decision has never been questioned, and it therefore
may
be considered settled that the legislature has not only
the sole power to grant corporate and other franchises,
but that this power is practically unlimited. It may exer-
cise that power or refuse to exercise it as it pleases, and
its action can not be questioned except in cases where it
has bestowed franchise privileges which the court would
say were detrimental to the public welfare. Subject to
¹ Ch. 80, sec. 2.
Piscataqua Bridge Co. v. New Hampshire Bridge Co., 7 N. H. 35-60.
2.
NEW HAMPSHIRE.
1357
the qualification above specified, there seems to be no
doubt that in this state a franchise may be perpetual and
exclusive, or limited and exclusive. It may be subject to
such conditions as to its use and enjoyment as the legisla-
ture may in its discretion determine.
Charges for franchises.-The large powers of legisla-
tion, which under the constitution as interpreted by the
supreme court in the decisions last above referred to, are
vested in the general court, would seem to be ample to
permit it to exact a consideration for any kind of a fran-
chise which it chose to grant, and to enact that a corpora-
tion operating in any municipality should, as a condition
precedent to the enjoyment of its rights, pay such a con-
sideration into the state or municipal treasury as the legis-
lature or the municipal authorities should prescribe. No
legislation of this kind has yet been enacted, however,
and except the tax or fee for incorporation, no considera-
tion for any franchise has ever been exacted; although
the charters of the Concord, Boston and Maine, and Man-
chester and Lawrence Railroads provide that any excess
of dividend over ten per cent annually shall be paid to the
state.
Methods of construction.-The various acts incorpo-
rating gas, water, and railway companies provide that the
work of construction shall be under the direction of the
municipal authorities so far as to render secure the lives
and property of citizens. The propriety of such restric-
1
¹ In the act to incorporate the Concord Horse R. R., ch. 118, Laws,
1878, sec. 2, the mayor and aldermen were authorized to determine the
distance at which the tracks should be laid from the sidewalk, and "to
make all such regulations as to the rate of speed and the mode of use of
said railroad as the public safety and convenience may require." In
the act to incorporate the Crystal Springs Water Company, Laws, 1878,
ch. 141, sec. 4, the work of making excavations and laying pipes, etc.,
in the streets, highways, etc., was "subject to such regulations as to the
safety of the citizens and security of the public travel as may be pre-
scribed by the selectmen of Bethlehem." Like provisions are found in
the acts of Plymouth Aqueduct Company, Laws, 1881, ch. 188; the Man-
1358
ECONOMIC LEGISLATION.
tions has never been questioned, and their legality is be-
yond doubt. So, too, the legislature, as an exercise of the
police powers of the state, may provide for the inspection
of the plant and service from time to time, as it has for
the inspection of steam boilers, etc., and may authorize
and compel changes in construction after completion,
whenever in its discretion the public good demands it,
even if the right to do so were not reserved to the state
under the general law, by which charters may be altered,
amended or repealed.
"All public interests are proper objects of legislation,
and it is peculiarly the province of the legislature to de-
termine by what laws those interests shall be regulated.
Nor is the expediency or the policy of such laws a subject
for judicial decision. The constitution has given to the
general court full power and authority to make and or-
dain such laws as they may judge for the benefit and wel-
fare of the state." Thus, the statutes that allow fire wards
to pull down, blow up or remove houses or buildings when
necessary to stop the progress of fire are constitutional.¹
"It is one thing to deprive a party of his rights and quite
another to regulate and restrain their exercise in such a
manner as the common convenience and safety may re-
quire." 2
The mayor and aldermen of cities and the selectmen of
chester Electric Light Company, ch. 235; act to incorporate the Dover
Horse R. R. Company, ch. 251; also acts authorizing the cities of Con-
cord and Manchester to establish water-works, Laws of 1871, chaps. 69
and 70; act to incorporate the Ammonoosuc Aqueduct Company, Laws
of 1883, ch. 191; act to incorporate the Berlin Water Company, Laws
of 1887, ch. 293. See also acts incorporating the Hampton Water-Works
Company, ch. 247, Laws of 1889; incorporating the Rochester Street
Railroad, ch. 178; incorporating the Exeter Street Railway Company,
ch. 218; incorporating Hanover Gas-light Company, Laws of 1872, ch.
134; Keene Gas-light Company, Laws of 1860, ch. 2346; Claremont Gas-
light Company, Laws of 1860, ch. 2423.
1 Dartmouth College v. Woodward, 1 N. H. 120, 130; State v. Clark,
28 N. H. 176, 178.
2 State v Freeman, 38 N. H. 428; State v. Marshall, 64 N. H. 549.
NEW HAMPSHIRE.
1359
3
towns, in the exercise of police powers over the franchises
granted to telegraph, telephone, and electric light com-
panies, may fix the size and location of poles and struct-
ures, the height, distance apart, number of wires, and,
upon application of the companies whose rights and inter-
ests are affected, may alter and change the location, etc.,
of poles or structures; the exercise of these powers are
subject to the supervision of the supreme court, upon ap-
plication of any person interested or aggrieved.' Such
companies are forbidden to cut, mutilate or injure any
shade or ornamental trees in the erecting or maintaining
of any pole or wire, without the consent of the owner or
occupant, unless the company procure of the selectmen
of the town a certificate in writing that the same is neces-
sary, and pay such damages as the selectmen may award.*
Regulations as to service. The charters of all borse
railway companies provide that the corporations shall have
power to fix, from time to time, such rates of compensa-
tion for transporting persons and property as they may
deem reasonable, and shall be subject to the duties and
liabilities, and possess all the rights and privileges, by
law incident to railroad corporations, so far as the same
are applicable; but, under the act to establish a board of
railroad commissioners, the commissioners are empowered
to fix tables of maximum charges for the transportation
of passengers and freight upon the several railroads op-
erating within this state, and to change the same from
time to time, as the public good may require. The power
of the legislature itself to prescribe in detail reasonable.
maximum charges for railroad transportation, or to con-
stitute the railroad commissioners a tribunal to fix them,
can not be doubted; but the foregoing enactment indi-
cates the policy which thus far the state has found it nec-
1 Ch. 80; Laws, 1881, ch. 54, sec. 4.
2 Ch. 80; Laws, 1881, ch. 54.
3 See note 1, under " METHODS OF CONSTRUCTION."
4 Ch. 154, sec. 13.
1360
ECONOMIC LEGISLATION.
་
essary to adopt by general legislation so far as it affects
corporations referred to in this article.
It is clear, however, that this policy, if public necessity
should require it, would be extended so as to include any
and all corporations whose business is devoted to a public
use; and it would seem that, in the absence of any such
statutory authority regulating the charges for such corpo-
rations, the supreme court would do so, on proper appli-
cation, upon principles of common law.'
Acts incorporating water companies usually provide
that they may establish such regulations as to tolls for use
of water as may from time to time be deemed proper.2
Corporations formed under charters in, which no specific
provisions are made as to charges would, under the usual
clause, which provides that they are vested with all the
powers and privileges and made subject to all the restric-
tions and liabilities by law incident to corporations of a
similar nature, have the power to fix charges; and it would
seem that such a power would be held to be necessary to
carry into effect the purposes for which they were organ-
ized.³
Discrimination in service; refusal to render service.
The proprietors of every public telegraph and telephone
line must provide and maintain offices for the transmission
and receipt of messages at such points as will reasonably
accommodate the public; and proprietors of electric light-
ing apparatus or lines must furnish the means of lighting
to all persons within reach and applying therefor upon
similar terms and conditions, without discrimination and
at reasonable rates. Upon failure so to do, any person
aggrieved may apply to the supreme court by petition for
redress, and the court may make such orders and issue
¹ Burke v. The R. R., 61 N. H. 241, 242.
See, for example, Laws, 1881, chaps. 70 and 75.
Downing. Mount Washington Road Co., 40 N. H. 230; Richards v.
R. R., 40 N. H. 135.
A
4
NEW HAMPSHIRE.
1361
:
such decrees as justice may require.' The use of the high-
ways by such companies is a public use.2
Except the provisions relating to telegraph and tele-
phone lines, electric lighting service, and railroads, it is
not known that any general law has been passed in this
state to prevent discrimination and to secure equality of
terms to all citizens. That any statute authorizing dis-
criminations would not be upheld, and that the courts
would by mandamus or injunction compel corporations to
provide on equal conditions equal accommodations at
equal rates to all persons, is beyond doubt. "The law
can not discriminate in favor of one citizen to the detri-
ment of another." The principle of equality pervades
the entire constitution.3 "The bill of rights is a bill of
their equal private rights reserved by the grantors of pub-
lic power.
Government is "instituted for the common
benefit, protection, and security of the whole community,
and not for the private interest or emolument of any one
man or class of men ;"5 the formation of a favored class is
not a purpose of the contracting parties, and therefore
not a power delegated by them.*
"94
The act incorporating the Berlin Water Company 6
provides that after it has commenced to receive pay
for water it shall be bound to furnish it to the inhab-
itants and to the town in its corporate capacity for
use within a reasonable distance from its main pipes.
at a reasonable rate. So also the act incorporating the
Hillsborough Water-Works Company and the Keene
Street Railway Company. These statutes embody the
rule which it is believed would apply to any corpo-
ration engaged in business of a public character. It
would be compelled to furnish service, upon a reasonable
1 Ch. 80, secs. 11, 12.
7
2 Laws, 1881, ch. 54, sec. 13.
⁹ State N. H. v. Pennoyer, 65 N. H. 113.
* State v. Express Co., 60 N. H. 250, 254.
6 Laws of 1887, ch. 293.
8 Laws, 1877, ch. 211.
5 Bill of Rights, Art. XVI.
7 Laws, 1877, ch. 166.
The general railroad law prohibits discriminations, ch. 160, sec. 1.
柴
​1362
ECONOMIC LEGISLATION.
}
demand therefor, at reasonable rates, to all persons under
like circumstances without discrimination.
Safety of life and property. The legislature may,
by general law or by provisions in the charters of cor-
porations, prescribe such conditions touching the conduct
of their business as will provide for the safety and security
of persons and property, as well as that proper and adequate
service to which the public is fairly entitled; and so far
as these are a matter of police regulation the authority to
prescribe such conditions may be delegated to the select-
men of towns and the mayor and aldermen of cities.
State and municipal aid. In 1876, article 5 of the
constitution was amended by the addition of the follow-
ing: "Provided, that the general court shall not authorize
any town to loan or give its money or credit directly or
indirectly for the benefit of any corporation having for its
object a dividend of profits, or in any way aid the same
by taking its stock or bonds." In view of this constitu-
tional provision it would seem that municipal aid can be
given to corporations only when their object is strictly and
solely to accomplish a public purpose, to meet a reasonably
pervading public demand, and not to make money.¹
¹ General Statutes, ch. 34, sec. 16, provided that "any town by a two-
thirds vote may raise by tax or loan such sum of money as they
shall deem expedient, not exceeding five per cent of the valuation
thereof, . . . and appropriate the same to aid the construction of any rail-
road in this state, in such manner as they shall deem proper." In ac-
cordance with the provisions of this statute the city of Concord aided the
Sugar River Railroad to the amount of $55,000. Newport and Sunapee
appropriated five per cent of their valuation for the same purpose, and
Claremont, $100,000. Manchester, Epsom, and Pittsfield in like manner
aided the Suncook Valley Railroad. Nashua took $200,000 of the stock to
aid the Nashua and Rochester road, and several cities and town also aided
other railroads in the state. In Perry v. Keene, 56 N. H. 514, the con.
stitutionality of this statute was upheld upon the ground that railroads
are public corporations because their purpose is public, notwithstand-
ing they are built for private gain; that the fact that the agency em-
ployed to secure a certain end is private does not destroy the public
character of that end. Therefore, taxes levied in aid of a railroad, were
levied for a public purpose within the meaning of article 5 of the con-
NEW HAMPSHIRE.
1363
•
Public service.-Acts incorporating water companies
usually provide that they may make contracts with in-
dividuals and corporations for suppplying them with
water.
In the absence of express limitations as to time for
which contracts of service may be made, it is thought to
be within the power of towns and cities by vote to au-
thorize contracts for any period of time, unless it were so
long or the consideration so large as to be, under the cir-
cumstances, evidence of fraud which would, upon the com-
plaint of a dissenting tax-payer, render it liable to be set
aside. It is the invariable custom, it is believed, in all
towns of the state, to submit matters of this kind to the
people at their town meeting, and authority is there con-
ferred upon the selectmen to enter into contracts upon such
terms and conditions as are there prescribed or such as
the selectmen may deem best. In cities it was formerly
customary for the city councils to make contracts from
stitution. That the test of whether the use of a thing is public is found
in the fact that it is devoted to the object of satisfying "a reasonably
pervading public demand." The result of this decision was that in
1876 article 5 of the constitution was amended as stated above. In
view of this constitutional provision, it is difficult to see how the
various acts referred to below, authorizing municipal aid to private
water companies, can be upheld, if, as a matter of fact, they contem-
plate dividends of profits. In other words, municipal aid can be given
to corporations only when their object is strictly and solely to accom-
plish a public purpose, to meet a reasonably pervading public demand,
and not to make money. In 1871, the town of Farmington was author-
ized to subscribe for and pledge its credit to Farmington Water-Works
Company to the amount of one-half of its capital stock. (Laws, 1871,
ch. 94, sec. 6.) So also, in 1881, the village fire precinct of Plymouth
was authorized to take stock in the Plymouth Aqueduct Company not
to exceed one-third and to determine the amount by vote (Laws, 1881,
ch. 188), and in 1887, the town of Franklin was authorized to
subscribe for stock in the Franklin Water Company, or to become
the owner of its stocks, notes, bonds, or obligations by purchase when
authorized by a two-thirds vote at town meeting called for that purpose,
or after five years to take and hold the stock at an agreed price, or
upon an appraisal if unable to agree. (Laws, 1887, ch. 291. See also
Laws. 1889, ch. 211.)
1364'
ECONOMIC LEGISLATION.
year to year; and it was claimed that contracts for a longer
period were invalid unless expressly authorized, for the
reason that taxes and appropriations can be levied and
made from year to year only. It is thought, however,
that contracts running for a term of years, if fair and
reasonable, would be binding in this state. Otherwise,
municipalities would seem not to be possessed of the con-
tractual powers necessary to enable them to carry out the
purposes to secure the ends for which they are organized.,
In December, 1888, the city of Manchester made a contract
for lighting its streets for a term of three years. This was
a change in the established custom which seems likely to
be followed hereafter in other cities and towns of the
state.
Alteration, amendment, etc., of franchises." The
legislature may at any time
modify or annul the
powers of any corporation whenever the public good shall
require the same; but the remedy against such corpora-
tion, its members, or officers, for any liability previously
incurred, shall not be impaired thereby."¹
This statute has been in force since 1843, so that in ab-
sence of express exemption from its provisions, all corpo-
rations, whether created by special enactment or organ-
ized under the general law, are subject to its provisions.
Under the rights thus reserved by the state, changes in
the provisions of a franchise after the company has com-
menced to operate under its authority, are within the
power of the legislature to make, so far as they affect the
public welfare, and do not impair the obligation of private
contracts.
The mayor and aldermen of cities, and the selectmen
of towns, may revoke the license given to telegraph, tele-
phone, or electric light companies when the public good
requires it; and upon application of the companies, or by
any person whose rights and interests are affected, they
1 Ch. 147, sec. 19.
NEW HAMPSHIRE.
1365
may alter and change the location, etc., of poles and
structures, or revoke the license upon proper cause shown;
but all such proceedings are subject to the supervision of
the supreme court, upon application of any person inter-
ested or aggrieved.'
Consolidation of franchises.-Corporations for public
objects are held in this state to be disabled to do any act
that would amount to a renunciation of their public
duties, or which would necessarily and directly disable
them from performing them; and they can not, therefore,
convey their franchises and corporate rights unless ex-
pressly authorized to do so by the legislature. Nor can
there be a consolidation of franchises without legislative
authority, and consent of all stockholders.
2
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
Historical.-In 1873, the city of Nashua was author-
ized to construct and maintain water-works for supplying
the city with water, and to purchase for that purpose the
real estate and other property of the Pennichuck water-
works, then in operation. It was further authorized to
levy taxes to defray the expenses of said works, and to
hire money, not exceeding $400,000, and to issue bonds,
notes, or other obligations of the city therefor.³ Like
authority was granted to the city of Dover in 1870, and to
issue its obligations therefor to the extent of $100,000; to
the city of Concord in 1871, with authority to issue its obli-
gations therefor in such an amount as might be deemed ad-
visable, bearing interest not greater than three per cent semi-
annually; to the city of Manchester in 1870, with author-
ity to issue its obligations therefor not exceeding $600,000,
bearing such interest as the city council should determine."
So, in 1881, the town of Rochester was authorized to con-
4
1 Ch. 80, secs. 2-9.
³ Laws, 1873, ch. 104.
5 Laws, 1870, ch. 70, 81.
2 Richards. Railroad, 44 N. H. 136.
Laws, 1871, ch. 69.
1366
ECONOMIC LEGISLATION.
struct water-works, and, by a major vote of those present
and voting at any annual or special meeting, to borrow
money therefor, and to issue notes and bonds, bearing in-
terest not exceeding six per cent annually, to such an
amount as might be deemed advisable.' In 1877, the town
of Milford, or any fire precinct in said town, was author-
ized to purchase the property of the Milford Water-Works
Company, or to lease them for a term of years.2 Like
provisions are found in the act authorizing the Lisbon fire
precinct to establish water-works. Also, act to establish
water-works in the town of Wolfborough. In 1889, the
town of Franklin was authorized to aid a water company,
or by a majority vote of those present and voting at any
town meeting, to borrow money to construct water-works,
and issue its notes and bonds therefor. So also, act to in-
corporate the Derry Water-Works, and act to incorporate
the Boscawen and Pennacook Water Company.
3
5
6
The foregoing enactments indicate the policy which has
thus far been adopted in the direction of permitting mu-
nicipalities to own and operate industrial works, and to
assist private persons in constructing and operating them.
It will be observed that they are confined to the construc-
tion and operation of water-works. No authority has
yet been given to any city or town to erect gas-works,
or electric lighting works, or to construct telephone lines
or street railways. Nor has the constitutionality of any
of the laws relating to the water-works yet been tested.
Power to erect or purchase.-Undoubtedly a city or
town may, as an exercise of police power, build water-
works for the purpose of sprinkling its streets or for ex-
tinguishing fires, or may manufacture gas or electricity for
lighting its streets and public buildings, or may maintain a
fire and police telephone or telegraph line. "Every member
of the community has a right to be protected in the enjoy-
1 Laws, 1881, ch. 242.
3 Laws, 1877, ch. 290.
5 Laws, 1889, ch. 220.
2 Laws, 1877, ch. 273.
* Laws, 1889, ch. 202.
Laws, 1889, ch. 251.
NEW HAMPSHIRE.
1367
ra
3
ment of his life, liberty, and property. He is, therefore,
bound to contribute his share in the expense of such pro-
tection, and to yield his personal service when necessary,
or an equivalent.". It therefore becomes the duty of mu-
nicipalities to adopt such reasonable means as will insure
the protection of the lives, liberties, and property of citi-
zens, such as lighting and sprinkling their streets, main-
taining fire and police departments,2 and they may adopt
such instrumentalities as they may deem best for that pur-
pose. But towns and cities in this state are only munici-
pal corporations established as a part of the government
of the country. "A municipal corporation is but a de-
partment of the state. The legislature may give it all the
powers such a being is capable of receiving, making it a
miniature state within its locality.' "As a part of the
governmental machinery of the state, municipal corpora-
tions legislate and provide for the customary local con-
veniences of the people." Whether in a given case a
city or town could best obtain a supply of gas or water,
or electric light, or any other thing needful for municipal
purposes, by taking the stock or bonds of a private cor-
poration, or by pledging its credit, would be a question of
fact to be shown by competent evidence. If such were
the fact, then subscriptions for stocks or bonds, or the
pledging of credit, might be justified unless prevented by
constitutional provisions referred to under "STATE AND
MUNICIPAL AID.” But it may be considered doubtful in
this state whether a city or town may go further, and
undertake to carry on industrial pursuits for profit, even
though the profits were to be used for defraying public
charges. Taxation imposed for such purposes, it would
seem, is not necessary in order to protect the lives, liber-
ties, and properties of citizens; and, it would seem, that
such undertakings are not within the scope of the powers
¹ Bill of Rights, art. 12.
>>4
3 State v. Hayes, 61 N. H. 232.
4
² Clark v. Manchester, 62 N. H. 579.
* Edgerly v. Concord, 62 N. H. 18.
}
1368
ECONOMIC LEGISLATION.
originally delegated to the state by the people for the pur-
pose of carrying on the government of the state as a
whole, or in its subdivisions of cities and towns.
Power to appropriate property. Within the limits
indicated in which municipalities may be authorized to
carry on industrial enterprises they may, as a necessary
incident thereto, be given the right to appropriate the
property of persons or corporations under the delegated
right of eminent domain; and if legislative authority
were granted to take the property of those engaged in
similar industries, there can be no question of the consti-
tutionality of such authority.'
See also under "CONDEMNATION OF PROPERTY."
Economic results.-As to the economic results thus far
realized from the construction and operation of water-
works by the cities referred to, it can only be said that the
surplus of earnings over expenses has been applied to the
payment of construction notes and bonds as they have be-
come due, and of interest on the bonded debt. Of course
this has compelled much higher rates for service than will
be necessary when the indebtedness is finally liquidated.
Meanwhile, rates are being lessened from year to year as
the indebtedness is paid off.
1 Northern Railroad v. Concord & Claremont Railroad, 27 N. H. 183;
Barker v. Andover, 8 N. H. 398.
NEW JERSEY."
EDITED BY A. Q. KEASBEY AND EDWARD Q. KEASBEY, COUNSELLORS
LAW, NEWARK, N. J.
AT
SUBDIVISION I.-HISTORICAL.
The first constitution of the State of New Jersey was
framed by the Provincial Congress, a revolutionary body
assembled at Burlington, June 10, 1776. On the 24th of
June, a committee of ten members of the congress was
appointed to prepare a draft of a constitution. Three days
before, the colonial governor, William Franklin, had been
denounced and arrested as a virulent enemy to the coun-
try." On the 26th of June, the committee reported, and
the report was discussed from day to day, until July 2,
1776, when the constitution was adopted by the congress.
Under this constitution the state was governed until 1844,
a period of sixty-eight years.
66
It provided that the government should be vested in a
governor, legislative council, and general assembly; that
the laws of the colony in the edition published by Mr.
Allinson should remain in force until abrogated by the
legislature, except such as were incompatible with the
¹ Unless otherwise stated, references to the constitution are to that
of 1875. References to the compilations of statutes are to the revision
of the statutes of New Jersey made by the legislature and published by
the state in 1875, cited as "Rev.," and to the supplement to the revis-
ion, compiled by G. D. W. Vroom and Wm. M. Lanning, and published
by authority in 1887, cited as "Sup. Rev." The session or pamphlet
laws are cited as "Laws" of the respective years; when cited by page,
the reference is to the official edition; when by chapter, they may be
found as readily in the smaller edition published by authority as a sup-
plement to the New Jersey Law Journal, Newark, N. J. As to state re-
ports, see Appendix "A."
VOL. II-6
(1369)
1370
ECONOMIC LEGISLATION.
charter, and that the common law of England, as well as
so much of the statute law as had been theretofore prac-
ticed, should remain in force until altered by future laws
of the legislature, except such parts as were repugnant to
the rights and privileges contained in the charter.
On the 29th of June, 1844, a new constitution was
adopted by a convention called for that purpose, which
was ratified by the people at an election held August 13,
1844. The legislative power was vested in a senate and
general assembly, and no restriction was placed upon their
power with respect to corporations, except that as to bank-
ing and money corporations the assent of three-fifths of
the members of each house should be requisite to the
passage of laws granting, continuing, altering or renewing
charters of such corporations; and that individuals or
private corporations should not be authorized to take pri-
vate property for public use without just compensation
first made to the owners.
This constitution continued unchanged until September
7, 1875. Under these two constitutions the legislature of
New Jersey possessed and exercised full power to create
and control corporations, and to grant franchises to incor-
porated companies, except as restrained by the constitu-
tion of the United States and the express provisions of the
successive state constitutions.
For some time prior to the final adoption of the consti-
tutional amendments referred to below, the abuse of legis-
lative power in respect to private corporations and the
granting of franchises had become so marked that public
attention was awakened to the necessity of confining it
within strict constitutional limits. In 1872, 1873, and
1874, the three years next preceding the amendments,
nearly five hundred acts were passed incorporating private
companies or giving additional powers to those in ex-
istence, and the three volumes of laws for those years
were swollen to more than four thousand pages. This,
together with the vast increase of laws relating to munic-
NEW JERSEY.
1371
1
ipal corporations and regulating the internal affairs of
cities and towns, led to the radical change brought about
by these amendments, making all special legislation on
these subjects impossible.
On the 7th of September, 1875, amendments to the
constitution of 1844 were ratified by the people at a gen-
eral election, among which were some which wrought a
very important change in the powers of the legislature
with respect to the creation of private corporations and
the granting of franchises. The provision requiring
three-fifths of the legislature to pass bank or money cor-
poration bills was stricken out, and it was provided that
the legislature should not pass private, special, or local bills
in a number of enumerated cases, which included bills
"granting to any corporation, association, or individual,
any exclusive privilege, immunity, or franchise whatever;"
and bills "granting to any corporation, association, or
individual, the right to lay down railroad tracks."
It was also provided that "the legislature shall pass
general laws providing for the cases enumerated in this
paragraph, and for all other cases which, in its judgment,
may be provided for by general laws. The legislature.
shall pass no special act conferring corporate powers, but
they shall pass general laws under which corporations may
be organized and corporate powers of every nature ob-
tained, subject, nevertheless, to repeal or alteration at the
will of the legislature."
There has been no change in the organic law since the
adoption of these amendments.
It is evident from this brief statement of the constitu-
tional history of the state, that its policy as to the fran-
chises which are the subjects of consideration, viz., those
relating to the right of way, privilege or authority to use
public ways in any manner, prior to the amendments of
1875, is to be sought in the various acts of the legislature
creating corporations with such franchises, and in the few
general statutes relating to such franchises, passed before
1372
ECONOMIC LEGISLATION.
that time, and that since the radical change brought
about by those amendments, such policy is to be dis-
covered alone in the general laws on the subject, passed
by the legislature in pursuance of the requirements of the
amended constitution.
After the adoption of the constitutional amendments, a
system of general laws on these subjects was put in
operation from time to time in pursuance of the mandate
to the legislature "to pass general laws under which cor-
porations may be organized and corporate powers of every
nature obtained," subject to repeal or alteration.
In view of the fact that for more than fifteen years there
has existed in the legislature no power to create a private
corporation or to grant to any corporation or individual
any exclusive privilege, immunity, or franchise whatever,
it does not seem necessary to make any minute inquiry
into the policy of the state as shown in its legislation
while its power to create corporations and clothe them
with franchises was practically unrestricted. Some gen-
eral facts may, however, be given to illustrate the changes
of policy brought about by the amendments.
As to the industries under consideration, as well as all
others requiring corporate powers and privileges, the policy
of the legislature was extremely liberal. From 1799, when
the first charter was granted to a water company, until
1875, when the constitutional restrictions were imposed,
private corporations were freely created, and franchises for
the use of the public highways and streets were freely
granted.
The usual provision as to water companies was that
they might condemn lands for their reservoirs and works
and lay their pipes through the streets with certain restric-
tions as to the time of obstruction and provisions for re-
laying the pavements and restoring the highways.
As to gas companies, the charters generally provided
that they might lay their pipes and erect their posts in the
streets, alleys, lanes, and avenues, without unnecessary ob-
NEW JERSEY.
1373
struction to public travel. In few instances was there any
provision in the charters as to the consent of the munici-
pal authorities. Practically, however, the exercise of the
privileges given was controlled by such authorities in virtue
of the powers conferred by the charter of the municipality.
Before the adoption of the constitutional amendments, a
general law was passed authorizing the incorporation of
gas companies,' but it was repealed by a general law on the
same subject after their adoption.2
As to street railways, the acts of incorporation almost
invariably required that before tracks should be laid in the
streets the consent of the corporate authorities should be
obtained, but very rarely was there any provision for the
consent of abutting land-owners.
As to telegraph companies, only a few private charters
were passed, and these gave power to condemn lands, and
authorized the use of the highways, streets and waters on
the lines designated, with provision that the works should
be so placed as not to interfere with the common use of
the highways, streets and waters. As to telegraph com-
panies, a general system was adopted long before the
amendments to the constitution. On the 5th of March,
1853,3 an act was passed authorizing the formation of such
companies by any two or more persons on filing the proper
certificate, and power was given "to use the public roads
or highways of the state on the line of their route for the
purpose of erecting posts or poles on the same to sustain
the wires or other fixtures, upon first obtaining the consent
in writing of the owner of the soil." It also provided that
public travel should not be interfered with, and that in
cities and towns the use of the streets should be subject to
regulation and restriction by the corporate authorities.
This act is embodied in the same form in the revised act
¹ Laws, 1874, p. 124. 2 Laws, 1876, p, 309, sec. 24 (Rev., p. 460).
3 Laws, 1853, p. 304.
1374
ECONOMIC LEGISLATION.
of April 9, 1875,' and has since been amended so as to in-
clude the telephone companies.²
Also before the adoption of the amendments, a general
law was passed authorizing the incorporation of gas com-
panies,³ but this act was repealed by the 24th section of a
general law on this same subject, passed April 21, 1876,
after the amendments were adopted."
At the session preceding the ratification of the constitu-
tional amendments, on the 7th of April, 1875, the revision.
act concerning corporations was passed containing a gen-
eral scheme for the formation and management of corpo-
rations, and authorizing the incorporation by certificate of
companies for carrying on various specified kinds of busi-
ness or any lawful business or purpose whatever, except
railroad companies or others requiring the right to cen-
demn lands, and insurance or banking companies or others
intended to derive profit from the loan or use of money.5
This act, with its numerous amendments, is the basis of
the present corporation system of the state.
The commission to suggest and prepare constitutional
amendments was appointed in April, 1873, and the pro-
posed changes were agreed to by the legislature at its ses-
sion in 1874. They were also agreed to by the legislature
of 1875, on the 8th of April, the day after the approval of
the general corporation act, and provision was then made
for submitting them to the people."
6
They were ratified at a special election held September
7, 1875, and became in force on the proclamation of the
governor, September 28, 1875.7
¹ Rev., p. 1174.
2 Laws, 1880, p. 201 (Sup. Rev., p. 1022); Laws, 1882, p. 241 (Sup. Rev.,
p. 1023); Laws, 1887, p. 119; Laws, 1888, p. 546; Duke v. Telephone Co.,
53 N. J. L. (24 Vr.), 341.
Laws, 1876, p. 309; Rev., p. 460.
3 Laws, 1874, p. 124.
5 Rev., p. 175.
6
Laws, 1875, p. 72.
7 Laws, 1876, p. 433.
NEW JERSEY.
1375
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation, how obtained. Since the amendment
of the constitution on September 7, 1875, the legislature
has had no power to pass special acts conferring corporate
powers, but is required to "pass general laws under which
corporations may be organized and corporate powers of
every nature obtained;"¹ and corporate powers can only be
obtained by complying with the provisions of these gen-
eral laws.
Some franchise companies are organized under the gen-
eral corporation act; others are organized under general
acts relating to certain classes of companies requiring
special powers.
The general corporation law does not apply to railroad
companies nor "to any other company which shall need
to possess the right of taking and condemning lands." It
makes no provisions for condemning lands and gives no
authority to use the public streets, but under it may be
organized those franchise companies that can lawfully ob-
tain a franchise for the use of the streets from the munici-
pal authorities with the consent of the owners of adjoining
lands, such, for example, as electric light, heat, and power
companies, and steam heat and power companies; other
companies may be organized under it if they do not re-
quire the special powers not conferred by the act.
Street railway companies, gas companies, telegraph and
telephone companies, and water companies are organized
under general acts relating especially to the respective
companies.
Articles of incorporation.-Under the general corpo-
ration law, the articles of association must be signed by
three or more persons and must be proved or acknowl-
edged in the same way as deeds are proved or acknowl-
edged.
¹ Const., as amended, Art. IV, sec. 7, par. 11.
' Rev., p. 175.
1376
ECONOMIC LEGISLATION.
Any number of persons not less than thirteen may form
a gas company upon signing and filing articles of associa-
tion as stated below.
Seven or more persons may associate themselves to-
gether by articles of incorporation for the construction
of street railways for the transportation of passengers.¹
Each subscriber must state his place of residence and the
number of shares of stock he agrees to take in said com-
pany.¹
Two or more persons, having subscribed to the neces-
sary capital stock of a telegraph or telephone company,
may become a body corporate upon filing articles as shown
below.2
The articles of water companies for supplying cities,
towns, and villages of not more than fifteen thousand and
not less than five hundred inhabitants with water, must
be signed by seven persons, the majority of whom must
reside in the state.3
Must show what. The articles of association of compa-
nies created under the general act must state the name of
the company; the place where it is to be conducted; the
object for which it is formed; the amount of capital stock,
not less than $2,000; the amount with which it will com-
mence business, not less than $1,000; the number of
shares and the par value thereof; the names and residences
of the stockholders, and the number of shares held by
each; the period of commencing and terminating of cor-
Laws, 1886, p. 185, ch. 135 (Sup. Rev., p. 363).
Rev., p. 175; Laws, 1890, p. 489. Telephone companies are organ-
ized under the same act as telegraph companies, although not men-
tioned in the act. (Laws, 1890, p. 489; Duke v. Telephone Co., 53 N. J.
L. (24 Vr.) 341.
Sup. Rev., pp. 650, 653. At the time of the passage of this act, there
were numerous water companies organized under special charters to
supply water to various cities. Cities of the first class were thus pro-
vided for, and, for this reason, were no doubt omitted from these pro-
visions. Newark and Jersey City had for a long time operated their
own works.
NEW JERSEY.
1377
porate existence; and, if a part of the business is to be
carried on outside of the state, the certificate of organiza-
tion must state what portion is so to be carried on outside
of the state and in what other state or states and coun-
tries, and in what town the principal office out of the state
is to be located, and also the name of the town within the
state in which the principal part of its business is to be
transacted.¹
The articles of incorporation of gas companies must
give the name of the company; the number of years it is
to continue; the name of the town in which it is proposed
to supply gas and maintain gas works; the amount of
the capital stock and the number of shares, and the names
and residences of thirteen directors, all of whom must be
residents of this state, and two-thirds, at least, residents.
of the place where the works are to be erected.2
The articles of street railroad companies (by whatever
motive power the line is to be operated) must state the
name of the company; the term of years the same is to
continue; the points to and from which the road is to be
constructed; the length of such road, as near as may be;
the name of the municipality in which it is to be operated;
the town and county in the state through, in or into which
it is intended to be made; the amount of the capital stock
of the company, which must not be less than ten thousand
dollars per mile and a proportionate sum for a fraction of
a mile; the number of shares of the capital stock; and
the names and residences of at least seven directors, to
serve for one year and until their successors are chosen, a
majority of whom must be inhabitants of the municipali-
Rev., p. 179; Sup. Rev., pp. 155, 159; Laws, 1888, p. 112; Laws, 1889,
p. 412. By an act passed March 10, 1892 (Laws, 1892, ch. 56), it is pro-
vided that it shall be lawful for any corporation of this state to carry on
business outside of the state, although not provided for in its certificate
or act of incorporation.
¹ Rev., p. 460, but see note 1, p. 1378.
Laws, 1890, pp. 82, 113 (Sup. Rep., p. 363).
1378
ECONOMIC LEGISLATION.
!
}
ties through which said road is intended to be constructed
and operated.¹
The articles of telegraph and telephone companies must
give a description of the line proposed to be constructed;
the location it is intended to traverse; the capital stock
of the company and its corporate name.²
Filing. The articles of incorporation of companies in-
corporated under the general law must be recorded with
the county clerk and filed in the office of the secretary of
state, and upon such filing the incorporators are invested
with corporate powers.
The articles of association of gas, telegraph, telephone
and street railway companies must be filed and recorded
in the office of the secretary of state, and upon so depos-
iting the articles they become bodies corporate.³
The articles of gas companies can not be so filed and
recorded until one-half, at least, of the capital stock is
subscribed for and twenty per centum paid in good faith
to the directors, and there must be attached an affidavit
that it is intended in good faith to erect gas works and to
manufacture and sell gas.
The articles of street railway companies can not be so
filed until at least $2,000 of stock for every mile or frac-
tion of a mile has been subscribed and paid in good faith,
in cash to the directors, and been by them paid to the state
treasurer, who must hold the same, to be repaid to the di-
rectors or treasurer of the company in sums of $2,000 for
each mile proven to have been constructed. An affidavit
must accompany the articles, showing that the subscrip-
tion is made in good faith in cash, whether the same be
in full or an installment, and that it is intended in good
¹ Laws, 1886, ch. 135 (Sup. Rev., p. 363). Chapter 55 of the Laws of
1892 provides that hereafter it shall not be necessary for more than one
director of any corporation organized under general or special law to re-
side in New Jersey.
¹ Rev., p. 1175; Laws, 1890, p. 489.
¹ Rev., p. 1175; Laws, 1890, p. 489: Laws, 1886, p. 185 (Sup. Rev., p.
363).
NEW JERSEY.
1379
faith to construct, maintain, and operate the road men-
tioned or as its route may be designated by municipal
authorities. This affidavit must be recorded with the
articles.¹
An additional payment of $2,000 per mile must be made
upon filing an acceptance of an ordinance of common
council authorizing an extension of the route.
If the company fail to obtain the right to lay its tracks
as described in the certificate, it may file an amended cer-
tificate, and if the new line is shorter, it may obtain the
repayment of money paid to the state treasurer.'
der "DISSOLUTION, FORFEITURE."
See un-
Organization; preliminary requirements.-Compa-
nies, incorporated under the general corporations act, and
telegraph, telephone, or water companies, are organized
by a meeting of the original incorporators upon two
weeks' notice signed by a majority of them and published
in a newspaper of the county where the corporation is es-
tablished, or upon two days' personal notice, or upon a
waiver of notice being signed by all. By-laws are adopted
at this meeting and directors and officers are elected.
The company may then commence business and the di-
rectors may call in subscription for stock.
In the case of street railway companies and gas compa-
nies, the directors are named in the certificate of incorpo-
ration, and they may organize without delay and com-
mence business as soon as the statutory conditions as to
capital stock above referred to are complied with.
Commencing business.-No street railway company
organized under the general act may begin to build its
road until a certificate is sworn to, stating that the full
amount of the capital stock has been unconditionally sub-
scribed to and fifty per centum of the par value of each
share has been actually paid in cash.'
Fees. A fee or tax must be paid to the secretary of
¹ Laws, 1886, p. 185, ch. 135 (Rev., p. 363).
1380
ECONOMIC LEGISLATION.
state on filing the articles or certificate of incorporation,
according to the amount of the capital stock, viz., for
companies having an authorized capital not exceeding
$100,000, twenty-five dollars, and for companies having an
authorized capital exceeding $100,000, twenty cents for
each $1,000 of the largest amount of capital authorized by
the certificate.
The fee for increase or decrease of capital stock is $20,
which must be paid to the secretary of state on filing cer-
tificate of increase or decrease, and if the increase exceeds.
$100,000, then one-fifth of a dollar per thousand for the
excess.¹
A fee of $20 must be paid to the secretary of state on
filing any certificate subsequent to the original certificate
of organization.
Amendments; repeals, etc.—The constitution provides
that all general laws for the creation of corporations shall
be subject "to repeal or alteration at the will of the legis-
lature." 2
An extension of corporate life does not affect the right of
the legislature to repeal the general law or a special charter,
nor does it continue any irrepealable or other contract with
the state contained in any special charter of the corporation,3
although it may be subject to a repeal by the legislature of
the law under which the franchise was granted or the
consent was given.
By the corporation.—If a certificate is defective by reason
of the omission of any matter required by law to be therein
stated or by reason of the objects therein expressed being
for a purpose not contemplated in the general laws in ex-
istence at the time of filing the original certificate, a new
certificate may be filed, setting forth the old one, supply-
ing the omissions and stating the true object desired by
the incorporation.*
1
¹ Sup. Rev., p. 150.
Rev. "Corporations," sec. 111.
Rev., p. 197; Laws, 1887, p. 156.
¹ Const., Art. IV, sec. 7, par. 11.
NEW JERSEY.
1381
The name of any corporation may be changed by a two-
thirds vote of the board of directors present at a regular
or special meeting called for that purpose, and recording
in the county clerk's office and filing with the secretary of
state a certificate signed by the board of directors or a
majority of them, setting forth first, the old name, and, sec-
ondly, the name now assumed to designate the corporation.¹
A change in the nature of the business may be made by
a vote of two-thirds in interest of the stockholders, and in
all cases by unanimous consent at any meeting called for
that purpose. A certificate of the proceedings, signed and
acknowledged by the officers, must be recorded in the
county clerk's office within thirty days, and published for
three weeks in a newspaper circulating in the county.
where the principal office is located.²
An increase in the number of directors may be made on
filing with the secretary of state the assent in writing of
two-thirds in value of the stockholders, setting forth the
increase.3
The location of the principal office may be changed by
a vote of two-thirds of the board of directors at a regular
or special meeting called for that purpose, upon filing with
the secretary of state a certificate setting forth, first, the
name of the corporation and the city or town where it is
located by charter or where its principal office is located;
and, secondly, the place, town or city in which it proposes
to locate the principal office. This must be signed by the
board of directors or a majority of them, and sealed with
their official seal. There must be an affidavit of the sec-
retary that the certificate is made by the authority of the
boord as expressed by a two-thirds vote of the members
present at a regular meeting or special meeting called for
the purpose.
1 Sup. Rev., p. 145. See also "CAPITAL STOCK.”
* Rev. "Corporations," sec. 33.
Sup. Rev., p. 153, secs. 33, 34. See also "CAPITAL STOCK.”
3
$
Sup. Rev., p. 144; Laws, 1880, p. 49.
1382
ECONOMIC LEGISLATION.
£.
Duration of charter.-Under the general incorporation
act the incorporators are required to fix in their certificate
the period during which the corporation shall exist, which
must not exceed fifty years, but corporate existence may
be extended for a further period not exceeding fifty years
on filing a certificate before the expiration of the charter,
setting forth the desire of the corporation that its exist-
ence shall be extended. The general acts providing for
the incorporation of gas, street railway, telegraph and tele-
phone companies fix no limit to the duration of the corpo-
ration, but, except in the case of telegraph and telephone
companies, the statute provides that the certificate of in-
corporation must state the number of years the company
is to continue.
As to the effect of an extension of corporate existence
upon the power of the legislature, see "AMENDMENTS, RE-
PEALS," etc.
Objects.-There is no definite limit to the objects for
which a corporation may be formed. The general act,
after enumerating manufacturing, mining, chemical, agri-
cultural and many other corporations, and those for carry-
ing on any wholesale or retail mercantile business, con-
cludes with the words "or any lawful business or purpose
whatever."
There is no special requirement as to the manner of
stating the objects of the corporation. The words of the
statute are, "the objects for which the company shall be
formed." The real purposes of the incorporation should
be stated distinctly, with such comprehensive terms as may
seem proper; purposes of the company not fairly within
the objects so stated would be held by a court to be ultra
vires.
Powers. All corporations have the usual powers to
have succession, to sue and be sued, to make and use a
common seal and alter the same at pleasure, to hold, pur-
1 Laws, 1876, p. 235; Sup. Rev., p. 150.
NEW JERSEY.
1383
chase, and convey real and personal estate, to appoint sub-
ordinate officers and agents, to make by-laws, and to wind
up and dissolve themselves at pleasure.
Franchise companies have the additional powers con-
ferred on them by statute or municipal ordinance to con-
demn lands, to use the streets for certain purposes, to take
tolls, etc. As to the special powers of these companies
respecting the acquiring and use of franchises and their
regulation, etc., see SUBDIVISION III, below.
Officers; meetings; voting; quorum, etc.-The orig-
inal directors of street railway and gas companies are
named in the certificate of incorporation. They serve for
one year and until their successors have qualified. The
original directors of corporations organized under the gen-
eral corporations act are elected by the stockholders. Sub-
sequent directors in all cases are elected by the stockhold-
The election is by ballot, each share being entitled
to one vote, unless the by-laws provide otherwise. The
number of directors under the general act must be at least
three, all being share-holders. The president must be one
of the directors. There must be also a secretary and
treasurer. The officers may be elected either by the stock-
holders or the directors as the by-laws prescribe.
ers.
5
The number of directors of gas companies is thirteen,'
of street railway companies not less than seven,² telegraph
and telephone companies at least three,3 of water compa-
nies not less than seven under the act of April 21, 1876,*
but water companies organized under the supplement of
April 12, 1876, to the general corporation act would need
only three directors, and by the supplement of February
21, 1877, it would seem that three directors would be suf-
ficient in the case of any water company, provided a ma-
jority of them reside in this state, but now it is sufficient
if one resides in the state." Vacancies occurring in the
8
6
Rev., p. 460.
Rev., p. 1175.
Laws, 1877, p. 19.
2 Laws, 1886, p. 185 (Sup. Rev. p. 368).
Laws, 1876, p. 318.
5 Laws, 1876, p. 103.
¹ Laws, 1891, ch. 139; Laws, 1892, ch. 55.
1384
ECONOMIC LEGISLATION.
office of director, or secretary, or treasurer, by death, res-
ignation, removal, or otherwise, may be filled for the re-
mainder of the year in such manner as may be prescribed
in the by-laws.¹
Meetings of stockholders must be held within the State
of New Jersey. Meetings of directors of companies or-
ganized under the general act may be held out of the state
if the by-laws so provide. No provision is made for meet-
ings of directors of gas, street railway, telegraph, and
telephone companies outside of this state.
Companies may provide by their by-laws for the manner
of conducting meetings, the number of shares which will
entitle a stockholder to vote, the number which shall con-
stitute a quorum, etc. In the absence of a by-law a ma-
jority of the stockholders in interest constitutes a quorum.
Capital stock. The capital stock of companies organ-
ized under the general law can not be less than $2.000, and
they must commence business with not less than $1,000.
The number of shares and par value and amount of capital
stock must be stated in the articles of incorporation.
The amount of the capital stock of gas companies and
the number of shares must also be stated in their arti-
cles; and the company can not begin business until one-
half, at least, of the capital stock has been subscribed for
and $2,000 has been paid in in good faith to the directors.
In the case of street railway companies, the amount of
the capital stock of the companies must be stated in the
articles of incorporation, and must not be less than $10,000
per mile, and a proportionate sum for a fraction of a mile;
the number of shares of capital stock must also be stated
in the articles of incorporation; and at least $2,000 of
stock for each mile or fraction of a mile must be subscribed
and paid in cash, as shown under "ORGANIZATION" above.
Certificates of stock must be signed by the treasurer of
¹ Rev., p. 81, sec. 20.
2 Laws, 1886, p. 185 (Sup. Rev., p. 363).
NEW JERSEY.
1385
the company. They are usually sealed and are often
signed by the president as well as the treasurer.
The directors of a company may assess upon each share
such sum as two-thirds of the stockholders may direct,
not exceeding the subscription, and the sums so assessed
must be paid to the treasurer as the directors may require.
Upon failure of the subscriber to pay within thirty
days after legal notice, the stock may be sold by auc-
tion.¹
Stock may be issued for money or for property pur-
chased. In the latter case there must be legibly stamped
upon the face of the certificates the words "Issued for
property purchased."
Increase and decrease of.-The capital stock may be
increased by the board of directors at their option in order
to provide means for the payment of maturing bonds;
the shares to be sold for cash only and not below par, and
no more to be issued than will be sufficient to pay the
bonds and interest.
Gas companies may increase their stock by a vote of
two-thirds in amount of all the stockholders at a meeting
called by the directors for that purpose upon twenty days'
notice, served personally upon or sent by mail to all the
stockholders. The proceedings must be entered upon the
minutes. A certificate must be filed in the department of
state.2
Street railway companies may increase their capital
stock by a vote of a majority in value of the share-holders
to an amount not greater than double the shares author-
ized. A certificate of the increase and of the number of
shares must be issued under the corporate seal, attested by
the president and secretary and filed with the secretary
of state.³
3
¹ Rev. "Corporations," secs. 27, 28.
Laws, 1886, p. 47; Sup. Rev., p. 328; Laws, 1891, p. 332, ch. 177.
Sup. Rev., p. 368; Laws, 1883, p. 241; the general corporation act
provides for a two-thirds vote.
VOL. II-7
1386
ECONOMIC LEGISLATION.
Water companies may increase their capital stock by a
majority vote.¹
In all cases of increase of stock a certificate must be
filed in the department of state setting forth the amount
and date of increase, and also the statute and the certifi-
cate authorizing it, and the total amount of stock issued,
including the increase.2
The stock of any company organized under the general
corporation act may be reduced by a vote of two-thirds in
interest of the stockholders at any meeting called for that
purpose, a certificate of the proceedings being recorded
within thirty days in the county clerk's office and pub-
lished for three weeks in a newspaper circulating in the
county where the principal office is located.³ Any com-
pany organized under any general or special law may de-
crease the amount of its capital stock and the par value
of the shares on filing with the secretary of state the as-
sent in writing of two-thirds in interest of the existing
stockholders, and filing with the secretary of state a cer-
tificate setting forth the amount of the capital stock as
decreased and the par value of the shares. This certificate
must be published as above.*
Any company, whether organized under a general law
or a special act, excepting railroad and canal companies,
may increase its capital stock to such amount as may be
determined upon by the board of directors, on filing in
the office of the secretary of state a certificate signed by
its president and under its corporate seal attested by its
secretary, setting forth the amount of the proposed in-
crease of the capital and the number of shares into which
it is to be divided, and also the assent in writing of stock-
1 Sup. Rev., p. 652; Laws, 1876, p. 318.
'Laws, 1891, p. 332.
3 Rev. "Corporations," sec. 33.
* See Laws, 1878, p. 157; Laws, 1882, p. 139; Laws, 1885, p. 140; Sup.
Rev., p. 151.
NEW JERSEY,
1387
holders owning at least two-thirds in value of the existing
capital stock.'
It is now provided that any corporation of this state in-
corporated under any general law of this state may, in one
certificate, change the name of said corporation, increase
or decrease the amount of the capital stock of said corpo-
ration, increase or decrease the number of shares of the
capital stock of said corporation, and increase or decrease
the par value of each of said shares of the capital stock
of said corporation, thus making any or all of said changes
in said one certificate.²
In order to do this, the assent in writing of two-thirds
in value of the stockholders and the assent of the majority
of the board of directors at a general or special meeting
called for the purpose must be obtained.²
A certificate, reciting these assents, executed by such
officers of the company as shall be determined by a reso-
lution of said board of directors, and under the seal of
said company, with an affidavit of the secretary of said
company that the seal of the company thereto attached is
the seal of said company and that the officers executing
said certificate are the officers of said corporation, as ex-
pressed therein, must be recorded in the office of the clerk
of the county where the principal office of said company
is located, and thereafter filed in the office of the secretary
of state, which recording must be done within thirty days
after the execution of said certificate.2
Transfer of.-Shares of stock are transferable on the
books in such manner as the by-laws may provide. The
stock and transfer books must be kept within this state
and at the principal office of the company.3
Bonds, debts, etc.-The directors of a corporation
have implied power to incur debts and to issue bonds for
¹ See Sup. Rev., p. 153; Laws, 1877, p. 179; Laws, 1882, p. 39; Laws,
1886, p. 226; Laws, 1889, p. 155.
Laws, 1892, ch. 2.
3 Rev., "Corporations," sec. 50.
1388
ECONOMIC LEGISLATION.
the payment of debts incurred in the lawful business of
the corporation within its corporate powers.'
Bonds to secure indebtedness may be issued by the or-
der of the board of directors. They are signed by the
president, sealed with the corporate seal, and usually
attested by the secretary.
Dividends.-Dividends by a corporation organized un-
der the general act may only be made out of surplus or
net earnings.²
Liability of stockholders.-Stockholders are liable for
the debts of the company to the amount of their unpaid
subscriptions to the stock, but not beyond it. Stock once
fully paid, either in money or in property, is not assess-
able.
Liability of officers and directors.-Directors are lia-
ble for misconduct according to the principles of the law
governing directors in their relations to the stockholders
and to creditors. They are liable by statute for certain
misfeasances, e. g., for making dividends except out of the
surplus and net earnings, for reducing the capital except
according to the statute, for debts incurred after changing
the nature of the business without the legal notice, and
for failure to file a certificate of payment in of capital.
stock for thirty days after request in writing so to do.
Reports. An annual report of the election of directors
and officers must be made by every company to the secre-
tary of state.
Gas companies must make an annual report for publica-
tion, of their capital stock and the proportion actually paid
in and of their existing debt.
1
Leggett v. N. J. Mfg. & Banking Co., 1 N. J. Eq. (Saxt.) 541; Hoyt
v. Bridgewater Copper Mining Co., 6 N. J. Eq. (2 Hal. Chy.) 253, 625;
Morris Canal & Banking Co. v. Fisher, 9 N. J. Eq. (1 Stock. 667); Lucas v.
Pitney, 27 N. J. L. (3 Dutch.) 221; Stokes . N. J. Pottery Co., 46 N. J. L.
237; Fifth Ward Savings Bank v. First Nat'l Bank, 48 N. J. L. 513; and
note to Hayden v. Lamson Consolidated S. S. Co., 13 N. J. Law Jour-
nal, 296.
2 Rev., “Corporations," sec. 7; see also Laws, 1891, p. 176, ch. 106.
NEW JERSEY.
1389
Cable railway, electric railway, and horse railway com-
panies are required to make annual returns to the state
board of assessors on the first Tuesday of January in each
year, showing the amount of the capital stock issued; the
amount actually paid in; the amount of funded and other
debts; the cost of the road, including its equipment and
appurtenances; the amount of expenditures for repairs,
superintendence, and management during the year, under
appropriate heads; the amount of income received from
all sources; and the dividends paid during the year and
the sources thereof.¹
་
2
Taxation.-Annual state taxes are imposed on certain
corporations by way of annual license fees. Telegraph,
telephone, and cable companies must pay a tax of two per
centum per annum on the gross amount of their receipts.
Gas companies and electric light companies, a tax of one-
half of one per cent on their gross receipts, and five per
cent upon the dividends in excess of four per cent. All
companies not otherwise provided for must pay an annual
state tax of one-tenth of one per cent on their capital
stock issued and outstanding up to and including three
million dollars, one-twentieth of one per cent on all sums
exceeding three millions and not exceeding five millions,
and the further sum of fifty dollars per million on all
amounts in excess of five millions. The statute says this
act shall not apply to "railway companies" nor to manu-
facturing or mining companies fifty per cent of whose
capital is invested in mining or manufacturing carried on
within this state.³
As to local taxes, there is a good deal of uncertainty and
difference of opinion and practice. The law is not very
clear, but the result of the statutes seems to be that all
manufacturing companies and all other companies not or-
ganized under the general corporation act (except steam
1 Laws, 1889, p. 332.
2 Laws, 1884; Sup. Rev., p. 1016, amended Laws, 1891, p. 150.
³ Laws, 1891, p. 150, ch. 113.
1390
ECONOMIC LEGISLATION.
1
railroad and canal companies) should be taxed on their real
and personal property the same as individuals, and that all
other companies are taxed on their capital stock and accu-
mulated surplus, the real estate being taxed, however, in
the city or township where it is located. The tax on the
capital stock and accumulated surplus is levied on the basis
of an assessment made by the local assessor, who ascertains
the amount of the capital stock and accumulated surplus
by inquiring of the companies' officers.
Consolidation of companies.-There is no statute pro-
viding for the consolidation of companies generally.
Horse or other street railway companies having lines in
the same county may consolidate in the following manner:
The directors of the several companies must enter into a
joint agreement for the consolidation, setting forth the
terms and conditions thereof, and the mode of carrying
the same into effect; the name of the new corporation;
the number and names and residences of the first officers
and directors; the number and par value of the shares of
stock, and the manner of converting the capital stock of
each into that of the new corporation; how and when the
officers and directors are to be chosen; and such other
details as may be deemed necessary to complete the con-
solidation. This agreement must be submitted to the
stockholders of each company at meetings to be called
separately, with notice of the purpose, and if three-fourths
of all the votes of all the stockholders are in favor of the
act of consolidation this fact must be certified thereon by
the secretaries of the several companies and the agreement
filed in the office of the secretary of state. The compa-
nies are thereupon consolidated, and the new corporation
is vested with all the powers and franchises of its constitu-
ent parts. Stockholders who refuse to convert their stock
into that of the new corporation may proceed by petition
to the court of common pleas to have it appraised, and
¹ See article by Edward Q. Keasbey in 11 N. J. L. Journal, p. 87.
NEW JERSEY.
1391
upon payment of the sum fixed the stock must be trans-
ferred to the company or retained for the benefit of the
remaining stockholders.¹
There is a statute providing for the consolidation of
companies organized under the general corporations act
for all or any of the following purposes: The improve-
ment and sale of lands, the construction, maintenance, and
operation of hotels and carrying on the business of an inn-
keeper, and the transportation of goods, merchandise, or
passengers upon land or water, having their principal
place of business in or carrying on business in whole or
part in the same county. The method of consolidation.
is similar to that above described relating to street rail-
ways, but the agreement must set forth also the place or
places, in this state or elsewhere, where the business is to
be conducted, the number of the directors, and the periods
during which the companies shall continue not exceeding
fifty years. A vote of a majority instead of three-fourths
in value of the stock is sufficient to ratify the agreement.²
Companies organized for such purposes are also empow-
ered to purchase stock in other companies organized for
the same purpose.3
4
Dissolution; forfeiture.-Corporations may be dissolved
by resolution of the board of directors with the consent of
two-thirds in interest of all the stockholders. The resolu-
tion must be passed by a majority vote at a meeting of
the directors called for the purpose, every director having
had three days' notice of the meeting. Notice of the reso-
lution must be mailed within ten days to every stock-
holder residing in the United States, and there must also
be published within the ten days in a newspaper circu-
lating in the county where the corporation has its princi-
pal office, and is conducting its business, once a week for
four weeks, a notice of a meeting of the stockholders to
be held at the principal office in such county to take ac-
¹ Laws, 1888, p. 74.
Laws, 1888, p. 445.
2 Laws, 1888, p. 441.
* Rev., p. 182.
1392
ECONOMIC LEGISLATION.
tion on such resolution. This meeting must be held be-
tween the hours of 10 A. M. and 3 P. M., and may be ad-
journed from time to time for not less than eight days at
any one time by a majority in interest of the stockholders
present, and notice of the adjournment must be published
in the same paper; and if at any such meeting two-thirds
in interest of the stockholders shall consent in writing
that such dissolution shall take place, and shall signify
their consent in writing, then and in such case such com-
pany, on filing such consent, duly attested by their secre-
tary, with the secretary of state, and on receiving from
him a certificate that such consent has been filed, shall
be dissolved, and the board of directors must cause this
certificate to be published once a week for four weeks in
a paper published and circulating in the same county, and
at the end of the four weeks the directors must proceed
to settle up and adjust the business and affairs of the
company as if it had been dissolved by lapse of time.
Corporations may also be dissolved by proceedings
taken for that purpose by creditors or stockholders in case
of insolvency, and in such proceedings a receiver is ap-
pointed with power to sell the property and franchises.¹
All the franchises of a corporation may be sold on pro-
ceedings for foreclosure of a mortgage in which they are
included. There is a provision for reorganizing after
the sale, which is applicable in terms to sales of railroads,
canals, turnpikes, bridges, and plank-roads, but has been
used in the case of horse railway companies,² although
there are no decisions declaring that it is applicable to
such companies.2
· Rev., p. 187.
2 Rev., pp. 945, 916; Laws, 1880, p. 159; Laws, 1887, p. 158; Sup. Rev.,
p. 836.
These statutes provide whenever any railroad created by or under
any law of this state, or by or under any joint or consenting legislation
of this state, shall be sold under any process or decree of any court of
this state or the United States, or under any power conferred by mort-
gage or deed in the nature thereof, the person or persons for or on
NEW JERSEY.
1393
An act was passed March 2, 1891, with special reference
to the sale of a street railway occupying a turnpike.¹
If a horse railway company organized under the gen-
eral act does not build and put in operation at least one-
half of its line within two years after the date of the ordi-
nance establishing its route, its corporate powers cease,
and the moneys paid into the state treasury are forfeited,
but an exception is made in case of delay by injunction.2
The charter of any company will be declared forfeited
in case of failure for two years to pay the state tax imposed
by the state board of assessors. The proclamation of for-
feiture is made by the governor on a report made by the
state treasurer on May 1st.3
Foreign corporations.-Foreign corporations are freely
allowed to do business in New Jersey, but they can not
whose account such railroad may be purchased shall be constituted a
body politic and corporate, and shall be vested with all the right, title,
interests, property and franchises of the corporation which was sold.
It is further provided that the purchasers or their vendees, or a ma-
jority of them, may call a meeting upon two weeks' notice published in
one newspaper in each of the counties through which the railroad may
run, and the majority of the persons may organize a new corporation,
electing a president and a board of six directors to serve for one year,
and may adopt a corporate name and seal and determine the amount of
the capital stock and issue certificates therefor.
The corporation has power to issue preferred stock and to issue bonds
secured by mortgage. A certificate under the seal of the corporation,
attested by the seal of the president, must be filed in the office of the
secretary of state within thirty days, specifying the date of the organi-
zation, the name adopted, the amount of capital stock and the names
and residences of the president and directors.
There is some confusion in these statutes. The act of March 10, 1880,
provides that there may be personal notice of the meeting instead of
publication, and says the board of directors shall consist of such num-
ber as is provided for in the original charter of the corporation reor-
ganized. The act of April 11, 1887, provides as stated above, but it is
an amendment of the act of March 25, 1875, and does not allude to the
act of March 10, 1880.
1
¹ Laws, 1891, ch. 28.
2 Sup. Rev., p. 365; Laws, 1888, ch. 335; Laws, 1889, ch. 68.
3 Laws, 1891, ch. 118, 119.
1394
ECONOMIC LEGISLATION.
exercise the special franchises that must be given by act
of the legislature with reference to the use of the streets
and the right of eminent domain.
The statutory privilege of using the highways to lay
gas and water pipes, or to stretch telegraph, telephone,
and electric light wires, or to lay street railways, is given
only to companies organized under the New Jersey stat-
utes providing for such companies.
SUBDIVISION III.-FRANCHISES.
How obtained.—In treating of this subdivision the im-
portant fact to be kept in mind is that the legislature of New
Jersey can not now grant to any individual or corporation
any exclusive privilege, immunity or franchise whatever,
nor the right to lay down railroad tracks, except by means
of general laws,' and that in pursuance of this provision it
has passed general laws for creating corporations for the pur-
pose of acquiring and using the particular franchises which
are the subject of consideration. Under these laws, that sort
of franchise which consists merely in the right to be a cor-
poration, if it can be properly so called, is in fact free to
all under easy conditions. Any group of persons, by filing
the proper certificate and paying the small state fee, may
become a corporation, with power to distribute gas, water
or electric light or power, to run street railways, to operate
telegraphs or telephones, and to carry on any business of
a similar character. And any such company may embrace
the whole state within the scope of its operations.
But the sort of franchise which results from the associa-
tion of the existence of the corporation and its actual
property with the privilege of employing its powers in
particular localities, although derived from the legislature,
is generally made subject to the consent of the municipal
authorities of such localities, under such terms as they
may impose, and sometimes with, but often without, the
1 Const., Art. IV, sec. 7, par. 11.
NEW JERSEY.
1395
consent of individual owners of land along the line of
the street used for the purposes of the corporation enjoy-
ing the franchise.
The general statutes usually imply the necessity of first
organizing as a corporation, and it seems to be assumed
that only corporations would undertake the works in-
volved.
Although the permission to use the streets is in fact, as a
general thing, to be asked of the local governments, the
authority to use them for any such uses as those here con-
sidered must come from the legislature. The right to use
the streets belongs to the public as distinguished from the
municipality, and the public is represented by the legisla-
ture. The legislature alone can grant any franchise for
the use of the public streets.¹
This power the legislature may exercise either directly
or indirectly; it may grant the privilege of using the
streets to individuals or companies for public purposes,
either with or without the consent of the local authorities,
or it may confer power on these authorities to permit such
use. As a practical matter, however, it may be said that
the exercise of these privileges in the streets is generally
made subject to the consent of the local authorities. There
are old charters which give powers without regard to mu-
nicipal consent, but even in these cases the exercise of
them is subject to the general power to regulate streets
and to the police power, and the later general laws nearly
all require the consent of the local authorities to be ob-
tained as a condition precedent to the exercise of the fran-
chise. Hence it follows that since the amendment to the
constitution, the struggle for special privileges, immunities
and franchises in cities has been transferred from the state
house to the city hall. And this is leading up to a system
of practical taxation by municipal authorities, through the
imposition of terms for their consent to the exercise of
¹ Morris & Essex R. R. Co. v. Newark, 10 N. J. Eq. (2 Stock.) 352, 363;
Domestic Tel. Co. v. Newark, 49 N. J. L. 344-346.
1396
ECONOMIC LEGISLATION.
the powers conferred by the legislature, in the desired
locality.
It becomes important, therefore, to consider not only
what powers are conferred by the legislature, but also
what conditions may lawfully be imposed by the local au-
thorities as the price of their consent or under their gen-
eral power to regulate the use of the streets.
The legislative authority to exercise municipal fran-
chises is conferred either by charter granted before 1876
or by general laws regulating the various kinds of fran-
chises, or by acts conferring such power on the local au-
thorities, either in general terms under the power to regu-
late streets or specifically by statutes relating to the
several franchises.
It is an open question what franchises may be granted
by municipal corporations under the general power to
regulate streets. They certainly can not grant any exclu-
sive franchises, and as most of the franchises are practi-
cally to some extent exclusive, legislative authority is
generally relied upon. Nor can they grant any franchise.
which is inconsistent with the use of a street for the pur-
poses of a street. They can not, for example, authorize
the operation of an ordinary steam railway, nor the
right to lay a railroad track at grade across a street.²
1
With respect to horse railways, grave doubt was ex-
pressed by Van Syckel, J., in 1872, in the Trenton case
above referred to,³ and he said the power, so far as he
could ascertain, had never been exercised in this state, and
that the attempt to assert it would doubtless provoke the
most determined resistance. Existing street railways
have been built under express legislative sanction, and
the general statute passed in 1886 provides that no street
¹ Morris & Essex R. R. Co. v. Newark, 10 N. J. Eq. (2 Stock.) 352; State,
Hoboken Land & Improvement Co., pros., v. Hoboken, 35 N. J. L. 205.
2 State, Montgomery, pros., v. Trenton, 36 N. J. L. 79; Chamberlain v.
Elizabethport Steam Cordage Co., 41 N. J. Eq. 43.
* State, Montgomery, pros., v. Trenton, 36 N. J. L. 79.
NEW JERSEY.
1397
railway shall be laid except in accordance with its provis-
ions. With respect to electric railways, it has been held
by the supreme court that the erection of poles with wires.
for the overhead system can not be permitted by the mu-
nicipality without express legislative authority.'
The power to lay gas pipes and water pipes is regulated
by statute, and we need not inquire how far the right to
grant it may be included in the general power to provide
for lighting the streets and for a supply of water. Tele-
graph and telephone lines are also regulated by statute.
The provisions of old charters need not be discussed.
Many of them still exist, and some that have long been
disused are occasionally revived. They are subject, how-
ever, to repeal by general laws, and are subject to the re-
strictions and conditions expressly imposed by the general
laws. They generally (but not always) provide for ob-
taining the consent of the municipal authorities, and, in
some cases, of the owners of land adjoining the streets.
The general laws relating to municipal franchises all
contain provisions requiring the consent of the municipal-
ity or local authority. The mode of giving this consent
is sometimes specified in the statute, and when it is, the
statute must be followed.
If an ordinance is required, nothing but an ordinance
will be effectual. As a general rule, where a common
council is authorized to do an act, but the mode of doing
it is not prescribed, it may be done by resolution as well
as by ordinance, but where the charter gives the power to
pass ordinances for regulating streets, it has been held
that the consent to laying gas pipes or putting up poles.
and wires for electric railways must be given by ordi-
nance.³
¹ State, Green, pros., v. Trenton, 23 Atl. Rep. 281 (15 N. J. Law Jour.
39). But see Halsey v. Rapid Transit St. Railway Co., 47 N. J. Eq. 380.
2 State, Hoboken Land and Improvement Co., pros., v. Mayor, etc., of
Hoboken, 35 N. J. L. 205.
State, Van Vorst, pros., v. Jersey City, 27 N. J. L. (3 Dutch) 493;
Green v. Cape May, 41 N. J. L. 45; Butler v. Passaic, 44 N. J. L. 171;
1398
ECONOMIC LEGISLATION.
Gas light companies have power to manufacture and
sell illuminating gas for lighting the streets and public
and private buildings in any city, town or village where
the company may be located, and to lay conductors through
the streets, lanes, alleys and squares of such city, village
or town, having first obtained the written consent of the
municipal authorities. Whether it must be given by or-
dinance or may be given by resolution depends on the
charter of the municipality. Where by the charter, the
power to regulate streets must be exercised by ordinance,
this consent must be given by ordinance.²
Electric light, heat and power companies have power to
use the public roads or streets for the purpose of erecting
posts or poles on first obtaining the consent in writing of
the owners of the soil, but no posts or poles can be erected
in the streets of an incorporated city or town without first
obtaining a designation of the street in which the same
are to be placed and the manner of placing the same.
Provision is also made for the laying of underground con-
duits and pipes on similar conditions.3
Telegraph and telephone companies have full power to
use the highways or public roads of the state on the line
of their route for the purpose of erecting poles and laying
wires on their first obtaining consent in writing of own-
ers of the soil; but no poles can be erected by them in
any incorporated town without first obtaining from the
municipality a designation of the streets in which the
same are to be placed and the manner of placing the same,
the use of the public streets to be subject to such regula-
People's Gas Light Co. v. Jersey City, 46 N. J. L. 297; State, Halsey,
pros., v. Newark, 15 N. J. Law Jour. 45; see, however, Halsey v. Rapid
Transit St. Ky. Co., 47 N. J. Eq. 380.
2
¹ Sec. 17; Gas Companies Act, Rev., p. 462.
People's Gas Light Co. v. Jersey City, 46 N. J. L. 297; Halsey v.
Newark, 15 N. J. Law Jour. 45.
3 Laws, 1884, pp. 94, 331 (Sup. Rev., pp. 163, 742).
NEW JERSEY.
1399
tions and restrictions as may be made by the corporate au-
thorities.'
Companies organized for the distribution of steam heat
and power are given authority to lay the necessary pipes
beneath the streets and highways, the consent of the com-
mon council or other legislative body of the town or town-
ship must be first obtained, and the use of the streets is to
be subject to the regulations and restrictions of the coun-
cil.2
Water companies are authorized and empowered to lay
their pipes beneath such public roads, streets, etc., as they
may deem necessary for their purposes, free from all
charge to be made by any person or persons or body pol-
itic whatsoever for said privilege, but the consent of the
municipal authorities, if any there be, of any town through
which the same may be laid, must be obtained. Power
is also given to old chartered companies to extend their
works."
3
Horse or street railway companies obtain the location
for their lines or extensions thereof by application to the
board of aldermen or township committee. After four-
teen days public notice of a public hearing an ordinance
may be passed refusing or granting such location or ex-
tension, and the location thus granted, if an acceptance.
thereof is filed within thirty days with the secretary of
state and the town clerk, is to be taken as the true loca-
tion, but the company must produce and file the written
consent, duly acknowledged, of the owners of at least
one-half of the property fronting on the street through
which the route runs. As to electric street railways, it
has been decided by the supreme court, in a recent case,
¹ Rev., p. 1175; Sup. Rev., p. 1023; Laws, 1890, p. 489; as to telephone
companies, see State, Duke, pros., v. Central Telephone Co., 53 N. J. L. 341.
2 Laws, 1887, p. 238.
8
653.
Laws, 1876, p. 318, as amended Laws, 1884, p. 42; Sup. Rev., pp. 650-
Sup. Rev. Municipal Corporations, sec. 719, note, p. 653.
1400
ECONOMIC LEGISLATION.
that permission to use poles and wires for the purpose of
supplying the power to electric motors can not be given
by municipal ordinance without authority from the legis-
lature, and that such authority is not implied in a statute
authorizing the use of electric motors. The contrary opin-
ion, however, was expressed by vice chancellor Van Fleet
in an earlier case, which was not alluded to by the supreme
court. A turnpike company also may operate a street
railway along the line of its turnpike, with the consent of
the municipality, and may acquire additional land and
right of way.3
Powers of municipalities, as to.-The legislature in
some cases expressly provides that the municipalities may
impose certain terms as a condition of their consent, or
that they may make certain regulations as to the use of
the franchise, and there are other terms and regulations
which the municipality has implied power to make.
The conditions expressly authorized are numerous and
various, and so far as germane, are stated under the appro-
priate subheads below. Municipalities have no power ex-
cept what is granted them by the legislature; and they
are not the source of any privilege or franchise, but since
the legislature gives them the power to regulate streets
and makes their consent necessary, it is to them that ap-
plication must be made, and it is their permission to use
the streets which gives the franchise its practical value,
and for this reason, as has been said, the contest for fran-
chises has been transferred from the state house to the
city hall.
Franchises are always subject to the police power of
cities and to the exercise of the power to regulate the
¹ State, Green, pros., v. Trenton, 23 Atl. Rep. 281 (15 N. J. Law Jour.
39); State, Halsey, pros., v. Newark, 23 Atl. Rep. 284 (15 N. J. Law
Jour. 45), with note stating the facts in evidence with regard to the use
of the overhead and storage battery systems and citing cases in other
states.
¹ Halsey v. Kapid Transit St. Ry. Co., 47 N. J. Eq., 380.
³ Laws, 1890, p. 166.
NEW JERSEY.
1401
streets within reasonable limits, and with a view to the
common use of the streets as streets. A municipal corpo-
ration, for example, may pass ordinances requiring a horse
railway company to make its tracks conform to the grade
of the streets, to keep in repair the space between (and
adjoining) the rails, to remove snow and the like, since
such regulations do not appreciably interfere with the
franchises, but the city can not make such changes as
affect the franchise or take away the property of the com-
pany.2
1
It is usual for the towns to require conditions as the
price of their consent. There is no doubt of their power
to require, as a condition, obedience to ordinances within
the ordinary municipal powers, and to make express con-
ditions as to paving the streets between the rails and
making the rails conform to grade, replacing pavements
after laying pipes, keeping the streets in repair, limiting
rate of speed and the like;' but even in this case it would,
no doubt, be held that the ordinances must be reasonable
and within the scope of municipal authority; but having
merely the power to designate the streets in which a tele-
graph may be set up, they can not use it as a means of
placing an embargo on the line.³
Limitations.-The limitations on the power of the leg-
islature are contained in the constitution. It can not, ex-
cept by general laws, grant the right to lay down railroad
tracks or any privilege, immunity or franchise whatever."
Special damages; property owners' rights. In the
case of water pipes, gas pipes and street railways, provis-
ion is not made for obtaining the consent of the owners
1
State, North Hudson Co. R. R. Co., pros., . Hóboken R. R. Co., 41
N. J. L. 71.
2 Jersey City & Bergen R. R. Co. v. J. C. & Hoboken H. R. R. Co., 20
N. J. Eq. 61-73 (s. e. on appeal, 21 N. J. E. 550), and other cases cited
under "POWERS OF MUNICIPALITIES AS TO" and "REGULATIONS AS TO
SERVICE."
3 American Union Tel. Co. v. Harrison, 31 N. J. Eq. 627.
Const., Art. III, sec 7, par. 11.
VOL. II-8
1402
ECONOMIC LEGISLATION.
of all the property adjoining the street, nor for condemn-
ing their rights and paying damages. It has been decided
that the use of the streets for these purposes was a proper
use, and imposed no new burden on the land.¹
But the general street railway act makes it a condition
precedent to obtaining permission to lay tracks in a street
that the company obtain and file with the clerk of the board
of aldermen the consent in writing of the owners of at
least one-half of the property fronting on the portion of
the street through which the railway is to be laid. This
consent must be acknowledged as deeds are."
With respect to poles and wires for electric street rail-
ways, it has been held in the court of chancery that no
new burden is imposed on the land, and that the owner
of the abutting land is not entitled to an injunction. The
supreme court in a later case, without deciding the ques-
tion as to a new burden, has held that the poles and
wires, unless expressly authorized by the legislature, are
an obstruction of the street, and that an abutting owner
is entitled to a certiorari for the purpose of setting aside a
city ordinance giving permission to set them up.³
If municipal consent to the laying of gas pipes or erect-
ing poles and wires for the electric railway be given by
resolution instead of by ordinance an owner of land in
the street or a rival gas company may challenge it by cer-
tiorari.¹
In the case of telegraph and telephone wires, the stat-
1 Hinchman v. Paterson Horse R. R. Co., 17 N. J. Eq. 75; Jersey City
& Bergen R. R. Co. v. Jersey City & Hoboken Horse R. R. Co., 20 N. J.
Eq. 61; Halsey v. Rapid Transit R. R. Co., 47 N. J. Eq. 380.
2 Laws, 1889, ch. 68.
3 Halsey v. Rapid Transit St. Ry. Co., 47 N. J. Eq. 380; State, Green,
pros., v. Trenton, 23 Atl. Rep. 281 (15 N. J. Law Jour. 39); State, Halsey,
pros., v. Newark, 23 Atl. Rep. 284 (15 N. J. Law Jour. 45), with note; see
also “Electric Wires in Streets and Highways,” by Edward Q. Keasbey,
p. 33.
'People's Gas Light Co. v. Jersey City, 46 N. J. L. 297; Halsey v.
Newark, 15 N. J. Law Jour. 45 (23 Atl. Rep. 284).
NEW JERSEY.
1403
utes require the consent of the land-owners or the pay-
ment of damages in case of refusal. And when wires are
attached to or extend over any building or land no lapse
of time will justify a presumption, of any perpetual right
to such attachment or extension.2 In case of the refusal
of the owners of the soil to consent to the use of the
soil of the roadway in front of their property for the
erection of poles, then the company has the full right to
exercise the power and to take proceedings to condemn.³
Telegraph companies may lay wires underground subject
to the same provisions and restrictions.
Condemnation of property.-Water companies are
given the power to condemn lands and the right of way
to lay their pipes below the public roads and streets free
from all charge from any person or body politic for the
privilege. And any aqueduct company in existence under
any special charter has the right from time to time to add
to or extend its works, and for that purpose to take lands
and streams of water.5
Telegraph and telephone companies in case of disagree-
ment with the owners of the soil as to the terms of the
erection or construction of their lines, either overhead or
underground, may proceed to condemn the same."
The property and franchises of one company may be
condemned for the use of another for a different purpose
by express authority of the legislature, but not for the
1
Sup. Rev., pp. 1022-1023. See Winter c. N. Y. & N. J. Tel. Co., 51
N. J. L. 83, and cases cited.
Laws, 1884, p. 239 (Sup. Rev., p. 1023).
3 Rev.. p. 174; Sup. Rev., p. 1022; Laws, 1890, p. 489; State, Duke, pros.,
v. Central N. J. Tel. Co., 53 N. J. L. 341.
Sup. Rev., pp. 650, 653.
5 For the latest discussion of the nature of the franchises conferred
by this act and the question whether it is exclusive or not, see Atl. City
Water-Works Co. v. Consumers' Water Co., 44 N. J. Eq. 427; 51 N. J.
L. 420.
6 Laws, 1880; p. 201 (Sup. Rev., p. 1022); Laws, 1890, p. 489; Laws,
1882, p. 240 (Sup. Rev., p. 1023).
'Milnor e. N. J. R. R. Co., 6 Am. Law Reg. 6.
1404
ECONOMIC LEGISLATION.
same purpose and to be used by another in the same
manner.¹ The right to cross a railroad or some insignifi-
cant interference with the rights or property of another
corporation may be given incidentally and by implication,
but if the taking involves the exclusive use of lands
already condemned and in use by another company, it is not
authorized by a general grant of powers of condemnation.'
Duration of franchise; renewal of.-As to duration
and extension of corporate existence, see "DURATION,"
SUBDIVISION II.
2
Conflicting grants.-Permission having been given by
the municipality under legislative authority to exercise a
franchise in the streets, and having been acted on by lay-
ing rails or the like, vested rights are acquired which can
not be taken away by the revocation of the permission,
and the same route can not be used by another company
without compensation. A railroad company, for example,
having laid its rails under such permission, another com-
pany can
not use them without compensation, even
though it also has the right under its charter to use the
same street.³ One company having been granted the joint
use of a street with another, its right is vested, and can
not be declared forfeited by the city for failure to agree
upon the terms of payment.3 So also when a horse rail-
way company has lawfully laid its rails in a street, it is
not lawful for a rival company to use them by running
cars or omnibuses upon them at regular intervals so as to
interfere with its business.*
¹N. J. S. R. R. Co. v. Long Branch Comm'rs, 39 N. J. L. 28; DeCamp
v. Hibernia Underground R. R. Co., 47 N. J. L. 43; Lehigh Valley R. R.
Co. v. Orange Water Co., 42 N. J. Eq. 205; Lehigh Valley R. R. Co. v.
Dover & Rockaway R. R. Co., 43 N. J. L. 528; State, Jersey v. Montclair
R. R. Co., 35 N. J. L. 328.
2 M. & E. R. R. Co. v. Blair, 9 N. J. L. (1 Stock.) 635; N. J. S. R. R. Co.
v. Long Branch Comm'rs, 39 N. J. L. 28.
3 Jersey City & Bergen R. R. Co. v. J. C. & Hoboken H. R. R. Co., 20
N. J. Eq. 61; s. c. on appeal, 21 N. J. Eq. 550.
Jersey City & Bergen R. R. Co. v. J. C. & Hoboken H. R. R. Co., 20
NEW JERSEY.
1405
Perpetual and exclusive franchises.-The constitu-
tion forbids the legislature "granting to any corporation,
association, or individual any exclusive privilege, immu-
nity, or franchise whatever" by private, local, or special
acts.¹
The legislature may grant a perpetual and exclusive
franchise, but only by means of general laws and subject
to repeal. The municipalities can not grant exclusive or
perpetual franchises unless expressly authorized to do so
by the legislature, but the franchise once granted, if it
has been acted on and money has been spent on the faith
of it, can not be withdrawn by the municipality.2
Exclusive franchises granted by the legislature under
general laws and consented to by the cities may therefore
be exclusive in favor of those who have acted upon them
and expended money, and often such a franchise is, in the
nature of things, to a greater or less extent exclusive.
Such franchises may be perpetual, subject to the right of
the legislature to repeal or alter the act.
No street railway can be constructed in the same street
or highway in which a street railway is constructed or
operated within a thousand feet of said railway, nor par-
allel therewith within less than two blocks thereof for a
greater distance than two hundred feet, without the writ-
ten consent of the company operating the said railway,
except to cross the same.³
3
It has been held that two or more water companies may
be formed under the statute in any of the localities to
N. J. Eq. 61-73; Citizen Coach Co. v. Camden Horse R. R. Co., 29 N. J.
Eq. 299.
1 Const. Art. IV, sec. 7, par. 11; Atlantic City Water Works Co. v. At-
lantic City, 39 N. J. Eq. 367.
2 Atlantic City Water Works . Atlantic City, 39 N. J. Eq. 367; Hud-
son Tel. Co. v. Jersey City, 49 N. J. L. 303; Jersey City & Bergen R. R.
Co. v. Jersey City & Hoboken H. R. R. Co., 20 N. J. Eq. 61; s. c. on
Appeal, 21 N. J. Eq. 550.
3 Laws, 1886, p. 185 (Sup. Rev., p. 363).
1406
ECONOMIC LEGISLATION.
which it applies, and each may acquire the same right to
make use of the public highways in conducting its busi-
ness.¹
1
Charges for franchises.-The municipality has no
right to impose a tax upon a franchise corporation under
color of a license fee. It has power to exact license fees,
but they must be for the purpose of regulating, and can
not be used either as a means of prohibiting the use of
the franchise or for the purpose of raising a revenue.
The power to license is a police power and must be exer-
cised for regulating. It is wholly distinct from the power
of taxation.2
It is usual for the towns to require conditions as the
price of their consent. There is no doubt of their power
to require as a condition obedience to ordinances within
the ordinary municipal powers, and to make express con-
ditions as to paving the streets between the rails and
making the rails conform to grade, replacing pavements
after laying pipes, keeping the streets in repair, limiting
the rate of speed, and the like; but since they can not
use the power to license as a means of levying a tax, it is
doubtful whether they can, without special legislative au-
thority, insist on the payment of money out of income or
otherwise as the price of their consent, even though the
power to consent goes to the use of the streets and is not
confined expressly to a designation of the streets. But
whether municipalities have this right or not, they have
in some cases persuaded street railway companies to agree
to pay a certain percentage of their net earnings to the
1 For the latest discussion on the nature of the franchises conferred
by this act and the question whether it is exclusive or not, see Atlantic
City Water Works Co. v. Consumers' Water Co., 44 N. J. Eq. 427.
State, Clark, pros., v. New Brunswick, 43 N. J. L. 175; Muhlenbrinck
v. Comm'rs, 42 N. J. L. 364; State, North Hudson Co. R. R. Co., pros.,
v. Hoboken, 41 N. J. L. 71.
³ State, North Hudson R. R. Co., pros. v. Hoboken, 41 N. J. L. 71.
* Jersey City & Bergen R. R. Co. v. J. C. & H. R. R. Co., 20 N. J. Eq.
61-73.
F
i
NEW JERSEY.
1407
city in consideration of permission to erect poles and
wires in the streets for the electric railway.
There is no statute in New Jersey giving municipalities
power to sell by public auction the franchise or privilege.
of using the streets for street railways, and without such
a statute such a power could not be exercised. The streets
belong to the public, and not to the municipality, and the
public is represented by the legislature and not the city
council.¹
Methods of construction. As to the general power
of municipalities to regulate and control, see "POWERS OF
MUNICIPALITIES AS TO," above.
The authority to prescribe methods of construction, and
provide for inspection from time to time, is lodged in the
legislature, but is not generally exercised. No board of
commissioners has been appointed to have control over
street railroads, and only recently has a commission been
provided for to take charge of electric wires in cities."
The power of the legislature may be delegated to munici-
palities, and it is frequently exercised under the right to
regulate streets, and by virtue of the power to withhold
consent to the use of the streets. The regulation is usu-
ally confined to the materials and to the original construc-
tion, and no claim is made to a right of inspection of
service. Whether changes in construction can be insisted
on after the work is completed, is a question that can not
be answered in general terms. The company has a right
of property in its franchise and in its materials, and
change of construction can not be ordered arbitrarily; but
the city has the police power, and the power to regulate
streets and prevent nuisances, and although it can not
make a structure illegal by withdrawing consent once.
given, it may remove any thing not erected in accordance
with the permission given.
¹ Morris & Essex R. R. v. Newark, 10 N. J. Eq. (2 Stock.) 352, 363;
Domestic Tel. Co. v. Newark, 49 N. J. L. 344, 346.
2 Laws, 1892, ch. 48.
1408
ECONOMIC LEGISLATION.
Electric light, heat, and power companies, before erect-
ing poles or posts in the streets of an incorporated city or
town, must obtain a designation of the streets in which
the same are to be placed, and the manner of placing the
same; and such posts must be so located as in no way to
interfere with the safety or convenience of travelers, and
the street must be subject to such regulations as may be
first imposed by the corporate authorities. Underground
conduits and pipes are subject to similar conditions; and
all such electric wires must be laid the greatest practicable
distance from the outside of any water or gas pipe already
laid down, the distance to be not less than three feet ex-
cept where it is necessary for the wires to cross the pipes.¹
There are similar provisions relating especially to cities
of the second and third classes, that is, cities having a
population of less than one hundred thousand, not includ-
ing summer or sea-shore resorts binding on the Atlantic
ocean.2
The legislature of 1892 passed an act entitled "An act
providing for the placing of electrical conductors under
ground in cities of this state, and for the creation of a
state board of electrical subways." It provides for the
appointment by the governor of a board of three commis-
sioners, and makes it their duty "to examine the manner
in which telegraphic, telephonic, and electric light wires,
and all other wires and cables, are constructed and used in
the cities in this state, and provides that wherever, in the
judgment of such commissioners, which shall be final, the
public welfare will be advanced by the removal of any
such wires, or of the poles commonly known as telegraph
poles, or other poles used for the support of electric wires,
from the surface of any street, avenue, or public highway
in any city of this state, it shall be the duty of such com-
missioners to order such poles and wires removed from the
1
¹ Laws, 1884, pp. 94, 331 (Sup. Rev., pp. 163, 742).
2 Sup. Rev., p. 742; Laws, 1884, p. 94.
³ Laws, 1892, ch. 48.
NEW JERSEY.
1409
surface of such streets or highways, and to further order
that such wires shall be placed under the streets or high-
ways of such city."
Telegraph and telephone companies using underground
cables instead of posts and poles, are subject to all legal
restrictions concerning the use of roads, highways, and
streets.¹
1
Gas pipes must be laid as far as practicable from
water pipes, and at least four feet, except at crossings,
where the gas pipe must cross below the water pipe at
right angles, and at a distance of at least twelve inches.²
Companies organized for the distribution of steam heat
and power are required to lay their pipes at least two feet
below the surface, and so as not unnecessarily to obstruct
or interfere with public travel or damage public or private
property. The use of the streets is subject to the regula-
tions and restrictions of the council, and the pipes must
be at least three feet from water pipes, except where they
cross them, and there they must be at least twelve inches
distant.3
The pipes of water companies are required to be at least
three feet below the surface, and not unnecessarily to in-
terfere with public travel or damage private or public
property."
4
A municipal corporation may pass ordinances requiring
a horse railway to make its tracks conform to the grade
of the street, to keep in repair the space between (and ad-
joining) the rails, to remove snow and the like, since such
regulations do not appreciably interfere with the fran-
chise, but the city can not make such changes as affect
the franchise or take away the property of the com-
pany.
5
2 Rev., pp. 460–463.
Sup. Rev., pp. 650, 653.
Laws, 1882, p. 241 (Sup. Rev., p. 1023).
Laws, 1887, p. 238.
State, North Hudson Co. R. R. Co., pros., v. Hoboken, 41 N. J. L. 71.
* Jersey City & Bergen R. R. Co. v. J. C. & Hoboken H. R. R. Co., 20
N. J. Eq. 61-73, and other cases cited.
1410
ECONOMIC LEGISLATION.
The statute provides that every railway company incor-
porated under the laws of this state then operating a street
railroad by horse power may construct and maintain one
or more elevated railroads over the streets or highways to
be operated by means of a wire rope or cable, and not by
locomotive steam engines. The elevated roads must be so
constructed as not to interfere with the use of any public
sewer, water pipe or any other public work, nor with ordi-
nary public travel, except to such an extent as may be un-
avoidable, and no elevated road may be constructed over
any street or highway without the consent of the munici-
pal authorities and the consent in writing of the owners
of at least one-half of the property fronting on the street,
and without payment of damages, if any, to owners who
have not given their consent.'
Regulations as to service.-As to the general power
of municipalities to regulate and control, see under "Pow-
ERS OF MUNICIPALITIES AS TO," above.
Whether a company organized for any public purpose
may change the methods employed to accomplish it de-
pends upon the nature of its franchise for the use of the
streets. Apart from this, a corporation may use what
methods it pleases to accomplish the object for which it
was incorporated.
Gas companies and electric light companies acquire their
local privileges under different statutes, and there is no
provision authorizing one kind of company to use the
means employed by the other for furnishing light, and it
is also probable that a change from manufacturing gas to
generating electricity would be held to be a change in the
object of the company, which could not be made without
the consent of the stockholders.
The quality of gas supplied by any company organized
under the general act must be, with respect to its illumi-
nating powers, such as to produce from an English par-
¹ Laws, 1886, p. 126. See also acts of 1878, p. 33; Laws, 1883, p. 241;
Laws, 1886, pp. 339, 69; Laws, 1882, p. 43.
1
NEW JERSEY.
1411
liamentary standard argand burner, known as the London
burner for sixteen candle gas, consuming five cubic feet
of gas an hour, a light equal in intensity to the light pro-
duced by not less than fourteen sperm candles of six to
the pound, each burning one hundred and twenty grains
an hour; and such gas must, with respect to its purity, be
so far free from sulphuretted hydrogen that it shall not
discolor paper imbued with acetate of lead, when these
tests are exposed to a current of gas, issuing for thirty
seconds, under a pressure of five-tenths of water; and
must not contain more than one per cent of carbonic acid
gas, nor more than two per cent of carbonic oxide gas,
nor more than ten per cent of hydrogen gas, under a
penalty of one hundred dollars a day for each and every
day that the gas supplied is not in accordance with these
requirements, to be sued for and recovered, with costs of
suit, on complaint in any court of competent jurisdiction,
the one-half of such penalty to be paid into the treasury
and for the use of the town or city where the works of
such company are located, the other half to the com-
plainant.'
Any street railway company may use electric or chem-
ical motors or grip cables as the propelling power of its
cars instead of horses, but must first obtain the consent of
the municipal authorities having charge of the public.
highways or streets on which it is proposed to use such
motors or grip cables.2
As to rates for service.-There is no period fixed for which
¹ Laws, 1877, p. 106, ch. 70 (Sup. Rev., p. 326).
2
Laws, 1886, p. 69, ch. 53, sec. 2 (Sup. Rev., p. 369.)
The court of chancery has held that this authorizes the use of the
overhead electric system. Halsey v. Rapid Transit St. Ry. Co., 47 N. J.
Eq. 380; but the supreme court has held that it does not. State,
Green, pros. v. Trenton, 23 Atl. Rep. 281 (15 N. J. Law Jour. 39); State,
Halsey, pros. v. Newark, 23 Atl. Rep. 284 (15 N. J. Law Jour. 45), with
note stating the facts and citing cases. See, also, Electric Wires in
Streets and Highways, by Edward Q. Keasbey. Callaghan & Co., Chi-
cago, 1892. Chapter II, secs. 19, 20.
1412
ECONOMIC LEGISLATION.
*
rates may be established without being subject to change,
and all general laws under which franchises are granted
are subject to repeal at any time by the legislature.
When tolls are made expressly subject to municipal or-
dinance, the municipality has the same control the legis-
lature had; but if the tolls and fares are not expressly
mentioned, it may well be doubted whether a general
provision that the company should comply with all the
ordinances would put it in the power of the city to injure
or destroy the franchise by reducing the tolls or charges.
The scope of city ordinances is regulation and control of
the streets.
It would seem that, in granting consent, the council can
not impose conditions that affect the franchise granted, as,
for instance, prescribing the rates of fare or the manner
of running cars, etc. Special charters usually fix the
rates of fare or toll, and in that case they can not be af-
fected by municipal ordinances.¹
Where rates of toll or fare are fixed by the legislature,
they can not be affected by municipal action.' If a com-
pany has a right to lay rails and operate a horse railway
without the consent of the city, the city can not prescribe
the mode and time of running cars, nor require a license
to be taken out.2
In cities of the first class, namely, having over 100,000
inhabitants, the fare on horse railways is limited to five
cents.3
Discrimination in service; refusal to render service.
Whether or not the statute providing for the incorporation
of a company for public purposes with a municipal fran-
chise expressly provides for service to be rendered to all
1
¹ Jersey City & Bergen R. R. Co. v. J. C. & Hoboken R. R. Co., 20 N.
J. Eq. 61-73; s. c. on appeal, 21 N. J. Eq. 550; State, N. J. R. R. Co.,
pros., v. Jersey City, 29 N. J. L. 170; State, H. & W. R. R. Co., pros., ".
Hoboken, 30 N. J. L. 225.
2 State, Hoboken & Weehawken Horse Ry., pros., v. Hoboken, 30 N. J.
L. 225.
3
Laws, 1882, ch. 141 (Sup. Rev., p. 741).
NEW JERSEY.
1413
alike, it is held that this duty is implied in the acceptance
of the right of eminent domain. The right of eminent
domain is only given for public uses, and this involves the
duty to serve the public equally.¹
The principle of these cases applies to refusal to render
service. Public companies given the right of eminent
domain have no right to refuse to perform the duty of
rendering public service, and a refusal would render them.
liable to proceedings for the revocation of their charters.²
Gas companies are forbidden by statute to refuse to sup-
ply gas because of the gas bill of a former owner of the
premises being unpaid.³
The civil rights act of May 10, 1884 (Supp. Rev. 113),
provides that all persons within the jurisdiction of New
Jersey shall be entitled to the full and equal enjoyment
of the accommodations, advantages, etc., of inns, public
conveyances on land and water, theaters and other places
of public amusement.
State and municipal aid. There have been no in-
stances for many years in this state of state aid to railroad
or telegraph, or other "franchise companies," but there
have been many cases in which townships have issued
bonds under legislative authority in aid of the construc-
tion of railroads. This legislation has not been extended
so as to apply to street railways, telegraph, telephone,
electric light companies, or other corporations holding
municipal franchises.
For cases of municipal ownership of stock in franchise
companies, see under SUBDIVISION IV.
¹ Scudder v. Trenton Falls Co., 1 N. J. Eq. 694, 729; Turnpike Co. v.
News Co., 43 N. J. L. 382; Nat. Docks R'y Co. v. Central R. R. Co., 32
N. J. Eq. 755; Olmsted v. Proprietors of the Morris Aqueduct, 47 N. J.
L. 311-333, disapproving Paterson Gas Light Co. v. Brady, 27 N. J. L.
(3 Dutch.) 245.
Turnpike Co. v. News Co., 43 N. J. L. 381; Nat. Docks R'y Co. v.
Central R. R. Co., 32 N. J. Eq. 755; Olmsted v. Props. of the Morris Co.
Aqueduct, 47 N. J. L. 311–333.
3 Laws, 1879, p. 316, Sup. Rev., p. 327.
1414
ECONOMIC LEGISLATION.
1
Public service.-Municipalities have statutory author-
ity to make contracts with gas, water, electric light, and
telephone and telegraph companies, to render service to
the municipality in lighting the streets, furnishing water
for fires, and sending messages to the police stations and
fire engine houses, etc.'
Municipal corporations are now authorized to enter into
contracts with water companies to furnish water for public
purposes for a year or term of years not exceeding twenty-
five years in any one term;2 but it has been held in the
court of errors and appeals that before the passage of the
act of March 15, 1881 (Laws, 1881, p. 118), it was criminal
to incur a present obligation for a continuing supply of
water in excess of the appropriations limited by ordinance,
and that a contract so entered into was void.³ The pipes
may be laid at the expense of the municipality, which is
authorized to issue bonds to pay for them, and the water
rates may be collected by the town. The town may also
contract to supply other towns which are not otherwise
supplied.*
In a general act providing a charter to be accepted by
cities having between six and ten thousand inhabitants,
passed March 12, 1879,5 it is provided that any individual,
firm, or corporation organized for that purpose, may con-
tract with the said city to construct and maintain water-
works for the purpose of supplying water for public and
private purposes-no contract to be entered into without
the affirmative vote of not less than four-fifths of the com-
mon council. The term of the contract is not to exceed
¹ See Sup. Rev., Title "Municipal Corporations.”
2 Sup. Rev., p. 654; Laws, 1881, p. 118; amended Laws, 1884, p. 324;
Laws, 1888, ch. 250; Laws, 1876, p. 318; authorizing the formation of
water companies.
3 Atlantic City Water Works Co. v. Read, 50 N. J. L. 665. See also
Atlantic City Water Works Co. v. Consumers' Water Co., 44 N. J. Eq. 427.
4 Sup. Rev., p. 654; Laws, 1881, p. 118, and supplement of April 17,
1884, Laws, 1884. p. 194.
5 Laws, 1879, p. 123; Sup. Rev., p. 746.
NEW JERSEY.
1415
thirty years, and at the end of the term, if the renewal
can not be agreed upon, then the city may purchase the
works at full valuation, to be determined by arbitration.
Alteration, amendment, etc., of franchises.-See un-
"PERPETUAL AND EXCLUSIVE FRANCHISES," and "PowerS
OF MUNICIPALITIES AS TO," above.
Under the present constitution, all statutes conferring
franchises and privileges are subject to repeal; before
the amendment of 1875, grants by the legislature, if they
amounted to contracts, could not be repealed without vio-
lating the constitution of the United States in regard to
impairing the obligation of contracts. The city can not
make changes which affect the franchise or take away
the property of the company.2
1
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
Historical.—The legislation of New Jersey shows no
tendency in the direction of acquiring ownership of the
corporate property of franchise companies or carrying on
these industries.
There is no question as to the constitutional power to
provide for such ownership by legislation, and in the
early period of the formation of corporations such as
those here under consideration, it was evidently expected
that such ownership might become the settled policy of
the state.
An act to incorporate the contributors to the Society
for the Encouragement of Useful Manufactures and for
the further encouragement of said society, passed Novem-
ber 22, 1791, contained elaborate provisions for the estab
lishment of a system of manufactures with special refer-
ence to the utilization of the great water power of the
city of Paterson. Three days after the passage of the
¹ State Board of Assessors v. Morris & Essex R. R. Co., 49 N. J. L. 193.
' Jersey City & Bergen R. R. Co. v. J. C. & Hoboken H. R. R. Co., 20
N. J. Eq. 61-73, and other cases cited under "POWERS OF MUNICIPALI-
TIES AS TO" and "REGULATIONS AS TO SERVICE."
1416
ECONOMIC LEGISLATION.
1
act, an act was passed authorizing the governor to make
a subscription, on the part of and for the use of the state,
of one hundred shares of stock of the company.
The act incorporating the Bordentown Water Company
was passed in 1835, and in the following year (Laws,
1836, p. 283) a supplement was passed, providing that, at
any time after twenty years from the passage of the act,
the borough of Bordentown, in its corporate capacity,
might acquire all the rights of the company by paying
first cost therefor with interest thereon. In 1849, another
corporation was organized to supply water to the borough
of Bordentown, and in this, as in the earlier one, a provision
was made, giving the borough the right, at any time after
twenty years from the passage of the act, to take the
property of the company by paying first cost and interest.'
In 1848, a company was formed for more effectually
supplying the city of Trenton and the borough of South
Trenton with water, and the eleventh section of the act
empowered the common council of the city of Trenton
to subscribe for one-half of the capital stock of the com-
pany, and gave the burgesses of South Trenton the like
privilege to an amount not exceeding one-quarter of the
stock.2
The city of Newark, in 1860, by an act passed March
20th, was authorized to acquire and own the property of
the Newark Aqueduct Company.3
The later general statutes, in regard to the supply of
water for public purposes, give cities and towns the
power either to make contracts with private companies or
with other cities, or to control and own water-works and
sources of supply and to lay pipes and distribute the water
themselves.
Under the various water-works acts, the city of Newark
recently entered into a contract for the control of an in-
definite supply of water in a large water-shed in the
3 Laws, 1860, p. 442.
¹ Laws, 1849, p. 286. 2 Laws, 1848, p. 109.
NEW JERSEY.
1417
northern part of the state, and for the construction of
reservoirs and the laying of pipes, the city either to take
the water at so much a million gallons for a period of
twenty-five years, or else to exercise the option to pur-
chase the reservoirs and pipes with a supply of fifty
million gallons daily for $6,000,000. A bill has been in-
troduced into the present legislature for the purpose of
giving other cities power to condemn and use a part of the
same source of supply and to construct pipes and reser-
voirs of their own.
By an act passed April 14, 1868, the mayor and alder-
men of the city of Paterson were authorized to subscribe
for and to hold stock in the Citizens' Gas Light Company
of Paterson to such an amount as they may by ordinance
prescribe, not exceeding twenty-five thousand dollars, and
to provide for the payment thereof by tax to be assessed
and collected.' As a matter of fact, these powers were
never exercised, and so far as known there is no in-
stance of municipal ownership of gas-works within this
state.
With these exceptions and the exception of the gen-
eral laws given below, it is not thought there are any stat-
utes in New Jersey authorizing cities to purchase or ac-
quire works for supplying gas or electric light or heat and
power, or to purchase and operate street railways, or carry
on any industrial or commercial business for public pur-
poses with public funds except for the supply of water.
Power to erect or purchase.-There is nothing in the
constitution to forbid legislation for the purpose of allow-
ing cities to own any public works, but such legislation
must now be general in its character and apply to all cit-
ies alike or to all which come within any reasonable
classification germane to the subject-matter of the legis-
lation.
Municipal corporations in New Jersey have not at-
1 ¹ Laws, 1868, p. 984.
VOL. II-9
1418
ECONOMIC LEGISLATION.
tempted to acquire the ownership of industrial works for
the public account without express legislative authority,
and there are no decisions in New Jersey on the question
whether they have power to do so under statutes giving
power generally to provide for a water supply, for lighting
the streets, and similar public needs.
Incorporated cities are authorized to take and convey
from such source as may be practicable water for domes-
tic and public purposes, and to this end to purchase or con-
demn existing water-works within the city and other prop-
erty and water rights, to construct reservoirs, canals, ba-
sins, stand pipes, buildings and machinery, and lay and'
relay pipes in the streets.' So also incorporated towns and
incorporated boroughs, camp-meeting associations and
other municipal commissions are authorized to purchase
and condemn lands and water rights, construct reservoirs,
aqueducts and apparatus, and lay pipes through the
streets.3
2
The statutes authorizing this do not become operative.
with respect to any city, town, or other municipality un-
til assented to by a majority of the legal voters thereof at
a special election.
Cities are authorized to borrow any sum not exceeding
ten hundred thousand dollars for the purpose of defraying
all the expenses and the cost of the purchase of real es-
tate, works, property rights, and franchises of an existing
water company, and of such other lands, buildings, privi-
leges, and appurtenances as may be purchased or taken,
and for the purchase of materials and construction of
works. For this purpose they may issue bonds. And by
the act of May 14, 1889, it is provided that where in any
2
¹ Rev., p. 720; Sup. Rev., p. 665; Laws, 1876, p. 366.
Sup. Rev., p. 659, sec. 746; Laws, 1884 (act of March 5).
Sup. Rev., p. 664, sec. 767; Laws, 1885, p. 54. See also Laws, 1887,
ch. 27.
4
Sup. Rev., p. 669, sec. 783; Laws, 1876, p. 366, amended Laws, 1877,
p. 119.
1
NEW JERSEY.
1419
city a contract has been or shall be made for the purchase
of water rights and property under the act of April 2,
1888 (Laws, ch. 250), it shall be lawful to issue bonds for
not less than twenty nor more than thirty years, provided
that the whole amount of the bonded indebtedness of the
city shall not exceed fifteen per cent of the total assessed
value of the real and personal property of the city; the
securities held in the sinking fund not being reckoned in
the indebtedness.'
Cities owning or controlling water-works are authorized
to make contracts with other cities, towns and townships
to supply the public and individual residents with water.2
In cities in which the water-works are owned and con-
trolled by the city authorities, the governing board may
extend their lines for four miles beyond the limits of the
city to supply individual consumers, and may make con-
tracts for the use of fire hydrants with the public authori-
ties of the township or municipal corporation into which
the mains are extended.³
In towns, boroughs, corporations, camp-meeting associa-
tions or other municipal commissions the board of water
commissioners is authorized, after an affirmative vote of the
legal electors, to expend a sum not exceeding $100,000, and
to issue bonds therefor, for the purpose of constructing
water-works, reservoirs, apparatus and fixtures necessary to
furnish a water supply. They may also purchase streams,
wells, reservoirs, aqueducts and fixtures, and a system or
partial system of water-works owned by any person or
corporation and consolidate it with the system of the
town.
4
Cities and towns not owning or controlling their own
water-works are authorized to execute contracts from time
Laws, 1889, ch. 292.
Sup. Rev., p. 672, sec. 800; Laws, 1885, p. 267.
3 Sup. Rev., p. 676, sec. 818; Laws, 1882, p. 83.
* Laws, 1887, ch. 27.
}
1420
ECONOMIC LEGISLATION.
to time with any other city having water-works for a sup-
ply of water for public and private use.¹
The purchase of gas-works by cities having a population
of less than three thousand inhabitants is authorized,
provided the gas-works shall have been in operation five
years.2
Examples of the exercise of ownership.-The follow-
ing municipalities own their water works: Asbury Park,
works built by village, June 30, 1886; Bayonne, supplied
in 1882; plant owned by city, water supplied by Jersey
City Water-works; Bridgeton, works built 1877-78; Bur-
lington, works built in 1804, purchased by the city in 1877
and extended; Camden, works built by private company
in 1860 and bought by the city in 1870; Cape May, works
built by the city in 1874; Gloucester City, built by the city
in 1883-4; Hackettstown, built by the village in 1860;
Jersey City, built by the city in 1852; Kearney, built by
the township in 1887; Newark, purchased by the city in
1860; New Brunswick, built by the city in 1876; Orange,
built by the city in 1883; Rahway, built by the city in
1871-2; Redbank, finished by the town in 1885; Salem,
built by the city in 1882; Trenton, purchased by city and
rebuilt in 1855; Woodbury, built by village in 1886.
¹ Sup. Rev., p. 658, sec. 741; Laws, 1879, p. 223; Sup. Rev., p. 672, sec.
801; Laws, 1886, p. 272; Laws, 1887, ch. 13.
'Sup. Rev., p. 743, sec. 1188; Laws, 1878, p. 339.
:
1
NEW YORK.¹
EDITED BY JAMES W. EATON, ATT'Y, ALBANY, N. Y.
SUBDIVISION I.-HISTORICAL.
The history of New York legislation, affecting public
franchises which involve the use of the public highways,
probably has something like a parallel in the history of
legislation in almost every other state. But the vastness
of the corporate interests here and the extent to which
undertakings involving the use of the public highways
have been carried, and the consequent body of statute law
and judicial interpretation, make such a history of special
interest and importance. In the early days before the
great scientific and economic results of modern inventive
genius had yet become known, municipal franchises for
the exercise of quasi public uses were lightly given away
by public authorities and were easily obtained. The in-
troduction of modern methods of transportation, the use
of
gas and electricity, the invention of the telegraph and
¹ Unless otherwise stated, references to the constitution are to that of
1846. References to the Revised Statutes of New York, enacted in 1830,
are designated by the letters "R. S.," with the number of the original
volume prefixed, and the original paging following, or by the part, chap-
ter, title, and section. Unofficial editions of the Revised Statutes, con-
taining subsequent legislation, have been compiled by private enterprise
from time to time, the one most generally known being Banks & Broth-
ers, the eighth edition of which was published in 1889. There is a very
late and very comprehensive compilation of the statutes, edited by
Clarence F. Birdseye, called Birdseye's Revised Statutes. These compi-
lations are designated as Banks and Birdseye, respectively. Session
laws are referred to as "Laws” of the respective years. The page where
found, in the eighth edition of Banks or Birdseye, is also given. As to
state reports, see Appendix “A."
(1421)
1420
ECONOMIC LEGISLATION.
to time with any other city having water-works for a sup-
ply of water for public and private use.¹
1
The purchase of gas-works by cities having a population
of less than three thousand inhabitants is authorized,
provided the gas-works shall have been in operation five
years.2
Examples of the exercise of ownership.-The follow-
ing municipalities own their water works: Asbury Park,
works built by village, June 30, 1886; Bayonne, supplied
in 1882; plaut owned by city, water supplied by Jersey
City Water-works; Bridgeton, works built 1877-78; Bur-
lington, works built in 1804, purchased by the city in 1877
and extended; Camden, works built by private company
in 1860 and bought by the city in 1870; Cape May, works
built by the city in 1874; Gloucester City, built by the city
in 1883-4; Hackettstown, built by the village in 1860;
Jersey City, built by the city in 1852; Kearney, built by
the township in 1887; Newark, purchased by the city in
1860; New Brunswick, built by the city in 1876; Orange,
built by the city in 1883; Rahway, built by the city in
1871-2; Redbank, finished by the town in 1885; Salem,
built by the city in 1882; Trenton, purchased by city and
rebuilt in 1855; Woodbury, built by village in 1886.
Sup. Rev., p. 658, sec. 741; Laws, 1879, p. 223; Sup. Rev., p. 672, sec.
801; Laws, 1886, p. 272; Laws, 1887, ch. 13.
2 Sup. Rev., p. 743, sec. 1188; Laws, 1878, p. 339.
1
NEW YORK.¹
EDITED BY JAMES W. EATON, ATT'Y, ALBANY, N. Y.
SUBDIVISION I.-HISTORICAL.
The history of New York legislation, affecting public
franchises which involve the use of the public highways,
probably has something like a parallel in the history of
legislation in almost every other state. But the vastness
of the corporate interests here and the extent to which
undertakings involving the use of the public highways
have been carried, and the consequent body of statute law
and judicial interpretation, make such a history of special
interest and importance. In the early days before the
great scientific and economic results of modern inventive
genius had yet become known, municipal franchises for
the exercise of quasi public uses were lightly given away
by public authorities and were easily obtained. The in-
troduction of modern methods of transportation, the use
of
gas and electricity, the invention of the telegraph and
1 Unless otherwise stated, references to the constitution are to that of
1846. References to the Revised Statutes of New York, enacted in 1830,
are designated by the letters "R. S.," with the number of the original
volume prefixed, and the original paging following, or by the part, chap-
ter, title, and section. Unofficial editions of the Revised Statutes, con-
taining subsequent legislation, have been compiled by private enterprise
from time to time, the one most generally known being Banks & Broth-
ers, the eighth edition of which was published in 1889. There is a very
late and very comprehensive compilation of the statutes, edited by
Clarence F. Birdseye, called Birdseye's Revised Statutes. These compi-
lations are designated as Banks and Birdseye, respectively. Session
laws are referred to as “Laws” of the respective years. The page where
found, in the eighth edition of Banks or Birdseye, is also given. As to
state reports, see Appendix “A.”
(1421)
1422
ECONOMIC LEGISLATION.
telephone, all leading to the investment of large amounts
of capital, have resulted in conflicting rights, giving rise
to an extremely complicated system of legal rules which
may be grouped under the head of the law of municipal
franchises. Gradually, too, the rapacity and greed of in-
dividuals and corporations to whom such franchises have
been granted, have led to a change in policy, in the direc-
tion of greater restriction imposed upon the grantees, and,
in some cases, to provisions that no franchise of this na-
ture should be granted, except for a valuable considera-
tion. So that, instead of the former spectacle of compa-
nies receiving franchises of great value, with hardly any
restriction upon their exercise, there is a marked tendency
now to rigidly insist upon the right of the state or the
right of the municipalities to receive compensation for
every privilege granted. This tendency is illustrated by
the recent street surface railway legislation requiring the
sale of franchises at auction to the highest bidder. These
changes in policy will be best shown by reference to the
succeeding portions of this article.
A general revision of the statutes of this state was made
in 1830, in which many provisions of a general nature
relative to corporations were inserted.
Subsequent to the enactment of the Revised Statutes,
many other general acts, including a number of acts ap-
plicable to particular classes of corporations, were passed.
These laws, so far as they applied to corporations, were
mostly modeled more or less closely on one of two general
corporation acts, viz., the manufacturing act of 1848, and
the railroad act of 1850, which have also served as models
for similar legislation in other states.
1
These general acts, with the amendments thereof, passed
from time to time, have been compiled by private enter-
prise, appended to the original Revised Statutes in the
propriate places, and the whole published as unofficial
¹ Laws, 1848, ch. 40; Laws, 1850, ch. 140.
ap-
1
NEW YORK.
1423
editions of the Revised Statutes, but no revision by the
state has been made since that date.
Of late, the necessity for a new official revisions of the
statutes has become very apparent, and steps have been
taken in that direction. In 1889, the legislature appointed
a commission to report on the subject. At the next ses-
sion of the legislature, in 1890, this commission reported a
general scheme of revision or codification which is to be
known as the "General Laws," when completed, and also
reported in extenso a revision of most of the laws applica-
ble to corporations having stock, except moneyed cor-
porations, which is to become part of the new "General
Laws," when completed. The revision of the balance of
the statutory law will be reported in parts in like manner
from time to time.
The report already submitted and passed upon comprises
several chapters which have been passed by the legisla-
ture, and which comprise, among others, the "general
corporation law," the "stock corporation law," the "rail-
road law," and the "transportation corporations law."
These general laws specifically repealed, for the most
part, all other laws relating to the same objects, and went
into effect May 1, 1891. Where it is important, as affect-
ing rights of existing companies, the old provisions
be given.
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation; how obtained.-Corporations in this
state are formed under general laws. These laws were
formerly framed for, and especially adapted to each class
of companies, but at the present time are included gen-
erally under the heads of the general corporation law
(Laws, 1890, ch. 563), applicable to corporations generally;
stock corporation law (Laws, 1890, ch. 564), applicable to
¹ Laws, 1890, ch. 563–569.
2 Laws, 1890, ch. 566, sec. 163.
1424
ECONOMIC LEGISLATION.
all stock companies except moneyed corporations;¹ rail-
road law (Laws, 1890, ch. 565), applicable to railroads,
street surface railways, and "other railroads in cities and
counties;" the transportation corporations law (Laws, 1890,
ch. 566), applicable to telephone, telegraph, gas, and elec-
tric light, water-works, pipe-lines, and other kindred com-
panies; the rapid transit act (Laws, 1891, ch. 4), applicable
to elevated railways in cities of over one million inhab-
itants (at present time New York City).
Besides the general acts affecting these different classes
of corporations, there are a number of special acts under
which franchise companies of long standing have been
incorporated, but by the constitution of 1846, corporations
can not now be created by special act except for munici-
pal purposes, and in cases where in the judgment of the
legislature the objects of the corporation can not be at-
tained under general laws.2
3
Articles or certificate of incorporation.—Incorpora-
tion is secured in every instance by the execution of a
certificate or articles of incorporation, which must be duly
acknowledged and filed as stated below.
No certificate of a proposed corporation can be filed or
recorded, having the same name as an existing domestic
corporation, or a name so nearly resembling it as to be
calculated to deceive, but a new or re-organized corpora-
tion may have the same name as the corporation to whose
franchise it has succeeded.5
Number of incorporators, and objects for which incor-
porated. Three or more persons may become a corpo-
1 "A stock corporation is a corporation having capital stock divided
into shares. A moneyed corporation is a corporation having banking
powers, or the power to make loans upon pledges or deposits, or author-
ized by law to make insurances." (Laws, 1890, ch. 563, sec. 2).
2 Const., Art. VIII, sec. 1.
³ Execution of articles consists in signing.
• See references under the various companies, "Number of Incorpo-
rators, etc.," below.
5 Laws, 1890, ch. 563, sec. 4.
NEW YORK.
1425
ration for manufacturing and supplying gas for lighting
the streets and public and private buildings of any city,
village, or town, or two or more villages or towns not over
five miles distant from each other, or for manufacturing
and using electricity for producing tight, heat, or power,
and in lighting streets, avenues, public parks, and places,
and public and private buildings of cities, villages, and
towns, within this state.¹
Seven or more persons may become a corporation for
the purpose of supplying water to any city, town, or vil-
lage, and the inhabitants thereof."
2
Seven or more persons may become a corporation for
the purpose of constructing, owning, using and maintain-
ing lines of electric telegraph or telephone wholly within
or partly beyond the limits of this state, or for the purpose
of owning any interest in any such lines or any grants
therefor.³
Twelve or more persons may become a corporation for
constructing and operating for public use, except in the
city of New York, lines of pipe for conveying or trans-
porting therein petroleum, gas, liquids, or any products or
property, or for maintaining and operating any line of
pipe already constructed and owned by any corporation,
person or persons, except in such city, for the public use.*
Thirteen or more persons may become a corporation for
constructing, maintaining, and operating an elevated tram-
way constructed of poles, piers, wires, rods, ropes, bars, or
chains, for the transportation of freight in suspended
buckets, cars, or other receptacles, for hire."
Fifteen or more persons may become a corporation for
the purpose of building, maintaining, and operating a rail-
road, or of operating a railroad already built not owned
by a railroad corporation, or for both purposes. This in-
3
¹ Laws, 1890, ch. 566, sec. 60.
2 Laws, 1890, ch. 566, sec. 80, as amended, Laws, 1892, ch. 617, sec. 1.
9 Laws, 1890, ch. 566, sec. 100
Laws, 1890, ch. 566, sec. 30.
Laws, 1890, ch. 566, sec. 40.
Laws, 1890, ch. 565, sec. 2.
1426
ECONOMIC LEGISLATION.
cludes street surface railroads for public use in the con-
veyance of persons and property in cars for compensation,
upon and along any street, avenue, road or highway, in
any city, town or village, or in any two or more civil di-
visions of the state, and other railroads (elevated, under-
ground, etc., but not street surface railways) in cities and
counties.¹
Not less than twenty-five persons must duly sign and
acknowledge articles of association to construct and oper-
ate a rapid transit railway in cities of over one million.
inhabitants (New York city), for the conveyance and
transportation of persons and property, and to enjoy and
exercise the rights, privileges, and franchises provided by
chapter 4 of the laws of 1891."
Five or more persons may become a corporation for the
purpose of establishing, maintaining, and operating any
stage or omnibus routes for public use in the conveyance
of persons and property elsewhere than in the city of New
York, or any stage routes already established for a like
public use.³
As to organization of purchasers of the property and
rights of franchise companies under forclosure of mort-
gage, etc., see "BONDS, DEBTS, ETC.," post.
Must show what.-The certificate of a gas or electric
light company must state the name of the corporation;
objects; amount of capital stock; term of its existence, not
to exceed fifty years; number of shares of which the stock
is to consist; number of directors, not less than three nor
more than thirteen; names and residence of the directors for
the first year; and name of the town and county in which
the operations of the corporation are to be carried on."
3
¹ Laws, 1890, ch. 565, secs. 90, 120 et seq.
2 Laws, 1891, ch. 4, secs. 4, 11.
Laws, 1890, ch. 566, sec. 20. Stage coach corporations are not strictly
franchise companies, but are so closely allied to them that the provis-
ions of law affecting them are given.
'Laws, 1890, ch. 566, sec. 60.
NEW YORK.
1427
The certificate of a water-works company must state the
name of the corporation; amount of its capital stock;
number of shares into which it is to be divided; location
of its principal office; number of directors, not less than
seven; names and residence of the directors for the first
year; name of the towns and villages which it is proposed
to supply with water; that the required permit of the au-
thorities of such towns and villages has been granted;
post-office address of each subscriber, and the number of
shares he agrees to take, the aggregate of which must be
at least one-tenth of the capital stock, ten per cent of
which must be paid in cash to the directors. At the time
of filing there must be annexed to the certificate and as a
part thereof, a permit, signed and acknowledged by a ma-
jority of the board of trustees of the village, in case an
incorporated village is to be supplied with water, and in
case a town, or any part thereof, not within an incorpo-
rated village, is to be so supplied, by the supervisor, justice
of the peace, town clerk, and highway commissioners
thereof, or a majority of them, authorizing the formation
of such corporation for the purpose of supplying such
village or town with water, and an affidavit of at least
three of the directors that the required amount of capital
stock has been subscribed and paid in cash.¹
1
The certificate of a telegraph or telephone company
must state the name of the corporation; its general route
and the points to be connected; its capital stock; the
number of shares into which it is to be divided; term of
its existence; the number of its directors not less than
seven; the names and residence of the directors for the
first year; and the post-office address of the subscribers,
and the number of shares which each agrees to take."
The certificate of a pipe-line company must state the
name of the corporation; number of years it is to con-
tinue; places from and to which it is to be operated; its
* Laws, 1890, ch. 566, sec. 100.
¹ Laws, 1890, ch. 566, sec. 80.
1428
ECONOMIC LEGISLATION.
length, as near as may be; name of each county through
or into which it is to be constructed; amount of its capital
stock, not less than fifteen hundred dollars for every mile
of pipe; the number of shares of which it is to consist;
number of directors, not less than seven, and the names.
and residence of the directors for the first year; and the
residence of each subscriber and the number of shares he
agrees to take, which must in the aggregate equal ten
hundred and fifty dollars for every mile of pipe proposed
to be constructed, twenty-five per cent of which must be
paid in cash. Such certificate must have indorsed or ap-
pended as a part thereof, an affidavit made by at least
three of the directors named therein, that stock has been.
subscribed in good faith and paid in as above provided;
´that it is intended in good faith to construct or operate
the line of pipe mentioned in such certificate; and that
such corporation was not projected or formed with the in-
tent or for the purpose of injuring any person or corpora-
tion, nor for the purpose of selling or conveying its fran-
chise to any person or corporation, nor for any fraudulent
purpose.¹
The certificate of incorporation of a tramway company
must state the name of the corporation; number of years
it is to continue; places from and to which such tramway
is to be constructed and operated; its length as near as
may be; name of each county through or into which it is
made; amount of capital stock and number of shares into
which divided; number of directors, not less than three;
names and residence of the directors for the first year;
residence of each subscriber and the number of shares
subscribed.2
The certificates of incorporation of all railroads, includ-
ing street surface railways and other railroads in cities and
towns (elevated, underground, etc.), must state the name of
the corporation; number of years it is to continue; kind of
2 Laws, 1890, ch. 566, sec. 30.
¹ Laws, 1890, ch. 566, sec. 40.
NEW YORK.
1429
1
road to be built or operated; its length and termini; name of
each county in which any part of it is to be located; amount
of the capital stock, not less than ten thousand dollars for
every mile of road, except a narrow-gauge road, when it
must be not less than three thousand dollars for every mile;
number of shares into which the capital stock is to be di-
vided; if the capital stock is to consist of common and pre-
ferred stock, the amount of each class and the rights and
privileges of the latter over the former; names and post-office
addresses of the directors of the corporation, not less than
nine, who are to manage its affairs for the first year; place
where its principal office is to be located; and the name
and post-office address of each subscriber to the certificate
and the number of shares of stock he agrees to take.'
Such certificate must have indorsed or annexed to be
taken as a part thereof, an affidavit of at least three of
such directors that at least ten per cent of the minimum
amount of capital stock authorized by law has been sub-
scribed; that ten per cent of such subscription has been
paid in good faith in cash to the directors named in the
certificate; and that it is intended in good faith to build,
maintain, and operate the road mentioned therein.' The
filing of a certificate, where the amount of stock required
has not been in good faith subscribed, and ten per cent
thereof paid in cash, is void.'
In case of a railway corporation (other than a street sur-
face railroad), to be operated in any of the cities and
counties of the state other than cities of over a million of
inhabitants, the commissioners duly appointed to determine
the necessity of such railway,2 must prepare an appropri-
ate certificate of incorporation, in which must be set forth
and embodied, as component parts thereof, the several con-
ditions, requirements, and particulars by such commis-
sioners determined, and which must also provide for the
1 Laws, 1890, ch. 565, sec. 2.
2 See Subdivision III, "FRANCHISES:-HOW OBTAINED," p. 1486.
S
1430
ECONOMIC LEGISLATION.
release and forfeiture to the supervisors of the county, or
if the road is to be constructed wholly or partly within a
city, to such city, of all rights and franchises acquired by
such corporation in case such railway or railways is not
completed within the time, and upon the conditions therein.
provided.¹
This certificate must have indorsed or annexed to be
taken as a part thereof, the affidavit of three directors in
duplicate that the full amount of stock has been subscribed
in good faith to construct, maintain, and operate the rail-
way mentioned in the certificate of incorporation.2
The articles of incorporation of a stage coach company
must state the name of the corporation; number of years
it is to continue; routes upon which it is intended to run,
as near as practicable; number of directors, not less than
three nor more than five; names of the directors for the
first year; amount of its capital stock, place of residence
of each subscriber thereto, and the number of shares he
agrees to take."
3
As to organization of purchasers of the property of
franchise companies under foreclosure of mortgage, etc.,
see "BONDS, DEBTS, ETC.," post.
Filing. Every certificate of incorporation, and every
amended certificate, must be filed in the office of the sec-
retary of state, and of the clerk of the county in which
the principal place of business of the company is to be lo-
cated, and recorded in books properly indexed and es-
pecially provided therefor.¹
If either of the duplicate certificates of incorporation
is lost or destroyed after filing, a certified copy of the
other certificate may be filed in place of the one so lost or
destroyed, and as of the date of its original filing, and
such certified copy has the same force and effect as the
original certificate had when filed."
¹ Laws, 1890, ch. 565, sec. 126.
3 Laws, 1890, ch. 566, sec. 20.
5 Laws, 1890, ch. 563, sec. 6.
Laws, 1890, ch. 565, sec. 128.
Laws, 1890, ch. 563, sec. 3.
NEW YORK.
1431
1
All taxes required by law to be paid before incorpora-
tion, and the fees for filing and recording the above certi-
ficates must be paid before filing.'
The certificates of incorporation of any corporation duly
filed are presumptive evidence of its incorporation, and any
amended certificate or other paper duly filed relating to the
incorporation of any corporation, or its existence or manage-
ment, and containing facts required by law to be stated
therein, is presumptive evidence of the existence of such.
facts.2
Within ten days after the election of directors of rail-
road companies in cities or counties (elevated, under-
ground, etc., but not street surface), as shown below (see
"COMMENCING BUSINESS"), the commissioners must deliver
to them a certificate in duplicate, verified by the oath of
three commissioners before a justice of the supreme court,
setting forth the certificate of incorporation and the or-
ganization of the corporation, and within five days there-
after must make the affidavit above provided (see "Must
show what"), and must file the certificate of incorpora-
tion and the affidavits in the office of the secretary of
state, and a duplicate of the same in the office of the clerk
of the county wherein such railway is located.³
Incorporators and their associates become a corporation
upon the filing of their articles. The statute specifically
declares this in the case of gas, electric light, and railway
companies.*
As to organization of purchasers of the property of
franchise companies under foreclosure of mortgage, etc.,
see "BONDS, DEBTS, ETC.," post.
As to nanies of corporations, see "ARTICLES OR CERTIFI-
CATE OF INCORPORATION," supra; as to papers necessary to
accompany the certificate of incorporation of water-works
companies, see "Must show what,” supra.
¹ Laws, 1890, ch. 563, sec. 3; see
*
FEES," post.
2 Laws, 1890, ch. 563, sec. 7.
Laws, 1890, ch. 565, sec. 128.
Laws, 1890, ch. 566, sec. 60; ch. 565, sec. 128.
i
1432
ECONOMIC LEGISLATION.
1
Commencing business.-No corporation can exercise
any corporate powers or privileges until the taxes and
fees referred to below have been paid.'
If any corporation, except a railroad, turnpike, plank-
road, or bridge corporation, does not organize and com-
mence the transaction of its business, or undertake the
discharge of its corporate duties within one year from the
date of its incorporation, its corporate powers cease.²
A domestic railroad corporation must begin the con-
struction of its road, and expend thereon ten per cent of
the amount of its capital, within five years after its certi-
ficate of incorporation is filed, and must finish its road
and put it in operation within ten years of such filing, or
its corporate existence and powers cease.3
1
The commissioners provided for in case of the organiza-
tion of railroads in cities and counties (elevated, under-
ground, etc.) must, within one hundred and twenty days
after their organization, cause a suitable book of subscrip-
tion to the capital stock of such corporation to be opened,
pursuant to due public notice, at a banking office in such
county or city. Whenever the whole capital stock, or an
amount proportioned to the part of the railway directed by
the commissioners to be constructed, has been subscribed by
not less than fifteen persons, and a fixed percentage of such
subscription has been paid in in cash, the commissioners
must, by written or printed notice of ten days served per-
sonally or by mail, call a meeting of the subscribers for
organization, and appoint inspectors of elections to serve
thereat. At such meeting, or at any subsequent one to
which the same may be adjourned, a majority in number
and amount of such subscribers may elect persons, of a
number to be theretofore determined by the commission-
ers (not less than nine), who shall be directors of the cor-
poration for one year.5
¹ Laws, 1890, ch. 563, sec. 3; see "FEES," post.
Laws, 1890, ch. 563, sec. 21.
3
Laws, 1890, ch. 565, sec. 5.
• See SUBDIVISION III-" FRANCHISES:-HOW OBTAINED," p. 1486, post.
Laws, 1890, ch. 565, secs. 126, 127.
تا
1
NEW YORK.
f
1433
Fees.-The secretary of state is entitled to the following
fees: For certified or exemplified copies of articles of
incorporation, etc., fifteen cents for each folio of one hun-
dred words, and one dollar for every certificate under seal
affixed thereon; for recording every certificate, fifteen
cents for each folio; for filing certificates of incorporation
of all companies except street surface railway companies,
the sum of ten dollars; for filing articles of association
for every other railroad, and for filing every agreement for
consolidation between two or more railroads, the sum of
twenty-five dollars.¹
The county clerk is entitled to ten cents for each folio
for recording the certificate, and eight cents a folio for a
copy.2
3
These are the fees to be directly paid before the certifi-
cate of incorporation is filed. But, in addition to these,
all franchise corporations must, before the certificate of
incorporation is filed, pay to the state treasurer a tax of
one-eighth of one per cent upon the amount of the capital
stock which such corporation or association is authorized
to have, and a like tax upon any subsequent increase
thereof.
4
Amendments, repeals, etc.-The constitution reserves
the power to alter or amend the charters of incorporated
companies.5
The directors of any corporation, in whose original cer-
tificate any matter required to be therein stated has been
omitted, may make and file an amended certificate to
conform to the requirements of law; and thereupon, for
all purposes, is deemed to be a corporation from the time
of filing the original certificate, but without prejudice to
any pending action or proceeding, or to any rights pre-
viously accrued."
¹ Laws, 1882, ch. 156.
Laws, 1890, ch. 563, sec. 3.
' Code Civ. Pro., sec. 3304.
Laws, 1886, ch. 143, as amended, Laws, 1887, ch. 284.
' Const., Art. VIII, sec. 1.
VOL. II-10
6 Laws, 1890, ch. 563, sec. 5.
1434
ECONOMIC LEGISLATION.
If the names and places of residence of the directors of
any railroad corporation have been omitted from the cer-
tificate, when executed and acknowledged, and thereafter
the requisite number of directors has been chosen at a
meeting of the subscribers to the certificate, a supple-
mental certificate, containing their names and places of
residence, may be filed with such certificate with the same
force and effect as if the names and places of residence of
the directors had been originally inserted.¹
The directors of stage coach companies may, by a two-
thirds vote, alter or extend the roads designated in their
certificate of incorporation by making, acknowledging,
and filing a certificate to that effect, as in case of the orig-
inal certificate.2
When any water-works corporation has entered into a
contract with the authorities of any town or village not
mentioned in its certificate of incorporation, but situated
in the same or an adjoining county, as the towns or vil-
lages mentioned therein, to supply it with pure and whole-
some water, it may file an amended certificate, stating the
name of such other town or village to be so supplied, and
may then supply such town or village with water in the
same manner and with the same rights and subject to
the same requirements as if it had been named in the
original certificate of incorporation.³
3
Any telegraph or telephone corporation may construct,
own, use, and maintain any line of electric telegraph or
telephone, not described in its original certificate of in-
corporation, whether wholly within or wholly or partly
beyond the limits of this state, and may join with any
other corporation in constructing, leasing, owning, using,
and maintaining such line, or hold or own any interest.
therein, or become lessees thereof, upon filing in the same
manner as the original certificate is required to be filed,
an amended certificate, executed and acknowledged by at
1 Laws, 1890, ch. 563, sec. 3.
* Laws, 1890, ch. 566, sec. 85.
2 Laws, 1890, ch. 566, sec. 21.
NEW YORK.
1435
!
least two-thirds of the directors of such corporation, de-
scribing the general route of such lines, and designating
the extreme points connected thereby, and upon procur-
ing the written consent of the persons owning at least
two-thirds of the capital stock of such corporation; such
amended certificate can not be filed until there is indorsed
or annexed an affidavit made by at least three of the di-
rectors of the corporation that such consent has been ob-
tained, which affidavit must be filed with and be a part
of such certificate.¹
See also "ALTERATION, AMENDMENT, ETC., OF FRANCHISES,"
p. 1561, post.
Duration of charter. The articles of railway, gas,
electric light, telegraph and telephone, pipe line, tramway,
and stage coach companies must specify the term of the
company's existence, which is limited in the case of gas
and electric light companies to fifty years.²
Any domestic corporation, at any time within three
years before the expiration thereof, may extend the term
of its existence beyond the time specified in its original
certificate of incorporation, or by law, or, in any certificate
of extension of corporate existence, with the consent of
the stockholders owning two-thirds in amount of its cap-
ital stock, by a certificate signed and acknowledged by
them and filed in the offices in which the original certifi-
cates of its incorporation were filed, if at all, and, if not,
then in the offices where the certificates of incorporation
are now required by law to be filed, and the officers with
whom the same may be filed must record them in the
books kept in their respective offices for the record of
such certificates, and make a memorandum of such record
in the margin of the original certificate in such book, if
any, and thereupon the time of existence of such corpo-
ration is extended, as designated in such certificate, for
¹ Laws, 1890, ch. 566, sec. 101.
2 See "ARTICLES OF INCORPORATION," supra.
1436
ECONOMIC LEGISLATION.
1
a term not exceeding the term for which it was incorpo-
rated in the first instance.¹
2
Objects.-The object or purpose of the corporation.
must always be stated in the certificate of incorporation,
and must be in strict accordance with the act to which the
company owes its life. As the charter or certificate of
incorporation is the measure of the scope of the com-
pany's powers and privileges, and as it is a general principle
of law that corporate grants are always construed strictly
against the grantee, it follows that the company can make
no changes in the objects named in its certificate of in-
corporation, except by re-incorporation. This principle
extends to the methods under which it assumes to render
service, and which in general can only be those which are
prescribed by the act under which it is incorporated.
While this is true as a general principle of law, there are
several statutes which recognize the necessity of giving
freer scope to the activities of companies incorporated un-
der them, by allowing them to render a service nearly akin
to the service for which they are primarily incorporated.
See under " REGULATIONS AS TO SERVICE," p. 1536.
Powers.-The general corporation law provides that
every corporation as such has power, though not specified
in the law under which it is incorporated, to have suc-
cession for the period specified in its certificate of in-
corporation or by law, and perpetually when no period is
so specified; to have a common seal and alter the same at
pleasure; to acquire by grant, gift, devise or bequest, and
to dispose of such property as the purposes of the corpo-
ration require, not exceeding the amount limited by law;
to appoint such subordinate officers and agents as its busi-
ness requires, and to allow them a suitable compensation;
and to make by-laws, not inconsistent with any existing
law, for the management of its property, the regulation
of its affairs, and the transfer of its stock. But no by-law
¹ Laws, 1890, ch. 563, sec. 22.
2 See “ARTICLES OF INCORPORATION; Number of Incorporalors," etc., supra.
NEW YORK.
1437
regulating the election of directors or officers is valid, un-
less published for at least two weeks in a newspaper in
the county where the election is to be held, and at least
thirty days before such election."
Any corporation which has sold any part of its real
estate may be authorized by the supreme court to hold
other lands not exceeding in value the lands so sold with-
in three years preceding the application for such author-
ity, and any domestic corporation doing business outside
of the state may acquire and convey such real and per-
sonal property as may be requisite for the convenient trans-
action of its business.3
In addition to these powers and those expressly given in
the law under which it is incorporated, no corporation pos-
sesses or can exercise any corporate powers, except such
as are necessary to the exercise of the powers so enumer-
ated and given."
(6
As to general power to contract debts, etc., see under
BONDS, DEBTS, ETC.," post.
As to power to consolidate with other companies, see
“CONSOLIDATION," post.
As to powers of franchise corporations to use highways,
take property, construct their plants and furnish service,
see under the appropriate sub-heads under SUBDIVISION III,
"FRANCHISES," post.
Water-works companies.-Every water-works corporation
has additional power to cause such examinations and sur-
veys for its proposed water-works to be made as may be
necessary to determine the proper location thereof, and
for such purpose by its officers, agents or servants, to enter
upon any lands or waters in the city, town or village where
organized, or in any adjoining city, town or village for the
purpose of making such examinations or surveys, subject
to liability for all damages done.5
1 Laws, 1890, ch. 563, sec. 8.
³ Laws, 1890, ch. 563, sec. 11.
2 Laws, 1890, ch. 563, sec. 10.
* Laws, 1890, ch. 563, sec. 9.
Laws, 1890, ch. 566, sec. 82, as amended, Laws, 1892, ch. 617, sec. 2.
1438
ECONOMIC LEGISLATION.
Telegraph and telephone companies.-Any telegraph or
telephone corporation may construct, own, use and main-
tain any line of electric telegraph or telephone, not de-
scribed in its original certificate of incorporation, by filing
an amended certificate, as shown under "AMENDMents,
REPEALS, ETC.," supra.
Pipe line companies.—Every pipe-line corporation, in ad-
dition to the powers conferred by the general and stock cor-
poration law, has power to cause such examinations and
surveys of its proposed line of pipe to be made as may
be
necessary to the selection of the most advantageous route,
and for such purpose by its officers, agents or servants may
enter upon the lands or waters of any person, upon, through
or across which such corporation can construct its line of
pipe, under the provisions of the statute, subject, however,
to liability for all actual damage which may be done thereto;
to take and hold such voluntary grants of real estate and
other property as may be made to it to aid in the con-
struction, maintenance, operation, and accommodation of
its pipe line; to lay out its pipe-line route not exceeding
twelve feet in width, but at the terminations of such line,
and at all receiving and discharging points, and at all
places where machinery may properly or must necessarily
be set up for the operation of such pipe line, it may take
such additional width, and for such length as may be nec-
essary; to take and convey through pipes any property,
substance or product capable of transportation therein by
any force, power or mechanical agency, and to erect and
maintain all necessary and convenient buildings, stations,
fixtures, and machinery for the purposes of its incorpora-
tion.¹
Tramway companies.-Every tramway corporation, in
addition to the powers conferred by the general and stock
corporation laws, has power to cause such examination
and surveys for its proposed tramway to be made as may
1 ¹ Laws, 1890, ch. 566, sec. 49.
NEW YORK.
1439
be necessary to the selection of the most advantageous
route, and for such purpose by its officers and servants to
enter upon the lands or waters of any person, but subject
to responsibility for all damages done thereto; to lay out
its tramway and to construct the same as provided by
law; to erect and maintain all necessary and convenient
buildings, stations, fixtures, and machinery for the accom-
modation and transaction of its business.¹
Railroad companies generally.—Subject to the limitations
and requirements of the law, every railroad corporation,2 in
addition to the powers given by the general and stock cor-
poration laws, has power to enter upon lands and make sur-
veys, subject to liability for damages done; to take and hold
necessary real estate, or to acquire the same by condemna-
tion, but only for the purpose of the corporation during the
continuance of its corporate existence; to lay out and con-
struct its road across or along any water-course, stream,
highway, plank-road, turnpike, etc.; to cross, intersect,
join, or unite with any other railroad, and to construct
the necessary conveniences in furtherance of the objects of
its connection; to erect necessary buildings; to convey
persons and property by the power or force of steam or
animals, or by any mechanical power; to receive compen-
sation therefor; to regulate the time and manner of such
transportation and the compensation to be paid therefor;
to purchase lands in other states for the purpose of secur-
ing a permanent supply of fuel, or stocks of companies in
this state for the purpose of erecting union railway de-
pots.3
Street surface railroads.-See under sub-heads of "SUB-
DIVISION III-FRANCHISES."
¹ Laws, 1890, ch. 566, sec. 31.
2 The provisions of sections 1-83 of chapter 565, Laws, 1890, in terms
apply to railroad companies generally. Many of these provisions, how-
ever, evidently affect steam railroads only. So much of these sections
as seem likely to relate to street surface railroads, and railroads in cities
and counties (elevated, underground, etc.), are given.
3 Laws, 1890, ch. 565, sec. 4.
1440
ECONOMIC LEGISLATION.
!
Other railroads in cities and counties (elevated, underground,
etc.)-Railroads in cities and counties other than street sur-
face railways (elevated, underground, etc.), also have power
to take and convey persons and property on their railroad
by the force of steam, or by any motor other than animal
power, and to receive compensation therefor; to enter
upon and underneath the several streets, avenues, and
public places, and lands designated by the commissioners,
and enter into and upon the soil of the same to construct,
maintain and use, in accordance with the plan adopted by
the commissioners, a railway upon the route and to the
points decided upon, and to secure the necessary founda-
tions and erect the columns, piers, and other structures.
which may be required to secure safety and stability in
the construction and maintenance of the railway con-
structed upon such plan, and for operating the same; and
to make such excavations and openings upon the route
through which such railway is to be constructed as may
be necessary from time to time.2
No such corporation has the right to acquire the use or
occupancy of public parks or squares in any such city or
county, or the use or occupancy of any of the streets or
avenues, except such as may have been designated for the
route of such railway, and except such temporary privi-
leges as the proper authorities may grant to facilitate such
construction; and no such corporation can construct a
street surface railroad to run in whole or in part upon
the surface of any street or highway.2
Stage coach companies.-In addition to the powers con-
ferred by the general and stock corporation laws, every
stage coach corporation has power to take and convey per-
sons and property in stages and omnibuses; to provide and
run the necessary stages and omnibuses upon their routes
for the public use; to receive compensation therefor; and
to erect and maintain all necessary and convenient build-
¹ See "How OBTAINED," p. 1486.
2 Laws, 1890, ch. 565, sec. 129..
NEW YORK.
1441
ings, fixtures and machinery, for the use and accommoda-
tion of their passengers and business.¹
By-laws.—See under "POWERS," supra, and "OFFICERS;
MEETINGS; VOTING; QUORUM, ETC.," post.
Officers; meetings; voting; quorum, etc.—The affairs
of every stock corporation must be managed by a board
of directors, consisting of the number stated in the certi-
ficate of incorporation,2 a majority of whom must be citi-
zens of the state, chosen annually from the stockholders,
at a time and place fixed by the by-laws of the corpora-
tion, by a majority of the stockholders voting at such
election. Vacancies are filled in the manner prescribed by
the by-laws. If a director ceases to be a stockholder, his
office becomes vacant. Notice of the time and place of
holding an election for directors must be given by publica-
tion at least once a week for four consecutive weeks, im-
mediately preceding such election, in a newspaper pub-
lished in the county where such election is to be held,
and in such other manner as prescribed by the by-laws.3
The number of directors of any stock corporation may
be increased or reduced, but not above the maximum or be-
low the minimum number prescribed by law,2 when stock-
holders owning a majority of the stock so determine at a
meeting held at the usual place of meeting of the di-
rectors, on thirty days' notice in writing to each stock-
holder of record. Such notice must be served personally
or by mail, directed to each stockholder at his post-office
address. The proceedings of the meeting must be entered.
in the minutes of the corporation, and a transcript verified
by the president and secretary, must be filed in the of
fices where the original certificates of incorporation were
filed.¹
If the directors of any corporation for the first year of
its corporate existence hold over and continue to be di-
¹ Laws, 1890, ch. 566, sec. 22.
2 See under "ARTICLES OF INCORPORATION-Must Show What."
3 Laws, 1890, ch. 564, sec. 20.
* Laws, 1890, ch. 564, sec. 21.
1442
ECONOMIC LEGISLATION.
rectors after the first year, because of their neglect or re-
fusal to adopt the by-laws required to enable the stock-
holders to hold the annual election for directors, all their
acts and proceedings while so holding over, done for and
in the name of the corporation, designed to charge upon
it any liability or obligation for the services of any such
director, or of any officer, or attorney, or counsel ap-
pointed by them, and every such liability or obligation is
fraudulent and void.¹ 1
If the directors of any stock corporation do not adopt
a by-law providing for the annual election of directors,
for sixty days after the first year of the corporate exist-
ence, or if for any reason the annual election of directors
is not held at the time appointed, any stockholder may
call a meeting of the stockholders for the election of di-
rectors by publishing the above notice, and by serving
upon each stockholder, either personally or by mail, di-
rected to him at his post-office address, a copy of such no-
tice, at least fifteen days before the meeting, which must
be held at the principal business office of the corporation,
or if it has none at the place in this state, where its prin-
cipal business has been transacted, or if access to such of
fice or place is denied, at some other place in the city, vil-
lage, or town, where such office or place is or was located.
At such meeting the stockholders attending constitute a
quorum, and they may elect inspectors of election and di-
rectors, and adopt by-laws providing for future annual
meetings and election of directors, if the corporation has
no such by-laws, which have the same effect as if they
had been adopted by the directors of the corporation;
and may transact any other business which may be trans-
acted at the annual meeting of the stockholders. In the
absence at such meeting of the books of the corporation,
showing who are stockholders, each stockholder, before
voting, must present his sworn statement, setting forth the
1 Laws, 1890, ch. 564, sec. 22.
NEW YORK.
1443
number of shares of stock owned by him and standing in
his name on the books, and, if known, the number of
shares of stock outstanding at the time when the election
should have been held, and, on filing such statement, he
may vote on the shares of stock owned by him and stand-
ing in his name on the books of the corporation. The in-
spectors must return and file these statements, with a cer-
tificate of the results of the election verified by them, in
the office of the clerk of the county in which such elec-
tion is held; the persons so elected are the directors of the
corporation."
2
At every election of directors and meeting of stock-
holders, each stockholder not in default in the payment
of his subscriptions, is entitled to one vote for every share
of stock held by him for thirty days immediately pre-
ceding the election or meeting. Such vote may be cast
by proxy, but no person can vote or issue a proxy to vote
at any meeting of stockholders or bond holders upon any
stock or bonds which are not in his possession or under
his control, or where he has ceased to retain the title
thereto, notwithstanding such stock or bonds may stand
in his name on the books of the corporation. No stock-
holder can sell his vote, or issue a proxy to vote, upon any
stock or bonds to any person for any sum of money, or
any thing of value. Any person offering to vote upon
stock or bonds must, if required by any inspector of elec-
tion, or any stockholder present, take and subscribe the
following oath: "I do solemnly swear that in voting at
this election I have not, either directly, indirectly, or im-
pliedly, received any promise or any sum of money, or
any thing of value, to influence the giving of my vote or
votes at this meeting, or as a consideration therefor; and
that I have not sold or otherwise disposed of my interest
in or title to any shares or bonds in respect to which I
offer to vote at this election, but that all such shares and
2 Laws, 1890, ch. 564, sec. 54.
¹ Laws, 1890, ch. 564, sec. 53.
1444
ECONOMIC LEGISLATION.
1
bonds are still in my possession, or subject to my con-
trol." Any person offering to vote as agent or attorney,
or proxy for any other person must, if required by any
inspector or stockholder, take and subscribe the following
- oath: "I do solemnly swear that the title to the stock or
bonds, upon which I now offer to vote, is, to the best of
my knowledge and belief, truly and in good faith, vested
in the persons in whose names they now stand, and that
such persons still retain control of the same, and that
I have not, either directly or indirectly, or impliedly, given
any promise or any sum of money, or any thing of value,
to induce the giving of authority to vote upon such stock
or bonds to me." The inspectors may administer this
oath, and all such oaths and all proxies must be filed in
the office of the corporation. No proxy is valid after the
expiration of eleven months from its date, and the holder
can not vote thereon after that time, unless the stock-
holder specifies therein the length of time it is to continue.
in force, which must be for some limited period; every
proxy is revocable at the pleasure of the person execut-
ing it.¹
The books and papers of the corporation must be
produced at any meeting of its stockholders, upon the re-
quest of any stockholder, and if the right to vote upon
any share of stock at any such meeting is challenged, the
inspectors of election must require the transfer books of
the corporation to be produced as evidence of stock held
therein, and all such shares as may appear thereon in the
name of any person may be voted on by such person, or
by proxy, subject to the above provisions."
If the election of directors is not held on the day desig-
nated by law, the directors must call a meeting for such
election within sixty days immediately thereafter; and no
shares can be voted upon at such election, except by the
persons or their proxies, who may have appeared on the
¹ Laws, 1890, ch. 564, sec. 54.
NEW YORK.
1445
transfer books of the corporation to have had the right
to vote thereon, on the day the election should have been
held.¹
The supreme court must, upon the application of any
person or corporation aggrieved by, or complaining of any
election of any corporation, or any proceeding, act or mat-
ter touching the same, upon notice to the adverse party,
or to those to be affected thereby, forthwith and in a sum-
mary way hear the affidavits, proofs and allegations of the
parties, or otherwise inquire into the matters or causes of
complaint, and establish the election or order a new elec-
tion, or make such order and give such relief as right and
justice may require, and may in its discretion order issues.
to be made up in such a manner and form as it may direct,
to try the respective rights of the parties touching the
matters complained of."
When the corporate powers of any corporation are to
be exercised by any particular body or number of persons,
a majority, if it is not otherwise provided by law, consti-
tutes a quorum, and every decision of a majority of such
persons duly assembled as a board is valid as a corporate.
act.3
If directors are not elected on the day designated in the
by-laws or by law, the corporation is not for that reason
dissolved, but the election may be held on any other day,
when a meeting for that purpose may be called pursuant
to the above provisions, and every director continues to
hold his office and discharge its duties until his successor
has been elected."
The directors may appoint from their number a presi-
dent, and from the stockholders a secretary and treasurer,
and may appoint such other subordinate officers, agents
and employees as the by-laws may designate, or they may
direct, who shall respectively have such powers and per-
form such duties in the management of the property and
¹ Laws, 1890, ch. 564, sec. 55.
Laws, 1890, ch. 563, sec. 17
2 Laws, 1890, ch. 563, sec. 15.
Laws, 1890, ch. 563, sec. 18.
1446
ECONOMIC LEGISLATION.
affairs of the corporation, subject to the control of the di-
rectors, as may be prescribed by them in the by-laws or
otherwise; and the directors may require any such officer,
agent or employee to give security for the faithful per、
formance of his duties, and may remove him at pleasure.'
The inspectors of election of every stock corporation
must be appointed in the manner prescribed in the by-
laws, but the inspectors of the first election of directors.
and of all previous meetings of the stockholders must be
appointed by the board of directors named in the certifi-
cate of incorporation. The inspectors appointed to act at
any meeting of the stockholders must, before entering
upon the discharge of their duties, be sworn to faithfully
execute the duties of inspector at such meeting with strict
impartiality, and according to the best of their ability,
and the oath so taken must be subscribed by them and
immediately filed in the office of the clerk of the county
in which such election or meeting may be held, with a
certificate of the result of the vote taken thereat.2
Books. The directors of every stock corporation must
keep at its principal office or place of business, correct books
of account of all its business and transactions, and must
cause its treasurer or secretary to keep a book containing
the names, alphabetically arranged, of all persons who are,
or within six years have been, stockholders of the corpora-
tion, showing their places of residence, the number of
shares of stock held by each, the time when they became
the owners thereof, and the amount actually paid thereon;
these books must daily, during business hours, be open for
the inspection of stockholders and creditors of the cor-
poration, and their personal representatives at such princi-
pal business office. Every stockholder, creditor, or rep-
sentative, may make extracts from such books.³
Every corporation that neglects or refuses to keep such
books, or to keep them open for inspection as required,
* Laws, 1890, ch. 564, sec. 28.
Laws, 1890, ch. 564, sec. 27.
3 Laws, 1890, ch. 564, sec. 29.
NEW YORK.
1447
forfeits to the people the sum of fifty dollars for every day
of neglect or refusal.¹
Capital stock.-The articles of incorporation of all
franchise companies must state the amount of the capital
stock, and the number of shares into which it is divided.
There is no limitation as to the maximum amount of cap-
ital stock, but the minimum amount is limited in the case
of pipe-line companies to $1,500 per mile, and in the case
of railroad companies, to $10,000 per mile, except narrow
gauge roads, which must not be less than $3,000 per mile.2
The stock corporation law provides that at the time of
subscribing any certificate of incorporation, every sub-
scriber must pay to the directors ten per cent upon the
amount subscribed by him in money, and no subscription.
can be received or taken without such payment, unless it
is issued for labor done or property actually received,
for the use and lawful purposes of such corporation, at its
fair value.³
The pipe-line act declares that no articles of associa-
tion shall be filed or recorded until at least ten hun-
dred and fifty dollars of stock for every mile of pipe line
proposed to be constructed or maintained and operated
shall be subscribed thereto, and twenty-five per cent paid
thereon, in good faith and in money, to the directors.*
Railroad companies in cities and counties (elevated, under-
ground, etc.), other than street surface railways, must have
the full amount of stock subscribed, or an amount propor-
tional to the part of the road to be constructed.5
No corporation can issue stock except for labor done or
property actually received for its proper purposes and at
¹ Laws, 1890, ch. 564, sec. 29.
2 See "ARTICLES OF INCORPORATION—Must show what,” supra.
Chapter 321 of the laws of 1886, relating to gas companies in the city
of New York, provides that the minimum amount of capital of such
companies shall be $2,500,000.
3 Laws, 1890, ch. 564, secs. 41, 42.
'Laws, 1890, ch. 566, sec. 40.
5 See ORGANIZATION," supra.
1448
ECONOMIC LEGISLATION.
:
its fair value, and all stock issued in violation of this pro-
vision is void.¹
Subscriptions to the capital stock of all franchise cor-
porations must be paid at such times and in such install-
ments as the board of directors may by resolution require.
If default is made in the payment of any installment, the
board may declare the stock and all previous payments for-
feited for the use of the corporation, after the expiration.
of sixty days from the service on the defaulting stock-
holder, personally or by mail, directed to him at his ad-
dress, of a written notice requiring him to make payment
within sixty days from the service of the notice at a place
specified therein, and stating the consequences of such
failure as aforesaid.2
Increase and decrease of.-Any domestic corporation may
increase or reduce its capital stock. If increased, the
stockholders are subject to the same liabilities with re-
spect to the additional capital, as are provided by law in
relation to the original capital; if reduced, the amount of
its debts and liabilities must not exceed the amount of its
reduced capital, and the owner of any stock is not relieved
from any liability existing prior to such reduction.³
Every increase or reduction must be authorized by the
vote of stockholders owning at least two-thirds of the
Laws, 1890, ch. 564, sec. 42. This provision would seem to have pre-
viously been in force with respect to gas and water companies, which were
amenable in this respect to the provisions of the manufacturing act of 1848,
ch. 40. (Banks, 1958, 2047, 2076; see gas-light act, Birdseye, 1244; water-
works act, Birdseye, 3322; manufacturing act, Birdseye, 1875, 1895, par.
89). So also the former railroad act provided for the payment in cash of
its stock subscriptions.
2 Laws, 1890, ch. 564, sec. 43. This is in effect the provision of the pre-
vious railroad law (Laws, 1850, ch. 140, sec. 7; Banks, 1740; Birdseye,
2405, par. 17); gas-light act (Laws, 1848, ch. 37, sec. 6, as amended in
Birdseye, 1246, par. 6; Banks, 2077); pipe-line company's act (Laws,
1878, ch. 203, sec. 8; Banks, 1864; Birdseye, 2218, par. 8); and water-
works act (Laws, 1873, ch. 737; Banks, 2047, as amended by later acts,
as shown in Birdseye, 3322 et seq.)
3 Laws, 1890, ch. 564, sec. 44.
NEW YORK.
1449
stock at a meeting specially called for that purpose. The
notice of such special meeting, signed by a majority of
the directors, stating the time, place, object, and the amount
of the proposed increase or reduction, must be published
once a week for at least three successive weeks in a news-
paper in the county where the principal business office of
the corporation is located, if any is published therein, and
a copy of such notice must be served personally or by
mail upon each stockholder or member, at least three
weeks before the meeting.'
At the time and place specified in the notice, the stock-
holders, representing in person or by proxy at least two-
thirds of all the capital stock, must organize by choosing
a chairman and secretary from their number; and if a suf-
ficient number of votes is given in favor of such increase
or decrease, a certificate of the proceedings showing the
amount of capital actually paid in, the whole amount
of the debts and liabilities of the corporation, and the
amount of increased or reduced capital stock, must be
made, signed, verified, and acknowledged by the chairman
and secretary, and filed in the office of the secretary of
state and of the clerk of the county where the principal
¹ Laws, 1890, ch. 564, sec. 45. This, in substance, is the provision of
the former gas-light act (Laws, 1848, ch. 37, secs. 20 and 21, as amended
by subsequent acts, and found in Birdseye, 1248, pars. 19, 20; Banks,
2078-9). The same general provision applies to increase or decrease of
railroad capital under the former act, except that in the case of increase
of such capital, the notice in question must be served on the stockhold-
ers at least twenty days prior to the meeting, and a copy published in
a newspaper designated for that purpose, by the railroad commission,
for at least four weeks prior to the meeting. (See Laws, 1889, ch. 426;
Birdseye, 2405, par. 19; Laws, 1878, ch. 264, secs. 1, 2; Banks, 1736.)
The former water-works act made no provision for the service or publi-
cation of notice of the meeting, but merely provided that the increase
or decrease must be at a meeting regularly called. (Laws, 1873, ch. 737,
as amended, Laws, 1881, ch. 77; Banks, 2049.) All these acts agree in
providing that no increase or decrease shall take place except by the
vote of the stockholders, representing not less than two-thirds of the
capital stock.
VOL. II-11
1450
ECONOMIC LEGISLATION.
1
place of business of the company is located. In case of
the reduction of the capital stock, except of a railroad
corporation, this certificate must have indorsed thereon
the approval of the comptroller to the effect that the re-
duced capital is sufficient for the proper purposes of the
corporation, is in excess of its debts and liabilities, and
that the actual market value of the stock, before reduc-
tion, was less than the par value. In case of the increase
or reduction of the stock of a railroad corporation, the
certificate must have indorsed thereon the approval of the
board of railroad commissioners. When such certificate,
so executed, is filed, the capital stock is increased or re-
duced to the amount named in the certificate.2
The proceedings of the meeting, at which an increase
or reduction is voted, must be entered in the minutes of
the corporation, and if the amount of the capital stock is
reduced, the amount of capital over and above the re-
duced capital, must be returned to the stockholders pro
rata, at such times and in such manner as the directors
may provide.³
1 Laws, 1890, ch. 564, sec. 46. This is the same provision as that of
the former gas-light act (except that the latter act provided that one
of the directors or trustees should be chairman of the meeting), as it
was also of the former railroad act. The gas-light act provided for the
countersigning of the certificate by the secretary, and the former rail-
road act relating to decrease of capital stock provided merely for verifi-
cation by the chairman. The former water-works act provided that the
certificate referred to should be signed and acknowledged by each
stockholder, and show the amount of stock of each person signing, and
the amount of increase and decrease. (See acts cited last above.)
2 Laws, 1890, ch. 564, sec. 46. This is the same provision as that of the
previous railroad act, except that such act provided in cases of decrease,
for the approval of the comptroller, instead of the railroad commis-
sioners. The former gas-light and water-works acts made no provision
as to the necessity of any approval (see acts above cited).
³ Laws, 1890, ch. 564, sec. 46. This latter provision is taken from ch.
264 of the laws of 1878, above cited (Banks, 1736), applying to corpora-
tions in general.
The former telegraph and telephone act provided merely for the in-
crease of capital stock, which increase might be provided for in the ar-
NEW YORK.
1451
A corporation can not divide or withdraw, or in any
way pay to its stockholders, or any of them, any part of
its property or assets, so as to reduce the value thereof
after deducting the amount of its debts below the amount
of its capital stock, or reduce its capital stock except in
the manner prescribed by law. The capital stock of a
corporation is deemed to be impaired when the value of
its property and assets is less than its paid up capital stock
after deducting the amount of its debts and liabilities.'
Transfer of. The stock of every corporation is deemed
personal property, and must be represented by a certificate
prepared by the directors and signed by the president and
treasurer, and sealed with the seal of the corporation, and
is transferable in the manner prescribed below and in the
by-laws; but no share is transferable until all previous
calls thereon have been fully paid in.²
No transfer of stock is valid as against the corporation,
its stockholders, or creditors for any purpose, except to
render the transferee liable for the debts of the corpora-
tion, as shown below, until it has been entered in the
transfer book, by an entry showing from and to whom
ticles of incorporation of the company. If the provision was omitted
there, it might be increased by publishing a notice of the intention so to
do, once a week for six successive weeks, in the state paper, and in a pa-
per published in the county where the principal office was located. It
was necessary to have the written consent of the share-holders holding
and owning three-fourths of the amount of the then capital stock, and
a certificate specifying the increase, and the number of shares into
which the stock should be divided, executed, approved, and acknowl-
edged by the board of directors, or a majority of them. Such certifi-
cate might also contain a provision for a change in route of the line of
the corporation (see ch. 265, Laws, 1848, sec. 8, as amended, Laws, 1875,
ch. 319; Banks, 2061; Birdseye, 3032, par. 7).
The statutes as to the increase or decrease of capital of pipe-line cor-
porations, which were long and cumbersome, and which were super-
seded, as well as other acts above cited, by the provisions of the "Stock
Corporations Law," are omitted as unnecessary. So also the act relat-
ing to gas companies in the city of New York, which is local in its char-
acter (Laws, 1886, ch. 321; Banks, 2084).
¹ Laws, 1890, ch. 564, sec. 23.
2 Laws, 1890, ch. 564, sec. 40.
1452
ECONOMIC LEGISLATION.
transferred. Such book is presumptive evidence of the
facts therein stated in favor of the plaintiff, in any action
or proceeding against the corporation or any of its officers,
directors, or stockholders.'
Lost or destroyed certificates.-The owner of a lost or de-
stroyed certificate of stock, upon the refusal of the corpo-
ration to issue a new one, may, upon application to the
supreme court at any special term held in the district
where he resides, secure an order requiring the company
to show cause why a new certificate should not be issued.
The application must be by petition, verified by the owner,
and stating the name of the corporation, the number and
date of the certificate, if known, or if it can be ascertained
by the petitioner, the number of shares named therein, to
whom issued, and as particular a statement of the circum-
stances attending the loss or destruction as the petitioner
can give. A copy of the petition and order must be served
on the president, or on the secretary or treasurer, person-
ally, at least ten days before the time designated for show-
ing cause.²
Upon the return of the order with proof of service, the
court must, in a summary manner and in such mode as it
may deem advisable, determine the matter; and if satisfied
that the petitioner is the lawful owner of the shares, or
any part thereof, described in the petition, and that the
certificate has been lost or destroyed, and after due dili-
gence can not be found, and that no sufficient cause has
been shown why a new certificate should not be issued,
an order must be made requiring the corporation, within
a designated time, to deliver the petitioner a new certifi-
cate for such shares, upon his furnishing such security as
to the court may appear sufficient to indemnify any other
person who thereafter may be found to be the lawful
owner of such lost or destroyed certificate. The court
may direct the publication of such notice as it may deem.
¹ Laws, 1890, ch. 564, sec. 29.
ด
Laws, 1890, ch. 564, sec. 50.
NEW YORK.
1453
proper, either before or after making such order, and any
person claiming any rights under such lost or destroyed
certificates may have recourse to the indemnity above pro-
vided for; and the corporation is discharged from all
liability to such person upon compliance with such order,
obedience to which may be enforced by attachment.¹
Stock in other companies.-No corporation can use any of
its funds in the purchase of any stock of its own or any
other corporation, unless the same has been bona fide
pledged, hypothecated, or transferred to it, by way of se-
curity for, or in satisfaction or part satisfaction of a debt
previously contracted in the course of its business, or pur-
chased by it at sales upon judgments, orders or decrees
obtained for such debts, or in the prosecution thereof.
But any domestic corporation, transacting business in this
state and also in other states, or foreign countries, may
invest its funds in the stocks, bonds, or securities of other
corporations owning lands in this state or such states, if
dividends have been paid on such stocks continuously for
three years immediately before such loans are made, or if
the interest on such bonds or securities is not in default.
Such stock, bonds or securities, must be continuously of a
market value twenty per cent greater than the amount
loaned or continued thereon.2
Company's lien on.—If a stockholder is in debt to the
corporation, the directors may refuse to consent to the
transfer of his stock until such indebtedness is paid, pro-
vided a copy of this provision is written or printed upon
the certificate of stock.3
Preferred stock.-Preferred stock may be exchanged for
common stock by two-thirds vote of the directors, upon
¹ Laws, 1890, ch. 564, sec. 51.
2 Laws, 1890, ch. 564, sec. 40.
³ Laws, 1890, ch. 564, sec. 26. A provision in the former railroad law
prohibiting officers and directors, under penalty of fine or imprison-
ment, from selling "short" (Laws, 1884, ch. 223; Banks, 1727; Birdseye,
2405, pars. 14, 15), is repealed by the present act. (See schedule of re-
pealed laws attached to Laws, 1890, ch. 565.)
1454
ECONOMIC LEGISLATION.
the written request of the holder, but the amount of the
capital stock must not be increased thereby.'
The articles of association of railroad companies, in-
cluding street surface railways and railways in cities and
counties (elevated, underground, etc.), must state if the
capital stock is of common or preferred stock, the amount
of each, and the rights and privileges of the latter over
the former.2
Bonds, debts, etc.-Business corporations, unless re-
strained by their charters or the acts under which they are
incorporated, possess the power to borrow money and issue
securities therefor. This general power, as will be seen,
has been pretty generally limited by statute in this state.
No stock corporation can create any debt in excess of
the amount of its paid-up capital stock, nor when its capital
stock is impaired or may become impaired by the creation of
such debt. No corporation can make any loans out of its
funds to enable a stockholder to pay an installment due
or to become due on any stock, or receive or discount any
note or other evidence of debt to enable any stockholder
to withdraw any part of the money paid by him for stock.5
No corporation can issue bonds except for labor done or
property actually received for its proper purposes and at
its fair value, and all obligations in violation of this pro-
vision are void."
No corporation refusing to pay its notes or other obli-
gations can make any transfer or assignment of its prop-
erty to any of its officers, directors, or stockholders, nor
can it make any such transfer to any person in contempla-
tion of insolvency.7
¹ Laws, 1890, ch. 564, sec. 47. The former law was to the same effect.
(Laws, 1880, ch. 225; Birdseye, 681, par. 42; Banks, 1737.)
4
2 Laws, 1890, ch. 565, sec. 2.
* Laws, 1890, ch. 564, sec. 24.
6 Laws, 1890, ch. 564, sec. 42.
' Laws, 1890, ch. 564, sec. 48.
vised Stats., part 1, ch. 18, title
3 Wells v. Salma, 119 N. Y. 280, 287.
5 Laws, 1890, ch. 564, sec. 25.
See note 1, p. 1448.
This was also the previous law. (Re-
4, sec. 4; Birdseye, 679, par. 33; Banks,
1729.)
NEW YORK.
1455
In addition to the powers conferred by the general
corporation law, every stock corporation has power to
borrow money or contract debts, when necessary for the
transaction of its business, or for the exercise of its corpo-
rate rights, privileges, or franchises, or for any other law-
ful purpose of its corporation; and may issue and dispose
of its obligations for any amount so borrowed, and may
mortgage its property and franchises to secure the pay-
ment of such obligations or of any debt contracted for the
purposes above specified; the amount of the obligations
issued and outstanding at any one time secured by such
mortgages, excepting mortgages given as a consideration
for the purchase of real estate, and mortgages authorized
by contracts made prior to the time when this provision
took effect,' must not exceed the amount of its paid-up
capital stock, or an amount equal to two-thirds of the
value of its corporate property at the time of issuing the
obligations secured by such mortgages, in case such two-
thirds value is more than the amount of such paid-up
capital stock. No such mortgages excepting purchase-
money mortgages may be issued without the written con-
sent, duly acknowledged, of the stockholders owning at
least two-thirds of the stock of the corporation, and such
consent must be filed and recorded in the office of the
clerk or register of the county where it has its principal
place of business. When authorized by such consent the
directors, under such regulations as they may adopt, may
confer on the holder of any debt or obligation secured by
such mortgage the right to convert the principal thereof,
after two and not more than twelve years from the date
of the mortgage, into stock of the corporation; and if the
capital stock is not sufficient to meet the conversion when
made, the stockholders must, in the manner provided, au-
thorize an increase of capital stock sufficient for that
purpose.2
1 May 1, 1891, Laws, 1890, ch. 564, sec. 73.
* Laws, 1890, ch. 564, sec. 2. This section is made up of provisions of
1456
ECONOMIC LEGISLATION.
If an action is brought against a corporation by the
procurement of any director to enforce a claim void by
law or to which there is a valid defense, and such action is
in the interest or for the benefit of any director, and by
their connivance the company is in default or has con-
sented to the validity of such claim, any stockholder may
apply to the supreme court for a stay of proceedings upon
affidavit setting forth the fact, upon proofs of the facts
in such further manner, and upon such notice as the court
may direct, such proceedings may be stayed, set aside or
vacated, or such other relief may be granted as may seem
proper, not injuriously affecting innocent parties who,
without notice of such wrong-doing and for a valuable
consideration, have acquired rights under such proceed-
ings.¹
1
An action may be maintained against any railroad cor-
poration by any laborer for the amount due him from any
contractor for the construction of any part of its road for
different laws previously in force. Thus, the provision regarding the
written assent of the holders of two-thirds of the stock as a prerequisite
to the right to mortgage is taken from the former gas-light act. (Laws,
1867, ch. 480; Birdseye, 1249, par. 26: Banks, 2082.) The provisions as
to the limitation of mortgage indebtedness is borrowed from the former
railroad law providing that no debt shall be contracted by an incorpo-
rated railroad company beyond its available means. (Laws, 1887, ch.
724; Banks, 1752; Birdseye, 2424, subd. 10.) The former water-works
act also provided for the consent of two-thirds of the owners of the
stock. (Laws, 1881, ch. 77, sec. 8; Birdseye, 3325, par. 7; Banks, 2049.)
The provision as to the conversion of bonded indebtedness into stock
is taken from the former railroad law. (Laws, 1887, ch. 724; Birdseye,
2424, subd. 10; Banks, 1752.) The former railroad act contains no re-
striction as to the consent of stockholders. It provides that where
money is borrowed for the purpose of laying a second track, or stock
increased, it should not exceed in the aggregate the sum of ten thou-
sand dollars for each mile of the road of such company (Laws, 1847, ch.
405; Banks, 1775); except as set forth above, so far as franchise com-
panies are concerned, the provision of the present law as to the limita-
tion of mortgage indebtedness to two-thirds the value of the corporate
property is new.
1
¹ Laws, 1890, ch. 565, sec. 16.
NEW YORK.
1457
ninety or any less number of days' labor performed by him
in constructing such road, if within twenty days there-
after a written notice has been served upon the corpora-
tion, and the action has been commenced after the expira-
tion of ten days and within six months after the service
of such notice; the notice must contain a statement of the
month and particular days upon which the labor was per-
formed and for which it was unpaid, the price per day, the
amount due, the name of the contractor from whom due,
and the section upon which performed, and must be signed
by the laborer or his attorney, and verified by him to the
effect that of his own knowledge the statements contained
in it are true; it must be served by delivering it person-
ally to an engineer, agent or superintendent having charge
of the section of the road upon which the labor was per-
formed, or by leaving it at his office or usual place of busi-
ness with some person of suitable age or discretion; if the
corporation has no such agent, engineer or superintendent,
or in case he can not be found and has no place of busi-
ness open, service may in like manner be made on any
officer or director of the corporation.'
Purchasers under mortgage, deed of trust, ete.-When
the property and franchises of any domestic stock cor-
poration are sold by virtue of any mortgage or deed
of trust, or pursuant to a judgment or decree of court,
or by virtue of any execution issued thereon, and the pur-
chaser at such sale acquires title to the same in the man-
ner prescribed by law, he may associate with him any
number of persons, not less than the number required by
law for the incorporation of such corporation, a majority
of whom must be citizens and residents of this state, and
they may become a corporation, and may take and possess.
the property and franchises thus sold, which were at the
time of sale possessed by the corporation whose property
has been so sold, upon making, acknowledging, and filing
¹ Laws, 1890, ch. 565, sec. 30.
1458
ECONOMIC LEGISLATION.
in the offices where certificates of incorporation are re-
quired by law to be filed, a certificate describing by name
and reference to the law under which it was organized, the
corporation whose property and franchises they have ac-
quired, and the court by whose authority the sale was
made, with the date of the judgment or decree authoriz-
ing the same, and a brief description of the property sold.
Such certificate must also state the following particulars:
The name of the new corporation intended to be formed
by the filing of such certificate; the maximun amount of
its capital stock, and the number of shares into which it
is to be divided, specifying the classes thereof, whether
common or preferred, and the amount of and rights per-
taining to each class; the number of directors, not less nor
more than the number required by law for the old corpo-
ration, who are to manage the affairs of the new corpora-
tion, and the names and post-office address of the directors
for the first year; and any plan or agreement which may
have been entered into at or previous to the time of sale,
in anticipation of the formation of the new corporation,
and pursuant to which such purchase was made.'
Such corporation is vested with and entitled to exercise
and enjoy all the rights, privileges, and franchises, which
at the time of such sale belonged to, or were vested in the
corporation, last owning the property sold, or its receiver,
and are subject to all the provisions, duties, and liabilities,
imposed by law on such corporations.¹
At or previous to the sale, the purchasers, or the persons
for whom the purchase is to be made, may enter into an
agreement, in anticipation of the readjustment of the re-
spective interests of the mortgage creditors and stockhold-
ers owning such property and franchises at the time of
sale, and for the representation of such interests of cred-
itors and stockholders in the bonds or stock of the new
corporation to be formed; such agreement may regulate
¹ Laws, 1890, ch. 564, sec. 3.
NEW YORK.
1459
:
voting by the holders of the preferred and common stock
at any meeting of the stockholders, and by the holders
and owners of any or all of the bonds of the corporation
foreclosed or to be issued by the new corporation; and
such right of voting by bond holders must be exercised
in such manner, for such period, and upon such conditions.
as may be therein described. Such argreement must
contain suitable provisions for the bond holders voting by
proxy, and must not be inconsistent with the laws of the
state; it is binding upon the corporation until changed,
as therein provided, or as otherwise provided by law.'
The new corporation, when duly organized pursuant to
such agreement and to the provisions of law, may issue
its bonds and stock in conformity with such agreement,
and may, at any time within six months after organiza-
tion, compromise, settle or assume the payment of any
debt, claim, or liability of the former corporation upon
such terms as may be approved by a majority of the
agents or trustees intrusted with the carrying out of the
agreement of reorganization, and may establish prefer-
ences in respect to the payment of dividends in favor of
any portion of its capital stock, and may divide its stock
into classes, but the capital stock of the new corporation
must not exceed in the aggregate the maximum of stock
mentioned in the certificate of incorporation, and the
bonds issued must not exceed the aggregate amount
which a corporation is authorized by law to issue."
The supreme court may direct a sale of the whole of the
property, rights, and franchises covered by the mortgages
or deeds of trust foreclosed at any one time and place to
be named in the judgment, either in case of the non-
payment of interest only, or of both the principal and in-
terest, due and unpaid and secured by any such mort-
gages or deeds of trust. Neither the sale nor the forma-
tion of the new corporation interferes with the authority
¹ Laws, 1890, ch. 564, sec. 4.
1460
ECONOMIC LEGISLATION.
or possession of any receiver of such property and fran-
chises, but he remains liable to be removed or discharged
at such time as the court may deem proper. No suit or
proceeding can be commenced against such receiver un-
less founded on willful misconduct or fraud in his trust
after the expiration of sixty days from the time of his
discharge; after the expiration of sixty days the new cor-
poration is liable in any action that may be commenced
against it, and founded on any act or omission of such
receiver, for which he may not be sued, and to the same
extent as the receiver, but for this provision, would be or
remain liable, or to the same extent that the new corpo-
ration would be, had it done or omitted the acts com-
plained of.¹
1
Every stockholder in any corporation, the franchises
and property whereof have been thus sold, may assent to
the plan of readjustment and reorganization of interests
pursuant to which such franchises and property have been
purchased at any time within six months after the organ-
ization of the new corporation, and by complying with the
terms and conditions of such plan become entitled to his
pro rata benefits therein. The commissioners, corporate
authorities, or proper officers of any city, town, or village,
who may hold stock in any corporation, the property and
franchises whereof is liable to be sold, may assent to any
plan or agreement of reorganization which lawfully pro-
vides for the formation of a new corporation, and the is-
sue of stock therein, to the proper authorities or officers
of such cities, towns, or villages, in exchange for the stock
of the old or former corporation by them respectively held
at par, and may assign, transfer, or surrender the stock so
held by them in the manner required by such plan, and ac-
cept in lieu thereof the stock issued by such new corpora-
tion.2
In the case of default in the payment of principal or in-
¹ Laws, 1890, ch. 564, sec. 5.
2 Laws, 1890, ch. 564, sec. 6
NEW YORK.
1461
terest of any bond secured by mortgage or deed of trust,
or whenever such property may be sold upon the fore-
closure of any such mortgage or deed of trust, any stock-
holder at any time during the pendency of the fore-
closure, and before the sale, may pay to the mortgagees
or grantees for the use and benefit of the holders of the
bonds, a sum equal to such proportion of the amount due
and secured to be paid thereby as his stock in the corpora-
tion bears to the whole capital stock, and on making such
payment, he, to that extent, becomes interested in such
mortgage or deed, and is protected in case of sale to the
extent of his proportional interest.¹
Dividends. No dividend can be declared or paid by
any stock corporation except from the surplus profits of
its business, nor when its capital stock is or will be im-
paired thereby, nor can it divide or withdraw, or in any
way pay to its stockholders any part of its property or as-
sets so as to reduce the value after deducting the amount
of its debts, below the amount of its capital stock.²
Every vote of the board of directors of any such cor-
poration declaring a dividend must be taken by ayes and
noes, to be entered and recorded in the minutes of the
proceedings of the board, which must be open to the in-
spection of every stockholder and creditor of the corpo-
ration daily during the usual hours of business."
Liability of stockholders.3-The stockholders of every
1 Laws, 1890, ch. 564, sec. 49. This provision is taken from the laws
of 1853, ch. 502 (Banks, 1777; Birdseye, 2444), which, however, was ap-
plicable only to railroad and plank-road companies, and was superseded
by laws, 1874, ch. 430, as amended, by laws, 1876, ch. 446, which pro-
vided (sec. 3) that when a reorganization was had after forclosure, a
stockholder assenting thereto within six months, received pro rata ben-
efit. (Laws, 1890, ch. 564, sec. 6).
' Laws, 1890, ch. 564, sec. 23; see "CAPITAL STOCK" as to impair-
ment, etc.
3 Under the Revised Statutes of the state, where the whole capital
stock of a corporation has not been paid in, and the capital paid is in-
sufficient to satisfy the claims of its creditors, each stockholder is bound
to pay the sum necessary to complete the amount of each share held
1462
ECONOMIC LEGISLATION.
stock corporation are jointly and severally personally
liable to its creditors, to an amount equal to the amount
of stock held by them respectively, for all debts or con-
by him, as fixed by the charter of the company, or such proportion of
that sum as may be required to satisfy the debts of the company. (R.
S., pt. 1, ch. 18, tit. 3, sec. 5; Birdseye, 673; Banks, 1723.) But under
the acts relating to the different kinds of corporations, passed subse-
quent to the Revised Statutes, a more stringent liability has been gener-
ally established.
The stock corporation act, which is the law now in force, is in most
respects a codification of previous laws covering the same subject. The
most important and sweeping change is in respect to the liability of
stockholders in railroad companies, including street surface railways.
Under the former law (Laws, 1850, ch. 140, sec. 10, as amended, Laws,
1854, ch. 282; Birdseye, 2406; Banks, 1741), the personal liability of
a stockholder in railway companies was limited to an amount equal to
the amount unpaid on the stock held by him, and covered all debts and
liabilities of such company until the whole amount of the capital stock
so held by him had been paid to the company. The increased liability
imposed, however, as to all debts to be contracted after the revision
went into effect (May 1, 1891; Laws, 1890, ch. 564, sec. 73), is presum-
ably not unconstitutional as impairing the obligations of a contract, by
reason of the power reserved in the legislature to amend acts of incor-
poration. (See Matter of Lee's Bank, 21 N. Y. 9.) The former railway
act further provided that all the stockholders should be liable for the
debts due or owing to its laborers or servants other than contractors, for
thirty days' personal service performed for such company, and included
the same provision respecting the necessity of first bringing an ac-
tion against the company, as the present law now provides. The no-
tice in writing was required to be given to the stockholders within
twenty days after the performance of the services, stating that the lab-
orer, etc., intended to hold the stockholder liable, and such action must
have been commenced within thirty days after the return of an execu-
tion unsatisfied as mentioned above. The stockholder, made liable by
such laborer or servant, had the right to recover the amount paid, of
the other stockholders, in ratable proportion to the amount of stock
held. (Laws, 1850, ch. 140, as amended, Laws, 1854, ch. 282; Banks,
1741; Birdseye, 2406.) The provision of the present law as to the non-
liability of representative stockholders, is substantially the same as the
former railway act (sec. 11), except there is nothing in the former law
concerning the filing and recording of the certificate referred to in the
present law as a prerequisite to fixing the liability of the stockholder.
The personal liability of the stockholder under the former gas-light
act (Laws, 1848, ch. 37; Birdseye, 1246, par. 10; Banks, 2077, 2079) was
NEW YORK.
1463
!
tracts made by the corporation, until the whole amount
of the capital stock has been paid in, and a certificate
substantially the same as that now provided for, except that the former
act specifically provided that the capital stock so fixed and limited
should be paid in, one half in one year and the other half in two years
after incorporating the company, or that the corporation should be dis-
solved; and further provided that the certificate to be made and filed
by the president and a majority of the board of directors should be
made and filed within thirty days after the payment of the last install-
ment of the capital stock. The former gas-light act provided for the
personal liability for the wages of laborers, servants and apprentices,
in the same manner, but no provision was made for notice to the stock-
holder of the intent to hold him liable. Another important difference
is, that the gas-light act provided that no stockholder should be person-
ally liable for any debt contracted by any company formed under said
act which was not payable within "one year" instead of "two years
after it is contracted, nor unless an action should be brought for its col-
lection against the company within one year after the debt became due.
The provision as to the two years within which an action should be
brought against a stockholder after he had ceased to be a stockholder,
is found in the former gas-light act.
The former water-works act provided that the personal liability
of stockholders should be the same as the personal liability of stock,
holders in the companies incorporated under the manufacturing act
of 1848, which is the same provision as that of the gas-light act, above
quoted. It was, however, especially provided in said water-works act
that no stockholder should be liable for any debt secured by mort-
gage. (See Laws, 1873, ch. 737, sec. 2, as amended, Laws, 1881, ch. 213;
Birdseye, 3323; Banks, 2047-8. See also Manufacturing Act, Laws, 1848,
ch. 40; Birdseye, 1893, par. 85, and 1895, par. 94; Banks, 1957, sec. 10;
1958, sec. 18.)
The personal liability of a stockholder in telegraph and telephone
companies, under the former law, was not to exceed twenty-five per
centum of the amount of stock held by him, and extended to all debts
and demands against such association which had been contracted and
which became due during the time the stockholder held such stock,
but no stockholder could be proceeded against for the collection of any
demand against such company until judgment had been obtained
against the company, and an execution returned unsatisfied in whole or
in part, or unless such company had been dissolved. (Laws, 1848, ch.
265, sec. 10; Banks, 2062; Birdseye, 3033, par. 9.)
The foregoing are the provisions of the principal statutes relating to
the liability of stockholders in companies commonly called franchise
companies. It will be seen that the present law in many respects works
a considerable change in such liability.
1464
ECONOMIC LEGISLATION.
thereof signed, verified, and acknowledged by the presi-
dent and a majority of the directors, has been filed and
recorded in the office of the clerk of the county where the
principal business office of the company is located.¹
Stockholders are also personally liable for all debts due or
owing to any of its laborers, servants, or employees, other
than contractors for services performed by them for such
corporation.2 Before such laborers, servants, etc., can
charge a stockholder for such services, they must give him
notice in writing within thirty days after the termination
of such services, that they intend to hold him liable, and
must commence an action therefor within thirty days after
the return of an execution unsatisfied against the corpora-
tion, upon the judgment recovered against it for such
services.³
No person holding stock in any corporation as collateral
security, or as executor, administrator, guardian, or trustee,
unless he has invested the trust funds in such stock, is per-
sonally liable as a stockholder; but the person pledging
Stock is considered the holder, and is so liable, and the
estates and funds in the hands of an executor, adminis-
trator, guardian, or trustee, are liable in a like manner,
and to the same extent as the testator, intestate, ward, or
person interested in such trust funds would have been, if
he were living or competent to act, and held the stock in
¹ Laws, 1890, ch. 564, sec. 57.
2 In the New York Law Journal (Nov. 7, 1890), Mr. Chas. T. Haviland,
of the New York bar, discussing the present law (not then enacted), says:
"The word 'employees' does not occur in any of the statutes impos-
ing a liability upon stockholders. In the case of Gurney v. Atlantic,
etc., R. Co., 58 N. Y. 67, it was held that the term 'employees' was
broad enough to include the counsel of the company. Whether under
this proposed statute each stockholder would be liable for all the salaries
due to officers of a corporation could only be determined by judicial
construction; but that the language is an innovation, is obscure, is a
change that will possibly vastly increase the liability of stockholders,
and that will be a fruitful cause of litigation is certain.”
3 Laws, 1890, ch. 564, sec. 57. See note 3, p. 1461, as to liability of
executors, etc., under former laws.
NEW YORK.
1465
!
his own name; but if it appears that such executor, etc.,
voluntarily invested the trust funds in such stock, he is
personally liable as a stockholder.¹
A stockholder is not personally liable for any debt of
the corporation until judgment has been recovered against
the corporation, and execution thereon returned unsatis-
fied in whole or in part, the amount due on such execu-
tion being the amount recoverable with costs; no action.
can be brought against a stockholder until the return of
such execution; and no stockholder is personally liable
for any debt of the corporation not payable within two
years from the date when contracted; nor unless an action
for its collection is brought against the corporation within
two years after the debt becomes due; and no action can
be brought against a stockholder after he has ceased to be
such, for any debt of the corporation unless brought
within two years from the time he ceased to be such stock-
holder.2
3
It should be noted that in this state the rule is that
statutes holding a stockholder personally liable are very
strictly construed. Thus it has been held that the phrase
"laborers, servants and apprentices" in the former statute
making stockholders personally liable for the wages of
such persons, applies only to those who perform menial or
manual services, and that a secretary, agent, superintend-
ent, or book-keeper is not a servant within that provision,
nor is an agent's assistant at a monthly salary who
exercises the principal's powers in the latter's absence.*
In the latter case, cited below, it was held that the
word "agent" is general, but that it is limited by the
more specific words "laborers" and "apprentice," with
which it is associated, and that the services referred to in
the act are menial or manual services performed by one
¹ See note 3, preceding page.
2 Laws, 1890, ch. 564, sec. 58.
'Lowry v. Inman, 46 N. Y. 119; Chase v. Lord, 77 N. Y. 1.
* See Dean v. DeWolf, 16 Hun, 186, affirmed, 82 N. Y. 626; Wakefield
v. Fargo, 90 N. Y. 213.
VOL. II-12
1466
ECONOMIC LEGISLATION.
}
of a class whose members usually look to the reward of
a day's labor or service for immediate or present support.
It should also be specifically noted that where the stat-
ate provides for the signing and verifying of a certificate
by the president and a majority of the directors of paid-
up stock, this act is an absolute prerequisite to the ceasing
of personal liability on the part of the stockholders, but
the certificate is not conclusive.¹
Liability of officers and directors.-The directors
voting to declare any illegal dividend, or to divide, with-
draw, or pay to its stockholders any part of its property
or assets unlawfully, or permitting the capital stock to
become impaired, are jointly and severally liable for all
the debts of the corporation then existing and thereafter
contracted while they respectively continue in office.2
The directors consenting to the creation of any debt in
excess of the paid-up capital stock, or when the stock is
impaired or may become impaired thereby, are personally
liable to the creditors, to the holders of such illegal obli-
gations and to all persons sustaining damage thereby.3
Any officer or agent of a corporation who neglects or
refuses to make the proper entries in the books of a cor-
¹ Veeder v. Mudgett, 95 N. Y. 295.
Laws, 1890, ch. 564, sec. 23. The provision as to the liability for
payment of dividends, except from surplus profits, and the withdrawal
or division to stockholders of any part of the capital stock of the
company was found in the Revised Statutes. (See R. S., pt. 1, ch. 18,
tit. 4, sec. 2; Banks, 1728; Birdseye, 678.) The former gas-light act
forbade dividends by insolvent companies, and made directors liable
in such case, but provided that if a certificate of objection was filed
with the clerk of the company and of the county within thirty days
after such payment, they should be exempt. (Laws, 1848, ch. 37, sec.
13; Birdseye, 1247; Banks, 2077.
³ Laws, 1890, ch. 564, sec. 24.
This changes the former law, which fixed the amount of indebted-
ness at not more than three times the amount of the capital stock paid
in. (R. S., pt. 1, ch. 18, tit. 4, sec. 3; Banks, 1728-9.) The provision in
the present law is borrowed from the manufacturing act and other acts
not under consideration here, and has not heretofore applied to fran-
chise companies in general.
NEW YORK.
1467
poration, or to exhibit and allow them to be inspected and
extracts taken as provided (See "Books," page 1446), is
liable to the party injured in the sum of fifty dollars and
all resulting damages.¹
2
The directors of the corporation are also personally lia-
ble for the debts of the corporation in case of failing to
make the reports of their financial condition, as shown
below, but any director may free himself from this liabil-
ity in the manner there shown. If any certificate or re-
port made, or public notice given by the officers or di-
rectors of a stock corporation is false in any material.
representation, the officers and directors signing the same
are jointly and severally personally liable for all of the
debts of the corporation contracted while they are officers
or directors thereof.3
Officers and directors are also personally liable for any
violation of the provisions of law relating to the loaning
of the money or withdrawal of stock by stockholders, as
shown under "BONDS, DEBTS, ETC," supra, to the extent of
such loan and interest for all debts contracted before the re-
payment of the same, or to the full amount of the dis-
counted notes, etc., and interest."
Criminal liability of.-An officer, agent, or other person
in the service of any corporation, foreign or domestic, who
willfully and knowingly, with intent to defraud, either
sells, pledges, or issues, or signs or executes, with intent
so to do or cause to be done, any certificate or instrument
purporting to be a certificate or evidence of the ownership
of any share of such corporation, or any bond or evidence
of debt of such company, or writing purporting to be such,
without being duly authorized so to do, or contrary to the
charter or laws under which such corporation exists, or in
excess of the power of such company, or of the limit im-
posed by law or otherwise upon its power to create or
issue stock or evidences of debt; or who re-issues, sells,
1
¹ Laws, 1890, ch. 564, sec. 29.
³ Laws, 1890, ch. 564, sec. 31.
2 See "REPORTS," post.
* Laws, 1890, ch. 564, sec. 25.
1468
ECONOMIC LEGISLATION.
1
pledges, or disposes of any surrendered or canceled certifi-
cates, or other evidence of the transfer or ownership of
any such share, or who causes any such enumerated acts to
be done, is punishable by imprisonment for not less than
three years nor more than seven years, or by fine not ex-
ceeding three thousand dollars, or by both.'
An officer, agent, or clerk of a corporation, or of persons
proposing to organize or to increase the capital stock of a
corporation, who knowingly exhibits a false, forged, or
altered book, paper, voucher, security, or other instrument
of evidence to any public officer or board authorized by
law to examine the organization of such corporation, or to
investigate its affairs, or to allow an increase of its capital,
with intent to deceive such officer or board in respect
thereto, is punishable by imprisonment in a state prison,
not exceeding ten years and not less than three years.²
A person who, without authority, subscribes or inserts
the name of another to or in any prospectus, circular, or
other announcement of any corporation or joint stock as-
sociation existing or to be formed, with intent to permit
the same to be published, and thereby to lead persons to
believe that such person is an officer, agent, member,
or promoter of such corporation, is guilty of a mis-
demeanor.3
A director of a stock corporation, who concurs in any
vote or act of the directors of such corporation, or any of
them, by which it is intended to make a dividend, except
from the surplus profits, and in the cases and manner al-
lowed by law; or, to divide, withdraw, or in any manner
pay to any stockholder, any part of the capital stock; or,
to reduce such capital stock without the consent of the
legislature; or, to discount or receive any note or other evi-
dence of debt in payment of an installment of capital
stock actually called in, and required to be paid, or with
intent to provide the means of making such payment; or,
¹ Penal Code, sec. 591.
3 Penal Code, sec. 593.
2 Penal Code, sec. 592.
NEW YORK.
1469
$
to receive or discount any note or other evidence of debt
with intent to enable any stockholder to withdraw any
part of the money paid on his stock; or, to apply any por-
tion of the funds, except surplus profits, directly or indi-
rectly, to the purchase of shares of its own stock; or, to
receive any such shares in payment or satisfaction of a
debt due to such corporation; or, to receive in exchange
for the shares, notes, bonds, or other evidences of debt of
such corporation, the stock, notes, bonds, or other evi-
dences of debt issued by any other stock corporation, is
guilty of a misdemeanor.¹
Reports.2-Every stock corporation, except moneyed
and railroad corporations, must annually, during the
month of January, or if doing business without the United
States, before the first day of May, make a report as of
the first day of January, which must state: The amount
of its capital stock and the proportion actually paid in;
in general terms, the nature of its existing assets and
debts; the amount of its debts or an amount which they
must not exceed; the amount of its assets or an amount
which its assets must at least equal; the names of its then
stockholders. Such report must be signed by a majority
of its directors, and verified by the oath of the president
or vice-president and treasurer or secretary, and filed in
the office of the secretary of state, and in the office of the
county clerk of the county where its principal business
¹ Penal Code, sec. 594. The punishment for a violation of this sec-
tion, is imprisonment in a penitentiary or county jail, for not more than
one year, or by a fine of not more than five hundred dollars, or both.
Penal Code, sec. 15.
2 Most of the former general stock corporation laws (except the tele-
graph and telephone act, and the water-works act, which seem to have
had no provisions on the subject) required that an annual report of the
business and financial status of stock companies be made by the presi-
dent and a majority of the directors, properly verified and filed in the
office of the secretary of state, and the clerk of the county where the
principal business office was located, and imposed a personal liability
for the debts of the corporation upon the directors of companies failing
so to report.
1470
ECONOMIC LEGISLATION.
1
office may be located. If the report is not so made and
filed, all the directors of the corporation are jointly and
severally personally liable for all the debts of the corpora-
tion then existing, and for all contracted before such re-
port is made. No director is liable for the failure to make
and file such report, if he files with the secretary of state,
within thirty days after the first day of January, or the
first day of April, as the case may be, a verified certificate,
stating that he has endeavored to have such report made
and filed, and that the officers or a majority of the direc-
tors have refused and neglected to make and file the same,
and appends to such certificate a report containing the
items required to be stated in such annual report, so far
as they are within his knowledge or are obtainable from
sources of information open to him, and verified by him
to be true to the best of his knowledge, information, and
belief.¹
Stockholders owning five per cent of the capital stock
of any corporation whose stock does not exceed one hundred
thousand dollars, or three per cent where it exceeds one hun-
dred thousand dollars, may make a written request to the
treasurer for a statement of its affairs under oath, embracing
a particular account of all its assets and liabilities, and the
treasurer must make such statement and deliver it to the
person presenting the request within twenty days there-
after, and keep on file for six months thereafter a copy of
such statement, which must at all times during business
hours be exhibited to any stockholder demanding an ex-
amination thereof; but the treasurer can not be required
to deliver more than one such statement in any six suc-
cessive months. For every neglect or refusal of the treas-
urer to comply with this provision he forfeits and must
pay to the person making such request the sum of fifty
dollars, and the further sum of ten dollars for every
¹ Laws, 1890, ch. 564, sec. 30, as amended Laws, 1892, ch. 2.
NEW YORK.
1471
:
twenty-four hours thereafter, until such statement is fur-
nished.¹
Every pipe-line corporation, monthly, on or before the
tenth day of the succceding month, must make a specific
statement, verified by the oath of the president and secre-
tary, that it is in all respects true and correct, showing the
amount of all commodities received, the amount delivered
during the month, and the stock on hand on the last day
of each month of the year, and how much of such stock
is represented by outstanding certificates, vouchers, re-
ceipts, or orders, and how much in credit balances on the
books of the corporation. This must be filed within three
days thereafter in the county clerk's office in the county
where the principal office of the corporation is located,
and a true copy must be posted in a conspicuous place in
its principal office for at least thirty days thereafter.²
Every railroad corporation in this state, or its lessees or
other person, who may be lawfully in possession of its
road, is required to make an annual report to the board of
railroad commissioners, according to the form prescribed by
such commissioners, of its operations for the year ending
with September 30th, and of its condition on that day,
which must be verified by the oaths of the president, or treas-
urer, and the general manager, or acting superintendent;
this must be filed in the office of such board on or before
December 20th in each year (except street surface railroads.
and elevated railways, whose reports are to be filed on or
before December 1st). Every such corporation is further
required to make quarterly and further reports to such
board in the form and within the time prescribed by it.
The date of the annual report and of filing the same may
be changed in the discretion of the board, but the length
of time between the date of the annual report and the
filing of the same can not be less than above prescribed.
Any railroad corporation neglecting to make such report
¹ Laws, 1890, ch. 564, sec. 52. * Laws, 1890, ch. 566, sec. 52.
1472
ECONOMIC LEGISLATION.
2
is liable to a penalty of two hundred and fifty dollars, and
an additional penalty of twenty-five dollars for each day
after December 1st it delays to file the same, to be sued
for in the name and for the use of the people of the state.¹
It has been held, under a similar provision in the general
manufacturing act, that an action to recover against the
directors of a corporation, because of failure to make or file
an annual report, is a penal action which abates upon
death of either party before verdict, but, when a judg-
ment is obtained, the original wrong is merged in the
judgment, which becomes a contract right, subject, of
course, to final reversal upon appeal.³
Taxation. In order to make clear the somewhat com-
plicated system of taxes to which corporations are subject
in this state, it will be necessary to give a brief resume of
the general scheme of taxation. Property liable to taxa-
tion, both of individuals and corporations, consists of lands
and personal property within the state. For the purposes
of taxation, the terms "lands," "real estate," and "reak
property" are defined to include not only the land itself,
but also all structures, superstructures, or substructures.
thereon or thereunder, such as telegraph lines and appur-
tenances, railroad tracks and structures, gas and water
pipes and mains, etc. Prior to the enactment of this
statute as amended above, the court of appeals had de-
clared that gas mains and pipes were not real estate under
the statute for the purpose of taxation. An elevated rail-
way may be taxed as real estate, though the fee of the
land on which it stands is in a person or corporation ex-
empt from taxation."
5
Personal property owned in the state, but permanently
¹ Laws, 1890, ch. 565, sec. 57.
3 Carr v. Rischer, 119 N. Y. 117.
* Laws, 1848, ch. 40.
R. S., pt. 1, tit. 1, ch. 13, sec. 2, as amended, Laws, 1881, ch. 293;.
Banks, 1082; Birdseye, 2952.
5
People v. Bd. of Assessors, etc., 39 N. Y. 81.
People v. Com'rs of Taxes, 82 N. Y. 459.
NEW YORK.
1473
situated away from the owner and not within the jurisdic-
tion of the state, is not included. On the other hand,
personal property of a non-resident within the state is
subject to taxation.
For the purpose of government, the state is divided into
sixty counties, and each county into a number of towns.
Every person is assessed in the town or ward where he
resides, for all his personal property, including what he
holds in a representative capacity. Lands, on the other
hand, are assessed in the town or ward where situated,
and the town or ward in each case is the unit for the pur-
poses of taxation. Thus, where a railroad runs through
several towns, the portion lying within each town is tax-
able there; and all lands, including lands belonging to
corporations (except telegraph property, which will be al-
luded to hereafter), are assessed according to this princi-
ple. Each county sends yearly to the comptroller of the
state the aggregate valuation, determined by its assessors,
of all the real and personal estate within it. These ag-
gregate valuations are examined by a state board of equal-
ization, consisting of certain specified officers. This
board has the power to increase or diminish the aggregate
valuation in any county, though it can not reduce the
aggregate valuation of all the counties.2 The state legis-
lature fixes the rate of tax for state purposes. The board
of equalization sends the valuation of each county, as
fixed by it, to the state comptroller, who, by means of the
rate fixed by the legislature, fixes the quota of state taxes
to be paid by each county. This quota is added to the
local taxes of each county, which are fixed by the board
of supervisors of such county (in the city and county of
New York by the board of aldermen), and together these
make up the local burden of taxation which is collected
by the local authorities, except municipal taxes in the
form of assessments for local improvements, those which
¹ See People ex rel. Hoyt v. The Com. of Taxes, 23 N. Y. 224.
2 Laws, 1859, ch. 312; Banks, 1108; Birdseye, 2978 et seq.
!
1474
ECONOMIC LEGISLATION.
are specially provided for by the charter of each munic-
ipality, and school and highway taxes-all of which do
not come within the purview of an article of this kind.
9
In 1880,¹ a new system of corporation taxes, borrowed
from the State of Pennsylvania, was introduced, by which
a tax is imposed upon the franchise of domestic corpora-
tions and upon the business within the state of foreign
corporations, which is to be paid directly into the state
treasury. This statute and the statute amendatory of it
(which are hereafter given) free the personal estate of all
corporations from contributing locally to make up the
quota of state taxes; so that at present the real estate of
every corporation contributes directly to make up the
state quota, as well as the local quota, but the personal
estate and capital stock pay only local taxes. Such local
taxes upon the personal estate of a corporation are as-
sessed in the town or ward where the principal office or
place for transacting the financial concerns of the com-
pany is located, or in case it has no such office or place
for transacting its financial concerns, then in the town or
ward where the business of the company is carried on;
and its real estate is taxed in the town or ward where it
is situated, in the same manner as the real estate of indi-
viduals.2
The president, cashier, secretary or treasurer, or other
proper officer of every incorporated company deriving an
income from its capital or otherwise, must on or before
the first day of July, in each year, make and deliver to
the assessors, or one of them, of the town or ward in
which the company is liable to be taxed a written state-
Laws, 1880, ch. 542; Banks, 1152; Birdseye, 3011, par. 335. This
statute was amended (Laws, 1881, ch. 361) as a whole, and not by sec-
tions. The amendatory act was held to be constitutional in People v.
Equitable Trust Co., 96 N. Y. 387; People v. Gold, etc., Telegraph Co.,
98 N. Y. 67.
2 R. S., pt. 1, tit. 2, ch. 13, art. 1, sec. 6; Birdseye, 2962, par. 54;
Banks, 1094.
NEW YORK.
1475
ment specifying: The real estate owned by the company,
the town or ward where the same is situated and the
sums actually paid therefor; the capital stock actually
paid in and secured to be paid in, excepting therefrom
the sum paid for real estate, and the amount of stock held
by the state or by any incorporated charitable or literary
institutions which are exempt; the town or ward where
the principal business office or place for transacting the
financial business of the corporation is situated, or if there
is no such place, the town or ward where the business is
carried on, or in which it is liable to be taxed.' Such
statement must also be delivered to the comptroller, on or
before the first day of July, and must be certified under
oath of the officer making it, to be in all respects just
and true. There is a penalty attached to the failure to
make such statement, and a long and complete process.
for enforcing collection of taxes against a corporation
through the comptroller and attorney-general.³
2
In making up the taxes to be paid upon the capital stock
the actual value of the capital stock is taken, together with
the surplus profits and reserve funds exceeding ten per
cent of its capital, from which is deducted the assessed
value of the real estate situated in the state and the actual
value of the real estate outside the state for the purpose
of preventing double taxation, as the real estate is always
assessed in the locality where it lies, and also the deduc-
tions specified above as exemptions.*
It is made the duty of the town assessors to apportion.
the valuation of the property of each and every railroad,
telegraph, telephone, and pipe line company appearing on
the assessment list among the several school districts in
¹ R. S., pt. 1, tit. 4, ch. 13, secs. 1, 2; Birdseye, 3008, par. 317; Banks,
1149.
R. S., supra, sec. 3; Birdseye, 3008, par. 318; Banks, 1149.
* See laws set forth in Birdseye, 3008 et seq.; Banks, 1150.
* See Banks, 1149; Laws, 1857, ch. 456; Banks, 1086; Birdseye, 2008,
par. 321.
1476
ECONOMIC LEGISLATION.
their town in which any portion of the property is situated.¹
The portion of any telegraph or telephone or electric light
line in any town or ward in this state is assessed in such
town or ward to the owner, or person, or corporation, or
association in control thereof in the manner provided by
law for the assessment of the lands of resident owners.²
The real and personal property of pipe line companies is
assessed and taxed in the several towns, villages, and cities
in the same manner as is the property of railroad corpora-
tions.3
These provisions govern the local taxation of corpora-
tions. In addition to this, a special tax solely for state
purposes is assessed upon the corporate franchise or busi-
ness.¹
Every corporation, joint-stock company, or association
whatever, domestic or foreign, doing business in this state,
except only savings banks and institutions for savings, life
insurance companies, banks, foreign insurance companies,
manufacturing or mining corporations or companies wholly
engaged in carrying on manufacture or mining ores with-
in this state, and agricultural and horticultural societies,
associations or corporations, which exceptions, however,
do not include gas companies, trust companies, electric or
steam heating, lighting, and power companies, are liable
to and must pay a tax, as a tax upon its franchise or busi-
ness, into the state treasury annually.5
The president or treasurer of every such association,
corporation or joint-stock company is required to make
report in writing to the comptroller, annually, on or be-
fore the fifteenth day of November, stating specifically the
¹ Laws, 1867, ch. 694, as amended, Laws. 1884, ch. 414; Banks, 1326;
Birdseye, 3017, par. 355.
2 Laws, 1886, ch. 659; Banks, 2066; Birdseye, 3020, par. 370.
3 Laws, 1890, ch. 566, sec. 54.
Laws, 1880, ch. 542, as amended, Laws, 1881, ch. 361; Laws, 1882, ch.
151; Laws, 1885, ch. 359, 501; Laws, 1889, ch. 193, 353, 463; See Birdseye,
3010 et seq.; Banks, 1152 et seq.
5 Laws, 1880, ch. 542, sec. 3, as amended Laws, 1890, ch. 522.
NEW YORK.
1477
amount of capital paid in, the date, amount, and rate per
centum of each and every dividend declared by the com-
pany during the year ending with the first day of said
month. In cases where the corporation fails to make or
declare a dividend upon either its common or preferred
stock during the year, or in case the dividends amount
to less than six per cent upon the par value of the
common or preferred stock, the secretary and treasurer,
after being duly sworn or affirmed to do and perform the
same with fidelity according to the best of their knowl-
edge and belief, must, between the first and fifteenth days
of November, in each year in which no dividend is made
or declared, or in which said dividends amount to less
than six per cent upon the par value of the stock, esti-
mate and appraise the stock of the company upon which
no dividend has been declared, or upon which the divi-
dends are less than six per cent, at its actual value in cash,
not less, however, than the average price which said stock
sold for that year; and when the stock has been so ap-
praised, they must forward to the comptroller a certificate
thereof duly verified, signed, and attested. If the comp-
troller is not satisfied with the valuation so made, he is
authorized and empowered to make a valuation thereof,
and to settle an account upon the valuation so made for
the taxes, etc., due the state. Any corporation dissatisfied
with the account so settled, may, within ten days, appeal
therefrom to a board made up of the secretary of state,
the state treasurer, and attorney-general, which board must
affirm or correct the account so settled by the comptroller,
and its decision is final; but such appeal does not stay
proceedings, unless the whole amount of the taxes, etc.,
as settled by the comptroller, is deposited with the state
treasurer.¹
If the dividend or dividends made or declared by such
corporation, joint-stock company or association, during
¹ Laws, 1880, ch. 542, sec. 1, as amended Laws, 1881, ch. 361.
1478
ECONOMIC LEGISLATION.
any year, amount to six or more than six per centum
upon the par value of its capital stock, then the tax
is to be at the rate of one-quarter mill upon the capital
stock for each one per centum of dividends so made or
declared; or if no dividend be made or declared, or if the
dividends made or declared do not amount to six per
centum upon the par value of said capital stock, then the
tax is to be at the rate of one and one-half mills upon
each dollar of the valuation of the said capital stock, made
in accordance with the provisions above; and in case any
such corporation, joint-stock company or association has
more than one kind of capital stock, as, for instance, com-
mon and preferred stock, and upon one of said stocks a
dividend or dividends amounting to six or more than six
per cent upon the par value has been made or declared,
and upon the other no dividend has been made or declared,
or the dividends thereon amount to less than six per
centum upon the par value thereof, then the tax is to be
at the same rate of one-quarter mill for each one per
centum of dividends made or declared upon the cap-
ital stock upon the par value of which the dividends
made or declared amount to six or more than six per
centum, and tax is to be charged also at the rate of
one and one-half mills upon each dollar of a valuation,
made in accordance with the provisions above, of the cap-
ital stock upon which no dividend was made or declared,
or upon the par value of which the dividends made or de-
clared did not amount to six per centum.'
It is the duty of the treasurer or other officer having
charge of the corporation to transmit the amount of the
tax to the treasury of the state within fifteen days after
the first day of January in each and every year.²
The amount of capital stock liable to taxation hereun-
der is the amount of capital stock employed within this
state, and in making to the comptroller the report in writ-
¹ Laws, 1880, ch. 542, sec. 3, as amended Laws, 1890, ch. 522.
* Laws, 1880, ch. 542, sec. 4.
NEW YORK.
1479
ing or certificate of estimate and appraisal aforesaid, it is
the duty of the president or treasurer to state specifically
the amount of capital stock employed within this state;
whenever the comptroller is dissatisfied with such report
or certificate of any corporation, whose capital is only par-
tially employed within this state, he is authorized and em-
powered to ascertain, fix, and determine the amount of
capital employed within this state, and settle an account
for the taxes and penalties due the state thereon.¹
If the officers of such corporation neglect or refuse to
comply with these provisions or to pay such tax, it be-
comes the duty of the comptroller of the state to add ten
per centum to the tax for each year for which such report
or certificate of appraisement and oath were not so fur-
nished, or for which such taxes have not been paid, for
which years taxes must be collected with the current
tax in the usual manner; but if the officers intentionally
fail to comply with these provisions for two successive
years, the comptroller must report the fact to the gov-
ernor, who, upon being satisfied that such delay was in-
tentional, must direct the attorney-general to take pro-
ceedings to declare the charter and privileges of said cor-
poration forfeited, and for such intentional failure the
charter, privileges, etc., of such corporation shall cease,
end, and be determined.2
In addition to the tax above provided for, every corpora-
tion formed for railroad or transportation purposes, and
every elevated railway company, and every other corpora-
tion, joint stock company, or association, foreign or do-
mestic, doing business in this state, aud owning, operat-
ing, or leasing to or from another corporation, joint stock
company or association, any railroad, pipe-line, or trans-
portation route or line or elevated railway or other device
for the transportation of freight or passengers, or in any
way engaged in such business, and every telegraph or tel-
¹ Laws, 1880, ch. 542, as amended Laws, 1882, ch. 151.
2 Laws, 1880, ch. 542, sec. 2.
1480
ECONOMIC LEGISLATION.
ephone corporation doing business in this state, must pay to
the state treasurer, as a tax upon its corporate franchise or
business, five-tenths of one per centum upon its gross
earnings in this state. This tax must be paid annually
on the first day of August in each year, and it is the
duty of the president, secretary, or other proper officer
of the company, on the same day, to transmit to the
comptroller, a statement under oath or affirmation of
the amount of the gross earnings of said companies,
derived from all sources during the year ending with
the preceding thirtieth day of June, together with the
amount of such tax so imposed. A penalty of ten per
centum is to be imposed upon any corporation which neg-
lects or refuses so to do for a period of thirty days after
any such tax becomes due.2
The corporations paying these special taxes are exempt
from all other taxes for state purposes, except upon their
real estate, but in all other respects they are subject to as-
sessment and taxation as heretofore.³
These special taxes are applicable to the ordinary and
current expenses of the state, and an action may be
brought by the attorney-general at the instance of the
comptroller, against any company neglecting or refusing
to pay any such tax.'
4
The comptroller has power to examine books, etc., of
companies failing to make proper reports or certificates,
and from the books and records, or from any other data in
his possession which is satisfactory to him, to settle the
tax and penalty." He may issue subpoenas for the exam-
ination of any person as a witness upon any subject or
matter relating to the capital stock of the corporation, and
persons disobeying such subpoenas are liable to punish-
ment.6
All accounts for taxes settled by the comptroller agree-
¹ Laws, 1880, ch. 542, sec. 6.
3 Laws, 1880, ch. 542, sec. 8.
5 Laws, 1880, ch. 542, sec. 12.
2
4
Laws, 1880, ch. 542, sec. 7.
Laws, 1880, ch. 542, sec. 9.
• Laws, 1880, ch. 542, sec. 13.
NEW YORK.
1481
1
ably to these provisions bear interest from a date thirty
days after the notice of settlement, and the comptroller is
required to send a notice in writing by mail to the post-
office address of such corporation, of the settlement of
said taxes.¹
The determination and settlement by the comptroller as
to the amount of capital stock used within the state, and
the tax and penalty to be paid thereon, can not be re-
viewed by writ of certiorari unless application therefor be
made within thirty days after the service of the notice of
settlement upon the corporation by the comptroller; and
motion for such writ must be made upon eight days' no-
tice to the comptroller. The corporation applying for the
writ must deposit with the state treasurer, before applying
therefor, the full amount of charges so settled by the
comptroller, and file with him an undertaking in such an
amount, and with such sufficient sureties as may be ap-
proved by one of the justices of the supreme court, to the
effect that, if the writ be vacated and the determination
of the comptroller sustained, the applicant for the writ
will make payment of all costs and charges which may
accrue against such applicant in the prosecution of such
writ, including costs on all appeals.2
After the expiration of thirty days from the service by
the comptroller of the notice of settlement aforesaid, if
no proceedings have been taken to review the same, it is
lawful for the comptroller to issue his warrant to the
sheriff of any county in the state, commanding him to
levy upon and sell the goods, chattels, lands, and tene-
ments of the corporation within his county, for the pay-
ment of the amount of said settlement, together with in-
terest and costs. Such warrant becomes a lien upon the
personal estate of the person, corporation, etc., against
which it is issued, from the time an actual levy is made,
Laws, 1881, ch. 361, secs. 15, 16; see Laws, 1885, ch. 501.
2 Laws, 1881, ch. 361, sec. 17; see Laws, 1885, ch. 501.
VOL. II-13
1482
ECONOMIC LEGISLATION.
*
and the proceedings are the same as in the case of an exe-
cution against property issued to the sheriff.¹
2
The comptroller is given power to readjust settlements
of taxes, and resettle the same, whenever it appears to
him that the same have been illegally paid, or so made as
to include taxes which should not have been lawfully de-
manded. The action of the comptroller upon such re-
settlement may be reviewed, both upon the facts and the
law, upon a writ of certiorari, by the supreme court, either
at the instance of the party making the application or by
the attorney-general in the name of the people of the
state, and from the decision of the supreme court an ap-
peal is given to the court of appeals.3
It must be remembered that in the case of foreign cor-
porations the tax is only upon the business within the
state, and hence no apportionment or appraisal of the
capital stock as above provided is required.*
Such taxes are taxes upon the franchise and not upon
property, and the fact that dividends derived partly from
United States securities, not taxable, furnish the basis for
computing the amount of tax, does not invalidate the stat-
ute; the amount of stock which is invested in such securi-
ties is not to be deducted from the whole capital stock, as
the tax is on the franchise and not on the property, and
the dividends are merely a measure of the value of the
franchise; neither is the statute unconstitutional under the
general constitutional provision, providing that the spe-
cific purpose of the taxes is to be sought in the provision
of the statute which imposes or creates it.5
It is lawful for any person having knowledge of the
evasion of taxation of franchises, etc., under the provisions
above cited, to report the same to the comptroller, and the
Laws, 1880, ch. 542, sec. 18; Laws, 1885, ch. 501.
2 Laws, 1880, ch. 542, sec. 19, as added to, Laws, 1889, ch. 463.
Laws, 1880, ch. 542, sec. 20, as added to, Laws, 1889, ch. 463.
People v. Equitable Trust Company, 96 N. Y. 387.
5 People v. Home Insurance Company, 92 N. Y. 328.
NEW YORK.
1483
attorney-general or comptroller may in his discretion
employ such person to assist in the collection of such evi-
dence to the prosecution and trial of suits for such taxes,
and to allow as compensation, from the sum collected, a
sum not exceeding ten per centum.¹
What has been said covers for the most part the general
taxes which are to be paid by corporations. It does not,
however, include taxes which are levied by municipalities
for exclusively municipal purposes, and which become
part of the total amount collected locally. For these taxes
special local laws must be consulted.
See "CHARGES FOR FRANCHISES," Subdivision III, below.
Of stock in hands of holders.-Shares of stock in corpo-
rations liable to taxation on their capital are exempt from
taxation.2
Exemptions from.-All stocks owned by the state, lit-
erary, or charitable institutions are exempt from taxation.³
Municipal authorities have power to exempt any gas
company from taxation on its personal property for a
period not exceeding three years from the organization of
the corporation.*
Consolidation of companies.-No stock corporation can
combine with any other corporation for the prevention of
competition.5. Any two or more gas or electric light cor-
porations may consolidate into a single corporation by
complying with the provisions of the business corpora-
tions law relating to the consolidation of business corpo-
rations.*
Any telegraph or telephone corporation organized under
the present law may lease, sell, or convey its property,
rights, privileges, and franchises, or any interest therein,
to any telegraph or telephone corporation, foreign or do-
mestic, and may acquire by purchase, lease, or conveyance
1 Laws, 1886, ch. 266, sec. 1.
2 R. S., pt. 1, tit. 1, ch. 13, sec. 7; Banks, 1084; Birdseye, 2953.
3
⁹ R. S., pt. 1, tit. 1, ch. 13, sec. 4, par. 6; Banks, 1083; Birdseye, 2952.
• Laws, 1890, ch. 566, sec. 61.
Laws, 1890, ch. 564, sec. 7.
1484
ECONOMIC LEGISLATION.
the property, rights, privileges, and franchises, or any in-
terest therein, of any such corporation, and may make or
receive payments thereof in its own stock, money, or
property, or in stock, money, or property of such other
corporation, but no such lease, sale, purchase, or convey-
ance is valid until ratified and approved by a three-fifths
vote of its board of directors or trustees, and by the vote.
or written consent of stockholders owning at least three-
fifths of the capital stock given at a meeting of all the
stockholders duly called for that purpose.'
Elaborate provisions for the consolidation of railroad
corporations exist, but it is specifically provided that
"street railroads shall not be consolidated under the pro-
visions" of the same."
Any street surface railroad corporation, or any corpora-
tion owning or operating any such railroad or railroad
route, in any city having a population of eight hundred
thousand or more, may contract with any other such cor-
poration for the use of their respective roads or routes in
such city, and thereafter may use or permit the use of the
same in such manner as may be prescribed in such con-
tract, provided it is not inconsistent with the provisions.
of the charter of the corporation whose railroad or route
is to be used under such contract. The contract must be
executed by the directors of the corporations under the
corporate seal of each corporation,3 and must be submitted
to the stockholders of each corporation at a meeting sepa-
rately called for considering the same. Notice of the time
and place of holding such meeting must be published
daily for at least four weeks in some newspaper in such
city last designated for the publication of the session laws
or of judicial proceedings and legal notices, and a copy of
such notice must be served on each of the persons in
1 Laws, 1890, ch. 566, sec. 104.
2
Laws, 1890, ch. 565, sec. 71, par. 2. As to consolidation of railway
companies, see sec. 70 et seq.
³ Laws, 1890, ch. 565, sec. 103.
NEW YORK.
1485
whose names the capital stock of each corporation stands
on the books thereof or on his legal representatives, either
personally or by duly mailing the same addressed to him or
his personal representatives at the address of such person
as stated on such books, at least thirty days before the
time of holding such meeting. At such meeting, a vote
by ballot must be taken upon the adoption or rejection of
such contract, and if two-thirds of all the stockholders
owning two-thirds of all the stock vote for the adoption
of such contract, that fact must be certified on the con-
tract by the secretaries of the respective corporations un-
der the seals thereof. The contract so adopted and certi-
fied, or a certified copy thereof, must be filed and recorded
in the office of the secretary of state and of the clerk or
register of the county in which such roads are located,
and from the time of such filing, is deemed and taken as
the contract of such corporations.'
Dissolution; forfeiture.-As to dissolution for failure
to organize and commence business, see " COMMENCING BUSI-
NESS,” p. 1432. See also "FORFEITURE OF FRANCHISES," p.
1563.
Failure to elect directors upon the day designated in the
by-laws does not dissolve the corporation,² but intentional
failure to comply with the provisions relative to the fran-
chise tax renders the corporation liable to dissolution as
shown above.3
Upon the dissolution of any corporation, its directors,
unless other persons are appointed by the legislature, or
by the court, are trustees of its creditors, stockholders or
members, and have full power to settle its affairs, collect
and pay outstanding debts, and divide among the persons.
entitled thereto the moneys and other property remain-
ing after payment of debts and necessary expenses. Such
¹ Laws, 1890, ch. 565, sec. 104.
2 Laws, 1890, ch. 563, sec. 18. See
QUORUM, ETC.," p. 1441.
* See "TAXATION," p. 1489.
4
OFFICERS; MEETINGS; VOTING ;
Laws, 1890, ch. 563, sec. 19.
i
1486
ECONOMIC LEGISLATION.
trustees have authority to sue for and recover the debts
and property of the corporation, by their name as such
trustees, and are jointly and severally personally liable to
its creditors, stockholders, or members, to the extent of its
property and effects that come into their hands.¹
Foreign corporations.-Any foreign corporation may
purchase at a sale upon the foreclosure of any mortgage
held by it, or upon any judgment for debts due it, or upon
any settlement to secure such debts, any lauds lying within
this state covered by or subject to such mortgage, judg-
ment, decree, or settlement, and hold the same for not ex-
ceeding five years from the date of such purchase, and
convey them by deed or otherwise, in the same manner as
a domestic corporation.²
Any foreign corporation doing business in this state
may acquire such real property in this state as may be
necessary for its corporate purposes in the transaction
of its business within the state, and convey the same by
deed or otherwise in the same manner as a domestic cor-
poration."
3
The transfer agent in this state of any foreign corpora-
tion, whether such agent is a corporation or a natural per-
son, must at all times during the usual hours of trans-
acting business, exhibit to any stockholder the transfer
book, and a list of the stockholders thereof, if in their
power to do so, and for every violation of this provision
such agent, or any officer or clerk of such agent, forfeits
the sum of two hundred and fifty dollars, to be recovered
by the person to whom such refusal was made.*
SUBDIVISION III.-FRANCHISES.
How obtained. In this state, the franchise, privilege,
or right to use the streets or highways for particular pur-
poses does not necessarily inure to a corporation by
¹ Laws, 1890, ch. 563, sec. 20.
Laws, 1890, ch. 563, sec. 12.
•
2 Laws, 1890, ch. 563, sec. 13.
Laws, 1890, ch. 564, sec. 56.
NEW YORK.
1487
reason of the mere fact of its incorporation for a particu-
lar object, for the attainment of which the grant of the
franchise in question is necesssary. Such privilege is usu-
ally the result of a separate and additional grant by the
sovereign power.
Subject to the rights of private property owners, the
power to grant franchises to use the public streets of any
city or municipal division resides primarily in the legis-
lature. A municipal corporation does not possess such
power, by reason of its general power over the streets. It
was held at quite an early date, in this state, that the right
to grant franchises of this character is not included in the
powers of a common council, as commissioners of highways.'
It is equally clear that any interference, however slight,
with the streets of a city can not be allowed in the ab-
sence of unmistakable authority from the legislature per-
mitting it. Whenever privileges of this kind are granted
to a corporation they are construed with great strictness.
against the grantee.³
The legislature has very generally delegated its power
to municipalities in this respect. Thus, gas, electric light
and water-works companies, may lay conductors, erect
poles and wires, etc., in cities, towns, and villages with the
consent of the municipal authorities, and under such rea-
sonable regulations as may be prescribed by such author-
ities.
The method of obtaining such franchises is by petition,
usually verified, to the municipal authorities having con-
trol of the subject-matter. In the case of cities these
are the common council, subject to the veto power of the
mayor, and in villages the board of trustees. In applying
for a franchise in any particular locality, care should be
taken to examine the charter or articles of incorporation
of the village or municipality, as such applications will
¹ Davis v. Mayor, etc., 14 N. Y. 506.
2
3
People v. Thompson, 98 N. Y. 6.
People v. Newton, 112 N. Y. 396.
1488
ECONOMIC LEGISLATION.
always be governed by any special provisions therein con-
tained.
It will thus be seen that under the fundamental laws of
the state, as it now exists, a franchise can not ordinarily
be obtained by private act. Application must always be
made in conformity with the provisions of the act under
which the company is sought to be incorporated.
Gas and electric light companies.-Gas companies incor-
porated for the purpose of supplying gas for light in the
city, town, or village where located, or in any two or
more villages or towns not over five miles distant from
each other, named in its certificate of incorporation, are
empowered to lay conductors for conducting gas through
the streets, lanes, alleys, squares and highways in such
cities, villages or towns with the consent of the municipal
authorities thereof, and under such reasonable regulations
as they may prescribe.¹
Electric light companies incorporated for the purpose of
using electricity for light, heat or power, are authorized to
lay, erect and construct suitable wires, or other conduct-
ors, with the necessary poles, pipes or other necessary fix-
tures in, on, over, and under the streets, avenues, public
parks and places of such cities, towns or villages for con-
ducting and distributing electricity with the consent of
the municipal authorities thereof, and in such manner and
under such reasonable regulations as they may prescribe.'
Water-works companies.-Water-works companies are au-
thorized to lay and maintain their pipes and. hydrants for
delivering and distributing water in any street, highway,
or public place of any town or village in which it has ob-
tained the permit so to do, and to lay their water pipes in
any streets, avenues, or public places of an adjoining town
or village.²
1 Laws, 1890, ch. 566, sec. 61; Laws, 1848, ch. 37, sec. 18, as amended,
Laws, 1871, ch. 95; Laws, 1879, ch. 512, sec. 2; Banks, 2078, sec. 18;.
2083; Birdseye, 1247, par. 18; 1252, par. 40.
2 Laws, 1890, ch. 566, sec. 82.
NEW YORK.
1489
As stated above (see "ARTICLES OF INCORPORATION"),
water-works companies, before incorporation, must secure
a permit, signed and acknowledged by a majority of the
board of trustees of the village in case an incorporated
village is to be supplied with water, or, in case a town or
any part thereof not within an incorporated village is to
supplied, by the supervisor, justices of the peace, town
clerk, and highway commissioners thereof, or a majority
of them, authorizing the formation of such corporation
for the purpose of supplying such village or town with
water.¹
Telegraph and telephone companies.-Telegraph and tele-
phone companies are authorized to construct and maintain
the necessary fixtures for their lines upon, over, or under
any of the public roads, streets, or highways, through,
across, or under any of the waters within the limits of this
state, and upon, through, or over any other land, subject
to the rights of the owners thereof to full compensation
for the same.2
Pipe-line companies.-Every pipe-line corporation, before
commencing the construction of its pipe line in any county,
or any proceeding for the condemnation of real property,
must plainly and distinctly mark and designate the line
adopted and located by them by a line of stakes consecu-
tively numbered and equally distant, not more than twenty
rods apart, so that each line can be definitely known and
ascertained in all places, and must make a map and survey
of the route so located and staked out, indicating thereon
the points where such route crosses each parcel of land to
which they have not acquired title by agreement; such
map and survey must be certified by the president and en-
gineer, and filed in the office of the clerk of the county
into or through which the line so located and mapped
passes; written notice of such filing must be given to the
¹ Laws, 1890, ch. 566, sec. 80.
2 Laws, 1890, ch. 566, sec. 102. As to operation of lines not mentioned
in articles of incorporation, see “AMENDMENTS, REPEALS, ETC.,' supra.
1490
ECONOMIC LEGISLATION.
owner or occupant, if he is known or can be ascertained,
of every parcel of land through which such route passes,
the title to which has not been acquired by purchase,
stating that such route passes over or across such owner's
or occupant's lands, and that the route thereof is indicated
thereon by such line of stakes. Any occupant or owner,
feeling aggrieved by the proposed location, may, within
fifteen days after the service of such notice, give ten days
written notice to the corporation, by service upon the
president, engineer, or any director thereof, and to the
owner or occupant of any lands to be affected by the al-
teration to be proposed by him, of the time and place
of an application to be made by him to a special term
of the supreme court in the judicial district in which
the lands are situated for the appointment of commis-
sioners to re-locate such line. If, upon the hearing, the
court considers that sufficient cause exists therefor, it must
appoint three disinterested persons commissioners, to ex-
amine the route located, and the proposed alteration
thereof, and direct the mode of proceeding; such commis-
sioners must report to the court the facts relating thereto,
and their opinion as to the proposed alteration, and what,
if any, alteration should be made in such line, and, there-
upon, the court must make such order as it deems proper
in relation to such alteration, and determine the location
of such line, and fix and adjust the costs, fees, and charges
of the commissioners, and the costs and charges of the
proceedings, and direct by which party the same shall be
paid, and may enforce payment thereof; such order is
final as to the location of the line upon the lands embraced
therein. The work of constructing or laying pipe, or the
instituting of proceedings for the condemnation of real
property, in any county, can not be commenced until after
the expiration of fifteen days from the service of the re-
quired notice, nor until all applications for a relocation of
the line in such county have been finally determined.¹
¹ Laws, 1890, ch. 566, sec. 41.
NEW YORK.
1491
:
Whenever any line of pipe of any such corporation
necessarily crosses any railroad, highway, turnpike, or
plank-road, it must be made to cross under the same, and
with the least injury thereto practicable; and unless the
right to cross is acquired by agreement, compensation
must be ascertained and made to the owners thereof, or to
the public in case of highways, in the manner prescribed
in the condemnation law, but no exclusive title or use can
be so acquired as against any railroad, turnpike, or plank-
road corporation, nor as against the rights of the people
of the state in any public highway, but the rights acquired
are a common use of the lands in such manner as to be of
the least practical injury, consistent with the use thereof
by such pipe-line corporation, nor can any such corpora-
tion take or use any lands, fixtures, or erections of any
railroad corporation, or acquire by condemnation the title
or use or right to run along or upon the lands of any such
corporation, except for the purpose of directly crossing the
same when necessary.¹
No pipe-line can be constructed upon or across any of
the canals of this state, except by the consent of and in
the manner, and upon the terms prescribed by the superin-
tendent of public works, unless constructed upon a fixed
bridge across such canal, with the consent of the person
for whose benefit such bridge is constructed and main-
tained, or upon such a bridge over the canal, at the cross-
ing of a public highway or street, with the consent of the
public officers having the supervision thereof, or of the
municipal authorities of any village or city within whose
limits such bridge may be, nor can the pipes of any such
corporation be laid through or along the banks of any of
the canals of this state, nor through or under any of its
rivers or creeks, unless such pipes are encased so as to pre-
vent leakage, in such manner as shall be approved by the
superintendent of public works.²
1 Laws, 1890, ch. 566, sec. 43.
2 Laws, 1890, ch. 566, sec. 44.
1492
ECONOMIC LEGISLATION.
Pipe-line companies can not construct their works across,
along or upon any public highway without the consent of
the commissioners of highways or municipal authorities
of the town in which such highway is located, upon such
terms as may be agreed upon. If such consent can not
be obtained, application may be made to the general term
of the supreme court of the department in which such
highway or bridge is situated for an order permitting the
corporation to construct its line along or upon such high-
way or upon such bridge. The application must be by
duly verified petition and notice, which must be served
upon the commissioners of highways or the municipal au-
thorities of the village or city according to the practice or
order of the court, or by an order to show cause; and the
court, upon the hearing of the application, may grant an
order permitting the line to be so constructed in such
manner and on such terms as it may direct.'
No pipe line can be constructed into or through any in-
corporated village or city in this state unless authorized
by a resolution prescribing the route, manner of construc-
tion, and terms upon which granted, adopted at a regular
meeting of the board of trustees of the village or the
common council of the city by a two-thirds vote, but such
resolution does not affect any private right. No pavement
can be removed in any city under these provisions, unless
done under the direction of the common council, nor until
such corporation has given a bond in such sum as the
common council may require for the replacing of the
same. In case any pavements are removed and not prop-
erly relaid, the common council may bring suit in any
court of record for the cost of relaying such pavements.
No gas-houses can be erected in any city under these pro-
visions for supplying gas to the inhabitants, unless consent
is first given by the corporate authorities of the city."
No pipe-line company can construct any line of pipe
1 Laws, 1890, ch. 566, sec. 45.
2 Laws, 1890, ch. 566, sec. 46.
NEW YORK.
1493
through or under any building, door-yard, lawn, garden, or
orchard, except by the consent of the owner in writing, duly
acknowledged, nor through any cemetery, nor within one
hundred feet of any building, except when authorized by
public officers to be laid upon or across any highway, or
when laid across or upon any turnpike or plankroad; and
no pipes can be laid for the purpose of carrying petroleum,
gas, or other property through any streets in cities without
the consent of a majority of the property owners on such
streets; and such pipes must be located with all reason-
able care and prudence, so as to avoid danger from the
bursting of the pipes.¹
Railroad companies generally.2—No railroad corporation
can erect any bridge or other obstruction across, in, or
over any stream or lake navigated by steam or sail boats
at the place where it may be proposed to be erected, nor
construct its road in, upon or across any street of any city
without the assent of the corporation of such city; nor
across, upon or along any highway in any town or street
in any incorporated village, without the order of the su-
preme court of the district in which such highway or
street is situated, made at a special term thereof, after at
least ten days written notice of the intention to make ap-
plication for such order has been given to the commis-
sioners of highways of such town or board of trustees of
the village in which such highway or street is situated.³
Any individual, joint-stock association, or corporation.
engaged in any lawful business in this state may, except
in any city of the state, lay down and maintain such rail-
road tracks on or across any street or highway, not exceed-
ing three miles in legnth, as may be necessary for the trans-
action of its business, and to connect any place of business
owned by them with the track of any railroad corpora-
tion, and to render such place of business more accessible to
the public, upon obtaining the written consent of the own-
1 Laws, 1890, ch. 566, sec. 42.
³ Laws, 1890, ch. 565, sec. 11.
2 See note 2, p. 1439.
1494
ECONOMIC LEGISLATION.
ers of all the lands bounded on, and of the local author-
ities having control of that portion of the street or high-
way upon which it is proposed to construct or operate
such railroad. If the consent of such property owners
can not be obtained, the general term of the supreme
court of the department in which such railroad is to be
constructed may, upon application, appoint three commis-
sioners, who must determine, after a hearing of all parties
interested, whether such railroad ought to be constructed
or operated, and the amount of damages, if any, to be
paid to such property owners; and their determination,
confirmed by the court, may be taken in lieu of the con-
sent of the property owners. But no such railroad can
be so located, graded, built, or operated as to interfere
with or obstruct the traveled part of any highway, or its
use as a highway, or the use of any street or highway in-
tersecting the same.¹
Street surface railroads.—Street surface railroads can not
be built, extended or operated, unless the consent in writ-
ing, acknowledged as are deeds entitled to be recorded,
of the owners of one-half in value of the property bounded
on, and also the consent of the municipal authorities hav-
ing control of that portion of a street or highway upon
which it is proposed to build or operate such railroad, has
been first obtained. In cities the common council, acting
subject to the veto power of the mayor; in villages the
board of trustees; and in towns the town board, are the
municipal authorities referred to. If, in any city, the ex-
clusive control of any street, avenue, or other property,
which is to be used or occupied by any such railroad, is
vested in any other authority, the consent of such author-
ity must also first be obtained. The value of the property
as above specified must be ascertained and determined by
the last completed assessment roll of the city, village, or
town in which it is situated, excepting property owned by
¹ Laws, 1890, ch. 565, sec. 20.
NEW YORK.
1495
t
such city, village, or town, the value of which must be as-
certained and determined by making the value thereof to
be the same as is shown by such assessment roll to be the
value of the equivalent in size and frontage of the adja-
cent property on the same street or highway.
The con-
sent of the municipal authorities operates as the consent
of such city, village, or town, as the owners of such prop-
erty; but where such railroad runs through a street or
avenue bounded on one side by a public square or park,
the consent of one-half of the property owners on the
opposite side of such square or park must also be first
obtained.¹
The application for the consent of the municipal au-
thorities must be in writing, and before acting thereon
such authorities must give public notice thereof and of the
time and place when it will first be considered; this notice.
must be published daily in any city for at least fourteen
days in two of its daily newspapers, to be designated by
the mayor, and in any village or town for at least fourteen
days in a newspaper published therein, and if none, then
daily in two daily newspapers published in the city near-
est such village or town. Such consent must be upon the
express condition that the provisions of the statute (Laws,
1890, ch. 565, secs. 90-109) 2 pertinent thereto shall be com-
plied with, and must be filed in the office of the clerk of
the county in which such railroad is located.3
The consent of the municipal authorities, in cities con-
taining ninety thousand inhabitants or over, according to
the last federal census, must contain the condition that
the right, franchise, and privilege of using any street,
highway, avenue, park, or public place, shall be sold at
public auction to the bidder who will agree to give the
Laws, 1890, ch. 565, sec. 91; Const., Art. III, sec. 18. See Laws,
1884, ch. 252; Banks, 1810; Birdseye, 2489, paṛ. 313.
2 That is the provision of the present law governing street surface
railroads.
Laws, 1890, ch. 565, sec. 92.
1196
ECONOMIC LEGISLATION.
city the largest percentage per annum of the gross re-
ceipts of such corporation, with a bond or undertaking in
such form or amount and with such conditions and sure-
ties as may be required and approved by the comptroller
or other chief fiscal officer of the city for the fulfillment
of such agreement, and for the commencement of such
road within one year, and its completion within three
years from the date of sale, according to the plans, and on
the routes fixed for its construction. The bidder to whom
such right, franchise, and privilege may be sold, must be
a duly incorporated railroad corporation of this state, or-
ganized to construct, maintain, and operate a street rail-
road in the city for which such consent may be given.
Notice of the time, place, and terms of sale, and of the
routes to be sold, and of the conditions upon which the
consent of the municipal authorities to the construction
and operation and extension of such street railroad will
be given, must be published by such authorities for at
least three successive weeks, and in any city having two
or more daily newspapers at least three times a week in
two of such papers, to be designated by the mayor, and in
any city where two daily newspapers are not published, at
least once a week in a newspaper published therein, to be
designated by the mayor. The comptroller or other chief
fiscal officer of the city must attend and conduct such
sale, and may twice adjourn the same, but not more than
four weeks in all, and may cancel any bid if the bidder
does not furnish adequate security, or otherwise comply
with the terms and conditions of sale, and may resell the
consent and license in the same manner as herein pro-
vided for the first sale.¹
The bidder who may operate and build such railroad
must at all times keep accurate books of account of the
1 ¹ Laws, 1890, ch. 565, sec. 93. The provisions of this section apply to
all applications for consents made under any statute, either before or
after the passage of this chapter, and not finally acted upon at the time
of its passage. (Ib.)
•
NEW YORK.
1497
t
business and earnings of such railroad, which books, at
all times, must be subject to the inspection of the munici-
pal authorities. In the event of the failure or refusal of
the party or corporation operating or using such railroad
to pay the rental or percentage of gross earnings agreed
upon, and after notice of not less than sixty days to pay
the same, the consent and right to operate such railroad
may be declared forfeited by the judgment of any court
having jurisdiction, after the party or corporation has had
opportunity to be heard in its defense, and may be again
sold to the highest bidder in the manner above provided.
All consents given by the municipal authorities cease and
determine at the expiration of two years thereafter, unless
prior thereto the consent of a sufficient number of the
property owners, or the order of the court in lieu thereof,
has been first obtained.'
If any required consent of property owners can not be
obtained, the corporation failing to obtain such consents
may apply to any general term of the supreme court, held
in the department in which it is proposed to construct its
road, for the appointment of three commissioners to de-
termine whether such railroad ought to be constructed
and operated. Notice of such application must, at least
ten days prior thereto, be served, personally, upon each
non-consenting property owner by delivering the same to
the person to whom such property is assessed upon the
assessment roll or by duly mailing the same, properly
folded and directed, to the property owner, at his post-
office address, with the postage prepaid thereon. If the
person upon whom such service is to be made is unknown,
or his residence and post-office address are unknown, and
can not by reasonable diligence be ascertained, service
may be made by publishing the same in such newspaper
of the county as the court may direct, at least once a week
for two successive weeks. Upon due proof of service of
¹ See note on preceding page.
VOL. II-14
1498
ECONOMIC LEGISLATION.
such notice, the court to which the application is made
must appoint three disinterested persons to act as commis-
sioners, who must, within ten days after their appoint-
ment, cause public notice to be given of their first meet-
ing, in the manner directed by the court, and may adjourn,
from time to time, until their business is completed. Va-
cancies may be filled by the court after such notice to par-
ties interested as it may deem proper to be given, and the
evidence taken before, as well as after the happening of
the vacancy, is deemed to be properly before such com-
missioners. After a public hearing of all parties inter-
ested, the commissioners must determine whether such
railroad ought to be constructed and operated, and must
make a report thereon, together with the evidence taken,
to the general term, within sixty days after appointment,
unless the court or judge thereof, for good cause shown,
extends such time; their determination that such road
ought to be constructed and operated must be taken in
lieu of the consent of the property owner herein before
required. The commissioners each receive ten dollars
for each day spent in the performance of their duties,
and their necessary expenses and disbursements, which
must be paid by the corporation applying for their ap-
pointment.'
Any street railroad, except in the counties of New York
or Kings, now in operation in this state, which by a two-
thirds vote of its directors decides to extend the route of
its road, so as to cross the Hudson river over and by any
bridge now or hereafter constructed under the provisions
of any law of this state, may so extend their route over
and across such bridge upon such terms as may be mutu-
ally agreed upon between it and such bridge company,
and may locate the terminus of their road in the county
adjoining the one in which their road is now located and
in operation, upon first obtaining the consent of such
1 ¹ Laws, 1890, ch. 565, sec. 94.
22
1
NEW YORK.
1499
bridge company or its lessees, and the consent of the own-
ers of one-half in value of the property bounded on, and
the consent also of the local authorities having the con-
trol of that portion of any street or highway upon which it
is proposed to construct or operate such railroad, or, in
case the consent of property owners can not be obtained,
commissioners may be appointed as above provided.'
Whenever any street surface railroad corporation has
been dissolved, or annulled, or its charter repealed by an
act of the legislature, the consent of owners of property
bounded on, and the consent of the municipal authorities
having the control of that portion of any street or high-
way upon which the railroad of such corporation has
been constructed and operated, and the order of the gen-
eral term confirming the report of any commissioner that
such railroad ought to be constructed or operated, are
not in any way impaired, revoked, terminated, or other-
wise affected, but continue in full force, efficacy, and be-
ing; and the right to the further enjoyment and use of
such streets and highways, and of all the powers, privi-
leges, and benefits therein, must be sold at public auction
by the municipal authorities within whose jurisdiction
such railroads are, in the same manner as provided above.
When such sale has been so made, the purchaser has the
right to the enjoyment and use of such consents and
orders, and of all the powers, privileges, and benefits
thereby created, in like manner as if originally named in
such consents, reports and orders, provided such purchaser
is otherwise authorized by law to construct, maintain, and
operate a street surface railroad within such municipality.2
The corporate existence and powers of every street sur-
face railroad corporation which has completed a railroad
upon the greater portion of the route designated in its
certificate of incorporation, within ten years from the date
of filing such certificate in the office of the secretary of
* Laws, 1890, ch. 565, sec. 106.
1 Laws, 1890, ch. 565, sec. 96.
1500
ECONOMIC LEGISLATION.
state, and which has operated such completed portion of
its railroad continuously for a period of ten years last
past, and is now operating the same, continues with like
force and effect, as though it had in all respects complied
with the provisions of law with reference to the time
when it should have fully completed its road; and every
such corporation has the right to operate any extensions
and branches of its railroad, now constructed and operated
by it, for a period of ten years last past, with like force
and effect, as though the route of such extensions and
branches were designated in its certificate of incorpora-
tion. But every such street railroad corporation is au-
thorized to operate such railroad and any extension or
branches thereof upon condition that it has heretofore or
shall hereafter obtain the consent of the municipal anthor-
ities having the control of that portion of the streets, ave-
nues or highways included in such railroad, or any exten-
tions or branches thereof to the construction and opera-
tion of the same, and also the consents of the owners of
one-half in value of the property bounded on that portion
of the streets, avenues or highways included in the route.
of such railroad, or any extension or branches thereof, to
the construction and operation of the same, or the de-
termination of commissioners, as shown above, in lieu of
such consents.¹
The statute ratifies all consents heretofore given or
grants made by local authorities having the control of the
portion of any street, avenue, or highway included in the
route of such railroad, or any extensions or branches
thereof, to any such street surface railroad corporation,
and declares that this provision does not apply to or affect
any railroad corporation in the city of New York, nor
any special grant made to or authority conferred upon any
street surface railroad corporation by any law of this state,
nor pending litigation; nor does it impair existing rights,
¹ Laws, 1890, ch. 565, sec. 107.
NEW YORK.
1501
privileges or franchises of any street surface railroad cor-
poration.¹
1
Other railroads in cities and counties (elevated, underground,
etc.)-Upon the application of at least fifty reputable house-
holders and tax-payers of any county or city, verified upon
oath, before a justice of the supreme court, that there is
need in said county or city of a steam railway in the
streets, avenues, and public places thereof, for the trans-
portation of passengers, mails, or freight, the board of
supervisors of such county, or the mayor of such city may,
within thirty days thereafter, by resolution of such board,
or the indorsement of said mayor, approve of the applica-
tion, and authorize its presentation to the supreme court;
if the railway is to be built, partly within, and partly
without the limits of a city, such application must be ap-
proved, and its presentation authorized, both by the mayor
of the city, and the board of supervisors of the county.
Upon the presentation of such application to a special
term of the supreme court, held in the district where such
railway, or some part thereof, is to be built, the court may
appoint five commissioners residents of the city, if the
railway is to be built wholly within the city, and of the
county if to be built wholly or partly outside of the limits
of a city, to determine the necessity of such railroad, its
route, the time within which, and the conditions upon.
which it shall be constructed, the damages to the property
owners along the line, and all matters lawfully submitted
to them, and discharge the duties imposed upon them
by law.2
Within ten days after appointment, and before entering
upon
the discharge of any duties, each commissioner must
take and subscribe the constitutional oath of office, and exe-
cute a bond to the people of the state in the penal sum of
twenty-five thousand dollars, with two or more sureties, to
be approved by the court, or a judge thereof, and condi-
1 ¹ Laws, 1890, ch. 565, sec. 107.
2 Laws, 1890, ch. 565, sec. 120.
1502
ECONOMIC LEGISLATION.
tioned for the faithful performance of the duties of the
office; said bond and oath must be filed in the office of the
clerk of the county.'
Within fifteen days after appointment, the commis-
sioners must meet in some convenient place in the
county or city and organize as a board with appropriate
officers.2
Within thirty days after organization, they must de-
termine upon the necessity of such steam railroad, and if
they find it to be necessary, they must, within sixty days
after organization, fix and determine its route; they have
the exclusive power to locate such route, over, under,
through, or across the streets, avenues, places, or lands in
such county or city, and to provide for the connection or
junction with any other railway or bridge, if the consent
of the owners of one-half in value of the property
bounded on, and the consent of the municipal authorities
having control of that portion of a street or highway, upon
which it is proposed to construct or operate such railway
has first been obtained; if the consent of such property
owners can not be obtained, the determination of three
commissioners appointed by the general term of the su-
preme court of the department where the railroad is to be
constructed, made after due hearing of all parties inter-
ested, and confirmed by the court, that such railway ought
to be constructed or operated, may be taken in lieu of the
consent of such property owners.3
No such railway can be located in or upon such portion
of any street, avenue, places, or lands in such county as
are now occupied by an elevated or undergound railway,
or in which such a railway has already been authorized
by law to be so located and constructed, or which are con-
tained in public parks, or occupied by buildings belonging
to the county or the state or United States, or in or upon
the following streets, avenues, and public places, viz:
1
¹ Laws, 1890, ch. 121.
3 Laws, 1890, ch. 565, sec. 123.
2
Laws, 1890, ch. 565, sec. 122.
NEW YORK.
1503
Broadway, Fifth avenue, below Fifty-ninth street, Fourth
avenue and Forty-second streets, in the city of New
York; Debevoise place, Irving place, Lefferts place, those
portions of Grand, Classon and Franklin avenues and
Dowling street, lying between the southerly line of Lex-
ington avenue and the northerly line of Atlantic avenue,
that portion of Classon avenue lying between the northerly
line of Lexington avenue and the southerly line of Park
avenue, and that portion of Washington avenue lying
between Park and Atlantic avenues, in the city of Brook-
lyn, and that portion of the city of Buffalo lying between
Michigan and Main streets, but such railway may be lo-
cated and constructed across such excepted streets, ave-
nues, and places at their intersection only with other
streets, avenues, and places.'
The commissioners, by such public notice and under
such conditions, and with such inducements as they may
prescribe, must invite the submission of plans for the con-
struction and operation of such railway, and must meet
at a time and place in such notice named, not more than
ninety days after their organization, and decide upon the
plans for its construction, with the necessary supports,
turnouts, switches, sidings, connections, landing places, sta-
tions, buildings, platforms, stairways, elevators, telegraph
and signal devices, or other requisite appliances upon the
route and location determined upon by them. They must fix
and determine a time when such railway or portions thereof
must be constructed and ready for operation; the maxi-
mum rates to be paid for transportation and conveyance.
thereon, and the hours during which special cars or trains
must be run at reduced rates of fare; the 'amount of
the capital stock of the corporation to be formed for the
purpose of constructing, maintaining and operating such
railway for public use in the conveyance of persons and
property; and the number of shares into which it shall be
1 Laws, 1890, ch. 565, sec. 123.
1504
ECONOMIC LEGISLATION.
divided, and the percentage to be paid in cash on subscrib-
ing therefor.¹
As to the organization of the company to operate such
railroad, see "ARTICLES OR CERTIFICATE OF INCORPORATION "
and “COMMENCING BUSINESS," supra."
2
Within one month after a corporation has been formed
and organized in the manner provided, the commis-
sioners must transfer and deliver to the corporation
all plans, specifications, drawings, maps, books, and pa-
pers in their possession, and, within the like period after
the organization of such corporation, must cause to be
paid to the treasurer thereof all money collected under the
provisions of this statute (see "SPECIAL DAMAGES; PROP-
ERTY OWNERS' RIGHTS," post), after deducting the necessary
expenses incurred by the commissioners and the amounts.
due them for salaries.³
Each of the commissioners is paid for his services at the
rate of ten dollars for each day of actual services as such
commissioner, and all necessary expenses incurred in the
discharge of his duties, to, be paid by such corporation,
but, if a sufficient amount of capital stock is not sub-
scribed within one year after the appointment of such
commissioners to authorize the formation of such corpora-
tion, the commissioners receive no salary, and must cause
to be returned to the subscribers for such stock the
amounts paid in by them, after deducting therefrom the
necessary expenses incurred by the commissioners, but the
time, if any, unavoidably consumed by the pendency of
legal proceedings is not to be deemed a part of any period
of time limited by these provisions.*
A majority of the members of any such board of com-
missioners is a quorum for the transaction of business or
the performance of any duty or function, or the exercise
of any power conferred or enjoined upon them. Any com-
1
¹ Laws, 1890, ch. 565, sec. 124.
3 Laws, 1890, ch. 565, sec. 132.
2 See pp. 1424 et seq., 1432.
* Laws, 1890, ch. 565, sec. 134. See, also, sec. 136.
NEW YORK.
1505
missioner may be removed for cause at any time by the
power appointing him, but not without due notice and an
opportunity to be heard in defense. A commissioner thus
removed is not eligible to a second appointment. In case
of the death, resignation, or removal from office of any
commissioner, the vacancy must be filled by the power ap-
pointing him, within thirty days after such removal or
notice of such death or resignation, in writing, to such
appointing power, given by some member of the board or
by the corporation; a certificate of every such appoint-
ment must be filed as herein before required. Except as
otherwise provided by law, the terms of office of the com-
missioners determine and expire with the performance of
their functions.¹
Any corporation, its successor or assigns, which has
constructed or put in operation a railway upon a part
and not upon the whole of the route fixed for such rail-
way by a board of commissioners may at any time apply
for authority to abandon any portion of the route upon
which the railway has not been constructed or is not
then in operation, with or without a change, re-location,
or extension of such portion not abandoned, or of any part
thereof. Such application must be made by petition in
writing, addressed to the board of supervisors of the
county or the mayor of the city in which such portion of
the route so desired to be changed or abandoned is situ-
ated. The proceedings upon such application for the ap-
pointment of commissioners, etc., is practically the same
as for the original location of the road. Such board has
all the authority conferred upon such commissioners. Be-
fore proceeding to hear the application of the corporation,
the board must give such public notice as it may deem
most proper and effective of the time and place of the hear-
ing. The board must hear such application, and all par-
ties who may be interested therein, within thirty days
I Laws, 1890, ch. 565, sec. 135.
1506
ECONOMIC LEGISLATION.
after completing their organization, and within sixty days,
they must determine whether any part of such route
should be authorized to be abandoned, or should be
changed and re-located, with or without extensions. If
the board determines that no abandonment of any part
of the route should be allowed, that no change and re-
location should be effected, and that no extension should
be made, it must dismiss the application.¹
If the board determines that an abandonment of any por-
tion of the route should be allowed, or that any change in
or extension thereof should be made, the board must pro-
ceed to authorize and require the same, upon such
conditions as to the board seems proper, and with or
without extension of the remainder of the route or of
any part thereof, by fixing, determining and locating the
route of the extensions, if any, and by directing the aban-
donment of the part of the route theretofore located, but
by the board allowed to be abandoned, and by fixing, de-
termining and relocating the part of the route thereto-
fore located, but by the board changed; and the board
must cause to be made in duplicate a survey and map
of the route so changed, fixed, determined, and located.
Neither such corporation nor any assign or successor
thereof thereafter has any authority to operate or con-
struct any railway upon any portion of the route by the
board so required to be abandoned. The board must
also fix and determine the time within which the railway
by it authorized and required upon any portion of the
route so changed, must be constructed and ready for
operation. If the railway or any portion of the route
not changed or allowed to be abandoned has not been con-
structed and made ready for operation, the board may ex-
tend and determine anew the time within which such rail-
way must be completed, but such extension of time can
not be for a longer period than that originally allowed by
¹ Laws, 1890, ch. 565, sec. 136.
NEW YORK.
1507
law for the completion thereof. If the board determines
that any portion of the route theretofore located should
be allowed to be abandoned, with or without a change or
re-location of any part thereof, and with or without ex-
tension, or if the board extends the time within which
such railway must be completed, it must make a report in
writing in accordance with such determination, describing
the portion of the route as so fixed, determined, and lo-
cated anew, and the part of the route allowed to be aban-
doned, and stating the time within which such corporation.
must construct and complete the railway theretofore or by
it authorized to be constructed, and prescribing that a
failure to complete it within the time so limited shall
work a forfeiture to the supervisors of the county or to the
city of the rights and franchises with respect to that portion
of the route so fixed, determined, and located anew, and
with respect to the then authorized extensions upon
which a railway shall not be constructed within the time
so limited; any recital of any forfeiture prescribed by any
commissioners under these provisions to be to the mayor,
aldermen and commonalty of the city of New York, is as
effectual for all purposes as if in terms recited to be to
such city.¹
Such report must be signed in duplicate by at least a
majority of the members of the board, and there must be
annexed the survey and map, as above provided, showing
the line and location of each and all the routes, with or
without extensions, as fixed, determined, and located,
but by the board allowed to be abandoned. Within ten
days after signing such report the board must cause the
same to be filed in the office of the secretary of state, and
the duplicate thereof in the office of the clerk of the
county wherein such railway is located; and thereupon
the corporation making such application, its successors
or assigns, is authorized to construct, maintain and oper-
1 ¹ Laws, 1890, ch. 565, sec. 136.
1508
ECONOMIC LEGISLATION.
ate such steam railway upon the routes so fixed and in
said report described, but the construction or operation.
of a railway upon any new location is subject to the same
requirements as to consent of property owners and mu-
nicipal authorities as was the original location.'
Such corporation, its successors and assigns, is author-
ized to maintain and operate all the railways and appur-
tenances by it constructed upon any portion of a route
which has been located by commissioners under these
provisions, and to complete within the time so extended
and determined anew, and thereafter to maintain and
operate the railway and the appurtenances, upon so much
of the routes theretofore fixed, determined and located as
have not been so authorized and required to be abandoned,
and with the same rights and effect, in all respects, as if
such extended time had been originally fixed in the orig-
inal certificate of incorporation. The other terms and con-
ditions in and by such certificate mentioned and prescribed,
except as the same are modified by the board as above au-
thorized, apply to the railway as so changed and located,
with the same force and effect as if such routes, as finally
so changed and located, had been originally prescribed.
If a new location or extension of route is fixed and de-
termined by the commissioners, they must also ascertain
and determine the aggregate pecuniary damages arising
from the diminution of value of the property, bounded on
that portion of the street or highway upon the line of
such new location or extension and of each parcel of real
estate so bounded, and their proceedings must be con-
ducted in the same manner and upon like notice as the
proceedings for that purpose before the original com-
missioners. Each commissioner is entitled to the same
compensation as were the original commissioners. No
corporation can be authorized under these provisions to
2
¹ Laws, 1890, ch. 565, sec. 136.
2 See "SPECIAL DAMAGES; PROPERTY OWNERS' RIGHTS," p. 1515.
NEW YORK.
1509
.
extend, abandon, or change the location of its route, or
any part thereof, where the greater portion of the route
or routes is in that portion of the city of New York
south or west of Harlem river,, or of any route or part
thereof in the city of Brooklyn or county of Kings,
or to construct, extend, abandon, or change the location
of any railway or route for a railway over, under, through,
or across any street, avenues, place, or lands south of One
Hundred and Twenth-eighth street or west of Third ave-
nue, in that portion of the city of New York south or west
of Harlem river, or where a railway might not by law be
constructed, or was not by law authorized to be by a board
of commissioners located on the fifth day of June, eighteen
hundred and eighty-eight.¹
Limitations. The power of the legislature, or of a
municipality acting by delegated authority, over its
streets, so far as all purposes required by public conven-
ience are concerned, is only limited by the rights of the ad-
joining owner, and the direct provisions of the constitution.
the
The constitution limits the power to grant franchises by
providing that the legislature shall not pass any private or
local bill, granting to any private corporation, association,
or individual, any exclusive privilege, immunity, or fran-
chise whatever; and, that no law shall authorize the con-
struction or operation of a street railway, except upon
condition that the consent of the owners of one-half in
value of the property bounded on, and the consent also of
the local authorities having the control of that portion of
the street or highway upon which it is proposed to con-
struct or operate such railway be first obtained, or in case
the consent of such property owners can not be obtained,
the general term of the supreme court, in the district in
which the road is proposed to be constructed, may, upon
application, appoint three commissioners, who shall deter-
mine, after a hearing of all parties interested, whether
1
¹ Laws, 1890, ch. 565, sec. 136.
th
1510
ECONOMIC LEGISLATION.
i
such railroad ought to be constructed or operated, and
their determination confirmed by the court, may be taken
in lieu of the consent of the property owners. This arti-
cle is not retrospective in its operation, and does not af
fect companies organized under laws existing prior to
1875.2
1
There is a further limitation upon the power of street
railroads (surface, elevated, etc.), in the provision of the
statute which forbids the construction or extension of any
such railway upon ground occupied by buildings belong-
ing to any municipality, to the state, or the United States,
or in public parks, except in tunnels, approved by the mu-
nicipal authorities having control of such parks.³
There is always the general limitation, apart from
statute, that the legislature has no power to grant a fran-
chise which is not for public purposes, or, at least, public
considerations must enter into every valid grant to appro-
priate the highway for any purpose.*
Control of streets. The rights of companies com-
monly known as franchise companies, such as gas, water,
telephone, telegraph, and street railway companies, de-
pend in a large measure upon the views which the courts
have taken of the powers of a municipality as to the use
of its streets. According to the ancient rule of the com-
mon law, as it obtains in this state, the public at large
have no other rights in an ordinary highway, which has
simply been dedicated to the public use without any trans-
fer of the ownership to the fee of the soil of such high-
way, than that of passage over it, and the rights necessa-
rily incident thereto. The presumption, in the absence of
evidence to the contrary, always is that the public has
merely an easement for highway purposes in the land
embraced in a street or road, and that the fee to the
¹ Const., Art III, sec. 18.
2 The People v. Brooklyn, etc., R. R. Co., 89 N. Y. 75.
³ Laws, 1890, ch. 565, secs. 109, 123.
* Fanning v. Osborne, 102 N. Y. 441.
NEW YORK.
1511
2
center of such street remains in the adjacent owners.'
Where this is the case, any interference with the soil
of the street or road not clearly within the purposes
for which it was dedicated to the public use, is a viola-
tion of the rights of the adjacent owners of the fee to the
road for which damages may be given in an action of tres-
pass. Thus, at an early date, it was determined that the
introduction of railways upon highways (including the
streets of a city where the fee of the street is in the abut-
ting owner) imposed an additional burden upon the high-
way besides the public easement, and that the legislature
had no power to make such an imposition (though it was
not per se a nuisance) without gaining the consent of or
making compensation to the owner of the fee. This rea-
soning was afterward applied to the case of street horse-
railway companies, and also to telegraph and telephone
companies, so probably of electric light poles for private
lighting exclusively. The principle has been extended to
the case of gas-light companies attempting to use a public.
highway in the country; though it does not apply, so far
as public gas-light companies are concerned, to the streets
of a city on the ground that the laying of gas pipes, water
pipes, drains, etc., and the erection of street lamps or
electric light poles for street lighting, are among the nec-
essary purposes for which the streets of a city are to be
used, and which the interest of the public therein demands."
4
Fanning v. Osborne, 102 N. Y. 441.
Trustees, etc., v. Auburn & Rochester R. R. Co., 3 Hill, 567; Will-
iams v. N. Y. C. R. R. Co., 16 N. Y. 97.
3 Fletcher v. Auburn, etc., 25 Wend. 462; Davis . Mayor, etc., 14 N.
Y. 506; Williams v. N. Y. C. R. R. Co., 16 N. Y. 97.
4
Craig . Rochester & Brighton R. R. Co., 39 N. Y. 404; Fanning v.
Osborne, 102 N. Y. 441.
5 Dusenbury v. Tel. Co., 11 Abbott's New Cases, 440.
6 Tuttle Case, 50 N. Y. Super. Ct. 464.
7 Bloomfield, etc., Gas-Light Co. v. Calkins, 62 N. Y. 386; Crook et al.
v. Flatbush Water Co., 27 Hun, 72; s. c. 29 Hun, 245; Tuttle v. Illum-
inating Co., 50 N. Y. Super. Ct. 464; Gas-Light Co. v. Mayor, 33 N. Y.
327.
1512
ECONOMIC LEGISLATION.
So far as country highways are concerned, all these uses
are in violation of the rights of the adjoining owner of the
fee, who is entitled to compensation for the taking of the
highway for such use without his consent, but a different
rule applies in the city ex necessitate.
Where the conveyance to the owner, abutting on a street
or highway, simply bounds him by such street, the before-
mentioned presumption holds good, and he is generally
held to own to the center of the street or highway.
Where on the other hand such conveyance bounds his lot
by the exterior line or side of the street, or otherwise ex-
cludes the highway or street, he takes no interest in the
fee thereof. In the latter case he is not entitled to dam-
ages for a reasonable use of the street by a railway com-
pany which acts under the authority of law and a license
from the municipal authorities, though he may obtain
damages for an improper or unreasonable use. This is so
whether the fee to the street is in the city or municipality
or not. Where the fee to the roadway is directly in the
municipality, the case is even stronger against the adjoin-
ing owner.
In most of the cities, towns, and villages of the state,
the municipal authorities do not own the fee of the street
or highway, which remains quite generally in the adjacent
owner, subject merely to the right of the public to use
such street or highway for the purposes which an appro-
priation for a street warrants. But in the city of New
York, and in some of the more recently laid out portions
of other cities in the state, the case is different. The cor-
poration of the city of New York has acquired, by grant
or condemnation, the title in fee to most of the land on
which its streets are laid, which title is held in trust for
the benefit of the people of the state; and the same state
of affairs obtains to a limited extent in other cities of the
¹ Drake v. R. R. Co., 7 Barb. 508; Forbes v. Rome, W. & O. R. Co. 121
N. Y. 505.
2 See Revised Laws of 1813, p. 409; People v. Kerr, 27 N. Y. 188.
.
1
NEW YORK.
1513
state in cases where the fee has been taken by the city by
condemnation proceedings or grant. Where the fee of
the street is in the city, it has been held that legislative
authority to construct a railway on the surface of the
street, without a change of grade, is a legitimate exercise
of the power of regulating public rights for public uses,
and neither the city nor the abutting owner is entitled to
compensation therefor, nor for mere interference with ac-
cess caused by the lawful use of the street for such pur-
poses. This doctrine was held in a case where a street
railway laid its tracks so close to the sidewalk as not to
leave room for a vehicle to stand in front of the plaintiff's
premises, whereby he was greatly incommoded.¹ This
doctrine, however, has been somewhat modified in later
cases, which hold that the legislature can not authorize
the erection of a structure in the nature of an elevated rail-
way, shutting out the abutting owner's light and air, and
his substantial access, without compensation to him, even
though he does not own the fee to the middle of the
street. This case was decided, as will be seen on exam-
ination, on the ground that the facts showed a plain, pal-
pable misappropriation of the street from the uses to
which a street should be put, and hence an interference
with the plaintiff's easements of light, air, and access, for
which he was awarded damages. It does not overrule the
preceding decisions as to the reasonable use of a street,
the fee to which is not in the adjoining owner.
2
No one can obtain a title by prescription in a public
street or highway; an individual using it obtains no par-
ticular grant in his favor.³
It must be remembered that where the adjacent owner
holds the fee of the street, such fee can ordinarily be only
of nominal value. It has no immediate market value, be-"
¹ Kellinger v. Street Railway Co., 50 N. Y. 206.
Story. Elevated R. R. Co., 90 N. Y. 122.
3 Wheeler v. Clark, 58 N. Y. Sup'r Ct. 267; Abendroth v. Manhattan
R. R. Co., 52 Sup'r Ct. 274, citing Burbank . Fay, 65 N. Y. 57.
VOL. II-15
1514
ECONOMIC LEGISLATION.
cause so long as the public has an easement of user in the
highway, it can not be used for any other purpose. Its
value, therefore, depends upon the possibility of the street
sometime ceasing to be used as such, and coming within
the disposal of the owner of the fee, and, perhaps, also in
the additional power which its ownership gives to prevent
the erection or establishment of obnoxious structures. As
a matter of fact, it very rarely happens that any compen-
sation is paid to the owner of the fee for the right to con-
struct an ordinary street railway using other motive power
than steam upon the highway, though the abstract right
to such compensation seems clear under the circumstances
referred to in the authorities before cited, viz: when the
adjacent owner clearly owns the fee to the center of the
highway. In the case of steam railways, the right is usu-
ally rigidly insisted upon.
As a conclusion from what has been stated, it may be
laid down as a rule of law, that no legislative or municipal
franchise can give a company or individual the right to
take and occupy the soil of the public highway or street.
of which the user simply has been dedicated to the public
as against the abutting owner, in whom resides the fee to
the center of the street, without the consent of or com-
pensation to such owner, unless the use to which the street
is sought to be put is one which is clearly within the ap-
propriate purposes of a street; as, for instance, the laying
of gas and water pipes, the erection of street lamps, elec-
tric light poles for street lighting, etc. But where the
abutting owner refuses his consent, the power resides in
the state to take such portion of the street as may be nec-
essary for the public use, by the right of eminent domain,
upon giving such compensation as may be adjudged to
be just. This power has been generally delegated by
the state to railroads, water-works companies, telegraph
companies, and other quasi public enterprises, by a series
of acts which are now included under what is known as
NEW YORK.
1515
the condemnation law,' and which prescribes the method
of taking land for public purposes. An extended consid-
eration of this act does not fall within the purview of this
work. In the case of street surface railways, and railways
in cities and counties (elevated, underground, etc.), there
are special provisions which have been considered above
(see under" How OBTAINED," p. 1494 et seq.).
Where, on the other hand, the fee to the soil of the
street is not in the abutting owner, he is not entitled to
compensation for the reasonable and proper use of the
street, though he may be entitled to compensation for
damage resulting to his adjoining property from an unrea-
sonable and improper use amounting to a nuisance, as
where his right to light and air or access are cut off, and
in no case can the street be put to uses inconsistent with
the purpose for which it was taken or dedicated.²
Special damages; property owners' rights.-See
“HOW OBTAINED.-Pipe-line companies.—Railroad companies
generally.-Other railroads in cities and counties (elevated, un-
derground, etc.)," supra. See also, "CONTROL OF STREETS,"
supra.
The statute provides as to railroad companies generally,
that they must pay all damages resulting from occupying
or crossing the road of any plank-road or turnpike com-
pany, and that in case of inability to agree as to such
damages, the right so to occupy or cross may be acquired
by condemnation.3
The commissioners appointed to determine as to the
construction of railroads in cities and counties (elevated,
underground, etc.), must, within one hundred and ten
days after organization, ascertain and determine the ag-
¹ Code of Civil Procedure, sec. 3357, et seq.; Laws, 1890, ch. 95.
2 See Story . Elevated Railroad Co., 90 N. Y. 122; Forbes v. R. R. Co.,
121 N. Y. 505.
3 Laws, 1890, ch. 565, sec. 1.
See "How OBTAINED:-other railroads in cities and counties (clevated, un-
derground, etc.)," p. 1501.
1516
ECONOMIC LEGISLATION.
gregate pecuniary damage arising from the diminution in
the value of the property bounded on that portion of the
streets or highways upon which it is proposed to construct
and operate such railway, because of its construction and
operation. For that purpose they must view the several
parcels of real estate so bounded, and appraise separately
the pecuniary damages of each parcel; they must give
notice of the time and place, when and where they will
meet to hear the owners, or persons interested in such
real estate, which notice must be published for at least
ten days consecutively, in at least two newspapers in the
county where such railway is to be constructed; they must
take such material testimony upon the probable diminu-
tion in value of any of such parcels as may be offered in
behalf of any person or party interested, and the aggre-
gate sum so appraised and determined by them is the ag-
gregate pecuniary damage required to be ascertained and
determined as above provided.'
No such corporation under these provisions can enter
upon any street, highway, or lane, until it has deposited
with some trust company, designated by the mayor of the
city within which it is proposed to construct the railway,
or any part thereof, and by the board of supervisors, when
the road does not lie wholly within a city, a sum of money
equal to the amount ascertained and determined by the
commissioners to be the aggregate pecuniary damage to
such property within the city, or within the county out-
side of any city, or until it has secured the payment of
such amount by depositing with such trust company ne-
gotiable securities, equivalent at their par and actual value
to such aggregate amount, and approved by the mayor of
such city, and by the county treasurer of the county if the
road is partly outside of the limits of such city. Such
corporation must also, at the same time, deposit with such
trust company, or with the county treasurer, as the com-
¹ Laws, 1890, ch. 565, sec. 125.
1
NEW YORK.
1517
missioners may direct, the sum of five thousand dollars in
cash, for the payment of the expense of apportioning
and distributing such fund; and unless such moneys
or securities are so deposited within one year after
obtaining the consent of the municipal authorities, and
of the property owners, or the confirmation of the de-
termination of the three commissioners in lieu thereof,
or unless within one year commissioners have made their
report of the aggregate damages, such corporation must
be deemed not to have accepted the franchises granted.
Where the commissioners fix and determine different
periods of time within which sections of such railway
must be constructed and ready for operation, they must
ascertain and report separately the aggregate pecuniary
damage to property bounded upon that portion of the
streets upon which each of such sections is located; upon
the deposit, as above provided, of moneys or securities
equivalent to the aggregate pecuniary damage to be sus-
tained by any one of such sections, the corporation is
vested with the right and privilege to construct its railway
through such section."
In case any of the securities deposited in lieu of money,
in the opinion of the county treasurer or trust company
with whom they may be deposited, fall below their actual
value at the time of deposit, the county treasurer or trust
company must call upon such railway corporation to sub-
stitute other securities equivalent at their par or market
value to the amount in lieu of which the securities for
which they are to be substituted were deposited, and, in
case such other securities are not furnished, the county
treasurer or trust company must call upon such corpora-
tion to furnish as a substitute, and it must so furnish, an
amount of money equal to the amount in lieu of which
the securities first above referred to were deposited.²
1
The commissioners must, within one hundred and forty
¹ Laws, 1890, ch. 565, sec. 125.
2 Laws, 1890, ch. 565, sec. 137.
1518
ECONOMIC LEGISLATION.
days after their appointment, make a report to a special
term of the supreme court of the department in which
such railway may be located of the amount of the pe-
cuniary damage arising from the diminution of value of
each parcel of property bounded on that portion of the
streets or highways upon which it is proposed to construct
such railway because of the construction, maintenance,
and operation thereof; the name and place of residence of
the owner of each parcel must be stated, if known, or if it
can be ascertained, and, if not, the name of the person
appearing by the certificate of the clerk or register of the
county to have the title thereto from the records in his
office, and a specific description of each parcel of property
with reasonable certainty. The testimony taken by the
commissioners as to the amount of such damage must ac-
company their report. Within thirty days after filing and
recording its certificate of incorporation, the corporation
authorized to construct and operate such railway must
move to confirm the report, giving notice of such motion
to the property owners in the manner in which the above
notice of the time and place of hearing before the com-
missioners is required to be given; if the corporation fails
to so move, any property owner may make the motion;
thereafter the proceedings must be conducted in the man-
ner prescribed in the condemnation law.
Before constructing or operating its railway in front of
any real estate bounded upon any street, avenue, or public
place wherein the corporation is authorized by the certifi-
cate and report of the commissioners to construct and op-
erate its road, such corporation must pay to the owner of
the real estate the damages sustained, or which will be
sustained by him in consequence thereof, as finally fixed
and ascertained, and the costs allowed him, if any; and
the court may direct that such damages be paid out of the
moneys deposited pursuant to the above provisions, or in
¹ Laws, 1890, ch. 565, sec. 133.
NEW YORK.
1519
case negotiable securities have been deposited in lieu of
money, that so much of such securities be sold as may be
necessary to raise the amount required to be paid to such
owner.¹
Condemnation.-Whenever any person, corporation,
joint stock association, or the state or any political divis-
ion thereof, is authorized to acquire title to real property,
including any right, interest, or easement therein, or ap-
purtenance thereto, for the public use by condemnation, it
must be done under the provisions of chapter 23, section
3357 et seq., of the Code of Civil Procedure. The pro-
ceeding must be instituted by the presentation of a peti-
tion to the supreme court setting forth the following
facts: 1st.
1st. The name and place of residence of the
plaintiff, and the business in which engaged; if a corpo-
ration, whether foreign or domestic, its principal place of
business within the state, the names and residence of its
principal officers, and the object or purpose of its incor-
poration or association; if a political division of the state,
the name and residence of the officer acting in its behalf.
2d. A specific description of the property to be con-
demned, and its location by metes and bounds with reas-
onable certainty. 3d. The public use for which the prop-
erty is required, and a concise statement of the facts
showing the necessity of its acquisition for such use.
4th. The names and residence of the owners of the prop-
erty (provision is made in case the owner of property is
an infant, lunatic, idiot, or non-resident, etc.). 5th. That
the plaintiff has been unable to agree with the owner of
the property for its purchase, and the reason of such in-
ability. 6th. The value of the property to be condemned.
7th. A statement that it is the intention of the plaintiff
in good faith to complete the work or improvement for
which the property is to be condemned, and that all the
preliminary steps required by law have been taken to en-
¹ Laws, 1890, ch. 565, sec. 133.
1520
ECONOMIC LEGISLATION.
title him to institute proceedings. 8th. A demand for
relief, that it may be adjudged that the public use requires
the condemnation of the real property described, that the
plaintiff is entitled to take and hold such property for the
public use specified, upon making compensation therefor,
and that commissioners of appraisal be appointed to as-
certain the compensation to be made.'
To this petition the owner of the property may inter-
pose an answer, which must contain a general or specific
denial of each material allegation of the petition contro-
verted by him, or of any knowledge or information suffi-
cient to form a belief, or a statement of new matter
constituting a defense to the proceedings.2
If judgment is rendered adjudging that the condemna-
tion of the real property described is necessary for the
public use, and that the plaintiff is entitled to take and
hold the property for such use, the court must appoint
three disinterested and competent freeholders, residents
of the county where the real property or some part of it
is situated, or of some adjoining county, commissioners
to ascertain the compensation to be made to the owners
for such property. Such commissioners take and sub-
scribe the constitutional oath of office, and may issue sub-
pœnas and administer oaths to witnesses. They must
proceed, without unnecessary delay, to ascertain and de-
termine the compensation which ought justly to be made;
and in fixing the amount of such compensation, they must
not make any allowance or deduction on account of any
real or supposed benefits which the owners may derive
from the public use for which the property is to be taken,
or the construction of any proposed improvement con-
nected with such public use. In case the plaintiff is a
railroad corporation, the commissioners must fix such
compensation at its fair value for railroad purposes.'
The report of the commissioners must be returned to
* Civil Code, sec. 3365.
¹ Civil Code, secs. 3358-3360.
³ Civil Code, secs. 3369, 3370.
NEW YORK.
1521
the court, and, if confirmed, the court must enter a final
order in the proceedings directing that compensation be
made to the owners of the property pursuant to the deter-
mination of the commissioners, and that upon payment
of such compensation, the plaintiff shall be entitled to
enter into the possession of the property, condemn, take,
and hold it for the public use specified in the judgment.
A deposit of the money to the credit of or payable to the
order of the owner, pursuant to the direction of the court,
is deemed a payment within the provisions of the stat-
ute.¹
The plaintiff may abandon condemnation proceedings
within thirty days after the entry of the final order, by
filing and serving a written notice of his determination to
do so, and paying the fees and expenses of the commis-
sioners, and the costs and expenses to be paid in such
order; and thereupon payment of the amount awarded for
compensation will not be enforced; but the plaintiff can
not renew proceedings to acquire title to such lands or any
part thereof without a tender or deposit in court of the
amount of the award and interest thereon.²
The above are the more important provisions affecting
this inquiry relative to the condemnation of property in
general. See also "CONFLICTING GRANTS," post.
Water-works companies.—Water-works companies have
the right to acquire necessary real estate or any interest
therein, and the right to lay, relay, repair, and maintain.
conduits and water pipes with connections and fixtures in,
through, or over the lands of others; the right to inter-
cept and divert the flow of waters from the lands of
riparian owners, and from persons owning or interested in
any waters; and the right to prevent the flow or drainage
of noxious or impure matters from the lands of others into
its reservoirs or sources of supply. If having made a con-
tract with any town or village to supply it with pure and
¹ Civil Code, sec. 3371.
2 Civil Code, sec. 3374.
1522
ECONOMIC LEGISLATION.
wholesome water, as authorized by the statute,' any water-
works corporation is unable to agree upon the terms of
purchase of any such property or rights, it may acquire
the same by condemnation. But no such corporation has
power to take or use water from any of the canals of the
state, or any canal reservoirs, as feeders, or any streams
which have been taken by the state, for the purpose of
supplying the canals with water.²
2
Before entering upon, taking or using any land for the
purposes of its incorporation, such corporation must cause
a survey and map to be made of the lands intended to be
taken or entered upon, by and on which the lands of each
owner or occupant must be designated; such map must be
signed by the president and secretary, and filed in the
office of the county clerk of the county in which such
lands are situated.3
Telegraph and telephone companies.-Telegraph and tele-
phone companies, if they can not agree with the owner of
lands, upon or over which their lines are to be constructed,
as to the compensation to be paid therefor, may have such
compensation determined in the manner provided for con-
demnation."
Tramway corporations.—So, also, tramway corporations,
in case they are unable to agree for the purchase or lease
of any real property required for their purposes, have the
right to acquire the same by condemnation."
Pipe-line corporations.—A pipe-line company, if unable
to agree for the purchase of any real estate required for
its purposes, and if its line of pipe in the county in which
such real estate is situated, has been finally located, has
the right to acquire title thereto by condemnation."
Railroad corporations generally.-Elaborate provisions,
1 See "PUBLIC SERVICE," post.
3 Laws, 1890, ch. 566, sec. 83.
5 Laws, 1890, ch. 566, sec. 32.
' Laws, 1890, ch. 566, sec. 84.
* Laws, 1890, ch. 566, sec. 102.
• Laws, 1890, ch. 566, sec. 42. See "How OBTAINED; pipe-line compa-
nies," supra.
NEW YORK.
1523
similar in many respects to those governing pipe-line
companies,' are made for the condemnation of property
by railroad companies.2 The most of these provisions,
however, seem intended for steam railroads, and for this
reason are omitted.³
The acquiring of property by railroad companies in
cities and counties (elevated, underground, etc.), other
than street surface railway companies, has been fully con-
sidered above."
Duration of franchise; renewal of.-The state or mu-
nicipality in granting a franchise may limit it, in terms
with respect to time and extent, which limitation will be
effectual subject to the qualifications above expressed.
5
Refusal to grant a franchise.-It follows necessarilý
from what has been said in regard to the power of the
legislature to grant franchises, that it has also the right,
generally, to refuse to grant them, and where the power to
grant such franchises is delegated to municipalities, the
questions as to whether a franchise shall be granted in a
particular case or not, is generally left to the discretion of
the municipal authorities. There is one important ex-
ception. Telegraph companies occupy a somewhat anom-
alous position with reference to state and municipal gov-
ernments, due to the fact that all such companies as have
accepted the restrictions and obligations of the act of
congress of July 24, 1866, become as to all government
business, agencies of the federal government, and are
given the privilege by such act of congress to construct,
maintain, and operate telegraph lines, over and along any
post-road, so long as they do not interfere with ordinary
travel. The word post-road, in this connection includes
letter-carrier routes established in any city or town for the
¹ See note 6, preceding page.
6
2 Laws, 1890, ch. 565, sec. 6, et seq.
See note 2, p. 1439.
HOW OBTAINED and "SPECIAL DAMAGES; PROPERTY OWNERS'
• See
RIGHTS," supra.
See "How OBTAINED," supra.
6 U. S. Rev. Stat., sec. 5263, etc.
1524
ECONOMIC LEGISLATION.
collection or delivery of mail matter,' which, in effect, are
most of the streets in any populous city. But this statute
does not give the right to enter upon private property, in-
cluding a street where the fee is in the adjoining owner,
without his consent or compensation to him, but merely
protects a telegraph company from any state or municipal
legislation, attempting to prevent the use of post-roads, as
aforesaid,² nor does the act take from the state legislature
the power to tax the property of such company.3
Conflicting grants. While the state or municipality
may, and often does grant rival and competing franchises,
it can not interfere directly with the rights of property of
the company already exercising a franchise of the same
nature. Thus the state or municipality could not grant to
a gas company the right to use the mains or pipes of an-
other company.*
Whenever any tramway, constructed by any tramway
corporation, crosses a railroad, highway, turnpike, plank-
road, or canal, it must be so constructed as not to inter-
fere with their free use for the purposes for which they
were intended."
Railroads generally. If two railroad corporations for a
portion of their respective lines embrace the same location
of line, or if their lines connect, or are tributary to each
other, they may, by agreement, provide for the construc-
tion by one of them, of so much of such line as is common
to both, or connects with its own line, and for the man-
ner and terms upon which the business thereon shall be
performed; the corporation that is not to construct the
part of the line which is common to both, may amend its
certificate of incorporation, and terminate its line at the
¹ U. S. Rev. Stat., sec. 3964.
2 Pensacola, etc., Tel. Co. v. Western Union Tel. Co., 96 U. S. 1.
3 West. Un. Tel. Co. v. Massachusetts, 125 U. S. 530.
* See under “ALTERATION, AMENDMENT, ETC., OF FRANCHISES," post.
5 Laws, 1890, ch. 566, sec. 33.
"See note 2, p. 1439, and note 1, p. 1533.
!
NEW YORK.
1525
point of intersection, and may reduce its capital to a
sum not less than ten thousand dollars for each mile
of road proposed to be constructed in such amended cer-
tificate.'
Street surface railroads.-Any railroad corporation in this
state whose cars are run and operated by horses or other
motive power, authorized by the statute (Laws, 1890, ch.
565, secs. 90-109), upon the surface of the street, except in
the city and county of New York, for the purpose of en-
abling it to connect with and operate its cars between its
tracks, and a depot or car-house owned by it may run upon,
intersect, and use, for not exceeding five hundred feet, the
tracks of any other railroad corporation, the cars of which
are run and operated in like manner with the necessary
connections and switches, for the proper working and ac-
commodation of the cars upon such tracks, and in connec-
tion with such depot or car houses, upon paying therefor
such compensation as it may agree upon with the corpo-
ration owning the tracks to be so used; and in case such
corporations can not agree upon the amount of such com-
pensation, it must be ascertained and determined in the
manner prescribed in the condemnation law.*
Except for necessary crossings, no street surface railroad
corporation can construct, extend, or operate its road or
tracks in that portion of any street, avenue, road, or high-
way in which a street surface railroad is lawfully con-
structed, except with the consent of the corporation own-
ing and maintaining the same, but any two or more such
railroad corporations organized under the present law,3
or under chapter 252, Laws, 1884, may unite and use
each other's tracks for a distance not exceeding one
thousand feet, whenever the court, upon an application for
commissioners, is satisfied that such use is actually neces-
sary to connect main portions of a line to be constructed
as an independent railroad, and that the public convenience
2 Laws, 1890, ch. 565, sec. 97.
¹ Laws, 1890, ch. 565, sec. 15.
3 Laws, 1890, ch. 565, secs. 90-109.
1526
ECONOMIC LEGISLATION.
requires the same; the right to such use can be given only
for a compensation, to an extent, and in a manner to be as-
certained and determined by commissioners to be ap-
pointed by the courts, as is provided in the condemnation
law, or by the board of railroad commissioners, in cases
where the corporations interested unite in a request for
such board to act. Such commissioners, in determining
the compensation to be paid for the use by one corpora-
tion of the tracks of another, must consider and allow for
the use of tracks and for all injury and damage to the cor-
poration whose tracks may be so used.¹
Other railroads in cities and counties (elevated, under-
ground, etc.)—Whenever the route selected by the commis-
sioners for the construction of a railway in a city or county
(elevated or underground), except street surface railways,
intersects, crosses, or coincides with any horse railway track
occupying the surface of the street or avenues, such rail-
way corporation is authorized to remove, for the purpose
of constructing its road, the tracks of such horse railway,
but the same must be done in such manner as to interfere
as little as possible with their practical operation or work-
ing, and upon the construction of such railway, where
such removals or changes have been made, the same must.
be restored as near as may be to their previous condition.
All such removals and restorations must be made at the
proper cost and charges of such corporation, but no au-
thority is given to any such corporation to use the tracks
of any horse railway.2
Whenever the route determined upon by the commis-
sioners coincide with the route covered by the charter of
an existing corporation, formed for the purpose of con-
structing and operating such a railway, and it has not for-
feited its charter or failed to comply with the provisions
requiring the construction of its road within the time pre-
scribed, such corporation has like power to construct and
operate such railway upon the fulfillment of the like re-
1
¹ Laws, 1890, ch. 565, sec. 102.
2
Laws, 1890, ch. 565, sec. 130.
NEW YORK.
1527
quirements and conditions imposed by the commissioners
as has the corporation specially formed so to do.¹
The commissioners may fix and determine the route by
which any elevated steam railway now in actual operation
may connect with any other steam railway or the depots
thereof, or with steam ferries, upon making compensation
therefor, and in case such corporation can not agree
with the owners of such steam railways, depots, and fer-
ries upon the amount of compensation, if such owners are
entitled to compensation, its amount must be ascertained
and paid in the manner prescribed in the condemnation
law; upon fulfillment by such elevated railway corpora-
tion, so far as it relates to such connection, of these re-
quirements and conditions, it possesses all the powers con-
ferred upon such corporations by statute; and, when any
connecting routes are so designated, such elevated railway
corporation may construct such connection with all the
rights and with like effects as though the same had been
part of the original route of such railway.³
2
Perpetual and exclusive franchises.-The constitu-
tion prohibits the legislature from passing any private or
local bill granting to any private corporation, association.
or individual, any exclusive franchises. Apart from the
constitution, and as to franchises granted before it went
into operation, or beyond its contemplation, it is a general
rule that grants of franchises are always to be strictly
construed against the grantee, so as to operate to sur-
render only such powers and privileges as are expressly
declared by the language employed in the grant, There-
fore, except so far as the franchise is expressly made ex-
clusive, the power is reserved to grant competing and
rival privileges to a subsequent grantee, however inju-
rious such grant may be to the prior grantee.*
4
1 Laws, 1890, ch. 565, sec. 131.
2 That is, Laws, 1890, ch. 565, sec. 129. See "POWERS," p. 1436.
³ Laws, 1890, ch. 565, sec. 131.
Syracuse Water Co. v. Syracuse, 116 N. Y. 167, and cases cited.
1528
ECONOMIC LEGISLATION.
A distinction must be taken in this respect between the
exclusive exercise of general privileges claimed under a
franchise, and the exclusive enjoyment of rights which
are a necessary part of the particular franchise and arise
therefrom. In the first case, such an exclusive right to
exercise general privileges can not be implied, can not be
conferred under the present constitution by private or
local bill, and is not conferred by any general law. In the
latter case an exclusive right may, and often does, neces-
sarily arise. A grant of a franchise to a company carries
with it certain incorporeal powers and privileges, which
are property in the same sense as the corporeal property
plant" which is the means of exercising such powers
and privileges, and which is connected therewith. Thus,
where there is a grant to a street railway company of a
franchise to construct and operate its road in the city
street, which franchise is not by its terms limited or revo-
cable, the grant is in fee, vesting the grantee with an
interest in the street in perpetuity to an extent necessary
for the street railway, and this grant, like its track and
rolling stock, on the dissolution of the corporation vests.
in its successors or representatives.
Or "
See "How OBTAINED-Pipe-line companies; Other rail-
roads in cities and counties (elevated, underground, etc.),”
and "CONFLICTING GRANTS," supra.
Charges for franchises.—It may be laid down generally
as an assured principle, that where the state or municipal
government has the right to make the grant it also has
the right to be paid for it. The power of granting any
thing implies the right of attaching conditions to the
grant, whether the grantor be a natural or artificial per-
son. There are instances of such right being recognized
on the part of municipalities in the city of New York.'
In only one case, however, has it been made compulsory
upon the municipality to exact a consideration for the
¹ Milhau v. Sharp, 15 Barb. 193.
1
NEW YORK.
1529
granting of a public franchise. In cities of ninety thousand
inhabitants and over, according to the last federal census,
franchises for operating street surface railways, when ap-
plied for as provided by law, must be sold at auction to
the bidder who will agree to give the largest percentage
per annum of the gross receipts to the municipal treas-
ury,' as more fully set forth under "How OBTAINED-Street
surface railways," supra.
Every corporation building or operating a railway con-
structed or extended under the provisions of the general
surface railway act of 1884, or new railroad law (Laws,
1890, ch. 565), within any city having a population of two
hundred and fifty thousand or more inhabitants, must, for
and during the first five years after the commencement of
the operation of any portion of its railway, annually, on
November 1st, pay into the treasury of the city in which
its road is located, to the credit of the sinking fund there-
of, three per cent of its gross receipts, for and during the
year ending September 30th, next preceding, and after
the expiration of such five years, must make a like annual
payment of five per cent of the gross receipts; any corpo-
ration now existing and operating a street surface railroad
which extends its tracks or constructs branches, and oper-
ates the same under the provisions of such laws, or the
corporation operating such branches, is required to pay such
percentage only upon such proportion of its gross receipts
as the length of such extension and branches bear to the
entire length of its tracks. In any other incorporated
city or village the municipal authorities have the right to
require, as a condition to their consent to the construction,
operation, or extension of a street surface railroad, the
payment anuually of such percentage of gross receipts,
not exceeding three per cent, into the treasury of the city
or village, as they may deem proper. In case of exten-
sion, the amount to be paid must be ascertained in the
1 Laws, 1890, ch. 565, sec. 93; see Laws, 1886, ch. 642; Banks, 1817;
Birdseye, 2495.
VOL. II-16
1530
ECONOMIC LEGISLATION.
manner above provided. The corporation failing to pay
such percentage of its gross earnings must, after Novem-
ber 1st, pay in addition thereto five per cent a month on
such percentage until paid. The president and treasurer
of any corporation required by these provisions to make
a payment annually upon its gross receipts must, on or
before November 1st in each year, make a verified report
to the comptroller, or the chief fiscal officer of the city, of
the gross amount of its receipts for the year ending Sep-
tember 30th, next preceding; and the books of such cor-
poration must be open to the inspection and examination
by such comptroller or officer, or his duly appointed agent,
for the purpose of ascertaining the correctness of its re-
ports as to its gross receipts. The corporate rights, privi-
leges, and franchises of any corporation which fails to
comply with all these provisions are forfeited to the peo-
ple of the State of New York, and upon judgment of
forfeiture rendered in an action brought in the name
of the people by the attorney-general, cease and deter-
mine.¹ 1
2
Methods of construction.-The power of the state to
impose conditions has already been discussed in the pre-
ceding sections of this subdivision. There are very few
general laws on the statute books which prescribe the spe-
cific conditions as to methods of construction, materials,
etc. The delegated power to grant franchises given to
municipalities carries with it the authority to prescribe all
the conditions which are frequently included in municipal
grants, the consideration of which is hardly germane to
an article of this kind.
It is provided by the acts authorizing the incorporation of
gas-light and electric light companies, that the municipal
authorities may impose upon such companies, in granting
a franchise to go through the streets of a municipality, any
1 ¹ Laws, 1890, ch. 565, sec. 95. See Laws, 1884, ch. 25; Banks, 1813;
Birdseye, 2488, par. 311.
2 See "How OBTAINED," supra.
NEW YORK.
1531
reasonable regulations as to the exercise of such franchise."
Conditions which, within the knowledge of the writer,
have been required of electric light companies under this
general provision are, among others, the use of properly
insulated wires, laid in conduits of certain dimensions, ma-
terials, and strength, and the requiring of a bond from
such company to secure the proper performance of all such
conditions, such proper performance to be evidenced by
the certificate of the street commissioner or other official
having supervision of the streets.
In the act applying to the construction of pipe lines, it
is provided that no such lines shall be constructed through
any incorporated city or village unless authorized by reso-
lution prescribing the manner of construction and terms
upon which granted, adopted at a regular meeting of the
board of trustees of the village, or the common council of
the city, by a two-thirds vote of such board or council,
but such resolution does not affect any private rights. For
various provisions affecting the construction of pipe line
companies, see "How OBTAINED-Pipe line companies,"
supra.
2
These examples will serve to illustrate the conditions
which may be imposed in this direction. Where, as in the
case of gas and electric light companies, the municipal
authorities have the right to impose "reasonable regula-
tions" the conditions to be required rest solely within the
sound discretion of the common council or other proper
authorities.
Where a company goes on and constructs its plant in
accordance with the franchise granted, a change in con-
struction after completion can only be compelled where
the right to enforce such a change is reserved in the fran-
chise or act of incorporation.
As pointed out above, the legislature may impose any
¹ See Laws, 1884, ch. 534; Laws, 1885, ch. 499; Laws, 1887, ch. 716;
Banks, 2412.
2 See Laws, 1878, ch. 203, as codified in Laws, 1890, ch. 566, sec. 46.
1532
ECONOMIC LEGISLATION.
reasonable conditions upon the granting of a franchise, or
delegate to the municipality the power to impose such
conditions. Perhaps one of the best examples of such
power, within the purview of this section, is the well-
known subway legislation which has met with so much
opposition in the city of New York.¹
1
The general purpose of this legislation is to compel all
corporations or persons owning or controlling electric
wires, or cables, used in any incorporated city of the state,
with a population of five hundred thousand or over, to put
the same underground, and the appointment of a commis-
sion of electrical subways charged with the responsibility
of enforcing such acts. By its terms the legislation in
question affects only the cities of New York and Brook-
lyn, and companies desiring to operate in those cities may
obtain all information necessary from the board of com-
missioners of electrical subways.
2
Judge Wallace, in an interesting case decided in the
United States Circuit Court for the Southern District of
New York, held that the New York subway acts of 1884
and 1885, requiring all electric wires in cities of a popula-
tion of five hundred thousand or over to be put under-
ground, are valid as a police regulation, even as to tele-
graph companies which have taken advantage of the acts
of congress relative thereto,3 though such subway legisla-
tion can not affect the company's wires on the elevated
railway structures, which are independent post-roads, but
only extends to the removal of wires and poles from the
streets. The Supreme Court of the United States affirmed
this holding in May, 1892 (not yet reported).
3
As to construction of tramway companies, see "CON-
1 See Laws, 1884, ch. 534; Laws, 1885, ch. 499; Laws, 1887, ch. 716;
Banks, 2412.
* Laws, 1884, ch. 534; Laws, 1885, ch. 499; Banks, 2412.
3 Western Union Tel. Co. v. Mayor, etc., 38 Fed. Rep. 552. See under
"Refusal to GRANT," above.
NEW YORK.
1533
}
FLICTING GRANTS," supra; as to powers of franchise com-
panies generally, see "POWERS,"
"POWERS," supra.
Railroads generally.'—Every railroad corporation which
builds its road along, across, or upon any stream, water-
course, street, highway, plank-road, or turnpike, which the
route of its road intersects or touches, must restore the
same to its former state, or to such state as not to have
unnecessarily impaired its usefulness, and any such high-
way, turnpike, or plank-road may be carried by it, under,
or over its track, as may be found most expedient. Where
an embankment or cutting makes a change in the line of
such highway, turnpike, or plank-road desirable, with a
view to a more easy ascent or descent, it may construct
such highway, turnpike, or plank-road on such new line as
its directors may select, and may take additional lands
therefor by condemnation, if necessary. Such lands so
taken become part of such intersecting highway, turnpike,
or plank-road, and are held in the same manner and
by the same tenure as the adjacent parts of the high-
way, turnpike, or plank-road are held for highway pur-
poses.2
Every railroad corporation, whose road is intersected by
any new railroad, must unite with the corporation own-
ing such new railroad in forming the necessary intersec-
tions and connections, and grant the requisite facilities
therefor; and if the two corporations can not agree upon
the amount of compensation to be made therefor, or upon
the lines, grades, points, or manner of such intersections
and connections, the same must be ascertained and deter-
mined by commissioners, one of whom must be a practical
civil engineer and surveyor, to be appointed by the court
as is provided in the condemnation law. Such commis-
sioners may determine whether the crossing of any rail-
¹ Some of these provisions undoubtedly apply only to steam railroads,
but it has seemed the safer course, whereever the applicability seemed
in any wise doubtful, to insert the provisions. See note 2, p. 1439.
2 Laws, 1890, ch. 565, sec. 11.
1534
ECONOMIC LEGISLATION.
road before constructed shall be beneath, at, or above the
existing grade of such railroad, and upon the route desig-
nated upon the map of the corporation seeking the cross-
ing, or otherwise."
The rail used in the construction or the relaying of the
the track of every railroad hereafter built or relaid in
whole or in part, must be of iron or steel, weighing not
less than twenty-five pounds to the lineal yard on narrow
gauge roads, and on all other roads not less than fifty-six
pounds to the lineal yard on grades of one hundred and
ten feet to the mile or under, and not less than seventy
pounds to the lineal yard on grades of over one hundred
and ten feet to the mile, except for turnouts, sidings, and
switches.2
The statute provides in the case of railroad corporations
generally, that whenever it is necessary or proper to build
any part of the railway underground, or to tunnel or
bridge any rivers, that the corporation may acquire and use
such lands under water and uplands as may be necessary
for such purposes, except along any canals of the state;
that it may construct the necessary foundations and struct-
ures required for such road, and may acquire in the man-
ner provided by law such lands, rights, or easements in
lands along its route, upon, over, or beneath the surface,
as may be necessary. If the road is constructed under-
neath the ground at such a depth as to enable a tunnel to
be used, the tunnel must be built and at all times kept in
condition so as to make the surface of the ground firm
and safe for buildings; and if surface excavations are
made, the surface must be restored to its former condition
as soon as can be done, except so far as is necessary for
the ventilation of the tunnel and for access thereto. Be-
fore constructing such tunnel in any city or incorporated
village, underneath any streets or public places thereof,
the consent of abutting property owners and of the mu-
¹ Laws, 1890, ch. 565, sec. 12.
Laws, 1890, ch. 565, sec. 31.
NEW YORK.
1535
nicipal authorities must be obtained, or the determination
of three commissioners, as in other cases, in lieu of the
consent of such property owners. Such use of property
is declared to be a public use, and provisions are made for
connection with other roads and the joint use of such
property by them.'
Street surface railroads.-Street surface railroad corpora-
tions are required, so long as they continue to use any of
their tracks in any street, avenue, or public place in any
city or village, to have and keep in permanent repair that
portion of such street, avenue, or public place between its
tracks, the rails of its tracks, and two feet in width out-
side of its tracks, under the supervision of the local au-
thorities, and whenever required by them to do so, and in
such manner as they may prescribe. In case of the neg-
lect of any corporation to make pavements or repairs after
thirty days notice to do so, the local authorities may
make the same at the expense of such corporation.2
Other railroads in cities and counties (elevated, underground,
etc.)—The statute provides that in the construction of rail-
roads in cities and counties other than street surface rail-
ways, that in all cases the surface of the streets around
the foundations, piers and columns must be restored to the
condition in which they were before such excavations
were made, as near as may be, and any interference with
or change in the water mains, or in the sewers or lamp-
posts, except such changes as may be made with the con-
currence of the proper department or authority must be
avoided. The use of the streets, avenues, places, and
lands designated by the commissioners, and the right of
way through the same for the purpose of a railway, as
authorized, is declared to be a public use, consistent with
the uses for which the roads, streets, avenues, and public
places are publicly held.³
As to the method of construction of railways in cities
¹ Laws, 1890, ch. 565, sec. 16.
3 Laws, 1890, ch. 565, sec. 129.
* Laws, 1890, ch. 565, sec. 98.
1536
ECONOMIC LEGISLATION.
and counties other than street surface railways, see "How
OBTAINED," supra.
Regulations as to service.-The general powers of
state and municipality to regulate service have been stated
above, under "METHODS OF CONSTRUCTION." The general
provision by which municipal authorities are authorized
to grant franchises under reasonable regulations, is com-
monly construed to cover the right to fix the rate of
charges for service. Lighting franchises usually contain
some such provisions where no general law is applicable.
The right of the legislature to fix the maximum charges.
which can be exacted for public services by companies or
individuals enjoying public franchises, rests upon what is
known as "The Police Power of the State." That is, in
the language of the courts, where the employment or bus-
iness becomes a matter of such public interest or import-
ance as to create a common charge or burden upon the
citizen, or where it becomes a practical monopoly, to
which the citizen is compelled to resort, and by means of
which a tribute can be exacted from the community, it is
subject to regulation in this as in other respects, by the
legislature. This principle undoubtedly allows the legis-
lature to regulate for the public interest the charges of all
companies engaged in quasi public business, i. e., railway,
gas, water, telegraph, and telephone corporations. Where
such charges are fixed by law, there is nothing to prevent
succeeding legislatures from changing such rates, as it is a
well-established principle that no legislature can limit or
control the legislative action of its successors, unless, in-
deed, the charter forbids such a change, and even then
the charter may be amended. But it would seem that no
such legislation could affect a valid and subsisting contract
between a grantee of a franchise and a citizen, on the
ground of the constitutional prohibition against the im-
pairment of contracts. Subject, however, to this qualifi-
1
2
¹ Buffalo East Side R. R. Co. v. B. S. R. R. Co., 111 N. Y. 132.
2 Const., Art. VIII, sec. 1.
NEW YORK.
1537
cation, there seems to be no guarantee against unwise and
impolitic legislation in this direction, so far as quasi pub-
lic franchise companies are concerned, except the force of
public opinion. The principle of the "Police Power" has
been lately extended a long distance in this state, in a case
which has held constitutional a law regulating the charges
to be exacted by grain elevators.¹
2
Gas and electric light companies. Companies organ-
ized as gas-light companies, may also manufacture and
use electricity for light, heat, or power. And domestic
electric light and power companies incorporated under a
general law, and having at least five stockholders, may,
by filing the certificate prescribed, obtain the right to
build, maintain, and operate electrical railroads other
than street surface railroads, and not more than twenty
miles in length.³
During the last session of the legislature a determined
but unsuccessful effort was made to limit the voltage of all
electrical currents used in cities to a maximum of six hun-
dred volts.
Upon the application in writing of the owner or occu-
pant of any building or premises within one hundred feet
of any gas main or of the wires of any electric light cor-
poration, and upon payment by him of all money due to
the corporation, the corporation must supply gas or elec-
tric light for lighting such building or premises, notwith-
standing there be rent or compensation in arrear, for gas
or electric light supplied, or for meter, wire, pipe, or fit-
tings furnished to a former occupant, unless such owner
or occupant undertook or agreed with the former occu-
pant to pay or to exonerate him from the payment of such
arrears, and refuses or neglects to pay the same. If, for
the space of ten days after such application, and the de-
posit of a reasonable sum, if required, the corporation
refuses or neglects to supply gas or electric light as re-
1
People v. Budd, 117 N. Y. 1; affirmed in U. S. supreme court.
2 Laws, 1890, ch. 566, sec. 60.
9 Laws, 1890, ch. 416.
1538
ECONOMIC LEGISLATION.
quired, such corporation forfeits and must pay to the
applicant the sum of ten dollars, and the further sum of
five dollars for every day thereafter during which such
refusal or neglect continues; but no such corporation is
required to lay service pipes or wires for the purpose of
supplying gas or electric light to any applicant where the
ground in which the pipe or wire is required to be laid is
frozen, or otherwise presents serious obstacles to laying
the same; nor unless the applicant, if required, deposits
with the corporation a sum of money sufficient to pay the
cost of his portion of the pipe or wire required to be laid,
and the expense of laying it.'
Every gas-light and electric light corporation may re-
quire every person to whom it supplies gas or electric light
for lighting any building, room, or premises, to deposit a
reasonable sum of money according to the number and
size of lights used or proposed to be used for two calendar
months, and the quantity of gas and electric light neces-
sary to supply the same, as security for the payment of
the gas and electric light rent or compensation for gas
consumed, or rent of pipe or wire and fixtures, to become
due to the corporation, but every corporation must allow
and pay to every such depositor legal interest on the sum
deposited for the time his deposit remains with the corpo-
ration.2
Any officer or other agent of any gas-light or electric
light corporation, for that purpose duly appointed and au-
thorized by the corporation, may, at all reasonable times,
upon exhibiting a written authority, signed by the presi-
dent and secretary of the corporation, enter any dwelling,
store, building, room, or place lighted with gas or electric
light supplied by such corporation, for the purpose of in-
specting and examining the meters, pipes, fittings, wires,
and works for supplying or regulating the supply of gas
or electric light, and of ascertaining the quantity of gas or
electric light consumed or supplied, and if any person, at
1
¹ Laws, 1890, ch. 566, sec. 65.
2 Laws, 1890, ch. 566, sec. 66.
1
NEW YORK.
1539
any time, directly or indirectly prevents or hinders any
such officer or agent from so doing, he forfeits to the cor-
poration twenty-five dollars.'
If any person neglects or refuses to pay the rent or re-
muneration due for the gas or electric light, or for the
wires, pipes, or fittings for supplying or using such gas or
electric light or for ascertaining the quantity consumed
or used as required by his contract with the corporation,
or refuses or neglects to make the deposit required, such
corporation may prevent the gas or electric light from en-
tering the premises of such person; and may enter such
premises between eight o'clock in the forenoon and six
o'clock in the afternoon and remove any meter, pipe, fit-
tings, wires, or other property of the corporation, and may
disconnect the same, whether the property of the corpo-
ration or not, from the mains or wires of the corporation."
No gas-light corporation in this state can charge or col-
lect rent on its gas-meters, either in a direct or indirect
manner, under a penalty of fifty dollars for each offense,
to be sued for and recovered in the corporate name of the
city or village where the violation occurs, and, when col-
lected, to be paid into the treasury of such city or village,
and to constitute a part of the contingent or general fund
thereof.3
In any city in this state having a population of eight
hundred thousand, or over, no corporation or person can
charge for illuminating gas a sum to exceed one dollar and
twenty-five cents per thousand cubic feet, and such gas must.
have an illuminating power of not less than twenty sperm
candles, of six to the pound, burning at the rate of one.
hundred and twenty grains of spermaceti per hour, tested
at a distance of not less than one mile from the place of
manufacture, by a burner consuming five cubic feet of gas
per hour, and must comply with the standard of purity
now or hereafter established by law; but in any district
* Laws, 1890, ch. 566, sec. 68.
1 ¹ Laws, 1890, ch. 566, sec. 67.
* Laws, 1890, ch. 566, sec. 69.
1540
ECONOMIC LEGISLATION.
or ward of any city containing over one million inhabit-
ants, which district or ward is separated from the main
portion thereof by a stream or other natural boundary,
any gas-light corporation may charge a price not to exceed
one dollar and sixty cents per thousand cubic feet, but
such corporation must not charge a greater price in the
city where its main works are situated than in such dis-
trict or ward.¹
Inspection of meters.-The statute provides that the gov-
ernor shall nominate, and with the consent of the senate,
appoint an inspector of gas-meters, who must reside in the
city of New York, whose duty it is, when required, to
there inspect, examine, prove, and ascertain the accuracy
of any and all gas-meters used, or intended to be used
for measuring or ascertaining the quantity of illum-
inating gas furnished to consumers by any gas-light cor-
poration in this state, except corporations engaged in
suppling natural gas, and when correct, to seal, stamp, or
mark such meters, with some suitable device which
must be recorded in the office of the secretary of state.
Such inspector holds his office for the term of five
years,
and until the appointment of his successor, but may
be removed by the governor for sufficient cause.
He re-
ceives an annual salary of twenty-five hundred dollars, to
be paid in the first instance out of the state treasury, on
the warrant of the comptroller, but which is charged to
and paid into the state treasury by the several gas-light
corporations in this state, in amounts proportionate to the
amount of their capital stock, to be ascertained and as-
¹ Laws, 1890, ch. 566, sec. 70; see Laws, 1886, ch. 332. The price of
gas in the city of Brooklyn and in the suburban districts of New York
is fixed at $1.60 per thousand cubic feet (Laws, 1887, ch. 270, 570), and
the price of gas in cities of one hundred thousand and not exceeding
five hundred thousand is fixed at not to exceed $2.00 per thousand cubic
feet;
in cities of five hundred thousand and not exceeding one million
two hundred and fifty thousand, at not to exceed $1.50; in cities of over
one million two hundred and fifty thousand, not to exceed $1.25, the gas
to be furnished to be twenty candle power. (Laws, 1890, ch. 505.)
NEW YORK.
1541
sessed by the comptroller of the state. If any gas corpo-
ration neglects or refuses to pay into the state treasury the
portion of such salary required of it, for thirty days after
written notice by the comptroller, the comptroller may
maintain an action in his name of office, against such cor-
poration for the same with interest at the rate of ten per
cent per annum, from the time when such notice was
given, and the costs of action.'
The inspector of gas-meters must appoint deputy in-
spectors, to reside wherever gas-meters are manufactured
in this state, to hold office during his pleasure, and who
must, in their respective places of residence, discharge the
same duties as are required of the inspector, and must be
paid by him out of his salary at the rate of two dollars
per day, while actually engaged in the discharge of such
duties.2
No corporation or person can furnish or put in use any
gas-meter which has not been inspected, proved, and
sealed by the inspector, except during such time as the of-
fice of inspector may be vacant, or if such inspector re-
fuses or neglects to prove and seal the meters furnished
for that purpose. Every gas-light corporation must pro-
vide and keep upon their premises, a suitable apparatus,
to be approved and sealed by the inspector of meters, for
testing the accuracy of the gas-meters furnished for use
by it, by which apparatus every meter must be tested, on
the written request of the consumer, and in his presence,
if he desires it. If any meter, on being so tested is found
defective or incorrect to the injury of the consumer, the
necessary removal, inspection, correction, and replacing
must be without expense to the consumer, but in all other
cases he must pay the reasonable expenses of the same.
If any consumer is not satisfied with such inspection, and
gives to the corporation written notice to that effect, he
1
Laws, 1890, ch. 566, sec. 62. See Birdseye, 1249, for former pro-
visions.
¹ Laws, 1890, ch. 566, sec. 63
جة
1542
!
ECONOMIC LEGISLATION.
may have such meter reinspected by the state inspector,
upon the same terms and conditions as provided for the
original inspection thereof.¹
Water-works corporations.-Water-works corporations.
must supply the authorities or inhabitants of any town or
village where they may have organized with pure and
wholesome water, at reasonable rates, to all consumers
who may use the same.²
Telegraph and telephone companies.-Numerous bills are
introduced every year to fix the charges of telegraph and
telephone companies, but no such law has yet been en-
acted.
The police department of any city may, in addition to
the police force now authorized by law, appoint not ex-
ceeding two hundred persons, who may be designated by
any corporation operating a system of signaling by tele-
graph to a central office for police assistance, to act as
special patrolmen in connection with such telegraphic sys-
tem. The persons so appointed in and about such service
have all the powers possessed by the members of the reg-
ular force, subject to the control of the police department
and the limitations imposed by it. No person can be ap-
pointed such special policeman who does not possess the
qualifications required by the police department for such
special service; and persons so appointed are subject, in
case of emergency, to do duty as part of the regular police
force of the city. The police department has power to
revoke any such appointment at any time. Every person
appointed must wear a badge and uniform, to be furnished
by such corporation and approved by the police depart-
ment; such uniform must be designated at the time of the
first appointment, and is the permanent uniform to be
worn by such special police; the pay of such special
patrolmen, and all expenses connected with their service,
must be wholly paid by such corporation, and no expense
or liability can at any time be incurred or paid by the
¹ Laws, 1890, ch. 566, sec. 64.
2 Laws, 1890, ch. 566, sec. 81.
NEW YORK.
1543
police department of any city for or by reason of the
services of such persons so appointed.¹ See also "DIS-
CRIMINATION IN SERVICE," etc., post.
Pipe-line companies. - Pipe-line companies are given
power by statute to regulate the time and manner of
transporting property through its lines, and the compen-
sation to be paid therefor, which must not exceed twenty-
five cents per one hundred miles for the transportation of
forty-two gallons of any product transported in lines of
one hundred miles in length or over, to be reckoned upon
the quantity or number of gallons delivered at the point
of delivery.2
The lines of every pipe-line corporation must be open to
the public use, and all persons desiring to transport pro-
ducts through them have the absolute right to such trans-
portation upon equal terms, in the order of their applica-
tions, on complying with the general requirements of such
corporation, as to delivery of such products and payment
for such transportation, but no application is valid for a
greater quantity of products than the applicant then owns
and has ready for delivery for transportation. Every such
corporation must provide suitable and necessary recepta-
cles for receiving all such products for transportation, and
for storage at the place of delivery until the same can rea-
sonably be moved by the consignee; they are liable as
common carriers from the time the property is delivered
until a reasonable time after it has been transported to the
place of consignment and ready for delivery, which time
must be fixed by the corporation by general regulation,
and must not be less than two days after the same is ready
for delivery and notice thereof given to the consiguee.
All rates and charges of every description, on account of
or connected with the transportation of any products,
must be fixed by such corporation by general rules and
regulations, which must be applicable to all parties who
2 Laws, 1890, ch. 566, sec. 49.
1
¹ Laws, 1890, ch. 566, sec. 105.
1544
ECONOMIC LEGISLATION.
transport any products through such pipe line, or who de-
liver or contract to deliver products for transportation;
and such rules must be written or printed and exposed to
public view, and at all times open to public examina-
tion.¹
No receipt, certificate or order of any kind can be made,
accepted or issued by any pipe-line corporation for any
commodity unless the commodity represented by it is
actually in possession of the corporation at the time; and
orders, vouchers, receipts or certificates received by the
company for any commodity delivered can not be issued
or used again, but must be canceled with the word "can-
celed" stamped or printed legibly across the face thereof,
and must be filed and preserved, and a record of the same
kept by the secretary. All vouchers must be surrendered
before the delivery of the commodity.2
Railroad companies generally.³-The general corporation
law provides that every railroad corporation must start
and run its cars for the transportation of persons and
property at regular times, to be fixed by public notice,
and must furnish sufficient accommodations for the trans-
portation of all passengers and property, and must trans-
port and discharge such passengers upon payment of the
fare or freight legally authorized, and forbids discrimina-
tion between competing companies, persons, or associa-
tions. It further provides that every railway corporation
may fix and collect the following rates of fare for trans-
porting any passenger and his ordinary baggage for each
mile or fraction of a mile:
1. Where the motive power is rope or cable, propelled
by stationary power, five cents, with right to a minimum
fare of ten cents; but if the railroad is less than two
miles in length, and overcomes an elevation of five hun-
dred feet or more to the mile, five cents for each one hun-
¹ Laws, 1890, ch. 566, sec. 50; see Laws, 1878, ch. 203; Banks, 1862.
Laws, 1890, ch. 566, sec. 51.
³ See note 1, p. 1533.
NEW YORK.
1545
湛
​dred feet of elevation so overcome, and the same rates of
fare if the motive power is locomotives, furnished with
cogs working into cogs on the railway, and the length of
road does not exceed four miles.
2. If a narrow gauge road, not incorporated prior to
May 15, 1879, and not located in the counties of New
York and Kings, or within the limits of any incorporated
city, and not more than twenty-five miles in length, five
cents; if over twenty-five and not more than forty miles, four
cents; and if over forty miles, three cents. Where, by
the laying down of a third rail upon a railroad of the or-
dinary gauge, a narrow gauge track is created and used
for the transportation of passengers, and the length of
road does not exceed six miles, including any connecting
road of the same gauge, such railroad, for the purpose of
fare, is deemed a narrow gauge road.
3. If the railroad overcomes an elevation of two hun-
dred feet to the mile, for at least two consecutive miles,
and does not exceed twenty miles in length, ten cents; if
it overcomes an elevation exceeding three hundred feet to
the mile, within a distance of two miles, five cents for
each one hundred feet of elevation; and where it over-
comes an elevation of more than one thousand feet, within
a distance of two miles, seven cents for each one hundred
feet of elevation in a mile.
4. If the line of its road does not exceed fifteen miles in
length, and does not enter or traverse the limits of any
incorporated city, and the distance traveled thereon by
the passenger does not exceed one mile, five cents.
5. In all other cases, three cents.'
The legislature may, when any railroad is opened for
use, from time to time, alter or reduce the rate of freight,
fare, or other profits upon such road; but not so as to
produce less than ten per centum per annum on the cap-
¹ Laws, 1890, ch. 565, secs. 34, 37. The New York Central Railroad is
limited to two cents per mile, and consolidated railroads to the amount
limited by law to the previous companies.
VOL. II-17
1546
ECONOMIC LEGISLATION.
ital actually expended, without the consent of the corpo-
ration, nor unless on an examination of the amounts re-
ceived and expended, the board of railroad commissioners
ascertain that the net income derived by the corporation
from all sources, for the year then last past, has exceeded
an annual income of ten per cent upon the capital of the
corporation actually expended.'
Any railroad corporation asking or receiving more than
the lawful fare, unless such overcharge was made through
inadvertence or mistake, not amounting to gross negli-
gence, forfeits fifty dollars, to be recovered with the ex-
cess so received by the party paying the same, by an action
commenced within one year.2
The conductor and the servants of the corporation may
put any passenger refusing to pay his fare out of the cars,
using no unnecessary force, on stopping the train, at any
usual stopping place or near any dwelling-house, as the
conductor may elect.³
Any railroad corporation may employ any inhabitants
of the state, of the age of twenty-one years, not addicted
to the use of intoxicating liquors, as a car driver or con-
ductor, or in any other capacity, if fit and competent
therefor.*
Every conductor and employee of a railroad corporation
employed in a passenger train, or at stations for passen-
gers, must wear upon his hat or cap a badge, which must
indicate his office or employment, and the initial letters
of the corporation employing him; and without such
badge he must not demand or receive from any passenger
any fare or ticket, or meddle or interfere with any passen-
ger, his baggage or property, or exercise any of the powers
of his employment.5
Every railroad corporation doing business in this state is
a common carrier. Any one of two or more corporations
5
¹ Laws, 1890, ch. 565, sec. 38.
3 Laws, 1890, ch. 565, sec. 40.
' Laws, 1890, ch. 565, sec. 43.
Laws, 1890, ch. 565, sec. 39.
* Laws, 1890, ch. 565, sec. 42.
NEW YORK.
1547
owning or operating connecting roads within this state, or
partly within and partly without the state, is liable as a
common carrier for the transportation of passengers or the
delivery of freight to any place on the line of a connect-
ing road; if it becomes liable to pay any sum by reason
of the neglect or misconduct of any other corporation, it
may collect the same of the corporation by reason of whose
neglect or misconduct it became so liable.¹
As to discrimination by connecting railroads, see “DIS-
CRIMINATION IN SERVICE, ETC.," post.
Street surface railways.-The municipal authorities may
make such reasonable regulations and ordinances as to the
rate of speed, mode of use of tracks, and removal of ice
and snow as the interest or convenience of the public may
require. A corporation whose agents or servants willfully
or negligently violate such an ordinance or regulation is
liable to such city or village for a penalty not exceeding
five hundred dollars, to be specified in such ordinance or
regulation.2
Any street surface railroad may operate any portion of
its road by animal or horse power, or by cable, electricity,
or any power other than locomotive steam power, which
may be approved by the state board of railroad commis-
sioners, and consented to by the owners of one-half of the
property bounded on that portion of the railroad with re-
spect to which a change of motive power is proposed; if
the consent of such property owners can not be obtained
in favor of such motive power, the determination of com-
missioners, appointed as above provided,3 must be taken in
lieu thereof. The provisions of sections ninety-one and
ninety-four, so far as applicable, govern.*
The owner or operator of any street surface railroad in
cities of this state having a population of five hundred
thousand, or more, may place upon the space between the
¹ Laws, 1890, ch. 565, sec. 48.
See "How OBTAINED," p. 1486.
* Laws, 1890, ch. 565, sec. 100.
* Laws, 1890, ch. 565, sec. 98.
See "How OBTAINED," p. 1486.
1548
ECONOMIC LEGISLATION.
tracks of such road sand in sufficient quantities, and no
more, to prevent the horses traveling thereon from slip-
ping.¹
1
The present law of the state provides that no street rail-
way company incorporated under the general act now in
force, or under chapter 252, Laws of 1884, shall charge any
passenger more than five cents for one continuous ride from
one point to another on its road or on lines operated or
controlled by it. This does not apply to any part of the
road constructed prior to the sixth day of May, 1884, and
then in operation, though it may apply to extensions.2
The legislature expressly reserves the right to regulate and
reduce the rate of fare,² though by the authority of the
cases cited above such power resides in the legislature
without express reservation.
Every street surface railroad corporation entering into a
contract of consolidation as shown above,3 must carry or per-
mit any other party thereto to carry between any two
points on the railroads, or portions thereof embraced in
such contract, any passenger desiring to make one con-
tinuous trip between such points for one single fare, not
higher than the fare lawfully chargeable by either of such
corporations for an adult passenger; and every such cor-
poration must, upon demand, and without extra charge,
give to each passenger paying one single fare, a transfer
entitling such passenger to one continuous trip to any
point or portion of any railroad embraced, in such con-
tract, to the end that the public convenience may be pro-
moted by the operation of the railroads embraced in such
contract substantially as a single railroad with a single
rate of fare. For every refusal to comply with this pro-
vision, the corporation so refusing forfeits fifty dollars to
the aggrieved party.*
As to power of electric light and power companies to
¹ Laws, 1890, ch. 565, sec. 108.
2 Laws, 1890, ch. 565, sec. 101.
3 See "CONSOLIDATION OF COMPANIES," p. 1483, supra.
4 Laws, 1890, ch. 565, sec. 105.
NEW YORK.
1549
operate electric railways, see "Gas and electric light com-
panies," supra.
Railroad commissioners.-The statute provides for the
appointment and continuance of a board of railroad com-
missioners, consisting of three persons, one of whom must
be experienced in railroad business; they are appointed by
the governor, with the advice and consent of the senate,
for the term of five years, and until their successors are
appointed and qualified. Vacancies occurring in the board
are filled by the governor, subject to the approval of the
senate.¹ Any commissioner may be suspended by the gov-
ernor upon written charges, but such suspension must be
reported to the senate and approved by a majority before.
the office becomes vacant.2
The board appoints the following officers to serve during
pleasure:
1st. A secretary, who must keep a full and faithful record
of its proceedings, and is the custodian of its records. Under
the direction of the board, he is its chief executive officer,
has general charge of its office, superintends its clerical
business, conducts its correspondence, is the medium of its
decisions, recommendations, orders, and requests, prepares
for service such papers and notices as required by the com-
missioners, performs such other duties as the board may
prescribe, and has power to administer oaths in all cases
pertaining to the duties of its office.³
2d. A marshal, who must attend at the office and meet-
ings and examinations of the board, serve notices and
other papers, and perform such other duties as the board
may prescribe.3
3d. The board may also appoint an
may also appoint an accountant
thoroughly skilled in railroad accounting, who, under di-
rection of the board, may make examinations of the
books and accounts of railroad and other corporations,
and supervise the quarterly and annual reports made to
'Laws, 1890, ch. 565, sec. 150.
'Laws, 1890, ch. 565, sec. 152.
2 Laws, 1890, ch. 565, sec. 151.
1550
ECONOMIC LEGISLATION.
the board, and collect and compile railroad statistics,
and perform such other duties as the board may pre-
scribe.¹
1
4th. An inspector, who must be a civil engineer, skilled
in railroad affairs, to make such inspections of railroads,
etc., as directed by the board.¹
5th. Such additional clerical force, not exceeding six
persons, as may be necessary, and such engineers, ac-
countants, and experts, as may be deemed of temporary
importance in conducting any investigation authorized
by law.¹
1
The commissioners must take and subscribe the consti-
tutional oath of office, and no person holding any official
relation, or owning stocks or bonds, or pecuniarily inter-
ested in any firm or corporation having business relations
with any railroad corporation, can be appointed as such
commissioner or to any place or office under such board.2
a
The principal office of the board must be in Albany,
and branch offices may be located in New York and Buf-
falo. The board must meet at least once a month at the
office in Albany. Two commissioners constitute
quorum, and all examinations or investigations made by
the board, may, by order of the board, be held and taken
before any one of the commissioners, and are to be deemed
the proceedings and decisions of the board when approved
and confirmed by it.³
The board of railroad commissioners has power to ad-
minister oaths in all matters relating to its duties; has
general supervision of all railroads; and must examine the
same and keep informed as to their condition and the
manner in which they are operated for the security and
accommodation of the public and their compliance with
the provisions of their charters and of law. In the per-
formance of their official duties, they may enter and re-
main during business hours in the cars, offices, and depots
¹ Laws, 1890, ch. 565, sec. 153.
³ Laws, 1890, ch. 565, secs. 155, 156.
' Laws, 1890, ch. 565, sec. 154.
NEW YORK.
1551
of any railroad, and may examine the books and affairs.
of such corporation and compel the production of books
and papers or copies thereof, and may cause to be sub-
pœnaed witnesses, who must appear and testify the same
as before a court of record or a referee.' The board must
take testimony upon and have a hearing for and against
any proposed change of the law relating to any railroad
or of the general railroad law, if requested to do so by
the legislature or a committee on railroads of either branch
thereof, or by the governor, and may take such testimony
and have such a hearing when requested to do so by any
railroad corporation or incorporated organization repre-
senting agricultural or commercial interests in the state,
and must report their conclusions in writing to the author-
ity making such request, and must recommend and draft
such bills as will, in its judgment protect the people's in-
terest in and upon the railroads of this state.¹
The board must prescribe the form of the report to be
made by railroad corporations, and may make changes and
additions in such form, upon giving six months notice be-
fore the expiration of any fiscal year, if such changes re-
quire any alteration in the method or form of keeping the
accounts, and, on or before September 15th in each year,
must furnish a blank form for such report. When the re-
port of any corporation is defective or believed to be er-
roneous, the board must notify the corporation to amend
the same within thirty days. All reports must be pre-
served in the office of the board.² 2
The board must investigate the cause of any accident
on any railroad resulting in loss of life or injury to per-
sons which in their judgment requires investigation, and
include the result thereof in their annual report to the
legislature. Before making such examination, reasonable
notice must be given to the railroad company of the time
and place of commencing the same. The manager of every
¹ Laws, 1890, ch. 565, sec. 157.
2 Laws, 1890, ch. 565, sec. 158.
1552
ECONOMIC LEGISLATION.
railroad must inform the board of such accident imme-
diately after its occurrence.¹
If any railroad corporation has violated any constitutional
provision or law, or neglects to comply with the terms of
law by which it was created, or unjustly discriminates in its
charges, or usurps any authority or refuses to comply with
any law or recommendation of the board, the board must
give notice thereof in writing to such corporation, and if
such violation, neglect, or refusal is continued, may forth-
with present the matter to the attorney-general, who
must take proceedings for the protection of the public in-
terests.2
If, after a careful personal examination, it appears that
repairs are necessary upon any railroad, or that additional
rolling stock or terminal facilities or any change of sta-
tions or rates of fare or in the mode of operating the road
is reasonable and expedient in order to promote the secur-
ity, convenience, and accommodation of the public, the
board must give notice and information in writing to such
corporation of the improvements and changes which they
deem to be proper, and must give an opportunity for a full
hearing as to the same; if the corporation refuses or ne-
glects to make such repairs, etc., within a reasonable time
after such information and hearing, and fails to satisfy the
board that no action is required to be taken by it, the
board must fix the time (which it may extend) within
which the same shall be made. It is the duty of such
railroad to comply with such decisions and recommenda-
tions as are just and reasonable, and if it fails to do so,
the board must present the facts in the case to the attor-
ney-general, and must also report them in its annual or
special report to the legislature. No proceedings of the
board have the effect to impair the legal rights, duties,
obligations, or liabilities of any corporation. The supreme
1
8
¹ Laws, 1890, ch. 565, sec. 159.
* Laws, 1890, ch. 565, sec. 161.
3
2 Laws, 1890, ch. 565, sec. 160.
NEW YORK.
1553
court, at special term, has power in its discretion to com-
pel compliance with the just and reasonable decisions and
recommendations of such board by mandamus, subject to
appeal to the general term and the court of appeals. In
all proceedings, the findings of the board are presumptive
evidence of the facts therein stated, and the recommenda-
tions of the board are deemed prima facie to be just and
reasonable.¹
Every railroad corporation must, on request, furnish the
board any necessary information required by it concerning
the rates of fare, and the condition, management, and oper-
ation of its road or other roads with which it is connected,
and must furnish the board copies of all contracts, agree-
ments, leases, or other engagements entered into by it with
any person or corporation. The commissioners must not
give publicity to such information unless the public inter-
ests require it or if the welfare and prosperity of railroad
corporations of the state may be thereby injuriously af-
fected.2
The board must charge and collect the following fees:
For copies of papers and records not required to be certi-
fied, ten cents per folio of one hundred words; for certified
copies of documents filed in its office, fifteen cents per
folio, and one dollar for each certificate under seal affixed
thereto; for each certified copy of the quarterly report
made by a railroad corporation, fifty cents; for each certi-
fied copy of the annual report, one dollar and fifty cents;
certified copies of evidence and proceedings before the
board, fifteen cents per folio. Such fees belong to the
state, and must be paid into the state treasury to the
credit of the general fund. No fees can be charged or
collected for copies, etc., furnished to public officers for
use in their official capacity or for the annual reports of
the board in the ordinary course of distribution.³
¹ Laws, 1890, ch. 565, sec. 162.
* Laws, 1890, ch. 565, sec. 167.
'Laws, 1890, ch. 565, sec. 163.
1554
ECONOMIC LEGISLATION.
The board must make an annual report on or before the
second Monday of January in each year, which must con-
tain a record of its meetings and an abstract of its pro-
ceedings for the year; the result of any examination or
investigation conducted by it; such statements, facts, and
explanations as will disclose the actual workings of the
system of railroad transportation in its bearing upon the
business and prosperity of the state, and such suggestions
as to the general railroad policy of the state, or the
amendment of its laws, or the condition, affairs, or con-
duct of any railroad corporation, as may seem to it appro-
priate; drafts of all bills submitted by it to the legislature,
and the reasons therefor; such tables and abstracts of all
the reports of all the railroad corporations as may be
deemed expedient; a statement in detail of the traveling
expenses and disbursements of the commissioners, their
clerks, marshal, and experts.¹
Copies of all official documents filed or deposited ac-
cording to law in the office of the board, certified by a
member of the board or by the secretary to be true copies
of the originals, under the official seal of the board, are
evidence in like manner as the originals.2
No railroad commissioner can, directly or indirectly, so-
licit or request from, or recommend to any railroad cor-
poration, or any officer, attorney, or agent thereof, the
appointment of any person to any place or position; nor
can such railroad corporation or officials offer any place,
appointment, or position, or other consideration, to such
commissioners, or to any clerk or employee of the com-
missioners or of the board; nor can the commissioners,
or their secretary, clerks, agents, employees, or experts ac-
cept, receive, or request any pass from any railroad in this
state, for themselves or for any other person, or any pres-
ent, gift, or gratuity of any kind from any railroad corpo-
ration; and the request or acceptance of the same by
them works a forfeiture of their office.³
¹ Laws, 1890, ch. 565, sec. 166.
³ Laws, 1890, ch. 565, sec. 168.
2 Laws, 1890, ch. 565, sec. 167.
1
NEW YORK.
1555
1
I
The total annual expenses of such board of railroad
commissioners are borne by the railroads of the state or
those doing business in the state, one-half in proportion to
their net income and one-half in proportion to the main
road and branches.¹
These provisions apply to all railroads within the state,
and to corporations, receivers, trustees, directors, or others,
owning or operating the same or any of them, and to
sleeping and drawing-room car corporations, and to all
other associations, partnerships, or corporations engaged
in transporting passengers or freight upon any such rail-
road as lessee or otherwise.2
Discrimination in service; refusal to render ser-
vice. The well known legal principle that a common
carrier (which includes a street railway company or an
elevated railway company), must furnish passage for per-
sons and goods to all who apply and are willing to pay the
reasonable compensation demanded, extends in a large
measure to all companies or individuals acting under a
public franchise, and holding themselves out to the public
as quasi public agencies. Thus, a telegraph company must
render equal and impartial service to all who are willing
to comply with reasonable regulations, and the reasonable-
ness of such regulations is to be determined from the facts
and circumstances of each case. So held where an
injunction was granted prohibiting defendant from re-
moving its "ticker" without good cause from a sub-
scriber's office.³
It is provided by statute that every telegraph and
telephone corporation must receive dispatches from and
for other telegraph and telephone lines or corporations,
and from and for every individual, and on payment of the
usual charges, must transmit the same with impartiality
and good faith, in the order in which they were re-
ceived, but intelligence of general and public interest for
newspaper publication, may be transmitted out of its reg-
¹ Laws, 1890, ch. 565, sec. 170.
² Laws, 1890. ch. 565, sec. 171.
³ Smith &. Gold, etc., Telegraph Co., 42 Hun. 454.
1556
ECONOMIC LEGISLATION.
ular order.¹ There is a penalty of one hundred dollars
under this provision for every refusal or neglect to comply
therewith. A telephone company is not permitted to
withhold facilities for the transaction of business from one
class of citizens which it accords to another. But such a
company is not compelled to transmit messages over its
line which are taken by rival companies for transmission,
in the regular course of business, on payment merely of
the nominal sums required of its ordinary subscribers.³
Gas companies must furnish gas at the same rates to all
consumers, who apply for the same, and who have a right
to the light under the company's charter, and are willing
and ready to pay therefor. See also under " REGULATIONS
AS TO SERVICE," supra.
5
All railroad corporations whose roads are crossed, inter-
sected, or joined by other railroad companies, must re-
ceive from each other, and forward to their destination, all
goods, merchandise, and other property intended for points
on their respective roads, with the same dispatch as, and
at a rate of freight not exceeding the local tariff rate
charged for similar goods, merchandise, and other prop-
erty, received at and forwarded from the same point for
individuals and other corporations."
As to discrimination by pipe-line and water-works com-
panies, see "REGULATIONS AS TO SERVICE:-Pipe-line com-
panies; Water-works companies," supra.
Safety of life and property.-As pointed out above,
the legislature may impose any reasonable conditions upon
the granting of a franchise, or delegate to the municipality
¹ Laws, 1890, ch. 566, sec. 103.
2 People ex rel. Postal Telegraph Co. v. Hudson River Telephone Co.,
19 Abbot's New Cases, 466; State ex rel. American Union Telegraph Co.
v. Bell Telephone Co., 11 Central Law Journal, 359.
3
People ex rel. Postal Telegraph Co. v. Telephone Co., 19 Abbot's New
Cases, 466.
* People ex rel. Kennedy v. Manhattan Gas Co., 45 Barb. 136.
5 See "METHODS OF CONSTRUCTION," supra.
• Laws, 1890, ch. 565, sec. 12.
NEW YORK.
1557
the power to impose such conditions. Perhaps one of the
best examples of such power, within the purview of this
section, is the well known subway legislation, which is
more fully considered under "METHODS OF CONSTRUCTION,"
above.
Of the provisions applying to railroad corporations gen-
erally,' and of interest in this connection, the following
may be mentioned: Railroad corporations must use
switches which will prevent the derailment of trains;
must erect and give suitable warnings where necessary;
must provide passenger cars with tools for use in case of
accidents; must use brakes which may be applied from
the locomotive; and, where the line of road is more than
forty miles in length, must furnish a suitable receptacle
for water, and must keep the same supplied with cool water
while in use.2
No railroad corporation is liable for injury to a passen-
ger while on the platform of a car or in any baggage,
wood, or freight car, in violation of the printed regulations
of the corporation posted up at the time in a conspicuous
place inside of the passenger cars then in the train, if there
is, at the time, sufficient room for the proper accommodation
of the passenger inside such passenger cars; and no per-
son other than those connected with or employed upon the
railroad can walk along its tracks except where they are
laid across or along streets or highways, in which case,
he must not walk upon the track unless necessary to cross
the same.³
All trains upon elevated railroads must come to a full
stop before any passenger is permitted to leave; and no
train must be permitted to start until every passenger de-
siring to depart has left the train, provided such passen-
ger has manifested his intention to do so by moving to-
ward or upon the platform of any car; nor until every
passenger upon the platform or station at which such
¹ See note 1, p. 1533.
' Laws, 1890, ch. 565, sec. 49.
Laws, 1890, ch. 565, sec. 53.
1558
ECONOMIC LEGISLATION.
train has stopped, desiring to board such cars, has actually
boarded the same, but no person must be permitted to
enter any train after due notice from an authorized em-
ployee that the train is full, and that no more passengers
can be received.¹
Every car used for passengers upon elevated railroads.
must have gates at the outer edges of its platforms, so
constructed that, when opened, they are caught and held
open; and every such gate must be kept closed while the
car is in motion, and, when the car has stopped and a gate
has been opened, the car must not start until such gate is
again firmly closed.²
2
Any elevated railroad corporation that fails or neglects
to comply with or enforce these provisions must, upon the
petition of any citizen to any court of record, and upon
due notice to such corporation, and proof of such failure
or neglect, pay to the clerk of the court, a sum not less
than two hundred and fifty nor more than one thousand
dollars, as such court may direct; the sum so ordered to be
paid must be paid by the clerk of the court to the county
treasurer, and must be distributed by such treasurer equally
among the public hospitals of the county in which the pro-
ceeding is had, at such time as the board of supervisors or
board of aldermen in any such county may direct; but
these provisions do not relieve elevated railroad corpora-
tions from any liability under which they may be held by
existing laws for damages to property."
The officers and board of directors of such railroad cor-
porations must cause copies of these provisions (sections
138, 139, 140) to be printed conspicuously and posted in
the depots or stations and in each car belonging to them."
State and municipal aid.-A municipal corporation.
can not subscribe for stock in a public improvement, or
borrow money for that purpose, unless expressly author-
ized by the legislature. Prior to 1875, there was no con-
5
¹ Laws, 1890, ch. 565, sec. 138.
3 Laws, 1890, ch. 565, sec. 140.
2 Laws, 1890, ch. 565, sec. 139.
Laws, 1890, ch. 565, sec. 141.
People v. Mitchell, 35 N. Y. 551; Wells v. Salina, 119 N. Y. 280.
NEW YORK.
1559
stitutional prohibition against the legislature authorizing
a municipal corporation to invest in any public under-
taking. It was very common for towns, villages, and
cities, prior to that year, to incur bonded indebtedness,
under direct legislative sanction, in aid of railroad corpo-
rations and other like undertakings, many of which bonds
are still in existence. But in that year the constitution
was amended by what is now section 11 of article 8,
which, forbidding a debt for any thing but a city, town or
village purpose, also forbids the ownership of stock in a
private corporation. This section, as amended by the vote
of the people, November 4, 1884, provides that no county,
city, town, or village shall hereafter give any money or
property or loan its money or credit to, or in aid of any
individual, association, or corporation, or become, directly
or indirectly, owners of stock in or bonds of any associa-
tion or corporation, or be allowed to incur any indebted-
ness, except for county, city, town, or village purposes.'
Public service. The duration of public contracts in
this state is generally governed by the charters or acts of
incorporation of the different cities or villages. Thus by
the charter of the city of Albany, contracts, except for light-
ing the streets, can not be made for more than two years.2
Apart, however, from statutory provision, it seems to be
clear, that no public contract can be let for an indefinite
time or for a period extending beyond the terms of office
of the public officials or authorities making such contract.³
This is on the principle that municipal authorities, like
legislatures, have no power to make contracts which will
control or embarrass their successors in the exercise of
their powers and duties.
Where, before the amended constitution of 1875, the
statute authorized a town to enter into a contract for the
lighting of its streets, but did not specify how long
1
¹ See "POWER TO ERECT OR PURCHASE," Subdivision IV., post.
2 Laws, 1883, ch. 298, tit. 9, sec. 4. For special provision in other
localities, see local acts.
³ Richmond County Gas-Light Co. v. Middletown, 59 N. Y. 228.
1560
ECONOMIC LEGISLATION.
the contract should run, it was held that the statute did
not make an absolute and binding contract for a term of
years, that the repeal of the statute annulled the contract.
The judge who wrote the opinion thought that the town
could revoke its contract at its pleasure, and that it could
not divest itself of the power to discontinue the lighting
of any or all of its streets.¹
In this connection, it should be noted that, while the
charters of most of the cities in the state provide that
public contracts for lighting, paving, etc., must be let to
the lowest bidder, the violation by the common council or
municipal authorities of such a provision can not be taken
advantage of in an action for damages by a competing
company or individual, on the ground that the authorities.
are acting in a judicial capacity in awarding the contracts,
and that the duty is a public one for the benefit of the
people at large, and not for the promotion of private in-
terests. But a suit by a tax-payer for whose benefit such
a provision is made, would probably lie, in such cases, by
statute. So it would seem that the clause as to contracts
being let to the lowest bidder does not prevent municipal
authorities from confining the bids, in their discretion, to
a particular material or system, which, by reason of a
patent thereon, effectually shuts out competition."
2
The board of trustees of any incorporated village of
this state has the power to contract for the term of one
¹ Richmond Co. Gas-Light Co. v. Middletown, 59 N. Y. 227, 228.
¹ East River Gas-light Co. v. Donnelly, 93 N. Y. 557.
³ Civil Code, sec. 1925 et seq.; Laws, 1881, ch. 531, as amended by
Laws, 1887, ch. 673; Banks, 938. This section of the code provides
that an action to obtain a judgment preventing waste of, or injury to
the estate, funds, or other property of a county, town, city, or incorpo-
rated village of the state, may be maintained against any officer thereof,
or any agent, commissioners, or other person acting in its behalf, by a
citizen, resident therein, who is assessed for and is liable to pay, or,
within one year before the commencement of the action has paid a tax
therein. This section does not affect any right of action in favor of a
county, city, town, or incorporated village, or any public officer.
* Matter of Dugro, 50 N. Y. 513.
!
.:
NEW YORK.
1561
year or more with any water-works corporation, for the
delivery by it to the village of water, through hydrants or
otherwise, for the extinguishment of fires and for sanitary
and other public purposes; and the amount of such con-
tract agreed to be paid must be annually raised as a part
of the expenses of such village, in the same manner as
other expenses of the village are raised, and when col-
lected must be kept separate from other funds, and be
paid over to such corporation by such trustees according
to the terms and conditions of the contract. Any such
contract entered into by the board of trustees of any
village is valid and binding upon such village, but no
contract can be made for a longer period than five years,
nor for a sum exceeding in the aggregate two and one-
half mills of every dollar of taxable property of such vil-
lage per annum, unless a resolution authorizing the same
has been submitted to a vote of the electors, in the man-
ner provided by the village law, and approved by a major-
ity of the voters entitled to vote and voting on such
question, at any annual election or at a special election
duly called. Any board of trustees, when so authorized,
may make such contract for a term not exceeding thirty
years, and the amount of such contract must be paid in
semi-annual installments."
Alteration, amendment, etc., of franchises.-Prop-
erty rights can not be taken or revoked by the state or
municipality without compensation. The state may re-
voke the charter of the company or its franchise where it
has reserved the right to do so, but it can not take with-
out compensation the property rights involved in the
franchise, and the corporeal property acquired thereun-
der, which vest on the decease or dissolution of the cor-
poration, in its representatives or successors; and where
the franchise is in its terms revocable if it is also by its
terms alienable or transferable, the clause of revocation is
necessarily null, if the power of alienability has been ex-
1
¹ Laws, 1890, ch. 566, sec. 81.
VOL. II-18
1562
ECONOMIC LEGISLATION.
¡
ercised.¹ It follows, that while the state or municipality
may, and often does grant rival and competing franchises,
it can not interfere directly with the rights or property of
the company already exercising a franchise of the same.
nature. Thus the state or municipality could not grant
to a gas company the right to use the mains or pipes of
another company.
The provision of the constitution2 providing that gen-
eral or special incorporating acts may be altered or re-
pealed, necessarily carries with it the implication of the
limitation of the exercise of any franchise granted to such
a company.
But it must be remembered that even where
the life of a corporation is limited, it may acquire perpet-
ual rights as pointed out above,3 under such franchises
which are thus unlimited in terms which vest on its de-
cease in its successors or the people who make it up.'
This doctrine was laid down in a case which held that
an act providing for the taking away from a street rail-
way company of its street franchise, and the winding up
of its affairs by a suit brought by the attorney-general,
and appointment of a receiver therein was unconstitu-
tional and void. The franchise in question was not by its
terms revocable, although the corporation was created for
a limited period. Where the right is reserved, the legis-
lature may take away the franchise of a company to be a
corporation, but it can not take away its property or in-
terfere or annul its contracts with third persons.¹
The principle, that a franchise is property, leads to the
conclusion that when, under such a franchise, rights have
been acquired and become vested, no amendment or alter-
ation by the legislature or municipal authorities, of the
franchise proper, or of the charter of the company, can
take away without compensation, the property or rights
which have become vested under a legitimate exercise of
1
¹ People v. O'Brien, 111 N. Y. 1, and cases cited.
2 Const., Art. VIII, sec. 18.
³ See under "Perpetual anD EXCLUSIVE FRANCHISE," p. 1527.
NEW YORK.
1563
the powers granted.' And while it is perfectly competent
for the legislature or municipality in the exercise of power
delegated by the legislature, to impose conditions, limita-
tions, and reservations upon a franchise granted, it is ex-
tremely doubtful whether the legislature ór municipality
can even under a reserved power of amendment, make
such radical changes in a franchise after a company
or individual has gone into operation under it as to ma-
terially impair or destroy the right of property therein
without compensation. On the other hand, a saving
reservation in a franchise by which the grantor re-
serves the right to make changes which do not destroy
the property involved in such franchise though the reser-
vation may materially lessen the profits of the company,
is probably valid. For example, if a surface railway com-
pany should, under a duly acquired franchise, lay its tracks
through certain streets specified in the franchise, and run
its cars thereon, it is probable that no general reserved
power of amendment in the franchise grant would warrant
the legislature or municipality in compelling the company
to tear up its tracks and lay them in other streets, without
compensation. On the other hand, there is no doubt that
the legislature has the power to fix the rate of fare to be
charged, and even to change such a rate of fare after the
company has gone into operation, without an express
reservation in the charter or act of incorporation.³
As to change of road of railroad corporations generally,
see Laws, 1890, ch. 565, sec. 13.
See also "AMENDMENTS, REPEALS, ETC.," Subdivision II,
supra, p. 1433.
Consolidation of franchises.—See
COMPANIES," p. 1483.
..
CONSOLIDATION OF
Forfeiture of franchises.-In case of other railroads.
in cities and counties" (elevated, underground, etc.) other
¹ Albany R. R. Co. v. Brownell, 24 N. Y. 345.
2 People v. O'Brien, 111 N. Y. 1, and cases cited.
³ See under “REGULATION AS TO SERVICE," supra.
•
1564
ECONOMIC LEGISLATION.
than street surface railroad corporations, the statute pro-
vides that if they do not commence the construction of
their roads within one year after having obtained the con-
sent of the municipal authorities and property owners,
or the determination of the general term as required,' and
do not complete the same in three years after obtaining
such consents, their rights, privileges, and franchises cease
and determine; but during the pendency of legal proceed-
ings the supreme court may extend the period for the
performance of any act required.2
A failure by any such corporation organized under the
provisions of the present general law to complete its railway
within the time limited in and by its certificate of incorpora-
tion, only works a forfeiture of the franchises of such corpo-
ration with respect to that portion of its route which such
corporation fails to complete, and does not affect the rights
and franchises of such corporation to construct and oper-
ate such part of its railway which it has completed within
the term prescribed by its certificate of incorporation, or
as to which the time for completion has not expired, not-
withstanding any thing to the contrary in its certificate
of incorporation.³
See also under "How OBTAINED-Street surface rail-
roads," and "CHARGES FOR FRANCHISES," supra.
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
Historical. For a number of years past, nearly all im-
portant cities in the state have owned and operated their
own water-works. A number of attempts have recently
been made in the direction of municipal ownership of
street lighting plants. In the city of Dunkirk, in the
western part of the state, the electric light plant is now
owned by the city, by virtue of chapter 29 of the Laws of
1888, and the city of Jamestown has also been empowered
to purchase such a plant, although in the latter case, up
¹ See "How OBTAINED," p. 1486.
3 Laws, 1890, ch. 565, sec. 126.
* Laws, 1890, ch. 565, sec. 99.
NEW YORK.
1565
$
to the present writing, nothing definite has been done.
These are the only instances, as yet, of municipal owner-
ship in this direction.
Power to erect or purchase.-In treating of the sub-
ject of ownership of industrial works by municipal corpo-
rations, it will be convenient to remember that a municipal
corporation, as such, has no inherent right of legislation.
Its powers are only such as are expressly granted by stat-
ute, or are necessarily or fairly implied, or incident to
those conferred by express grant, or those essential to the
objects and purposes of the corporation.'
The constitution, as amended by the vote of the people,
November 4, 1884, provides that no county, city, town, or
village shall hereafter be allowed to incur any indebted-
ness, except for county, city, town, or village purposes;
and that no county, town, or city of over one hundred
thousand inhabitants, or any such city, shall become in-
debted in an amount exceeding ten per cent of the author-
ized valuation of the property in such city or county sub-
ject to taxation; but this does not prevent the issue of
certificates of indebtedness or revenue bonds issued in an-
ticipation of the amount of money contained or to be
contained in the taxes, for which a collection of taxes is
to be used; nor does it prevent an issue of water bonds to
provide for a supply of water, which, however, must not
exceed in terms twenty years, and a sinking fund must be
created on the issue of said bonds for their redemption;
the amount to be raised by taxes for county or city
purposes, in a county containing a city of over one hun-
dred thousand inhabitants, or in any such city of the
state, in addition to providing for the principal and inter-
est of existing debts, must not exceed in the aggregate, in
any one year, two per centum of the assessed valuation
of the real and personal estate of such county or city.
1
It will be seen that the right of the city or municipal
¹ People v. Mitchell, 35 N. Y. 551; Wells v. Salina, 119 N. Y. 280.
•
'1566
ECONOMIC LEGISLATION.
2
subdivision to incur indebtedness is very strictly limited.
As to what is the county, city, or village purpose for which
indebtedness may be incurred, no definition can be given.
It may be said in a general way that what is called a "city
purpose" must have two characteristics: it must be pri-
marily for the benefit, use, or convenience of the city, as
distinguished from the public outside of it, although they
may be incidentally benefited; and the thing to be done
must be within the ordinary range of municipal action.
These words are substantially quoted from the leading
case on this subject. In this case it was held that an act
"providing for the laying out of public places and parks
in several wards of the city of New York, and in the ad-
jacent district of Westchester county," was not in viola-
tion of the constitutional provisions above referred to
within the reasons above stated. So in an interesting
case it was held that the Brooklyn bridge was also a
public purpose within the meaning of the act. This
bridge had been undertaken at first by a private corpora-
tion, both cities being stockholders-New York to the
amount of one million dollars. But during the progress
of the work, the amendment to the constitution above re-
ferred to was made, and the legislature attempted to meet
the difficulty by providing for the dissolution of the cor-
poration and making it a work and improvement of the
cities, to be completed at their joint expense. This act on
the part of the legislature was upheld by the court of
appeals in the case above cited, which contains an inter-
esting discussion of the whole question in the decision
stated. It can hardly be doubted that the legislature has
power at any time to authorize municipalities to buy and
operate, within the limitation of taxation prescribed by
the constitution, any public work of purely municipal
¹ Matter of the Application of the Mayor, Aldermen, etc., of the City of
New York, to acquire title to certain lands for public parks, 99 N. Y. 569.
¹ People ex rel. Murphy . Kelley, 76 N. Y. 475.
2
NEW YORK.
1567
}
scope, such as the undertakings which come within the
purview of this article.
The village water-works law' provides that whenever
the trustees and president of a village deem it advisable
that a board of water commissioners be organized in the
village, they must certify that fact to the village clerk,
who calls a meeting of the president and trustees, who
organize as a board of water commissioners. Or the trus-
tees, upon the request of the tax-payers, may call a special
election for the election of a board of water commissioners
separate from the trustees. Such board must organize by
the election of the usual officers, and may make all neces-
sary rules and regulations for its government and the
transaction of its business.*
A meeting of the electors of any village may be called
by its board of trustees, upon notice published, at which
the question may be submitted whether the taxes author-
ized for the purposes aforesaid shall be levied and col-
lected from the village; and no commissioner can proceed
with any duties under the statute unless the majority of
voters and of the tax-payers whose names appear upon
the last assessment roll of the village voting at such meet-
ing vote in favor of such taxes.3
The result of the election having been certified to the
board of water commissioners by the clerk of the village
upon the returns of the village trustees acting as inspec-
tors, the board is ready to commence the building of its
works; it can borrow money on the credit of the village,
purchase land, easements, water and water rights, or take
them by the right of eminent domain and pay the value
appraised by the commission, and let the contract for the
¹ Laws, 1875, ch. 181.
2 Laws, 1885, ch. 170.
9 Laws, 1875, ch. 181. See, also, Board of Water Commissioners of
Clinton . Dwight, 101 N. Y. 12; Fleming v. Village of Suspension Bridge,
92 N. Y. 368; In re Water Commissioners v. Clark, 3 N. Y. Supp. 347;
Dows v. Village of Irvington, 13 Abb. N. C. 162; 66 How. Pr. 94; Village
of Olean v. King, 5 N. Y. St. Rep. 172.
1568
ECONOMIC LEGISLATION.
building of the works after three weeks' advertisement for
proposals. Their contracts are binding on the village.
Their power extends over lands in the county in which the
village is situated. They may use the soil of any highway
in the county to lay pipes in; must give bonds for the
faithful performance of their duties; and are entitled to
no pay.'
1
1
The receipts from water rents are to be applied to the
payment of expenses and the interest on the bonds; and
the surplus is to be used for a sinking fund. If a deficiency
arises, the village trustees must cause it to be collected
from the taxable property of the village. The commission-
ers are also authorized to purchase water-works already in
operation in the village.¹
Economic results. It is quite impossible under the
circumstances to say very much about the economic results
of the investment of public funds in those enterprises.
which are commonly considered to be within the purpose
of so called franchise companies operating in municipali-
ties.
The isolated case of the water supply is hardly a fair
test of the advantage of municipal ownership, as it is con-
ceded on all sides that it is absolutely necessary for a city
of any considerable size to control a large, convenient, and
easily accessible water supply for the purpose of extinction
of fires, apart from the convenience of its citizens, and it
would be useless, therefore, to make any comparison be-
tween the economic conduct of such enterprises and the
water-works owned by private corporations, even if there
were an easily accessible basis of comparison. The public
water-works of the present are operated generally on a
very large scale, while the water companies doing busi-
ness in the state are almost exclusively confined to small
towns, where the necessity of a large water supply is not
so pressing.
¹ See note 3, preceding page.
1
NORTH CAROLINA."
EDITED BY JOHN W. HINSDALE, ATT'Y, RALEIGH, N. C.
SUBDIVISION I.—HISTORICAL.
By the constitution of 1776, the legislative authority
was vested in the general assembly of North Carolina.
In the exercise of this authority innumerable private laws
have been enacted, incorporating navigation, bridge, ferry,
canal and other companies. In the constitution of 1868, it
is provided that corporations may be formed under gen-
eral laws, and shall not be created by special act, except
for municipal purposes, and in cases where, in the judg-
ment of the legislature, the object of the corporation can
not be attained under general laws, and that all general
laws and acts passed pursuant to this section, may be al-
tered or repealed. In pursuance of this provision general
laws for the incorporation of railroad and other compa-
nies for almost any purpose, have been enacted. The leg-
islatures have, however, continued, in a very liberal man-
ner, to grant charters to companies which, it would seem,
might just as well be incorporated under the general law.
2
Since 1868, a number of street railway and gas compa-
nies have been chartered by the general assembly, with
power to condemn land and to conduct their business in-
dependently of the municipalities in which their property
is located, and to fix their fares and rates. Several of the
¹ Unless otherwise stated, references to the constitution are to that
of 1868. References to the statutes are to the Code of North Carolina,
by section simply. The session laws are referred to as "Laws" of the
respective years. As to state reports, see Appendix ‘A.”
Const., Art VIII, sec. 1.
(1569)
1570
ECONOMIC LEGISLATION.
street car companies have the right to transport freight
as well as passengers, and most of them may use any
motive power that may be preferred. In 1889, an act was
passed authorizing any gas company in the state to sup-
ply electricity for lighting and power at rates to be fixed
by themselves, but the consent of the authorities of the
city, town or village must first be obtained.¹
Bridge, ferry, turnpike and water companies have been
chartered from the earliest days of the state government.
Water companies are chartered at nearly every session of
the legislature. The usual features of their incorporation
are the power to condemn land, construct their works and
fix their own rates.
Telephone and telegraph companies have been likewise
chartered with power to condemn right of way.
There is no general or special legislation by which the
rates of any corporation are regulated, except that in some
instances ferry and bridge companies are subject to a
schedule of tolls, either named in their charter or to be
fixed by the court.
It has been the policy of the state from the earliest days.
of its existence to encourage and foster public enterprises
by the grant of most liberal franchises, and also by the
subscription of public funds in their aid. Railroads and
navigation companies have received material assistance.
from the state, and counties, cities and towns have been
permitted to subscribe to the capital stock of such corpo-
rations. The Raleigh and Gaston Railroad Company, the
North Carolina Railroad Company, the Western N. C.
Railroad Company, the Atlantic and N. C. Railroad Com-
pany were built principally by the aid of the public funds.
It is quite common for the legislature to authorize the
subscription by counties, cities and towns to such and
similar enterprises. Many instances might be cited. In
1883, the town of Asheville was authorized to subscribe to
1 ¹ Laws, 1889, ch. 35.
NORTH CAROLINA.
1571
چھو
2
the capital stock of a gas and water supply company.¹
In 1885, the town of Greensboro was permitted to aid in
the construction of water works. In 1889, the town of
Henderson was empowered to indorse the bonds or sub-
scribe to the stock of an electric light, water-works and
power company.3
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation, how obtained. The constitution pro-
vides that corporations may be formed under general laws,
but shall not be created by special act except for munici-
pal purposes, and in cases where, in the judgment of the
legislature, the object of the corporation can not be at-
tained under general laws.*
The companies herein considered, whether their corpo-
rate rights and powers are acquired by special act of the
legislature or under the provisions of a general law, in-
clude water, gas, electric, street railway and telephone
companies.
Special charters are obtained by application to the legis-
lature. The usual course is for some member of either
house to introduce a bill to incorporate the company.
This is referred to an appropriate committee before whom
the promoters may appear and present their views. The
bill is reported upon by the committee, and must pass both
houses. Every such bill introduced into either house of
the general assembly must be accompanied by a receipt.
from the state treasurer for a tax of twenty-five dollars."
The constitution provides that no special charter shall
be granted by the legislature unless notice for thirty days.
shall have been published."
Telegraph, telephone, gas, electric, street car and water
companies may be organized under the general law.
¹ Laws, 1883, p. 752.
Laws, 1889, p. 882.
2 Laws, 1885, p. 1079.
* Const., Art. VIII, sec. 1.
Sec. 696, as amended, Laws, 1885, ch. 93.
• Const., Art. II, sec. 12.
1572
ECONOMIC LEGISLATION.
Articles of incorporation.-Under the general law any
number of persons not less than three who may wish to
engage in any business in the state except building rail-
roads, banking or insurance, may become a corporation
under the general law. Such persons must execute arti-
cles of agreement under their hands and seals before the
clerk of the superior court of the county where such busi-
ness is to be carried on, or where the application is to be
made, or where the meetings of the corporation are to be
held.¹
Must show what.-The articles of incorporation must
state the corporate name; the business proposed, and the
place where it is to be carried on; the length of time de-
sired; the names of persons who have subscribed; the
amount of capital, number of shares and amount of each.'
Publication of.—The clerk of the superior court, upon
the execution of the articles of incorporation, must issue
letters declaring the said persons and their successors a
corporation for the purposes prescribed in their articles,
and must cause the publication of a notice thereof in a
newspaper in which must be set forth the substance of the
articles, the amount of capital and value of shares.2
Organization; preliminary requirements. The first
meeting of all corporations, whether chartered by special
act or under the general law, unless otherwise provided in
their acts of incorporation, must be called by a notice
signed by one or more of the persons named in the act
of incorporation, setting forth the time, place, and pur-
poses of the meeting; and such notice, ten days at least
before the meeting, must be delivered to each member or
published in some newspaper printed nearest the proposed
place of meeting.3 This call may be waived by the writ-
ten consent of every stockholder, or by the presence of
every stockholder at the first meeting, of which an au-
thentic record must be preserved.*
¹ Sec. 677.
2 Sec. 679.
3 Sec. 665.
Sec. 688.,
NORTH CAROLINA.
1573
•
A failure to organize the company for two years after
a special charter has been granted or letters of agreement
under the general law have been issued, is taken as a for-
feiture of the charter.¹
Fees.-The fees to be paid to the clerk of the superior
court for incorporation under the general law are a tax of
twenty-five dollars, two dollars for the probating and re-
cording the articles of agreement, and one dollar for the
certificate declaring the incorporation.²
Every bill introduced into either house of the general
assembly to incorporate any company, or to amend any
act relating to said company, must be accompanied by a
receipt from the state treasurer for a tax or fee of twenty-
five dollars.3
Amendments; repeals, etc.-The authority of the leg-
islature to grant acts of incorporation has never been
questioned, and it has been settled by the supreme court
that a legislative charter to a corporation is a contract of
inviolable obligation, and that no state can constitutionally
pass a law impairing such contract, unless the power to
alter or repeal is reserved.
4
All charters granted since the constitution of 1868 are
subject to amendment or repeal by the legislature, the
constitution providing that all general and special acts
passed pursuant to this section (relating to corporations
other than municipal) "may be altered from time to time
or repealed."5 This section has been construed in the
case of Western Railroad Co. v. Rollins, 82 N. C. 523,
which "holds that the legislature has the power under the
said section of the constitution to alter or repeal all gen-
eral laws and special acts, by which corporations, associa-
tions, and joint stock companies are formed." In almost
every instance, a special charter by its terms is to "take
¹ Sec. 688.
2 Secs. 678, 680.
3 Sec. 696, as amended, Laws, 1885, ch. 93.
• Bank of the State v. Bank of Cape Fear, 13 Iredell's Law, 75.
• Const., Art. VIII, sec. 1.
1574
ECONOMIC LEGISLATION.
effect from and after its ratification." Amendments usu-
ally become immediately operative, as in almost every in-
stance the act of assembly by its terms is to “take effect
at once."
By the corporation. In the absence of legislative author-
ity, corporations created by special act or organized under
general law have no power to change their business.
The question whether a company chartered by the leg-
islature can change its methods or means of service with-
out special legislative authority has never been before the
North Carolina courts. There is no difficulty in making
such change by a company incorporated under the general
law, because the charters of such companies may be
amended upon application to the clerk, after the publica-
tion of a notice for thirty days, provided no change is
made as to the business of the company.¹
2
The only general law enacted in this state which au-
thorizes a change in methods without changing the actual
object of service, is that which authorizes gas companies
to supply electricity for lighting purposes. Most of the
street car companies are authorized by their charters to
use any motive power, as, for example, The Asheville
Street Railway Company,3 The Raleigh Street Railway
Company, The Fayetteville Street Railway Company,5
The Winston and Salem Street Railway Company. The
Raleigh Street Railway Company, which at first adopted
horse power, has determined to use electricity, and has
been authorized by the legislature to operate a system of
electric lighting and to supply electric power or other
force along the line of its route in the city.7
4
6
Duration of charter.-The articles of incorporation of
companies organized under the general law must state the
length of time for which they desire corporate existence;8
¹ Laws, 1885, p. 70.
3 Laws, 1881, p. 886.
5 Laws, 1889, p. 810.
'Laws, 1889, p, 790.
2 Laws, 1889, p. 576, ch. 85.
* Laws, 1881, p. 818.
8 Sec. 677.
6 Laws, 1889, p. 812.
.8
NORTH CAROLINA.
1575
but no body corporate established since 1883 may exist
for a longer term than sixty years, unless otherwise pro-
vided in the act creating the same. Upon the expiration
of its charter, the corporation is continued a body corpo-
rate for the term of three years to close its business.¹
Powers. The powers of specially chartered companies
are such only as are specially granted or necessarily im-
plied, except as they may be affected by the general laws.
They are, of course, confined to the business designated
in the act which created them, and in the absence of leg-
islative authority they have no power to change that busi-
ness, nor can a company organized under the general law
change its business without special authority from the
legislature.
There are no special provisions of law as to the several
industries herein described, except telegraph companies.
(See SUBDIVISION III.)
2
By-laws. All corporations may make by-laws and reg-
ulations for the conduct of their business and the manage-
ment of their property. They may by their by-laws,
when no other provision is specially made, determine the
manner of calling and conducting all meetings, the num-
ber of members that shall constitute a quorum, the num-
ber of shares that shall entitle the member to one or more
votes, the mode of voting by proxy, the mode of selling
shares for the non-payment of assessments, the tenure of
office of the several officers, and the manner in which va-
cancies shall be filled.3
Officers; meetings; voting; quorum, etc.-All meet-
ings other than the meeting for organization, which has
already been considered above, must be called as provided
in the by-laws.*
Corporations may elect in such manner as they may
determine to be proper, all
be proper, all necessary officers, fix
their compensation, and define their duties and obliga-
¹ Sec. 687.
2 Sec. 663.
* Sec. 664.
¹ Sec. 688.
1
1576
ECONOMIC LEGISLATION.
1
tions, and may make by-laws and regulations for the con-
duct of their business and the management of their prop-
erty. They may by their by-laws, when no other provis-
ion is specially made, determine the manner of calling and
conducting all meetings, the number of members that shall
constitute a quorum, the number of shares that shall en-
title the members to one or more votes, the mode of voting
by proxy, the mode of selling shares for the non-payment
of assessments, the tenure of office of the several officers,
and the manner in which vacancies shall be filled.2
Capital stock.-There is no general law regulating the
amount of capital stock required to be paid in before a
corporation can organize and commence business. This
depends upon the provisions of each charter. In the ab-
sence of any regulation upon this subject, the company
can organize as soon as the requisite amount of stock is
subscribed. North Carolina charters not uncommonly
provide a minimum capital stock.
There is no law directing how or when the capital stock
must be paid in. This is usually regulated by the act or
articles of incorporation or the by-laws of the company.
It is not unusual for the payment to be made otherwise
than in money. The fraudulent issue of stock is made a
criminal offense.2
Increase and decrease of.-Capital stock may be increased
from time to time to a maximum amount. There is no
statutory provision for reducing the capital stock of a
company chartered by the legislature. In the case of a
company chartered under the general law, an increase or
reduction of stock can be made upon an application for
that purpose to the clerk of the superior court. No
special formalities are required upon such application.
3
Transfer of.-The transfer of stock is almost always
provided for in the by-laws of the company. Stock is
personal property, and transferable on the books of the
³ Laws, 1885, p. 70.
¹ Sec. 663.
2 Sec. 664.
NORTH CAROLINA.
1577
company upon the surrender of the old certificate properly
indorsed.
Company's lien on.-The company has no lien upon the
shares of a stockholder for any claim which it may have
against him, except for unpaid subscription before the
stock is issued.
Bonds, debts, etc.-A mortgage debt incurred for legit-
imate purposes is valid and binding; but no conveyance
of the property of a corporation, whether absolute or
upon conditions in trust, or by way of mortgage, is good
as against creditors existing prior to the time of its exe-
cution or as against torts committed by said corporation,
its agents or employes, prior to the execution of the deed,
if proceedings to enforce such claims be begun within
sixty days from the registration of the deed.
It is questionable whether a mortgage of the franchise.
of a corporation can be made without some authority con-
tained in its charter.
If a sale be made under a mortgage executed by any cor-
poration on all its works and property, and there be a con-
veyance pursuant thereto, such sale passes to the purchaser
at the sale, not only the works and property of the corpo-
ration as they were at the time of making the mortgage,
but any works which the corporation may, after that time
and before the sale, have constructed, and all the property
of which it may be possessed at the time of the sale, other
than debts due to it. Upon such conveyance to the pur-
chaser, the said corporation is ipso facto dissolved, and the
purchaser forthwith becomes a new corporation, by any
name which may be set forth in the said conveyance, or
in any writing signed by him and recorded in the same
manner in which the conveyance is recorded. Such cor-
poration succeeds to all the rights, franchises, and privi-
leges of the mortgagee; and the purchaser and his assigns
may issue as many shares of stock therein as they think
¹ Sec. 697.
VOL. II-19
:
1578
ECONOMIC LEGISLATION.
proper, not exceeding the amount of stock in the first cor-
poration at the time of sale.¹ 1
Dividends.-No corporation organized under the gen-
eral law is permitted to declare any dividend when its
debts, whether due or not, exceed two-thirds of its assets.² 2
Liability of stockholders. It is usual, in a charter ob-
tained under the general laws, to insert a provision that
no stockholder shall be responsible for the liabilities of the
company. This, however, is needless, as, unless otherwise
provided, the only liability which a stockholder incurs in
any corporation is for the amount of his subscription.
Liability of officers and directors.-There are no pro-
visions in the statute law of North Carolina upon the
subject of the liability of officers and directors, except that
in case of fraud by the president, directors, managers or
stockholders in any corporation, they are personally liable
to creditors and others injured thereby.³
Reports. No reports are required by law. The by-
laws of the company generally provide for annual reports
of the operations and financial condition, to be made by
the officers at stockholders' meetings.
Taxation.-Every corporation is taxed upon its real
and personal property as an individual. It is required to
list its real estate in the counties in which it is situated,
and its personal property, including money and solvent
credits, in the township in which its principal office or
place of business is located. From its solvent credits it
may deduct its debts, and is liable to be taxed only upon
the balance. Incomes derived from any property not
taxed during the preceding year are likewise subject to
taxation. In order to prevent double taxation, the com-
pany is required, in addition to its other property, to de-
liver to the assessor a sworn statement of the amount of
its capital stock, setting forth particularly the name and lo-
¹ Sec. 698.
5
4
2 Sec. 681.
Laws, 1889, ch. 18, sec. 18.
$ Sec. 686.
5 Laws, 1889, ch. 216, sec. 5.
NORTH CAROLINA.
1579
2
cation of the company or association; the amount of cap-
ital stock authorized and the number of shares into which
such capital stock is divided; the amount of the capital
stock paid up; the market value, or, if no market value,
then the actual value of the shares of stock; and the assessed
valuation of all its real and personal property (which real
and personal property must be listed and valued as other
real and personal property). The aggregate amount of
the real and personal property is deducted from the ag-
gregate value of its shares of stock, and the remainder,
if any, is subject to taxation as stock.
In addition to the foregoing taxes, telegraph and tele-
phone companies doing business in the state are required
to pay a tax of two per centum on their gross receipts, and
must make a sworn return thereof to the state treasurer
quarterly. The franchise of every telegraph company,
whether lying wholly or partly in this state, is subject to
taxation at a valuation to be fixed by the governor, treas-
urer and auditor of the state.¹
The state and county tax may not exceed 663 cents on
the $100.00 valuation, except by special statute and for
special purposes, such, for example, as to pay interest on
a debt incurred in subscribing to the stock of a railroad.2
Cities and towns are unrestricted, but their taxes rarely
exceed one and a quarter per centum.
Of stock in the hands of holders.-Persons owning shares
in an incorporated company are not required to list them,
but the company must pay the tax.³
Exemptions from.-It is very questionable whether a
municipality has the power to abate taxes even for a lim-
ited term, in favor of any corporation or for any purpose.
The constitution provides that "all taxes levied by any
county, city, town or township shall be uniform and ad
valorem, upon all property in the same, except property
exempted by this constitution" (such as property held
¹ Laws, 1889, ch. 218, sec. 22.
9 Laws, 1889, ch. 218, sec. 16.
4
2 Const., Art. V, sec 1.
'Const., Art. VII, sec. 9.
1580
ECONOMIC LEGISLATION.
for educational, scientific, literary, charitable or religious
purposes, etc.) This provision deprives the legislature of
the plenary power it would otherwise have over the sub-
ject of taxation, and the rights (which it would otherwise
possess) to make, or to authorize a municipality to make,
exceptions or exemptions. All property must be taxed.
Dissolution; forfeiture.-A failure to organize the
company for two years after a special charter has been.
granted or letters of agreement under the general law
have been issued, must be taken as a forfeiture of the
charter.¹
Upon a conveyance of corporate property by sale under
mortgage the corporation becomes ipso facto dissolved, and
the purchasers may organize as a new corporation, as
shown under "BONDS, DEBTS, ETC.," above.
All corporations formed under the general law may be
dissolved by suit instituted by the company, a corporator
or a judgment creditor, or by the authority of the attorney
general in the name of the state, for any abuse of its pow-
ers to the injury of the public or of the corporators or of
its creditors or debtors; for non-user of its power for two
years or more consecutively; for insolvency manifested by
the return of an execution unsatisfied, upon a judgment
against the company, docketed in the superior court of the
county where it has its only or principal place of business;
or upon any conviction of the company for a criminal
offense, if such offense be persistent.2
A non-user for two years is a ground of forfeiture of a
special charter.³ Upon the expiration of its charter a cor-
poration is continued a body corporate for the term of
three years, to close its business.3
SUBDIVISION III.-FRANCHISES.
How obtained.-Local highway franchises may be ob-
tained either from the legislature by special grant or they
¹ Sec. 688.
2 Sec. 694.
3 Sec. 687.
NORTH CAROLINA.
1581
!
&
may be conferred upon companies organized under the
general law by the municipalities in which their property
and business is located. The power upon the part of mu-
nicipalities to confer such franchises must be contained
either expressly or inferentially in the municipal charters.¹
No private charter can be granted by the legislature unless
a notice for thirty days shall have been published.2
Any telegraph company, chartered or incorporated in
this or in any other state, has the right to construct, main-
tain, and operate lines of telegraph along any railroad or
public highway in this state.³
Condemnation of property. - Telegraph companies
have power to contract with any person or corporation for
the right of way, and may condemn such right of way ac-
cording to the provisions of the statute.*
6
Perpetual and exclusive franchises.-The power of
the legislature to grant franchises has never been ques-
tioned in this state. The constitution provides that "no
man or set of men are entitled to exclusive or separate
emoluments or privileges from the community but in
consideration of public services," and that perpetuities
and monopolies are contrary to the genius of a free state
and ought not to be allowed. The legislature is the sole
judge of the public service. In Yadkin Navigation Co.
v. Benton, 2 Hawkes, 13, Chief Justice Taylor says: "The
constitutional objections appear to me to be equally unten-
able. Exclusive emoluments and privileges may be granted
in consideration of public services. The nature of such
services, whether great or small, certain or contingent, is
not a subject of judicial inquiry; it properly belongs to
and may safely be intrusted with legislative wisdom. Nor
is this charter forbidden by that clause of the declaration
1 Laws, 1868, Art. II, sec. 12.
9 Sec. 2007.
5 Const., Art. I, sec. 7.
7 Bank v. Taylor, 2 Murphy, 266.
6
2 Const., Art. II, sec. 12.
* Secs. 2009-13.
Const. Art. I, sec. 31.
1582
ECONOMIC LEGISLATION.
of rights which condemns monopolies and perpetuities.
It requires no argument to prove that it is not included in
the first term; and the other imports property locked up
from the uses of the public, and which no person has
power to alienate. Whatever emoluments are granted to
these subscribers the grant was made in contemplation of
a great national benefit to be derived from the union of
their funds and intelligence, and under a certainty that
without such incitement individual enterprise could not
be raised into action, and the main services of the public
property would continue as nature formed them. But
others are not excluded from a participation in the profits,
for as the stockholders may transfer their shares, so every
citizen, at his discretion, may invest his money in this en-
terprise." It was decided in Washington Toll Bridge
Co. v. Commissioners of Beaufort, 87 North Carolina, 491,
that an exclusive grant of the right to keep a toll bridge
and transport passengers a distance of six miles from a
certain point opposite a large trading town, in considera-
tion of a reduction of former toll rates, is obnoxious to the
constitutional inhibition against monopolies.
It is plain, therefore, that the power to grant a franchise
is inherent in the legislature, but the right to make the
franchise exclusive has been doubted.
Charges for franchises.-The legislature has the un-
doubted power to grant or to authorize a municipality to
grant a franchise upon any consideration that might be
deemed proper. It has, however, never required the pay-
ment of a sum of money for such privilege.
Methods of construction.-There are no general laws
prescribing methods of construction, material to be used,
or providing for the inspection of the plant and service,
or to compel changes in construction after completion.
These are all matters upon which the state has never es-
pecially reserved the right to interfere.
Regulations as to service.-Gas companies are per-
NORTH CAROLINA.
1583
mitted to supply electricity for lighting and power¹ at
rates to be fixed by themselves, but it is a prerequisite that
the municipal authorities consent.
There are no general regulations of the rates of fares
of any of these corporations. The legislature, under its
constitutional power to amend any charter, unquestion-
ably has the right to interfere. The several charters of
street railways sometimes fix the maximum charge.
Discrimination in service.-There are no general laws
regulating discrimination in service, and the several char-
ters are silent upon this subject.
Safety of life and property.-There are no general
laws of the state to insure the safety of life and property
as affecting corporations. The citizen can only hold the
company to the common-law responsibility. It is usual,
however, in the charters of electric companies, to provide
against dangerous locations of the wires. The municipal
authorities would unquestionably have the right to inter-
fere at any time to abate a nuisance or to correct an abuse
of this character.
State and municipal aid.-The constitutionality of
laws granting aid to corporations has been repeatedly af-
firmed by the supreme court. The last case is that of
Wood v. Oxford, 97 North Carolina, 227, in which the
present chief justice says: "It may be said, in general
terms, that the legislature can authorize a county, city or
town to use its revenue and credit for any legitimate pub-
lic purpose within the scope of its organization, unless
prohibited by the constitution. This is necessarily so, be-
cause the ends to be attained by such municipalities can
not generally be accomplished without public expendi-
tures. It may not always be easy to apply the rule of law
to determine what is a legitimate object of such expendi-
tures. It is clear, however, that they may be made for
such public improvements and advantages as tend directly
¹ Laws, 1889, p. 576.
1584
ECONOMIC LEGISLATION.
to provide for and promote the general good, convenience,
and safety of the county or town making them, as an or-
ganized community, although the advantage derived may
not reach every individual citizen or tax-payer residing
there. Hence, it has been held that the legislature could
authorize a town to subscribe and raise money to pay for
capital stock of a navigation company operating in its
neighborhood. (Taylor v. Commissioners, 2d Jones Eq.
141.) It has also been held that a county could subscribe
and issue its bonds to raise money to pay for capital stock
of a railroad company whose road was located through it.
(Caldwell v. Justice, 4th Jones Eq. 323.) Indeed, the
principles applied in the cases just cited have been recog-
nized and acted upon uniformly in a great number of cases
decided by this court. And upon the same principle, a
county or town may be authorized by the legislature, for
like public purposes, to donate its money, its credit, or
other appropriate thing to an individual or corporation."
Public service.-There is no limit to the length of time
for which a contract may be made with one of these com-
panies for public service, except the lifetime of the corpo-
ration. Such contracts are usually made with the author-
ities of the municipality interested, by virtue of some
provision in the charter of the municipality or the general
power of such agents to represent their principal.
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
There is nothing in the constitution or statutes of North
Carolina authorizing a municipality to own and operate
any of these companies. The question whether they can
do so without special legislation has never come before the
courts of the state. There is no question but that the
legislature may authorize such ownership.
NORTH DAKOTA.¹
EDITED BY ROBERT M. CAROTHERS, ATT'Y, GRAND FORks, n. dak
SUBDIVISION I. HISTORICAL.
As far as judicial decisions are concerned, this branch
of the law is without a history in this state, for the reason
that the courts, either territorial or state, have never been
called upon to pass upon it.
However, the state constitution and the statutes speak in
no uncertain voice on the subject, the provisions of which
are stated below.
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation; how obtained. It is provided in the
constitution that all corporations, other than municipal,
shall obtain their charters under the provisions of general
laws.2
Articles of incorporation.-Articles of incorporation
must be prepared by the incorporators, one-third of whom
must be residents of the state. They must be subscribed
by the incorporators, and acknowledged by each, before
some officer authorized to take and certify acknowledg-
ments of conveyances of real property.³
Must show what. The articles of incorporation must set
forth the name of the corporation; the purpose for which
¹ Unless otherwise stated, references to the constitution are to that of
1890. References to the statutes are to the Compiled Laws of 1887, by
section simply. The Session Laws are referred to as "Laws" of their
respective years. As to state reports, see Appendix “A.'
³ Secs. 2902, 2904.
2 Const., sec. 131.
(1585)
1586
ECONOMIC LEGISLATION.
it is formed; the principal place of business; the term for
which it is to exist; the number of its directors or trust-
ees, and the names and residences of such of them as are
to serve until the election of such officers, and their quali-
fications; the amount of the capital stock and the number
of shares into which it is divided.'
Filing. The articles must be filed with the secretary of
state, who must cause the same to be recorded in a book
kept in his office, for that purpose, called "the book of
corporations;"2 and he must issue to the corporation
a certificate that the articles have been filed in his office,
and thereupon the persons signing the articles, and their
associates and successors, become a body politic and corpo-
rate by the name and for the purposes stated in said arti-
cles.3
Amendments, repeals, etc.-The constitution forbids
the changing or amending of any charter of incorporation
by special law.*
Every private corporation may change the place where
its principal business is to be transacted at a meeting called
for that purpose, by the directors. Notice of the time and
place of the meeting, and stating its object, must be person-
ally served upon each stockholder or member, and be pub-
lished in a newspaper, at the place of the principal office,
once a week for four consecutive weeks immediately prior to
such meeting. At least two-thirds of the entire capital stock
must be represented by the vote in favor of the proposed
change. A certificate must be signed by the chairman and
secretary of the meeting, as well as a majority of the di-
rectors, showing a compliance with the law, the place to
which the principal office is transferred, the amount of stock
represented, and the vote by which the change was accom-
plished. This certificate must be filed in the office of the
secretary of state. The written assent of the holders of
•
¹ Sec. 2902.
Const., sec. 131.
2 Sec. 2906.
3 Sec. 2905.
NORTH DAKOTA.
1587
three-fourths of the subscribed capital stock is as effectual
to authorize a change of the place of business of the cor-
poration as if a meeting were called and held. Upon such
written assent the directors may proceed to make the cer-
tificate above provided for.'
As to increase or decrease of capital stock, see "CAPITAL
STOCK," below.
Duration of charter.-The articles of incorporation
must state the term for which the corporation is to exist.2
Officers; meetings; voting; quorum, etc.-The arti-
cles of incorporation must state the number of its direc-
tors or trustees, and the names and residences of those
who are to serve until the election and qualification of
officers.2
The constitution provides that in all elections for di-
rectors or managers of a corporation each member or
share-holder may cast the whole number of his votes for
one candidate or distribute them upon two or more candi-
dates.3
4
Directors must be elected annually by the stockholders
or members. All elections must be by ballot, and a vote.
of the stockholders representing a majority of the sub-
scribed stock is necessary for a choice. Each stockholder
is entitled to one vote for each share held by him.5
6
The number of directors must not be less than three nor
more than eleven, and each director must be a stockholder
to an amount to be fixed by the by-laws, and one-third
of the officers of all private corporations must be residents
of the state."
Books. All corporations for profit are required to keep
a journal of all meetings of the directors, members, or
stockholders, with the time and place of holding the same,
whether regular or special, its object, how authorized, and
the notice thereof given. The record must also embrace
1 Laws, 1890, ch. 49, sec. 1.
• Sec. 2923.
/ Sec. 2925.
2 Sec. 2902.
6 Sec. 2926.
³ Const., sec. 135.
¹ Sec. 2897.
!
1588
ECONOMIC LEGISLATION.
every act done or ordered to be done, and state who were
present and who were absent.¹
In addition to the above record, there must be kept a
book to be known as the "stock and transfer book," in
which must be kept a record of all stock, the names of
the stockholders or members alphabetically arranged, in-
stallments paid or unpaid, assessments levied and paid or
unpaid, a statement of every alienation, sale, or transfer
of stock made, the date thereof, and by and to whom, and
such other records as the by-laws prescribe.¹
Both of the above records must be kept open to the in-
spection of every stockholder, member, or creditor.¹
Capital stock.-The constitution provides that no cor-
poration shall issue stock, except for money, labor done,
or money and property actually received."
2
The articles of incorporation must state the amount of
the capital stock and the number of shares into which it
is divided.³
After the certificate of incorporation has been issued by
the secretary of state, the directors must proceed to open
books of subscription to the capital stock then unsubscribed,
and to secure subscriptions to the full amount of the fixed
capital. A subscription to the stock of a corporation.
about to be formed is to be held for the benefit of the cor-
poration, when it is formed, and may be enforced by it."
4
Any proxy or power given by a married woman, touch-
ing any shares of stock of any corporation owned by her,
is valid and binding the same as if she were unmarried.
6
Assessments. After one-fourth of its capital stock has
been subscribed, the directors of any corporation may, for
the purpose of paying expenses, conducting business, or
paying debts, levy and collect assessments upon the sub-
scribed stock. No assessment can exceed ten per cent of
the amount of the capital stock named in the articles of
¹ Sec. 2937.
5 Sec. 2912.
2 Const., sec. 138.
• Sec. 2911.
¹ Sec. 2913.
3
³ Sec. 2902.
7 Sec. 2943.
NORTH DAKOTA.
1589
incorporation; but, if the whole capital of a corporation
has not been paid up, and the corporation is unable to
meet its liabilities or to satisfy the claims of its creditors,
the assessment may be for the full amount unpaid upon
the capital stock; or, if a less amount is sufficient, then
it may be for such a percentage as will raise that amount.'
No assessment can be levied while any portion of a pre-
vious one remains unpaid, unless the power of the corpo-
ration has been exercised according to law for the purpose
of collecting such previous assessment, or the collection
of such assessment has been enjoined.2
Every order levying an assessment must specify the
amount thereof, when, to whom, and where payable;
must fix a day, subsequent to the full time of publication
of the assessment notice, and not less than thirty nor more
than sixty days from the time of making the assessment
order, on which unpaid assessments shall be delinquent;
also a day for the sale of delinquent stock, not less than
fifteen nor more than sixty days from the day the stock is
declared delinquent.3
Upon making the order, the secretary must cause the
same to be published once a week for four consecutive
weeks in some newspaper of general circulation and de-
voted to the publication of general news; also in some
newspaper published in the county in which the works.
of the corporation are situated, if a paper be published
therein.*
The notice must be personally served upon each stock-
holder, or, in lieu of personal service, must be sent through
the mail, addressed to each stockholder at his residence,
if known, and, if not known, at the place where the prin-
cipal office of the corporation is situated."
If any portion of an assessment remains unpaid on the
day on which the stock becomes delinquent, the secretary
1 Sec. 2944.
• Sec. 2947.
2
* Sec. 2945.
3 Sec. 2946.
5 Sec. 2948.
1590
ECONOMIC LEGISLATION.
must cause to be published, in the same papers in which
the notice of the levy of the assessment was published, a
notice stating upon what shares of stock the assessment
is delinquent, the amount, and the place, day, and hour,
where and when said stock will be sold.' By publi-
cation of this notice, the corporation acquires jurisdic-
tion to sell and convey a perfect title to all the stock de-
scribed in the notice, but no more stock can be sold than
is sufficient to pay the assessments due and the costs of
sale.2
2
On the day of sale, the secretary must, unless otherwise
ordered by the directors, sell or cause to be sold at public
auction, to the highest bidder for cash, so many shares of
each parcel of the described stock as may be necessary to
pay the assessment and charges thereon. The person of-
fering to pay the assessment and costs for the least num-
ber of shares, or fraction of a share, is the highest bidder,
and, upon the payment of the assessment and costs, the
stock purchased must be transferred to him on the stock
books of the corporation.²
If there are no other bidders, the stock may be bid in
by the corporation through the president, secretary, or
any director. While the stock remains the property of
the corporation, it is not subject to assessment, nor can
any dividends be declared thereon.²
Increase and decrease of.—The constitution provides that
the stock of a corporation shall not be increased, except in
pursuance of general law, nor without the consent of the
persons holding the larger amount, in value, of the stock,
first obtained at a meeting to be held after sixty days'
notice, and that all fictitious increase of stock shall be
void.3
The amount of capital stock may be increased or dimin-
ished by the directors, at a meeting called for that pur-
pose, upon notice being given of the time and place of
³ Const., sec. 138.
¹ Secs. 2949, 2950.
2 Sec. 2952, et seq.
NORTH DAKOTA.
1591
*
the meeting, stating its object and the amount to which
it is proposed to increase or diminish the capital stock.¹
Such notice must be personally served upon each stock-
holder resident in the state, at his place of residence, if
known, otherwise at the principal office of the corpora-
tion, and be, published in a newspaper published in the
county of such principal place of business, once a week
for four weeks successively.2
The capital stock must in no case be diminished to an
amount less than the indebtness of the corporation, or the
estimated cost of the works which it may be the purpose
of the corporation to construct.3
Before a change can be effected, at least two-thirds of
the entire capital stock must be represented by the vote
in favor of the increase or diminution, and a certificate
must be signed by the chairman and secretary of the meet-
ing and a majority of the directors, showing a compliance
with the statutory requirements. This certificate must
be filed in the office of the secretary of state, there to be
recorded in the book of corporations, and thereupon the
capital stock shall be so increased or diminished.*
The written assent of the holders of three-fourths of the
subscribed capital stock is as effectual to authorize the in-
crease or diminution of the capital stock as if a meeting
were called and held. Upon such written assent, the di-
rectors may proceed to make a certificate, as above pro-
vided for.5
Transfer of.-See under "Books," above.
Shares of stock owned or held by a married woman may
be transferred as if she were a femme sole.
6
Bonds, debts, etc.-The constitution provides that no
corporation can issue bonds except for money, labor done,
or money and property actually received; that the in-
debtedness of a corporation can not be increased except
³ Sec. 2936 (2).
¹ Sec. 2936.
* Sec. 2936 (3, 4, 5).
'Const., sec. 138.
2 Sec. 2936 (1).
5 Sec. 2936 (6).
• Sec. 2911.
1592
ECONOMIC LEGISLATION.
in pursuance of general law, nor without the consent of
the persons holding the larger amount, in value, of the
stock, first obtained at a meeting to be held after sixty
days' notice; and that all fictitious increase of indebted-
ness is void.¹
2
For the satisfaction of any judgment against a corpora-
tion, its franchise and all the rights and privileges
thereof may be levied upon and sold under execution,
without any exemption. The purchaser at the sale must
receive a certificate of purchase of the franchise, and must
be immediately put into possession of all the property nec-
essary for the exercise of the powers thereof, and must
thereafter conduct the business of the corporation, with all
its powers and privileges, and subject to all its liabilities,
until the redemption of the same.2
At any time within one year from the date of such sale,
the corporation may redeem the franchises by paying or
tendering to the purchaser the sum paid therefor, with
twelve per cent interest thereon, and, upon such payment
or tender, the franchise and all the rights and privileges
thereof revert and belong to the corporation, as if no sale
had been made.2
Dividends. A dividend belongs to the person in whose
name the stock stands upon the books of the corporation
on the day when it becomes payable.³
Liability of stockholders.-Each stockholder is indi-
vidually and personally liable for the debts of the corpora-
tion to the extent of the amount that is unpaid upon the
stock held by him.*
Liability of officers and directors.-The trustees of
dissolved corporations are jointly and severally liable to
the creditors, stockholders, and members of the corpora-
tion to the full extent of its property in their hands."
Reports. The legislative assembly, or either branch
¹ Const., sec. 138.
* Sec. 2933.
² Sec. 2964, et seq.
³ Sec. 2918.
5 Sec. 2941.
NORTH DAKOTA.
1593
thereof, may examine into the condition and affairs of any
corporation, at any time, and for that purpose, may appoint
a committee. Such committee may administer all neces-
sary oaths to the directors, officers, and stockholders, and
may examine them as to the affairs and condition of the
corporation; and all safes, books, papers, and documents
belonging to the corporation are subject to their exam-
ination.¹
Taxation.-All the real and personal property of cor-
porations in this state, unless expressly excepted, is sub-
ject to taxation.2
The capital stock and franchises of corporations must be
listed in the county, town, or district where the principal
office is located in this state; if there be no such principal
office in this state, then in the town or district where the
business is carried on.3
The personal property of gas and water companies must
be listed in the town where the principal works are lo-
cated; gas and water mains and pipes laid in roads, streets,
and alleys must be held to be personal property.*
In making up the amount of credits which any person.
is required to list for himself, or other person, company,
or corporation, he is entitled to deduct from the gross
amount thereof, the amount of all bona fide indebtedness
of himself, or of any such person, company, or corpora-
tion; but no acknowledgment of indebtedness, not founded
on actual consideration, believed when received to have
been adequate, and no such acknowledgment made for
the purpose of being so deducted can be considered a
debt.5
Dissolution; forfeiture.-A corporation may be dis-
solved by the expiration of the time limited by its articles
of incorporation; by operation of law in an action brought
¹ Sec. 2970.
Laws, 1890, ch. 132, sec. 8.
5 Laws, 1891, ch. 100, sec. 2.
VOL. II-20
2 Laws, 1890, ch. 132, sec. 2.
Laws, 1890, ch. 132, sec. 10.
1594
ECONOMIC LEGISLATION.
by any district attorney, in the name of the state, or on
leave granted by the district court, or judge thereof, for
the purpose of vacating the charter or articles of incorpo-
ration, or for the purpose of annulling the existence of a
corporation other than municipal, whenever such corpora-
tion has offended against any of the laws creating, alter-
ing, or renewing such corporation, or has violated the
provisions of any laws, by which such corporation has
forfeited its charter or articles of incorporation, by abuse
of its power, or has forfeited its privileges by failure to
exercise its powers; or has done or omitted to do any act
which amounts to a surrender of its corporate rights,
privileges, or franchises; or whenever it has exercised a
franchise or privilege not conferred upon it by law.'
1
The voluntary dissolution of a corporation may be ef-
fected by the district court of the county where the office
or principal place of business of the company is situated,
upon its voluntary application for that purpose.2
The application must be in writing, and must set forth
that at a meeting of the stockholders or members called
for that purpose, the dissolution was resolved upon by a two-
thirds vote of all the stockholders or members, and that
all claims and demands against the corporation have been
satisfied and discharged. It must be signed by a majority
of the board of directors or other officers having the man-
agement of the affairs of the corporation, and must be veri-
fied in the same manner as a complaint in a civil action. The
court must order the application to be filed, and that the
clerk give not less than thirty nor more than fifty days'
notice of the application by publication in some newspaper
in the county.3
Objections to the application may be filed at any time
before the expiration of the time of publication, and from
the judgment of the district court, an appeal may be taken
as in other actions.
¹ Sec. 5346.
2 Sec. 2983.
3 Sec. 2939.
NORTH DAKOTA.
1595
Unless a corporation organizes and begins the transac-
tion of business, or the construction of its works, within
one year from the date of its incorporation, the corpo-
rate powers cease.'
Unless other persons are appointed by the court, the di-
rectors or managers of any corporation at the time of its
dissolution are trustees of the creditors and stockholders
or members of such dissolved corporation, and have full
power to settle the affairs of the corporation, to collect and
pay debts, and divide among the stockholders the property
which remains after the payment of the debts and neces-
sary expenses. For such purposes they may maintain and
defend actions in their own names by the style of the trust-
ees of such corporation dissolved, naming it, and no action
whereto any such corporation is a party abates by reason
of such dissolution.2
A corporation once dissolved can be revived only by the
same power by which it can be created.³
SUBDIVISION III.-FRANCHISES.
How obtained. The constitution provides that the
legislative assembly shall pass no law granting the right
to construct and operate a street railroad, telegraph, tele-
phone, or electric light plant within any city, town, or in-
corporated village, without requiring the consent of the
local authorities having control of the street or highway
proposed to be occupied for such purpose.*
Condemnation of property.-The constitution pro-
vides that the exercise of the right of eminent domain by
the legislature, over the property of corporations, the same
as the property of individuals, shall never be abridged."
Discrimination in service; refusal to render service.
The constitution provides that the police power of the state
¹ Sec. 2939.
✦ Const., sec. 139.
2 Sec. 2940.
³ Sec. 2942.
5 Const., sec. 134.
1596
ECONOMIC LEGISLATION.
may ever be invoked to compel corporations to conduct
their business in such a manner as not to infringe the
equal rights of individuals or the general well-being of the
state.¹
1 Const., sec. 134.
:
OHIO.¹
1
EDITED BY J. D. BRANNAN, ATT'Y, CINCINNATI, OHIO.
SUBDIVISION I.—HISTORICAL.
The State of Ohio has had two constitutions, that of
1802 and that of 1851. The former contained no provisions
affecting the subject of this inquiry. Prior to the adoption
of the second constitution, municipal and private corpora-
tions were for the most part created, governed, and operated
by virtue of special enactments of the legislature appli-
cable to each individual corporation. A general act for the
incorporation of certain associations was passed by the
territorial legislature in 1798, but was repealed in 1799.2
In 1810, the Steubenville Water Company was incor-
porated, and was followed by numerous similar companies
designated as aqueduct, hydraulic, or water companies. In
1839, the city of Cincinnati was authorized to purchase
water-works, and it is believed has ever since owned and
operated its own works for this purpose.
In 1837, the Cincinnati Gas Light and Coke Company
was incorporated, and in time other similar companies
were created.
Electric telegraph companies were incorporated in 1849.
' Unless otherwise stated, references to the constitution are to that of
1851. References to the statutes are to the Revised Statutes of Ohio by
section simply. There are two editions of the Revised Statutes, pub-
lished in 1890, compiled by private enterprise, i. e., Giauque's and Smith
& Benedict's; where the section numbers differ both are given, those of
Smith & Benedict being designated by the abbreviation, S. & B. The
session laws are referred to as "Laws" by volume and page. As to the state
reports, see Appendix "A.”
2 Chase's Stat., pp. 204, 286.
A
(1597)
1598
ECONOMIC LEGISLATION.
Although not exactly in the line of the companies under
discussion, yet their history and development may aid in
this connection.
The other lines of companies embraced in this discussion
have all developed since the adoption of the present con-
stitution, and will be noticed below.
Under the old constitution municipalities were often au-
thorized or permitted to subscribe to the stock of corpora-
tions, or in other ways to aid them in their enterprises,
while the companies themselves were given very extensive
powers in their use of the streets, etc. The granting of
such aid was held to be valid by the supreme court.'
In 1842, the charters of all companies thereafter granted
were made subject to alteration, suspension, or repeal.²
In 1846, a general act was passed for the incorporation of
manufacturing companies,3 and was extended in its opera-
tions, in 1848, to telegraphic companies. One year prior
to this, however, power was given, generally, to any per-
son or persons to construct lines of telegraph. In 1851,
a general act for the incorporation of gas companies was
enacted."
5
The constitution of 1851 prohibited the conferring of
corporate powers except by general law, and since its
adoption all corporations, municipal as well as private,
have been formed only under general laws passed in con-
formity with this provision of the constitution. The pro-
visions of the general laws above referred to for the incor-
poration of manufacturing companies, etc., were, by the
legislature, embodied into a general incorporation act, in
1852, which provided, among other things, for the forma-
1 R. R. v. Clinton Co., 1 0. S. 77; R. R. v. North Tp., 1 O. S. 105;
Loomis v. Spencer, 1 O. S. 153; Cass v. Dillon, 2 O. S. 607; Thompson v.
Kelley, 2 O. S. 647; State v. Union Tp., 8 O. S. 394; Paris Tp. v. Cherry,
8 O. S. 564; Knox Co. v. Nichols, 14 O. S. 260; Fosdick v. Perrysburg, 14
O. S. 472.
2 40 Laws, 70.
€ 49 Laws, 88.
3 44 Laws, 37.
750 Laws, 274.
* 46 Laws, 25. 5 45 Laws, 34.
}
OHIO.
1599
tion of telegraph, water, and gas companies. In 1861, an
act was passed for the incorporation of street railways;'
and, in 1876, an act was passed for the incorporation and
operation of inclined railways.²
*
the
In 1880, the provisions of these various acts, and the
various amendments to the same, were codified and em-
bodied in the Revised Statutes,³ and in the same year
provisions relating to telegraph companies were extended
so far as applicable to telephone companies; in 1885,
the provisions relating to gas companies were extended to
natural gas companies in certain cities of the second
class; in 1886, an act was passed regulating electric light
and power companies; and, in 1887, the provisions relat-
ing to telegraph companies were extended to such com-
panies.7
8
6
In 1880, an act was passed relating to steam heat and
power companies, but it is believed that no company has
ever operated under it.
The general policy of the state since the adoption of the
present constitution can be stated to be that of free and
ready incorporation of all companies, control of the use
and occupancy of streets and public ways by munici-
pal authorities, and the absolute prohibition of all aid to
these enterprises by state or municipality.
The legislature has given ample power to corporations
to acquire and exercise franchises to perform services for
the public and for individuals for compensation, but at the
same time the right of municipalities to perform such
services for themselves and for their citizens is well estab-
¹ 58 Laws, 66.
2 73 Laws, 229.
3
Sec. 3232, et seq.
* Sec. 3471; In R. R. Co. v. Tel. Ass'n, 26 W. L. B. 14, the supreme court
said that the term, "telegraph," as a mode of transmitting messages and
other communications, is sufficiently comprehensive to embrace the
telephone without section 3471.
'Sec. 3561a; note 4, p. 300.
* Secs. 8752, 8753; S. & B. [8035-233], [8035-234]; 83 Laws, 143.
* Sec. 3471a. 8 Sec. 9219; S. & B. [8227-1]; 77 Laws, 83.
!
1600
ECONOMIC LEGISLATION.
lished. As new public needs have arisen, and new inven-
tions have been made, the legislature, moved thereto in
most cases by the application of interested persons, has
adopted acts which prescribe the powers and duties of cor-
porations formed to bring such new inventions into practical
use, and to satisfy such new public needs. This has some-
times been done by adding sections to existing statutes,
making them applicable so far as possible to the new un-
dertaking, and sometimes it has been done by passing
new general laws for the incorporation of companies to
carry on such new enterprises. The statutes and amend-
ments to statutes which followed the invention of the tele-
phone and of apparatus for producing and utilizing elec-
tric light and power, are notable examples of this exten-
sion of legislation to meet the requirements of the public.
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation, how obtained.-Corporations can only
be formed under general laws; the legislature can pass no
special act conferring corporate powers.¹
Articles of incorporation.-Any number of persons,
not less than five, a majority of whom must be citizens of
the state, may associate themselves together and subscribe
articles of incorporation for profit; the form of such arti-
cles is prescribed by the secretary of state, who furnishes,
upon application, printed forms without charge. The ar-
ticles must be acknowledged before an officer authorized
to take the acknowledgment of deeds, and his official
character must be certified by the clerk of the court of
common pleas of the county in which the acknowledg-
ment is made.3
Must show what.-The articles must state the name of
the corporation, which must begin with the word "the"
and end with "company," if the organization is for profit;
its location or principal place of business; the purpose for
1 Const., Art. XIII, secs. 1, 2.
2 Sec. 3236.
3 Sec. 3238.
OHIO.
1601
which organized; the amount of its capital stock, and the
number of shares into which it is divided;¹ and if the
purpose of the organization includes the construction of
an improvement not to be located in a single place, the
articles must also set forth the kind of improvement in-
tended, the termini of the same, and the counties into or
through which it or its branches are to pass.2
3
Filing.—The articles must be filed and recorded in the
office of the secretary of state, and a duly certified copy
of the same is prima facie evidence of the existence of the
corporation. The secretary of state has in several in-
stances refused to file articles where he considered the
purpose of the incorporation unlawful.5
6
Organization.-Upon the filing of the articles of in-
corporation, the subscribers thereto, their associates, suc-
cessors, and assigns, by the name and style therein pro-
vided, become a body corporate. As soon as ten per cent
of the stock is subscribed, the incorporators, or any five
of them, must so certify in writing to the secretary of
state, and call a meeting of the stockholders to elect di-
rectors.7
Notices. Thirty days' notice, published in a newspaper
of general circulation in the county where the corporation
is located, is required upon the opening of books for sub-
scription to the capital stock, of the first meeting of stock-
holders, of meetings to amend the articles of association
or increase the capital stock, of application to a court to
change the name, and of the sale of stock which is delin-
quent; and ten days' similar notice of the time and place
of holding a called meeting for the election of directors.s
In the case of the sale of delinquent stock, the notice
¹ Sec. 3236.
2 Sec. 3237.
³ All other certificates required to be filed with the secretary of state
must also be recorded.
¹ Sec. 3238.
6 Sec. 3239.
5 See under "OBJECTS," below.
7 Sec. 3244.
8 Secs. 3238a, 5855, 3242 (as amended, 88 Laws, 280), 3244, 3253, 3262,
3246.
1602
ECONOMIC LEGISLATION.
should be made in the county where the subscriber resides,
or where he resided at the time of making his subscription
or becoming a stockholder; or if he reside out of the
state, then in the county where the corporation is located.¹
In the case of increase of capital stock, notice is also re-
quired to be sent to each stockholder by letter.2
All of these notices, except that upon an application to
the court for a change of name, are unnecessary if all the
stockholders are present, in person or by proxy, or if
waived in writing by all of the stockholders, which waiver
should be recorded in the books of the company.3
4
Upon the adoption or change of regulations, notice per-
sonally or by reasonable publication is required. Notice
is not required if two-thirds of the stockholders assent in
writing to the adoption or change.*
All notices of meetings for the purposes above specified
should state the business to come before the meeting.
5
Fees. The fees for filing the articles of incorporation
are graded according to the amount of the capital stock.
For a capital stock of $10,000 or under, the fee is $10; if
over $10,000, the fee is one-tenth of one per cent of the
capital stock. The fee for filing an increase of the capital
stock is at the same rate. The fee for filing the certificate
of reduction of capital stock is $5; for filing articles of
consolidation, the same rate as for original articles, with-
out any reduction for any fees paid upon the incorporation
of the constituent companies. For filing amendments to
articles of incorporation, the fee is twenty cents per hun-
dred words, but in no case less than $5. For filing a cer-
1 Sec. 3253.
³ Secs. 3238a, 3244, 3242, 3262.
2 Sec. 3262.
* Sec. 3251.
5 Prior to 1884, the fee for the incorporation of companies was merely
nominal, and insufficient to maintain the department of the office of the
secretary of state. The smallness of the fee encouraged the filing of
many articles with large amounts of capital stock, with no real intent
of carrying on the business specified, incorporation being secured for
other purposes. The records of the office of the secretary of state be-
OHIO.
1603
tificate of extension of purpose, or change of domicil of a
corporation, the fee is $5. For filing certificates of the
subscription to the capital stock, the fee is $2.¹
2
Amendments, repeals, etc.—By the provisions of the
constitution, all general laws for the formation of corpo-
rations may, from time to time, be altered or repealed."
This does not merely reserve to the legislature the power
to prevent the organization of new companies under the
law by repealing or changing it, but corporations organ-
ized under it before the repeal or change are not beyond
legislative control,3 and the power of a company to adopt.
or enforce regulations is subject to this legislative control.*
came incumbered with the certificates of these "straw" companies as
the secretary termed them. To discourage this practice, and at the
same time secure a larger revenue, the legislature, upon the recommen-
dation of the secretary of state, fixed the fees upon a graduated scale. The
rate of these fees was changed in 1886, 1887, and 1889. Notwithstanding
the large increase in the fees charged, the secretary of state stated, in
his report of 1889, that the aggregate capital stock, original and in-
creased, of corporations formed and existing in 1889 exceeded by $100,-
000,000 that of any previous year. He accounts for this increase by the
fact that the transformation of private capital into corporate stock is
rapidly becoming the favored form of investment in business circles;
that private firms are daily capitalizing their assets, and every new en-
terprise assumes the form of a corporation before commencing its career.
During the year 1890, 1,219 certificates were filed, and the total amount
of capital stock, including the increased stock of corporations formed in
1890, was $283,865,000, as against $257,541,505 for 1889. The fee for filing
the certificate of consolidation of the Wabash Railroad Company, filed
August 1, 1889, was $52,000. It was paid under protest and suit brought
to recover it on the ground that the fees act was unconstitutional as im-
posing a special tax contrary to Const., Art. XII, sec. 2. The supreme
court held the act valid. (Ashley v. Ryan, 28 W. L. B. 11.) In Railway
Co. v. State, 28 W. L. B. 222, it was held that an act requiring railroad
companies to pay a fee" of one dollar per mile contravened sections
two and five of article twelve of the constitution.
¹ Sec. 148a.
Const., Art. XIII, sec. 2.
3 Shields v. State, 26 O. S. 86; R. R. Co. v. Moore, 33 O. S. 384, 392;
State v. Sherman, 22 O. S. 411.
* Penn. Co. v. Wentz, 37 O. S. 333, 338; R. R. Co. v. Sharpe, 38 O. S. 150;
R. R. Co. v. Schultz, 43 O. S. 270, 274.
The provision of a general railroad act, passed prior to the adoption
1604
ECONOMIC LEGISLATION.
By the corporation.-A corporation may amend its arti-
cles so as to change its corporate name, the place where
located, or where its principal business is transacted; so as
to modify, enlarge, or diminish the purpose for which it.
was formed; or so as to add any thing omitted from or
which might lawfully have been provided for in such ar-
ticles originally; but a corporation can not by amendment
change substantially the original purpose of its organiza-
tion, nor increase or diminish the amount of its capital
stock; such increase or diminution must be accomplished
by proceedings which will be hereafter stated.¹
Amendments to the articles are made as follows: The
owners of at least three-fifths of the capital stock must
vote for the amendment at a meeting of stockholders, upon
notice given by a majority of the directors. A copy
of the amendment, with a certificate signed by the
president and secretary and sealed with the corporate
seal, if there be one, stating the fact and date of the adop-
tion of the amendment and that such copy is a true copy of
the original must be recorded in the office of the secretary
of state. The amendment does not take effect until filed for
record, nor until the secretary of state has given notice of
such amendment for three consecutive weeks in a news-
paper of general circulation in the county where the prin-
cipal office of the corporation is situated. No corpora-
tion can change its name to one already appropriated or to
of the present constitution, which provided that no reduction should be
made in the rates allowed railroads organized under the act unless their
net profits for the previous ten years amounted to ten per cent on their
capital, is in the nature of a contract and binding on the state. (Iron
R. R. Co. v. Lawrence Furnace Co., 29 O. S. 208.) The word "capital'
as used in said act means the capital stock of the company. (Railway
Co. v. Furnace Co., 27 W. L. B. 251.)
When a gas company is organized under a special charter (prior to the
constitution of 1851), it is subject to the provisions of the general stat-
utes of the state, unless it clearly appears from the terms of the charter
that it was intended to exempt it from such provisions. (State v. Gas
Co., 34 O. S. 572.) See also infra, p. 1650, note 3.
¹ See under "CAPITAL STOCK."
OHIO.
1605
one likely to mislead the public. Nor can a corporation by
amendment provide for a purpose which is unlawful.'
By the courts.-The name of a corporation may also be
changed by order of the court of common pleas of the
county where its principal office is located, or, if it has no
principal office, of the county where it is situate, upon a
petition filed by the directors and upon good cause shown.
Thirty days' notice of the object and prayer of the peti-
tion must be given by publication in a newspaper of gen-
eral circulation in the county. A copy of the order of the
court must be filed with the secretary of state and pub-
lished in a newspaper of general circulation in the county.
The corporation having complied with these provisions is
thereafter to be known by such new name.
The change
of name does not affect the rights or powers of the corpo-
ration or the restrictions upon it, or the rights of any in-
dividual or other corporation.2
Objects.-Corporations may be formed for any purpose
for which individuals may lawfully associate themselves,
except for dealing in real estate or carrying on pro-
fessional business.3 The objects of the corporation must
be stated in the articles of association."
The secretary of state, upon the advice of the attorney-
general, has, in a number of instances, refused to file ar-
ticles of incorporation where he considered the purpose of
the incorporation to be unlawful, as, for instance, where
the object of the proposed corporation was "buying, sell-
ing, dealing, and investing in bonds, stocks, and other in-
vestment securities, and doing all things incident thereto,5
and where the object was "to purchase leases, franchises,
and equipments of other incorporated companies."
1 Sec. 3238a.
* Sec. 3235.
2 Secs. 5855, 5856, 5857.
• Sec. 3236.
5 Cincinnati Commercial Gazette, March 10, 1891.
6 24 W. L. B. 269.
1606
ECONOMIC LEGISLATION.
Powers.-Corporations organized under the general
laws of the state have power to sue and be sued, to make
contracts, acquire and convey such real and personal
property as may be necessary and convenient to carry
into effect the objects for which they were created, to
make and use a common seal, and to do all needful acts to
carry into effect the objects for which created,' but a cor-
poration can exercise no powers but such as are given to
it, or such as are necessary to carry into effect these
powers.2 A corporation has no power to buy the stock of
another corporation.3
Corporations are forbidden to employ their capital or
property, directly or indirectly, for any other purpose than
to accomplish the legitimate objects of their formation,*
and have no power to engage in pursuits not included in
the statement of their purposes of incorporation.
Of special companies.-The various franchise companies
are given special powers relative to the operation, etc., of
their franchises, and are subject to conditions and regu-
lations which will be fully considered in their appropriate
places under Subdivision III. Generally speaking, it
may be said that they are given the power to carry on
their particular lines of industry, and to use the streets
and highways under certain conditions.
Gas, electric light and power, water, and natural gas
companies in certain cities are empowered to manufacture,
sell, and furnish their respective products for supplying
municipalities and the citizens of the same."
Telegraph, telephone, and electric light and power com-
panies may construct, own, use, and maintain their lines
whether described in their articles of incorporation or
¹ Sec. 3239.
2 Bonham v. Taylor, 10 O. 108; Bartholomew v. Bentley, 1 O. S. 37;
Ewing v. Bank, 43 O. S. 31.
3 Franklin Bank v. Commercial Bank, 36 O. S. 350.
5 Secs. 3550, 3561a, 8752; S. & B. [8035-233]; note 4, p. 1626.
4 Sec. 3266.
OHIO.
1607
not, or whether wholly within or partly without the
state.¹
Sewerage companies may construct and maintain sewers
and drains.2
3
Inclined plane railway companies are given power to
construct, operate, and maintain inclined planes for the
conveyance of passengers and freight, or either, with neces-
sary offices, depots, etc., and may establish and maintain
parks or pleasure grounds, and acquire and hold the neces-
sary real estate for the same; they may also hold, lease,
or purchase, and maintain and operate such portion of any
street railway leading to or connected with the inclined
plane as may be necessary for the convenient dispatch of
their business, upon the same terms and conditions on
which they hold and maintain and operate their inclined
planes; certain restrictions are placed upon laying tracks
and changing motive power which will be considered in
their proper places under Subdivision III.
4
By-laws.-Corporations may adopt such regulations
for their government, not inconsistent with the constitu-
tion and laws of the state, as they may see fit; and the di-
rectors may adopt by-laws, not inconsistent with such
regulations or the constitution or laws of the state, and
may change the same at pleasure.5
The regulations of the corporation may provide as to
the time, place, and manner of calling and conducting
meetings; the number of stockholders constituting a
quorum; the time of the annual election for directors and
the mode of giving notice thereof; the duties and com-
pensation of officers; the manner of election or appoint-
ment, and the tenure of office of all officers except di-
rectors."
1
6
These regulations may be adopted or changed by the
¹ Secs. 3454, 3455, 3471, 3471a.
474 Laws, 66.
2 Sec. 3871.
5 Secs. 3249, 3250.
³ Sec. 3444.
• Sec. 3252.
{
1608
ECONOMIC LEGISLATION.
assent in writing of two-thirds of the stockholders, or by
a majority vote at a duly notified meeting.'
2
Officers; meetings; voting; quorum; etc.-As soon
as ten per cent of the stock is subscribed, the incorporators
or any five of them must call a meeting, giving the pre-
scribed notice thereof, of the stockholders to elect direc-
tors. Not less than five nor more than fifteen directors
must be elected, who continue in office until the time fixed
for the annual election, and until their successors are
elected and qualified; they must be chosen by ballot by
the stockholders either in person or by proxy; each share
entitles to as many votes as there are directors to be
elected, and a plurality of votes is necessary for a choice,
but no person can vote on a share on which any install-
ment is due and unpaid;³ this provision does not give the
right of cumulative voting. The incorporators or such
of them as are present are required to be the inspectors
of the election, and to certify what persons are elected,
and to appoint the time and place of the first meeting of
the directors. The articles of incorporation may provide
that each stockholder, irrespective of the amount of his
stock, shall be entitled to one vote only at any election
of directors or upon any subject submitted at a stock-
holders' meeting."
¹ Sec. 3251.
3
• State v. Stockley, 45 O. S. 304.
2 Sec. 3244.
3 Sec. 3245.
5 Sec. [3245,-1]; S. & B. 3245a. Every corporation whose articles con-
tain the above limitation is subject to the following provisions: No
person can hold or own stock in excess of one thousand dollars face
value;
the directors must annually, within thirty days after December
31st, file with the county recorder a statement of its financial condition
on said date (31st), giving the assets and liabilities, the amount of
paid-up capital stock, the names of stockholders, and the number of
shares owned by each; said statement must be signed and sworn to by
a majority of the directors including the treasurer. By-laws for the
government of the company, and for the distribution of its net earn-
ings among its workmen, patrons, and share-holders, may be made by
the stockholders. [3245,-2]; S. & B. 3245b.
OHIO.
1609
Unless otherwise provided by the regulations of the
corporation, an annual election for directors must be held
on the first Monday in January of each year; if, for any
cause, directors are not elected at an annual meeting or
other meeting called for that purpose, they may be chosen
at a stockholders' meeting at which all the stockholders.
are present in person or by proxy, or at a meeting called.
by the directors upon due notice.¹
2
The statute provides that, upon the application of one-
tenth, in interest, of the stockholders of a corporation en-
titled to vote at any meeting for the election of directors,
or the determination of any question, or of the subscribers
to stock, or of creditors and stockholders for reorganiza-
tion, made within fifteen days before any meeting, the
court of common pleas of the county, or a judge thereof,
or, in case of absence or disability, the probate court may
appoint inspectors of election for such meeting. Before
the application is acted upon, notice must be served upon
the corporation at its general office, and such other notice,
by publication or otherwise, must be made as the court
may require. If the court consider the appointment of
such inspectors proper and right, it may appoint three com-
petent disinterested persons to so act. It is also provided
that, before the meeting, the officers or agents of the cor-
poration having charge of the transfer of stock must make
under oath and deliver to said inspectors a list of the
stockholders as shown by the books, which is prima facie
evidence of the ownership of the stock; in case of the
absence of such list, the inspectors must ascertain the
ownership by the books, stock certificates, or other satis-
factory proof. The inspectors receive and count the votes,
and determine the result, and their certificate is prima
facie evidence thereof.5 The court or judge appointing
the inspectors fixes their compensation, and may require
1 Sec. 3246.
4
Sec. [3245,-4]; S. & B. 3245b(2).
5 Sec. [3245,-6]; S. & B. 3245d.
VOL. II-21
3
2 Sec. [3245,-3]; S. & B. 3245a(2).
* Sec. [3245,-5]; S. B. 3245c.
1610
ECONOMIC LEGISLATION.
security for its payment from the applicants for such ap-
pointment, and the corporation may become liable therefor
if the meeting by vote so determine. This method of
appointing inspectors is not often resorted to, but has
sometimes been adopted where contests for control of the
corporation were pending or expected.
2
A majority of the directors must be citizens of the
state, and must be sworn faithfully to discharge their
duties.3 All the directors and all executive officers must
be holders of stock in an amount to be fixed by the by-
laws.2
The number of directors may be increased to any num-
ber not greater than fifteen, or decreased, before or after
such increase, to any number not less than five by a vote
of the majority of the stock at any regular meeting.*
The directors must chose one of their number to be
president, and if the regulations do not otherwise provide
for the election of such officers, they must appoint a secre-
tary and treasurer of the corporation.3 A majority of the
directors form a board,3 and may fill vacancies in the
board by appointment for the unexpired term, unless the
by-laws otherwise provide. The corporate powers, busi-
ness, and property of corporations must be exercised, con-
ducted, and controlled by the board of directors.2
2
Books. A record of all stock subscriptions and trans-
fers is required to be kept, and the books and records of
the company are open to the inspection of any stock-
holder at all reasonable times."
5
Capital Stock.-The articles of incorporation must
show the amount of capital stock and the number of
shares into which it is divided. The incorporators or
any five of them may order books to be opened for sub-
scription to the capital stock of the company, upon giving
¹ Sec. [3245,-7]; S. & B. 3245e.
* Sec. 3267.
2 Sec. 3248.
5 Sec. 3254.
3 Sec. 3247.
Sec. 3236. Corporations for profit must have a capital stock. (Sec.
3235.)
í
!
OHIO.
1611
the required notice. An installment of ten per cent on
each share is payable at the time of making the subscrip-
tion, and the balance in such installments and at such
times and places as the directors may require.²
Installments of stock unpaid for sixty days after call
may be collected by action, or the directors may sell the
stock at public auction after due notice; the owner is en-
titled to any residue after the payment of the amount due
on the stock, and if the whole installment is not paid by
the sale, the company may recover the residue by action.³
Stockholders are entitled to certificates of their paid-up
stock. Stock is personal property, and when fully paid
up is subject to levy and sale upon execution against the
owner. Corporations are forbidden to advertise a larger
amount of capital stock than has been actually subscribed
and paid in."
7
Increase and decrease of.-A corporation can not increase
or decrease its capital stock by amendment of its articles
of incorporation, but after the original capital stock is fully
paid up, the corporation may increase its capital stock, or
the number of shares into which it is divided, by a vote of
the holders of a majority of the stock, at a meeting duly
called by a majority of the directors; such increase may
be made at any meeting at which all the stockholders are
present in person or by proxy and waive notice thereof in
writing, and also agree in writing to such increase, nam-
ing the amount of the increase to which they agree. The
capital stock may also be increased by the issuing of pre-
ferred stock as shown below. A certificate showing the
action of the company must in each case be filed with the
secretary of state."
The board of directors may, with the written consent
of the owners of a majority of the shares as shown by the
books, reduce the amount of the capital stock and the
¹ Sec. 3242. See "NOTICES," above.
• Sec. 3253.
* Sec. 3238a.
• Sec. 3254.
5 Sec. 3255.
8 Sec. 3262.
2 Sec. 3243.
6 Sec. [3269,-3].
9 Secs. 3262, 3263.
1612
}
ECONOMIC LEGISLATION.
nominal value of the shares and issue certificates therefor;
but the rights of creditors can not be affected or impaired
thereby. A certificate of such action must be filed in the
office of the secretary of state.¹
Transfers of.—A record of all stock subscriptions and
transfers must be kept, and whenever any stock is as-
signed and delivered by a stockholder, the assignee
thereof is entitled to have the same transferred on the
books, and the name of such assignee must be enrolled as
a stockholder.2
Stock in other companies.-A corporation has no power
to buy the stock of another company.3
Preferred stock.-Upon the assent in writing of three-
fourths in number of the stockholders, representing at
least three-fourths of the capital stock, the company may
issue preferred stock, and may stipulate that such pre-
ferred stock shall be entitled to a dividend not exceeding
six per cent per annum, out of the annual profits of the
company, in preference to all other stockholders, and that
such preferred stock may be converted into common stock
at the election of the holder. Preferred stock may also
be issued as security for borrowed money.5
Bonds, debts, etc.-A corporation may borrow money,
not exceeding the amount of its capital stock, and may is-
sue notes or coupon or registered bonds therefor, bearing
any rate of interest authorized by law, and may mortgage
its real and personal property, or both, to secure payment
of the same."
The action of the directors for borrowing money, issu-
ing bonds, or involving an expenditure of money, must be
by yea and nay vote, and the record must show the vote
of each director voting upon the question."
¹ Sec. 3264.
2 Sec. 3254.
3 Franklin Bank v. Commercial Bank, 36 O. S. 350.
5 Sec. 3257. See "BONDS, DEBTS, ETC." below.
* Sec. 3263.
6 Sec. 3256; Hayes v. Galion G. L. & C. Co., 29 O. S. 330; Burt v. Rat-
tle, 31 O. S. 116.
OHIO.
1613
Upon the request of the holders, registered bonds may
be changed into coupon bonds, and coupon into registered,
either by substitution or proper indorsement thereon, and
the lien, rights, and security of the bonds are not affected
by such change.¹
Street railway companies are authorized to borrow
money, not to exceed the capital stock, at a rate not ex-
ceeding seven per cent, for any purpose for which it may be
needed in its business, and may execute bonds or promis-
sory notes therefor in sums not less than $100, and may
secure payment of the same by pledge of its property and
income;² such security may be by mortgage or other writ-
ing, and may include the real and personal property of the
company; it must be recorded in the recorder's office of
each county in which the property is situate, and is a
lien from the date of record.
4
Upon the written assent of not less than three-fourths
of the stockholders, representing at least three-fourths of
the stock, a company may borrow money, not in excess
of one-half of the stock actually paid in, by way of mort-
gage or otherwise, and may stipulate that the holders shall
have the right to convert the amount borrowed, or any
part of the same, into common or preferred stock."
7
Dividends.-Directors are forbidden to make dividends
except from the surplus profits, and in calculating profits,
interest unpaid, although due, on debts owing to the com-
pany is not to be included; in order to ascertain the sur-
plus profits, there must be charged in the account of profit
and loss, and deducted from the actual profits, all the ex-
penses paid or incurred, attending the management of the
business of the company; the interest paid, due, or ac-
crued on debts owing by the company; all losses esti-
mated, including all debts owing to the company which
have remained due without presentation and on which no
¹ Sec. 3265.
* Secs. 3289, 3309a.
7 Sec. [3269,-2].
² Secs. 3287, 3309a.
3 Secs. 3288, 3309a.
5 Sec. 3257.
• Sec. [3269,-1].
1614
ECONOMIC LEGISLATION.
interest has been paid for more than one year, or on which
judgment has been recovered and has remained unsatisfied
for more than two years and on which no interest has been
paid during that period.¹
Corporations are forbidden to advertise a greater divi-
dend than has actually been earned and credited or paid
to the stockholders.'
Liability of stockholders.-The constitution requires.
that dues from corporations be secured by such individual
liability of the stockholders and other means as may be
prescribed by law; but that, in all cases, each stockholder
shall be liable to a sum equal in amount to the stock owned
by him in addition to any amount unpaid on the same.2 In
accordance with this provision, the statute provides that
stockholders shall be liable to an amount equal to the stock
held by them in addition to any unpaid installments upon
the same. No costs can be collected of a stockholder to
an amount which, together with the amount to be paid by
him on the debts of the company, will exceed the amount
of the stock on which he is liable; but interest may be
recovered, although the amount of the recovery thereby
exceeds the original liability of the stockholder."
6
The term "stockholder" applies not only to such per-
sons as appear by the books to be such, but to any equita-
ble owner of stock, although the stock appears on the
books in the name of another; but a pledgee of stock
who does not have it transferred to him on the books of
the company is not the legal or equitable owner of the
stock, and is not liable as a stockholder.' Holders of pre-
ferred stock are subject to the statutory liability equally
with the common stockholders.8
¹ Sec. [3269,-3].
2 Const., Art. XIII, sec. 3. The word "dues" includes not only a claim
for a debt arising upon contract, but a demand for unliquidated damages
arising from a tort. (Rider v. Fritchey, 27 W. L. B. 283. )
3 Sec. 3258.
• Sec. 3259.
* Sec. 3260.
5 Mason. Alexander, 44 0. S. 318.
7 Henkle r. Salem Mfg. Co., 39 O. S. 547, 553.
º B. & O). R. R. v. Smith, 25 W. L. B. 179; Miller v. Ratterman, 47 0.
8
OHIO.
1615
This liability is secondary to that of the company and
can be enforced only by the creditors, and in case of the
insolvency of the company or when payment can not be
enforced against it by ordinary process. The company
can not collect or assign the extra liability of the stock-
holders; it attaches in favor of creditors at the time the
debt is contracted, and is not discharged by assignment
or transfer of the stock, but the successive holders im-
pliedly undertake to indemnify the assignor from the lia-
bility. In a suit to enforce this liability, the existing
stockholders are liable, and if by reason of insolvency the
amount is not collectible, the assignors of the stock up to
the time the liability attached may be charged with the
deficiency.3
3
Stockholders' liability may be enforced by an action
brought by a stockholder or by a creditor against all
stockholders jointly, which action must be for the benefit
of all creditors and against all persons liable as stock-
holders. Any creditor can enforce this liability if the
company has become insolvent and made an assignment,
but if the company has property subject to levy and sale
on execution, though not sufficient to pay its debts, and
continues to transact its business, the right does not accrue
until after judgment and execution returned unsatisfied
for want of goods whereon to levy." Suit begun by one.
creditor on behalf of himself and all other creditors is a
demand for all and saves the running of the statute of
S. 154. In the case of Burt v. Rattle, 31 O. S. 116, it was held that pre-
ferred stock issued under an act to authorize manufacturing corporations
to issue preferred stock to pay debts and furnish working capital, and
which provided that the preferred stockholders should not be liable for
debts of the company, was not stock, but certificates of indebtedness.
¹ Wright v. McCormack, 17 O. S: 86.
1
2 Umsted v. Buskirk, 17 O. S. 86.
3 Brown v. Hitchcock, 36 O. S. 667; B. & O. R. R. Co. r. Smith, 25 W.
L. B. 179.
* Sec. 3260; Lemar v. Stephens, 27 W. L. B. 301.
3 Barrick v. Gifford, 47 O. S. 180. See also Bronson ". Schneider, 27 W.
L. B. 362.
1616
ECONOMIC LEGISLATION.
limitations as against all creditors who come in and assert
their claims before the final determination of the action.¹
Liability of directors and officers.-The incorporators
of a corporation are liable to any person affected thereby
to the amount of any deficiency in the actual payment of
the ten per cent of the stock at the time of certifying to
the subscription;2 persons contracting as directors are
without authority to create any corporate obligation, but
are personally liable if the said ten per cent has not been
subscribed.³
Every director violating or concerned in violating the
provisions of the statute relative to dividends or advertis-
ing of capital stock is liable personally to the creditors
and stockholders to the full extent of any loss they may
sustain by reason of such violation. If directors of
co-operative companies required to make reports to the
county recorder, as shown below, fail to make the required
statement, or make a false statement, they are personally
liable for all claims against the corporation.5
Reports. Every corporation is required to make an
annual report or statement of its financial condition, set-
ting forth its assets and liabilities, and a copy of this state-
ment, together with a list of the stockholders and their
places of residence, must be furnished each stockholder."
In practice, this required list of stockholders is seldom
furnished.
Corporations which have adopted the provisions of the
statute permitting them to limit the power of stockholders
to vote, as shown above,' are required annually, within
thirty days after December 31st, to file with the county re-
corder a statement of their financial condition on said 31st
day of December, giving the assets and liabilities, the
amount of paid-up capital stock, the names of stockhold-
¹ Barrick v. Gifford, 47 O. S. 180.
3 Trust Co. v. Floyd, 47 O. S. 525.
5 Sec. [3245,-2]; S. & B. 3245b.
7
' See "OFFICERS; MEETING; VOTING;
2 Sec. 3244.
* Sec. [3269,-4.]
6 Sec. 3268.
QUORUM ;
etc.
OHIO.
1617
1
ers, and the number of shares owned by each; this state-
ment is to be signed by a majority of the directors, includ-
ing the treasurer.¹
2
Taxation. The constitution provides that the property
of corporations now existing or hereafter created shall
forever be subject to taxation the same as the property of
individuals. No annual tax is levied on corporations as
such. All companies of the kind discussed in this work
must list for taxation all their personal property, which
must include such real estate as is necessary to the daily
operation of the company, also moneys and credits of the
company, at the actual value in money.3
A corporate franchise being a mere privilege or grant
of authority by the government, is not property and is
therefore not subject to taxation. The stock or value in-
vested in the lines of electric telegraph companies is ex-
pressly made subject to taxation.5
6
Of stock in hands of holders.-No person is required to
list for taxation shares of the capital stock of any com-
pany the capital stock of which is taxed in the name of
the company in this state. The return for taxation of
the property of an Ohio corporation is supposed to repre-
sent the capital stock and the latter is therefore not taxa-
ble in the name of the owner; but shares of a foreign
corporation are taxable in the name of the owner, al-
though the capital of the corporation is taxed in the state
1
¹ Sec. [3245,-2]; S. & B. 3245b.
3 Sec. 2744.
2 Const., Art. XIII, sec. 4.
✦ Bank v. Hines, 3 O. S. 1, 7; Baker v. Cincinnati, 11 O. S. 534.
* Sec. 8751; S. & B. (8035–232).
6 Sec. 2746. This is also true of preferred stock, although the certifi-
cates stipulate that the holder is not entitled to vote at meetings of the
company, it being legal to make such stipulation, and although divi-
dends on the preferred stock are guaranteed and are secured by a mort-
gage. Such guaranty is not a guaranty for payment in any event, but
only in the event that dividends are earned. (Miller v. Ratterman, 47
O. S. 141.)
'Jones v. Davis, 35 O. S. 474, 477.
1618
ECONOMIC LEGISLATION.
where located, and although the corporation has substan-
tial property in Ohio on which it pays taxes in said state.
The same is true of shares of a company formed by the
consolidation of an Ohio company with companies of
other states, notwithstanding such company pays taxes in
Ohio on the portion of its property situated in Ohio.¹
Licenses.-The regulation of an occupation by license is
not unconstitutional as being taxation by a non-uniform
rule, where a special benefit is conferred by the public
upon those who follow it, or where the occupation imposes
special burdens on the public, or where it is injurious or
dangerous to the public."
2
Consolidation of companies.³—The statute provides,
in the case of telegraph companies, that two or more com-
panies, whose several lines are not parallel or in competi-
tion with each other, and which when united will form a
continuous line for receiving and transmitting dispatches,
may consolidate into a single corporation in the same man-
ner as railroad companies, and that such companies may
¹ Lee v. Sturges, 46 O. S. 153.
4
2 Marmet v. State, 45 O. S. 63; Baker v. Cincinnati, 11 O. S. 534.
3 It has been held that special privileges conferred on a railroad com-
pany by a private charter granted under the constitution of 1802 do not
so inhere in the road constructed under such charter as necessarily to
pass to any corporation which may have acquired under subsequent
legislation the right to operate the same. (Railroad Co. v. Moore, 33 0.
S. 384.)
Where a corporation, in pursuance of an act of the legislature, trans-
fers or conveys its franchises to be a corporation to others, the transac-
tion, in legal effect, is a surrender or abandonment of its charter by
the corporation and a grant by the legislature of a similar charter to the
transferees or purchasers, and the charter so granted is subject to all the
provisions of the constitution existing at the time it is so granted.
(State v. Sherman, 22 O. S. 411.)
* Sec. 3470. In the case of the consolidation of railroad companies,
an agreement of consolidation is to be submitted to the stockholders of
the respective companies, providing, as to the terms and conditions
thereof, the name of the new company, the number of directors and
officers and their places of residence, the amount of capital stock, the
number of shares, and the manner of converting the stock of each of the
OHIO.
1619
1
join with other companies in conducting, leasing, owning,
and using lines of magnetic telegraph; and they may own
and hold any interest in such lines or become lessees of
the same,' but it is unlawful for such company or compa-
nies and the owner or owners of the right of way to con-
tract for the exclusive right thereof for telegraphic pur-
poses. These provisions, so far as applicable, have also
been extended to telephone and electric light and power
companies.2 How far the courts may hold them appli-
cable can not now be determined. In the case of Street
Railway Company v. Telephone Association, 26 W.
L. B. 14, the supreme court said that the term "tele-
graph," as a mode of transmitting messages and other
communications, is sufficiently comprehensive to embrace
the telephone without this statutory extension.
Power is given to any street railway company to lease
or purchase any street railway, or railroad operated as a
street railway by electric power, or incline plane railway,
together with all the property, franchises, rights, and priv-
ileges respecting the use and operation of such railway, in
whole or in part, within this state; and corresponding
power is given to companies to let or sell their property.3
Power is also given to any two or more such companies to
"enter into any arrangements for their common benefit
consistent with and calculated to promote the objects for
which they were created." 3 The holders of at least two-
constituent companies into that of the new company. This agreement
must be accepted by each of the companies separately, in a meeting duly
called for the purpose, by a two-thirds vote of all the votes cast, and
this vote must be certified thereon by the secretary of each of the compa-
nies, and it or a certified copy thereof filed with the secretary of state.
Upon complying with these provisions, the several companies become
one company, and must proceed to elect directors and establish a prin-
cipal office, etc. (Secs. 3379–3392.) Provision is made for buying out
stockholders not assenting to the consolidation in the nanner stated be-
low as to street railways.
¹ Sec. 3455.
3 88 Laws, 493, sec. 2505a.
2 Secs. 3471, 3471a.
}
1620
ECONOMIC LEGISLATION.
}
1
thirds of the stock of each company must assent to such
lease or purchase at a meeting called for that purpose by
the directors, on thirty days' notice to each stockholder, at
such time and place and in such manner as is provided for
annual meetings. Stockholders refusing to assent to such
lease or purchase, and signifying the same in writing to
the purchaser within ninety days, are entitled to demand
and receive from the lessee or purchaser the average mar-
ket value of their stock for six months preceding the day
of the meeting of the company at which the sale or lease
is approved, and, in case of disagreement as to the value
of the stock, the question may be submitted to arbitrators
appointed, upon motion of either party, by the court of
common pleas, and if a stockholder refuses to submit to
arbitration, the judge, upon the application of a director
of either of the companies, parties to the contract, must
appoint arbitrators. If the stockholder refuses to receive
the amount awarded, the company may deposit it with
the clerk of the court, which deposit operates as payment.
Ten days' notice of the intention to apply for the appoint-
ment of arbitrators must be given by the parties desiring
the arbitration, and in case of non-residents the notice
must be by publication for four consecutive weeks. It is
further provided that, whenever the lines or authorized
lines of any street railway companies meet or intersect, or
whenever any such lines and that of any incline plane
railway or any railway operated by electricity may be con-
veniently connected or operated to mutual advantage,
such companies may consolidate into a single corporation,
or whenever the line of a company in this state is made
or is being constructed to the boundary line of the state
or to any point either in or out of the state, such company
may consolidate its capital stock with that of any company
in an adjoining state whose line has been made or is being
constructed to the same point or points, in the same man-
ner and with the same effect as provided for the consolida-
2
¹ 88 Laws, 493, sec. 2505a. 2 88 Laws, 493, sec. 2505a; secs. 3302-3304.
OHIO.
1621
tion of steam railways;' but these provisions are not to be
construed to extend the term of any grant by a municipal
corporation, or to extend or enlarge any of the rights of
any of the separate roads consolidated thereunder.2
Dissolution; forfeiture.-A corporation may be dis-
solved by expiration of the term limited in its charter, or
upon application to the common pleas or superior court,
by a majority of the directors, or by not less than one-
third in value of the stockholders, when the stock and
property of the company has been so reduced that it will
not pay the just demands against the company or afford a
reasonable security to creditors; when a dissolution will
be beneficial to the interests of the stockholders, or when
the objects of the corporation have wholly failed, have
been abandoned, or their accomplishment is impracticable ;3
or upon application by one-fifth in amount of the stock-
holders of a manufacturing corporation, when for two out
of the last three years the net earnings have not been suf-
ficient to pay a dividend of six per cent upon the paid up
capital. Or by a majority vote in amount of its stock-
holders, at a meeting duly called, when, no installment of
the capital stock having been paid, no investments made,
and no debts incurred which are unpaid, the objects of the
corporation can not be accomplished.5
.3
The application for dissolution must give the reason for
the same, and there must be attached an inventory of all
of the property of the corporation and of the books, vouch-
ers, and securities relating thereto; an account of the cap-
¹ 88 Laws, 493, sec. 2505b. See note 4, p. 220.
2 88 Laws, 493, sec. 2.
3 Sec. 5651. Under sections 5651, 5673, the court has no authority to
appoint a receiver until the order has been made dissolving the corpora-
tion. Mer. Trust Co. v. Etna Iron Works, 4 0. C. C. 579; Bacon F. &
Co. v. N. W. Stove Co., 5 O. C. C. 289.
* Sec. 5673. Equitable owners of stock can not make the application
for dissolution. They must be legal owners. Armstrong v. Brewing Co.,
26 W. L. B. 39.
6 Sec. 5674.
i
1622
ECONOMIC LEGISLATION.
ital stock, giving the name and residence of each stock-
holder, the number of shares owned by each and the
amounts paid and unpaid on each share; a statement of
all incumbrances and of all unsatisfied engagements or de-
mands, giving the residence of each creditor (if known),
the sum owing, the nature of the debt or demand, and the
consideration of the same.¹
2
A receiver may be appointed by the court with ample
powers to settle the business of the corporation, but un-
less a receiver or other person is appointed by competent
authority the directors of the corporation at the time of
dissolution are continued as trustees to settle the corporate
business.3 The board of directors of any corporation may
appoint three trustees to adjust and settle the affairs of the
company, when necessary, and such trustees may use the
corporate name for such a period as may be necessary.*
The trustees so appointed must report annually to the
stockholders, and a majority in interest of the stockholders
may remove a trustee or fill a vacancy.5
An action in quo warranto may be brought in the name
of the state against persons acting as a corporation with-
out being legally incorporated, or against a corporation
when it has offended against a provision of an act for its
creation, or renewal, or an act altering or amending such
acts; when it has forfeited its privileges and franchises by
non-user; when it has committed or omitted an act which
amounts to a surrender of its corporate rights, privileges,
and franchises; when it has misused a franchise, privilege,
or right conferred upon it by law; or when it claims or
holds by contract or otherwise, or has exercised a fran-
chise, privilege, or right in contravention of law. And
when in any such action it is found and adjudged that a
corporation has, by an act done or omitted, surrendered or
forfeited its corporate rights, privileges, and franchises, or
¹ Sec. 5652.
5 Sec. 5688.
2 Sec. 5657, et seq.
3 Sec. 5675.
Sec. 5687.
OHIO.
1623
has not used them during a term of five years, judgment
must be entered that it be ousted and excluded therefrom,
and that it be dissolved; and when it is found that a cor-
poration has offended in any matter or manner which does
not work such surrender or forfeiture, or has misused a
franchise, or exercised a power not conferred by law, judg-
ment must be entered that it be ousted from the continu-
ance of such offense, or the exercise of such power.'
Where a corporation has abused or misused its corporate
powers, but not in any particular as to which it is declared
by statute the act shall operate as a forfeiture of its char-
ter, the court is vested with discretion to determine
whether the corporation shall be ousted of its franchise to
be a corporation, or from the exercise of the powers ille-
gally assumed.2
A corporation may forfeit its charter through neglect or
abuse of its franchises; but a forfeiture is not allowed ex-
cept under express limitation, unless a plain abuse or neg-
lect of power, by which the corporation fails to fulfill the
design of its creation, is shown; 3 it remains a legal cor-
poration until dissolved by act of legislature, by its own
volition, or by a proceeding in quo warranto against the
corporation itself. In quo warranto, where a corporation
has assumed franchises not granted, and it appears that
the certificate of incorporation does not comply with the
requirement of the statute under which it is organized,
the court, in the exercise of its discretion, will oust it of
the franchise to be a corporation, and not merely of the
usurped franchises."
4
A judgment of ouster does not retroact so as to affect
or destroy a contract prior to its rendering.
6
¹ Secs. 6760, 6761, 6780. In State v. Standard Oil Co., 27 W. L. B. 197, the
Standard Oil Co. of Ohio was ousted from the right to make and the power
to perform the agreement under which the Standard Oil Trust was formed.
2 State v. Building Ass'n, 35 O. S. 258.
³ State v. Farmers' College, 32 O. S. 487.
* State v. Taylor, 25 O. S. 279.
3 State v. Cent. O. Ass'n, 29 O. S. 309.
'Gaff v. Flesher, 33 O. S. 107, 115; Society Perun v. Cleveland, 43 O. S.
481, 497.
1624
ECONOMIC LEGISLATION,
1
In the absence of express legislative provision, the for-
feiture of the charter of a corporation can only be estab-
lished by judicial action, and can not be inquired into
collaterally. Neither a neglect to exercise corporate pow-
ers, nor even an abuse of them, ipso facto, works a forfeit-
ure of the franchise; the corporation subsists until the
forfeiture be ascertained and declared by a competent tri-
bunal, in a judicial proceeding instituted for that purpose
by the government.2 A corporate franchise will not be
forfeited by non-user without a judicial sentence. The
powers of a corporation do not cease in consequence of an
act violating its charter, although the charter provide that
such a consequence shall ensue; the act of violation must
be established in some proceeding instituted by the state,
and there must be a final decree in the case.*
5
Foreign corporations.-It is not contrary to the laws
of Ohio, nor against public policy, in the present condition
of its laws, for a foreign corporation, lawfully organized
in another state, to do business in Ohio. Such corpora-
tion, authorized, by the laws of the state in which it was
organized, to do business in this state, may transact busi-
ness in Ohio not inconsistent with Ohio laws, and may sue
and be sued in the courts. But corporations of other
states are not citizens, entitled to all the privileges and
immunities of citizens in the several states, within the
meaning of the constitution of the United States, that
provision being applicable to natural persons only. For-
eign corporations can exercise none of their franchises or
powers within this state except by comity or legislative
consent; that consent may be upon such terms and condi-
tions as the general assembly under its legislative powers
may impose. The probate court of Hamilton county has
¹ Bank v. Renick, 15 O. 322.
2 State v. Bryce, 7 O. (2 pt.) 82.
3 Webb v. Moler, 8 O. 548; State v. Ins. Co., 14 O. 6.
Finnell v. Burt, 2 H. 202, 206.
5 Newburg Pet. Co. v. Weare, 27 O. S. 343; Bank v. Jones, 16 O. S. 145.
• W. U. Tel. Co. v. Mayer, 28 O. S. 521.
OHIO.
1625
held that by the law of comity a foreign corporation may
avail itself of the provisions of the statutes as to rights
of way, the same as a domestic corporation, when such
exercise is not inconsistent with the laws of its own state
or the provisions of its charter.¹
SUBDIVISION III.—FRANCHISES.2
How obtained.-Municipal franchises, or the right to
use the streets and public ways of a city or village by
franchise companies, are granted directly or indirectly by
the legislature. As will be seen below municipal fran-
chises are granted in this state in three different ways, by
the legislature directly to a class of companies, by the mu-
nicipal authorities, and by the probate court.
From the legislature.-Inclined plane railways are the
only companies in this connection that gain their author-
ity directly from the state. By statute, they are given the
right to cross public streets and highways, either over or
above such streets, in such a manner and at such a distance
above or below the same as not to obstruct the ordinary
use of the same.3 Such companies are authorized to con-
struct and operate inclined planes for passengers or freight,
and to hold, lease, or purchase and operate such portion of
any street railway leading to or connected with the inclined
plane as may be necessary for the convenient dispatch of
their business, upon the same terms and conditions on which
¹ Edison Gen. E. Co. v. Cincinnati, Goebel's Rep. 304.
* The provisions relating to franchises are often found in the statutes
under two main heads, viz., the chapters relating to municipalities and
the chapters relating to corporations; frequent repetitions are therefore
found, and in some cases contradictions and inconsistencies. These
have been pointed out and explained by note or otherwise where they
occur.
The privilege to use the streets, given to a company by a municipality,
sometimes spoken of by the courts as a "grant" (34 O. S. 194; 37 O.
S. 556), sometimes as a permission" (4 W. L. B. 1126, 1130), and some-
times as a "franchise" (18 O. S. 262; 38 O. S. 644).
3 Sec. 3445.
VOL. II-22
1626
ECONOMIC LEGISLATION.
they hold, maintain, and operate their inclined plane, but
no track can be constructed in any highway without
the written consent of a majority of the property-holders
on the proposed line, and no motive power can be used on
said streets except animals without the consent of the
board of public works in any city having such a board,
and of the common council or other public authority hav-
ing charge of or owning such highway or street.¹
4
From municipal authorities.—Water companies, gas com-
panies, telephone companies,3 natural gas companies in
certain cities, electric light and power companies, sewer-
age companies, and steam heat and power companies, may
use the streets, alleys, and public places in cities and
towns for laying the necessary pipes, wires, conduits, and
appliances by and with the consent of the proper munici-
pal authorities, and under such reasonable regulations as
they may prescribe; and, in the case of natural gas com-
¹ 74 Laws, 66; Sec. 3444. The Cincinnati Inclined Plane Railway Com-
pany having constructed its elevated track over certain streets, and hav-
ing leased certain street railways in accordance with the powers given by
the statute, claims that it is a steam railroad and not subject, either as
to its incline or leased street railway lines, to the general provisions
of the statute governing street railways; that its right to operate is per-
petual, and that a renewal by the city of the grant to its lessor is
unnecessary. A suit has been brought by the city, which will test
these questions.
2 See also under "BY PROBATE COURT," below.
3 88 Laws, 296.
* In 1885, section 3561a was passed, providing that the provisions of
the statutes relating to gas companies, so far as applicable, should ap-
•ply to cities of the second class, third grade, having a population in
1880 of not more than 16,000 (Sandusky, Hamilton, Portsmouth).
5 See under "POWERS OF MUNICIPALITIES." Secs. 3561a, 3550, 3871,
8752; S. & B. [8035-233]; 9219; S. & B. [8227-1].
On March 25, 1880, the legislature passed an act authorizing munici-
palities to grant the use of the streets to lay pipes for heat and power
companies. (Sec. 9219; S. & B. 8227-1.) In January prior the council
of Cincinnati, by ordinance, authorized the use of the streets for this
purpose according to the "Holly System of Steam Heating in Cities."
The act of March validated the ordinance, and the supreme court sus-
tained its constitutionality. (Kumler v. Silsbee, 38 O. S. 445.) Nothing
has ever been done under this act or the ordinance of the city.
Prior to the passage of section 8752 (S. & B. 8035–233) in 1886, there was
OHIO.
1627
.
panies, with the written assent of a majority of abutting
land-owners.¹
2
Street railway companies, also, upon application in
writing to the city council, may obtain a grant or right to
lay their tracks, etc., in the streets of a municipality; this
grant can only be made by ordinance, which must prescribe
the terms and conditions upon which and the manner in
which the road is to be constructed and operated and the
streets and alleys to be used and occupied ; this ordinance
can not be passed until due notice has been made by pub-
lication for three consecutive weeks, and the grant can
only be made to the person or corporation agreeing to
carry passengers at the lowest rate of fare, and upon the
written consent of a majority in feet front of the property-
holders on each street or part of street on the line of the
proposed road.³ Council can not act upon such ordinance
except upon the recommendation of the board of public.
works or the board of improvements in municipalities
having such boards, and all ordinances granting a fran-
chise or creating a right require the approval of the
mayor, but preliminary ordinances designating a route.
and ordering the clerk to advertise for proposals do not re-
quire such approval, as they do not create a right or grant
a franchise. Street railways with single or double tracks,
etc., may be constructed or extended within or without, or
partly within and partly without, any municipal corpora-
tion or unincorporated village. The right to construct or
extend a street railway within or beyond the limits of a
3
no provision which expressly or by fair implication gave a municipal
corporation power to grant to an electric light company the right to erect
and maintain, in the streets, poles and appurtenances to furnish electric
light. (Brush Elec. L. Co. v. Jones Bros. Elec. Co., 5 O. C. C. 340.)
1
¹ Sec. 3561a.
2 Sec. 2501.
³ Sec. 2502. The provisions of this section as to publication of notice,
competitive bidding, and consent of property owners do not apply to a
renewal of the grant. (State ex rel. Hadden v. R. R. Co., 6 O. C. C. 318;
affirmed by supreme court without report, 27 W. L. B. 64.) See note 1,
p. 1631.
* State v. Henderson, 38 O. S. 645.
i
1628
ECONOMIC LEGISLATION.
•
J
municipal corporation can only be granted by council or
ordinance, and the right to construct within or without an
unincorporated village can be granted only by the county
commissioners by order entered on their journal.¹ Ex-
isting routes may be extended by the proper municipal
authorities upon complying with the same requirements
and conditions as an original route.²
By the probate court.-Telegraph, telephone, and electric
light and power companies are authorized to construct
their lines and necessary appliances along and upon any
public road and across any waters within the state, but
must not incommode the public in the use of the road or
endanger or injuriously interrupt the navigation of such
waters, and these powers are not to be so construed as to
authorize the construction of any bridge across any of the
waters of the state. If the lands authorized to be appro-
priated to the use of the company are subject to the ease-
ment of a street or other public use, the mode of use by
such company must be agreed upon between the municipal
authorities and the company; if they can not agree or the
municipal authorities delay unreasonably, the probate
court, in proceedings instituted for that purpose, must
direct in what mode such line shall be constructed along
such street or alley.3
¹ Secs. 3437, 3438.
2 Secs. 3437, 3439. Where part of a street car route is over unimproved
streets, the title to which is not yet in the city, the city may allow a
temporary track on streets not in the route, around such unimproved
streets, and without consents of abutting proprietors, this not being a
grant, but a rovocable license. (Mathers v. Cincinnati, 3 W. L. B. 709.)
A street railway company chartered in another state can not acquire
the right to run cars in Ohio by a license from an Ohio company to use
its tracks. (City v. St. Ry., 2 W. L. B. 17.)
An application to council for leave to construct a street railway may
designate a portion of the proposed route in the alternative. The grant
is not necessarily invalid by reason of its covering only a part of the
route specified in the original application. (Simmons v. Toledo, 5 O. C.
C. 124.)
³ Secs. 3454, 3461, 3471, 3471a, 8746; S. & B. [8035-227]. See p. 1599.
The power to erect necessary fixtures, etc., does not restrict the com-
OHIO.
1629
!
Powers of municipalities.-All municipal corpora-
tions are organized under general laws in accordance with
the provisions of the constitution,' and their powers and
duties defined and prescribed.
Classification of municipalities.'-Municipal corporations.
pany to an overhead system or exclude underground systems of electric
lighting. (Edison Gen. Electric Company v. Cincinnati, Goebel's Pro-
bate Reports, 304.) In this case the city filed a petition in error, which
was dismissed because not filed within the time provided by law; the
attorney-general of the state was then requested to bring quo warranto
proceedings to show cause why the company should not be ousted from
the privileges it was exercising of laying conduits for wires, but he re-
fused to act. The court of common pleas of Hamilton county in an un-
reported case recently held the decree of the probate court in this case
was not invalid for want of jurisdiction.
1
Const., Art. XIII. The provisions of the constitution require all
corporate powers to be granted by general laws. The legislature has,
however, divided municipal corporations into various grades and classes
according to population, and the supreme court has repeatedly held
this classification to be valid, and that laws applying to all municipal
corporations of a certain grade and class are general laws. (Marmet v.
State, 45 O. S. 66; State v. Hudson, 44 O. S. 137; State v. Covington, 29
O. S. 102; State v. Mitchell, 31 O. S. 592; State v. Brewster, 39 O. S.
653.) If the statute applies only to a particular city of its grade and class,
by reason of its provisions, and can not be adapted to any other city
in the same grade and class, it is special and not general, and is in-
valid if it confers corporate powers. (Reemlin v. Smith, 25 W. L. B. 138.)
A statute providing for classification according to population does not
forbid other classifications by the same act, which confers corporate
power provided such classification be just and reasonable and not ar-
bitrary. (Bronson . Oberlin, 41 O. S. 476; Marmet ». State, 45 O. S. 67.)
But an act which confers corporate power on cities having, at the last
federal census, a certain population and no more, when there is only
one such city, does not create a class and is invalid, as it is special and not
general. (State v. Anderson, 44 O. S. 247; State v. Schwab, 27 W. L. B. 159.)
A mode of legislation now commonly adopted, and which is supposed
to escape the effect of the decision in State v. Anderson, supra, is to
make an act apply to municipal corporations which had at the last, or
shall have at any subsequent federal census, a certain number of in-
habitants, or not more than a certain number, and not less than a cer-
tain number.
In Slane v. Norwood, decided by the supreme court in June, 1891,
but not reported, a decision of the circuit court was affirmed
which held valid a classification of villages into those situated in coun-
1630
ECONOMIC LEGISLATION.
are divided, according to population, into cities of the first
and second classes, and villages of the first and second
classes, and hamlets; cities of the various classes are further
divided into first, second, third, and fourth grades; cities
must have a population of at least 5,000; villages of not
less than 200; and hamlets must have not less than 50
electors; but a hamlet upon an island may be organized
without reference to the number of permanent inhabit-
ants.¹ For the most part this discussion is confined to
cities and the larger villages, but, so far as applicable, the
provisions affecting all municipalities will be considered.
Powers.-All municipalities are bodies corporate, and
may sue and be sued, contract and be contracted with, ac-
quire, hold and possess, and dispose of property subject to
any special statutory provisions. These general powers are,
however, seldom relied upon to sustain grants of fran-
chises or privileges to corporations.
2
The trustees of hamlets are given exclusive control
and jurisdiction over the streets, alleys, and sewers, and
may, by ordinance, provide generally for the comfort,
convenience, health, and prosperity of the inhabitants.3
The councils of cities and villages may provide by ordi-
nance generally for a supply of water, to light the streets,
alleys, etc., and to provide for the laying down of gas pipes,
and to regulate all structures within the corporate limits."
As shown above, the use of the streets and public places
ties containing a city of the first grade of the first class, and those not
so situated, the subject-matter of the act being the construction of side-
walks. But a classification of villages situated in such counties into
those which had acted under certain statutes and those which had not
so acted was held invalid. (Costello v. Wyoming, 27 W. L. B. 263.)
Owing to legislation of this character, the powers conferred upon mu-
nicipal corporations are not the same as to all such corporations, and
before determining the law in any special case, the statutes must be ex-
amined with reference to the grade and class and population, and often
with reference to other characteristics of the particular municipality.
The method of legislation just explained is largely used in bringing
about municipal ownership of these various works, such as natural gas
works, electric light works, etc.
¹Sec. 1546 et seq.; sec. 1553. 2Sec. 1552. 3 Secs. 1651, 1653. Sec. 1692.
OHIO.
1631
!
of a city or village is usually made to depend directly upon
the authorization of the municipal authorities. In cities
of the first class, first grade, every ordinance, or order
granting a franchise or creating a right, must be passed by
a majority of the board of legislation and approved by the
mayor, unless passed over his veto by a four-fifths vote
of said board. In other municipalities, ordinances, reso-
lutions, and contracts require the concurrence of a ma-
jority of all the members elected to council, and in all
municipalities no contract, agreement, or obligation can
be entered into except by ordinance or resolution.2
1
As to street railways.—The council or county commis-
sioners respectively have power to fix the terms and con-
ditions upon which street railways may be constructed and
operated.³
¹ Sec. 1655a; S8 Laws, 222. By a recent act, a new form of municipal
government is provided for cities of the first grade of the first class (Cin-
cinnati). The act is not very clear as to the details of the powers vested
in the new boards, but it may be said generally that the powers of the
former council are vested in a board called the board of legislation, and
that a board called the board of administration is vested with the powers
and required to perform most of the duties theretofore conferred upon or
required of the board of public improvements. (88 Laws, 222, sec. 1655a.)
Grants of the use of streets, or renewals of such grants, and permission
to open streets, formerly required the recommendation of the board of
public affairs (later the board of public improvements), and ordinances
granting any franchise or creating any right required the approval of
said board. (Secs. 2227, 2231.)
In these respects the new board of administration does not succeed
to the powers or duties of the board of public improvements.
The name of the administrative board of such cities has been fre-
quently changed, having been sometimes called "board of city
affairs," sometimes "board of public affairs," sometimes "board
of public works," and sometimes "board of public improvements."
These changes have accompanied the legislating a board out of
office for political reasons, and the substitution of another board with
practically the same powers, but a different name. In reading the de-
cisions of the courts relative to grants of franchises, these facts should
be borne in mind to avoid confusion arising from the names of the boards.
2 Sec. 1693.
3 Sec. 3443. In the larger cities, at least, it is the custom for council
1632
ECONOMIC LEGISLATION.
If the route is along a public road owned by a person
or company or within the control or management of the
board of public works or other public officer, such person,
company or officer may agree with the grantee of the
route as to the terms and conditions upon which the road
may be occupied¹ or the property may be appropriated.2
The council of any city or village may grant permission
by ordinance to any company or individual owning or
having the right to construct a street railway to extend
the track on any street where council may deem such ex-
tension beneficial to the public, and such extension is sub-
ject to the same conditions as original routes as to con-
sents of property owners, etc.³
The exercise in good faith by council of the discretion
vested in it to grant permission to extend the track of a
street railway will not be interfered with by the courts,
and such extension may be beyond the termini named in
the certificate of incorporation of the company; the act
conferring such an extension is not an act conferring cor-
porate powers, but is merely a permit to the company to
exercise corporate powers conferred by general law.*
to adopt a general street railway ordinance providing in addition to the
statutory requirements, the manner of constructing and operating, the
compensation to be paid to the city, the regulations as to running
cars, etc.; and all grants are made subject to the provisions of this gen-
eral ordinance.
¹ Sec. 3441.
2 Sec. 3440. A private owner over whose property a route has been
established may, by active participation in establishing the route and
bidding for the right to construct the road, be estopped from denying
that his property is dedicated for the purpose; under such circum-
stances, the fact that the route passes through such private property
does not prevent competitive bidding and the grant is not invalid.
(Harrison v. St. Ry., 17 W. L. B. 265.)
3 Secs. 2505, 3438. But consents of property owners on part already
built are not necessary. (St. Ry. v. St. Ry., 10 W. L. B. 72.)
* Simms v. St. Ry., 37 O. S. 556. Council may designate two or more
streets in which it is declared to be beneficial to the public to have an ex-
tension located, leaving to the company the choice of the various routes so
designated; this is not a delegation of the discretion of council; pro
OHIO.
1633
Subways for electric wires.-Cities of the first grade, first
class, have power to grant permission to construct subways
and conduits for electric wires for light, power, etc.,¹ and
for telegraph and telephone wires.2
Gas companies.-A gas company in any city or village
and natural gas companies in certain cities³ are given
power to extend their pipes to any point in the vicinity of
the city or village outside of the corporate limits; but the
right of way must be obtained from the corporate or other
authorities or from the person having control of the places
to be affected by such extension.*
Council may at any time require gas companies to lay
pipes and light any street, alley, or public place.
Limitations as to grants.-The grant to sewerage
companies may be upon such terms, conditions, and lim-
itations as may be deemed expedient; security for faithful
performance of the same may be required; and no grant
or privilege can be given that will interfere with the
rights of any other corporation or person. Natural gas
companies in certain cities 3 and street railway companies,
as has been shown above, must obtain the consents of a
majority of the abutting property holders in addition to
the authorization and grant from the municipality.7
Consents to the construction of a street railway inure to
the benefit of the lowest bidder; they need not in terms
be given to the lowest bidder; it matters not by whom
longation of an existing track is an extension, no matter in what direc-
tion it is made; it need not be in a straight line; "extension means
increase of the system rather than prolongation of the line; advertise-
ment of the application for an extension is not necessary. (Sommers v.
Cincinnati, 8 Am. Law Rec. 612.)
An extension is valid although necessitating the use of a track already
built by another company, and a grant of one extension does not ex-
haust the power of council and prevent a grant of another and further
extension. (St. Ry. v. St. Ry., 10 W. L. B. 72.)
1
¹ 88 Laws, 390.
³ See note 4, p. 1626.
6 Sec. 3871.
2 88 Laws, 296.
4
* Secs. 3552, 3561a.
5 Sec. 2480.
Secs. 3561a, 2502, 3438; see
HOW OBTAINED."
1634
ECONOMIC LEGISLATION.
they are obtained or to whom given; they are regarded as
assents to the construction and operation of the road in
the designated streets. Consents to a single track can
not be counted as consents to a double track.2 The con-
sent of a majority of the feet front abutting on a street
along which it is proposed to construct or extend a street
railway must be had whether the grant be made by coun-
cil or by the county commissioners.3
It is required that council shall grant the right of con-
structing and operating street railways to the person or
company offering to carry passengers at the lowest rates
of fare; council can not make the grant to one bid-
¹ State v. Bell, 34 O. S. 194; Knorr v. Miller, 25 W. L. B. 128; s. c. 5 0.
C. C. 609; 27 W. L. B. 64. Power to consent can not be delegated and
can only be given by one holding at least a freehold estate. (Rapp v.
St. Ry., 12 W. L. B. 119.)
A written consent by an unauthorized stranger, though afterward rat-
ified by the owner after the passage of the ordinance, can not be counted
as a written consent. (Sommers v. Cincinnati, 8 Am. Law Rec. 612.)
A tax-payer not owning property on the proposed street car line is not
entitled to object because the consents are wanting. (Sommers . Cin-
cinnati, 8 Am. Law Rec. 612; Harrison v. St. Ry., 17 W. L. B. 265; Sim-
mons v. Toledo, 5 O. C. C. 124.) Property owners on the line are en-
titled to an injunction against a grant when the requisite consents have
not been given. (Roberts v. Easton, 19 O. S. 78.) The action of council
in making the grant is not conclusive of the fact that the majority have
given their consents (Ib.), but it will not be presumed that council
acted without the consents if its proceedings purport to be predicated
upon them. (College v. Nesmith, 2 Cin. Sup. Ct. Rep. 24.)
2 Roberts v. Easton, 19 O. S. 78.
3 Sec. 3439. By special proviso, the provisions requiring ordinances
and proposals for the construction of street railways to be submitted or
recommended by the board of public works or board of improvements,
notice of the application by advertisement, the grant to be made to the
lowest bidder, and the written consent of a majority in feet front of the
abutting property holders, the limitation of the grant to a term of
twenty-five years, forbidding the release of a grantee from his obliga-
tions under said grant, providing as to extensions and grants by councils
and county commissioners, forbidding the use and occupancy of existing
lines for a distance greater than one-eighth of the contemplated route,
etc., are not to apply to any county containing a city of the second grade,
second class (Montgomery county). (Sec. 3439.)
* Sec. 2502. A grant to one whom council has in good faith found to
OHIO,
1635
ding "the lowest price for commutation tickets in pack-
ages."
1
Gas, natural gas in certain cities, water or electric light
companies can not go into operation in any city where
such a company has already been formed until the question
of authorizing such operation has been submitted to the
qualified voters of such city or village and authorized by
ordinance.2
3
Control of streets.-In cities and villages, council has
general care and control of the streets, and in hamlets
exclusive jurisdiction is given to the trustees.*
5
Special damages; property owners' rights. Provis-
ion is made by statute for the appraisement of any dam-
age suffered by any person over whose lands the lines of
electric telegraph shall pass, and, as will be seen below,
ample provision for the condemnation of private property,
when necessary, is made.
6
As to the special damages that a property owner may
suffer because of the use of the streets by franchise com-
panies, the rulings of the courts are for the most part
those of the inferior courts. It was held by the circuit
court for the seventh district, that the construction and
maintenance of a telegraph or telephone line upon the
highway is a new and additional burden upon the fee, to
which when the highway was established it was not con-
templated it should be subjected, and for which the owner
is entitled to additional compensation. The circuit court
be the lowest bidder will not be held invalid on the ground that his bid
was not in fact the lowest bid, without clear proof that council erred in
such finding. (Simmons v. Toledo, 5 O. C. C. 124.)
¹ St. Ry. v. Smith, 29 O. S. 291. 2 Secs. 3551, 3561a, 2491; note 4, p. 1626.
³ Sec. 2640.
'Sec. 1651.
5 See also under "CONDEMNATION OF PROPERTY."
• Sec. 8747; S. & B. [8035-228].
7 Smith v. Tel. Co., 2 O. C. C. 259.
was in this case found to be in the
Although the fee in the highway
abutting land-owner, and an ease-
ment only in the public, the language used is broad enough to cover a
case where the fee is in the public.
1636
ECONOMIC LEGISLATION.
2
of the first district has held that an abutter upon a street
can not enjoin the erection of poles for electric street rail-
ways; that it is not an additional burden upon the land;
that the use of cars drawn by horses, or rails permanently
placed in the roadway, is not an unlawful or improper
change of the use of a highway, and does not impose an
additional burden upon the adjacent land, and that the
use of the highway in substantially the same way but with
different motive power, does not alter the case.¹ A cable
railway is not an additional burden on the street. The
common pleas court of Hamilton county has held that the
erection of an electric light pole on the edge of the side-
walk in front of plaintiff's premises, without his consent,
and without compensation to him, is unlawful, and may
be enjoined ; and it makes no difference whether the fee
in the street is vested in the city or not.* The construc-
tion and operation of a street railway in a street is not
such a new use of the street as will entitle an abutting
property-owner to damages unless some special or particu-
lar injury is thereby done to him. If the line is to be so
constructed as to be an obstruction to the convenient ac-
cess to the abutting property, it may be enjoined until the
consent of the owner is obtained, or his interest in the
highway is otherwise obtained."
Condemnation of property.-The constitution pro-
vides that no right of way shall be appropriated to the
use of any corporation until full compensation has been
made or secured by a deposit of money, to the owner, ir-
respective of benefits; and that the compensation shall be
¹ St. Ry. v. Winslow, 3 O. C. C. 425; Pelton v. R. R. Co., 22 W. L. B. 67.
2 Harrison v. St. Ry., 17 W. L. B. 265.
3 McLean v. Brush E. L. Co., 9 W. L. B. 65.
St. Ry. v. Lawrence, 38 O. S. 41; McLean v. Brush E. L. Co., 9 W. L.
B. 65.
5 St. Ry. v. Cumminsville, 14 O. S. 523; St. Ry. v. Winslow, 3 O. C..
C. 427.
OHIO.
1637
determined by a jury of twelve men.' The power of emi-
nent domain is not conferred by these provisions of the
constitution, they simply prescribe the mode for and the
limitations upon its exercise; the power is an inseparable
incident of sovereignty, and its exercise is conferred upon
the general assembly in the general grant of legislative
authority; the power vests upon public necessity, and can
only be exercised when such necessity exists; this neces-
sity relates rather to the nature of the property and the
uses to which it is to be applied than to the exigencies of
the particular case. The power of eminent domain can
only be delegated to a corporation by statute; it should
not be taken to be so delegated by doubtful implication,*
and being in derogation of private right it must be strictly
construed.5
6
2
Appropriation of property by authorized corporations
can only be made when the corporation is unable to agree
with the owner, guardian, or trustee, as to the compensa-
tion to be paid, or when the owner is incapable of con-
tracting in person or by agent, and has no guardian or
trustee, or is unknown, or his residence is unknown or be-
yond the state. Before impaneling a jury to assess the
damages, the court must hear and determine the questions
of the existence of the corporation, its right to make the
appropriation, its inability to agree with the owner, and
the necessity for the appropriation. Upon these questions
the burden of proof is upon the corporation, and any in-
terested person must be heard. If such corporation takes
possession or occupies any property without an agreement
¹ Const., Art. I, sec. 19; Art. XIII, sec. 5.
² Giesy v. R. R. Co., 4 O. S. 308.
3 Platt v. Pa. Co., 43 O. S. 228, and 47 O. S. 366.
+ Bowersox v. Watson, 20 O. S. 496, 508.
5 Currier v. R. R. Co., 11 0. S. 228; R. R. Co. v. Daniels, 16 O. S. 396;
Miami Coal Co. v. Wigton, 19 O. S. 560.
6 Sec. 6415.
Sec. 6420. The right of the plaintiff to make the appropriation is
1
1638
ECONOMIC LEGISLATION.
in writing with the owner, or without appropriating and
paying for the same, it may be restrained from such use
and occupancy, or required to proceed to appropriate the
same according to law.¹
2
Land appropriated to a particular public use may be
condemned for another public use, but the subsequent
grant can not be construed to authorize the destruction or
subversion of the former use, unless such appears by ex-
press words, or by necessary implication, to be the legis-
lative intent. But land held by a corporation, whether
acquired by purchase or appropriation, which is not em-
ployed in nor needed for the proper exercise of its corpo-
rate franchises, is not within the reason or operation of
this rule. Municipal corporations may appropriate for
necessary public offices, or a prison, land of a railroad
company which is not needed or used in the operation of
its road or the conduct of its business.3 Where an ease-
ment and not a fee is taken in more land than is necessary
for the use, the land-owner can not be subjected without
compensation to the occupancy and burden upon the sur-
plus of another corporation holding under an attempted
grant in perpetuity from the first corporation.*
As the right of appropriating property can only be dele-
gated by statute, and as there is no general provision con-
ferring this right on all corporations, it is necessary,
in
order to ascertain whether a particular corporation has
shown by establishing that the appropriation is for a public and not
merely a private purpose. (Toledo Elec. Ry. Co. v. Ry. Co., Lucas Co.
Probate Court, 26 W. L. B. 172.)
The inability of the parties to agree as to the compensation is estab-
lished by proof of bona fide attempts to reach a settlement, and not
merely colorable formal efforts; no special or set form of words is nec-
essary, and acts showing a desire and effort to agree may be as convinc-
ing as speech itself. (Ib.)
1 Sec. 6448.
2 R. R. Co. v. Dayton, 23 O. S. 510.
3 R. R. Co. v. Belle Centre, 25 W. L. B. 298.
* Platt v. Pa. Co., 43 O. S. 228, and 47 O. S. 366.
!
OHIO.
1639
this power, to examine the statutes relating to the class of
corporations to which the one in question belongs, and if
the power is not conferred by such acts it does not exist
in the corporation.
No provision is made by general law for the appropri-
ation of property of any kind by gas companies, water
companies, or steam heat and power companies.
1
Telegraph, telephone, and electric light and power com-
panies 2 are authorized to enter upon any land whether
held by an individual or a corporation, and whether ac-
quired by purchase, appropriation, or by any provision of
its charter, for the purpose of making preliminary exam-
inations and surveys, with a view to the location and
erection of its lines, and such companies may appropriate
so much thereof as may be deemed necessary for the
erection and maintenance of its poles, wires, etc., and for
stations, and the rights of way over such lands and ad-
jacent land sufficient to enable it to construct and repair
its lines, but may not, without the written consent of the
owner, enter a building or edifice, or use or appropriate
any part thereof, nor erect any pole, pier, etc., in any yard
or inclosure within which an edifice is situate, nor in cases
not provided for by the agreement of municipal authorities
or the decree of the probate court (see "How OBTAINED ")
erect any pole, pier, or wire, etc., so near to any edifice as
to occasion injury thereto, or risk of injury in case such
pole, pier, etc., be thrown down, nor injure or destroy any
fruit or ornamental tree. When the land sought to be
appropriated for such purposes is held by a corporation
incorporated under any law of Ohio, whether held by
purchase or in virtue of any appropriation authorized,
the right of the company to appropriate such land is
4
¹ In State v. Salem Water Co., 5 O. C. C. 58, it was expressly held that
companies incorporated to construct water-works and to supply water
can not appropriate land for a right of way for pipes, and that such
companies have no power of eminent domain.
2 Secs. 3471, 3471a; see p. 1599.
4
³ Sec. 3456.
* Sec. 3457.
1640
ECONOMIC LEGISLATION.
limited to such use of the same as will not, in any material
degree, interfere with the practical uses to which the com-
pany is authorized to put such lands, and no such com-
pany is permitted to erect poles, piers, etc., in such close
proximity to any other authorized line as to interfere me-
chanically with the practical working of the same.' If, at
any time, a corporation, upon whose property such fix-
tures have been erected under these provisions, has occa-
sion to use the land for any authorized purpose, such fix-
tures must be removed to such convenient place as may
be designated by the corporation requiring the use of the
ground, upon reasonable notice in writing, and be there
erected so as not to interfere with the practical uses to
which said corporation is authorized to put such land;
and if it is impracticable to erect said poles, etc., upon
such lands in consequence of the uses to which the cor-
poration puts the land, adjoining lands may be appro-
priated.2 In the case of railroad lands, the rights of these
companies to use such lands for the permanent structures,
etc., is limited to the land which lies within five feet of
the outer limits of the right of way of the railroad com-
pany, where it is practicable to erect the line within those
limits; when the company seeks to appropriate lands that
lie beyond those limits, its petition must set forth the
facts showing that it is impracticable to erect such line
within said limits, and must designate either by survey
and map, or by reference to monuments, or by other
means of easy identification, the place or places where
the company seeks to establish the line; the probate court
must, in all cases, determine, if it be controverted by the
railroad company, whether the erection of the line at the
place or places designated will, in any material degree, in-
terfere with the practical uses to which said railroad com-
pany is authorized to put such land; and if the court is
satisfied that it will interfere, it must reject the petition,
1 Sec. 3458.
2 Sec. 3468.
OHIO.
1641
or require the structure to be erected at such other place
or places as the court may direct; but this power of ap-
propriation can not be so construed as to authorize any
company to appropriate the use of the track or rolling
stock of any railroad company for the purpose of trans-
porting poles, materials, or employes, or for any other
purpose whatever.¹
The grantee of a street railway route may appropriate
any property necessary therefor, when the owner fails ex-
pressly to waive his claim for damages by reason of the
construction and operation of the railway; and in any city
of the first class, third grade (Toledo), a person or com-
pany authorized to construct and operate, and which has
constructed and is operating a street railway, may appro-
priate any property necessary for the purpose of occupy-
ing and using any existing street railway tracks under the
provisions and limitations as to use of tracks of another
company given below. Compensation for the appropria-
tion of a street or avenue must be irrespective of any bene-
fit from the improvement, and should include not only
damages accruing by reason of the appropriation of the
¹ Sec. 3459.
2 Sec. 3440, as amended 87 Laws, 178.
The necessity for the appropriation by one street railway company of
the joint and equal use with another company of street railway tracks
laid in a public street in Toledo by the other street railway company,
can not be defeated by proof that no physical impossibility exists to
prevent the plaintiff company from operating a slightly different route.
The discretion conferred upon council to first pass upon the necessity
and need for a street railway is not to be disregarded by the court.
Seniority of rights in a street confers no priority of right, and a junior
street railway company is entitled to take a joint and equal use of the
tracks with a senior company.
Proof of a street being a business center where the people largely
seek to go, will establish the necessity for such appropriation. And the
people of one portion of the city will not be given a greater opportunity
to go there by street railway than those of another portion.
The police powers of the city are ample to regulate the joint use of
the tracks by the different companies. (Lucas County Probate Court.
Toledo Electric Ry. Co. v. Ry. Co., 26 W. L. B. 172.)
VOL. II-23
1642
ECONOMIC LEGISLATION.
street, but also any diminution in the value of the abut-
ting lot in consequence of the appropriation. The jury
must determine the amount of compensation or damages
without reference to the distinction between a public and
private nuisance, and the consequent rights of the abut-
ting property owner to claim compensation, and if so re-
quested, the court must so direct the jury.' The property
of a railroad company in its tracks is subject to be taken
for a like public use in common upon compensation being
first made; this must be assessed by a jury as in other cases
of condemnation of private property to public uses,
but where the original grant was made subject to such
terms and conditions as council might thereafter prescribe,
the council has the right to prescribe a reasonable com-
pensation, and without proof that it is inadequate, the use
of the track by a second company will not be enjoined;
but no authority can be given to occupy the tracks or
other structure of any existing street railway for more
than one-eighth of the entire distance between the termini
of the route, as actually constructed, operated, and run
over, of the company or individuals to whom such grant
is made, except in granting permission to extend existing
routes in cities of the first class, first, second, and third
grades (Cincinnati, Cleveland, Toledo), such cities and
the companies owning such routes have the same rights
and powers as they had under the former laws and con-
tracts, and no extension of any street railway located
wholly without such city, or of any street railway wherever
located which has been or shall be built in pursuance of
a right obtained from any source or authority other than
municipal coporations, can be made within the limits of
such city, except as a new route, and subject to the pro-
visions of the statutes relating to the establishment of new
routes.3
¹ Sec. 3442.
2 R. R. Co. v. R. R. Co., 36 O. S. 239.
3 Sec. 3438. In the case of St. Ry. v. St. Ry., 10 W. L. B. 72, prior
to the adoption of this provision, it was held that when a renewal of a
2
OHIO.
1643
Duration of franchise; renewal of.-No grant or re-
newal of a grant for the construction and operation of a
street railway is valid for a longer period than twenty-five
grant was accepted with a condition that the city might grant the right
to use the track to any other company on such terms as the council may
deem equitable, and the city had granted such right and prescribed the
terms, the court would not interfere if they were reasonable; the com-
pany can not object because a part of its business will be taken away.
The history of the proviso as to the occupancy of the routes of other
companies is of interest. In 1859, the council of the city of Cincinnati
adopted a general street railway ordinance, subject to the provisions of
which a number of routes were established and grants made. This or-
dinance reserved to the council the right to grant to a second or third
company or individual the right to occupy any track already laid down
to the extent of one-tenth of the whole route. (Coppock & Herten-
stein's Cincinnati Ordinances, pp. 517, 520.) Another general ordi-
nance, passed in 1879, reserved to council the right to permit other
street railways to run over one-tenth of the route of any street railway
constructed or operated under the provisions of the ordinance. (C. &
H. Cincinnati Ordinances, pp. 528, 533.) Most of the street railway
companies in Cincinnati entered into a consolidation, after which, while
the routes remained separate as originally established, they were op-
erated by the consolidated company. From time to time, new routes
were taken into the consolidation. Subsequently a practice grew up of
"raiding" the consolidated company, by means of what were sometimes
called “grasshopper routes." Some company or individual would apply
to council for the establishment of a new route which would begin some-
where on the outskirts of the city and proceed by the nearest route to some
street where it would meet the track of one of the existing routes in the
consolidation, run along that track to the extent desired not in excess of
one-tenth of the track of that route, then leave it, cross by some unoc-
cupied street to the track of another existing route, run along that track
in like manner and again crossing to the track of a third existing route,
and so on until it reached the center of the city. Sometimes the same
result would be reached by the extension in this fashion of a street rail-
way lying outside the city limits and operated under permission of
county authority or by agreement with a turnpike company. By means
of specious arguments that the public good would be served by compe-
tition, and through other influences, such grants were not infrequently
made. Such "grasshopper routes" could be constructed with little ex-
pense, and it can readily be seen that, while each of the routes one-tenth
of the track of which the "grasshopper" used was
grasshopper" used was a separate route, yet
the injury was to the one company which operated all of these routes.
The result was that the consolidated company, to protect itself, was
1644
ECONOMIC LEGISLATION.
!
years from the date of the same, except in cities of the
second class, second grade, in which the grant or renewal
may be made for fifty years.' Cities of the first class, first
and second grades, and of the second class, second grade
(Cincinnati, Cleveland, Dayton), are given explicit power
to renew street railway grants, at their expiration, upon
such conditions as may be considered to the public in-
terest.2
Cities of the second class, fourth grade, are authorized
to contract for a supply of water for public purposes and
for supplying their citizens for a term not exceeding
twenty years.³ Municipalities generally are empowered to
contract for a water supply for public uses and for supply-
ing citizens for such a time as may be mutually agreed
upon.*
The franchise of sewerage companies may be for such a
term of years as may be deemed expedient, and if, at the
expiration of such grant, the municipality fail or refuse to
renew the grant, it must purchase the plant.5
forced to buy the "grasshopper" grant and bring the new route into the
consolidation. This abuse became so common, not. only in Cincinnati
but in other large cities, that application was made to the legislature for
relief, and the result was the passage of this provision as an amendment
to section 3438, the statutes theretofore being silent upon the subject.
¹ Sec. 2502, as amended, 88 Laws, 389. A grant or permission to ex-
tend a street car route for a period greater than twenty-five years is
valid to the extent of twenty-five years (Sommers v. Cincinnati, 8 Am.
Law Rec. 612). A city authorizing a change in motive power may also
extend the grant for a period of twenty-five years from the passage of
the new ordinance, although the grant has not yet expired (Clement v.
City, 16 W. L. B. 355). Competition is not required in case of the re-
newal of street railway grants, as in construction of a new road (Has-
kins v. Cin. Cons. St. Ry., 4 W. L. B. 1126); neither is the consent of
abutting lot owners (Pelton v. St. Ry., 22 W. L. B. 67 ; State ex rel. Had-
den v. R. R. Co., 6 O. C. C. 318).
2 Sec. 2501. Whenever in the opinion of the city council the public wel-
fare would be promoted thereby, it may, by agreement with the company,
terminate a grant previous to its expiration and renew the franchise for a
period not exceeding the limitation fixed by statute. (State ex rel. Had-
den v. R. R. Co., 6 O. C. C. 318; affirmed by supreme court, 27 W. L. B. 64.)
3 Sec. 9404; S. & B. [8417-27]. • Secs. 2434, 3551. 5 Secs. 3871, 3872.
OHIO.
1645
Conflicting grants. Where the legislature has power
to require one public easement to yield to another more
important, the intention to grant such power must appear
by express words or by necessary implication; and such
implication arises only when requisite to the enjoyment
of the powers expressly granted, and can be extended no
further than such necessity requires.'
When the probate court has acted under the provisions.
of the statute and directed the manner in which an elec-
tric light company shall construct its line, the court has
exercised what is practically a franchise granting power,
and the city can not afterward by ordinance grant to an-
other company the right to use the poles of the first com-
pany in any manner not in accordance with the terms of
the decree of the probate court making the grant to said
company.2
The statute as to sewerage companies expressly pro-
vides that franchises granted to such companies must not
interfere with the rights of any other corporation or
person.3
In the case of Railway Co. v. Telegraph Assoc., 48 0.
S. 390, the supreme court held that the dominant purpose
for which streets are opened is to facilitate public travel,
and that a franchise granted to a telephone company for
¹ Hickok v. Hine, 23 O. S. 523; State v. R. R. Co., 37 O. S. 177; Com-
missioners v. Board Public Works, 39 O. S. 634.
2 Hauss Elec. L. Co. v. Jones Bros. Elec. Co., 23 W. L. B. 137.
Where a license to erect poles to support wires for electric lighting
has been issued by a city board in a manner not in accordance with the
statutes, such license is invalid. But where such license was in fact is-
sued with the condition that but one line of poles should be permitted
on any one street or alley, and that where the same has been occupied
by the poles of one company, other like companies to whom a permit
should be granted to use the street should be allowed to string their
wires on the poles of the company first occupying the same, the first
company is not entitled to an injunction restraining other companies
so licensed from stringing wires on plaintiff's poles; nor has it the right
to claim that by their charters such companies were not authorized to
carry on such business. (Brush Elec. L. Co. v. Jones Bros. Elec. Co.,
5 O. C. C. 340.)
9 Sec. 3871.
1646
ECONOMIC LEGISLATION.
constructing and operating its lines upon such streets is
subordinate to the rights of the public in the streets, for
the purpose of travel. Prior use of the streets by the tel-
phone company did not give it a right paramount to the
easement of the public to adopt a new mode of travel on
the streets. If the use of electricity by a street railway
as motive power interferes with the use by the telephone
company of the earth as a "ground circuit" for its return
current, the telephone company can not enjoin the opera-
tion of the railway by electricity, but must re-adjust its
methods to meet the condition created by the introduction
of electro-motive power on the street railway.
See also under "CONDEMNATION OF PROPERTY."
Perpetual and exclusive franchises.-The power to
grant an exclusive right by ordinance in the nature of a
contract must be expressly granted or so far necessary to
the proper execution of the power already granted as to
be free from doubt.'
2
Council can not by ordinance, contract, or otherwise
grant the exclusive privilege of using the streets to convey
gas to the corporation or its citizens, and where a gas
company extends its lines to a village and uses the same
to convey to the village lamps gas manufactured by the
company outside of the village and uses its manufactory
and pipes as one plant, such village can not grant to such
company the exclusive franchise to furnish gas.³
The statute provides that no gas, natural gas in certain
cities, water, or electric light company can go into opera-
tion or contract with a municipality in which such a com-
pany has been already formed until after the question of
authorizing such operation has been submitted to the
qualified voters and authorized by ordinance.¹
Council has no power to grant to a street railway com-
pany the exclusive use of a street for street railway pur-
¹ State v. G. L. & C. Co., 18 O. S. 262.
3 Cin. G. L. & C. Co. v. Avondale, 43 0. S. 257.
4 Secs. 3551, 3561a, 2491; note 4, p. 1626.
2 Sec. 2485.
OHIO.
1647
poses; and such a grant may be enjoined in a suit brought
by the city solicitor in the name of a tax-payer.¹ An or-
dinance granting the right to construct and operate a
street railway through certain streets upon certain terms
and conditions therein expressed and subject to such other
terms and conditions as council might thereafter prescribe,
does not give an exclusive right to use the route upon
which the road is constructed, and council may afterward
grant to another company the right to use part of the
route already occupied upon payment of a reasonable sum
by the second company to the first.2 See also under" CoN-
DEMNATION OF PROPERTY," above.
It is provided by a recent statute that in cities of the first
class, first grade, but one company can be authorized
to construct and operate subways for electric wires (other
than telegraph and telephone wires). This limitation,
however, does not conflict with orders already made by
the probate court of any county containing a city of the
first class, first grade (Hamilton county) when investments
have been made on the faith thereof.3
Charges for franchises.-Nothing in the provisions
authorizing the probate court to grant terms upon which
telegraph, telephone, electric light and power companies
may occupy the streets, or granting the right to munici-
palities to agree upon terms, is to be construed to author-
ize such municipal corporation to demand or receive any
compensation for the use of a street, alley, etc., beyond
¹ Cin. St. Ry. v. Smith, 29 O. S. 291.
2 St. Ry. v. St. Ry., 36 O. S. 239. Where council has authorized one
street railway company to lay double tracks in a street and at the same
time authorized another company to lay a single track in the same
street, neither of the companies to have any priority over the other and
the tracks to be laid as near the center of the street as practicable, a
court has not the right to require the latter company to unite in the
building of but two tracks in the street for the joint use of both com-
panies. Where a company has the right to place a track in the center
of a street and has so placed the track, another company will be re-
strained from placing its track in the center of said street to the injury
of the former company, without its consent. (St. Ry. v. St. Ry., 5 O. C.
C. 319.)
3 SS Laws, 390, 391.
1648
ECONOMIC LEGISLATION.
what may be necessary to restore the pavement to its
former state of usefulness,' but a city may grant a right
of way through a park and receive a rent therefor.2
Street railway grants usually require the payment to the
city of a certain sum per lineal foot of each car run on
the route or a certain per cent of the gross earnings, or
both. This provision is made by the general ordinance or
in the ordinance making the grant. No grant to con-
struct subways and conduits for electric wires (other than
telegraph and telephone wires) can be made by a city of
the first grade and first class except to the highest bidder
or for a less compensation than one per cent annually of
the gross proceeds of the operation of such subways.³
1.
Methods of construction; materials; inspection.—It
is provided as to electric light and power companies that
all wires erected and operated must be covered with water-
proof insulation, and the piers, poles, wires, etc., must be
so located and arranged as not to interfere with the suc-
cessful operation of existing telegraph and telephone
lines. Where electric lines have been erected on the
lands of a corporation, if the corporation apprehend dan-
ger or risk of danger to its works or practical operations
in consequence of decay or defect in the mode of structure
of any of the works of such company, it may require the
electric company, upon five days' notice in writing, to re-
pair such decayed or defective works, or, if the danger is
imminent so as not to admit of delay, the corporation may,
without notice, repair the defect and recover the reasona-
ble expenses thereof, with costs of suit.5
In cities of the first class of the first grade (Cincinnati),
grantees of the right to construct subways for electric wires
are subject to reasonable regulations made by the board of
public improvements, or their successors in office, as to
the construction and operation of the subways.3
¹ Secs. 3461, 3471, 3471a.
3 88 Laws, 390.
5 Secs. 3469, 3471, 3471a.
2 Mathers v. St. Ry., 3 W. L. B. 551.
* Sec. 8752; S. & B. [8035–233].
OHIO.
1649
The grantee of the right to construct such subways for
electric wires must give bond in the sum of $250,000 to re-
store the streets and keep them in repair for five years,
and the board of public improvements is required to
make and enforce rules and regulations to secure the
construction of the subways in the most approved man-
ner. These provisions are not made in the case of sub-
ways for telegraph and telephone wires.2
Before any street railway is constructed in a street less.
than sixty feet wide with a roadway of thirty-five feet or
under, council must provide that the crown of the street be
made as nearly a flat uniform curve from curb to curb as
practicable, without ditch gutters, and in such a manner
as to give all wheeled vehicles the full use of the roadway
up to the face of the curb, after the plan of the streets in
Philadelphia and New York; and in any street, when-
ever the tracks of two street railways, or of a street rail-
way and a steam railroad, cross each other at a convenient
grade, the crossing must be made with crossing frogs of
the most approved pattern and materials, and kept up
and in repair at the joint expense of the companies own-
ing said tracks.3 Council may require any part or all of
the track between the rails within the corporate limits to
be paved with stone, gravel, bowlders, or Nicholson or
other wooden or asphalt pavement, as may be deemed
proper; but without the corporate limits, such paving
can not be required. In cities of the first class, second
grade (Cleveland), council may require the railway com-
pany to pave and keep in repair sixteen feet for a double
track or seven feet for a single track, the materials to be
the same as in the rest of the street.¹ A street railway
company, after due notice, may be required to pay the ex-
pense of making new pavement between its tracks where
the grant contains a condition that it shall make, con-
struct, and keep in repair that part of the street, and that
4
188 Laws, 390.
2 88 Laws, 296.
* Sec. 2504, as am. 87 Laws, 246.
3 Sec. 2503.
1650
ECONOMIC LEGISLATION.
upon failure so to do, the city may do the work at the ex-
pense of the company.'
See also under "CONDEMNATION OF PROPERTY."
A municipal corporation has the same power to protect
any private water supply and prevent the pollution thereof
as though the water-works were owned by it.2
Regulations as to service. The services of franchise
companies are largely regulated by municipal ordi-
nances and contracts.
As to price.-The council of any city or village in which
electric lighting companies, natural or artificial gas com-
panies, or gas light and coke companies may be estab-
lished, or into which their wires, mains, or pipes may be
conducted, has the power to regulate from time to time.
the price which said companies may charge for service
to the citizens or to the public. Where a gas company
extends its pipes to a village and uses such pipes to convey
to the village lamps gas manufactured by the company
outside the village, and uses its manufactory and pipes as
one plant, such company is established in such village
within the meaning of this provision of the statute regu-
lating the price of service. Council may fix the "mini-
mum price" at which gas must be furnished to the citi-
zens and to the public for a period not exceeding ten years,
and if the gas company assents thereto by written ac-
ceptance filed in the office of the clerk of the corporation,
council can not reduce the price during such period."
¹ City v. St. Ry., 45 O. S. 98.
4
2 Sec. 2434.
³ Sec. 2478. A gas company chartered before the adoption of the pres-
ent constitution is subject to the provisions of an ordinance regulating
the price of gas adopted by the council under section 2478, where the
right to fix its own prices is not expressly conferred by the terms of its
charter. (Zanesville v. Gas-Light Co., 47 O. S. 1.) But in a similar case,
not yet reported, the U. S. Circuit Court held that an ordinance fixing an
unreasonable price is invalid and that its enforcement may be enjoined.
(Cleveland Gas-Light Co. v. Cleveland.)
Cin. Gas Co. v. Avondale, 43 O. S. 257.
• Sec. 2479. This section applies to natural gas companies although
the words "natural gas" are not used in the section. (Toledo v. Gas Co.,
5 O. C. C. 557. An agreement between the city and a gas company that
regulations as to rates and prices should be such as might be agreed upon
OHIO.
1651
3
An agreement between the council and a gas company for
a supply of gas fixing the rates for a term of twenty years
is not binding after the expiration of ten years,' although
it may be for the first ten years.2 Council is not author-
ized to make a contract which for an indefinite period
leaves to other parties the regulation of the price to be
paid for gas. It is competent for the legislature to sub-
mit the regulation of the price of gas to the city coun-
cil; but where such power is so vested it must be exer-
cised in good faith, and if fraudulently exercised would
be void; in a proceeding in quo warranto for disobedience
of an ordinance the good faith of the members who
passed it may be inquired into. But in the absence of
facts showing fraud or bad faith on the part of council,
the inadequacy of the price is not subject to inquiry;
the presumption is in the favor of the good faith and
validity of the action of the council in passing an ordi-
nance fixing the price of gas.¹
1
4
Sewerage companies may prescribe the terms upon which
their sewers may be used by citizens, and also by the mu-
nicipality, and the rate of charge annually for such use."
Council may regulate by ordinance at intervals of five
5
by the city and gas company, although unlimited as to time, is valid and
binding for ten years; and during this period the city can not regulate
the price of gas under section 2478. If the company unreasonably re-
fuse to agree upon proper rates for gas for any portion of said term of
ten years, then a court of equity will administer appropriate relief. But
the company can not be compelled to agree to an unreasonable rate.
(Ib.) The charter of a gas company, the ordinances allowing it to
lay pipes in the streets, and the acceptance of the ordinance, do
not constitute a contract which limits the power of council to regulate
the price of gas. (State r. Gas Co., 3 0. C. C. 251.) A gas company
is not entitled to an injunction against the use of electric light, or any
other light than the company's gas, although the defendant, in consid-
eration of a reduced price for gas, had agreed to take all his gas from
the company for ten years and not to introduce other illumination, un-
less it appear that the company has no full and adequate relief in dam-
ages in an action at law. (Steineau ». Gas Co., 25 W. L. B. 329.)
Somers v. Cin., S Am. L. Rec. 612,
¹ State r. Gas Co., 37 O. S. 46.
³ Cin. Gas Co. v. Avondale, 43 O. S. 257.
State v. Cin. G. L. & C. Co., 18 O. S. 262.
5 Sec. 3874.
1652
ECONOMIC LEGISLATION.
years the price to be charged for heat and power by steam
heat and power companies.'
In cities of the first class, first grade, the board of pub-
lic improvements, or its successors in office, has power to
fix the rental to be charged by a subway company for the
use of the subway by electric companies, but the same
must be estimated upon a percentage based on the amount
invested in the construction, maintenance, and operation
of the subways.²
When any extension of a street railway line is made, the
charge for carrying passengers on any railway so extended,
and its connections with other roads by consolidation un-
der existing laws, can not be increased by reason of such
extension or consolidation.3 The statute provides further
that no increase of existing rates of fare can be made by
reason of any consolidation of street railways, that the
fare charged upon any of the separate routes so consoli-
dated must not be in excess of that charged prior to the
consolidation, and that the fare for one continuous ride
over all such consolidated lines must not exceed the max-
imum fare charged over any one of said lines prior to the
consolidation.^
As to quality and quantity.-Illuminating gas to be mer-
chantable must have a minimum value of not less than
twelve candles; that is, a burner consuming five cubic
feet per hour, must give a light, as measured by the pho-
tometer in ordinary use, of not less than twelve standard
sperm candles each consuming one hundred and twenty
grains per hour, and every gas meter must be tested with
the burner and under the pressure best adapted to it, and
the result calculated at a temperature of sixty degrees
Fahrenheit.5 The standard unit of measure for the sale
of illuminating gas by meter is fixed by statute, and is the
cubic foot containing 62.321 pounds avoirdupois weight
of distilled or rain water weighed in air of the temperature
of 62 degrees Fahrenheit, the barometer being at 29
¹ Sec. 9220; S. & B. [8227–2].
2 88 Laws, 390.
³ Sec. 2505. See note 3, p. 1661. 88 Laws, 493, sec. 2505a.
6 Sec. 3557.
OHIO.
1653
inches. All gas companies must provide a meter prover
of the kind described below, and also a photometer
for the comparison of the lights of gases and candles by
means of a disk.²
No gas-meter is to be set unless it has been tested by
a meter prover sealed and stamped,3 and any company au-
thorizing the setting of a meter or allowing it to be used
by a consumer of gas without being so sealed and stamped
is liable to a fine of $25 to $100. Meters in use must
be tested on request of the consumer, in his presence, if
desired, with a meter prover, the holder of which must
contain not less than five feet, and which has been tested,
stamped, and sealed in the office of the secretary of state;
if the meter is found correct, the consumer requesting the
inspection must pay a fee of twenty-five cents, and the
expense of removing the meter for the purpose of being
tested, and the reinspection must be stamped on the meter;
if found incorrect, no fees or expenses are to be paid by
the consumer, and the company must furnish a new meter
without charge. Gas companies are forbidden to charge
rent for meters, but by another provision of the stat-
ute the councils of cities and villages are authorized to
regulate the charges for rent of meters by electric light
companies, natural or artificial gas companies, or gas
light or coke companies.5
3
Agents of the company may enter the premises lighted
by the company's gas to examine or remove meters, and
to ascertain the quantity of gas consumed or supplied; if
hindered or prevented, the agent may procure a warrant
from a justice of the peace directing a constable to enter
the premises with the agent of the company. If a con-
sumer refuse or neglect to pay for gas supplied to him, the
company may cut off the supply, and may, after twenty-
four hours' notice, remove the meter and gas-pipes; but a
gas company has not the right to refuse to furnish gas
¹ Sec. 3553. 2 Sec. 3561, as amended, 88 Laws, 123.
+ Sec. 3554.
5 Sec. 2478.
6
3 Sec. 3556.
• Sec. 3558.
1654
ECONOMIC LEGISLATION.
on account of arrearages due for gas furnished to former
occupants of the same premises. Any person who will-
fully or fraudulently injures a meter or prevents it from
duly registering the quantity of gas, or interferes with
its proper action or just registration, or attaches a pipe to
a main or pipe, or burns or uses gas supplied by the com-
pany, unless it passes through the meter, or fraudulently
burns or wastes the gas, is liable to fine and resulting
damages.²
Council can not deprive itself of the right to designate
the kind of meter to be used or the right to inspect and
regulate the same or the right to specify the quality of gas.³
Council may, by ordinance, provide for the appoint-
ment of an inspector to inspect all gas and gas-meters,
and certify the correctness of all bills against consumers
of gas, make photometric tests, and perform such other
duties as may be prescribed by ordinance.*
Telegraph companies and probably telephone com-
panies, so far as these provisions are applicable, may, by
special agreement or by rules or regulations, limit their
liability to damages for mistakes in the transmission and
delivery of messages, but can not stipulate against their
own negligence; the burden of proof is on the company
to show that the inaccurate transmission of a message
was not caused by its fault or negligence. For failure to
deliver a message, the company is only liable for such
damages as naturally flow from the breach of contract, or
such as may fairly be supposed to have been within the
contemplation of the parties when the contract was made.
¹ Sec. 3559.
2 Sec. 3560; note 4, p. 1626.
³ Sec. 2485.
* Sec. 2484. In the case of the Cincinnati Gas Light and Coke Co. v.
Cincinnati, 18 O. S. 237, it was held that an act providing that the salary
of a state inspector of gas meters and of illuminating gas should be paid
by the several gas companies in the state, in amounts proportionate to
their appraised valuation, is not unconstitutional, in that it provides for
taxation by a not uniform rule. This act was repealed by section 7437,
and section 2484 now takes its place.
' Tel. Co. v. Griswold, 37 O. S. 301.
6 Bank v. Telegraph Co., 30 O. S. 555.
6
OHIO.
1655
If the company is in default, but its default is made mis-
chievous to plaintiff only by some other intervening cause,
such as the dishonesty of a third person, the company is
not responsible for the loss caused by such third person.'
The willful divulging of the contents of a private dispatch
and the willful refusal or neglect to transmit or deliver a
private dispatch, and the willful delay in sending or de-
livering the same by a person connected with a company
with a view to injure the sender or intended receiver, or
to benefit himself or some other person, are punishable by
fine and imprisonment.2
Discrimination in service.-Telegraph and telephone
companies must receive dispatches from and for other
lines and from and for any individual, and, on payment of
its usual charges for transmitting dispatches, must trans-
mit the same with impartiality and good faith, under a
penalty of one hundred dollars for refusal or neglect.³ A
contract between a telephone company and the owner of
the telephone instruments which discriminates in favor
of one telegraph company and against others is against
public policy as declared by statute, and void; the use
of patented property, when devoted to public use, is sub-
ject to control by state legislation where the exigencies
require it. If requested, telegraph and telephone com-
panies must forward dispatches over other lines, the
termini of which are within the limits of the usual deliv-
ery of such companies, upon tender of the charges, and
must accept dispatches from other lines and forward the
same, and for omission so to do the company is liable to
a penalty of one hundred dollars." If the line is not in
good working order, or the dispatches on hand for trans-
mission will occupy the time so that an offered dispatch
can not be transmitted within the time required, the re-
¹ Bank v. Telegraph Co., 30 O. S. 555.
* Secs 3462, 3471; State v. Tel. Co., 36 O. S. 296.
* State v. Tel. Co., 36 O. S. 296.
2 Secs. 3466, 3471.
5 Sec. 3463.
1656
ECONOMIC LEGISLATION.
ceiver must so state to the applicant, and if required by
him write such statement on the dispatch; for an omis-
sion so to do, or for intentionally giving false informa-
tion as to the time within which the dispatch may be sent,
the receiver and the company are liable as above.¹ Dis-
patches must be transmitted and delivered in the order in
which they are received for transmission or delivery, but
arrangements may be made with newspapers for the trans-
mission for purposes of publication of intelligence of gen-
eral and public interest out of its regular order, and dis-
patches by officers of the state or the United States, on
public business, may have preference when the public in-
terests require it; delivery of dispatches need not be made
at a greater distance than the published regulations of the
company require; if the sender request it, and offer to pay
the necessary postage, the company must affix the neces-
sary postage stamps and mail the dispatch at place of de-
livery in time for the first mail after receipt at the office
of delivery.2
Where it is the duty of a gas company to furnish gas
to a city at rates fixed by ordinance, as shown above, it
may, if it refuse, be compelled by a mandatory injunction
so to do, so long as it continues to exercise and enjoy its
franchises as a gas company.3
Safety of life and property.-Sewerage companies are
specially made liable for damages to the rights of others
occasioned by their acts, neglect, or default."
Where the tracks of two street railways cross each other
or in any way connect at a common grade, when one or
both such street railways use other than horse power for
propelling their street cars, the crossings must be made
and kept in repair at the joint expense of the companies
owning the tracks, and all such cars used on said street
railways must come to a full stop, not nearer than ten feet
1 Sec. 3464.
3 Gas Light Co. v. Zanesville, 47 O. S. 35.
2 Sec. 3465.
• Sec. 3871.
•
OHIO.
1657
nor further than fifty feet from the crossing, and must not
cross until the way is clear; and when two or more cars
approach the crossing at the same time, the car or cars on
the road first built have precedence.¹
1
Whenever the tracks of any street railways cross the
tracks of any steam railroad at grade, the street railway
company operating said line of cars must cause their cars
to come to a full stop, not nearer than ten feet nor further
than fifty feet from the crossing, and, before proceeding to
cross, must cause some person in their employ to go ahead
and ascertain if the way is clear and free from danger, and
said cars must not proceed to cross until signaled so to do
by such person employed as aforesaid, or said way is clear
for their passage over said tracks. Every person in charge
of a street car who willfully fails to comply with these pro-
visions is personally liable to any person injured by reason
of such failure to a penalty of one hundred dollars, to be re-
covered by civil action at the suit of the state, and the com-
pany is also liable in damages to the person injured.' Coun-
cil may by ordinance require the owners of any street rail-
road operated by electricity, cable, compressed air, or any
motive power other than horses or mules, to place watch-
men at every street crossing, intersection, or corner deemed
dangerous.2
Damages for causing death by wrongful act, neglect, or
default are limited in all cases to ten thousand dollars.3
State and municipal aid.-The constitution provides
that the credit of the state shall not in any manner be
given or loaned to or in aid of any individual, association,
or corporation, and that the state shall not become a joint
owner or stockholder in any company for any purpose
whatever; that the state shall not assume the debts of any
municipality or of any corporation unless the debt was
created to repel invasion, suppress insurrection, or defend
the state in war.5 The general assembly is also forbidden
to authorize any county, city, town, or township, by vote
4
3 Secs. 6134, 6135.
* Const., Art. VIII, sec. 5.
¹ 88 Laws, 581. 2 Sec. 3443a; S9 Laws, 346.
Const., Art. VIII, sec. 4.
VOL. II-24
•
1658
ECONOMIC LEGISLATION.
1
1
of its citizens or otherwise, to become a stockholder in
any joint stock company, corporation, or association, or to
raise money for or loan its credit to or in aid of any such
company, corporation, or association. This does not pro-
hibit the construction by municipalities of railroads or
other works of like character, but an act intended, in
fact, to result in granting aid to a private enterprise is
within the prohibition.3
2
2 Walker v. Cincinnati, 21 O. S. 14.
¹ Const., Art. VIII, sec. 6.
3 Wyscaver v. Atkinson, 37 O. S. 80; Taylor v. Ross Co., 23 0. S. 22. These
provisions were not in the constitution of 1802, and the legislature, by spe-
cial acts, authorized many cities, towns, counties, etc., to become stock-
holders in private corporations for the construction of railroads, etc. Many
of the enterprises thus aided failed, and repudiation of the bonds often fol-
lowed. These provisions were inserted in the present constitution to pre-
vent these evils; they seem clear enough, but have given rise to much
litigation. The cases given above are the leading cases in the contro-
versies. In the case of Walker v. Cincinnati, the supreme court held
valid the act authorizing the construction of the Cincinnati Southern
Railroad by the city of Cincinnati, such railroad to be the property of
the city. In the case of Wyscaver v. Atkinson, 37 O. S. 80, the facts
were as follows: An act was passed authorizing certain townships to
build railroads and to lease and operate the same; there was in fact but
one township to which the act could apply, and no provision was made
for operating the road; the road was to extend only seven miles, and
was to connect two railways not in existence, but authorized by similar
acts. The court held that the evident intent was to make the proposed
road a link in a more extended route or line of railway, for no provision
was made for operating the proposed road by the township, the power
being given only to lease upon completion, and, in case the road should
not be completed with the expenditure of the money authorized, the
act provided for its sale by the foreclosing of the mortgage given to se-
cure the bonds; that the sale was probable because the sum authorized
to be spent would not be sufficient even to iron the track; the court
found that the evident intent was that the road should be in some man-
ner consolidated with other roads, that the purpose and effect of the
act was to unite the means and credit of the township with that of other
parties in order to promote a common enterprise, and therefore was un-
constitutional; however general the act might be on its face, it was,
when applied to the facts, clearly an attempt to evade the constitution.
See also Kissel v. Columbus Grove (Putnam Co. Common Pleas and Cir-
cuit Court), 27 W. L. B. 183.
In Bellaire Goblet Co. v. Findlay, 5 O. C. C. 418, 425, 429, it was held
that a special contract between a city owning natural gas-works and a
OHIO.
1659
*
Public service.-Municipalities generally may contract
with water companies, natural or artificial gas companies,
and electric light companies, for supplying water, light,
and heat for all public purposes; but unless already au-
thorized by vote of the people, as provided above (See
"PERPETUAL AND EXCLUSIVE FRANCHISES"), to erect its
works, such company must be so authorized before it can
operate within the municipality, and it has been held in
the lower courts that the contract for such public service
can not be for a longer period that ten years.2
A special provision relative to water supply authorizes
any municipality, except cities of the first class, first
consumer by which the city agreed to furnish the consumer gas at a
price less than the rates prescribed for consumers generally was in viola-
tion of the constitution, being an indirect method of furnishing aid by
the city to a private enterprise. (See also Dalzell . Findlay, 5 O. C. C.
435; affirmed by supreme court without report, 27 W. L. B. 128.)
But it is not illegal for a city to agree to furnish natural gas for fuel
to an electric light company at a special rate in consideration of the
company's agreement to furnish electric light to the city at prices less
than would be charged in case of a higher rate for the gas. Such a con-
tract benefits all the citizens. (Foster v. Findlay, 5 O. C. C. 455.)
¹ Secs. 2491, 3551, 8753; S. & B. [8035-234]. Gas companies were first
subjected to the restriction as to the vote of the people before they
could begin operating. In 1887, this provision was extended to natural
gas companies, and, in 1889, to electric light companies. Sec. 2491 now
provides that a municipal corporation may contract with electric light,
natural or artificial gas, or water companies for public service, subject
to certain restrictions of sec. 3551. These restrictions are that no such
company (water, gas, and natural gas in certain cities) shall go into op-
eration in a municipality where such a company already exists until
the question of authorizing such operation has been submitted to the
voters of such municipality. The act of 1886 (sec. 8753; S. & B. 8035–
234) authorized contracts without reference to any such restriction.
The court of common pleas of Hamilton county has held in effect that this
act is subject, however, to this restriction, by reason of the provisions of
sec. 2491. (Brush E. L. Co. v. Jones Bros. Electric Co., 23 W. L. B. 329.)
2 Gas Co. v. Lima, 4 O. C. C. 22. A gas light company (in operation)
duly organized and authorized by the vote of the people of a city to
erect gas-works can make legal contracts with the city to furnish gas
without another vote of the people; the provision of the statute applies
only to the formation of another company.
1660
ECONOMIC LEGISLATION.
grade (Cincinnati), to contract with a water company for
a water supply for public purposes upon such terms and
for such a term as may be agreed upon, but such contract
is not binding until ratified by the electors at a special or
general election.' Cities of the second class, fourth grade,
are authorized to contract for water supply for a term not
exceeding twenty years.²
The council of municipalities may contract with sewer-
age companies for the use of sewers for draining the
streets, but can not use such sewers except with the con-
sent of the company and in the manner and upon the
terms mutually agreed upon.3
4
No contract can be entered into by a municipal corpo-
ration unless the auditor of the corporation, or the clerk,
if there be no auditor, shall first certify that the money
required for the contract is in the treasury to the credit of
the fund from which it is to be drawn, and not appropri-
ated for any other purpose. In Cope v. Wellsville, 25 W.
L. B. 250, the court of common pleas of Columbiana
county held that this section applied to a contract with an
electric light company, and that the village had no power
to enter into the contract unless the certificate had been
made.
Alteration, amendment, etc., of franchises.-The
constitution provides that no "special privileges or im-
munities shall ever be granted that may not be altered,
revoked, or repealed by the general assembly." It has
been held, where a corporation acting under a special
charter is invested with franchises to be exercised to sub-
serve the public interests, the terms upon which the cor-
poration may be required to discharge its duties to the
public are subject to legislative supervision and control,
unless it appear from the terms of its charter that it was
the intention to exempt it from such interference; a gas
1 Sec. 2434.
• Sec. 2702.
2 Sec. 9404; S. & B. [8417-27].
5
Const., Art. I, sec. 2.
³ Sec. 3873.
OHIO.
1661
1
company's charter, granted before the adoption of the
present constitution, containing no provision as to the
price to be charged for gas or as to meters, is subject to
the provisions of a subsequent general act regulating the
same,' and where power is reserved in the act of incorpo-
ration, the exercise of this reserved power does not impair
the obligation of contracts within the meaning of the
constitution of the United States.2
After a street railway grant or renewal has been made,
the grantee can not be released from the obligations im-
posed by the terms of the grant or renewal during the
term thereof.³
Consolidation of franchises.-The statute provides
that municipal councils or county commissioners, as the
case may be, "shall have power to fix the terms and con-
ditions upon which street railways may be constructed,
operated, extended, and consolidated." This undoubtedly
gives ample power for the consolidation of the highway
franchise. See also "CONSOLIDATION OF COMPANIES."
Forfeiture of franchises. If a gas company neglects
to furnish gas to the citizens or the corporation in accord-
2
¹ State v. Gas Co., 34 O. S. 572.
3
Harper v. Ampt, 32 O. S. 291. A gas company organized “to manu-
facture and furnish illuminating gas for lighting streets, public and pri-
vate buildings," is not authorized, in the absence of further legislation,
to substitute natural gas. (Findlay Gas Co. v. Findlay, 2 O. C. C. 237.)
³ Secs. 3438, 2502. The city can by ordinance authorize a street rail-
way company to substitute a cable or electricity for horses as motive
power, and in consideration of the more rapid transportation can au-
thorize a higher rate of fare than that stipulated for in the original
grant; this would not be a release, but a modification made in good
faith for a sufficient consideration. (Clement v. City, 16 W. L. B. 355.)
And a street railway does not cease to be such because a grip cable op-
erated by steam is substituted for horses as motive power. (Ib.) Leavel
to file a petition in error in this case was refused by the supreme court.
(19 W. L. B. 74.) The legislature has power to give to the board of pub-
lic works, as distinguished from the council, the right to consent to a
change of motive power from animals to electricity. (C. & S. Tel. Ass'n
v. Cin. Inc. Plane Co., 23 W. L. B. 165.)
• Sec. 3443.
1662
ECONOMIC LEGISLATION.、
2
ance with the prices fixed by council from time to time,
the company forfeits all right under its charter and coun-
cil may proceed to erect gas-works or by ordinance may
empower any person so to do,' but a temporary failure to
furnish gas does not operate as a forfeiture unless it be
caused by neglect or misconduct of the company. If a
gas company is required by council to lay pipes and light
any street or alley and refuses or neglects to comply with
such requirement for six months after notification, the
council may erect gas-works and preclude the company
from all streets not occupied by it;3 but council may at
any time after such default permit the company to occupy
the streets and alleys for the purpose of lighting the same
or furnishing light or gas to the citizens and public build-
ings.*
In State v. Boyce, 43 O. S. 46, it was held that the failure
to give bond and begin work within a year as prescribed
in an ordinance did not work a forfeiture of the grant,
because of a pending injunction which excused the delay.
In an action brought by an electric street railway com-
pany to enjoin the threatened occupation of its track and
the center of the street by another electric street railway
company, the court will not, at the instance of such de-
fendant company, adjudicate whether for any reason the
plaintiff company has forfeited its right to construct and
operate a street railway. This, in the first instance, is
for the action of the city authorities, who, if the forfeiture
has occurred, may insist upon or waive it.5
1 Sec. 2482.
2 Sec. 2483.
3 Sec. 2480.
• Sec. 2481.
5 St. Ry. v. St. Ry., 5 O. C. C. 319. A city which has granted a street
railway route subject to certain conditions as to the manner of operat-
ing will not be compelled to seek specific performance of the terms of
the grant in case of their violation, but is entitled to an injunction.
(Cincinnati v. St. Ry., 2 W. L. B. 17.)
OHIO.
1663
SUBDIVISION IV. MUNICIPAL OWNERSHIP.
2
Cities and villages are clothed with general powers to
light the streets and public places, and to provide for the
laying down of gas pipes,¹ to provide for a supply of water
by the construction of wells, pumps, cisterns, aqueducts,
water-pipes, reservoirs, and water-works, and for the pro-
tection thereof, and to prevent unnecessary waste of water
and the pollution thereof. There is no doubt that in
Ohio the legislature may authorize municipalities to con-
struct railroads, water-works, gas-works, and other like
improvements, and to levy taxes to provide means there-
for, if such undertakings are not a device to give or lend
the money or credit of the municipality in aid of other
persons or corporations; the corporation may construct
the work itself, but can not do it in partnership with oth-
ers. In the case of Fellows v. Walker, 39 Fed. Rep. 651,
Judge Jackson, of the United States circuit court, care-
fully considered the question of municipal ownership.
The case arose on an injunction against the city of Toledo
to prevent the issue of bonds for a natural gas plant. The
court held that the issuing of bonds for the purpose of
supplying municipal corporations and their citizens with
natural gas, was not unconstitutional as exercising the
power of taxation for private purposes. "So long as the
act is for the benefit of the public or the entire municipal-
ity, or all the citizens of the municipality, it does not lose
its character as an act for public purposes so as to become
private in the sense that prevents the exercise of the power
of taxation.
The question of public interest de-
termines the question of right to supply gas and water,
and not the mere location of the works or the source of
supply." In the case of State v. Toledo, 25 W. L. B. 218,
an action in quo warranto, the supreme court of Ohio
passed upon the same questions, and held that "the sup-
¹ Secs. 1692, 2492.
2 Sec. 1692.
1664
ECONOMIC LEGISLATION.
plying of municipal corporations and their citizens with
natural gas is a public use or purpose, for which the tax-
ing power may be constitutionally exercised."
""
Cities and villages may appropriate real estate within
the corporate limits for gas-works, and either within or
without the corporate limits for water-works, sewers,
drains, and ditches; but no more real estate can be taken.
than is reasonably necessary for the purpose to which it
is to be applied.' Such appropriation must be by legal
proceedings after the passage of a resolution by a two-
thirds vote of the council declaring the intent to appro-
priate, the purpose of the appropriation, and setting forth
a description of the property.2
In addition to the general levy, the council may levy
annually taxes for erecting, enlarging, and improving
water-works, gas-works, sewers, etc., and for supplying
the municipality with water, light, and drainage, and also
for real estate and right of way for such works.3
Complete provision is made by statute for the govern-
ment and control of these industries, the details of which
are unnecessary to the present discussion.
In the case of water-works, the trustees or water-works
board can not contract for work the estimated cost of
which exceeds $500, except after two weeks' advertise-
ment for proposals in one or more daily papers, and the
contract must be let to the lowest responsible bidder.*
Bond for the faithful performance must be given. In case
of emergency, council may by a two-thirds vote of all
members, authorize the board to contract without such
advertisement.5
The council of any municipality owning water-works
may, on the written request of any number of citizens
living on the outside of the limits thereof, extend and
maintain the pipes, etc., to any distance ouside of the cor-
¹ Sec. 2232.
4 Sec. 2419.
2 Secs. 2234-2261.
* Secs. 2262, 2683.
5 Sec. 2420.
1
OHIO.
1665
porate limits not exceeding three miles, and for this pur-
pose has the right to make use of such streets and public
grounds as may be necessary. The pipes and aqueducts
must be so constructed and laid as not to interfere unnec-
essarily with the use of such streets, etc., and such muni-
cipality has the same power and jurisdiction to prevent or
punish any pollution or injury to the water so conveyed,
or any injury to the works, as they may have within the
corporate limits.2
Any city or village whose territory is contiguous to that
of another city or village, may, with the assent of such
other city or village, establish and maintain such portion
of its water-works as it deems advisable within the limits
of such other city or village, and may make use of such
of the public streets, etc., of such other city, as may be
necessary for its pipes, etc.3 Such aqueducts and pipes
must be so constructed as not to unnecessarily interfere
with the use of such streets; and such city or village has
jurisdiction to prevent any pollution or injury to the
water so conveyed, or to the stream or source from which
the same is obtained, or any injury to any portion of said
water-works. Any city or village having water-works
may enter into contract with any contiguous city or vil-
lage for the supply of the latter with water, upon such
terms as may be mutually agreed upon by the councils of
the respective cities or villages; and any such city may
dispose of any surplus water for manufacturing or other
purposes by lease or otherwise, upon such terms as may
be agreed upon by the trustees and approved by the
council.5
The jurisdiction of any municipality owning water-
works, to prevent or punish any pollution of the water,
extends ten miles beyond the corporate limits."
Council has power, whenever it may be deemed expe-
¹ Sec. 2421.
1
2 Sec. 2422.
³ Sec. 2423.
¹ Sec. 2424.
5 Sec. 2425.
• Sec. 2433.
1666
ECONOMIC LEGISLATION.
dient and for the public good, to erect gas-works at the ex-
pense of the municipality, or to purchase any gas-works al-
ready erected therein.' This power extends also to the erec-
tion or purchase of natural gas works.2 The United States
circuit court has held that the provisions of the statute as
to the forfeiture of rights by a gas company upon failure.
to light streets as required by council, and empowering
the municipality to erect such works upon such failure,
are not to be construed as precluding a city from building
its own gas-works, even when a company has erected gas-
works by authority of the city, and has complied with all
of the requirements of the council, the contract between the
city and the gas company having expired by its own lim-
itation. The supreme court of Ohio holds that the city
has the right to build its own gas-works, without regard
to the question of the expiration of the contract between
the city and the gas company, and whether such gas-
works are to be used for public lighting alone, or for both
public lighting and the furnishing of light to private con-
sumers.5
3
4
Council is prohibited from making any contract with a
gas company which does not secure to the municipality
the right to purchase the works and plant at any time
within the existence of the agreement.
It is doubtful whether the general power to erect gas-
¹ Sec. 2486. 2 Bellaire Goblet Co. v. Findlay, 5 O. C. C. 418, 424, 425.
3 Hamilton Gas Co. v. Hamilton, 37 Fed. Rep. 832. If a gas company
organized to manufacture illuminating gas to light streets and public
and private buildings, abandons the manufacture of gas for such pur-
poses, the municipality has power to provide means for furnishing light
and heat to the inhabitants, and may utilize natural gas for such pur-
pose. (Findlay G. L. Co. v. Findlay, 2 O. C. C. 237.)
* State v. Hamilton, 47 O. S. 52.
5 State v. Toledo, 25 W. L. B. 218, 229.
• Sec. 2485. A contract duly entered into between a gas company
and a city is legal, although it fails to secure to the city council the right
to purchase the gas plant; if it provides that the city has no such right,
it is illegal; if it is silent, the right remains in the city to purchase un-
der the provision of the statute. (Gas Co. v. Lima, 4 O. C. C. 22.)
OHIO.
1667
works, and the power to light the streets and other public
places, could be construed as including the right to pur-
chase gas wells and the territory necessary for laying pipes
from them to the municipality; at all events, the general
power to erect or purchase gas-works does not include the
right to appropriate real estate outside of the corporate
limits, as shown above. As to municipalities which have
been authorized to maintain natural gas-works, there are
statutory provisions as to the acquisition of real estate
outside of the corporate limits. The passage of a large
number of acts granting power to certain municipalities
to issue bonds for procuring territory, etc., to supply the
municipality and its citizens with natural gas, seems to
indicate that such power is not included in the general
powers of municipal corporations. Unless otherwise pro-
vided by statute, municipalities which have been or may
be authorized to maintain natural gas-works are made
subject to the provisions as to water-works so far as the
powers to take lands, rights, easements, and the general
control and government are concerned,' and any such mu-
nicipality may exercise any and all of its powers outside
of the corporate limits.2
¹ Sec. 2491a. This section does not apply to natural gas-works erected
under a special act, and under sections 2486 to 2491, Rev. Stats., before
the passage of section 2491a. (Bellaire Goblet Co. v. Findlay, 5 O. C.
C. 418.)
2 Sec. [2491,-2]; S. & B. [8232–53].
Section [2491,-2] (S. & B. [8232-53]) provides that such municipal-
ities have the rights and powers and are subject to the restrictions of
sections 3878 and 3880. These are the provisions as to pipe line compa-
nies. Section 3878 provides as to the exercise of the right of eminent
domain, the occupation of highways and the filling of excavations, and
makes such companies common carriers, and subject to the duties and
liabilities of the same; and section 3880 provides that "such company
may transport, store, insure, and ship natural gas or petroleum, and
transport and store water for the purpose of furnishing the same to en-
gineers employed in developing for or in the production and transporta-
tion of petroleum, and for that purpose may lay down, construct, and
maintain the necessary pipes, tubing, tanks, machinery, and arrange-
ments."
1668
ECONOMIC LEGISLATION.
A municipality which has granted a franchise to a sew-
erage company, is required to either renew the grant or
purchase the plant for the benefit of the municipality at a
price not exceeding the actual cost thereof;¹ and the pro-
visions of the statute are expressly stated as not to be
construed to prevent any city or village from constructing
sewers, or establishing and maintaining a system of sew-
ers, not to interfere, however, with the work of such com-
pany.2
Cities of the first grade, first class, have power to con-
struct subways and conduits for electric wires (other than
telegraph and telephone wires), and the board of public
improvements has power to contract for the construction
thereof.3
¹ Sec. 3872.
2 Sec. 3875.
3 88 Laws, 390.
OREGON.¹
1
EDITED BY GEORGE H. WILLIAMS, ATT'Y, PORTLAND, Oregon.
SUBDIVISION I.-HISTORICAL.
Legislation in Oregon is comprised within about the
last fifty years. The present constitution was adopted in
1857, and went into effect when Oregon was admitted as
a state in 1859. Prior to that time Oregon had existed,
first, under a provisional government established by the
people of the territory until such time as the United States
government should extend its jurisdiction over them; and,
second, as one of the territories of the United States.
During the first and second periods there was no general
incorporation law, but every company formed in the ter-
ritory was created by a special act of the legislative as-
sembly. Special charters were thus granted to numerous
road and bridge companies. These charters prescribed
the mode of organization, defined the powers and obliga-
tions, and fixed the maximum rate of toll to be charged,
with a reservation of power to the proper county officials
after the lapse of a specified period to change the rates of
toll and to purchase the road or bridge. A clause was
usually inserted making it lawful for the company to en-
ter and take possession of the necessary land, roads, streets,
or alleys, doing no unnecessary damage, and providing
also for the mode of assessing the damages to be paid to
the owner of the property taken, in case the company
1 References to the constitution are to that of 1859. References to
the statutes are to Hill's Annotated Laws of Oregon (1887) by section
simply. The session laws are referred to as "Laws" of the respective
years. As to state reports, see Appendix "A."
(1669)
1670
ECONOMIC LEGISLATION.
should be unable to agree with such owner in reference
thereto.
Franchises were also granted to several railroad compa-
nies, and provision was made as well for the operation of
ferries. These companies were not confined in their
operations to single towns, but the purpose of their crea-
tion, aside from the benefit expected to accrue to corpo-
rators and stockholders, was to facilitate communication
between the several parts of the state. The authority
above mentioned to make use of the necessary streets and
alleys was but an incidental aid to the objects of incorpo-
ration. Many of these charters were what are known as
"close charters."
With the various subjects treated of herein, with the
exception of water, the people were but little concerned,
as the towns were small and the country in an undeveloped
state. Hence there was little occasion for, and in fact lit-
tle or no direct legislation on the subject. In several
municipal charters the power to provide water was con-
ferred upon the local authorities who were granted power
to purchase and hold lands within or without the city for
water-works.
As to the legislation during this period, it need only be
added that few, if any, of the above mentioned corporations.
are now operated under their special charters; the rights
therein granted are either not used, or are exercised under
the existing law. All the municipal charters granted at
that time have also been changed.
The present constitution abolished the granting of special
charters to private companies, and provides that corpora-
tions may be formed under general laws, but not by special
laws, except for municipal purposes, and that all such laws
shall be subject to alteration and amendment or repeal, but
not so as to destroy any vested corporate rights. It also
limits the liability of stockholders,2 and forbids the appro-
¹ Const., Art. XI, sec. 2.
1
2 Const., Art. XI, sec. 3.
OREGON.
1671
priation of property without compensation being first
made or secured.¹
With regard to municipal corporations, it declares that
all acts incorporating towns and cities shall restrict their
power of taxation, borrowing money, contracting debts,
and loaning their credit; and that no municipal cor-
poration, by vote of the citizens or otherwise, shall become
a stockholder in, or raise money for, or loan its credit to,
or in aid of, any joint-stock company, corporation, or asso-
ciation.3
After the admission of Oregon as a state under the pres-
ent constitution and prior to 1862, no private corporation
could be formed in the state, for the reason that no gen-
eral law had been passed under the authority given by the
constitution. In that year a general incorporation act
was passed, applicable to all business companies. This act
defined the mode of formation and organization and set
forth their powers and obligations. Provision was made
therein for the appropriation of private property by cor-
porations, and also that any corporation, operating under
a special charter granted by the legislature, might, by fil-
ing its articles of incorporation as prescribed in the act,
acquire the rights and privileges and become subject to the
limitations and duties of corporations formed under the
act without waiver of any vested rights acquired under the
original charter. Though added to and amended from
time to time, this act of 1862 is still the law upon the
subject.
In several instances the legislature has exercised its su-
preme power and directly granted the public highway
franchise. In 1862, persons and companies constructing
telegraph lines were given the right to construct the same
along the public highways and streets of the state, with
power to erect the necessary fixtures. In the same year,
corporations organized for constructing railways, macad-
1 Const., Art. XI, sec. 4.
3 Const., Art. XI, sec. 9.
5
Const., Art. XI, sec. 5.
4
* Sec. 3234.
5 Secs. 4160, 4161.
1672
ECONOMIC LEGISLATION.
amized roads, plank-roads, or clay roads, were authorized
to agree with the county court of the county wherein any
road, street, alley, or public grounds may be, unless it be
within a municipality, as to the extent, terms, and cou-
ditions upon which the same may be appropriated, used,
and occupied, and in case agreement can not be made to
appropriate so much thereof as may be necessary.¹ In case
such road, street, or alley was within the limits of a town, the
local authorities were authorized to designate the streets,
etc., to be occupied, and upon failure to make such desig-
nation within a reasonable time, when requested, the com-
pany was authorized to appropriate without reference
thereto.2 In 1880 and 1885, the legislature granted first
to the Oregonian Railway Company (Limited), and then
to the Portland and Willamette Valley Railway Company,
the right to lay their tracks upon certain streets in the
city of Portland. The act passed in the latter year was
upheld by the supreme court in the case of the Railway
Co. v. Portland, 14 Ore. 188, though the main question un-
der consideration in that case was a grant to the company
of certain other public property in the city.
Power has also been conferred upon individuals to erect
and operate water and gas-works within certain towns,
with authority to lay the necessary pipes and mains, and
charge the town and others for the water and gas furnished
-a grant made in 1859 of the power to operate gas-works
in the city of Portland being by its terms exclusive. In-
stances of these grants, however, have been rare, the policy
of the state in the past and present being to vest this right
directly in the municipality, and to allow it to prescribe
the terms and conditions upon which the franchise may be
exercised.
The legislature so far has not availed itself of the power
conferred by the constitution to pass a general law for the
incorporation of cities and towns, but each municipality
¹ Sec. 3242.
2 Sec, 3243.
!
OREGON.
1673
is incorporated by a special act of the legislature. From
their municipal charters, the policy of the state toward
the subjects of this inquiry is mainly to be gathered as the
general laws do not cast much light thereon. By these
charters, which of course vary in detail, the local author-
ities are intrusted with the management and control of
all matters of purely municipal concern, and generally the
legislature confers upon them the regulation of the use
of the streets, highways, and public grounds therein. In
terms they are empowered to supervise and control the erec-
tion and maintenance of telegraph, telephone, and electric
light poles and wires, the laying down of tracks for street
and other railways, and the laying of pipes for water, gas,
and other purposes, and power has been granted to require
electric light wires to be placed under ground.
There is no doubt that the policy of the state favors
competition, as the following instances of legislation will
illustrate: The North Brownsville charter of 1891¹ pro-
vides that the municipality shall not grant an exclusive
light or water franchise, and in the incorporation law,
treating of the powers of corporations created for the
purpose of operating a railroad, it is provided that noth-
ing in the act shall be construed to authorize the leasing
of any railroad line to any company or corporation which
forms a competing or parallel line to its railroad.²
In permitting the municipality to grant the water fran-
chise to private persons or corporations, the legislature has
usually declared that it shall be upon such terms as are
just. These, however, are not always the terms of the
grant, as several charters passed at the session of 1891
will serve to illustrate: The Baker City charter 3 prohibits
the granting of an exclusive franchise to any corporation
or person to construct or maintain any gas, electric light,
or water-works, telephone or telegraphic communications,
or any other matters of public utility, except upon the ap-
2 Laws, 1891, p. 1141.
¹ Laws, 1891, p. 1023.
VOL. II-25
2 Sec. 3221, sub. 7.
1674
ECONOMIC LEGISLATION.
proval of the legal voters after notice given, as in the case
of letting a contract for public improvement. In the
North Brownsville charter, it is declared that no franchise
to supply light or water granted by the municipality shall
be exclusive; and in the Hillsboro charter, that no such
franchise shall exceed ten years, and that in granting a
franchise, provision is to be made for the purchase of the
plant and works by the municipality, in case it shall so
desire.
As indicative of the tendency of the times in several
charters granted in recent years, the corporation is en-
joined from granting, to any one, the water franchise.
With reference to gas as a means of lighting the mu-
nicipality, the legislation has been similar to that provid-
ing for water supply, but, the subject not being of such
moment, has not been as full. The tendency toward mu-
nicipal ownership of the light franchise is not decided as
in the case of water. Mention in the charters of electricity
as a means of light has been confined within the last few
years. Wherever a water or light franchise is granted,
the laying of pipes, erection of poles, wires, and lights,
is subject to the supervision and control of the local au-
thorities.
Street railways are operated subject to the regulations
of the municipality. This may include designation of the
streets to be used, laying of tracks, rates of fare to be
charged, improvement of the portion of the street occupied
by tracks, rate of speed, motive power, etc. The municipal
charters occasionally contain provisions relative to the terms
upon which the street railway franchise shall be granted.
Thus, the Astoria charter, 1891,2 limits such a franchise
to thirty years, and prohibits any franchise to be given
which does not require the company to improve the street
upon which its tracks are laid, between the outer rails
and one foot on either side thereof, in the same manner
Laws, 1891, p. 290.
¹ Laws, 1891, p. 773.
OREGON.
1675
as such streets are improved, and does not provide for a
revenue to the city therefrom.
1
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation, how obtained.-All franchise compa-
nies must be formed under general laws. The corpo-
rations treated of in this inquiry, as well as others, formed
for business purposes, are formed under a law, the provis-
ions of which are stated below.
Articles of incorporation.-Any three or more persons
may incorporate themselves for the purpose of engaging
in any lawful enterprise, business pursuits or occupation,
by signing and acknowledging written articles in tripli-
cate.2
Must show what.-The articles of incorporation must
set out the name of the corporation; its duration, if lim-
ited; the business to be engaged in; the location of its
¹ Const., Art. XI, sec. 2.
2 Sec. 3217, as amended, Laws, 1891; secs. 3218, 3220, 3221. As to
whether this provision as to termini applies to street railways, there is
no dictum of the supreme court. It may be said that ordinarily a street
railway is limited to streets and highways of a particular municipality.
Under the policy of the state, the control of the use of highways is
usually granted to the municipalities by the several charters. There-
fore, upon what terms a street railway company is allowed to operate
within the municipality rests in the will of the common council or
public authorities of such municipalities. Instances have been cited
above wherein the charter has imposed limitations upon the granting
of the franchise. But upon what streets such railways shall run is
within the discretion of the municipal authorities, and such privileges
are granted by ordinances. So, where it is proposed to run a street rail-
way entirely within the limits of a city, it would be difficult to determine
beforehand what the precise termini would be if articles of incorpora-
tion should be filed with the proposed termini stated therein, and if they
should get a franchise to run or operate on the same streets, but with
different termini, a change in the articles of incorporation would
thereby be incurred.
Some railway corporations run to towns in the vicinity of the munic-
ipality, which, though their main intention may be to operate a street
railway, are incorporated similarly to railway companies, and in such
cases it is the part of prudence to give the termini.
1676
ECONOMIC LEGISLATION.
?
principal office or place of business; the amount of cap-
ital stock and the amount of each share of such capital
stock; and if the corporation is formed for the purpose of
constructing any railroad, the termini of such road.'
Filing. The articles of incorporation must be filed and
recorded, one with the secretary of state, one with the
clerk of the county where the principal office or place of
business is to be located, and the third must be retained in
the possession of the company. Upon making and filing
the articles of incorporation, the incorporators are deemed
a body corporate.¹
Organization; preliminary requirements.-Corpora-
tions may open books and receive subscriptions to stock;
as soon as one-half of the capital stock has been sub-
scribed, they may give notice of a meeting to elect a board
of directors, not less than three in number. The notice
must state the time and place of meeting, and must be
published for thirty days in a newspaper of general circu-
lation in the county where the meeting is to be held. The
meeting may be held prior to the expiration of thirty days,
and without the publication if all stockholders are present
or consent in writing thereto. The corporators present
thereat are inspectors of election, and certify who are
elected directors and appoint a time for their first meet-
ing. When elected and qualified, at the first meeting
thereafter, the directors must elect one of their number
president, and appoint a secretary to keep a fair and cor-
rect record of all official business of the corporation.²
Amendments; repeals, etc.-All laws of the legislature
relative to corporations, public and private, are subject to
alteration, amendment or repeal, but not so as to destroy
any vested corporate right.³
By the corporation.-The directors may file supplementary
articles of incorporation, whenever a three-fourths vote
¹ See note 2, preceding page.
3 Const., Art. XI, sec. 2.
* Secs. 3222, 3223, 3226.
OREGON.
1677
of all the stock subscribed so determines, for the purpose
of engaging in any business cognate to the original ob-
jects of the corporation, or at any time when a seven-
eighths vote of all the stock subscribed so determines, for
the purpose of engaging in any enterprise or pursuit, or
for the purpose of changing any part of their road or canal
or either terminus or both, not in violation of law or of any
contract entered into by said corporation.¹
Notice of the filing of such supplementary articles, set-
ting forth the object of the same, must be published by
the directors.¹
By a majority vote of the stock, the stockholders may
change the general place of business.2
Powers. A corporation has power to sue and be sued;
to contract and be contracted with; to have and use a
corporate seal and to alter the same at pleasure; to pur-
chase, possess, and dispose of all necessary and convenient
real and personal property, and to take, hold, possess, and
dispose of all property donated to aid in the objects of in-
corporation; to appoint subordinate officers and agents,
and prescribe their duties and compensation; to make by-
laws for the management of its property and general reg-
ulation of its affairs, including provisions for sale of stock
for delinquent assessment.³
The evidence of the powers of a corporation is found in
the general laws and the articles of incorporation. A cor-
poration has no powers other than the statute confers or
such as are incidental."
A corporation can not be a partner, but may be a joint
owner, of special franchises (in this case, of a ferry fran-
chise).
Officers; meetings; voting; quorum, etc.-Directors
must be stockholders and residents of this state; but a
4
¹ Sec. 3238.
2 Sec. 3237.
Oregon Cascade R. R. Co. v. Bailey, 3 Ore. 164.
5 Lakin v. Railroad Co., 13 Ore. 436.
"Hackett v. Multnomah R. R., 12 Ore. 124.
³ Sec. 3221.
1678
ECONOMIC LEGISLATION.
minority of the directors in corporations formed for the
purpose of constructing railroads, flumes, or carrying on
mining enterprises within or without the state, may be
non-residents.¹ Directors must qualify by taking an oath
to faithfully and honestly discharge their duties.2
There must be an annual election of directors, and, at
each election after the first, the president acts as inspector
of elections and certifies who are elected. Directors hold
office for one year and until their successors are elected
and qualified.²
The powers vested in the corporation are exercised by
the directors or by their agents or servants under their di-
¹ It may be considered doubtful whether a minority of the directors
of a street railway may be non-residents, because the reasons which are
applicable to a railroad company are not so active in the case of a street
railway. Yet this question has not been passed upon by the supreme
court, except as shown below.
Upon the question as to whether a minority of the board of directors
may be non-residents, in the case of State v. Smith, 15 Ore. 116, the
court says: "It applies to corporations constructing railways or military
wagon roads, canals or flumes, or publishing newspapers or conducting
institutions of learning. They may be enterprises of great extent or
very limited. I do not see that the legislature has in view organizations
engaged in general business any more than those engaged in local mat-
ters. If it did, it should have so indicated. The court could hardly be
expected to determine the lengths the road should be, or the size of a
canal or flume, in order to decide whether the corporation constructing
it had the right to permit the minority of its board of directors to reside
out of the state. I do not see that the court can do more than decide
whether the corporation comes within the character of organizations al-
lowed the privilege referred to, and it seems to me this does."
The corporation in question was incorporated to engage in the manu-
facture of iron and steel, etc., and to build and operate railroads. The
railroad in question was a short narrow guage, about three miles in
length, from its furnace to its mine. The question was raised as to the
power of certain non-resident directors to act.
This point can be practically reached by including in the articles of
incorporation, in the statement of its proposed pursuits, that it intends
to build and operate railroads, etc.
If the articles of incorporation also include the building of a canal or
flume to convey water to a town, this may permit a minority of directors
of a water company to be non-residents.
² Secs. 3223, 3224, 3225, 3227.
OREGON.
1679
rection. A majority may exercise the powers vested in
the directors, and any less number may constitute a quorum
at all regular or stated meetings authorized by the by-laws,
if either directors or corporators have filed with the secre-
tary of state and county clerk a written statement desig-
nating such number.¹
Each stockholder attending in person, or by proxy in
writing, at any election, is entitled to one vote for each
share of stock subscribed by him, but after the first elec-
tion of directors, no person can vote on any share upon
which any installment or portion thereof is due and un-
paid.' Cumulative voting is not permitted.
Capital stock.-The amount of the capital stock and
the amount of each share must be stated in the articles of
incorporation.2
Stockholders may direct the manner in which property
may be disposed of, but a corporation can not subscribe
for its own stock.4
5
Stock in all private corporations is deemed personal
property, and subject to attachment, execution, levy, and
sale as such; in case of such sale, the corporation is re-
quired to make the necessary transfer to the purchaser
upon the stock books. All sales of stock transfer to the
purchaser all rights of the original holder, and subject the
purchaser to the payment of any unpaid balance due or to
become due on such stock; but if the sale be voluntary,
the seller is still liable to existing creditors for the amount
of such balance, unless the same be duly paid by the pur-
chaser.6
Corporations may make by-laws not inconsistent with
any existing law for the sale of any portion of its stock for
delinquent or unpaid assessments due thereon, which sale
may be made without judgment or execution; but no such
sale can be made without thirty days' notice of the time
¹ Secs. 3223, 3224, 3225, 3227.
2 Sec. 3220.
³ Sec. 3235; Moore v. The W. L. T. Co., 7 Ore. 359.
* Holladay v. Elliott, 8 Ore. 84. 5 Sec. 3229.
• Sec. 3230.
1680
ECONOMIC LEGISLATION.
and place thereof in some newspaper in circulation in the
neighborhood of such corporation.¹
A stockholder is liable to pay only such assessments on
the stock as are made by the directors, and such assess-
ment must be shown by the records of the corporation.2
Unpaid subscriptions constitute a fund upon which cred-
itors may rely."
3
Increase and decrease of.-The stockholders of a corpora-
tion may, at any meeting called for that purpose, increase
or diminish the capital stock or the amount of the shares
by a vote of the majority of the stock.*
Transfer of.—Every corporation must keep a stock book
in such manner as to show the original stockholders, their
respective shares, the amount paid and the amount due
thereon, and all transfers thereof, which stock book is
subject to the inspection of any person interested therein.5
Bonds, debts, etc.-The property in the hands of a cor-
poration not having been declared a dividend in the hands
of a stockholder is subject to execution on a judgment
against the corporation."
Dividends.-See under "LIABILITY OF OFFICERS AND
DIRECTORS."
Liability of stockholders.-The stockholders of all
corporations and joint-stock companies are liable for the
indebtedness of the corporation to the amount of their
stock subscribed and unpaid and no more.7
When part of the stockholders are insolvent, the sol-
vent must pay the proportion of the insolvent, to be
apportioned among them according to the amount of their
stock subscribed and unpaid, irrespective of what may be
due by other stockholders.8
Liability of officers and directors.-If the directors
of a corporation declare and pay dividends when the cor-
¹ Sec. 3221.
2 G. & S. Mining Co. v. Ruble, 8 Ore. 284.
3 Lee v. Imbrie, 13 Ore. 510.
5 Sec. 3228.
7 Const., Art. XI, sec. 3.
• Sec. 3235.
6 Hughes ". Ore. Ry. Co., 11 Ore. 158.
8
* Hodges & Wilson v. Mining Co., 9 Ore. 200.
OREGON.
1681
poration is insolvent, or which renders it insolvent or di-
minishes the amount of its capital stock, they are jointly
and severally liable for the debts of the corporation then
existing or incurred while they remain in office; or if
they, by any official act or conduct, fraudulently induce
any person to give credit to the company, they are liable
in like manner to such person for any loss he may sustain,
but any director voting against such dividend or fraudu-
lent act or conduct, or filing his objection thereto when
the same comes to his knowledge, is exempt from this
liability.¹
Directors of a corporation, by their acts, securing to
themselves an advantage over other stockholders or the
creditors of the corporation, are held to be trustees to
that extent for the benefit of the corporation or injured
parties.2
Reports. No reports are required of franchise compa-
nies; road and bridge companies are required to make
reports, but railways or corporations created for the pur-
pose of conducting water by pipes under ground are spe-
cially exempted from these provisions.3
Taxation. The personal property of every corporation
is liable to assessment and taxation unless otherwise spe-
cially provided, and may be seized and sold for taxes as in
the case of a natural person. The assessment must be
made in the county where the principal office or place of
business of such corporation is situated. Personal prop-
erty subject to taxation must be valued at its true value
in cash.5
4
The real estate of incorporated companies liable to tax-
ation must be assessed in the county in which the same
lies in the same manner as the real estate of individuals."
Real estate must be assessed at its true value in cash."
2 Corbett v. Woodward, 5 Sawyer (U. S. C. C.), 404.
1
¹ Sec. 3231.
9 Sec. 3255.
• Sec. 2744.
7 Sec. 2752.
5 Sec. 2758.
• Sec. 2739.
i
1682
ECONOMIC LEGISLATION.
!
The legislature is required by the constitution, in the
act incorporating a town or city, to restrict its powers of
taxation,' but the rate of taxation in such towns and cities
varies.
2
Of stock in hands of holders.-When the corporation is
taxed on its capital stock, the share-holders must not be
taxed as individuals for their stock. In practice, fran-
chise companies are not taxed on their stock. The stock
in such corporations is assessed to the holders thereof, and
the corporation pays taxes upon its property the same as
an individual.
3
Dissolution; forfeiture.-By a majority vote of the
stock, at any`meeting called for that purpose, the stock-
holders may authorize the dissolution of the corporation and
the settling of its business and disposing of its property
and dividing the capital stock, in any way they may see
proper. The corporation may also expire by limitation
specified in the articles of incorporation, or its powers may
be annulled by forfeiture or other cause by judgment of a
court. In either of the above cases, the corporation con-
tinues to exist as a body corporate for five years thereafter,
if necessary, for the purpose of prosecuting or defending
suits, actions, or proceedings by or against them, settling
their business, disposing of property, and dividing capital
stock, but not for the purpose of continuing their corpo-
rate business.4
Any corporation failing to elect directors and to com-
mence the transaction of its business within one year from
the time of filing the articles of incorporation, is divested
of its corporate powers; and if any corporation, for any
period of six months after the commencement of its busi-
ness, neglects and ceases to carry on the same, its corpo-
rate powers cease; but none but the state can take advan-
tage of such neglect.
¹ Const., Art. XI, sec. 5.
• Sec. 3233.
2 Sec. 2750.
5 Sec. 3232.
³ Sec. 3235.
• Willamette F. C. T. L. Co. v. Kettridge, 5 Saw. (U. S. C. C.) 44.
OREGON.
1683
Foreign corporations.-Foreign corporations are al-
lowed to do business in this state upon the compliance
with certain conditions precedent.
Any foreign corporation, before transacting business in
this state, must appoint an attorney, who is a citizen and
resident of the state and of the United States, to accept
service of all writs and process necessary to give complete
jurisdiction of such corporation to the state or federal
courts.¹
Any foreign corporation incorporated for the purpose of
constructing or constructing and operating, or for the
purpose of or with the power of acquiring and operating
any railway, or for the purpose of conducting water, gas,
or other substance by means of pipes laid under the
ground, on compliance with the laws of the state for the
regulation of foreign corporations, has the same rights,
powers, and privileges in the exercise of eminent domain,
collection of tolls, and other prerogative franchises, and in
the control, management, and disposition of their business,
franchises, and property, as corporations organized for
similar purposes under the general incorporation laws of
the state.²
In case, however, a foreign corporation leases the line
of a railroad incorporated in this state, it must be upon
the following condition: Such foreign corporation must.
enter into an agreement with the state, duly executed by
the corporation, signed by its president and attested by its
secretary, which must be filed with the secretary of state,
that all suits or actions by and between such corporation
and citizens of this state, during the continuance of the
lease, shall be prosecuted or defended in the courts of the
state, except where such action is commenced in or re-
་
¹ Secs. 3276-77. It is doubtful whether the provisions of this section
apply to franchise companies. (Singer Mfg. Co. v. Graham, 8 Ore. 17;
Oregon & Wash. T. & I. Co. v. Rathbun, 5 Sawyer, 32; Oregon Nat'l
Bank v. Traver, 7 Sawyer, 210; Bank of B. C. v. Page, 6 Ore. 431.)
2 Sec. 3293.
گی
1684
ECONOMIC LEGISLATION.
moved to the federal courts by a citizen of this state.
Upon a failure to comply with the terms of this agreement,
the lease utterly determines and is rendered null and void,
at the option of the legislature. The legislature reserves
the right to prescribe the rates to be charged for the
transportation of persons and property on such leased
lines, and to make such police regulations for the govern-
ment of such roads as it may determine.'
In view of the case of Insurance Company v. Morse, 20
Wall. (U. S.) 445, a question arises as to the validity of
the law requiring foreign corporations to remain in the
state courts.
SUBDIVISION III.-FRANCHISES.
How obtained.—The legislature of this state is invested
with the legislative power to the fullest extent, except so
far as limited expressly or impliedly by the constitution of
this state or by the constitution of the United States, and
in considering the constitutionality of an act or the power.
of the legislature, the question is not as to what power
has been delegated by the people to the legislature, but as
to what limitations they have imposed.2
3
The legislature has full power to grant the highway
franchise, even though the streets and highways of the
municipality are affected, and, as we have seen (see Sub-
division I), has exercised this right; but it can not divert
or subject the streets to any use inconsistent with the con-
tract of dedication. By the expression, " uses inconsistent
with the contract of dedication," is meant that the uses
can not be different from what the property was intended
for. Thus, in the case of the P. & W. V. R. R. v. City of
Portland, 14 Ore. 188, the property in question was uncon-
ditionally dedicated to the public use as a public landing.
The court observes: "When this was done, there re-
1 Sec. 3293.
2 David v. Portland, 14 Ore. 98.
R. R. Co. v. Portland, 14 Ore. 188.
OREGON.
1685
mained in the dedicator the legal title, to which, so to
speak, was attached and vested in him every right of use.
or of property not inconsistent with the use he had given
to the public. In a word, it may be used for the use to
which he dedicated the property, viz., as a levee or public
landing. Any other use inconsistent with that use be-
longed to him. To this property, thus dedicated to the
public use, the dominion of the legislature attached, but
its power over it is not supreme. It might regulate its
use or promote its improvement, but it could not divert or
subject it to any use clearly inconsistent with the purposes
of its dedication."
In seeking to obtain a franchise grant, the applicant in-
troduces or causes to be introduced into the legislature a
bill detailing what is sought, upon which the usual course
of legislation is followed.
How far the authority of the legislature is limited by
that provision of the constitution' which provides that no
law shall be passed granting to any citizen or class of citi-
zens privileges or immunities which, upon the same terms,
shall not equally belong to all citizens, has not been judi-
cially determined in this state. It is not conceived, how-
ever, that its meaning is to take away from the legislature
the discretion to refuse a franchise in a particular case,
though a similar franchise may have already been con-
ferred upon others.
The common practice, however, is to leave it to the
municipal authorities to say upon what terms the various
industries treated of herein may be exercised.
Telegraph companies have the right to construct lines.
along the public highways and streets, or across the rivers
or over any lands belonging to the state, free of charge;
but such lines must not obstruct any highway, street, or
navigable stream.2
When it becomes necessary or convenient in the location
¹ Const., Art. I, sec. 20.
* Secs. 4160-4161.
1686
ECONOMIC LEGISLATION.
}
of any railroad, or for the conducting of water by means
of pipes laid under the surface of the ground, to appropri-
ate any part of the public road, street, or alley, or public
grounds, the county court of the county wherein such
road, street, alley, or public grounds may be, unless the
same be within the corporate limits of a municipality, is
authorized to agree with the corporation as to the extent,
terms, and conditions upon which the same may be appro-
ated, used, or occupied by such corporation; and if no
agreement can be reached, the corporation may make the
necessary appropriation in the location and construction
of its road.¹ If such road, street, alley, or public grounds
be within the limits of a town, whether incorporated or
not, the corporation must locate the road upon such par-
ticular road, street, or alley, or public ground within the
town, as the local authorities having charge thereof may
designate; and if the authorities fail or refuse to so desig-
nate the location, within a reasonable time after request,
the corporation may make appropriation without reference
thereto.2
Any person or corporation constructing a water ditch to
be used for irrigation, manufacturing or mining purposes,
ditches or water pipes for conveying water to cities and
towns for domestic purposes or for extinguishment of fires
over any state, tide, swamp, overflowed, and school lands,
is granted a right of way for twenty-five feet on each side
of said ditches or water pipes.3 Such persons or corpora-
tions must file notes of a survey with the secretary of
state showing location of such water ditch or water pipe.*
Patents granted by the United States for any of the
above lands are subject to any vested rights of the owners
of such water ditches or pipes."
1 Sec. 3242.
2 Sec. 3243. As to the question whether railroad in this connection
includes street railways, see “CONDEMNATION OF PROPERTY," note 1.
³ Sec. 4058.
* Sec. 4059.
5 Sec. 4060.
4
OREGON.
1687
There is no general law relative to the granting the use
of streets for electric, gas, steam heating, or water compa-
nies. The control of the use of the streets is generally
granted by the several charters to the municipalities, and
they are generally given the power to confer the franchises.
Municpalities confer franchises by ordinance.
Powers of municipalities as to.-Municipal corpora-
tions in Oregon are formed by special charters. The leg-
islature so far has not availed itself of the power conferred
by the constitution to pass a general law for the incorpo-
ration of cities and towns. By these special charters,
which, of course, vary in detail, the local authorities are
intrusted with the management and control of all matters.
of purely municipal concern, and generally the legislature
confers upon them the regulation of the use of the streets,
highways, and public ground therein. In terms they are
empowered to supervise and control the erection and
maintenance of telegraph, telephone, and electric light
poles and wires, the laying down of tracks for street and
other railways, and the laying of pipes for water, gas, and
other purposes.
The legislative control over municipalities is unlimited,
except so far as they are vested with the rights incident to
private corporations, and in this control the legislature
may regulate the use of the street. As to what rights in-
cident to private corporations are vested in the municipal-
ity, the court, in the case of the P. & W. V. R. R. Co. v. City
of Portland, 14 Ore. 193, says: "But, while the munici-
pality exists, as to private property which it may have
been allowed to acquire under its charter, such property
is, doubtless, as much protected by the constitution as the
private property of the citizen. Nor can the legislature
deprive the city of such property, except it be for public
use, and only then upon just compensation. But the
¹ East Portland v. Multnomah Co., 6 Ore. 62; P. & W. V. R. R. Co. v.
Portland, 14 Ore. 188; David v. Portland, 14 Ore. 98.
1688
ECONOMIC LEGISLATION.
easement or property which the city has in public streets
or public places is of a different character. It is not pri-
vate property of the city, nor can the city sell or use it for
other than proper public purposes. The city might sell
the market-house or appropriate it to some other munici-
pal use, but it can not sell its streets nor use them for
other than the legitimate purposes connected with such
use. Over these all streets and highways, and public
places, and their uses the plenary power of the legisla-
ture, in the absence of special restrictions, has been often
asserted in several leading cases." That is to say, where
a municipality has or owns property it possesses the same
rights in relation thereto as persons or individuals,
though, as has been observed, the municipality owes its
corporate existence to a special act, and is not formed
under the general incorporation laws, hence the legisla-
ture has the power to limit or contract its powers.
Control of streets.-By their special charters munici-
palities are generally given the control of the streets and
highways; but while the city may sell property owned by
it in its private capacity, or appropriate it to some other
municipal use, it can not sell its streets nor use them for
other than the legitimate purposes connected with such
use. In the absence of special restrictions the power of
the legislature over the streets and highways and public
places and their uses is plenary. As to the power of the
legislature to appropriate such property to uses inconsist-
ent with the contract of dedication, see "How OBTAINED,"
above.
1
Special damages; property owners' rights. - Tele-
graph companies have the right to construct their lines
over the lands of private persons by paying the damages
sustained. If the owner of such lands and the company
can not agree on the damages, each party selects one disin-
terested person as appraiser, and these select a third per-
2
¹P. W. V. R. R. Co. v. Portland, 14 Ore. 193.
* Secs. 4160, 4161.
OREGON.
1689
2
son; the award of damages by such board is final. The
claim for damages by a private person must be made within
twelve months after the telegraph is erected over his land.²
In the case of Paquet v. Mt. Tabor St. Ry. Co., 18 Ore.
233, it was held that a railway corporation authorized to
locate, construct, and operate its road upon a street in
an incorporated city by authority of the common council
thereof, granted in accordance with the charter of the
city, or upon a county road in the country, under an
agreement with the county court of the county in
which the road is situated, in accordance with the
provisions of law, can not be enjoined from proceed-
ing with its enterprise at the suit of an owner of lands
abutting upon the street and county road, whether the fee
to the lands to the center of the street and county road
adjacent thereto is in such owner or not, without estab-
lishing by allegations and proofs that the construction and
use of the railway will specially interfere with the owner's
ingress and egress to and from his premises. The court
says: "The establishment of a public highway practically
divests the owner of the fee to the land upon which it is
laid out, of the entire present beneficial interest, of a pri-
vate nature, which he had therein. It leaves him nothing
but the possibility of a reinvestment of his former inter-
est in case the highway should be discontinued as such.
This view, I am aware, is contrary to the ancient doctrine
that the owner of the fee owned the land subject only to
such public uses, and that he had a right of action when
the uses were diverted to a different purpose. Such a
doctrine may have been applicable where the ownership.
was merely subject to a right of way over the land; but
where, as in modern cases, it is devoted exclusively to the
purposes of a public thoroughfare, and the control thereof
is committed to legally constituted authorities charged
with the duty of maintaining it for such purpose, the doc-
1 Sec. 4162.
VOL. II-26
2 Sec. 4164.
1690
ECONOMIC LEGISLATION.
trine becomes but a vague theory, and should be laid away
among the antiquities of a past age.
I can not
perceive that the owner of the fee has any more right to
complain than any other member of the community has,
or that his rights are affected in any greater degree."
And in McQuaid v. Portland & V. Ry. Co., 18 Ore. 247, the
court says:
"But in whomsoever the fee to the land con-
stituting the street may be is not, to my notion, very im-
portant, in a case like the one under consideration. The
use of the land as a street includes, practically, its entire
beneficial interest. There is no estate of a private character
left in the dedicator, if the fee does remain in him, which
he can utilize, and, if it vests in the lot owner by virtue
of his deed to the lot, it confers no rights which are not
secured to him by the implied covenant, arising out of the
conveyance, that he shall have a right of way over the
street, and egress and ingress to and from his premises by
means thereof.
The appropriation, however, is
only a part of the easement or use secured to the public in
the land embraced within the public road or street. The
legislative jurisdiction in such matters is limited to a con-
trol of the use which belongs to the public, and it should
not be presumed that the legislature intended to exercise
it in violation of private rights and interests. It author-
izes the appropriation of the part of the public road or
street as such, and amounts to no more than a partial
change of the manner of its use. It does not attempt to
interfere with the private rights of the owners of the land
abutting upon the road or street, and I doubt very much
whether the legislature has the legal right, by such an act
to destroy or seriously impair rights of that character.
They are virtually private property, and can not be taken
by a railway corporation without compensation being first.
made or secured in such manner as may be prescribed by
law.
The use of a public highway by a railway
corporation under the appropriation authorized by said
statute is, in my opinion, a legitimate use of it, when it
OREGON.
1691
¡
does not infringe upon the adjoining land-owner's right
of access to the highway; but when it materially inter-
feres with such right the land-owner can maintain an
action against the corporation for damages for the depre-
ciation caused thereby to his land."
Condemnation of property.-The constitution provides
that no person's property shall be taken by any corpora-
tion under authority of law without compensation being
first made or secured in such manner as may be prescribed
by law.¹
Compensation or an effort to compensate is prerequisite
to bringing suit under the provisions of the statutes rela-
tive to eminent domain,² which apply to the United States
as well as individuals,³ and the action must be conducted
as an action at law, except as otherwise specially provided.*
Whenever the law authorizes private real property to be
appropriated to public uses, the same may be entered, ex-
amined, surveyed, and selected in the manner prescribed
by the statute giving such authority, and thereafter the
state, county, or other municipal or public corporation
seeking to make the appropriation, may proceed and the
compensation be determined and paid, in the manner pro-
Const., Art. XI, sec. 4. Section 3258 et seq. of the laws of Oregon
provide as to the condemnation of private property by railroad com-
panies. In the case of Thompson-Houston Co. e. Simon, 20 Ore. 60, it
was claimed that the term railway" included street and suburban
railway corporations organized to transfer passengers and propelled by
horse-power or electricity, as well as railroads authorized to transport
passengers and freight propelled by steam. The court recognized that
a street railway organized to carry passengers was in the broad
sense of the term a common carrier; but it held that the statutes gov-
erning the right of eminent domain were to be strictly construed, and
that it was clearly the intention of the legislature to limit such powers
to railroads strictly as such, and that street railways were not included.
This decision may necessitate legislation upon the general subject of the
rights of street railways, but as yet there has been none.
Oregon Ry. & N. Co. v. Oregon R. E. Co., 10 Ore. 444; U. S. v. Ore-
gon Ry. & N. Co., 9 Sawyer, 62.
3 U. S. v. Oregon Ry. & N. Co., 9 Sawyer, 62.
• Sec. 3259.
1692
ECONOMIC LEGISLATION.
vided by statute, except that such compensation, in case of
such state, county, municipal, or other corporation, is paid
by the deposit in court of an order duly drawn upon the
treasurer for the amount thereof.¹
By condemnation, a corporation acquires no greater
rights than by purchase, and when property is held by a
corporation, and necessary for the public uses for which it.
is created, it is not subject to condemnation and appropri-
ation by another company engaged in the same business.
But a corporation has no exclusive use of a right of way
not necessary or useful for its business, and such other
corporation may condemn and appropriate it.2
When it becomes necessary or convenient for the con-
ducting of water by means of pipes laid underground, to
appropriate any part of the public road, street, or alley, or
public grounds, if no agreement can be reached, as stated
above (see "How OBTAINED "), the corporation may make
the necessary appropriation.
3
All corporations organized for conducting water by
means of pipes underground are granted the right by
statute to appropriate as much land as may be necessary
for such purpose, not exceeding sixty feet in width,
besides a sufficient quantity for workshops and material
for construction, timber excepted. And any corporation
organized in whole or in part for the construction of a
canal for navigation or manufacturing purposes, may ap-
propriate such water, water ways, water rights, or privi-
leges, as may be necessary or convenient for the purpose
of supplying, operating, or maintaining the same, but no
appropriation of private property can be made until com-
pensation therefor is made to the owners thereof, irre-
spective of any increased value by reason of the proposed
improvement by such corporation.*
Duration of franchise.-Charters of municipalities oc-
casionally contain provisions relative to the terms upon
¹ Sec. 3270.
3 Secs. 3242-3243.
2 Oregon C. R. Co. v. Bailey, 3 Ore. 165.
• Secs. 3239-3240.
OREGON.
1693
:
which the street railway franchise may be granted. Thus
the Astoria charter limits such a franchise to thirty years.
Conflicting grants.-A private corporation, by agree-
ment with the county court, may locate its plant on part
of any public highway. It acquires thereby a common
right to use with the public, and is authorized so to do
though another company, without agreement with the
county court, has already located thereon.¹
2
Perpetual and exclusive franchises.-A franchise is
construed the more strictly against the grantee, and is not
exclusive unless expressly made so by the grant. There
are instances, however, of exclusive franchises. The com-
mon practice, as above stated, is to leave it to the munici-
pal authorities to say upon what terms the various indus-
tries treated of herein may be exercised.
In the case of ferries, it has been held that the statute
gives the exclusive right to transport between the termini,
and that a franchise can not be granted to another to ope-
rate a ferry just outside of or beyond the termini of the
franchise already granted, to accommodate the same
travel.3
For special examples of power to grant exclusive fran-
chises, see "SUBDIVISION I-HISTORICAL," above.
Methods of construction.—Any corporation organized
for the construction of any railway, or for the conducting
of water by means of pipes laid under ground, may change.
the grade or location of its road or pipes, not departing
from the general route specified in the articles of incor-
poration, to avoid annoyances to public travel, or danger-
ous or deficient grades or curves, unsafe ground, or other
like reasonable causes, and for such purposes have the
same rights to enter upon, survey and appropriate the
1
Douglass County Road Co. v. C. & G. R. R. Co., 8 Ore. 102.
2 C. & G. Road Co. v. Stephenson, 8 Ore. 263.
Montgomery . Multnomah R. R., 11 Ore. 344.
1694
ECONOMIC LEGISLATION.
necessary line and materials, as in the original location and
construction of such road, canal, or water pipe.'
As to agreement as to terms, conditions, location, etc.,
of railroads or water pipes for conducting water under-
ground, see under "How OBTAINED" above. As to general
powers of municipalities as to these industries under their
special charters, see "POWERS OF MUNICIPALITIES AS TO"
above. See also under "SUBDIVISION I.-HISTORICAL."
Regulations as to service.-All dispatches must be
transmitted by telegraph companies in the order in which
they are received under penalty of one hundred dollars,
to be recovered with costs of suit by the person whose
dispatch is postponed out of its order; but communica-
tions from other telegraphic lines in connection with lines
in this state may have precedence over all ordinary pri-
vate communications, and intelligence of general and pub-
lic interest may be transmitted for publication out of its
order.2
Immediate transmission must be given by telegraph
companies to official dispatches in time of war, insurrec-
tion, riot, or other civil commotion or resistance of public
authority.3
All persons in the employ of any telegraph company
are exempt from militia duty and from serving on juries
while employed in the office of said company or along the
route of its telegraph lines."
Railroad corporations are common carriers, and are
entitled to receive just compensation for the transporta-
tion of persons and property over their road, in such a sum
as may be prescribed by the legislative assembly of the
state.¹
As to powers of municipalities under their special
charters, see "SUBDIVISION I.-HISTORICAL," and "Pow-
ERS OF MUNICIPALITIES AS TO."
¹ Secs. 3241, 3254. See " CONDEMNATION OF PROPERTY," note 1, as to
question whether "railway" includes "street railways."
2 Sec. 4176.
3 Sec. 4165.
• Sec. 4167.
OREGON.
1695
Discrimination in service; refusal to render service.
See under " REGULATIONS AS TO SERVICE " above.
State and municipal aid.-Under the constitution, no
county, city, or other municipal corporation, by vote of its
citizens or otherwise can become a stockholder in, or raise
money for, or loan its credit to or in aid of any joint-stock
company, corporation, or association,' nor can the state
subscribe to or be interested in the stock of any associa-
tion or corporation,2 or assume the debts of any county,
town, or other corporation whatever unless such debts have
been created to repel invasions, suppress insurrections, or
defend the state in war.¹
Forfeiture of franchises. See under "DISSOLUTION;
FORFEITURE," Subdivision II.
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
Historical. So far, legislative provision has been made
for municipal ownership of but two of the subjects herein.
treated-water and the means of lighting the town incor-
porated. Such provisions are to be found in most of the
charters now granted, and while authority is usually con-
ferred upon the local authorities to grant these franchises
to others, municipalities have availed themselves in a num-
ber of instances of the power to exercise them. The pros-
pect is, especially as to the water supply, of increased
activity in that direction in the future. This is to a large
extent attributable to the growing value of these franchises
to the public. To accomplish this end the more readily,
the power is now conferred upon them in fuller and more
elaborate terms than heretofore.
As most of the charters now granted provide for the
exercise of the light and water franchise in case the mu-
nicipality so desires, and as this right is exercised in a
number of cases, it is not deemed necessary in this con-
nection to mention them in detail.
1 Const., Art. XI, sec. 9.
2 Const., Art. XI, sec. 6.
1696
ECONOMIC LEGISLATION.
Municipal ownership and operation of water franchises
seems always to have been within the contemplation of
the legislature, and so, for a considerable time past, with
the light franchise. Of the subjects under investigation
herein, the water question was naturally the first to be
considered in these charters. In the earlier charters the
grant to the municipality was of the right to erect water-
works within or without the city, "to provide water," or
to "provide the city with good and wholesome water," or
kindred terms were employed. Soon fuller legislation be-
came necessary, and gradually the grant included the
power to purchase, erect, and operate the necessary water-
works, to sell or lease the same, to build reservoirs, to lay
pipes, to charge rates, to purchase or condemn the neces-
sary private property either within or without the city, to
incur indebtedness therefor, and issue bonds to secure pay-
ment of the same, until at the present time water commis-
sions exist in several of the cities of this state, whose
rights, powers, and rules of conduct have been provided for
by elaborate legislation.
Power to erect or purchase.-Municipal corporations
are created by special charters in which the privileges
granted and obligations imposed are defined and set out.
With regard to municipal corporations the constitution
declares that all acts incorporating towns and cities should
restrict their power of taxation, borrowing money, con-
tracting debts, and loaning their credit."
The powers of the water commissions, as granted by the
state in special charters, have been upheld in the case of
David v. Portland, 14 Ore. 188, wherein the subject was
thoroughly discussed and an elaborate opinion rendered.
This was a case where certain residents of the city of Port-
land, owners of real estate and personal property, and tax-
payers therein, commenced a suit to restrain the water
committee from constructing certain water-works and
¹ Const., Art. XI, sec. 5.
OREGON.
1697
>
from issuing and disposing of certain bonds under an act
of the legislative assembly of the State of Oregon.¹
1 This act was entitled "an act to amend an act entitled 'an act to in-
corporate the city of Portland,' approved October 24, 1882,” and was
passed by the legislature at the special session in November, 1885. By
its provisions the city of Portland was given power to construct or pur-
chase, keep, conduct, and maintain water-works of a character and ca-
pacity to furnish the city and inhabitants with an abundance of good,
pure, wholesome water for all uses and purposes necessary for the com-
fort, convenience, and well-being of the same; and, to this end, it was
empowered to acquire by purchase or otherwise, the necessary real and
personal property within and without the limits of the city, and to issue
bonds for such purposes. These powers were to be exercised by cer-
tain tax-payers named, to be styled the "water committee." This com-
mittee was authorized to issue and dispose of the bonds of the city to an
amount not to exceed $700,000, payable at the expiration of thirty years
in gold coin, with interest payable in gold. As soon as the water-
works, in the judgment of the committee, should be ready for use, five
persons were to be selected for the purpose of maintaining and con-
structing said water-works, who were to be styled individually "water
commissioners," and collectively the "water commission." This water
commission was given all the powers and authority of the city respect-
ing such work. After the first board the commissioners were to be ap-
pointed by the governor of the state for a term of ten years each. The
commissioners were required to be tax-payers to the extent of at least
twenty-five dollars per year for the year immediately before their elec-
tion. All moneys collected or received by the commission were required
to be deposited with the treasurer of the city, to be kept in a separate
fund, and to be paid out on the order of the chairman countersigned by
the clerk. The commission was authorized to hire and discharge la-
borers, agents, and workmen, to make all necessary rules and regula-
tions for the management of the works, to establish rates for the use
and consumption of water, to provide for the payment of monthly wa-
ter rates, etc. The commission before the first day of January of each
year was required to make a written estimate of the probable expense
of maintaining the water-works during the ensuing year, and also the
cost of any contemplated alterations or improvements, and thereupon to
ascertain and prescribe as nearly as practicable a water rate for that
year, which would insure a sufficient income from the sale of water to
pay the expenses and costs, together with one year's interest on the
bonds outstanding. After the expiration of five years one per centum
of the par value of the outstanding bonds was to be added to such es-
timate as a sinking fund. A quarterly statement in detail of receipts and
disbursements was to be made and signed by the chairman and clerk,
and filed by the city auditor and clerk, and published in two daily
1698
ECONOMIC LEGISLATION.
Power to appropriate property for.-When author-
ized so to do, municipal and other public corporations may
papers of the city, and as a part of the last quarterly report in each
year an inventory or statement of the property, implements, and ma-
terials pertaining to the water-works, together with the condition and
approximate value thereof was to be added.
The validity of this act was attacked on several grounds: It was
claimed that the act and sections amended were not set forth and pub-
lished at full length, as required by article 4, section 22 of the constitu-
tion, which decrees that " no act shall ever be revised or amended by
mere reference to its title; but the act revised or section amended shall
be set forth and published at full length;" and that the members of the
water committee were officers of the city, and were not required by the
act to take an oath of office. The enacting clause after the title is as
follows: Be it enacted by the legislative assembly of the State of Ore-
gon, that the act entitled 'an act to incorporate the city of Portland,'
approved October 24, 1882, be and the same is hereby amended by add-
ing thereto the following sections, numbered from 142-167, inclusive
of both, which sections shall constitute and be numbered as chapter 13
of said act, and entitled 'water-works.''
It was claimed that the act amended a section of the city charter in
force, which provided that the city of Portland is not bound by any con-
tract, or in any way liable thereon, unless the same is authorized by a
city ordinance, and made in writing, and, by order of the council, signed
by the auditor or some other person in behalf of the city, etc. This
section was not set out at length. The court held that said section was
not amended by the provisions of the act in question, as said act pro-
vided only for a class of contracts which the city previously had no
power to make, and that as to such contracts as were within its power
the section had the same effect as if this act had never been passed.
A further objection was made, based upon section 20, article 4 of the
state constitution, which provides that every act shall embrace but one
subject and matters properly connected therewith, which subject shall
be expressed in the title: that the subject of the act was not expressed
in the title, but the court held that it was in the nature of a supple-
mental act, and that its object and purpose was clearly indicated by the
heading, and further holding that it is sufficient if the subject be
stated generally, and that it is not necessary that the title specify the
object in all its particulars; that the act in question embraced but one
subject, and that the title was broad enough to indicate the general ob-
ject of the act.
A further objection was made that the members of the water committee
were officers of the city, and were not required to take an oath of office,
the contention being based on section 3 of article 15 of the constitution,
which provides that every person elected or appointed to any office un-
OREGON.
1699
appropriate private real property in the same manner as
other corporations, compensation in such case being paid
der the constitution shall, before entering upon the duties thereof, take
an oath or affirmation to support the constitution of the United States
and of this state, and also an oath of office. The court held that they were
not elected or appointed to an office under the constitution within the
meaning of the section of the constitution requiring them to take an
oath of office, and that they were no more than agents of the city re-
quired by the act to carry out its provisions. The court also observed
that it might be said that the act need not require an oath of office to
be taken, and that even if they came under the name of officers under
the constitution, the act need not prescribe an oath of office, as the pro-
vision of the constitution upon that subject is one that executed itself.
Another objection made was that the water commissioners, as they
are styled, are officers whose term of office is required to be limited by
the clause of the constitution contained in section 2 of article 15 of the
constitution, which provides that "the legislative assembly shall not
create any office the term of which shall be longer than four years."
But the court held that they were not such officers as were referred
to in said section, and that they were no more agents of the city un-
der the act than the water committee were, and that also sections 6
and 7 article 6 of the constitution relative to the manner of selection of
county, township, precinct and city officers, did not apply, as they were
not officers belonging to either of these classes.
As to the objection that the legislative assembly had no power to issue
bonds in the name of the city and make it liable for their payment, the
court held that the power of the legislature over municipal corporations
in the absence of constitutional restrictions was unlimited except so far
as they were endowed with the rights incident to a private corporation ;
that public parks, gas, water, and sewerage in towns and cities may
ordinarily be classed as private affairs, but they often become matters of
public importance, and whether they are the one or the other is a fact
which may be determined by the legislature; that in this act the legisla-
ture has not attempted to usurp any power possessed by the city of Port-
land; that it was a matter of public necessity, and was an enterprise
in its character aimed to benefit the community and the public, and
that the legislature had the power to authorize the issuance of the bonds
in the name of the city; that the legislature of the state is invested with
legislative power to the fullest extent, except so far as limited expressly
or by necessary implication in the constitution of the state and subject
to the restrictions of the constitution of the United States; and that in
considering the constitutionality of an act of the legislature the question
is not as to the extent of the power that has been delegated by the peo-
ple to the legislative assembly, but as to the extent of the limitations
they have imposed upon that body.
1700
ECONOMIC LEGISLATION.
by a deposit in court and an order drawn upon the treas-
ury thereof.¹
Any incorporated city or town has the right to appro-
priate any private real property, water, water-courses, or
water or riparian rights to any public or municipal use or
uses, or for the general use or benefit of the people of the
city or town, and any such property or rights may be en-
tered upon, surveyed, examined, and selected, for the pur-
pose of constructing any ditch, canal, flume, or reservoir,
or laying or constructing any pipe or aqueduct in the mode
prescribed for the appropriation of land for corporate pur-
poses, and such appropriation may extend beyond the cor-
porate limits of said city or town, to or along any adjacent
or neighboring lake, spring, or stream; and after the se-
lection of such rights and property as the council may pro-
vide, such city or town may proceed in the manner pre-
scribed to have the appropriation made and compensation
determined and paid, except that compensation is to be
paid by a deposit in court of an order duly drawn upon the
treasurer for the amount. In cases of cities of less than
15,000 inhabitants, no action for the appropriation of pri-
vate property, allowed herein, or for payment therefor, can
be taken except a majority of the tax-payers voting at an
election held for that purpose are in favor thereof.2
1 Sec. 3270.
2 Sec. 3271, as amended, Laws, 1891.
}
1
PENNSYLVANIA.'
EDITED BY MARLIN E, OLMSTED, ATT'Y, Harrisburg, pa.
SUBDIVISION I.—HISTORICAL.
In former years, the legislature, from time to time,
enacted general laws providing that, by complying with
certain conditions, applicants might obtain from the courts,
or from certain specified state officers, charters for various
classes of corporations, but no such law enacted prior
to 1874, except as to water companies, covered any of the
classes of corporations treated of in this work; whenever
a charter was desired for any such corporation, it was
necessary to obtain a special act of assembly for that pur-
pose. Of these special charters, there were granted to water
companies, 116; to gas companies, 80; to gas and water
companies, 40; and to street passenger railway companies,
72. They are varied in their provisions. The first char-
ter granted to a private water company was received by
the York Water Company in 1816. Although the availa-
bility of gas, or "inflammable air," as it was at first pop-
ularly called, was discovered near the close of the eight-
eenth century, it does not seem to have been used as an
illuminating agent in Pennsylvania prior to 1843, in which
year a charter for that purpose was granted to the Ken-
sington Gas Company. Shortly thereafter, the legis-
lature passed the act of March 11, 1857, entitled "An act
to provide for the incorporation of gas and water compa-
nies." This title, however, was something of a misnomer,
¹ Unless otherwise stated, references to the constitution are to that
of 1874; the session laws are referred to as Laws" of their respective
years. As to state reports, see Appendix
A.'
(1701)
1702
ECONOMIC LEGISLATION.
as the act did not provide for their incorporation, but
simply provided certain general powers and regulations for
all such companies as might thereafter obtain from the leg-
islature special acts of incorporation. These special acts
frequently contained further and different provisions; but
the general act was useful as supplying deficiencies in the
special charters. It conferred upon both gas and water
companies the right to enter upon public streets, lanes,
alleys, or highways for the purposes of their incorpora-
tion, subject only to such regulations as the councils of
boroughs, towns, cities, or districts might adopt in regard
to grades, or for the protection or convenience of public
travel over the streets or highways occupied. It also con-
ferred upon water companies the power of eminent do-
main to enter upon or occupy such lands as were neces-
sary for the carrying out of their corporate purposes.
The power of the legislature to grant special charters
was originally unlimited. The manner in which it was
frequently exercised may be seen from the somewhat happy
combination of powers indicated in the title of "An act
to enable the governor to incorporate a company for mak-
ing a canal and lock navigation on the waters of the Sus-
quehanna river, near the borough of Harrisburg, with
power to the said company to supply the said borough
with water, and to insure against fire," passed in 1823.
As a specimen of " omnibus" legislation, reference may be
had to the act of March 29, 1855, page 293, entitled "An act
to regulate certain election districts, defining the duties of
street commissioners of New Brighton, Beaver county, pro-
viding for a widening of Broad street (Philadelphia), relative
to the election of cashiers and solicitors of banks in Phila-
delphia county, authorizing the corporation of the city of
Philadelphia to lay gas pipes through public highways,
changing the name of Charles Orrick Barton Campbell to
that of Charles Barton Campbell, and incorporating the
Germantown Water Company." As illustrating the man-
ner in which charters were obtained in the days of special
PENNSYLVANIA.
1703
legislation, the well authenticated story is told of a gen-
tleman now occupying a prominent seat in the councils
of the nation, formerly an influential member of the Penn-
sylvania legislature, that on one occasion, being reminded
on the last day of the session that he had forgotten to
obtain a charter desired by a number of constituents, he
folded a blank sheet of paper and wrote on the back
thereof the title of an act to incorporate a company by a
certain name, secured the attention of the chair, and ob-
tained the unanimous consent of the house to a suspen-
sion of the rules, and had the bill passed a first, second,
and third time by its title. He then obtained possession
of the paper, and on the blank side wrote in the act of
assembly which had already been passed by the house, and
had it promptly passed by the senate. The state constitu-
tion, as amended in 1864, made some slight change, pro-
viding that no bill passed by the legislature should con-
tain more than one subject, which should be clearly ex-
pressed in the title, and also that no law thereafter en-
acted should create, renew, or extend the charter of more
than one corporation. In 1857, by amendment of the con-
stitution, there was imposed upon the legislature for the
first time a restriction upon its power to grant irrevocable
charter contracts by a distinct provision that "the legis-
lature shall have the power to alter, revoke, or annul any
charter of incorporation hereafter conferred by or under
special or general law, whenever, in their opinion, it may
be injurious to the citizens of the commonwealth, in such
manner, however, that no injustice shall be done to the
corporators," a provision to which further reference will
be hereafter made. The legislature itself, by the general
act of May 3, 1855,' had declared that "every charter of
incorporation granted, or to be granted, shall be deemed
and taken to be subject to the power of the legislature,
unless expressly waived therein, to alter, revoke, or annul
1
¹ Laws, 1855, p. 423.
1704
ECONOMIC LEGISLATION.
the same, whenever, in their opinion, it may be injurious
to the citizens of the commonwealth; in such manner,
however, that no injustice shall be done to the corporators,
and as fully as if the reservation of said power had been
therein expressed." Whatever the effect of this legisla-
tion may have been upon charters subsequently granted, it
is manifest that it could not affect charters previously
granted by special acts in which the legislature did not
reserve the right to repeal, alter, or amend; such special
charters were and are undoubtedly within the protection
of that provision of the federal constitution which forbids
the states to pass laws impairing the obligation of con-
tracts.
The constitutional amendments of 1857 and 1864 still
left it within the power of the legislature to enact special
laws creating single corporations with every variety of
powers which it might see fit to confer upon them. Such
charters conferring power to engage in different enter-
prises were termed "omnibus charters." The state con-
stitution of 1874 introduced a radical change, section 7,
Article III, thereof, declaring that "The general assembly
shall not pass any local or special law
cre-
ating corporations, amending, renewing or extending the
charters thereof, or granting to any corporation, associa-
tion or individual any special or exclusive privilege or
immunity, or to any corporation, association or individual
the right to lay down a railroad track." This constitu-
tion, which was adopted by the people at an election held
December 16, 1873, went into effect the first of January,
1874, in which year the legislature enacted what is known
as the general corporation act of 1874,' providing for the
incorporation and regulation of a great variety of corpo-
rations, including those for the construction and mainte-
nance of telegraph lines, the supply of water to the
public, and the manufacture and supply of gas, or the
'Laws, 1874, p. 73.
PENNSYLVANIA.
1705
supply of light or heat to the public by any other
means.
The act was a very long one and far from clear in many
of its provisions. It was commonly understood that the
provision as to gas, light, and heat covered the incorpora-
tion of companies for the supply of natural gas for light
and fuel, and for the supply of light, heat, or power
by means of electricity. It was also commonly understood
that under the provisions of the act such companies ob-
tained exclusive privileges, and no others could be incor-
porated for the same purpose in the same district or
locality until the first company chartered had, from its
earnings, realized and divided among its stockholders for
five years a dividend equal to eight per centum per annum
upon its capital stock. There was, consequently, a rush
for charters, and hundreds were granted covering nearly
every city, town and district in the state. For a time the
governor refused to grant more than one natural gas char-
ter for the same district, but finally being led to believe
that there were doubts as to the extension of the exclusive
privilege to that class of corporations, numbers of dupli-
cates were issued. A quo warranto having been issued at
the instance of the attorney-general against one of these
companies for the purpose of testing the validity of its
charter, the supreme court ruled not only that it had no
exclusive franchise but also that it had no franchise at all,
holding that the act of 1874 did not authorize the forma-
tion of companies to supply natural gas; whereupon the
legislature passed the act of May 29, 1885,2 entitled "An
act to provide for the incorporation and regulation of na-
tural gas companies," the fourteenth section of which per-
mitted associations theretofore engaged in the business of
transporting or dealing in natural gas under color of a
charter to accept the provisions of the act and become
corporations thereunder, a privilege which most of them.
speedily accepted.
¹ Emerson v. Commonwealth, 108 Pa. 111.
VOL. II-27
¹
2 Laws, 1885, p. 29.
1706
ECONOMIC LEGISLATION.
In Scranton Electric Light & Heat Co.'s Appeal, 122
Pa. 154, the supreme court decided that the exclusive
privilege conferred by the act of 1874 did not extend to
electric light companies, and Mr. Chief-Justice Gordon,
who delivered the opinion, intimated very strongly that
the act did not even provide for the incorporation of com-
panies for the supply of electric light to consumers.
Thereupon the legislature, by supplementary act of May
8, 1889,¹ amended the act of 1874 so as distinctly to in-
clude companies for "the supply of light, heat and power,
by means of electricity."
2
By supplement approved May 1, 1876, the act of 1874
was amended so as to provide for the incorporation of
companies "for the purpose of constructing, maintain-
ing, and leasing lines of telegraph for the private use of
individuals, firms, corporations, municipal and otherwise,
for general business, for police, fire alarm, or messenger
business, or for the transaction of any business in which
electricity over or through wires may be applied to any
useful purpose."
4
The corporation amendment act of 1883³ amended the
act of 1874 so as to permit the formation of corporations
for the maintenance and operation of motors, cables, etc.,
for the traction of the cars of street railway companies;
but a separate act was passed April 22, 1887, for the in-
corporation and regulation of such companies for "operat-
ing passenger railways by cables, electrical, or other
means." Neither of these acts, however, provides for the
incorporation of street passenger railway companies.
No general provision was made for the incorporation of
street passenger railway companies until the passage of
the act of May 23, 1878,5 providing for their incorporation
in cities of the third, fourth, and fifth classes, and within
¹ Laws, 1889, p. 136.
3 Laws, 1883, p. 122.
Laws, 1878, p. 111.
2
Laws, 1876, p. 90.
* Laws, 1887, p. 8.
PENNSYLVANIA.
1707
the boroughs and townships of the commonwealth. An
act passed March 19, 1879,¹ provided for their incorpora-
tion in cities of the second and third classes. In Wein-
man v. Pass. R'y Co., 118 Pa. 192, the supreme court
declared the latter act to be unconstitutional, it being
declared special because relating to but a certain class
of street railway corporations, and local because its ope-
rations were confined to cities of the second and third
classes only, and did not extend throughout the common-
wealth. Although the act of 1878 has not been passed
upon by the supreme court, it has been declared unconsti-
tutional by the lower courts for the same reasons. No
further act for the chartering of such companies, and
none at all for Philadelphia, which is the only city of the
first class, was passed until the act of May 14, 1889,2 which
provided generally for the incorporation and government.
of street railway companies throughout the common-
wealth. The passage of this act through the legislature.
was carefully observed by parties interested in the subject,
whose vigilance and diligence were such that articles of
association of eight different corporations (two for Pitts-
burgh and six for Philadelphia) were laid before the gov-
ernor, and letters patent issued upon the same day, before
the ink was dry upon his approving signature to the bill;
and it was but a short time before charters were issued
covering most of the streets of Philadelphia and Pitts-
burgh, on some of which the charters must be two or three
deep.
Under the general laws herein mentioned, charters have
been issued since 1874, to July 1, 1890, to 313 natural gas com-
panies. 125 for manufacture of gas, 321 water companies, 4
for the supply of light other than gas by means not speci-
fied, 12 motor power or traction companies, 44 steam heat
companies; 238 for telegraphic and telephonic and other
business conducted by electricity; and 204 street passenger
1 Laws, 1879, p. 9.
2 Laws, 1889, p. 211.
1708
ECONOMIC LEGISLATION.
railway companies, of which 23 were for Philadelphia and
87 for Pittsburgh.
The judicial policy of the state has been strict in the
construction of charters. It is laid down as a maxim that
there is no such thing as a doubtful charter; that to doubt
as to the existence of a corporate power is to be resolved
that it does not exist. As to the exercise of powers
clearly granted, the policy has been reasonably liberal.
No disposition to pare down or unduly hamper them has
been shown.
The legislative policy has been liberal. The general in-
tent of recent legislation has been to specify the powers
conferred in such manner as to preserve a classification
of the various purposes for which corporations may exist,
and to confine each corporation to its proper class.
Corporations are subjected to a special system of taxa-
tion for state purposes. As a rule, quasi public corpora-
tions are not subject to taxation for local purposes.
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation; how obtained. The constitution of
1874 deprived the legislature of the power of creating cor-
porations by special act.¹
1
The legislature has, therefore, enacted several general
statutes providing that corporations of various classes may
be chartered by the governor upon compliance with cer-
tain conditions by the proposed corporators. Principal of
these statutes is the corporation act of 1874,2 which, with
its several supplements, embraces the incorporation and
regulation of companies for a variety of purposes, includ-
ing those for the construction and maintenance of tele-
graph lines, the maintenance and leasing of lines of tele-
graph, for the private use of individuals, firms, corpora-
tions, municipal and otherwise, for general business, and
for police, alarm, or messenger business, for the transaction
¹ Const., Art. III, sec. 7.
2 Laws, 1874, p. 73.
PENNSYLVANIA.
1709
1
1
1
of any business in which electricity over or through wires.
may be applied to any useful purpose; the supply of
water to the public, or the supply, storage, or transporta-
tion of water or water power for commercial and manu-
facturing purposes; 2 the manufacture and supply of gas
or the supply of light, heat, or power by means of
electricity, or the supply of heat, light, or power, to the
public, by any other means. The provisions governing
natural gas companies are similar to those governing other
companies, except as herein stated.
3
The act of 1874, and its supplements, are intended,
where reference is made herein to the general law
of 1874.
The scheme of this law embraces corporations of the
first class, commonly referred to as corporations not for
profit, and corporations of the second class, commonly re-
ferred to as corporations for profit. The latter class em-
braces such corporations as are herein treated of, which
are governed by the general law of 1874. This law not
only provides for the creation of new corporations, but
also how pre-existing corporations may become subject to
its provisions.
By the 25th section, it is provided that "the incorpora-
tion of any association of persons for the purposes named
in this act, or accepting the same, shall be held and taken
to be of the same force and effect as if the powers and
privileges conferred, and the duties enjoined had been
conferred and enjoined by special act of the legislature,
and the provisions of the same shall be construed accord-
ing to the same rules of law and equity as if it had been
created by special charter, and no modification or repeal
of this act shall affect any franchise obtained under the
provisions of the same. This provision has not been
judicially construed.
1
Laws, 1876, p. 90.
⁹ Laws, 1889, p. 136.
¹ Laws, 1889, p. 226.
I
1710
ECONOMIC LEGISLATION.
Legislation since 1874 has been:
1. By express amendment or supplement to the act of
1874.
1
2. By regulative enactments, not by way of supplement
or amendment of the act of 1874, but by express reference
to corporations existing or thereafter created by any law
of the commonwealth.
3. By enactments providing for the creation of special
classes of corporations. These enactments are the act of
May 29, 1885, relative to natural gas companies; the
act of April 22, 1887, relative to traction companies,
and the act of May 14, 1889, relative to street passen-
ger railway companies. Whether or not the latter enact-
ments are to be construed in pari materia with the general
law of 1874 has not been judicially determined. Some of
their provisions have been drafted with a side glance at
that law, and other provisions similar to those contained
in the law of 1874 will undoubtedly receive similar judi-
cial construction.
This chapter has been prepared on the assumption
that, as a rule, the three acts named are to be treated
as if not in pari materia with the general law of 1874,
and the reader will bear this in mind when these statutes
and the law of 1874 are referred to.
At risk of repetition, it will be stated that the franchises
of companies herein treated of are those created under
the general law of 1874, and the three acts named. It will
also be noted that the creation of traction companies was
provided for by a supplement of 1883 to the general law of
1874. They are, nevertheless, treated herein with reference
to the act of 1887, as that act, since its passage, has been
acted under in the formation of such companies, and com-
panies formed prior to its passage are authorized to accept
its provisions.
Articles of incorporation.-Under the general law of
1874, five or more persons, three of whom at least must be
citizens of Pennsylvania, may obtain a charter of incorpo-
PENNSYLVANIA.
1711
ration upon application to the governor; this certificate or
application for charter must be signed by the incorpora-
tors, and must be acknowledged by three subscribers be-
fore the recorder of deeds of the county in which the chief
operations are to be carried on, or in which the principal
office is situated. The three acknowledging must subscribe
an oath or affirmation before the recorder, to be indorsed
on the certificate, to the effect that the statements contained
therein are true. The certificate, accompanied with proof
of publication as shown below, must then be presented to
the governor of the commonwealth. If, upon examina-
tion, he finds it in proper form, and within the purposes of
the act, he must indorse thereon his approval, and direct.
letters patent to be issued incorporating the subscribers,
their associates and successors, to be a body politic and
corporate in deed and in law, by the name chosen.'
2
Each subscriber to the articles of street passenger rail-
way companies must subscribe thereto his name, place of
residence, and the number of shares of stock he agrees to
take in the company; and there must be indorsed upon
or annexed to the articles of association an affidavit made
by at least three of the directors named in said articles
that at least $2,000 of stock for each proposed mile of rail-
way has been subscribed, and ten per cent paid thereon,
in good faith and in cash to the directors named in the
articles of association, and that it is intended in good faith
to construct, maintain, and operate the road mentioned
therein.
The articles must then be acknowledged by at least
three directors before some officer competent to take ac-
knowledgments of deeds. The governor, upon the filing
of said articles and affidavit as shown below, is then re-
quired to issue letters-patent creating the subscribers to
the articles of association, and all persons who shall be-
come stockholders in the company, a corporation by the
1 Laws, 1874, p. 73.
2 Laws, 1889, p. 211, sec. 1.
1712
ECONOMIC LEGISLATION.
name specified therein, and possessing the powers and
privileges specified in the act of assembly.¹
Corporations created as motor power companies for the
purpose of operating passenger railways by cable, electric-
ity or any other means, organized before the enactment
of the statute for the creation of such companies (March
22, 1887) may avail themselves of the provisions relative
to such companies and become corporations upon accept-
ing the provisions of the law respecting the same under
seal of the corporation filed in the office of the secretary
of the commonwealth, together with the surrender of the
letters-patent or charter formerly granted.2
As to the organization of foreign corporations, see "FOR-
EIGN CORPORATIONS," p. 1780. As to renewal of charters,
see "DURATION OF CHARTERS; RENEWAL OF," p. 1722. As
to organization of purchasers of corporate rights or fran-
chises at public sale, see "BONDS, DEBTS, ETC," p. 1739.
Must show what.—The certificates or articles of incorpo-
ration of companies created under the general law must
set forth the name of the company; the purpose for which
formed; the place or places where its business is to be
transacted; the term of its existence; the names and resi-
dences of subscribers and the number of shares subscribed
by each; the number of directors, and the names and resi-
dences of those chosen to serve for the first year; the
amount of capital stock, and the number and par value of
shares into which divided; that ten per centum of the cap-
1 ¹ Laws, 1874, p. 76. Any street passenger railway company existing
prior to the passage of the act governing such companies, under color
of any charter or letters-patent of the commonwealth, may, upon ac-
cepting the provisions of the act in writing, under seal of the corpora-
tion and filing such acceptance in the office of the secretary of the com-
monwealth, become and be a body corporate thereunder, governed
solely by the provisions of the act, and the governor is directed to cause
new letters patent to be issued to the said company creating it a cor-
poration under the same name by which it was originally incorporated.
Laws, 1889, p. 217, sec. 20.
Laws, 1887, p. 12, sec. 9
PENNSYLVANIA.
1713
ital stock has been paid in cash to the treasurer of the
company; the name and residence of the treasurer.
In addition to the foregoing, companies formed for the
purpose of constructing and maintaining and leasing lines
of telegraph, and for transacting business by electricity
over or through wires, must also add in what counties in
this state it is proposed to carry on business, and in what
other state it is proposed to carry on business.'
As to natural gas companies organized under supposed
authority of the act of 1874, the statute provides that any
association or person or corporation theretofore engaged
in the business of transporting or dealing in natural gas
for any purpose, under color of a charter or letters-patent,
may obtain the benefits of the act of 1885 and become a
corporation thereunder, upon accepting the provisions
thereof in writing under the seal of the company, to be
filed in the office of the secretary of the commonwealth,
and the surrender of its letters-patent or charter formerly
granted. And the governor is required to issue letters-
patent creating such accepting companies, corporations
under the act of 1885, with the same name as borne by the
company whose charter was surrendered. It is further
required that the acceptance of the act of 1885 shall state
in writing the place or places where the company presently
intends to mine for and produce or receive natural gas,
and the place or places to which it is to be presently sup-
plied, the general route of its pipe lines, the term for
which the corporation is to exist, the amount of its capital
stock, and the number and par value of its shares.2
Natural gas companies must also set forth the place or
places where natural gas is intended to be mined for and
produced or received; the place or places where it is to be
supplied to consumers; the general route of pipe line or
lines and branches, and location of general office.³
1 Laws, 1876, p. 90, sec. 3.
3 Laws, 1885, p. 30, sec. 2.
2 Laws, 1885, p. 34, sec. 14.
1714
ECONOMIC LEGISLATION.
Traction companies for operating passenger railways by
cable, electricity, or other means, must also set forth the
location of the general office.¹
Street passenger railway companies must, in addition,
state the length of road as near as may be; the streets and
highways upon which the said railway is to be laid and
constructed, showing also the circuit of the road; the
amount of the capital stock of the company, which must
be not less than $6,000 per mile of road proposed to be
constructed; the number of shares of which said capital
stock is to consist; the name and residence of the presi-
dent. The statement of the par value of shares, pay-
ment of ten per cent to the treasurer, place of business,
name and residence of each subscriber and number of
shares subscribed by each, and name and residence of the
treasurer, are not in terms required.
Publication of.—Under the general law of 1874 and its
supplements, notice of the intention to apply for the char-
ter must be published in two newspapers of general circu-
lation printed in the proper county for three weeks, setting
forth briefly the object and the character of the corpora-
tion to be formed.
Motor or traction companies are subject to the same re-
quirements as companies under the general law. Natural
gas companies must publish in two newspapers of general
circulation printed in each of the counties named in the
charter, for three weeks, a similar notice, which must also
state the place where the business and its various branches
is to be conducted. No publication of intention to apply
for a charter is required in the case of street passenger
railway companies.
3
Filing. The certificate or articles of incorporation must
be recorded in the office of the secretary of the common-
wealth, in a book to be kept by him for that purpose.
The original certificate, with all of its indorsements, is
2 Laws, 1889, p. 211, sec. 1.
¹ Laws, 1887, p. 9, sec. 2.
3 Laws, 1885, p. 30, sec. 2.
PENNSYLVANIA.
1715
then returned to the company, and is required to be re-
corded in the office of the recorder of deeds of the county
where the chief operations are to be carried on, and
"thenceforth the subscribers thereto, and their associates
and successors, shall be a corporation for the purposes and
upon the terms named in the said charter." Certified
copies of the record are made evidence for all purposes in
the courts of the state. The recording of the certificate
in the office of the recorder of deeds is often neglected,
but it is of the utmost importance, as until that is done
the authority of the subscribers to act as a corporation is
at least doubtful."
In addition to these statutory provisions, the secretary
of the commonwealth has adopted a rule requiring the
application for charter to be deposited in his office during
the three weeks of publications of notice.
Traction or motor companies are subject to the same
provisions.
The articles of association of street passenger railway
companies, together with the required affidavit, must be
filed in the office of the secretary of the commonwealth,
who is required to indorse thereon the day of filing, and
record the same in a book kept for that purpose.
¹ The act of 1874 originally provided that a charter obtained thereun-
der for gas or water companies should be exclusive; but as amended by
supplement, the privilege of exclusive incorporation is restricted to gas
companies. A water company was incorporated some time before the
amendment, but failed to record its certificate until after the supple-
mentary act had been passed. A second water company applied to the
governor for incorporation for the same district. The company holding
the first charter resisted the second application, claiming it had the ex-
clusive right. The second company made the point that the first com-
pany never obtained an exclusive privilege, as it did not become a cor-
poration until the act had been amended, and, therefore, obtained only
such powers as were conferred by the act thus amended. The point
was considered a close one, but the governor issued the second charter
under advice of the attorney-general, who intimated that if the first
company should apply, he would issue a quo warranto against the sec-
ond, for the purpose of obtaining a decision of the court upon the
question.
1716
ECONOMIC LEGISLATION.
Commencing business.-Corporations created under
the provisions of the general law of 1874 must, within two
years from the date of their letters-patent, proceed in good
faith to organize and do the things contemplated by the
charter, and must pay up at least one-fourth of the capital
stock, and upon failure so to do are liable to forfeiture of
their corporate rights.¹
Fees. The statute provides that the secretary of the
commonwealth must charge and receive a fee of $5 upon
every paper relating to corporations filed or recorded in
his office. There is to be paid to him also a charge of $25
for letters-patent, making the total fees so required to be
paid for obtaining a charter of incorporation $30. Pas-
senger railway companies must pay $80 and $2 for a certi-
fied copy of the articles of association, making the usual
charge $82.
In addition to this there is to be paid as a consideration
for the charter, except in the case of street railway com-
panies, a bonus of one-fourth of one per cent upon the
amount of capital stock named in the charter and upon
any subsequent increase thereof. This is payable in two
equal installments. The first must be paid upon the in-
corporation of the company, and the second, one year
thereafter. Letters-patent can not be issued until the first
installment has been paid." Corporations, upon increasing
their capital stock in pursuance of any general or special
law, must pay to the state treasurer for the use of the
commonwealth a bonus of one-fourth of one per cent upon
the amount of the authorized increase in two equal annual
installments; the first to be due and payable upon the
date of the authority to increase as aforesaid, and the sec-
ond within one year thereafter. It is, to say the least,
1 ¹ Laws, 1876, p. 37, sec. 11, as amended Laws, 1889, p. 242; Laws, 1883,
p. 122, sec. 5. See under "FORFEITURE," p. 1779.
2 Laws, 1868, p. 113, sec. 15; Laws, 1874, p. 107, sec. 44; Laws, 1878,
p. 97, sec. 1; Laws, 1889, p. 115, sec. 1.
• Laws, 1889, p. 115. It had been held by the department that the
first installment of bonus upon the proposed increase of capital stock
PENNSYLVANIA,
1717
1
doubtful whether in the case of any increase of stock the
payment of any bonus can be required until the increase
has been actually made. The bonus thus required to be
paid is not a tax, but rather the price of the corporate
franchise. It does not exempt the company from tax-
ation. It is a debt, and bears interest at six per cent
from the time it is due. A corporation chartered under a
law which gives it authority to increase its capital stock
from time to time, but does not require the payment of
any bonus, can not be required to pay bonus upon an in-
crease made after the passage of a subsequent general law
applying in terms to all companies, as the requirement of
such bonus would impair the charter contract, in violation
of Article I, section 10, of the constitution of the United
States.3
2
When any corporation has reduced its capital stock in ac-
cordance with the provisions of law (see “CAPITAL STOCK,"
p. 1733), such corporation is not liable in the aggregate for
a greater bonus than one-fourth of one per centum upon the
capital stock as altered or reduced. The operation of this
provision is fairly illustrated by the case of a company
having a capital of $500,000, upon which the first install-
ment of bonus, $625, has been paid, and the second remains.
unpaid. If its capital were reduced to $250,000, payment
of the second installment of bonus could not be enforced.
Amendments, repeals, etc.-The constitution provides
that "the general assembly shall have the power to alter,
became due whenever the stockholders of the corporation consented to
the increase, without reference to the time when the increase was actu-
ally made; but in Dauphin Common Pleas it was decided that no bonus
was due until the stock was actually increased. (Com. v. Pa. Mining,
Mfg. & Supply Co., Dauphin C. P.) The act of 1889 is understood to
have been framed for the purpose of making payments conform to the
original view of the department, but the intention is not very clearly
expressed.
¹ Com. v. Girard Bank, 1 Pearson, 323.
2 Com. v. Aliance Coal Min. Co., 13 W. N. C. 324.
³ Com. v. Erie & Western Transportation Co., 107 Pa. 112.
1718
ECONOMIC LEGISLATION.
revoke, or annul any charter of incorporation now exist-
ing and revocable at the adoption of this constitution, or
any that may hereafter be created, whenever, in their
opinion, it may be injurious to the citizens of this com-
monwealth; in such manner, however, that no injustice
shall be done to the corporators."¹
The treatment of this subject from the standpoint of
judicial decision is necessarily general and at large, as a
federal question, and, therefore, not within the scope of
this chapter.
The following Pennsylvania cases bear upon the act of
1855, the constitutional amendment of 1857, and the con-
stitutional provision of 1874, which are substantially similar
in terms.
Repeal or forfeiture for non-user or abuse of franchise
are not embraced within the constitutional provision as
to the obligation of contracts.2
A supplement conferring a new right, but not imposing
any new burden, is a mere license, and is not protected
from repeal.³
The amendment of 1857 did not give an arbitary power
to the legislature to repeal charters at will; it only au-
thorized such repeal for cause. It can be done only where
the charter is injurious to the citizens of the common-
wealth, and such reason should appear in some way as the
moving cause which induced the legislature to take such
action, and then "no injustice shall be done to the incor-
porators."
The constitutional convention is not the legislature, nor
is a constitutional provision legislation, within the mean-
ing of this provision.*
Notwithstanding judicial dicta to the contrary, it would
¹ Const., Art. XVI, sec. 10.
2 Erie & North-east R. R. Co. v. Casey, 26 Pa. 287; Chinclecla-
mouche Lumber Co. v. Commonwealth, 100 Pa. 438.
Philadelphia, etc., R'y Co's Appeal, 102 Pa. 123.
Williamsport Pass. R'y Co's Appeal, 120 Pa. 1.
PENNSYLVANIA.
1719
seem that the legislature is the final judge of what is in-
jurious, and when legislative action by alteration or revoca-
tion should be taken.'
By the corporation.—It is provided that if any corpora-
tion chartered under or accepting the general law of 1874,
and its supplements, "shall desire to improve, amend, or
alter the articles and conditions of the charter or instru-
ment upon which said corporation is formed and estab-
lished, it may make application to the governor for such
improvement, amendment, or alteration." Notice setting
forth briefly the character and objects of the desired im-
provements and alterations, and the intention to make ap-
plication therefor, must be published in the same manner.
as in case of original articles. The corporation must then
prepare a certificate under its corporate seal, setting forth
the character and objects of the proposed improvement,
amendment, or alteration, which must be acknowledged
by the president and secretary before the recorder of deeds
of the county wherein its principal office or place of busi-
ness is located. Upon presentation of such certificate,
with proof of publication of notice, the governor is re-
quired to examine the same, "and if he finds it to be in
proper form, and that such improvements, amendments, or
alterations, are or will be lawful and beneficial, and not in-
jurious to the community, and are in accord with the pur-
poses of the charter, he shall approve thereof and indorse
his approval thereon, and direct letters-patent to issue in
the usual form, reciting the said improvements, amend-
ments, or alterations, and the said certificate shall then be
recorded in the office of the secretary of the common-
wealth, and, with all its indorsements, shall then be recorded
in the office for the recording of deeds in and for the
proper county, where the principal office or place of busi-
ness of said corporation is located, and from thenceforth
the same shall be deemed and taken to be a part of the
1
¹ Wagner Institute v. Philadelphia, 132 Pa. 612.
1720
ECONOMIC LEGISLATION.
charter or instrument upon which said corporation was
formed or established, to all intents and purposes, as if the
same had originally been made part thereof: provided that
nothing herein contained shall authorize the amendment,
alteration, improvement, or extension of the charter of
any gas or water company, so as to interfere with or cover
territory previously occupied by any other gas or water
company." But this is not to be construed to authorize
the right of eminent domain to be given to any corporation
by amendment of its charter, nor to permit any change in
the objects and purposes of such corporation as shown by
its original charter."
Should the governor refuse to allow the amendment ap-
plied for, there is no appeal from his decision. The
legality of amendments allowed by him can be examined
by the court upon proceedings by quo warranto at the suit
of the commonwealth, or should the corporation, in the at-
tempted exercise of its amended franchise, infringe upon
the rights of any other corporation or person, the validity
of the amendment might doubtless be determined under
the act of June 19, 1871 (P. L. 1360), which provides that,
in all proceedings in courts of law or equity, it shall be the
duty of the court to inquire whether a corporation com-
plained of does in fact possess the right or franchise to do an
act alleged to do injury to private rights, or to the rights
and franchises of other corporations, and to restrain by
injunction if it does not possess such right or franchise.
Thus far the courts have not been called upon to con-
strue the act permitting amendments, but it has been
passed upon a number of times by the governor or those
acting under and for him. November 2, 1885, the attor-
ney-general's department decided that it did not authorize
a change of name. In the case of the Excelsior Oil Co.,*
in March, 1887, a subsequent attorney-general ruled that
3
¹ Laws, 1883, p. 122, sec. 3.
2
Laws, 1883, p. 122, sec. 4.
3 In re Martin Color & Chemical Co., 16 W. N. C. 510.
* 3 County Court Rep. 184.
PENNSYLVANIA.
1721
the name of a corporation is a necessary part of its char-
ter, and may be changed by amendment under the act of
1883, and subsequently instructed the secretary of the
commonwealth that all changes of name of corporations.
of the second class (for profit) must be made by amend-
ment under said act, which, according to his opinion, re-
pealed the act of April 20, 1869 (P. L., p. 82), authorizing
the courts of common pleas to change the names of corpora-
tions. This opinion may be sound as to corporations
chartered under, or accepting, the corporation act of 1874,
and its supplements, but was probably not intended to
cover other corporations as to which the act of 1869 would
seem to be still in force-e. g., corporations under the
statutes governing natural gas companies, traction compa-
nies, and street passenger railway companies. In the
case of the Wilkesbarre Electric Light Co.,¹ it was held by
the attorney-general, July 22, 1886, that a company au-
thorized to "supply light by means of electricity" may,
by amendment, acquire the right to supply heat and power
by means of electricity and steam generated in their
lighting plants. In the case of the Conshohocken Gas
Light Co., 5 C. C. R. 585, the secretary of the common-
wealth in a written opinion declared that, "upon the
question of the power and propriety of clothing a gas
company with the additional franchise of an electric light
company by an amendment to its charter, the impression
seems to be that such amendment can be made."
2
An amendment attempting to increase the number of
counties in which a telephone or telegraph company might
operate was not approved. But it was ruled by the at-
torney-general, March 21, 1884, in the case of the Sayre
Water Co., that when such amendment does not conflict
with the rights of any other company, there may be, by
amendment, a reasonable extension of the territorial lim-
its of a water company.³
¹ Meredith, Formation of Corporations, p. 245, ed. 1889.
2 2 Chester Co. Rep. 129.
' Meredith, Formation of Corporations, p. 228, ed. 1889.
VOL. II-28
1722
ECONOMIC LEGISLATION.
Duration of charter; renewal of.-Charters of cor-
porations organized under the general law of 1874, of
traction or motor companies, and of natural gas compa-
nies, may be perpetual or may be limited in time by their
own provisions. The articles of incorporatioh must al-
ways set forth the term for which they are to exist.
Corporations created by or under any law of the state,
whose charters are about to expire by lapse of time from
their own limitation, may, if they are within the class
named in section 2 of the corporation act of 1874 relating
to corporations for profit, be rechartered, or have their
charters renewed under the provisions of that act, by se-
curing the governor's approval of and placing on record
in the proper county a certificate setting forth the facts
required by companies seeking original charters, and that
it is a renewal of the former charter, the date of the orig-
inal charter, the name by which the corporation was char-
tered, the financial condition of the corporation at the
date of said certificate, the capital stock paid in, the funded
debt, floating debt, estimated property and cash assets.
Such certificate must be accompanied by a certificate, un-
der the seal of the corporation, showing the consent of at
least a majority in interest to such rechartering.
Any corporation becoming re-chartered must also ex-
pressly accept the provisions of the constitution of Penn-
sylvania and of the act of 1874, and surrender all privi-
leges conferred by its original charter, not enjoyed by cor-
porations of its class under said act or the general laws.
of Pennsylvania. Letters-patent are issued by the gov-
ernor, whereupon the said re-chartered corporation exists
as a new corporation under the provisions of the general
law, and, subject to the said provisions and the constitu-
tion of the state, all of its former rights, privileges, powers,
immunities, lands, property, and assets of every kind or
character are vested in the re-chartered corporation with
like effect as if its original charter had not expired.
Objects. The general law of 1874 expressly requires
PENNSYLVANIA.
1723
that, in all charters granted, the purpose for which the cor-
poration is formed must be distinctly stated. The separate
acts for the incorporation of natural gas companies, trac-
tion companies, and street passenger railway companies by
necessary implication also require a statement of purposes
in the certificate and articles of association. No charter
will be granted by the governor which does not distinctly
state the purpose for which the corporation is formed.
As to change of objects, see under "AMENDMENTS, RE-
PEALS, ETC.," p. 1717.
Powers. The constitution provides that "no corpora-
tion shall engage in any business other than that expressly
authorized in its charter," and forbids any corporation to
hold any real estate excepting such as may be necessary
and proper for its legitimate business.'
The general powers of corporations herein treated of
are: to have perpetual succession, subject to the power
generally remaining, under the constitution; to defend
and maintain judicial proceedings; to use a common seal
and alter the same at pleasure; to hold, purchase, and
transfer such real and personal property as the pur-
poses of the corporation may require, not exceeding the
amount limited by its charter or by law; to appoint and
remove such subordinate officers and agents as the busi-
ness of the corporation may require, and to allow them a
suitable compensation; to make by-laws not inconsistent
with law for the management of its property, the regula-
tion of its officers, and the transfer of its stock; to enter
into any obligation necessary for the transaction of its
ordinary affairs.²
Companies formed for the purpose of constructing,
maintaining, and leasing lines of telegraph for the private
use of individuals, firms, corporations, municipal and
otherwise, for general business and for police, alarm, or
messenger business, or for the transaction of any business
1 Const., Art. XVI, sec. 6.
2 Laws, 1874, p. 73, sec. 1.
1724
ECONOMIC LEGISLATION.
in which electricity over or through wires may be applied
to any useful purpose, are expressly authorized to transact
business either wholly or partly within and partly without
the limits of any city, borough, or township in this state
or partly in any other state or states.
As to power to consolidate and purchase property of other
corporations, see under "CONSOLIDATION," p. 1776. As to
power to condemn property, see under " CONDEMNATION," p.
1789. As to power to use highways, etc., see "How Oв-
TAINED," p. 1782. See, also, under "CAPITAL STOCK," p.
1730; and "BONDS, DEBTS, ETC.," p. 1739.
By-laws. The general law of 1874 provides that “the
by-laws of every corporation created under the provisions
of this statute, or accepting the same, shall be deemed and
taken to be its law, subordinate to this statute, the char-
ter of the same, the constitution and laws of this com-
monwealth, and the constitution of the United States."
They must be made by the stockholders or members of
the corporation, at a general meeting called for that pur-
pose, unless the charter prescribes another body, or a dif
ferent mode, and must prescribe the time and place of the
meeting of the corporation, the powers and duties of its
officials, and such other matters as may be pertinent and
necessary for the business to be transacted, and may con-
tain penalties for the breach thereof, not exceeding twenty
dollars.¹
Natural gas companies also have power to make by-laws
not inconsistent with law for the election and regulation
of their directors and officers, the management of their
property, the regulation of their affairs, and for the sub-
scription, collection, and transfer of their stock.2
Officers, meetings, voting, quorum, etc.-The consti-
tution provides that "in all elections for directors or man-
agers of a corporation, each member or share-holder may
cast the whole number of his votes for one candidate, or
2 Laws, 1885, p. 29, sec. 1.
1 Laws, 1874, p. 77, sec. 5.
PENNSYLVANIA.
1725
2
distribute them upon two or more candidates, as he may
prefer." This provision as to cumulative voting does not
apply to a corporation organized before the constitution
was adopted, and whose charter defines the voting power
of the stockholders, nor does it require legislation to give
it effect, but applies to all private corporations, including
railroad companies, incorporated since the adoption of the
present constitution, and any stockholder may exercise his
right without giving notice of his intention so to do.³
Where at an election for seven directors the cumulative
system of voting was used, and only five candidates re-
ceived a plurality, the three next highest receiving an
equal number of votes, the election is valid as to the five,
who can thereupon organize and act as a board.*
The business of every corporation created under the
general law of 1874, or accepting the same, must be man-
aged and conducted by a president, a board of directors or
trustees, a clerk and treasurer, and such other officers,
agents, and factors as the corporation may authorize. The
directors or trustees must be chosen annually by the stock-
holders or members at the time fixed by the by-laws, and
hold their office until others are chosen and qualified in
their stead; the manner of such choice, and of the choice
or appointment of all other agents and officers of the com-
pany, must be prescribed by the by-laws. The number of
directors or trustees must not be less than three; one of
them must be chosen president by the directors or by the
members of the corporation, as the by-laws direct.
At a meeting to be called for that purpose, the members
of a corporation may determine, fix, or change the number
of directors or trustees that shall thereafter govern its
affairs; and a majority of the whole number of such di-
¹ Const., Art. XVI, sec. 4. The law of 1874 (p. 78, sec. 10) makes a
similar provision, together with an explanation of what is meant by
cumulative voting.
2
Hays". Com., 82 Pa. 518.
* Wright c. Com., 109 Pa. 560.
3 Pierce v. Com., 104 Pa. 150.
1726
ECONOMIC LEGISLATION.
rectors or trustees is necessary to constitute a quorum.
The clerk must be sworn, and must record all the votes
of the corporation and the minutes of its transactions in
a book to be kept for that purpose. The treasurer must
give bond in such sum and with such sureties as may be
required by the by-laws for the faithful discharge of his
duties, and must keep the moneys of the corporation in a
separate book account, to his credit as treasurer, and if he
neglect or refuse, he is liable to a penalty of fifty dollars
for every day he fails so to do, to be recovered at the suit
of any informer in an action of debt."
1
Every such corporation may determine, by its by-laws,
what number of stockholders must attend, either in per-
son or by proxy, or what number of shares or amount of
interest must be represented at any meeting to constitute
a quorum. If the quorum is not so determined, a major-
ity in interest of the stockholders constitutes a quorum."
No person acting as judge or election officer for any such
corporation can enter on his duties until he takes and
subscribes an oath or affirmation before a judge, alder-
man, justice of the peace, or other person qualified by law
to administer oaths, that he will discharge the duties of
his office or appointment with fidelity, and that he will
not receive any vote but such as he verily believes to be
legal. If any such judge or officer knowingly and will-
fully violates his oath or affirmation, he is subject to all the
penalties imposed by law upon the officers of the general
election of this cominonwealth violating their duties, and
must be proceeded against in like manner and with like
effect. If any election, as aforesaid, be held without the
person holding the same having first taken an oath or af
firmation, or be invalid for any other reason, such election
must be set aside in the manner provided by law, and a
new election ordered by the court of common pleas of the
proper county, upon the petition of not less than five
1 Laws, 1874, p. 77, sec. 5.
' Laws, 1874, p. 77, sec. 6.
PENNSYLVANIA.
1727
stockholders, supported by proof satisfactory to the
court.¹
The act of May 7, 1889,2 regulates the voting power of
stock held as collateral security. The stock certificate
and transfer books are prima facie evidence of the right
to vote. In case objection is taken, the judges of election
inquire, summarily, as to whether the name given in the
certificate, or standing on the transfer book, is that of the
absolute and bona fide owner thereof, or as the holder of
the same as executor, administrator, or trustee created by
last will and testament or by decree of court. If not, the
vote or votes tendered must be rejected; and, in such
cases, the bona fide owner, including a person who has
transferred stock to a trustee as collateral for a loan, re-
serving in the conveyance the right to vote upon the
stock, shall, upon offering evidence of ownership satis-
factory to the judges of election, be entitled to vote.
In case of the death, removal, or resignation of the
president or any of the directors, treasurer, or other offi-
cer of any such company, the remaining directors may
supply the vacancy thus created until the next election.³
All elections for directors or trustees must be by ballot,
and every share of stock entitles the holder thereof to one
vote, in person or by proxy.'
Any corporation which has decided, at a meeting called
for that purpose, by a majority vote of those present
either in person or by proxy, to elect a portion of their
directors for a term or termis longer than one year, may at
the next ensuing election divide the directors or managers
which are to be chosen into two, three, or four classes, and
elect the first class to serve for the term of one year, and
the second, third, or fourth to serve for two, three, or four
years respectively; and at all ensuing elections the stock-
holders shall only elect the number of directors necessary
1 Laws, 1874, p. 78, sec. 8.
3 Laws, 1874, p. 78, sec. 9.
? Laws, 1889, p. 102.
¹ Laws, 1874, p. 78, sec. 10, as amended, Laws, 1876, p. 47.
1728
ECONOMIC LEGISLATION.
to take the place of those whose terms of office then ex-
pire, and such directors must be elected for the longest
term.¹
The stockholders of street passenger railway companies.
must meet on the second Monday in January in every
year, at their office, of which meeting public notice must
be given two weeks previously by the secretary, and must
choose, by a majority of the votes present, a president
and the number of directors prescribed by the by-laws
(not less than four nor more than twelve), for the ensuing
year, who continue in office until the next annual meeting
and until others are chosen. At the annual meeting the
stockholders have full power and authority to make, alter,
and repeal, by a majority of votes given, any or all by-
laws, rules, orders, and regulations, and to do and perform
such other corporate acts as may be deemed advisable.
The stockholders may meet at such other times as they
may be summoned by the president and directors, in such
manner and form and upon such notice as may be pre-
scribed by the by-laws; and the president, on request in
writing of any number of stockholders representing not
less than one-tenth in interest, must call a special meeting,
giving the like notice as for the annual meeting, and stat-
ing specifically the objects of the meeting; such objects,
and no other, can be acted on at such meeting.2
The directors of such railway companies, at their regu-
lar meeting next preceding the time of the annual election,
must appoint three stockholders to be judges of the said
election and to hold the same, and the persons so appointed
are not eligible to an election as directors or said election,
and must respectively take and subscribe an oath or af-
firmation before an alderman, justice of the peace, or no-
tary public, well and truly according to law to conduct
such election to the best of their knowledge and ability;
they must decide upon the qualifications of voters, and
¹ Laws, 1889, p. 214, sec. 8.
¹ Laws, 1887, p. 411, sec. 1.
PENNSYLVANIA.
1729
when the election is closed must count the votes and
declare who has been elected. Whenever any judge ap-
pointed as above fails to attend the meeting of stockhold-
ers, and whenever any board of directors neglects or re-
fuses to appoint such judges, the stockholders of such
company, at their annual meeting, may supply the vacancy
or select proper persons to conduct the election. If at any
time an election of directors is not made at the time speci-
fied, the corporation is not for that reason dissolved, but it
is lawful to hold and make such election of directors
within three months thereafter by giving at least ten days
previous notice thereof in the manner aforesaid. In case of
the death or resignation of a director, or failure to elect in
case of a tie vote, the vacancy may be filled by the board
of directors. At all elections by the stockholders, each
share of stock entitles the holder to one vote, and ballots
must have indorsed thereon the number of shares repre-
sented, but no share transferred within sixty days next
preceding the election entitles the holder to vote at any
such election, nor can any proxy be received or entitle the
holder to vote unless the same bears date and has been
duly executed within three months next preceding such
election. No subscriber is entitled to vote at any election,
or at any general or special meeting of the company, on
whose shares any arrearages may be due more than thirty
days next preceding said election or meeting.2
Any corporation chartered or existing by or under any
law of this state may determine by the vote of its stock-
holders holding a majority in interest of all of its stock, at
a meeting duly called for the purpose, the time of holding
the annual meeting for the election of the officers of the
corporation, and the number of directors that shall there-
after govern its affairs; but the number of directors can
not be less than three nor more than fifteen, and at least
one-third of the directors of every corporation must be
Laws, 1889, p. 213, sec. 7.
¹ Laws, 1889, p. 214, sec. 9.
1730
ECONOMIC LEGISLATION.
and remain during their term of service residents of the State
of Pennsylvania; this provision does not apply to any com-
pany incorporated prior to May 31, 1887, unless such com-
pany file in the office of the secretary of the commonwealth
a certificate of its acceptance and also of the provisions of
the constitution of the commonwealth, which acceptance
must be made by resolution adopted at a regular or called
meeting of the directors, trustees, or other proper officer
of such corporation, certified under the seal of the corpo-
ration, a copy of which, certified under the seal of the
office of the secretary of the commonwealth, is evidence
for all purposes.'
There are no special provisions of the statute relating to
this sub-head affecting traction companies.
As to treasurer of natural gas companies, and president
and treasurer of street railway companies, see "ARTICLES
OF INCORPORATION; Must show what," p. 1712.
As to companies organized by purchasers of corporate
rights at public sales, see under "BONDS, DEBTS, ETC.," p.
1739. As to power to regulate by by-law, see "By-Laws,"
p. 1724.
As to interest of officers in contracts, etc., see
"PUBLIC SERVICE," p. 1806.
Capital stock.-Articles of association must state the
amount of capital stock, the number and par value of
the shares into which it is divided, and that ten per cent
of the capital stock has been paid in cash to the treasurer
of the company.
The capital stock of companies re-organized by the pur-
chasers of corporate franchises at judicial sale can not
exceed the amount authorized in the original charter of the
company as whose the property and franchises were sold.
The capital stock of every franchise company operating
under the general law must consist of not more than one
million dollars, except companies incorporated for the pur-
¹ Laws, 1887, p. 281.
PENNSYLVANIA.
1731
pose of supplying the public with water, whose capital
stock must not exceed two million dollars. This is a gen-
eral provision, and does not govern classes of corpora-
tions permitted by other provisions to have a greater
amount of capital stock.
Companies incorporated for the supply of heat, light,
and fuel, or any of them, by any process of manufacture,
natural gas companies, and traction companies are au-
thorized to have capital stock not exceeding five millions.
of dollars.2
Street passenger railway companies are limited to a cap-
ital stock of $30,000 per mile, except those whose railways
are operated by other than animal power. The capital
stock of such companies may be increased to one hundred
thousand dollars per mile."
4
Except as to street passenger railway companies, neither
the constitution nor statute fixes any minimum of capital
stock which must be named in their charter. The require-
ment that ten per cent of the amount of capital stock
named therein, must be paid in cash before letters-patent.
can be issued is imperative. In view of this requirement,
and of the fact that the bonus herein before mentioned
must be paid upon the amount of capital named in the
certificate or articles of association, it is customary at the
time of incorporation to ask only for such an amount of,
capital stock as the present necessities of the company
are likely to require. This amount may be subsequently
increased by any of the various classes of corporations,
within the limits above mentioned, and as to some of
them it may be decreased.
¹ Laws, 1874, p. 79, sec. 11, as amended, Laws, 1889, p. 180.
2 Laws, 1887, p. 313, sec. 4; Laws, 1885, p. 29, sec. 1; Laws, 1887, p. 8,
secs. 1, 4.
3 Laws, 1889, p. 212, sec. 5.
4 By decision of the lower courts, corporations are held to strict and
exact compliance; failure to comply or evasion of the requirement, e. g.,
by treating a check or note as cash, will be deemed cause for declaring
the charter void.
1732
ECONOMIC LEGISLATION.
The act of June 8, 1891,¹ provides that any corporation
created by special or general law, notwithstanding any
limitation upon the amount of its capital stock by such
special or general law, shall have authority, with the con-
sent of the persons holding the larger amount in value
of its stock, to increase its capital stock to accomplish and
enlarge the business and purposes of its incorporation, to
the amount of ten millions of dollars in the aggregate,
said increase to be made at once, or from time to time, as
its stockholders aforesaid shall determine.
This statute has not been judicially construed. As its
effect upon special limitations has not been thus ascer-
tained, those limitations, notwithstanding the sweeping
terms of the statute, are herein stated as above.
2
The constitution provides that "No corporation shall
issue stocks .. except for labor done or money or
property actually received." By statute, the same pro-
vision is made as to companies organized under the gen-
eral law of 1874.3
The constitution also provides that "No act of the gen-
eral assembly shall authorize the investment of trust funds
by executors, administrators, guardians or other trustees
in the .. stock of any private corporation," but in-
vestments made prior to the passage of this provision are
saved from its operation.*
Capital stock must be divided into shares of not more
than $100 each, and is deemed and treated as personal prop-
erty. Certificates of stock must be signed by the presi-
dent and countersigned by the treasurer, and sealed with
the common seal of the corporation, and no note or obli-
gation given by a stockholder, whether secured by pledge
or otherwise, can be considered as payment of any part of
the capital stock."
1
¹ Laws, 1891, p. 223.
3 Laws, 1874, p. 81, sec. 17.
'Laws, 1874, p. 79, secs. 11, 12;
' Const., Art. XVI, sec. 7.
* Const., Art. III, sec. 22.
Laws, 1887, p. 273.
PENNSYLVANIA.
1733
Corporations created under the general law of 1874, and
traction and natural gas companies are authorized to take
real and personal estate, mineral rights, patent rights, and
other property necessary for the purposes of their organ-
ization and business, and to issue stock to the amount of
the value thereof in payment therefor, which stock so
issued shall be declared and taken to be full paid stock,
and not liable to any further calls or assessments. When
stock is so-issued in payment for property, it must not be
stated or certified as having been issued for cash, but in
all the certificates and statements required, the actual facts
must be given.' This provision does not do away with
the necessity for the payment in cash of ten per cent of
the capital stock named in the charter before letters-
patent can be obtained; but when, after incorporation,
there is an increase of the original amount of the capital
stock made in the manner hereinafter pointed out, the
whole increase may be issued in payment for property.
As to assessments see note 2, under "LIABILITY OF STOCK-
HOLDERS," p. 1746.
Increase and decrease of.—The constitution provides that
"The stock
of corporations shall not be increased
except in pursuance of general law, nor without the con-
sent of the persons holding the larger amount in value of
the stock first obtained at a meeting to be held after sixty
days' notice given in pursuance of law," and that "all fic-
titious increase of stock . . . shall be void.” 2
To carry this provision into effect there was passed "An
act to provide for the manner of increasing the capital
stock and indebtedness of corporations."3 This act does
not confer upon any corporation authority to increase its
capital stock, but simply provides the manner in which it
may increase the same "to such an amount as such corpo-
ration is by law authorized to increase its capital stock."
¹ Laws, 1874, p. 81; Laws, 1887, p. 11, sec. 4; Laws, 1885, p. 31,
sec. 4.
2 Const., Art. XVI, sec. 7.
Laws, 1874, p. 61.
1734
ECONOMIC LEGISLATION.
The general law of 1874 contains practically the same
provisions relative to the manner of increasing capital
stock; and the same are found relative to natural gas
companies and traction companies.3
2
Briefly stated, the authority to increase the amount of
capital stock named in the charter is to be obtained in the
following manner: The board of directors must, by reso-
lution, call a meeting of the stockholders to be held at the
chief office or place of business in this commonwealth, for
the purpose of holding an election for or against the pro-
posed increase, and appoint three judges, stockholders of
the corporation, to hold the said election. If one or more
of the judges be absent, the judge or judges present may
appoint others to fill the vacancy or vacancies. If none
of those appointed should appear, undoubtedly the stock-
holders at the meeting may appoint three judges to hold
the election.
1
Notice of the time, place, and object of the meeting
must be published once a week for sixty days prior thereto
in at least one newspaper published in the county, city, or
borough wherein the meeting is to be held. Under the
ruling of the attorney-general and practice of the secretary
of the commonwealth, this notice may be waived by unan-
imous consent of the stockholders, but, in view of the
positive requirements of the constitution and the acts
of assembly, the safer practice is to give the published
notice.
The judges must respectively take and subscribe an oath
or affirmation, before an officer authorized by law to ad-
minister the same, well and truly according to law to con-
duct such election to the best of their ability. They are
authorized to decide upon the qualifications of voters, and
when the election is closed to count the number of shares
and declare whether the persons or bodies corporate hold-
¹ Laws, 1874, p. 82, secs. 19–22.
' Laws, 1887, p. 11, secs. 5-8.
2 Laws, 1885, p. 32, secs. 6-9.
PENNSYLVANIA.
1735
ing the larger amount of the stock of the corporation
have consented to the increase or refused to consent
thereto. They must make out duplicate returns of the
election, stating the number of shares of stock voted for
and the number voted against the increase, and subscribe
and deliver the same to one of the chief officers of the
company.¹
Each ballot must have indorsed thereon the number of
shares thereby represented, and be signed by the holder
or by the person holding the proxy therefor. No share
or shares transferred within sixty days will entitle the
holder to vote at such election, and no proxy can be re-
ceived or entitle the holder to vote unless bearing date and
having been executed within three months next preceding
such election."
For the information of the judges in holding the elec-
tion, it is made the duty of the corporation to furnish
them with a statement of the amount of its capital stock
and the names of persons or bodies corporate holding the
same, with the number of shares by each respectively
held, which statement must be signed by one of the chief
officers of the company, with an affidavit annexed thereto
that the same is correct and true to the best of his knowl-
edge and belief.¹
If the holders of a majority of all the stock consent.
to such increase, one of the duplicate returns of election,
signed by the judges, must, within thirty days after the
election, be filed in the office of the secretary of the com-
monwealth, together with a copy of the resolution of the
board of directors calling the meeting, and proof of
publication of notice. Where notice is waived by unani-
mous consent of the stockholders, the practice of the de-
partment requires that there must be filed in the office of
the secretary of the commonwealth, together with the re-
turn of the judges of election, a written waiver, signed by
¹ Laws, 1874, p. 82, secs. 19-22.
1736
ECONOMIC LEGISLATION.
all the stockholders of the corporation, accompanied by an
affidavit of an officer of the company to the effect that the
persons subscribing the waiver are the owners of all the
capital stock of the corporation.
When, in pursuance of the consent of the holders of the
majority of the stock thus obtained, an increase has actu-
ally been made, the president or treasurer of the corpora-
tion must, within thirty days thereafter, make and file in
the office of the secretary of the commonwealth a return,
under oath, of the amount of such increase and the terms
of the same; that is to say, the terms on which the ad-
ditional stock was issued. Neglect or omission to file this
return subjects the corporation to a penalty of $5,000, to
be collected on an account settled by the auditor-general
and state treasurer as accounts for taxes due the common-
wealth are settled and collected.¹
Upon such increase of capital stock a bonus or fee, as
shown above (see "FEES," p. 1716), must be paid to the
state treasurer.
Water companies in cities of the first and second classes
have the right to increase the amount of their capital, from
time to time, to such amount as may be found requisite
and "exigible" for the purposes thereof to any amount
not exceeding two millions of dollars.²
Street passenger railway companies whose railways are
operated by other than animal power may increase their
capital to one hundred thousand dollars per mile.3
Whenever any street passenger railway company, incor-
porated under the act of 1889, shall, in the opinion of the
directors, require an increased amount of capital stock in
order to complete and equip its road and carry out the
full intent and meaning of its articles of association, the
directors, if authorized by "a majority of the stock-
¹ See "TAXATION," p. 1750.
Laws, 1887, p. 269. Quære? as to the constitutionality of this act, see
Weinman v. Pass. R'y Co., 118 Pa. 192.
3 Laws, 1889, p. 212, sec. 5.
PENNSYLVANIA.
1737
1
holders owning at least a majority of the stock," at a meet-
ing called for that purpose, may file with the secretary of
the commonwealth a certificate setting forth the amount
of such desired increase, and thereafter such company is
entitled to have such increased capital as is fixed by said
certificate. This provision does not contain the same de-
tails as those above cited, nor is it in compliance with the
constitutional requirement of sixty days' notice by pub-
lication. It is safer practice, and not inconsistent with
the requirements of this act, that such companies de-
siring to increase their capital stock conduct their proceed-
ings in accordance with the requirements of the other acts,
whose provisions are fuller and more complete on the
subject.
Any corporation created under the provisions of the gen-
eral law of 1874, and any corporation of the classes named
in the second section thereof, now in existence by author-
ity of any law of this commonwealth, may reduce its cap-
ital stock, or alter and change the par value of the shares
thereof by a vote of the stockholders taken in the manner
and under the regulations prescribed above.2
Natural gas companies and traction companies are au-
thorized to reduce their capital stock in the manner above
indicated, but street railway companies created under the
act of 1889 can not reduce their capital stock below the
amount named in their articles of association, the statute
not providing for such reduction.
Transfer of.—Stock is transferable at the pleasure of
the holder in person or by attorney duly authorized, as the
by-laws of the corporation may prescribe, subject to all
payments due or to become due thereon, but no certificate
can be transferred while the holder thereof is indebted to
the company, without the consent of the board of directors.3
1 Laws, 1889, p. 212, sec. 5.
2 Laws, 1874, p. 83, sec. 23, as amended, Laws, 1876, p. 33, sec. 5.
³ Laws, 1874, p. 78, sec. 7.
VOL. II-29
"
*
1738
ECONOMIC LEGISLATION.
Shares are not transferable until all previous calls thereon
have been fully paid, or shall have been declared forfeited
for non-payment of calls.'
Company's lien on.-See under "Transfer of," last above.
Preferred stock.-Corporations created under or accepting
the provisions of the general corporation law of 1874 are
authorized to issue preferred stock, the holders of which
are entitled to receive such dividends thereon as the board
of directors of the corporation may prescribe, payable only
out of the net earnings of the corporation. The consent
of a majority in interest of the stockholders must first be
obtained at a meeting to be called for that purpose, of
which public notice must be given during thirty days in a
newspaper of general circulation published in the proper
county.2
Deferred stock.-Corporations operating under the pro-
visions of the general law of 1874 may issue deferred
stock in payment of real or personal estate, in which
case the fact must be expressly stated in the charter or
certificate filed, with the amount of said deferred stock,
the consideration therefor, and the terms on which it is is-
sued. Such stock may be made to await payment of divi-
dends thereon until out of the net earnings of the corpo-
ration at least five per cent has been declared and paid
upon its other full paid stock.
Stock in other companies.—It is not lawful for companies
of the character herein discussed, operating under the gen-
eral law of 1874, to use their funds in the purchase of any
stock in any other corporation or to hold the same except
as collateral security for prior indebtedness,' but any trac-
tion company may invest its funds in the purchase of
shares of stock and bonds of any corporation whose works,
railways, motors, or other property are leased, operated, or
¹ Laws, 1874, p. 79, sec. 12, as amended, Laws, 1887, p. 273.
2 Laws, 1874, p. 81, sec. 16.
3 Laws, 1874, p. 81, sec. 17.
PENNSYLVANIA.
1739
•
constructed by it, but the total par value of the shares of
stock of other corporations thus held by it must not at
any time be in excess of fifty per cent of the actual par
value of the shares of its own capital stock then issued,
and the total par value of such shares and bonds of
other corporations thus held must not be in excess of
the par value of the shares of its own capital stock then
issued.¹
Bonds, debts, etc.-The constitution provides that "no
corporation shall issue
bonds except for labor
done or money or property actually received, and all fic-
titious increase of
indebtedness shall be void.""
By statute the same provision is made as to companies or-
ganized under the general law of 1874.3 The constitution
also provides that "no act of the general assembly shall
authorize the investment of trust funds by executors, ad-
ministrators, guardians, or other trustees in the bonds
of any private corporations," and that "the
indebtedness of corporations shall not be increased except
in pursuance of general law, nor without the consent of
the persons holding the larger amount in value of the
stock first obtained at a meeting to be held after sixty
days notice given in pursuance of law."2
All corporations subject to the general corporation act of
1874, traction companies, and natural gas companies, are
authorized to borrow money and secure any indebtedness
created by them by issuing bonds with or without coupons
attached, and to secure the same by mortgage upon their
real estate and machinery, or real estate alone, to an amount
not exceeding one-half of the capital stock of the corpora-
tion paid in, and at a rate of interest not exceeding six
per cent per annum. Telegraph and telephone compa-
nies, water companies, companies for the manufacture and
supply of gas or the supply of light, heat, and power by
¹ Laws, 1887, p. 8, sec. 1, par. 7.
3 Laws, 1874, p. 81, sec. 17.
Const., Art. XVI, sec. 7.
Const., Art. III, sec. 22.
1740
ECONOMIC LEGISLATION.
means of electricity, or the supply of light or power to
the public by any other means, are specially authorized
to borrow money and secure the payment of the same by
mortgage on their property and franchises to an amount
not exceeding double the amount of the capital stock of
the corporation actually paid in, at a rate of interest not
exceeding six per cent.¹
1
Street passenger railway companies, under the act of
May 14, 1889, page 213, find their authority in section six
of the act, which reads as follows:
"The president and directors of any railroad company
created under this act shall have power to borrow money,
not exceeding the amount of capital stock subscribed, and
issue the bonds of the company therefor in such amounts
as shall not exceed double the amount actually paid up of
the capital stock subscribed; the proceeds whereof shall
be actually expended in the construction and equipment
of their roads; these bonds to be payable at such times
not exceeding thirty years after the date thereof, and at
such place and at such rate of interest not exceeding seven
per centum per annum, as said directors may deem best, and
may secure the payment of said bonds and interest by a
mortgage on said road and franchises."
The section above quoted must be read in subjection to
the constitutional provision above, and the president and
directors can not lawfully exercise the authority given
them to borrow money and issue bonds without first obtain-
ing the consent of the persons holding the larger amount
in value of the stock at a meeting to be held after sixty
days' notice given in pursuance of law. A company can
not, previous to its incorporation, nor in its charter, create
a fixed indebtedness. The provisions of the constitution
and of the acts providing for increase of indebtedness
apply to the creation of any fixed indebtedness, whether it
¹ Laws, 1874, p. 80, sec. 13, as amended, Laws, 1889, p. 257; Laws, 1885,
p. 31, sec. 3; Laws, 1887, p. 10, sec. 3.
PENNSYLVANIA.
1741
be original or an increase; but a mortgage to secure an
existing debt is not an increase of indebtedness.2
Bonds of any company subject to the constitutional pro-
vision, that is to say, any company organized since Janu-
uary 1, 1874, or any company previously organized which
has accepted the provisions of the constitution of 1874,
which show upon their face that they were issued the day
after the corporation was organized, are void under the
provision of the constitution requiring sixty days' notice
of meeting.*
3
The provisions stated above, as to methods, etc., of in-
creasing capital stock, apply also as to increase of indebt-
edness. (See under "CAPITAL STOCK-Increase and decrease
of," supra.)
Traction companies may purchase the bonds of corpora-
tions, as shown above. (See "CAPITAL STOCK-Stock in.
other companies," supra.)
In the case of sale, lease, or mortgage of corporate fran-
chises or property, a copy of the minutes of any meeting
of the stockholders or directors authorizing or directing
such sale, letting, or mortgaging, properly proven, may
be acknowledged and recorded in the proper office for re-
cording deeds, and, after the dissolution of the corporation
which has sold, let, or mortgaged its property or franchises,
such minutes may be proved by the secretary who kept
the same, or by any other ex-officer of such dissolved cor-
poration having the custody thereof." Any duly author-
ized sale or lease or mortgage by a corporation is not in-
validated by any informality in the execution or acknowl-
edgment of any conveyance, mortgage, or other instru-
ment by any officer of such corporation in carrying the
1
¹ Opinion of Attorney-General, re Hempfield Coal Co., 2 Chester Co.
Rep. 181.
2 Ahl v. Rhoads, 84 Pa. 319.
3 Const., Art. XVI, sec. 7.
* Maas v. Pa., Poughkeepsie & N. E. R. R. Co., 1 Mon. 497. See Appeal
of Columbia Nat'l Bank, 16 W. N. C. 357.
5 Laws, 1881, p. 69.
1742
ECONOMIC LEGISLATION.
same into effect, but no defect in substance is cured by
this provision.¹
The plaintiff or assigns in any judgment against any
private corporation "may have execution (by) fieri facias
from the court wherein said judgment is entered, which
shall command the sheriff or other officer to levy the sum
of said judgment, with interest and costs of suit, of any
personal, mixed or real property, franchises and rights of
such corporation, and thereupon proceed and sell the same
excepting lands held in fee, which latter shall be pro-
ceeded against and sold in the manner provided in cases
for the sale of real estate. The proceedings on judgment
under the aforesaid provisions
shall be without
stay of execution: Provided that the purchaser or pur-
chasers of any or of all of said property, real, personal, or
mixed, together with the franchises and rights, shall take
the same clear of all incumbrances excepting any mort-
gage or mortgages which may legally exist at the time of
the levy thereupon, the lien of which shall not be affected
in any manner by said sale." 2
This "levy may extend to the property, franchises, and
rights of said corporation in any and every county of this
commonwealth, wherein the same may be, and
the levy and sale thereof shall be as effective as though
the said property franchises and rights were located, used,
levied upon, and sold in the county wherein said writ of
execution was issued, and shall fully divest the defendants
of all interest therein." 3
"Whenever the material, rolling stock, property, and
franchises, of any gas, water,
or of any corporation
created by or under any law of this state, shall be sold
and conveyed under and by virtue of any process or decree
of any court of this state, or of the circuit court of the
¹ Laws, 1881, p. 70, sec. 3.
2 Laws, 1870, p. 58, sec. 1; Laws, 1836, p. 774, sec. 72 (?). The statute
reads 62d section, but 72d was undoubtedly intended.
Laws, 1870, p. 59, sec. 2.
PENNSYLVANIA.
1743
..
United States, or under or by virtue of a power of sale
contained in any mortgage or deed of trust, without any
process or decree of a court in the premises, the person or
persons for or on whose account such material,
•
property, and franchises,
may be purchased, shall
be and they are hereby constituted a body politic and cor-
porate, and shall be vested with all the right, title, inter-
est, property possession, claim and demand in law and
equity of, in and to such
property or franchises
with the appurtenances, and with all the rights,
powers, immunities, privileges, and franchises of the cor-
poration as whose the same may have been so sold, and
which may have been granted to or conferred thereupon.
by any act or acts of assembly whatsoever in force at the
time of such sale and conveyance, and subject to all the
restrictions imposed upon such corporation by any such
act or acts except so far as the same are modified
hereby."
The persons for or on whose account such property
and franchises have been purchased must meet within
thirty days after the conveyance thereof is delivered. No-
tice of the time and place of such meeting must be given
once a week for two weeks in a paper published in the
city or county in which such sale was held. At such meet-
ing the purchasers must organize a new corporation by
electing a president and board of six directors to continue
in office until the first Monday of May succeeding such
meeting, and annually thereafter, on the said day, there
must be held an election for a president and six directors,
1 Laws, 1878, p. 145, sec. 1, as amended, Laws, 1887, p. 278. Before the
passage of the act of 1878, there was no statutory provision for the re-
organization of purchasers of franchises of other than railroad, canal,
turnpike, bridge, and plank-road companies. It was, however, held by
the attorney-general, in 1877, that the power to sell the franchises under
an execution implied the right of the purchasers to use them. He there-
fore determined that they could reorganize the company under the
same or any other name, and when reorganized and officers appointed,
the fact should be certified to the governor, and new letters-patent
issued.
1744
ECONOMIC LEGISLATION.
to serve for one year. The purchasers must also adopt at
such meeting a corporate name and common seal, and de-
termine the amount of the capital stock, which must not
exceed the amount authorized in the original charter of
the original company. They are also authorized to issue
stocks and bonds, to which further reference will be made
herein under the proper head.' It is the duty of such new
corporation, within one calendar month after its organiza-
tion, to make a certificate thereof under its common seal,
attested by the secretary or president, specifying the date
of such organization, the name adopted, the amount of
capital stock, and the names of its president and directors,
and transmit the same to the secretary of state to be filed
in his office and there remain, and a certified copy of such
certificate so filed is evidence of the corporate existence
of said corporation.2
These provisions do not inure, to the benefit of any coal,
iron, steel, lumber, or oil, or mining, manufacturing,
transportation, or telegraph company, unless, before claim-
ing or using the benefits thereof, it shall file in the office
of the secretary of the commonwealth an acceptance of
the provisions of the constitution of Pennsylvania, which
acceptance must be made by a resolution adopted at a
regular or called meeting of the directors, trustees, or
other proper officers of the corporation, and certified
under its seal.' This apparent discrimination between
certain classes of companies is immaterial, as, even without
such formal acceptance, the new corporation is subject to
all the provisions of the constitution applicable to any
corporation of its class.
By the statutes cited, reorganized corporations are au-
thorized to issue stock in shares of fifty dollars each, and
¹ Laws, 1878, p. 145, sec. 1, as amended, Laws, 1887, pp. 276, 278.
2 Laws, 1878, p. 145, sec. 2.
³ Laws, 1878, p. 145, sec. 3; Laws, 1887, p. 280.
This for the reason that by the express provisions of the act a new
corporation is created, and hence existing laws govern it.
PENNSYLVANIA.
1745
may then, or at any time thereafter, create and issue pre-
ferred stock to such an amount and upon such terms as
they may deem necessary; and, from time to time, to issue
bonds, at a rate of interest not exceeding six per centum,
to any amount not exceeding their capital stock, and to
secure the same by one or more mortgages upon the real
or personal property and corporate rights and franchises,
or any part or parts thereof.
Dividends.—Street passenger railway companies must
declare dividends of so much of the profits of the com-
pany as appears advisable to the directors, "in the months
of July and January in each and every year," which must
be paid to the stockholders or their legal representatives,
on application at the office of such company at any time
after the expiration of ten days from the time of 'declar-
ing the same; but the dividends must in no case exceed
the amount of the net profits actually acquired by the
company, so that the capital stock shall never be impaired
thereby; and if the directors make any dividend which
impairs the capital stock of the company, those consent-
ing thereto are liable in their individual capacity to the
company for the amount of capital stock so divided, re-
coverable by action of debt as in other cases; and a di-
rector present when such dividend was declared is consid-
ered as consenting, unless he forthwith enters his protest
on the minutes of the board and gives public notice to the
stockholders of the same.¹
Liability of stockholders.-The stockholders in corpo-
rations operating under the general law of 1874 are liable
in their individual capacity to the amount of stock held
by them, for all work or labor done, to carry on their
operations. This provision does not increase or diminish
the liability of stockholders in corporations which are to
be governed, controlled, and managed by other special
¹ Laws, 1889, p. 215, sec 11.
1746
ECONOMIC LEGISLATION.
}
provisions, but their liability is fixed and defined by such
provisions.¹
The liability created by this general provision exists to
the amount of the stock held by the stockholders, without
any reference to the question whether it has been paid for
or not. Hence the stockholder, although he has paid in
full to the corporation for his stock, is, nevertheless, still
liable for the whole of the value of his stock to the class
of creditors named. It is an additional liability of stock-
holders entirely apart from their liability for unpaid sub-
scriptions to capital stock, enforceable by creditor's bill or
otherwise.2
No provision for any personal liability of stockholders
of natural gas, traction, or street passenger railway com-
panies is made.
In any action or bill in equity brought to enforce any
liability under these provisions, the plaintiff may include
as defendants any one or more of the stockholders of such
corporation claimed to be liable therefor; and if judgment
be given in favor of the plaintiff for his claim, or any part
thereof, and any stockholder so made defendant is found
to be liable, judgment must be given against him. Execu-
tion upon such judgment must first be levied on the prop-
erty of the corporation found in the county where the
¹ Laws, 1874, p. 80, sec. 14, as amended, Laws, 1876, p. 32, sec. 3. The
act of 1874 originally included the words " or materials furnished," but
they were omitted in the amendment of 1876.
2 Lane's Appeal, 105 Pa. 49; Patterson v. Wyomissing Co., 40 Pa. 117;
Bunn's Appeal, 105 Pa. 49. In Price's Appeal, 106 Pa. 421, it was held
that "section 12 of the act of April 29, Laws, 1874 (P. L. 79), authoriz-
ing a corporation to assess upon each share of stock such sums of money
as the stockholders think proper, not exceeding in the whole the orig-
inal par value of the stock, confers the power to make such assessment
upon stock, the full par value of which has been already paid by the
subscriber. The liability to assessment thereby imposed is independent
of and beyond the liability for assessment up to par value." But con-
sequent upon this decision, the act of May 25, Laws, 1887, p. 273, was
enacted repealing so much of the act of 1874 as authorized the corpora-
tion to make assessments.
PENNSYLVANIA.
1747
chief business of the corporation is carried on; if suffi-
cient property to satisfy the same can not be so found, the
deficiency, or so much thereof as the stockholders, defend-
ants in such judgment, are liable to pay, must be collected
of the property of such stockholders. A stockholder pay-
ing any part of such judgment is entitled to have such
part thereof assigned to him, with power to enforce the
same in the same manner against the company, and if it
can not be collected of the property of the corporation,
then ratably against the other solvent stockholders orig-
inally liable for the claim on which such judgment was
obtained; but no stockholder is personally liable for pay-
ment of any debt contracted by the corporation, unless
suit "be brought against such stockholder or stockhold-
ers within six months after such debt shall have become
due." 1
The officers and stockholders of corporations organ-
ized under or accepting the provisions of the general law
of 1874 are not individually liable for the debts of said
corporation otherwise than is thus provided above.2
Liability of officers and directors.-At common law
directors are liable to both creditors and share-holders for
flagrantly negligent management of the corporate assets.³
See under "LIABILITY OF STOCKHOLDERS" and "DIVI-
DENDS," above.
3
Reports. The constitution provides that "the existing
powers and duties of the auditor-general, in regard to
railroads, canals, and other transportation companies, ex-
cept as to their accounts, are hereby transferred to the
secretary of internal affairs, who shall have a general su-
pervision over them, subject to such regulations and alter-
ations as shall be provided by law; and, in addition to the
annual reports now required to be made, the said secretary
may require special reports at any time upon any subject
1 Laws, 1874, p. 80, sec. 15.
2 Laws, 1874, p. 83, sec. 24.
" Watts' Appeal, 78 Pa. 370; Warner v. Hopkins, 111 Pa. 328.
1748
ECONOMIC LEGISLATION.
relating to the business of said company from any officer
or officers thereof.""
Railroad and telegraph corporations, with others, are
required under a penalty of five thousand dollars, to make
report within thirty days after the expiration of the finan-
cial year, according to the form to be prescribed by the
auditor-general (secretary of internal affairs), embracing
in detail the operation and affairs of the said corporation
during the financial year, and such other information as
he may direct.2
By the act of May 11,3 a bureau of industrial statistics
is created in the department of the secretary of internal
affairs, the purpose of which is the collection, compilation,
and publication of statistics in regard to the wages of
labor and the social condition of the laboring classes, to
enable the people of the state to judge how far legislation
can be invoked to correct existing evils; to facilitate these
duties, all corporations, firms, or individuals engaged in
mining, manufacturing, or other business, and all persons
working for wages within the commonwealth, are required
to furnish statistical information as the chief of the said
bureau may demand. The refusal to comply with this act
subjects the person refusing to a penalty of one hundred
dollars. The same act expressly transfers, as does the
constitutional provision above, from the auditor-general to
the secretary of internal affairs, the duties imposed by the
above provisions relative to reports of railroad and tele-
graph companies, and requires the secretary of internal
affairs to transmit to these corporations the required blanks
on which to make reports.
In pursuance of this authority, the secretary of internal
affairs now requires street passenger railway, telegraph,
and telephone companies to make reports on blank forms
furnished by him for each year ending with the thirtieth
¹ Const., Art. XVII, sec. 11.
3 Laws, 1874, p. 135.
2 Laws, 1870, p. 61.
PENNSYLVANIA.
1749
of June, showing the names and residences of officers, lo-
cation of offices, amount of capital stock, funded debt,
cost of plant, characteristics of the same, monthly state-
ments of passengers or freight carried, rates, receipts, ex-
penses, etc. These reports are published together with
tabulated statements made from them.¹
The president and directors of street railway companies
must exhibit, at each annual meeting of the stockholders,
a full and complete statement of the affairs and proceed-
ings of the company for the preceding year, with all mat-
ters necessary to convey to the stockholders a full knowl-
edge of the condition and affairs of the company, and the
president and directors must whenever required furnish to
the legislature or either branch thereof a full and authen-
tic report of their affairs and transactions relating thereto
as may be demanded by them.2
It is also specifically made the duty of each street rail-
way corporation incorporated under the general act of
1889 to make out and return to the auditor-general an an-
nual report according to the form prescribed by him, em-
bracing in detail the operations and affairs of the cor-
poration during the preceding year up to and including
the thirty-first day of October, and such other information
as the auditor-general may direct; blank forms must be
forwarded by the auditor-general to such corporations on
or before the first day of October in each year. The re-
port must be attested by the oath or affirmation of the
president or acting superintendent or the treasurer of the
company and forwarded to the auditor-general on or be-
fore the first day of December in each year; every such
corporation refusing or neglecting to make such report is
liable to a penalty of five hundred dollars to the use of
¹ See Annual Report of the Secretary of Internal Affairs, Part IV,
Railroads, Canals, Telegraph, and Telephones, 1890–91.
2 Laws, 1889, p. 215, sec. 10.
1750
ECONOMIC LEGISLATION.
the commonwealth for every such refusal or neglect, to be
sued for and recovered as are debts of like amount.¹
The requirements as to the reports to be made by corpo-
rations under the revenue laws are given under "TAXA-
TION," below.
Taxation.The state constitution contains the follow-
ing provisions relative to taxation :
"All taxes shall be uniform upon the same class of sub-
jects within the territorial limits of the authority levying
the tax, and shall be levied and collected under general
laws; but the general assembly may by general laws ex-
empt from taxation public property used for public pur-
poses, actual places of religious worship, places of burial
not used or held for private or corporate profit, and insti-
tutions of purely public charity."
"2
"All laws exempting property from taxation other than
the property above enumerated shall be void."3
"The power to tax corporations and corporate property
shall not be surrendered or suspended by any contract or
grant to which the state shall be a party."4
State taxes.—The method of collecting state taxes from
corporations is very simple. No taxes for state purposes.
are levied locally in the districts in which their property
is located or business conducted. In fact, none for state
purposes are imposed upon the specific items, real estate
or other, of which their property is composed. For the
purpose of state taxation, reports are required to be made
by specified officers of the corporation to the auditor-
general at given periods, upon the receipt of which that
officer ascertains the amount of tax due and states the
same in a formal account, or, as it is technically termed,
"settlement" against the company.
This settlement,
with the report and other papers relating thereto, is then
submitted to the state treasurer for his revision and ap-
¹ Laws, 1889, p. 216, sec. 13.
3 Const., Art. IX, sec. 2.
2 Const., Art. IX, sec. 1.
* Const., Art. IX, sec. 3.
PENNSYLVANIA.
1751
probation. He must within a reasonable time return the
settlement and papers connected therewith to the auditor-
general with his signature if he approve thereof. In the
event of his disapproval, his reasons must be stated in
writing. If the auditor-general and state treasurer can
not agree, the auditor-general must lay the account be-
fore the governor with his own reasons and the reasons
of the state treasurer respecting the same; and the decision
of the governor is conclusive as to the said officers, who
must thereupon readjust the account in accordance there-
with.¹
When an account has been so settled by the auditor-
general, and approved by the state treasurer, a certified
copy is sent to the corporation, which, if dissatisfied there-
with, may appeal therefrom to the court of common pleas
of Dauphin county, the county wherein the state capital
is located. The appeal must be filed in the office of the
auditor-general within sixty days after the receipt of no-
tice of the settlement. The auditor-general transmits it
to the clerk of the court, to be by him entered of record
subject to like proceedings under the direction of the at-
torney-general as in common suits. Within ten days after
such appeal, the appellant must enter into sufficient se-
curity before one of the judges of the court of common
pleas to prosecute the appeal with effect, and to pay any
resulting judgment costs and charges. It then assumes
the form of a suit by the commonwealth against the cor-
poration. In so far as, if at all, the account is not ap-
pealed from, it is final and conclusive against the company,
but as to the parts appealed from, the burden is upon the
commonwealth to establish its claim. The appeal must
contain a specification of all the objections which the com-
pany wishes to urge to the settlement, and must be drawn
with great care and particularity, as no objection which is
not definitely specified in the appeal will be entertained.
1 Brightley's Purdon's Digest, title, Public Accounts.
%
1752
ECONOMIC LEGISLATION.
by the court.¹ A jury trial may be had if desired by either
party, but it is usual to try the cases under the act of
April 22, 1874,2 without a jury, the court finding both the
facts and the law. The findings of fact by the court are
conclusive, but from its conclusions of law, either party
may appeal direct to the supreme court, the highest court
of record in the state. If questions arising under the
constitution or laws of the United States are involved,
they may be properly raised by the specifications of ob-
jection in the appeal,³ and if the decision of the supreme
court be against the company, it may, regardless of the
amount involved, obtain a review in the supreme court of
the United States. The court costs in such appeals are
trifling, but if the corporation loses, an attorney-general's
commission of 5 per cent is added to the amount of tax
found due. It is also required to pay interest at 12 per
cent per annum from sixty days after the date of the
settlement.
Settlements unappealed from are certified by the aud-
itor-general to the attorney-general to bring suit thereon
in the court of common pleas of Dauphin county. In the
absence of an appeal, no defense to the merits of the set-
tlement can be heard, and judgment is therefore speedily
obtained. For the purpose of hearing and determining
all suits, claims, and demands whatever at law or in equity
in which the commonwealth may be the party plaintiff for
accounts, unpaid balances, unpaid taxes, penalties, and all
other causes of action, real, personal and mixed, the court
of common pleas of Dauphin county is clothed with juris-
diction throughout the state."
For the purpose of verifying the accuracy of any re-
turn made to them, the auditor-general and state treas-
urer, or any agent appointed by them, or either of them,
1 -Brightley's Purdon's Digest, title, Public Accounts.
2 Laws, 1874, p. 109.
³ Bell's Gap R. R. Co. v. Pennsylvania, 134 U. S. 232.
4 Laws, 1870, p. 57.
PENNSYLVANIA.
1753
are authorized to examine books and papers of cor-
porations.¹
The auditor-general is also clothed with very extensive
powers to compel the attendance of witnesses and the
production of books and papers at his office. His writs
for the purpose may be directed to the sheriff or coroner
of any county, and for failure to comply therewith, he'
may cause the party offending to be committed to the com-
mon jail.²
These extraordinary remedies are seldom resorted to, as
corporations are usually most faithful in making returns.
It is not incumbent upon the auditor-general to compel
either an examination of the books or papers or the at-
tendance of the parties; but, if he and the state treasurer
deem it more conducive to the public interest, they may,
in case of failure to furnish such information, estimate ac-
counts against the corporations for taxes supposed to be
due, and add thereto fifty per cent to protect the state
from any loss which might otherwise accrue by reason of
neglect or refusal of the corporation to furnish the proper
reports.2
Payments of amounts found due upon settlements made
as aforesaid must be made to the state treasurer. Receipts
for money so paid are not available in law, unless signed
by him or some person known to be in his employ and for
whom he is answerable, and countersigned by the auditor-
general.2
The auditor-general and state treasurer, at the request
of each other or of the party, may, within twelve months
of the date of any such settlement, revise the same, unless
it shall have been appealed from.2 With the concurrence
of the attorney-general, they are authorized to revise any
settlement whenever it may appear that the same has been
erroneously or illegally made, and resettle the same and
¹ Laws, 1889, p. 420, sec. 29.
1 Brightley's Purdon's Digest, title, Public Accounts.
VOL. II-30
1751
ECONOMIC LEGISLATION.
}
credit or charge the amount resulting from such resettle-
ment upon the current account of the corporation. Cred-
its resulting from such resettlements are assignable, and
thus made available to parties indebted to the state.¹
If the system of collection is simple, it by no means fol-
lows that it is always an easy matter to tell just what
taxes any particular corporation is required by law to pay.
The corporation tax laws have been so frequently amended,
revised, and re-enacted, and the various amending, revis-
ing or re-enacting statutes so carelessly and inartistically
drawn that corporations, state officers, attorneys, and
courts are not infrequently puzzled to apply them to the
various conditions of different corporations, and determine
their duties and obligations thereunder. An attempt to
combine them in one statute was made in the passage of
the act of June 7, 1879, Laws, p. 112, entitled "An act to
provide revenue by taxation." Several of its most im-
portant features were judicially declared unconstitutional
or otherwise invalid, but it has been supplemented by the act
of June 10, 1881, Laws, p. 86; act of 1885, Laws, p. 193; and
the further supplement of June 1, 1889, Laws, p. 420, which
is intended to supply much of the pre-existing statute law
and comprise within itself a general system of corporate
taxation. The latter consists of thirty-six sections, many
of them very long and involved, and rendered more so by
the attempt to cover special cases and peculiar conditions
not common to most corporations. To recite the whole
act would hardly assist the understanding of any person
not familiar with previous acts and with the decisions of
the courts thereunder. The attempt will here be made to
state with reasonable accuracy the taxes which, under ex-
isting laws, the corporations herein discussed will be called
upon to pay under ordinary circumstances.2
¹ Brightley's Purdon's Digest, title, Public Accounts.
2 Since this chapter was written, the revenue act of 1889 has been
amended in several important particulars by the so-called "Boyer bill,”
approved June 8, 1891, Laws of 1891, p. 229. In so far as the corpora-
PENNSYLVANIA.
1755
On capital stock.-Beginning in 1840, the legislature has
continuously, under various statutes for the purpose, taxed
the capital stock of corporations. Under the act of 1889,
tions treated of in this chapter are concerned the changes to be noted
are two:
First.-Section 1 of the act of June 1, 1889, is so amended as to in-
crease the rate of taxation on all bonds, mortgages, etc., to four mills
annually on each dollar of the value thereof, to take effect January 1,
1892. The Boyer bill does not, in terms, require corporations, when
paying interest upon bonds or other evidences of indebtedness, to
deduct therefrom any state tax; neither does it in any way refer to the
act of June 30, 1885, Laws of 1885, p. 193, the fourth section of which, as
herein explained (see p. 1765), makes it the duty of treasurers of corpo-
rations when paying interest to deduct a tax of three mills. It is under-
stood, however, that the state authorities will insist that the two acts
are to be construed together and corporations held liable under the
provisions of the act of 1885 for the assessment and collection of the tax
imposed by the act of 1891. It is quite probable that the courts will
eventually have to determine the legal duties and responsibilities of
corporations in the premises.
Second.-Corporations are required to report their dividends, etc., to
the auditor-general as heretofore; but the provisions taxing corporations
paying six per cent or more in dividends at the rate of one-half mill
upon the capital stock for each one per centum of dividend is done
away with, and all corporations of the classes discussed in this work,
whether paying dividends or not, are taxed five mills annually, begin-
ning with 1892, upon an appraisement of the capital stock, to be made
between the first and fifteenth days of November, by the president, sec-
retary, and treasurer, or any two of them, who, being first duly sworn
or affirmed, are to estimate and appraise the capital stock "at its actual
value in cash, not less, however, than the average price which said stock
sold for during said year, and not less than the price or value indicated
or measured by net earnings, or by the amount of profit made and either
declared in dividends or carried into surplus or sinking fund." If the
auditor-general and state treasurer, or either of them, are not satisfied
with the appraisement, they are authorized to make a new valuation
based upon any information in their possession, and settle an account.
for taxes thereon, with the right to the company to appeal to the court.
if dissatisfied. If the officers of any corporation refuse for a period of
sixty days to make a report and appraisement, the act makes it the
duty of the auditor-general and state treasurer to estimate a valuation
of the capital stock of such defaulting corporation and settle an account
for taxes, penalty, and interest, from which there shall be no right of
appeal.
1756
ECONOMIC LEGISLATION.
it is made the duty of the president, chairman, or treas-
urer of every corporation, foreign or domestic, doing busi-
ness in Pennsylvania or having capital or property em-
ployed in this state, to make report in writing to the au-
ditor-general, annually, in the month of November, stating
specifically: the total authorized capital stock; total au-
thorized number of shares of stock; number of shares of
stock issued; par value of each share; amount paid into
the treasury on each share; amount of capital paid in;
amount of capital upon which dividend was declared; date
of each dividend declared during said year ending with
the first Monday of November; rate per centum of each
dividend declared; amount of each dividend during the
year ending with the first Monday in said month; gross
earnings during said year; net earnings during said year;
amount of surplus; amount of profit added to the sinking
fund during said year; highest price of sales of stock be-
tween the first and fifteenth days of November aforesaid;
highest price of sales of stock during the year aforesaid;
average price of sales of stock during the year. The au-
ditor-general requires this report to be signed by two offi-
cers of the company, that is to say, the treasurer and either
the president or secretary.
If the corporation has not, during the year ending with
the first Monday of November, made any dividend, or, if
the dividends made by it upon either its common or pre-
ferred stock have not amounted to six per cent upon the
par value of said stock, then two of the three specified
officers, namely, president, treasurer, and secretary, must,
between the first and fifteenth days of November, being
first duly sworn or affirmed to do the same with fidelity
and according to the best of their knowledge and belief,
estimate and appraise the capital stock upon which no
dividend has been made or declared, or upon the par value
of which the dividend or dividends made or declared
¹ Laws, 1889, p. 428.
PENNSYLVANIA.
1757
amount to less than six per cent in cash, not less, however,
than the average price which said stock sold for during
said year, and not less than the price or value as indicated
or measured by the amount of the dividends made or de-
clared; and, when the same has been so truly estimated
and appraised, they must forthwith forward to the auditor-
general a certificate thereof, accompanied by a copy of
their said oath or affirmation, signed by them and attested
by the magistrate or other person duly qualified to admin-
ister the same.¹
While the appraisement must not be less than the av-
erage price during the year, it may be more. The thing
to be determined is the value during the first fifteen days
of November, and not the average value during the year.²
Par value, as here used, means the par value of the capital
paid in, and not of the authorized or subscribed capital.
Thus, where the capital stock of a corporation was divided
into shares of fifty dollars each, upon which only twenty
dollars per share had been paid in and the corporation had
paid dividends amounting to six per cent upon the amount
paid in, no appraisement of the stock was required.3
If the auditor-general and the state treasurer are not
satisfied with the appraisement and valuation made by the
officers of the company, they are authorized to make their
own valuation thereof based upon the facts contained in
the report or upon other information obtainable by them,
and settle accounts for taxes, penalties and interest thereon.
But from such valuation the corporation may appeal to
the court as in other cases."
4
In assessing the value of the capital stock, the company's
¹ Laws, 1889, p. 428, sec. 20, supra. See note 2, p. 1754.
Pennsylvania R. R. Co. v. Com., 94 Pa. 474.
3 Lehigh Ave. Co. v. Com., 129 Pa. 405; Phila. v. Gray's Ferry Pass. R'y
Co., 52 Pa. 177; Second & Third Sts. Pass. R'y Co. v. Phila., 51 Pa. 465;
Philadelphia v. Ridge Ave. R'y Co., 102 Pa. 190. See note 2, p. 1754.
* Laws, 1889, p. 428, sec. 20.
1758
ECONOMIC LEGISLATION.
!
officers act as officers of the commonwealth, and the
maxim “Omnia praesumuntur rite acta" applies.
Where the auditor-general sets aside such a valuation
and makes a different one, the burden is upon the com-
monwealth, in case of an appeal therefrom, to show that
the valuation made by the officers was not a proper one,¹
and it is not absolutely required that the valuation be as
high as the quotations of the stock exchange between
November 1st and 15th, if they are higher than the
average selling price during the year. The presumption
as to the correctness of the valuation made by the com-
pany's officers may be rebutted by showing that it was
fraudulently or erroneously made.2
3
1
When the report, and, if necessary, the valuation, has
been made, the tax to be charged by the auditor-general
is, in the event of dividends having been declared amount-
ing to six per cent or more, computed at the rate of one-
half mill upon the capital stock for each one per cent of
dividend. Thus, a corporation paying a six per cent divi-
dend is taxed three mills upon the par value of its cap-
ital stock; a ten per cent dividend would fix the tax at
five mills upon the capital stock; but it will be found that
in every instance the tax is equal to five per centum upon
the amount of the dividend.
If no dividend has been made, or if the dividends have
not amounted to six per cent upon the capital stock, the.
tax is imposed at the rate of three mills on each dollar of
the value thereof, ascertained as above shown. If the
company has more than one kind of capital stock, as for
instance, common and preferred, they are considered and
taxed separately; that is to say, if one pays dividends of
six per cent or more, such tax is imposed at the rate of
oue-half mill upon the capital for each one per cent of
dividend, while if upon the other stock no dividends, or
¹ Com. v. Lehigh Valley R. R. Co., 37 Leg. Int. 407.
2 Com. v. Erie Ry. Co., 2 Pearson, 380.
3 Laws, 1889, p. 430. See note 2, p. 1754.
PENNSYLVANIA.
1759
dividends less than six per cent have been paid, the tax is
three mills upon the valuation.¹
The amount of any profit added to the sinking fund
without division among its stockholders must "be treated
as having been divided amongst the stockholders, and shall
subject the capital stock to taxation as a dividend: pro-
vided, however, that said moneys, or any part thereof, be
expressly set apart for the payment of debts.” 2
3
Although frequently spoken of as a "dividend tax,'
the tax imposed by these provisions is not a tax on divi-
dends, but upon the capital stock, the dividends being used
only to furnish the rule by which the amount of tax is
to be measured. None of the Pennsylvania statutes have
ever declared it to be a franchise tax, and the courts have
invariably held it to be a tax upon the corporate property,
and therefore not applicable to such property as may be,
for any reason, not within the jurisdiction or taxing power
of the state. That portion of the capital stock of a com-
pany invested in United States bonds is not taxable," nor
capital stock representing investments in patents granted
by the United States."
4
Stock dividends subject the capital stock to taxation the
same as cash dividends; and where a company has not for-
¹ Laws, 1889, sec. 21, pp. 429, 430. See note 2, p. 1754.
2 Laws, 1889, p. 430, sec. 21.
3 Phoenix Iron Co. v. Com., 59 Pa. 104; A. & O. Tel. Co. v. Com., 66
Pa. 57. The state of New York, in 1881, enacted a statute providing
that each corporation within its provisions should be subject to a tax
upon "its corporate franchise or business," to be computed in a certain
manner, which method of computation was precisely the same as in the
Pennsylvania statute. In Home Ins. Co. v. New York, 134 U. S. 594,
the New York tax was declared to be a franchise tax," and not a tax
upon the property of the corporation, and therefore not invalid, although
a portion of the capital of the company was invested in United States
bonds.
* Com. v. Standard Oil Co., 101 Pa. 119.
5 Com. v. Pa. Coal Co., 5 C. C. R. 90; Com. v. Lack. Iron & Coal Co.,
129 Pa. 346.
6 Com. v. U. G. Imp. Co., 7 C. C. R. 116; Com. v. Westinghouse Air
Brake Co., 49 Leg. Int. 208.
1760
ECONOMIC LEGISLATION.
mally declared a dividend, if it has, in any manner, practi-
cally transferred to the stockholders its earnings, or given
them the benefit thereof, the transaction may be treated as a
dividend. Thus, where a company having a capital of $100,-
000, out of its net earnings increased the value of its plant to
$1,000,000, and paid cash dividends to its stockholders upon
$1,000,000, the increase from $100,000 to $1,000,000 was
treated as amounting to a stock dividend of $900,000, and
the company was taxed accordingly. But the mere water-
ing of stock, without dividing any profit, is not within this
rule. Where a corporation in process of winding up its af-
fairs returns to its share-holders a surplus in excess of the
amount of capital stock paid in, the amount of said excess is
treated as a dividend, subjecting the company to taxation
accordingly.³
2
1
As to what constitutes " doing business," within the
statute, so as to subject foreign corporations to the capital
stock tax, see Com. v. Standard Oil Co., 101 Pa. 119, in
which it was held that the ownership of shares of stock
in Pennsylvania corporations doing business therein, and
the purchase of oil in this state by a foreign corporation,
did not constitute doing business in this commonwealth
by the latter, within the meaning of the taxing statutes.
See also Com. v. Bell Tel. Co., 129 Pa. 217, in which it
was held that a Massachusetts corporation, having no of-
fice, agent, or place of business in Pennsylvania, but own-
ing telephone patents under which it licensed Pennsyl-
vania corporations to operate, and telephones which it
rented to them to be used by their customers, the owner-
ship remaining in the Massachusetts corporation, was not
subject to taxation upon its capital stock.
Although none of the statutes taxing capital stock have
I Lehigh Crane Iron Co. v. Com., 55 Pa. 448. See Com. v. C. P. & A.
R. R. Co., 29 Pa. 370; Com v. W. U. Tel. Co., 15 W. N. C. 331.
2 Com. v. P. Ft. W. & C. R. K., 74 Pa. 83; Com. v. Erie & P. R. R. Co.,
74 Pa. 94; Com v. Lake Shore R. R. Co., 2 Pearson, 392.
³ Matson's Ford Bridge Co. v. Com., 117 Pa. 265.
PENNSYLVANIA.
1761
2
1
5
provided for any apportionment thereof, the general rule
has been established by the auditor-general's department,
and sanctioned and declared by the courts to be, that the
corporation, whether foreign or domestic, is taxable only
on so much of its capital stock as represents the propor-
tion which its property and assets owned in this state
bears to its whole property and assets. In the case of
railroads, the proportion taxable is usually ascertained
upon the mileage basis, and so in the case of telegraph 3
and pipe-line companies. But this is only a convenient
means of estimating the proportionate value of the prop-
erty in Pennsylvania where it can not well be definitely
ascertained. Where the actual value within and without
the state can be shown, a mileage basis is not applied. In
the case of a telephone company operating partly within
and partly without the state, it was, by both parties, con-
sidered fair to tax that proportion of capital stock which
the number of telephones used in Pennsylvania bore to
the whole number. Fractions of time have also been
recognized, and where a company is organized within the
tax year, the tax is apportioned according to the time
during which the company is in existence within the
year. And where an act is repealed within the year,
taxes will be charged from the end of the preceding year
to the date of the repeal. Where the rate of the capital
stock tax was changed during the year by an act which.
supplied the former act, it was held that the company
was taxable under the old act up to the time of the pas-
¹ Com. v. Standard Oil Co., 101 Pa. 119.
2 Com. v. Pittsburgh & C. R. R. Co., 2 Pearson, 389; Pittsburgh, Ft. W.&
Chicago R. R. Co. v. Com., 66 Pa. 73; Com. v. Erie R'y Co., 98 Pa. 127.
3 Com v. W. U. Tel. Co., 15 W. N. C. 331.
Com. v. National Transit Co., 5 C. C. R. 90.
5 Com. v. C. C. & A. R'y Co. (in Dauphin C. P., not reported).
Com. v. Wyoming Valley Coal Co., 50 Pa. 410; Com. v. Lehigh Val-
ley R. R. Co., 3 Luz. Leg. Obs. 147; Com. . Standard Oil Co., 101 Pa.
119; Com. v. N. Y. L. E. & W. R. R. Co., No. 386, January Term, 1892, in
Dauphin Com. Pleas.
7 Com. v. Atlantic Refining Co., 2 C. C. R. 62.
1762
ECONOMIC LEGISLATION.
sage of the new one, and for the remainder of the year
under the new act.¹
2
As to bonds, mortgages, etc., owned by corporations,
while they are made taxable specifically as bonds and
mortgages, it is nevertheless provided that corporations.
paying the tax on capital stock "shall not be required to
pay any further tax on the mortgages, bonds, and other se-
curities belonging to them, and constituting any portion
of their assets included within the appraised value of their
capital stock, but corporations, limited partnerships, and
joint stock associations holding such securities as trustees,
executors, administrators, guardians, or in any other
fiduciary capacity, or in any other manner, shall return
and pay the tax imposed by this act upon all securities so
held by them as in the case of individuals." 3
The fifth proviso to this cumbersome section reads as
follows:
"That the provisions of this section shall not apply to
the taxation of the capital stock of corporations, limited
partnerships, and joint stock associations, organized ex-
clusively for manufacturing purposes, and actually carry-
ing on manufacturing, within the state, excepting com-
panies engaged in the brewing or distilling of spirits or
¹ Ebervale Coal Co. v. Com., 91 Pa. 47.
2 See below under "Of bonds, etc., in hands of holders," p. 1764.
³ Laws, 1889, p. 430, sec. 21, fourth proviso. Corporations of the class
herein discussed seldom hold such property as trustees or in any fiduciary
capacity whatever. These provisions in this respect were framed with
reference to trust companies, of which there are many in the state hold-
ing large amounts of taxable securities as trustees for estates, etc. Of
course, if any of the classes of corporations concerning which this work
is more particularly written do own such property in such a capacity,
they must return it to the local assessor, but bonds and mortgages
owned by them in their own right, may properly be said to be repre-
sented by and included in the value of their capital stock, which is tax-
able under the above provision, and, therefore, they are not subject to
be specifically taxed as bonds and mortgages through the medium of the
local assessors and the other machinery provided for the collection of
such tax from individuals.
PENNSYLVANIA.
1763
malt liquors, and such as enjoy and exercise the right of
eminent domain."
In case of failure to furnish the report and appraise-
ment required to be made, as aforesaid, on or before De-
cember 31, in each and every year, the accounting officers.
may add 10 per cent to the company's tax on capital stock
for that year, and if the officers, or any of them, inten-
tionally fail for three successive years to comply with said
requirements as to reports and appraisements, they, or
either of them so offending, are guilty of a misdemeanor,
and on conviction may be sentenced to pay a fine of $500,
and undergo imprisonment not exceeding one year, or
either, at the discretion of the court. If the company is
prevented from complying with the law because mis-
informed by the auditor-general, it is not liable to the
penalty, and where a statute is repealed reserving the
right to collect accrued taxes, but without expressly re-
serving the right to collect interest and penalties, they are
not collectible.³
2
On gross receipts.-Street passenger railway, telegraph,
telephone, and electric light companies, are also, in addi-
tion to the capital stock tax above, subject to a tax of eight
mills upon the dollar of their gross receipts from business
within this state.
This tax is payable semi-annually upon the last days of
January and July in each year. To enable the auditor-
general to ascertain the amount due, it is made the duty
of the proper officer of every such company to make and
transmit to him a statement under oath or affirmation of
the amount of gross receipts of said company derived.
from all sources, and also of the gross receipts derived
from business done wholly within the state during the
preceding six months ending on the first days of Janu-
ary and July in each year. For neglect or refusal, for a
¹ Laws, 1889, p. 431, sec. 22.
2 Del. Div. Can. Co. v. Com., 50 Pa. 399.
3 Com. v. Standard Oil Co., 101 Pa. 119.
1764
ECONOMIC LEGISLATION.
period of thirty days after said tax becomes due, to make
said return or to pay the tax, the auditor-general is au-
thorized to add to the amount of the tax a penalty of ten
per centum.¹
Where the works of one company are leased to and
operated by another, the "gross receipts tax" must be
apportioned between the companies in accordance with
the terms of their respective leases or agreements; but
the commonwealth looks first to the corporation operat-
ing the works, and when it has paid the tax upon the
taxable gross receipts the corporation from which the
works are leased is not to be held liable for any tax upon
the proportion of said receipts which may be received by
it as rental for the use of its works.¹
These provisions as to gross receipts taxes do not extend
to gas, water, heat, or fuel companies.¹
Of bonds, mortgages, etc., in hands of holders. All stocks,
bonds, mortgages, and other evidences of indebtedness
held, owned, or possessed by any person or corporation
resident, located, or liable to taxation in Pennsylvania, are
taxable annually for state purposes at the rate of three
mills on the dollar of the value thereof.3 Elaborate pro-
visions are made in the act for the assessment and collec-
tion of this tax. The taxable persons and the officers of
taxable corporations are to make return of their holdings
on blanks furnished them for the purpose by the local
assessor in the ward, district, borough, or township in
which they may reside or the principal office of the cor-
poration be located. The assessor must assess them at
their actual value, and return the same to the county
commissioners. In case of failure of the taxable person
or corporation to make the return, the assessor may make
an estimate of his or its taxable holdings, and the com-
missioners will add fifty per centum thereto. From the
valuation so made an appeal is allowed. The county com-
2 See note 2, p. 1754.
¹ Laws, 1889, p. 431, sec. 23.
9 Laws, 1889, p. 420. See note 2, p. 1754.
PENNSYLVANIA.
1765
missioners make their return to the state treasurer, who
submits it to the state board of revenue commissioners, of
which he is a member, the other members being the au-
ditor-general and the secretary of the commonwealth.
They adjust the valuation of the several counties through-
out the commonwealth. Each county is charged with its
quota of tax, and is responsible for its collection from the
individual taxables. One-third is returned to the county
for local purposes.
2
1
Bonds, mortgages, etc., issued by public or private cor-
porations of the state, or by foreign corporations doing
business in the state, are withdrawn from the method of
assessment and collection above referred to, the statute
declaring that the taxable, whether a natural person or a
corporation, shall not include in the return to the local
assessors, "the obligations of public or private corpora-
tions the tax upon which is required by law to be collected
from the holder of such obligations, and paid into the state
treasury by the corporation, it being the true intent and
meaning of this act that the provisions of the law in force
at the time of the passage of this act relating to the col-
lection of the tax upon such obligations shall remain un-
affected by the present act." ³
The loans taxes.-So far as it applied to bonds, mort-
gages, etc., issued by private corporations, "the law in
force," and which was thus continued in force, makes it
the duty of the treasurer of each private corporation in-
corporated by or under the laws of this commonwealth, or
the laws of any other state or of the United States, and
doing business in this commonwealth, upon the payment.
of any interest on any scrip, bond, or certificate of indebt-
edness issued by said corporation to residents of this com-
2
1 Laws, 1889, p. 420.
Laws, 1889, p. 426.
See note 2, p. 1754.
The act of 1891, Laws, p. 232, sec. 3, provides for
the return to the counties, beginning with 1892, of three-fourths of this
tax.
3 Laws, 1889, p. 421, sec. 2.
1766
ECONOMIC LEGISLATION.
monwealth and held by them, to assess the tax imposed
and provided for state purposes upon the nominal value
of such evidence of debt, and to report on oath, annually,
on the first Monday of November, to the auditor-general
the amount of indebtedness of the corporation owned by
residents of this commonwealth, as nearly as the same can
be ascertained, and it is also his duty to deduct three mills¹
on every dollar of the par value of the obligation from
the interest paid as aforesaid, and return the same into the
state treasury within fifteen days after the thirty-first day
of December in each year; compensation for his service
is the same that city and borough treasurers receive for
similar services; for every failure to assess and pay tax
and make report as aforesaid, the auditor-general must
add ten per centum as a penalty to the amount of the tax.
Upon payment of said tax by a corporation, the bonds,
certificates, or other evidences of indebtedness issued by
it, are exempt from all other taxation in the hands of the
holders. It will thus be seen that corporations, either
foreign or domestic, doing business in Pennsylvania, are
charged with the duty and responsibility of assessing and
collecting the tax imposed by law upon the owners of the
bonds, mortgages, etc., which said corporations may have
issued, when such owners are residents of Pennsylvania.³
2
2 Laws, 1885, p. 194, sec. 4.
1 Now 4 mills; see note 2, p. 1754.
9 For similar provisions requiring the treasurers of counties, cities, dis-
tricts, and boroughs to deduct the state tax from the interest paid to hold-
ers of evidences of indebtedness of municipalities, see Laws, 1844, p. 501,
sec. 42. In Com. v. Lehigh Valley R. R. Co., 104 Pa. 89, the seventeenth
section of the revenue tax of June 7, 1879, Laws, 1879, p. 120, and the sec-
ond section of the act of June 10, 1881, Laws, 1881, p. 99, were declared in-
operative and invalid. While they commanded the treasurer of the com-
pany to deduct a three-mill tax when paying interest upon the bonds, they
failed to provide for any assessment of the bonds. To overcome this diffi-
culty, the act of 1885, as shown above, required the treasurer to assess
the tax upon their nominal value. As all bonds are not of equal value,
and many are worth more and others less than their nominal or par
value, and bonds and mortgages issued by individuals and by corporations
not doing business in Pennsylvania are, when owned by residents of
PENNSYLVANIA.
1767
Although the act makes it the duty of the treasurer of
the company to assess and deduct the tax and pay it into
the state treasury, an account therefor may be properly
settled against the corporation. The duty is not imposed
upon the treasurer as an individual, but as an officer of the
company. The tax is not imposed upon the corporation,
but its duty and responsibility is that of assessor and col-
lector. This duty is compulsory and legally obligatory
upon the company, and is constitutionally valid.'
Foreign corporations doing business in Pennsylvania
are subject to this duty of assessment and collection of
state taxes upon bonds, etc. Although the treasurer of
the corporation is required to report annually on the first
Monday of November the amount of the indebtedness
owned by residents of the commonwealth, the account for
tax thereon should be settled by the auditor-general for
the calendar year.3 Evidences of indebtedness held in
Pennsylvania in trust for persons whose residence is un-
known are subject to this tax,3 and, although the act, in
terms, makes it the duty of the treasurer of the company
"to deduct three mills on every dollar of the interest
paid," it is construed as requiring him to deduct from
4
Pennsylvania, required by other provisions of the law to be assessed at
their actual value, it was ruled by the Dauphin County Court that these
special provisions for the assessment of corporate bonds were void be-
cause in conflict with that provision of the state constitution requiring
all taxes to be uniform and to be levied and collected under general
laws; but the supreme court of the state sustained the validity of the
law. Com. v. Del. Div. Canal Co., 123 Pa. 594.
¹ Com. v. Del. Div. Canal Co., 123 Pa. 594; Com. v. Reading & Wil-
mington R. R. Co., 2 Pearson, 394; Com. v. L. V. R. R. Co., 129 Pa. 429;
Com. v. Martin, 107 Pa. 185; Com. v. Chester City, 123 Pa. 626. Also,
Chester City v. Pa., 134 U. S. 240; Bell's Gap R. R. Co. v. Pennsylvania,
134 U. S. 232.
2 Com. v. N. Y. L. E. & W. R. R., 129 Pa. 463. This case is now pend-
ing in the supreme court of the United States.
3 Com. v. L. V. R. R. Co., 129 Pa. 429.
The rate is now 4 mills; see note 2, p. 1754.
1768
ECONOMIC LEGISLATION.
the interest paid a tax of three mills upon the principal
debt.¹
Theoretically this tax is imposed upon the bond holder,
the corporation being merely the assessor and collector,
but, practically, it often falls upon the corporation which,
in issuing bonds, must either stipulate that it will itself
pay the tax and pay the interest without any deduction
for taxes, or else sell its bonds at a lower rate or pay an
increased rate of interest. It has been customary of late
years to insert in most corporate mortgages a provision re-
quiring the corporation to pay the stipulated interest with-
out any deduction for taxes. It has also been quite cus-
tomary for individual money lenders to require of individ-
ual borrowers an agreement to pay the tax upon the mort-
gage in addition to the stipulated interest, and it is al-
leged that in many instances the lender has collected the
tax from the borrower, but has himself failed to return
the mortgage for taxation, or to pay to the state the tax
thus collected from the borrower. To provide against
this, it is now declared unlawful for any person, co-part-
nership, unincorporated association, limited partnership,
joint stock association, or corporation, whatsoever, in
loaning money at interest, whether such loan be secured
by bond and mortgage, or otherwise, to require the bor-
rower to pay the tax imposed thereon, and in all cases
where such tax has been paid by the borrower, the same
must be deemed and considered usury, and be subject to
the laws governing the same.²
Penalties, liens, etc.-In the settlement of accounts for
taxes due by corporations, the auditor-general is author-
¹ Com. v. Del. Div. Canal Co.. 123 Pa. 594; Hinchman v. R. R. Co., 5
C. C. R. 362.
2 Laws, 1889, p. 427, sec. 18. It may be questioned whether, under the
constitution, it is competent for the legislature to amend the usury laws
of the commonwealth in an act the title of which restricts its purposes
to the provision of revenue by taxation, and in any event it is quite
probable that corporations will continue to issue bonds with the same
provisions as to taxation as heretofore.
PENNSYLVANIA.
1769
ized to charge interest on the amount found due at the
rate of twelve per cent per annum, from thirty days after
the time the said tax or balances became due and payable,
to the time of the settlement of the same, provided he
shall first have sent to the corporation a statement of the
amount due. All balances due the commonwealth on
accounts settled by the auditor-general bear interest from
sixty days after date of settlement at the rate of twelve
per cent per annum until the same are paid; and judg-
ments recovered on said accounts bear interest at the rate
of twelve per cent per annum until paid; and the pay-
ment of such interest does not relieve the corporation
from any of the penalties prescribed by law for neglect or
refusal to furnish reports or to pay claims due the com-
monwealth. This interest charge is itself a penalty, and
is governed by the rules relating to penalties.2
In so far as the duties of the auditor-general in the set-
tlement of accounts are ministerial, they may be performed
by a clerk acting under his authority.' Accounts settled
by the auditor-general are conclusive, unless appealed
from within sixty days, and bringing suit on an account is
sufficient notice of the settlement."
The taxes imposed as above stated, upon corporations,
are liens upon their franchises and property, both real and
personal, from the time the said taxes are due and payable,
and whenever the franchises or property of a corporation.
are sold at judicial sale, all taxes due the commonwealth
must first be allowed and paid out of the proceeds of such
sale before any judgment, mortgage or other claim which
may have been entered of record or become a lien after
the passage of these provisions.³
No corporation is permitted to be dissolved by a decree
Laws, 1889, p. 436, sec. 30.
2 Com. v. Standard Oil Co., 101 Pa. 119; Easton Bank v. Com., 10 Pa.
442.
' Phila. & Reading R. R. Co. v.
• Iron Co. v. Com., 55 Pa. 448.
VOL. II-31
Com., 104 Pa. 86.
6
' Laws, 1889, p. 437, sec. 31.
1770
ECONOMIC LEGISLATION.
of any court of common pleas, nor is any judicial sale
valid, nor can distribution of the proceeds be made, until
the taxes due the commonwealth have been fully paid into
the state treasury, and the certificate of the auditor-gen-
eral, state treasurer, and attorney-general to that effect
filed in the proper court with the proceedings for dissolu-
tion or sale.¹
Local taxes.-The taxing power is exercised by counties,
cities of the first, second, and third classes, boroughs, poor
districts, and school districts. The purposes for which
local taxes are levied are such as pertain to the proper
needs of the various taxing authorities. The rate neces-
sarily varies with the requirements of the locality. Local
as well as state taxes are governed and qualified by the
constitutional provisions relating to uniformity. The sys-
tem of local taxation is based upon statutes voluminous
and intricate, made up of various enactments engrafted
upon a system originating in 1834. It will not be profit-
able for the purposes of this work to make an extended
investigation of this system or of these numerous statutes.
A few general observations will suffice.
552
The subjects of county taxation are "real estate, viz:
All houses, lands, lots of ground, and ground rents, mills,
and manufactories of all descriptions; all furnaces, forges,
bloomeries, distilleries, sugar-houses, malt-houses, brewer-
ies, tan-yards, and ferries. The following personal estate,
viz: All horses, mares, geldings, and cattle above the age
of four years.
The statutes conferring the taxing power
upon cities, boroughs, poor districts and school districts
are numerous, some being general in their character, and
others special as to particular cities, boroughs, or districts;
but, generally speaking, the subjects of all local taxation
are those above named. As the corporations herein
treated of are quasi public in their character, the statutes
under which these local taxes are imposed do not, as con-
¹ Laws, 1889, p. 437, sec. 32.
2 Laws, 1834, p. 512, sec. 4.
PENNSYLVANIA.
1771
strued by the courts, include such of their property as is
necessary and indispensable to their public purposes, ex-
cept in particular instances where the statute specifically
mentions such property. (See "Exemptions," infra.)
Licenses.-The cities of the commonwealth are divided
generally into three classes. Philadelphia is the only city
of the first class, and Pittsburg and Allegheny the only
cities of the second class, they being the only cities hav-
ing more than one hundred thousand inhabitants. All
other cities are, or, by accepting the provisions of the act
of May 23, 1889,' may become, cities of the third class.
Cities of the third class are authorized to levy and col-
lect for general revenue purposes a license tax not exceed-
ing $100 annually on all street railway cars and other
vehicles used in the city for hire or pay, telegraph, tele-
phone, steam-heating, gas, natural gas, water, electric
light, all power companies or agencies, and all individuals,
furnishing communication, light, heat, or power by any of
the means enumerated, and to regulate the collection of
the same.2
By act of April 11, 1868,3 passenger railway corporations
in Philadelphia are required to pay annually a license fee
of $50 for each car.¹
Boroughs are authorized to impose a license tax on
hacks, carriages, omnibuses, and other vehicles carrying
persons or property for pay."
5
Of stock in hands of holders.-Shares of stock in corpora-
tions paying a capital stock tax under section 21 of the
act of 1889, or relieved from the payment of such tax by
said section, are not taxable in the hands of the holders for
any purpose.
6
¹ Laws, 1889, p. 277.
Laws, 1889, p. 287, art. 5, sec. 3, cl. 4.
3 Laws, 1868, p. 849.
• See Union Pass. R'y Co. v. Philadelphia, 83 Pa. 429.
Laws, 1889, p. 39.
6 Laws, 1889, p. 420, sec. 1, and Laws, 1891, p. 230, sec. 1.
f
1
1772
ECONOMIC LEGISLATION.
Exemptions from.-Corporations organized exclusively
for manufacturing purposes, and actually carrying on
manufacturing within the state, excepting those engaged
in brewing or distilling spirits or malt liquors, and such
as enjoy and exercise the right of eminent domain, are ex-
empted from the operation of the tax upon capital stock.'
Electric light companies are manufacturing companies,
but are not of the class which the legislature intended to
exempt.2
As construed by the courts, the language of a general
tax statute, although broad enough in its terms to include
the property of quasi public corporations upon which has
been conferred the right to occupy the streets and public
highways, etc., does not include such property as is neces-
sary and indispensable to the public purposes of the cor-
poration. Said Mr. Justice Gordon, who delivered the
opinion of the court in County of Erie v. Erie & Western
Transportation Co., 87 Pa. 437: "It has been repeatedly
ruled that the property of canal and railroad companies
and other quasi public corporations necessary for the exer-
cise of their several franchises, as depots, toll houses and
water stations, is not taxable for local purposes. The rea-
son given for this exemption is that these things enter into
the very composition of the works of these corporations and
without which they could not exercise their corporate func-
tions. On the other hand, it has been often and expressly
held that such property as does not enter into the structure
of a company's works, but is used only as a convenience
for carrying on its business, is taxable.”
Under the act of assembly (supra, p. 1770) that made tax-
able" real estate, viz., all houses, lands, lots of ground and
ground rents, etc.," the bed, berme bank, and tow-path of
a canal company, with the toll houses and collectors' houses,
are not included, but are exempt, and the toll-house of
a canal company so built as to be occupied by the col-
¹ Laws, 1889, p. 429, sec. 21, and Laws, 1891, p. 248, sec. 5.
' Com. v. Northern Electric Light & Power Co., 145 Pa. 105.
PENNSYLVANIA.
1773
The
lector for his family residence is free from taxation.
reservoirs of a canal, the machinery for raising cars, the
houses and gardens occupied by the lock tenders, collect-
ors and engineers on the line of a canal and railroad, are
exempt from taxation as real estate, but not the offices
occupied by those functionaries in the adjoining town, nor
the buildings used as boarding houses for workmen.2 The
water stations and depot of a railroad company, offices,
oil houses and places to hold cars, and such places and
buildings as may fairly be deemed necessary and indis-
pensable to the construction of the road, are not taxa-
ble as real estate, whilst warehouses, coal lots and coal
shutes, machine shops, wood yards, and the like are
taxable.³ 3
4
The works of an incorporated gas company are not tax-
able as real estate for state and county purposes, but
dwelling-houses erected for the residence and accommoda-
tion of workmen are; but the exemption applies only to
the public works of the class of corporations which are
in their nature public, as distinguished from mere private
corporations. "It may be somewhat difficult to define
what is a public work or a public corporation in this
sense, but it is clear that one of the characteristics is that
it has the right of eminent domain, that it has franchises
which justify the legislature in defining or considering it
public."5
It is not corporations, as such, that are "considered to
be exempt from taxation, except so far as expressly im-
posed, but public works held by corporations, together
with their necessary appurtenances as public works. Cor-
porations for mere private purposes can claim no such ex-
1
¹ Lehigh Coal & Nav. Co. v. Northampton Co., 8 W. & S. 334.
2 Wayne Co. v. D. & H. Canal Co., 15 Pa. 351.
R. R. Co. v. Berks Co., 6 Pa. 70.
* West Chester Gas Co. v. Chester Co., 30 Pa. 232; Pittsburgh's Appeal,
123 Pa. 374.
5 Pittsburgh's Appeal, 123 Pa. 374. In this case the pipes of a natural
gas company were held not taxable for city purposes.
}
1774
ECONOMIC LEGISLATION.
emption, and their lands are taxable just as the lands of
individuals are, unless expressly exempt."
1
In Allegheny Co. v. Diamond Market, 123 Pa. 164, the
buildings of a market company are declared taxable, and,
as stated in the syllabus, it was held that "the principle
that the works of a public corporation, a railroad com-
pany, for example, may not be subjected to local taxa-
tion without express statutory mandate, is not applied to
the property of a private corporation which may carry out.
its purposes without the right of eminent domain."
2
In the city of Pittsburgh, under an act of assembly which
expressly declares that "all real estate situated in said city,
owned or possessed by any railroad company, shall be and
is hereby made subject to the taxation for city purposes the
same as other real estate in said city," the land, buildings,
and improvements thereon situated in the city belonging
to railroad companies, are held liable to taxation, notwith-
standing that they are essential to enable the railroad com-
panies to exercise their franchises in the operation of their
railroads. And similar real estate of a passenger railway
company in the city of Pittsburgh is taxable under the said
act.3 In Citizens Pass. R'y Co. v. Donohugh, 10 Weekly
Notes of Cases, 62, horses used for drawing street cars
were held taxable by C. P. No. 4, of Philadelphia. But,
where a "case stated" showed that the lot, stables, and
horses of a street passenger railway company were "used
only in and about the business of conveying passengers
and produce according to the defendant's corporate pow-
ers, and that they were appurtenant, necessary, and indis-
pensable therefor," the supreme court refused to sustain a
tax for county purposes. See Northampton County v.
Easton Pass. R'y Co., 1 Advance Reports, 561.
Examination fails to disclose that any case involving the
liability of the property of water, telegraph, telephone,
1 Carbon Iron Co. v. Carbon Co., 39 Pa. 255.
'Pennsylvania R. R. Co. v. Pittsburgh, 104 Pa. 522.
Citizens Passenger R'y Co.". Pittsburgh, 104 Pa. 522.
!
PENNSYLVANIA.
1775
heat, or electric light companies to local taxation has been
before the courts. The fact seems to be that in some parts
of the state the property of such companies is taxed lo-
cally and in others it is not, but it would seem that, under
the principle of the cases above cited, such property, so far
as indispensably necessary to the public works of such cor-
porations, is exempt from taxation, except in cases where
there may be acts of assembly special to certain localities,
as in the case of the city of Pittsburgh, above mentioned,
and in Philadelphia, where, under the act of April 21,
1858, Laws, p. 385, the offices, cars, houses, and other real
property of railroad corporations situated in said city, the
superstructure of the road and water stations only ex-
cepted, are declared to be subject to taxation by ordinances
for said purposes.
Strictly speaking, none of the property mentioned is
exempt from taxation. The constitution, in sections 1 and
2 of Art. IX, provides that all laws shall be void which
exempt from taxation any property, save "public prop-
erty used for public purposes, actual places of religious
worship, places of burial not used or held for private or
corporate profit, and institutions of purely public charity."
It is undoubtedly within the power of the legislature to
subject the property of street railway, gas, water, tele-
graph, telephone, and other quasi public corporations to tax-
ation. Their present exemption rests in the fact that this
power, as the statutes are construed by the courts, has not
been generally exercised. The courts have drawn a line
between private corporations engaged in private pursuits,
such as coal companies, manufacturing companies, and the
like, and those which, while private corporations in one
sense, are, nevertheless, devoted to the service of the pub-
lic. A statute imposing taxes generally upon all real es-
tate, or all personal property, will be held to embrace the
property of the former, but not of the latter, except so far
as it is not necessary for the conduct of the public busi-
ness in which the corporation is engaged. The unwisdom
1776
ECONOMIC LEGISLATION.
of taxing such property is so great that the court will not
presume it to have been intended unless the statute dis-
tinctly specifies it. Recognizing the distinction thus
drawn by the courts, the legislature, except in a few
special instances, confined to particular localities, has not
specified such property for taxation.
Consolidation of companies.-The constitution per-
mits the connecting of railroad lines, but forbids the con-
solidation of competing lines of railroad or canal. This
provision does not apply to street railways.²
Corporations created under or accepting the general
law of 1874 are authorized to purchase all the property,
real, personal, and mixed, of any corporation in existence,
by virtue of any law of this commonwealth, of the classes.
covered by the said general law. The method of obtain-
ing consent to such purchase is the same as in the case of
the increase or decrease of capital stock as shown above.
Upon such sale the selling corporation ceases to exist, and
its property and franchises not inconsistent with the
general law are thereafter vested in the corporation pur-
chasing.3
The statute expressly authorizes telegraph companies
to connect their lines with those of other companies, and
makes it the duty of such other companies to permit such
connection."
The act of May 29, 1885, relating to natural gas com-
panies, provides, in section 17,5 for the consolidation of any
two or more companies existing under the provisions of
that act, made with the consent of a majority of the stock-
holders, in value, in each. The consolidation is made
under such name as may be agreed upon, on the filing of
the certificate in the office of the secretary of the com-
monwealth.
Before consolidation takes place, the reasons therefor
¹ Const., Art. XVII, secs. 1, 4.
2 Gyger v. R'y Co., 136 Pa. 96.
3 Laws, 1874, p. 83, sec. 23, as amended, Laws, 1876, p. 33, sec. 5.
Laws, 1874, p. 92, sec. 33.
5 Laws, 1885, p. 36.
PENNSYLVANIA,
1777
must be submitted in writing to the governor of the com-
monwealth, and approved by him. Notice of the pro-
posed consolidation and the submission of the reasons
therefor to the governor must be given by publication in
a newspaper of general circulation printed in the county
where the principal offices of the companies proposing to
consolidate are situated.
Consolidation in a manner not permitted in the act is
declared void, and also to work a forfeiture to the com-
monwealth of the franchises of the offending companies,
as well as the stock and property in the same of the stock-
holders consenting to such attempted consolidation.
The traction law of 1887¹ makes no provision for the
consolidation of traction companies, nor does the law of
1889,2 providing for the incorporation of street railway
companies, make any such provision. Street railway
companies, however, are held to be within the provisions
of the act of May 16, 1861,3 authorizing the consolidation
of railroad companies.*
That act provides for consolidation and merger of any
railroad company chartered by the commonwealth under
the following restrictions and conditions: The directors
and managers, by joint agreement under the corporate
seal of each company, prescribe the terms and conditions
of the consolidation and merger, and the manner of con-
verting the capital stock of the company to be merged in
the capital stock of the company into which such merger
is to be made, together with such other provisions as they
deem necessary to perfect the said consolidation and
merger. This agreement is submitted to the stockholders
of each of the companies at a meeting specially called, the
time, place, and object of which are notified by publica-
tion once a week for two successive weeks before such
meeting, in one newspaper published in each of the coun-
¹ Laws, 1887, p. 8. * Laws, 1889, p. 211.
Laws, 1861, p. 702.
'Hestonville, etc., R. R. Co. v. Philadelphia, 89 Pa. 210.
1778
ECONOMIC LEGISLATION.
ties through or into which the railroads of the companies
respectively extend or are authorized to extend.
A vote by ballot, in person or by proxy, is taken at the
meeting for the adoption or rejection of the agreement,
each share entitling the holder thereof to one vote. If
the majority favor the consolidation, a certificate of the
fact, together with a copy of the agreement, is filed in the
office of the secretary of the commonwealth, and there-
upon the consolidation is effected. The statute further
declares the effect of such merger, giving it the usual legal
incidents, and provides that a certified copy of the certifi-
cate and agreement filed in the office of the secretary of
the commonwealth shall be competent evidence of the
consolidation.
Dissatisfied stockholders, within thirty days after the
execution of the agreement for consolidation, may apply
by petition to the court of common pleas of the county
in which the chief offices of the said companies may re-
spectively be, to appoint three disinterested persons to es-
timate and appraise the damage, if any, done to such
stockholders by such consolidation. The award of such
persons, or a majority of them, when confirmed by the
court, is final. These persons are also required to appraise
the share or shares of such stockholders, at the full mar-
ket value thereof, without regard to any depreciation in
consequence of the proposed consolidation, and the com-
pany may at its election, either pay to the stockholders
the amount of damage so found, or the amount of stock
so ascertained; and upon payment of the value of the
stock as aforesaid, the said stockholders must transfer the
stock so held by them to the said company, to be disposed
of by the directors or retained by them for the benefit of
the remaining stockholders.¹
¹ The provisions of the act relating to dissatisfied stockholders were
doubtless made in view of the decision of the supreme court in Lau-
This case,
man v. The Lebanon Valley R. R. Company, 30 Pa. 42.
decided in 1858, arose under a special act of assembly, providing for the
PENNSYLVANIA.
1779
i
Dissolution; forfeiture. The general law of 1874 con-
tains no general provisions relative to the dissolution of
corporations. The act of April 9, 1856,' provides that
the court of common pleas of the proper county may hear
the petition of any corporation under the seal thereof, by
and with the consent of a majority at a meeting of the
corporators duly convened, praying for permission to sur-
render any power contained in its charter, or for its disso-
lution, and a decree may be accordingly entered, if the
court is satisfied that the petition may be granted without
prejudice to the public welfare, or the interests of the cor-
porators. This act confers jurisdiction in the winding up
of a corporation.
The decree of the court takes effect upon the filing and
recording of a certified copy thereof in the office of the
secretary of the commonwealth. The supplement to this
act of April 4, 1872,2 defines the term "proper county" to
be either the county in which the principal operations of
the corporation are conducted, or that county in which its
principal office or place of business is located, and requires
that notice of the petition must be given by publication
in two papers in the county in which the principal opera-
tions are conducted, and in that in which the principal of-
fice is located.
3
The revenue act of 1889 ³ provides that no decree of dis-
solution shall be entered until all taxes due the common-
wealth have been fully paid into the state treasury, and
the certificate of the auditor-general, state treasurer, and
merger of two railway companies. It was held that the dissenting
stockholder had no right to object to the transfer of all the property
of the one corporation to the other under the authority of the act of
assembly, but that he could not be compelled by law to accept the stock
of the other company in payment for the shares held by him; and the
court granted an injunction, to be dissolved on the defendants giving
security to the plaintiff in double the market value of the stock, to be
paid when its value should be ascertained.
1 Laws, 1856, p. 293.
* Laws, 1889, p. 437, sec. 32.
2 Laws, 1872, p. 40.
ง
1780
ECONOMIC LEGISLATION.
attorney-general to this effect be filed in the proper
court.
If any company incorporated under the provisions of
the general law of 1874 does not proceed in good faith to
carry on its work, and construct and acquire its necessary
buildings, structures, property, or improvements within
the space of two years from the date of its letters patent,
and does not within five years thereafter complete the
same, the rights and privileges granted to said corpora-
tion revert to the commonwealth, but an extension of
time for the completion of the works may be granted in
the discretion of the court of common pleas of the proper
county, upon petition thereto. And a further statute pro-
vides in effect, that any such corporation which does not,
within two years from date of its letters patent, proceed
in good faith to organize and do the things contemplated
by its charter, and pay up at least one-fourth of its capital
stock, shall be held and deemed to have forfeited its char-
ter, it being made the duty of the attorney-general, on ap-
plication of any citizen, to take the proper legal steps to
forfeit and vacate the charter.2
Foreign corporations.-Corporations of other states
doing business in this state, and in which three or more
stockholders are citizens of this state, may, if they are of
the class of corporations covered by section 2 of the corpo-
ration act of 1874, become corporations of this state, sub-
ject to the provisions of the said act of 1874, by having ap-
proved and recorded a certificate, in which must be stated
the name of the corporation; its purposes; the place or
places of business; the term for which it is to exist; the
names and residences of the stockholders, and the number
of shares held by each; the number of its directors, and
the names and residences of those elected for the current
year; the amount of its capital stock, and the number and
Laws, 1876, p. 37, sec. 11, as amended, Laws, 1889, p. 242, sec. 2.
2 Laws, 1883, p. 123, sec. 5.
PENNSYLVANIA.
1781
par value of the shares into which it is divided; the legis-
lation under which it was originally created; its financial
condition at the date of the certificate, showing capital
stock paid in, floating debt, estimated value of property
and cash assets, if any. This certificate must be accom-
panied by a certificate under the seal of the corporation,
showing the consent of a majority in interest of such cor-
poration to such application for charter, and to a renuncia-
tion of its original charter and of all privileges not enjoyed
by corporations of its class under the laws of this com-
monwealth. The certificate must be acknowledged by at
least three of the directors before the recorder of deeds of
the county in which the chief operations are to be carried
on or in which the principal office is situated, and the oath
or affirmation of the said directors made before the said
recorder that the statements contained therein are true
must be indorsed thereon.¹
The certificate must then be presented to the governor,
who, if he finds it in proper form, and the corporation to
be one whose purposes are within the provisions of the
statute, must indorse thereon his approval and cause let-
ters-patent to be issued in the usual form. The certificate
is to be recorded by the secretary of the commonwealth in
a book kept by him for that purpose; it is then returned
to the company, and, with all of its indorsements, must be
recorded in the office for the recording of deeds in and for
the county where the chief operations are to be carried
on. From the date of its letters-patent, the company is
declared to be an existing corporation of this common-
wealth.2
1
Laws, 1881, p. 89. The secretary of the commonwealth held that
the certificate must also show ten per cent of capital stock paid in cash.
(5 C. C. R. 231.) But the contrary is ruled in an opinion filed September
19, 1892, by Deputy Attorney-General J. A. Stranahan, which will doubt-
less appear in C. C. R.
2 Laws, 1881, p. 89.
1782
ECONOMIC LEGISLATION.
SUBDIVISION III.-FRANCHISES.
How obtained.-There is no constitutional provision
defining the authority by which the highway franchises
may be granted, except Article XVII, section 9, which de-
clares that "no street passenger railway shall be constructed
within the limits of any city, borough or township without
the consent of its local authorities." With this exception,
all streets and public highways are under the paramount
control of the legislature, from which body, primarily, the
right to occupy or use them must emanate. This author-
ity the legislature is prevented by Article III, section 7, of
the constitution, from exercising locally as to any particu-
lar city or district, or specially as to any particular corpo-
ration, but it must be conferred by general laws, applicable
alike to all parts of the commonwealth and to all members
of the class of corporations affected.
In the general laws passed since the adoption of the
present constitution, the legislature has not conferred this
authority absolutely, but subject to the consent of the local
authorities of the municipality or district. When a com-
pany has secured incorporation its right to enter upon
public highways depends upon the authority contained in
the act of assembly under which it has been chartered,
and upon the authority which it may obtain from the local
authorities, usually the city or borough councils.'
1
can
Many portions of the act of 1874 have been so frequently amended
and re-amended that it is almost impossible to ascertain definitely what
powers companies now obtaining charters
secure, and still more
so to define the powers of charters obtained before the various amend-
ments to the act. The constitution requires that so much of any statute
as is amended be re-enacted and published at length. In the amend-
atory act it is customary to first recite at length the existing law pro-
posed to be amended, followed by the form in which it is proposed that
it shall stand as amended. Parties desiring to amend in a certain par-
ticular, therefore, obtain re-enactments of the whole section to be
amended. This is frequently done without reference to former amend-
ments. For instance, the third amendment re-enacts the original section
PENNSYLVANIA.
1783
The authority of municipalities to grant these franchise
rights is limited only by such restrictions as may have.
been placed upon them by the legislature. The para-
mount control of all public highways being in the latter
body, it may authorize their occupancy and use without
the consent of the municipal authorities, except as to street
passenger railway companies.
Companies incorporated for the maintenance of tele-
graph lines are authorized to "construct lines of telegraph
along and upon any public roads, streets, lands, or high-
ways, or across any of the waters within the limits of this
state, by the erection of the necessary fixtures," etc. "But
the same shall not be so constructed as to incommode the
public use of said roads, streets, or highways." Companies
"for the purpose of constructing, maintaining, and leas-
ing lines of telegraph for the private use of individuals,
firms, corporations, municipal and otherwise, for general
business, and for police, fire alarm, or messenger business,
or for the transaction of any business in which electricity
over or through wires may be applied to any useful pur-
pose," which includes telephone companies and electric
at length, omitting the second amendment, or the section is amended in
the desired particular and the remainder of the section is not amended
to conform to it; thus, clause 3, of section 34, originally conferred certain
exclusive privileges upon both gas and water companies. In the third
section of the supplement of June 2, Laws, 1887, p. 310, this clause is
amended and re-enacted, water companies being omitted and the exclu-
sive privileges confined to corporations "for the manufacture of gas for
light only . . provided that said corporation shall, at all times,
furnish pure gas and water." In the same supplement, for the purpose
of distinctly including fuel companies, the first clause of section 34,
which originally applied to companies for the manufacture and supply
of gas, or the supply of light or heat to the public by any other means,
was amended so as to read "for the manufacture and supply of light,
heat, and fuel, or any of them, by any process of manufacture." As,
according to the dicta of Mr. Justice Green, in Emerson v. Common-
wealth, 108 Pa. 126, gas is neither heat nor light, it is possible that the
act as now amended may be held to authorize the creation of companies
for the manufacture of gas only for fuel.
1 ¹ Laws, 1874, p. 92, sec. 33, clause 1.
1784
ECONOMIC LEGISLATION.
central station companies, are required, before the exercise
of any of their powers, to make application "to the mu-
nicipal authorities of the city, town, or borough in which
it is proposed to exercise said powers for permission to
erect poles or run wires on the same, or over or under any
of the streets, lanes, or alleys of said city, town, or bor-
ough, which permission shall be given by ordinance only,
and may impose such conditions and regulations as the
municipal authorities may deem necessary." In addition
to these provisions, the right to enter upon any public
street, lane, alley, or highway is specifically conferred upon
electric light, heat, and power companies, but no such
company "shall enter upon any street in any city or bor-
ough of this commonwealth until after the consent to such
entry of the councils of the city or borough in which such
street may be located shall have been obtained."2
Water companies are given the franchises herein dis-
cussed, subject only "to such regulations in regard to
streets, roads, lanes, and other highways and impairing
the free use thereof as little as possible, and subject to
such regulations as the councils of said borough, town,
city, or district may adopt in regard to grades, or for
the protection and convenience of public travel over the
same.'
993
If it may be assumed that the amendatory act of 1887*
applies to companies supplying manufactured gas for light-
ing purposes, then they, as well as those for supplying
light, heat, and fuel, are authorized to enter upon and oc-
cupy public streets, lanes, alleys, or highways, subject to
the regulation of borough or city councils in regard to
1
¹ Laws, 1876, p. 90, sec. 4; Laws, 1885, p. 164. The act of 1876 is in
pari materia with the provisions of the act of 1874, relating to telegraph
companies. The act of 1876 amplifies and defines their powers, and im-
poses regulations upon the exercise of them. (See Bell Telephone Co.
v. Com., 17 W. N. C. 505.)
Laws, 1889, p. 136, sec. 2, par. 1.
Laws, 1874, p. 93, sec. 34, par. 2, as amended, Laws, 1889, p. 226.
Laws, 1887, p. 310, sec. 34. See note 1, p. 1782.
PENNSYLVANIA.
1785
i
grades or for the protection and convenience of public
travel over the same, but with the further proviso, not ap-
plicable to water companies, that they can not enter upon
any street in any city or borough "until after the consent
to such entry of the councils of the city or borough in which
said street may be located shall have been obtained."¹
The right of eminent domain for the laying of pipe lines
is conferred upon natural gas companies, and is expressly
declared to "include the right to appropriate land upon
or under which to lay said lines and to locate pipes upon
and over, under and across any lands, rivers, streams,
bridges, roads, streets, lanes, alleys, or other public high-
way,” etc.,² but the right to enter upon any public lane,
street or highway must be exercised in such way as to do
as little damage as possible to such highway, and to im-
pair as little as possible the free use thereof, subject to
such regulations as the councils of any city may by ordi-
nance adopt. It is also provided that such companies
"shall not enter upon or lay down their pipes or conduits
on any street or highway of any borough or city of this
commonwealth without the assent of the councils of such
borough or city by ordinance duly passed and approved.”
3
¹ Laws, 1887, p. 312, sec. 2.
Laws, 1889, p. 34, sec. 11.
2 Laws, 1885, p. 33, sec. 10.
Laws, 1885, p. 35, sec. 13. In People's Natural Gas Co.v. Pittsburgh,
C. C. R. 311, the court of common pleas of Allegheny county granted a
preliminary injunction to restrain the city from interfering with the com-
pany, which, under peculiar circumstances, was attempting to cross with
its pipe lines three unimportant streets without the consent of councils.
This case arose under the act of May 29, 1885, supra, which is by no means
clear in its provisions. The thirteenth section above requires the assent
of councils before any natural gas company shall enter upon or lay down
their pipes or conduits on any street or highway, and the judges, under
the peculiar circumstances of the case, expressed doubts whether the as-
sent of councils was required to a mere crossing under a street, and there-
fore granted the preliminary injunction, which was sustained by the su-
preme court, where, however, no opinion was filed. It will be found,
upon examination, that this case is not authority for the position that
streets may be occupied or used in any way without the consent of
councils in the absence of express legislative enactment to that effect.
VOL. II-32
1786
ECONOMIC LEGISLATION.
It is plain that were it not for this last provision, the
power of these companies would be ample, and for the oc-
cupancy of highways they would be absolutely independent
of the action of councils, except as to such reasonable
regulations as they might adopt concerning the laying,
inspecting, and repairing of pipes. But this provision
places it within the power of councils to exclude them
altogether. The power to exclude would seem to embrace
the right to impose conditions upon entry, but in the Ap-
peal of the City of Pittsburgh, 115 Pa. 4, it was ruled
that while councils might withhold their assent, neverthe-
less, if it were given, all conditions annexed thereto, in
excess of those contemplated by the power given to regu-
late were illegal and invalid. The power of councils to
legislate upon condition is denied, and it is declared to
be "obvious on reading the act in question that two
things only were delegated to councils: first, the power to
give or withhold assent to enter upon the city's streets;
and, second, the right to adopt regulations, the reason-
ableness of which is virtually declared to be a judicial
question. Any attempted legislation on the subject out-
side of these matters is ultra vires, a mere usurpation of
authority never delegated to them. We conclude, there-
fore, that the grant of assent is valid, but the so-called
conditions precedent, if they be so regarded, are null and
void."
As already stated, the constitution requires the consent
of the local authorities in the construction of a passenger
railway within the limits of any city, borough or town-
ship. A similar requirement is found in the act of May
14, 1889, providing for the incorporation of such com-
panies.2
1
Motor power companies for operating passenger railways
by cable, electrical, or other means, commonly called "trac-
tion companies," are given the power to enter upon any
¹ Const., Art. XVII, sec. 9.
2 Laws, 1889, p. 217, sec. 15.
PENNSYLVANIA.
1787
street upon which a passenger railway is constructed, with
the consent of said company, for the purpose of construct-
ing, maintaining and operating motors, cables, and elec-
trical and other appliances for the traction of the cars of
said passenger railway company; but such construction
and operation "shall be subject to such reasonable regu-
lations for the protection of public travel on any street
so occupied as shall be required by any borough,
town or city in which the same may be located, by ordi-
nance duly enacted," and no company which may here-
after be incorporated under this act shall enter upon any
street for the purpose of constructing thereon or therein
any such motors, cables, or other appliances, until after the
consent to such entry of the councils of the borough,
town, or city in which said street may be located shall
have been obtained; and no company heretofore incorpo-
rated shall be permitted to avail itself of the provisions of
the ninth section of this act, permitting re-incorporation
thereunder, until after it shall have filed in the office of
the secretary of the commonwealth its stipulation, duly
sealed and attested, binding it not to enter, for the pur-
pose aforesaid, upon any street not theretofore occupied
by it, with such motors, cables, or other appliances, with-
out such consent to such entry of the councils of the bor-
ough, town, or city in which such street may be located.'
From the foregoing it appears that, with the exception
of water companies, none of the corporations treated of
in this work can enter upon public streets without the
consent of councils, which should be granted by ordi-
nance. It would seem that water companies are not re-
quired to obtain such assent, but are subject only to such
regulations as councils may adopt in regard to grades, or
for the protection and convenience of public travel over
the streets or highways.
Powers of municipalities as to.-See under "How
OBTAINED," p. 1782.
¹ Laws, 1887, p. 8, sec. 1.
1788
ECONOMIC LEGISLATION.
Classification of municipalities.-The cities of the com-
monwealth are divided into three classes, each class having
a different system of government. Cities containing six
hundred thousand inhabitants and over are of the first
class; cities of less than six hundred thousand and more
than one hundred thousand are of the second class; and
cities of less than one hundred thousand and more than
ten thousand are of the third class. Philadelphia is the
only first class city, and Pittsburgh and Allegheny the only
cities of the second class.
Other cities existing under special charters, and subject
to special legislation enacted prior to the constitution of
1874, have retained their former systems of government
by failing to adopt the provisions of general laws enacted
since 1874.
As to requirements as to passage of ordinances, see un-
der" MUNICIPAL OWNERSHIP," p. 1810.
Limitations.-There is no limitation upon the author-
ity of the legislature to grant the occupancy of the right
of way, privilege, or authority to use public highways,
except that it must be granted by general law applicable
to all parts of the state and to all members of the class of
corporations affected, and subject to the constitutional
provisions already mentioned requiring the assent of
councils to the construction of street railways.
Control of streets.-The paramount control of all pub-
lic highways being in the legislature, it may authorize
their occupancy and use without the consent of the mu-
nicipal authorities, except as to street passenger railway
companies.
The unauthorized use of a highway is a nuisance which
will be enjoined at the suit of the commonwealth, the
municipality, or of a private person who suffers a special
injury.¹
¹ Peterson v. Navy Yard R'y Co., 5 Phila., 199; Com. v. Lombard Pass.
R'y Co., 1 W. N. C. 489; Phila. v. 17th and 15th Sts. Pass. R'y Co., 8
Phila. 648.
į,
PENNSYLVANIA.
1789
Special damages; property owners' rights.-The oc-
cupancy of streets of a city by corporations of the classes
herein discussed, for their necessary purposes, under legis-
lative grant, with the consent of councils, does not con-
stitute an invasion of the private rights of adjoining prop-
erty owners.¹
As to public roads in country districts, it is held that
the only servitude imposed on the land in its original
taking for a public highway is the right of the public
to construct and maintain thereon a safe and convenient
roadway which must at all times be free and open for
public use as a highway, and that its occupation for
any other use is an additional burden for which the
owner of the fee is entitled to compensation under the
constitutional provision as to condemnation of prop-
erty.2
Condemnation of property.-The constitution pro-
vides that municipal and other corporations and individ-
uals invested with the privilege of taking private property
for public use shall make just compensation for property
taken, injured, or destroyed by the construction or en-
largement of their works, which compensation shall be
paid or secured before such taking, injury, or destruction,3
and that the exercise of the right of eminent domain shall
never be abridged or so construed as to prevent the gen-
eral assembly from taking the property and franchises of
¹ Lockhart v. Craig St. R'y Co., 139 Pa. 419; Dutton v. Norristown Pass.
R'y Co., 1 Mont. Co. Law Rep. 4; Faust v. Pass. R'y Co., 3 Phila. 164;
Phila. v. Empire Pass. R'y Co,, 3 Brewst. 547. The case of Lockhart v.
Craig St. R'y Co., 129 Pa. 419, decided that the erection of poles and
wires for the traction of cars by the overhead electric system was not a
use of the streets for which the abutting property owner was entitled to
compensation.
2 Sterling's Appeal, 111 Pa. 35. In this case a natural gas company
was restrained by injunction from laying its pipes under a public road
without making or securing compensation to the owner of the lands
traversed by said road.
9 Const., Art. XVI, sec. 8.
1790
ECONOMIC LEGISLATION.
incorporated companies, and subjecting them to public
use, the same as the property of individuals.¹
Express legislative authority is required to enable any
corporation to take, under the power of eminent domain,
property of another corporation taken or used by it under
the like power, and, when the power is granted, its exer-
cise must be justified by necessity.2
Companies supplying manufactured gas for lighting pur-
poses, as well as those for supplying light, heat, and fuel,³
are invested with the power of eminent domain, and the
damage as to private property is to be ascertained and
compensation made therefor in accordance with the pro-
visions of the forty-first section of the act of 1874, page
104.
4
Street railway companies incorporated under the act of
1889 are authorized to occupy turnpikes upon making
compensation therefor in the manner provided by the
fourteenth section of the act, and are also authorized to
use not exceeding five hundred feet in length of the track
of any other company already laid down, if necessary to
construct a circuit upon its own road at the end thereof.
Such track can be used only with the consent of the local
authorities of the city, town, or borough, and compensa-
tion for the use thereof must be made in the manner
pointed out by the fourteenth section."
Water companies are given power to appropriate so
much of the water from rivers, creeks, canals, water-rights,
and easements within and without the limits of the city,
borough, or place in which the company is located as may
be necessary for their purposes, and are authorized to enter
upon and occupy all such lands and inclosures as may be
necessary for their purposes, the damages to private prop-
Const., Art. XVI, sec. 3.
2 Appeal Pittsburgh Railroad Company, 122 Pa. 511; People's Pass.
Railway Co. v. Marshall St. R'y Co., 25 Weekly Notes of Cases, 318.
3 See note 1, p. 1782.
5 Laws, 1889, p. 211, sec. 14.
* Laws, 1889, p. 217, sec. 17.
PENNSYLVANIA.
1791
erty to be ascertained and compensation to be made there-
for as provided in the forty-first section of the act of 1874,
which is very full and complete upon the subject.¹
Traction companies are not vested with the power of
• eminent domain; street railways and natural gas compa-
nies possess the power.
The fourteenth section of the act of 1889, relating to street
railway companies, page 216, and the tenth section of the
act of 1885, relating to natural gas companies, page 33,
contain substantially the same provisions, which are, that
in the event of failure to agree with the owner, upon peti-
tion to the court of common pleas, the court must ap-
point five persons to assess the damages and make report
thereof to the court, either party having the right of ap-
peal and jury trial, and writ of error to the supreme court.
The acts differ in two particulars. The street railway law
provides for the appointment of viewers upon the petition
of the corporation, and the natural gas law provides for the
appointment of viewers upon the petition of either the cor-
poration or the property owner. In the case of natural
gas companies, the persons appointed must be disinterested
freeholders of the county.
The provisions of the act of 1874, above referred to, are
those of the act passed subsequently to the adoption of
the constitution, and intended to enforce the provisions of
Article XVI, section 8, above cited. The act provides that
where an appeal is taken from the report of the viewers it
must be entered within thirty days from the ascertainment
of the damages, and the filing of the report thereof in
court must be signed by the party or parties taking the
same, or by their agent or attorney, and be accompanied
by the affidavit of the party, agent or attorney, that the
same is not taken for the purpose of delay, but because
the affiant firmly believes injustice has been done.
¹ Laws, 1874, p. 93, sec. 34, par. 2, as amended, Laws, 1889, p. 226;
Laws, 1874, p. 104.
1792
ECONOMIC LEGISLATION.
The act does not specially direct as to the method of
procedure after the appeal has been filed, but such cases
follow the ordinary course of the trial of cases at common
law under the practice in Pennsylvania.
The forty-first section of the act of 1874, page 104,'
above referred to, provides that in case of failure to agree
upon the compensation, the court of common pleas of the
proper county, upon petition by the corporation or the
owner, or any one on behalf of either, shall appoint five
discreet and disinterested freeholders of the proper county,
and appoint a time and place, ten or more days thereafter,
for the meeting upon the premises injured or taken, of
which five days' notice must be given by the petitioner, to
the viewers and to the other party, and the viewers, or any
three of them, having been first sworn or affirmed justly
and impartially to decide and report concerning all matters
and things to be submitted to them, and having viewed the
premises, shall estimate the damages with due regard to
any advantages that may result, and determine to whom
the damages are payable, and make report thereof to the
court. The report is then confirmed, and judgment en-
tered, and execution may issue, as in other cases, after
thirty days.
The corporation is required to tender a bond, with two
sufficient sureties, to the party claiming the damages, con-
ditioned for the payment of the damages agreed upon or
awarded as provided by the act. This bond is given also
where, by reason of the legal incapacity of the owner, no
agreement can be made. This bond must be approved by
the court, and notice of its presentation for that purpose
given to the other party before entry upon the property.
The viewers may be appointed before or after entry, and
upon the report of the viewers, or any four of them, filed
in court, either party within thirty days thereafter may
appeal to the court, which appeal is to be in the usual form
directed by the court.
Refusal to grant a franchise.-The authority of the
PENNSYLVANIA.
1793
{
state to refuse to grant to corporations of the classes
herein discussed the right to use public streets and high-
ways is absolute and unlimited. The authority of mu-
nicipalities to grant such right is limited only by such
restrictions as may have been placed upon it by the legis-
lature. Where an act of assembly requires that the con-
sent of councils shall be first obtained, they may give it
or withhold it. Upon this point the appeal of the City of
Pittsburgh, 115 Pa. 4, is authority.'
A municipality may be compelled by mandamus to re-
ceive, and act upon, in due form, the application by the
proper officers of the corporation to enter upon streets
under such reasonable regulations as the authorities may
impose.¹
Conflicting grants. See under "CONDEMNATION OF PROP-
ERTY," supra.
2
Where consent to the occupation of a street has been
given to rival companies, the one making the first actual
entry has the better right. But where one has received
the requisite consent and the other has not, the latter has
no standing in court to restrain the former.3 The mere
survey and staking out of a line and return of a map
thereof to the company by the chief engineer is not a suf-
ficient location as against a rival company. To make the
location effectual, it must be adopted by proper corporate
action.*
Perpetual and exclusive franchises.-The constitution
declares that no law "making irrevocable any grant of
special privileges or immunities shall be passed."
A gas company incorporated "for the manufacture of
gas for light only" is granted the exclusive right to have
1 Supply Co. v. City, 41 Leg. Int. 252; Gas Co. v. City, 34 P. L. J. 240.
2 Norristown Pass. R'y Co. v. Citizens' Pass. R'y Co., 3 Mont. Law
Rep. 119.
3 Electric Lighting Co. v. Underground Electric Co., 16 W. N. C. 407.
• Williamsport R. R. Co. v. R. R. Co., 141 Pa. 407.
'Const., Art. I, sec. 17.
1794
ECONOMIC LEGISLATION.
ا
and enjoy the franchises and privileges of such corporation
within a district or locality covered by its charter, and no
company can be incorporated for that purpose until the
first company has "from its earnings realized and divided
among its stockholders during five years a dividend equal
to eight per centum per annum upon its capital stock,
provided that said corporations shall at all times furnish.
pure gas and water.'
The executive department has construed the term dis-
trict, in relation to the charter of a water company, to
mean municipal subdivisions, and that such a charter can
not embrace more than one municipality."
Before this provision was restricted to illuminating gas
companies it was held that the exclusive right conferred
upon water companies by the act of 1874 did not conflict
with the constitutional provision above. The franchise is
that of acting in a corporate capacity, and of exercising
the right of eminent domain, not necessarily the exclusive
right to furnish such supply. This right is exclusive, how-
ever, against other incorporated water companies, and,
also, individuals and unincorporated associations. An in-
dividual having pipes laid before a water company was
chartered, an injunction was refused to restrain him from
supplying such citizens as had connected or might there-
after connect with pipes already laid, but he was restrained
from extending such pipes, although he had obtained mu-
nicipal consent therefor.3 The company claiming exclu-
sive privileges under these provisions must show some
honest and active effort to assert and exercise the right
claimed before the court will be moved to protect the
1 Laws, 1874, p. 93, sec. 34, as amended, Laws, 1887, p. 312, sec. 3. By
the original act of 1874, this exclusive right or privilege was granted to
gas and water companies, but by the amendment of 1887 the right was
restricted as above to illuminating gas companies. (See note 1, p. 1782,
and also under "AMENDMENTS, REPEALS, ETC.," above.
2 In re Monongahela Water Co., 9 C. C. R. 57.
3 Freeport Water Works Co. v. Prager, 3 C. C. R. 371.
PENNSYLVANIA.
1795
2
1
2
privilege. This exclusive privilege does not extend to
natural gas companies, nor to companies for the supply
of light or heat to the public "by any other means
" than
gas.3
4
Waiver of the exclusive right by a company already in-
corporated does not authorize the incorporation of a sec-
ond company. The consent of the corporation already in
existence can not confer power to do that which the legis-
lature has prohibited. Where a charter is forfeited by
reason of non-compliance with the statutory requirements
as to construction of works, etc., the commonwealth may
grant a second charter for the same district without first.
having had recourse to judicial action for the purpose of
determining the forfeiture."
A municipal corporation exercising the functions of a
private corporation in supplying its citizens with water
does not thereby lose its distinctive municipal character.
The construction of its works, therefore, although it may
impair the value of the works of a water company char-
tered under the act of 1874, is damnum absque injuria.
Legislation in Pennsylvania does not confer upon mu-
nicipalities authority, in granting municipal consent to
the use of a street, to limit such consent in such manner
as to preclude the giving of like consent to others within
the municipality; that is to say, the municipality is not
authorized to grant an exclusive franchise."
¹ Scanton Electric Light and Heat Co. v. Scranton Illuminating Heat
and Power Co., 3 C. C. R. 628.
2 Emerson v. Com., 108 Pa. 111.
4
Appeal of Scranton Elec. L. Co., 122 Pa. 154.
Opinion of Attorney-General, February 3, 1877.
"Com. v. Lykens Water Co., 110 Pa. 391.
Lehigh Water Co.'s Appeal, 102 Pa. 515.
A municipality by ordinance granted the right to enter upon its
streets and supply the citizens with natural gas, requiring the work to
be done at a fixed time, and the gas to be introduced within fifteen
months, and provided that “no other privilege shall be given by the city
authorities for a similar purpose for a period of two years from the date
of its passage." The company having expended a large sum of money in
1796
ECONOMIC LEGISLATION.
Charges for franchises.-There is no constitutional
limitation upon the right of the legislature to require such
consideration as it may see fit for a grant of a franchise.
It does require the payment of the bonus and fees men-
tioned herein. (See "FEES" and "TAXATION-Licenses,"
pp. 1716, 1771.)
As to the authority of a municipality to exact a consid-
eration for its consent to occupy streets, highways, etc.,
there is no case of accepted authority directly to rule the
point, but the tendency of the recent decisions in Penn-
sylvania seems clearly to indicate that the power of a mu-
nicipality, when its consent is requested, is confined to the
making of reasonable regulations as to the manner in
which the franchise is to be exercised. This regulative
power undoubtedly exists, whether or not the statute re-
quiring consent at the same time confers express authority
to make regulations as to the use of the franchise. The con-
stitutional and statutory provisions cited with reference to
the companies herein treated of do not authorize munici-
palities to impose terms and conditions. Where such an
authority is given the right to exact conditions in the
nature of a consideration may exist. In the appeal of the
City of Pittsburgh, 115 Pa. 4, the city had given its consent
to the occupancy of its streets by natural gas companies
upon certain conditions. The court declared the grant of
assent to be valid, but declared the conditions null and
void. (See under "How OBTAINED," p. 1782.)
Telegraph and telephone companies may be required
to pay a license fee for poles erected in the streets; a fee
prosecuting its work, filed a bill in C. P. of Crawford county for an in-
junction to restrain the city and another company from interfering with
the rights granted by the ordinance. That court granted the injunc-
tion, but upon appeal to the supreme court the decree was reversed; a
number of technical points were involved, and no opinion was filed. It
can not, therefore, be stated upon what ground the decree was reversed,
nor for what principle the decision of the supreme court is authority.
(Meadville Nat'l Gas Co. v. Meadville Fuel Gas Co., 1 C. C. R. 448.)
PENNSYLVANIA.
1797
of one dollar for each pole in the city of Chester, and five
dollars in the city of Philadelphia.'
Methods of construction.-Light, heat, and power
companies are "subject to such regulations as the councils
of any borough or city whose highways may be occupied
shall adopt in regard to grades, or for the protection
and convenience of public travel over the same." It is
also provided that "where any such company shall use its
systems of distribution for the conveyance of gas for any
of the purposes aforesaid at a greater pressure than four
ounces per square inch of pressure, or where the gas man-
ufactured shall contain more than ten per cent of carbonic
oxide, such system of distribution shall be provided with
suitable appliances for preventing or taking up any leak-
age, so that danger to life, property, and vegetation may
be avoided." 2
Water companies are "subject to such regulations in re-
gard to streets, roads, lanes, and other highways, and im-
pairing the free use thereof as little as possible, and sub-
ject to such regulations as the councils of said borough,
town, city, or district may adopt in regard to grades, or for
the protection and convenience of public travel over the
same." 3
66
Traction companies, in construction and operation, are
subject to such reasonable regulations for the protection
of public travel on any street so occupied, as shall be re-
quired by any borough, town, or city in which the same
may be located, by ordinance duly enacted."
5
Street railway companies are authorized to cross or-
dinary railroads at grade. As to occupancy of track
of other roads, etc., see "CONDEMNATION," p. 1789.
¹ Philadelphia v. Western Union Telegraph Company, 33 Legal Intel-
ligencer, 149; Philadelphia v. Western Union Telegraph Company, 43
Legal Intelligencer, 150; Chester v. Telegraph Company, 2 Delaware
County Reports, 506.
* Laws, 1887, p. 311, sec. 2.
3 Laws, 1874, p. 93, as amended, Laws, 1889, p. 226, sec. 2.
* Laws, 1887, p. 8, sec. 1.
Laws, 1889, p. 217, sec. 18.
1798
ECONOMIC LEGISLATION.
A recent common pleas case, not reported, holds that
courts of equity have jurisdiction to regulate the manner
of the crossing of steam railroads at grade by street rail-
way companies.
"? 1
Natural-gas companies, in the use of the highways, are
"subject to such regulations as the councils of any city
may, by ordinance, adopt. Where any dispute arises
between the corporation and the municipal authorities, or
any land owner or corporation through, over, or upon
whose property or easement, pipes are to be laid, as to the
manner of laying the pipes, and the character thereof,
with respect to safety and public convenience, the court of
common pleas of the proper county is required, upon the
petition of either party, to hear the matter, and define, by
its decree, what precautions, if any, must be taken in the
laying of pipes, and by injunction to restrain their being
laid in any other way than as decreed. Either party is
given the right of appeal to the supreme court as in equity
cases, but the appeal is not to act as a supersedeas of the
decree. In like manner the court is to decide whenever
any dispute arises as to pipes already laid, and to define
the duty of the corporations as to their re-laying, repair,
amendment, or improvement. It is a misdemeanor pun-
ishable by fine and imprisonment, either or both, in the
discretion of the court, for any person to willfully or ma-
liciously break, injure, or destroy any of the pipes, con-
duits, or other works or machinery of any natural gas
company, or interfere with the same so as to interrupt the
business of the company.³
2
What regulations are reasonable is a question that
must depend upon the circumstances of the particular
There are no specific regulations by law under this
head, nor authority for the purpose indicated, save as em-
braced in the general police power, the authority of the
case.
¹ Laws, 1885, p. 34, sec. 11.
³ Laws, 1885, p. 36, sec. 18. Secs. 20
the plugging of abandoned gas wells.
2 Laws, 1885, p. 34, sec. 12.
and 21 of this act provide as to
PENNSYLVANIA.
1799
municipality to regulate, and the provisions of the specific
safety conditions above stated.
A municipal ordinance requiring the rails of a street
railway to be of the kind known as "street rails for horse
railway cars" is reasonable,' and so is a requirement that
a bond be given to keep in repair streets occupied ;² but
an ordinance requiring repaving between tracks with
Nicholson or other wooden or concrete pavement was
held unreasonable; so also one to keep in repair a greater
portion of the street than it occupied. A municipality
can not require a company to use as a part of its line the
track of another company; nor require it to relay its.
tracks so as to make room for or "straddle" the line of
another company.
6
5
4
Non-user of a branch track for eleven years by one
company can not be alleged by another company as an
abandonment, nor can the latter prevent the former from
reversing the direction in which it is running its cars on
their circuit. But a location of line once made exhausts
the authority. Authority to lay a double track is not
exhausted by the laying of a single track, and double
track may be completed after a delay of ten years.º
8
Where a company, by charter, was required to keep a
street in good repair from curb to curb, it was held liable
for the removal of a heavy deposit of earth and stones
washed in by an extraordinary flood. A municipality
10
¹ Harrisburg Pass. R'y Co. v. Harrisburg, 2 Chester Co. Rep. 333.
'Frankfort Pass. R'y Co. v. Phila., 17 W. N. C. 245.
Philadelphia v. Empire Pass. R'y Co., 3 Brewst. 570.
Harrisburg v. Harrisburg Pass. R'y Co., 1 Pearson, 298.
'Schuylkill River Pass. R'y Co. v. Smedley, 14 W. N. C. 402; Norris-
town Pass. R'y Co. v. Citizens Pass. R'y Co., 3 Mont. Law Rep. 119.
G Phila. v. Continental Pass. R'y Co., 2 W. N. C. 283; West Phila.
Pass. R'y Co. v. Phila., 10 Phila. 70.
7 Phila. Union Pass. R'y Co., 2 Pennypacker, 434; Hestonville Pass.
R'y Co. ". Phila., 89 Pa. 210.
* Wirth v. Philadelphia Pass. R'y Co., 2 W. N. C. 650.
9 Hestonville Pass. R'y Co. v. Phila., 89 Pa. 210.
10 Pass. R'y Co. v. Pitts., 80 Pa. 72.
1800
ECONOMIC LEGISLATION.
may recover cost of paving or repairing when a company
is in default.¹
Where a company is in default, it has no standing in
equity to enjoin the municipality from obstructing the
company's track on a street by neglecting to pave.²
Regulations as to service.-See under "DISCRIMINA-
TION IN SERVICE," post.
With the exception of those cited below, there are no
constitutional provisions or legislative enactments regu-
lating the charges or service to be made or rendered by
any of the classes of corporations herein discussed.
Street passenger railway companies chartered under, or
accepting the provisions of the general law of 1889 are
not required to state in their articles of association the
power to be used in propelling their cars, and they may,
by the terms of the act, propel them "by any power other
than by locomotive." 3 Their right to occupy any street
with their lines is dependent upon the consent of councils.
No other body has power to prescribe the power to be
used, nor to prevent the change from one motive power to
another at the pleasure of the railway corporation. The
authorities of boroughs are given authority to limit the
compensation of vehicles carrying persons or property for
hire within the borough limits."
¹ Frankfort Pass. R'y Co. v. Phila., 17 W. N. C. 245.
2 13th and 15th Sts. Pass. R'y Co. v. Phila., 13 W. N. C. 487.
3 Laws, 1889, p. 211. The act of May 8, 1876, Laws, p. 147, repeals the
limitations contained in any of the charters of passenger railway com-
panies in cities of the first class, restraining them to the use of horse
power, and permits them to use other than animal power in the carriage
of passengers in their cars, whenever so authorized by council, provided
"that the councils of said cities shall not exercise any of the powers
conferred by this act except such railway companies shall reduce their
fares to five cents for a single ride on said railway." This piece of
legislation is both local and special, and, therefore, unconstitutional.
(Weinman v. Pass. R'y Co., 118 Pa. 192.) But such companies incor-
porated prior to May 14, 1889, may accept the provisions of the act of
that date.
* Laws, 1889, p. 39.
PENNSYLVANIA.
1801
1
The general law of 1874 provides that the charge by all
telegraph companies organized under its provisions, and
those accepting the same, for the transmission of any tele-
graphic dispatch, must include the charge for the delivery
thereof, and no extra additional charge can be made for
such delivery. The act of 1876, Laws, p. 90, amended the
law of 1874 so as to authorize the incorporation of tele-
phone companies (see supra, p. 1706). The section of the
act of 1874 just cited was not amended. Its application
to telephone companies has not been judicially determined.
But, further than this, the act does not attempt to regulate
the charges to be made by such companies.
Under the power to regulate, the municipality is not
authorized to specify the time of year during which a
natural gas company may carry on its operations.2
Gas and water companies are required at all times to
furnish pure gas and water, and any citizen using the same
is authorized to make complaint of impurity or deficiency
in quantity, or both, to the court of common pleas of the
proper county, by bill filed, and, after hearing, the court is
authorized to make such order in the premises as may
seem just and equitable, and either dismiss the complaint
or compel the corporation to correct the evil complained
of; this provision is applicable to all gas and water com-
panies incorporated under any law of the commonwealth.³
The procedure to enforce the remedy is governed by the
rules of equity practice, including the right to costs and
the right of appeal. The term "pure water" is not used
in its chemical or abstract sense, but means wholesome or
ordinarily pure.*
The court of common pleas of the proper county also
has jurisdiction and power upon the bill or petition of any
1 Laws, 1874, p. 92, sec. 33, par. 5.
' Chartiers Valley Gas Co.v. Pittsburgh, 34 Pitts. L. J. 240.
³ Laws, 1874, p. 93, sec. 34; Laws, 1881, p. 112; Laws, 1887, p. 312,
sec. 3.
• Com. v. Towanda Water Works, 22 W. N. C. 429.
VOL. II-33
ר.
1802
ECONOMIC LEGISLATION.
citizen using the gas or water of any company to hear,
inquire, and determine as to the charges for gas or water,
and to decree that the said bill be dismissed or that the
charges be decreased, as may seem just and equitable, and
to enforce obedience by the usual process.'
A company chartered for the purpose of supplying.
illuminating gas may, as ruled by the secretary of the
commonwealth, secure electric light franchises by obtain-
ing from the governor au amendment to its charter in the
manner provided by the corporation amendment act of
1883.
Discrimination in service; refusal to render.-The
constitution provides that "the exercise of the police
power of the state shall never be abridged or so construed
as to permit corporations to conduct their business in such
manner as to infringe the equal rights of individuals or
the general well-being of the state."2
It also provides that "all railroads and canals shall be
public highways, and all railroad and canal companies shall
be common carriers. Any association or corporation or-
ganized for the purpose shall have the right to construct
and operate a railroad between any points within this state,
and to connect at the state line with railroads of other
states. Every railroad company shall have the right with
its road to intersect, connect with, or cross any other rail-
road, and shall receive and transport each the other's pas-
sengers, tonnage, and cars, loaded or empty, without delay
or discrimination." 3
"All individuals, associations, and corporations shall
have equal right to have persons and property transported
over railroads and canals, and no undue or unreasonable
discrimination shall be made in charges for, or in facilities
¹ Laws, 1874, p. 93, sec. 34, par. 7.
2 Const., Art. XVI, sec. 3. There is a dictum that this provision applies
only to ordinary railroads and not to street railway companies. Gyger's
Appeal, 136 Pa. 96.
Const., Art. XVII, sec 1. See note 2, above.
PENNSYLVANIA.
1803
for transportation of freight or passengers within the
state or coming from or going to any other state. Per-
sons and property transported over any railroad shall be
delivered at any station at charges not exceeding the
charges for transportation of persons and property of the
same class in the same direction to any more distant sta-
tion; but excursion and commutation tickets may be is-
sued at special rates."1
No discrimination in charges or facilities for transporta-
tion shall be made between transportation companies and
individuals, or in favor of either, by abatement, drawback,
or otherwise, and no railroad nor canal company, or any
lessee, manager, or employee thereof shall make any pref-
erence in furnishing cars or motive power."
The transportation and supply of natural gas for public
consumption by natural gas companies is a public use, aud
it is their duty to furnish customers along their lines within
their respective districts with natural gas for heat, or light,
or other purposes.3
It is the duty of any corporation or person owning any
telegraph line doing business within this state to receive dis-
patches from and for other telegraph lines and corporations,
and from and for any individual, and, on payment of their
usual charges to individuals for transmitting dispatches as
established by the rates and regulations of such telegraph
lines, to transmit the same with impartiality and in good
faith, under penalty of one hundred dollars for every neg-
lect or refusal so to do, to be sued for as debts of like
amount are by law recoverable, and to be recovered with
costs of suit in the name and for the benefit of the person
or persons sending or desiring to send such dispatch.*
1 Const., Art. XVI, sec. 3.
Const., Art. XVII, sec. 7.
Laws, 1885, p. 32, sec. 10.
See note 2, p. 1802.
See note 2, p. 1802.
4 Laws, 1874, p. 92, sec. 33. Although not expressly decided, it is
probable telephone companies are subject to this provision. Bell Tele-
phone Co. v. Com., 17 W. N. C. 505.
1804
ECONOMIC LEGISLATION.
In the case of Com. ex rel. Stern v. Wilkesbarre Gas
Company, 2 Kulp, 499, in the common pleas court of Lu-
zerne county, the right of the relator to compel the com-
pany to supply and furnish gas for illumination of his
dwelling was sustained; it was held that the general grant
of eminent domain, i. e., to enter upon the streets and on.
private land to lay pipes, etc., itself imposed a public duty,
which an individual who is willing to comply with the rea-
sonable rules of the company may enforce by mandamus.
In Bell Telephone Company v. B. & O. Telegraph
Company, 17 W. N. C. 505, it was held that a telephone
company which had granted to a telegraph company
the use of its telephones for the transmission of tele-
graph messages, and otherwise to facilitate its business,
was bound to furnish the same facilities to every other
telegraph company on similar terms, although its contract
with the first company in terms was exclusive, and that
the provision of the statute above cited requiring tele-
graph corporations to receive messages from other compa-
nies in the same manner as from individuals, and transmit
them without discrimination, applies to telephone compa-
nies. In the opinion, the judge awarding the mandamus
says: "The respondent operates lines for the transmis-
sion of human speech by means of the telephone. It is
averred by the relator and admitted by the respondent
that the use of the telephone is a public necessity which
no other human agency can supply. Consequently the
telephone business is a public business.
A public
servant can not avoid the performance of any part of the
duty it owes to the entire public by a contract, even with
the patentee of the invention." And in its per curiam
opinion affirming the judgment the supreme court said:
"His opinion contains a correct statement of the law, and
vindicates the judgment.""
¹ As to authority to refuse service, see also Allegheny Heating Com-
pany's Appeal, 1 Mon. 91; Ohio Valley Gas Campany's Appeal, 1 Mon.
97 (1889). These cases were heard on appeal from the granting of pre-
1
:
1
PENNSYLVANIA.
1805
Safety of life and property.-The constitution pro-
vides that "no act of the general assembly shall limit the
amount to be recovered for injuries resulting in death, or
for injuries to persons or property."
95 1
2
A street railway company is liable to a citizen for in-
jury resulting from its neglect to repave, etc., but only
on proof of special damages over and beyond the public in-
jury.³ And the action may be maintained not only against
an original corporation but as well against a corporation
which has leased the franchises of the original company.*
State and municipal aid.—The constitution provides
that "the credit of the commonwealth shall not be
pledged or loaned to any individual, company, corpora-
tion, or association, nor shall the commonwealth become
a joint owner or stockholder in any company, association,
or corporation;"" and that "the moneys of the state over
and above the necessary reserve shall be used in the pay-
ment of the debt of the state, either directly or through
the sinking fund, and the moneys of the sinking fund
shall never be invested in or loaned upon the security of
any thing except the bonds of the United States or of this
state."6
The constitution also provides that "the general assem-
bly shall not authorize any city, borough, township, or in-
corporated district to become a stockholder in any com-
pany, association, or corporation, or to obtain or appro-
priate money for or to loan its credit to any corporation,
association, institution, or individual."
liminary injunctions, and the decrees below granting the injunctions
were reversed, no opinion being filed. As technical objections were in-
volved, the points on which the cases are authority do not appear. For
opinions of the lower courts in these cases, see 6 C. C. R. 96, 99.
'Const., Art. III, sec. 21.
2 Mayberry v. 2d and 3d Sts. Pass. R'y Co., 9 W. N. C. 404.
' Phila. Pass. R'y Co. v. Phila., 2 W. N. C. 639.
* Mullen v. Phila. Traction Co., 20 W. N. C. 203.
' Const., Art. IX, sec. 6.
7 Const., Art. IX, sec. 7.
Const., Art. IX, sec. 12.
1806
ECONOMIC LEGISLATION.
Public service. The power of municipalities to con-
tract is necessarily limited by their ability to incur indebt-
edness, the limitations upon which are stated below, under
"MUNICIPAL OWNERSHIP," p. 1810 et seq.
The statute provides that "it shall not be lawful for any
councilman, burgess, trustee, manager, or director of any
corporation, municipality, or public institution to be at the
same time a treasurer, secretary, or other officer, subordi-
nate to the president and directors, who shall receive a
salary therefrom, or be the surety of such officer, nor shall
any member of any corporation or public institution, or
any officer or agent thereof, be in anywise interested in
any contract for the sale or furnishing of any supplies or
materials to be furnished to or for the use of any corpora-
tion, municipality, or public institution of which he shall
be a member or officer, or for which he shall be an agent,
nor directly or indirectly interested therein, nor receive
any reward or gratuity from any person interested in such
contract or sale, and any person violating these provis-
ions, or either of them, shall forfeit his membership in
such corporation, municipality, or institution, and his
office or appointment thereunder, and shall be held guilty
of a misdemeanor, and, on conviction thereof, be sentenced
to pay a fine not exceeding five hundred dollars; provided,
that nothing in this section contained shall prevent a vice-
president of any bank from being a director of such bank,
or of receiving a salary as vice-president." "Any person
who shall contract for the sale or sell any supplies or ma-
terials as aforesaid, and shall cause to be interested in any
such contract or sale any member or officer or agent of any
corporation, municipality, or institution, or give or offer
to give any such person any reward or gratuity to influ-
ence him or them in the discharge of their official duties,
shall not be capable of recovering any thing upon any
contract or sale in relation to which he may have practiced
¹ Laws, 1860, p. 400, sec. 66.
•
PENNSYLVANIA.
1807
or attempted to practice corruptly, but the same shall be
void, and such party shall be guilty of misdemeanor, and,
on conviction thereof, shall be sentenced to pay a fine mot
exceeding five hundred dollars." An ordinance passed by
a borough council, a majority of whom are stockholders
in a water company contracting with the latter for a sup-
ply of water to the public, is void under these provisions,
and incapable of subsequent ratification.2
As to cities of the first class, with reference to contracts,
the statute provides that all contracts relating to city affairs
must be in writing, signed and executed in the name of
the city by the officer authorized to make the same, after
due notice, and in cases not otherwise directed by law or
ordinance, such contracts must be made and entered into
by the mayor. No contract can be entered into or exe-
cuted directly by the city councils, or their committees,
but some officer must be designated by ordinance to enter
into and execute the same. All contracts must be coun-
tersigned by the comptroller, and filed and registered by
number, date, and contents in the mayor's office, and at-
tested copies furnished to the comptroller and to the de-
partment charged with the work.3
Every contract for public improvements must be based
upon an estimate of the whole cost, furnished by the
proper officer through the department having charge
of the improvement, and no bid in excess of such estimate
can be accepted. Every such contract must contain a
clause that it is subject to these provisions, and the liability
of the city thereon is limited by the amounts which have
been or may be from time to time appropiated for the
same.³
Every contract involving an appropriation of money
must designate the item of appropriation on which it is
2
Laws, 1860, p. 400, sec. 67.
Borough v. Water Co., 23 W. N. C. 413. See, also, act of May 15,
Laws, 1874, p. 178, and section 3 of the act of June 4, 1883, Laws, p. 72.
3 Laws, 1885, p. 51, art. 14, sec. 1.
1808
ECONOMIC LEGISLATION.
founded, and must be numbered by the comptroller in the
order of its date, and charged as numbered against such
item, and so certified by him before it takes effect as a
contract, and must not be payable out of any other fund,
and if he certify any contract in excess of the appropria-
tion properly applicable thereto, the city is not liable for
such excess, but the comptroller and his sureties are liable
in damages for an amount not exceeding such excess,
which may be recovered in an action on the case for negli-
gence by the contracting party aggrieved. But so much
of this provision as enacts that a contract certified by the
comptroller must not be payable out of any other fund
than the item of appropriation against which it is num-
bered does not apply to such contracts for public improve-
ments as are referred to above (article 14, section 1).'
No debt or contract is binding upon the city of Phila-
delphia, unless authorized by law or ordinance, and an ap-
propriation sufficient to pay the same is previously made
by councils; but persons claiming unauthorized debts or
contracts may recover against the person or persons il-
legally making the same.²
2
No city of the first class, no head of any department
thereof, and no commission, board or trust, or any other
agent, officer or employee of either or any thereof, exercis-
ing any powers of government therein, either in the mak-
ing of contracts, the approval thereof, or in the authoriza-
tion of the expenditure of the money of said cities of the
first class in any manner whatever, can make any contract
without a previous appropriation has first been made by
the said councils, draw, issue or approve any warrant for
any expenditure by such department, commission, board or
trust or any other agent, officer, or employee, unless an ap-
propriation has been previously made in accordance with
the provisions of this act, and no warrant can be drawn
against any item in said appropriations in excess of said item;
2 Laws. 1858, p. 386, sec. 5.
¹ Laws, 1885, p. 45, art. 7.
...
ผู้
PENNSYLVANIA.
1809
and any contract made or warrant issued in violation of
these requirements is absolutely void as against said cities;
and any head of department, board, commission or trust,
agent, officer, or employee issuing such warrant is deemed
guilty of a misdemeanor, and, upon the conviction thereof,
must be fined a sum not exceeding five thousand dollars and
is liable to imprisonment for a term not exceeding three
years, and be thereafter disqualified from holding any office
or position of trust under the state, or any county or munic-
ipality thereof, and the countersigning of any warrant or
warrants by the city comptroller contrary to these provis-
ions likewise constitutes in such officer a misdemeanor,
and subjects him to like penalties, but nothing contained in
these provisions can be construed to relieve or exempt any
officer or other person violating them from liability to any
other punishment or penalties now provided by law.'
The following statutory provisions, relative to formali-
ties necessary, apply to cities of the second class. "No
ordinance shall be passed through councils except by bill,
and no bill shall be so altered or amended on its passage
through either branch as to change its original purpose.
"No bill shall be considered unless referred to a commit-
tee, returned therefrom and printed for the use of the
members;" and "no bill shall be passed containing more
than one subject, which shall be clearly expressed in its
title." "Every bill shall be read at length in each branch.
All amendments made thereto shall be printed for the use
of the members before the final vote is taken on the bill;
and no bill shall become a law upon the same day on
which it was introduced or reported. On its final passage,
the votes shall be taken by yeas and nays, and the names
of the persons voting for and against the same be entered
on the journal, and a majority of the members elected to
each branch be recorded thereon as voting in its favor."2
Similar limitations apply to votes on amendments and
reports of committees of conference.2
¹ Laws, 1879, p. 131, sec. 3.
*
Laws, 1874, p. 231.
1810
ECONOMIC LEGISLATION.
Similar provisions are contained in the act providing
for the incorporation and government of cities of the
third class.¹
Similar limitations apply to votes on amendments and
reports of committees of conference.2
Cities of the third class are empowered to contract for
the supply of gas or other light, or for the furnishing of
water for any length of time not exceeding ten years.¹
There are no express statutory provisions relating to the
methods of making contracts by boroughs.
Alteration, amendment, etc., of franchises.-The con-
stitutional provisions as to the power of the legislature to
alter, revoke, or aunul charters of incorporation as well as
the extent and method by which corporations may obtain
amendments to their charters are pointed out in "AMEND-
MENTS, REPEALS, ETC.," p. 1717.
As to these special franchises, the general doctrine seems
to be that, after municipal consent has been given and the
work constructed, a property right in the nature of an
easement vests in the possessor of a franchise, and this
property right, of course, is not subject to be altered or im-
paired by subsequent action on the part of the municipality,
except so far as it may be the subject of proper and rea-
sonable police regulations. Said Trunkey, J., who deliv-
ered the opinion in Hestonville, etc., Co. v. City of Phila-
delphia, 89 Pa. 210-218: "An absolute right vested by
legislation of the state and assented to by councils of the
city can not be subverted by city ordinance. The fran-
chise is not held at the mercy of any one."
See "How OBTAINED," p. 1782, supra.
Forfeiture of franchise.-See "DISSOLUTION, FORFEIT-
URE, ETC."-Subdivision II, p. 1779.
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
Historical.-It can not be said that there has been in
Pennsylvania a policy of the state regarding the question
¹ Laws, 1889, p. 277.
PENNSYLVANIA,
1811
of municipal ownership and exercise of the franchises
herein treated. The constitutional provisions applying to
the use of public funds or credit to assist private persons
or companies in constructing or operating industrial works
have been given.
A general act was passed March 11, 1857, relating to
gas and water companies; its provisions were applicable
to such companies as were thereafter incorporated by
special act of assembly. This act provided that the town,
borough, city, or district within which a gas or water com-
pany should be located might, after twenty years from the
introduction of water or gas, become the owners of the
works and property of the company by paying therefor
the net cost of erecting and maintaining the same, with
interest thereon at the rate of ten per centum per annum.
This provision is substantially re-enacted in the corpora-
tion act of 1874.
Special laws have authorized the ownership of gas and
water-works in certain cities, but these instances are not
sufficient to develop any policy of the state with reference
to the same.
It is not uncommon for municipalities to own water-
works and supply water to their inhabitants. The city of
Philadelphia, under acts of assembly special to itself,
supplies its citizens with gas, but aside from that in-
stance, light and heat are usually supplied by private en-
terprise.
Power to erect or purchase.-The power of munici-
palities to erect or purchase these works is necessarily lim-
ited by their ability to incur indebtedness.
The constitution provides that any county, township,
school district, or other municipality incurring any indebt-
edness shall, at or before the time of so doing, provide for
the collection of an annual tax sufficient to pay the inter-
est, and also the principal thereof, within thirty years.'
Const., Art. IX, sec. 10.
1812
ECONOMIC LEGISLATION.
The constitution also provides that "the debt of any
county, city, borough, township, school district, or any
other municipality or incorporated district, except as herein
provided, shall never exceed seven per centum upon the as-
sessed value of the taxable property therein, nor shall any
such municipality or district incur any new debt or increase
its indebtedness to any amount exceeding two per centum
upon such assessed valuation of property without the as-
sent of the electors thereof, at a public election, in such
manner as shall be provided by law; but any city, the debt
of which now exceeds seven per centum of such assessed
valuation, may be authorized by law to increase the same
three per centum in the aggregate at any one time upon
such valuation."
"" 1
The act of April 20, 1874, Laws, p. 65, enacted for the
purpose of carrying the above provisions into effect, regu-
lates the manner of increasing the indebtedness of munici-
palities, provides for the redemption of the same and for
the holding of elections authorizing such increase.
The city of Erie contracted for the erection of a market-
house, agreeing to pay a rental equal to six per cent of the
cost, and having an option to purchase within twenty-five
years. The debt of the city exceeded the constitutional
limit. The cost of the market-house, it appeared, would
be from $25,000 to $50,000. The city was enjoined from
carrying out the contract on the ground that thereby a
debt was created within the constitutional prohibition.2
Construing the provision as to increase by election, the
supreme court, in the appeal of the City of Wilkesbarre,
109 Pa. 554, said: "There is no warrant in the constitution
to sustain the proposition that the city may now, and from
time to time as it sees proper, within the maximum limit
of seven per centum, increase the indebtedness by successive
steps, if each increase be less than two per centum. Such
¹ Const., Art. IX, sec. 8.
2 Appeal of the City of Erie, 91 Pa. 398.
PENNSYLVANIA.
1813
action is not sanctioned by either the letter or the spirit
of the constitution. It is not one specific increase of more
than two per centum that is forbidden, it is an aggregate
indebtedness exceeding that per centum that is probibited.
Sections 2 and 3 of the act of 20th April, 1874, Pur. Dig.,
pages 1928-29, repeat the language of the constitution, and
provide for elections in furtherance thereof. The argu-
ment that ignores the aggregate indebtedness and consid-
ers the addition only thereto, proves too much. It would
nullify the right of the electors to vote on the question of
increase altogether. By successive increases, each less
than two per centum, the city might have the aggregate
indebtedness reach the seven per centum without a vote of
the electors. Up to that per centum the city would deny
the right of the electors to vote on the question of increase,
and beyond that per centum the constitution itself pro-
hibits any increase."
It was therefore held that an increase beyond two per
centum in the aggregate of the indebtedness of a city
could not be made without a vote of the electors.'
Among the enumerated powers of boroughs is the fol-
lowing: "To levy and collect annually for borough pur-
poses any tax not exceeding one-half cent on the dollar on
the valuation assessed for county purposes, as now is or
may be provided by law."
2
By act of April 16, 1875, boroughs were authorized
to lay a tax in addition to the tax already author-
ized, not exceeding a percentage of eight mills on the
assessed valuation. The money raised by the tax is to
be appropriated as follows, as directed by the act of May
8, 1876 :*
"That money so raised and collected shall be used, laid
out, and expended for the following purposes, and none
1
¹ See also Pike Co. v. Rowland, 94 Pa. 238; Wheeler v. Philadelphia,
77 Pa. 338.
2
Laws, 1851, p. 322, sec. 2, par. 24.
³ Laws, 1875, p. 55, sec. 1.
* Laws, 1876, p. 147.
1814
ECONOMIC LEGISLATION.
:
other, namely for the purpose of purchasing, erecting,
and maintaining such fire plugs or hydrants, gas lamps,
posts, gas or kerosene lamps, and hose for fire-engine
companies as may be required to supply the said boroughs
with a sufficient supply of water for the extinguishment
of fires, cleansing the streets, and other public purposes,
and with gas or kerosene oil for purposes of properly
lighting and illuminating the streets, lanes, alleys, and
other public places in said boroughs, of paying for said
gas, water, and hose for fire engines, and defraying the ex-
penses in making all necessary attachments to gas and
water mains in said boroughs, together with all other
necessary expenses in securing a full, sufficient, and abun-
dant supply of gas, water, and hose for fire engines, in
and throughout the said boroughs for the said purposes,
subject to all the further provisions of said act.”
The special tax, however, can not be laid until after ac-
ceptance of the act at a special election to be held for that
purpose.
A municipality within which a gas or water company is
located may, after twenty years, become the owner of the
works on paying therefor the net cost of erecting and
maintaining the same, with interest thereon at the rate of
ten per centum per annum, deducting from said interest
all dividends theretofore declared.¹
2
No provision of law upon this subject is contained in the
general legislation governing cities of the first and second
classes. The act of 1889, for the government of cities of the
third class, contains the following: "The councils of any
city of the third class are hereby authorized and empowered
to purchase for such price as may be agreed upon by the
councils of the city and a majority of the stockholders of
the company, all the real, personal, and mixed estate of any
water, gas, or electric light company or companies in such
1 Laws, 1874, p. 95, sec. 34, clause 7.
* Laws, 1889, p. 308, art. 12, sec. 1.
PENNSYLVANIA.
1815
city, or adjacent thereto, and thereupon the said city shall
possess and may exercise all the rights, powers, privileges,
and franchises by law belonging or pertaining to such
company or companies, and may take and appropriate any
stream or streams of water, spring or springs, lands, ten-
ements, hereditaments, property, and materials, near or ac-
cessible to such city which may be necessary for the erec-
tion and maintenance of water, gas, or electric light works,
and for the supplying of the city with water or light, or
may enter into and upon any lands and inclosures, streets,
or highways, to procure materials for the construction of
said works, doing as little damage as possible to the prop-
erty, and making compensation to the owner or owners of
all species of property taken, appropriated, or injured by
them for the purposes aforesaid." But these powers can
not be exercised by council until authority so to do has
been given them by a majority of the voters of such city
at a special election held for that purpose, of which elec-
tion the mayor must give notice as provided for municipal
elections.¹
It was held in Davis v. Borough, 3 C. C. R. 573, that
a borough will be restrained from purchasing an electric
light apparatus at a cost exceeding the current available
revenue, without having first provided for the tax as pre-
scribed by the constitution. The general borough law
contains no provision expressly authorizing the purchase
of electric light works, and it may well be doubted whether
in the absence of such provision a borough has any power
to make such purchase. But by the act of 1891, all bor-
oughs now or hereafter incorporated are authorized to man-
ufacture electricity for commercial purposes, and for the
supply and use of their inhabitants. They are authorized
by ordinance to provide for the introduction of any form
or style of electricity that may be deemed most expedient
and desirable for use in dwelling houses, store-rooms, and
2 Laws, 1891, p. 90.
¹ Laws, 1889, p. 308, art. 12, sec. 1.
2
•
1816
ECONOMIC LEGISLATION.
other places in the borough, and to regulate the price to
be charged for the same."
Where electric light companies organized under the laws
of the commonwealth are already furnishing electric light
to the borough or public, the borough is authorized to pur-
chase the works of such corporation at such price as may be
agreed upon by borough councils and a majority in value of
the stockholders of the corporation. In case of failure to
agree, the borough may present a petition to the court of
common pleas asking for the appointment of viewers to
assess the value of the plant and works taken, whereupon
the court is to appoint seven discreet and disinterested free-
holders, none of whom shall be stockholders in said cor-
poration, or tax-payers in said borough. The court is also
to appoint a time for their meeting, of which meeting ten
days' notice must be given to all parties in interest. The
viewers having been first duly sworn or affirmed faithfully,
justly, and impartially, to appraise the property, and hav-
ing viewed the premises, and taken such testimony as may
be offered by either party touching the value of the prop-
erty and franchises, must estimate and determine what
amount of damage has been done, or may be sustained,
by the corporation, and to whom payable, and make re-
port thereof to the court, which report, having been con-
firmed by the court, judgment may be entered thereon.
Each viewer is entitled to receive two dollars for each day
necessarily employed in the performance of the duties pre-
scribed.¹
Either party may, within thirty days after the confirma-
tion of such report, appeal therefrom to the court, and
upon such appeal either party may put the cause at issue in
such form as may be directed by the court, and the same
shall then be tried by said court and a jury, and after
final judgment either party may appeal to the supreme
court.¹
¹ Laws of 1891, p. 90.
PENNSYLVANIA.
1817
1
Before any debt can be contracted' or incurred by any
borough for the manufacture of electricity, the question
of the right to increase the debt of the borough for that
purpose, must first be submitted to the qualified voters of
the borough in the manner provided by law for the in-
crease of indebtedness of municipal corporations through-
out the commonwealth.'
The provisions of the act are also extended so as to
cover boroughs which, prior to its passage, had provided
plants for the manufacture of electricity. All indebted-
ness theretofore contracted or incurred by them in pursu-
ance of a vote of the electors taken in the manner pro-
vided by law for the increase of the indebtedness of
municipal corporations, is validated and confirmed.'
Section 1 of Art. XVI of the constitution, avoiding
charters or grants of exclusive privileges not actually ex-
ercised when the constitution was adopted, relates to pri-
vate corporations only, and does not prevent the exercise,
by a municipality, since the adoption of the constitution,
of a right possessed by it but never exercised before its
adoption. A municipal corporation exercising the func-
tions of a private corporation in supplying its citizens with
water does not thereby lose its distinctive municipal
character. The construction of its works, therefore, al-
though it may impair the value of the works of a water
company chartered under the general law of 1874, is
damnum absque injuria. The exclusive right conferred
upon water companies by that law does not conflict with
Art. I, sec. 17, of the constitution, prohibiting the ir-
revocable grant of special privileges or immunities. The
franchise is that of acting in a corporate capacity, and of
exercising the right of eminent domain, not necessarily
the exclusive right to furnish such supply.²
Municipalities may therefore erect works and supply
the public with water, notwithstanding the existence of a
2
¹ Laws of 1891, p. 90.
Lehigh Water Co's Appeal, 102 Pa. 515..
VOL. II-34
1818
ECONOMIC LEGISLATION.
private corporation claiming the privilege of exclusive in-
corporation under the act of 1874. The right of such a
corporation to construct water-works and supply the pub-
lic is exclusive only as against other water companies. It
was not the intent of the legislature to prohibit cities and
boroughs from providing their inhabitants with pure water
by works of their own construction.'
There has never been any attempt on the part of a mu-
nicipality to supply heat to the public, and, ordinarily,
where private corporations have provided an adequate
supply of gas or electric light of satisfactory quality, or
water of reasonable purity, the municipalities have been
content to leave the business in their hands.
Lehigh Water Co's Appeal, 102 Pa. 515.
1
RHODE ISLAND.'
EDITED BY AMASA M. EATON, ATT'Y, PROVIDENCE, R. I.
SUBDIVISION I.-HISTORICAL.
Rhode Island was formed by the union of the four
towns of Providence, Portsmouth, Newport, and War-
wick. Providence, Portsmouth, and Newport were united
in 1643 under a charter obtained by Roger Williams, un-
der the title "Providence Plantations." No government
was formed under this charter until 1647, when a general
assembly from the four towns met in Portsmouth and
adopted the charter. Warwick was admitted at this
time, although its name did not appear in the original
grant.
Upon the restoration of Charles II, fearing that the
charter of the colony might be modified or revoked, Roger
Williams and John Clarke were sent to England to obtain
a new charter or a confirmation of the old one. John
Clarke returned in 1663 with "the charter of the English
Colony of Rhode Island and Providence Plantations in
New England in America."
The colony, and, after the Revolution, the state, was
governed under this charter until 1842, when the present
state constitution was adopted.
In considering the rise and growth of corporate powers
and the grants of charters, that is, of acts of incorporation
in this state, the historical development of the state and of
'Unless otherwise stated, references to the constitution are to that of
1842. References to the statutes are to the Public Statutes of 1882 by
chapter and section. The session laws are referred to as Laws of the
respective years. As to the state reports, see Appendix "A."
(1819)
1820
ECONOMIC LEGISLATION.
its general assembly should be borne in mind. The legis-
lature, as its name implies, was a general assembly of all
the freemen of the colony. They were, in the beginning,
all expected to be present, and to take part in what was
done. Soon those who were unable to attend in person.
sent their proxies by their neighbors. Under this theory
and practice, all the freemen of the colony being present,
either in person or by proxy, any business might be trans-
acted without further notice. Petitions for acts of incor-
poration were preferred, therefore, to the general as-
sembly, and were forthwith granted by that body. Some-
times the act simply directed that the charter be signed
and sealed by the secretary in the same form as that of
some other company. Of course this method was only
suited to a primitive form of society.
1
In time, with the growth of the colony, the general as-
sembly gradually changed its character and became a rep-
resentative body, an assembly of delegates from the differ-
ent towns, instead of an assembly of all the freemen of
the towns. It was no longer true that any particular
measure presented involved only the interests of those pres-
ent in the general assembly; it might, and often did, affect
the interests of those not present, and who had no notice
thereof. Hence arose the necessity of continuing the
subject-matter of a petition until the next meeting of the
assembly, with an order of notice, in order that all inter-
ested or affected might have an opportunity to be heard.
The custom gradually grew of continuing petitions to the
next session with an order of notice, until finally it was
incorporated into the constitution of the state, which pro-
vides that "hereafter when any bill shall be presented to
either house of the general assembly, to create a corpora-
tion for any other than for religious, literary, or charitable
purposes, or for a military or fire company, it shall be
¹ See Schedules of General Assembly, May, 1744, p. 39, in manuscript
only.
RHODE ISLAND.
1821
1
continued until another election of members of the gen-
eral assembly shall have taken place, and such public no-
tice of the pendency thereof shall be given as may be re-
quired by law." This provision in the organic law led
to the passage in 1844 of an act which has continued, sub-
stantially, in force ever since, in relation to petitions for
acts of incorporation.2
When the constitution of 1842 went into effect, there
was a popular distrust of corporations. Evidently the
theory which the framers of this constitution had in mind
was that no charter of a business nature should
be
granted until, with due notice of the pendency of the pe-
tition for the passage thereof, the voters of the state
should have an opportunity to elect members of the gen-
eral assembly with special reference, if need be, to the
question of the passage of such charter. Since that time
this distrust has been allayed, and the policy of the law
is to grant all proper charters. This constituțional re-
striction, however, still works delay and is a bar to busi-
ness activity. To save time, it has become the custom for
those desiring to organize under a charter without delay,
to buy or use some old charter, under which no organiza-
tion has been effected, and under cover of the reserved
power of the legislature to amend or repeal, to carry
through the legislature without notice, such changes as
may be necessary to adapt the charter to the needs of the
petitioners. The supreme court of the state has decided
that such a course is not contrary to Art. IV, sec. 17, of
the state constitution, above cited.
In this state, as in many others, after the Dartmouth
College case,³ a clause was added to each charter granted,
reserving the power of the legislature to amend or repeal
it. By inadvertence, charters were sometimes granted
without this reservation, and thus possessed a peculiar
1 Const., Art. IV, sec. 17.
3 4 Wheaton (U. S.), 518.
2 Pub. Stats., ch. 19, sec. 2.
1822
ECONOMIC LEGISLATION.
value. To guard against this and to obviate the necessity
of such a reservation in every charter granted, the act of
1844 was passed and is still in force.'
In 1863, to increase the revenue of the state in conse-
quence of the exigencies of war, a tax or fee of one-tenth of
one per centum was imposed upon the capital stock of all
business corporations thereafter created, the tax not to
be less than $100. This has been maintained ever since
as the policy of the state.
In this state, the general assembly is the most powerful
of the three branches of government. Until 1842, the
legislature was supreme, and since then, under the state
constitution, it retains much of its power; the courts
and judges are subject to its will, and the governor has no
veto power, and his office, speaking generally, is mainly
an ornamental one.³
Subject only to the constitutional provision above re-
ferred to, the power of the general assembly over the grant-
ing of corporate powers is unlimited. The general assem-
bly has not delegated any portion of this power to any
municipality or court. It therefore follows that no mu-
nicipal enactment or judicial decree can grant any corpo-
rate franchise.
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation, how obtained.-All companies are in-
corporated by special act of the legislature, upon petition
of the incorporators. Corporations can not be formed
under general laws.
The constitution provides that "hereafter, when any
bill shall be presented to either house of the general as-
sembly, to create a corporation for any other than for re-
1
¹ Laws, 1844, p. 65, sec. 3; Pub. Stats., chap. 152, sec. 17.
Laws, 1863, ch. 475; Gen. Stats., ch. 25, sec. 10; Pub. Stats., ch. 27,
sec. 14.
* Const., Art. X, secs. 2, 4. But see Taylor v. Place, 4 R. I. 324.
RHODE ISLAND.
1823
ligious, literary, or charitable purposes, or for a military
or fire company, it shall be continued until another elec-
tion of members of the general assembly shall have taken
place, and such public notice of the pendency thereof
shall be given as may be required by law." This re-
quired notice is to be given by the petitioner in a news-
paper of the town or county where it is intended to es-
tablish the corporation, or, if there be no such paper, then
in some newspaper of an adjoining town or county; it
must be published for three weeks successively preceding
the first Wednesday in April next after the preferring of
the petition, and must contain a notice of the pendency
of the proposed bill, the purpose of the corporation, and
the place where it is intended to be established.2 To
avoid the delay incident upon this method of procedure,
it is the custom, as already explained, to secure some old
charter and have it so amended as to secure the desired
ends; this has been held to be a constitutional and valid
proceeding and within the power of the general assembly.3
Any manufacturing corporation, with a paid up capital
of $30,000 or more, created prior to the passage of Pub.
Stats., ch. 155, may adopt the provisions of the general
law relative to such companies by making and causing to
be recorded as shown below (see "CAPITAL STOCK") a
certificate stating the amount of capital stock actually
paid in, whether any has been divided or withdrawn,
the amount of debts and credits, the estimated value of
its real and personal property, and stating under oath
that they have made careful examination and faithful
estimation, and that said certificate is true, etc.; and
after so doing the stockholders are not liable for the debts
of the company subsequently contracted, except as other-
wise provided.*
Organization.—Companies are required to organize
' Const., Art. IV, sec. 17.
2 Pub. Stats., ch. 19, sec. 2.
* Union Co. v. Sprague, 14 R. I. 452.
Pub. Stats., ch. 155, sec. 17.
1824
ECONOMIC LEGISLATION.
within two years from the passage of their act of incor-
poration, unless otherwise provided in the charter. Fail-
ure to so organize renders the charter void.¹
See under "OFFICERS; MEETINGS; VOTING; QUORUM,
ETC.," below, as to requirements as to first meeting.
Within thirty days after organization, corporations must
file with the secretary of state a certificate under oath of
the treasurer, or other authorized officer, stating the name
of the corporation, date of organization, amount of cap-
ital stock paid in and the date thereof, the town where
the corporation is located, and the name and post-office
address of the treasurer.2
3
Fees. All business corporations at the time of re-
ceiving their charter are required to pay into the state
treasury a tax or fee of one-tenth of one per centum of their
capital stock, but such fee is not to be less than $100.4
As to third parties the charter is valid although this tax has
not been paid ;" and a stockholder can not plead such failure
in an action against him as a member of such company."
.5
Upon any increase of capital stock a like tax of one-
tenth of one per centum is to be paid. The certificate of
the general treasurer that this tax has been paid must be
furnished to the secretary of state before the issuance of
any certified copy of the charter or act providing for in-
crease of capital stock, and upon a delay of thirty days,
the treasurer is required to take steps to collect it."
4
7
Amendments, repeals, etc.-Unless otherwise ex-
pressly provided, all charters passed since 1844 may be
amended or repealed at the pleasure of the general assem-
2 Pub. Stats., ch. 152, sec. 19.
¹ Pub. Stats., ch. 152, sec. 18.
3"Business corporations" probably includes all corporations doing
business for profit.
* Pub. Stats., ch. 27, sec. 14. The policy of the state is to charge
charter fees for business charters only.
' Hughesdale v. Vanner, 12 R. I. 491.
6 Slocum ". Providence Steam and Gas Pipe Co., 10 R. I. 112; Slocum
v. Warren, 10 R. I. 116.
7 Pub. Stats., ch. 27, sec. 15, 16.
RHODE ISLAND.
1825
1
bly, and are subject to the provisions of the general
law.¹
Changes in the name, business, objects, etc., of a cor-
poration, are effected by application to the legislature,
and this application need not be continued until another
legislature is elected, but amendments are valid if adopted
by the legislature to which presented.2
Duration of charter.-All acts of incorporation are
unlimited in respect to time, so far as known; the charter
of each company governs in this respect.
Objects, etc.-Inasmuch as in this state no charter can
be obtained by means of a certificate of incorporation, the
charter itself must contain the statement of the objects.
of the incorporation. Changes in these objects are effected
by amendment to the charter as explained above.
3
Powers. Unless the charter provides otherwise, a cor-
poration has perpetual succession, may make, use, alter,
or renew a common seal, may take, hold, and convey realty
and personalty, may sue and be sued, may elect officers.
and fix their compensation and duties, and make any
by-laws consistent with the law. It, may bind itself
by a negotiable promissory note or bill of exchange for
debts contracted in the course of its legitimate business,
or in any manner not foreign to the purpose of its crea-
tion; and may enter into partnership to be terminated at
the will of the corporation."
4
By-laws. Corporations may determine by by-laws,
unless other provision is specially made, the manner of
calling and conducting meetings, the number of shares
that shall constitute a quorum, the mode of voting by
proxy, of selling shares for non-payment of assessments,
' Laws, 1844, p. 65, sec. 3; Rev. Stats., ch. 125, sec. 14; Gen. Stats.,
ch. 139, sec. 17; Pub. Stats., ch. 152, sec. 17.
2 Union Co. v. Sprague, 14 R. I. 452.
Clark v. Sch. Dist. No. 7, 3 R. I. 199.
3 Pub. Stats., ch. 152, sec. 1.
5 Allen & Sons e. Woonsocket Co., 11 R. I. 288. In this case all of the
stock was held by one person.
i
1826
ECONOMIC LEGISLATION.
and the tenure of office of officers, and may affix penalties.
for breach of by-laws not to exceed $20, provided no by-
law shall be repugnant to the charter.'
2
Officers; meetings; voting; quorum, etc.-Every
corporation created by this state must have a place of
business and a clerk, treasurer, or other agent resident
herein, and the recording officer of such corporation must
also be a resident of the state or his office thereby becomes
vacant. The company may by by-laws determine the
tenure of office of officers, etc.¹ An officer can not act as
auctioneer in the foreclosure of any mortgage held by the
corporation.*
3
A corporation may determine by by-laws the manner of
calling and conducting meetings, the number of shares
that shall constitute a quorum, that shall entitle the
owner to one or more votes, and the mode of voting by
proxy.¹
1
The first meeting of all corporations, except banks, un-
less otherwise provided for in their charters, must be
called by a notice signed by any one or more of the per-
sons named in the charter, setting forth the time, place,
and objects of the meeting, to be delivered at least seven
days before the meeting to each member, or published in
some newspaper of the county where the corporation may
be established, or, if there be no such newspaper, then in
some newspaper of an adjoining county.5
If there be no person duly authorized to call or preside
at such meeting, any justice of the peace of the county,
upon written application of three or more members, may
issue a warrant to either of said members, authorizing
him to call a meeting by giving the same notice as above,
and the justice may, in the same warrant, direct such per-
son to preside at such meeting until a clerk shall be duly
¹ Pub. Stats., ch. 152, sec. 3.
3 Pub. Stats., ch. 152, sec. 15.
5 Pub. Stats., ch. 152, sec. 4.
2 Pub. Stats., ch. 152, sec. 16.
Pub. Stats., ch. 137, sec. 9.
RHODE ISLAND.
1827
1
chosen and qualified, if there be no officer present legally
authorized to preside thereat. A corporation, when so
assembled, may elect officers and transact any business that
it might transact at a regular meeting.²
The failure to hold an annual meeting, etc., does not im-
pair the validity of a charter, but officers may be elected
at a subsequent meeting, duly notified, to be held for that
purpose.³
The books of the corporation are prima facie evidence
as to who possesses the right to vote at a corporation
meeting. A pledgor of stock standing on the books in
the name of the pledgee is entitled to vote and may com-
pel a transfer or a proxy to himself, but if he has acqui-
esced for years in the control of the stock by the recorded
owner and makes no attempt to inform the corporation of
his ownership until a contested election, and then not un-
til the votes are being or have been counted, it is too late
to ask for the interference of a court of equity. If stock
stand in the name of a trustee, he is the proper person to
vote on it until the equitable owner shall seasonably assert
his rights.*
Books. The corporation records or minutes of the do-
ings of the company, regularly kept, are evidence, though
not conclusive, of the corporate proceedings, and of all
that may be fairly inferred from them.5
6
Capital stock.-The capital stock of manufacturing
corporations must not exceed the appraised value of its
property, which must be determined by the town assessors
of the town where located," and a certificate of such ap-
praisal, signed and sworn to, must be recorded with the
¹ Pub. Stats., ch. 152, sec. 5.
2 Pub. Stats., ch. 152, sec. 6.
3 Pub. Stats., ch. 152, sec. 7. This provision was adopted to relieve
the general assembly of the necessity of declaring charters valid not-
withstanding such failure.
4 Hoppin v. Buffum, 9 R. I. 513; Wilson v. Cent. Bridge, 9 R. I. 590.
5 Woonsocket Union R. Co. v. Sherman, 8 R. I. 564.
Pub. Stats., ch. 155, sec. 8.
1
1828
ECONOMIC LEGISLATION.
town clerk.' The cost of such appraisal is $10 and the
expenses of the appraisers.²
The capital stock of such companies must all be paid
in, and within ten days after the payment of the last in-
stallment, a certificate as to the amount of the capital
stock must be made and filed for record in the office of
the town clerk where the manufactory is established; this
certificate must be signed and sworn to by the president,
treasurer, clerk, and a majority of the directors or other
managing officers.3 A note given for stock in a manu-
facturing corporation is not to be considered payment.*
In general, paid up stock can not be assessed without
special authority of the charter or statutes, but the legis-
lature, under its reserved power to alter, amend, or repeal,
may provide for such assessment, and a stockholder in a
company, the charter of which provided at the time his
stock was bought that the stockholders should not be lia-
ble further than the amount of their shares and interest,
can not object to an assessment on his stock made under
an act of the legislature passed after he bought his stock.
The sale of stock for non-payment of assessments is gov-
erned by the provisions of the by-laws.
6
New shares of capital stock, representing the surplus
of the corporation, and distributed to its stockholders, are
not to be considered as income and do not belong to a life
tenant.8
9
Shares in a corporation are liable to execution like other
personal property. An officer charged with a levy on ex-
ecution against a defendant whose shares in a corporation
have been attached must serve a copy thereof upon the
I Pub. Stats., ch. 155, sec. 10.
3 Pub. Stats., ch. 155, secs. 1, 2, 18.
2 Pub. Stats., ch. 155, sec. 9.
4 Pub. Stats., ch. 155, sec. 7.
5 Atlantic De Laine Co. v. Mason, 5 R. I. 463.
6 Gardner v. Hope Ins. Co., 9 R. I. 194.
7 Pub. Stats., ch. 152, sec. 3.
Parker v. Mason, 8 R. I. 427; Brown, Adın'r, 14 R. I. 371.
9 Pub. Stats., ch. 223, sec. 22.
RHODE ISLAND.
1829
treasurer or other similar officer of such corporation;¹ said
shares must be advertised and sold as in other levies, and
a deed thereof by said officer vests the title of the defend-
ant, and must be recorded by the recording officer of the
company; such deed vests in the purchaser all the de-
fendant's title, and a transfer on the corporation books is
superfluous, if recorded as provided above.³
Bequests. In case of a devise or bequest to any corpora-
tion in excess of the amount limited in the charter, the
corporation may make application to the legislature at any
time within one year of the probate of the will for author-
ity to take and hold such gift, in excess of the limit of the
charter, but a bequest having been made before the pas-
sage of the above provision, the corporation can only take
to the limit of the amount fixed in the charter."
4
Increase and decrease of.-Within thirty days after in-
creasing the capital stock, all corporations are required to
file a certificate, as shown under "ORGANIZATION," above,
and stating, in addition to the items there set forth, the
amount of such increased stock paid in and the date
thereof."
Upon the increase of the capital stock of manufactur-
ing corporations, a certificate as to the amount of the
capital stock, etc., as already stated relative to the original
capital stock, must be filed with the town clerk.
Any manufacturing corporation may, by a vote at a
meeting called for the purpose, reduce its capital stock,
subject to the provisions of its charter, and a certificate
thereof must be recorded as in the case of increase of the
capital stock.
Transfer of.-Shares of stock of corporations are per-
sonalty, unless otherwise provided in the charter, and
Pub. Stats., ch. 223, sec. 20.
2 Pub. Stats., ch. 223, sec. 21.
3 Lippitt ". Am. Wood Paper Co., 14 R. I. 301.
Pub. Laws, ch. 761, sec. 1.
Pub. Stats., ch. 152, sec. 19.
* Pub. Stats., ch. 155, sec. 4.
6 Wood r. Hammond, 16 R. I. 98.
7 Pub. Stats., ch. 155, secs. 2, 18.
1830
ECONOMIC LEGISLATION.
are transferable as the by-laws may provide.' Record of
the transfers of stock of corporations incorporated by the
sole authority of this state must be made and kept in the
state, and the recording officer must be a resident of the
state.² The delivery of the certificate and a power of at-
torney transfers the title, except as to payment of dividends,
etc., but until record thereof with the corporation the
holder of record may be treated by the corporation as the
holder in fact.³
The legal title to stock "assignable only on the books”
of the corporation will not pass by assignment of the
shares neither made nor recorded on the books of the
company, but it has been held that in the case of stock
conveyed by indorsement on the certificate, and attached
by the creditors of the transferer before transfer on the
books, the attachment could not be sustained. A transfer
of stock made to hinder and defraud creditors is certainly
void at common law and semble by statute in this state."
Bonds, debts, etc.-The power of manufacturing cor-
porations to contract debts is limited to an amount equal
to the capital stock paid in,' and loans by the company to
its stockholders are not permitted.8
9
The realty and personalty of a manufacturing corpora-
tion are liable for its debts by attachment, levy, or sale on
writ of attachment or execution. On final judgment
against a corporation, execution issues against its goods,
chattels, and real estate; or, if the officer make return
that he can not find sufficient property, a writ of scire
facias may be sued out against the officers of the corpora-
tion, or, if there be none, against any of its stockholders.
or members. Upon return thereof, unless they shall make
it appear they had not property of the corporation suffi-
¹ Pub. Stats., ch. 152, sec. 2; Arnold v. Ruggles, 1 R. I. 165.
2 Pub. Stats., ch. 152, sec. 15.
* Lippitt v. Am. Wood Paper Co., 15 R. I. 141.
5 Beckwith v. Burrough, 13 R. I. 294.
6 Beckwith . Burrough, 14 R. I. 366.
8 Pub. Stats., ch. 155, sec. 7.
3 Laws, 1888, ch. 690.
7 Pub. Stats., ch. 155, sec. 15.
9 Pub. Stats., ch. 155, sec. 19.
RHODE ISLAND.
1831
cient to satisfy the judgment, or any part thereof, execu-
tion shall issue against them as for their own private debt,
for the amount which they do not hold property enough
of the corporation to satisfy.'
A corporation may bind itself by a negotiable promis-
sory note or bill of exchange for debts contracted in the
course of its legitimate business or in a manner not for-
eign to the purpose of its creation.²
A cestui que trust, as well as any other stockholder, may
lawfully bid upon the property of a corporation in which
they are thus interested at any public auction sale thereof,3
but an officer of a corporation can not act as auctioneer in
the foreclosure of any mortgage held by the corporation.*
Dividends. See under “LIABILITY OF OFFICERS AND DI-
RECTORS."
Liability of stockholders. The liability of stock-
holders of manufacturing corporations is limited to their
shares, paid up to the par value thereof, and to an addi-
tional amount up to but not exceeding the par value of their
shares, for failure to file the certificate or annual report as
shown below.5
Members of manufacturing corporations are jointly and
severally liable-first, for all debts and contracts of the
company until the capital stock, original or increased, is
paid in and the certificate thereof properly recorded, and
the required appraisement made and filed; this liability
extends to all persons who were stockholders when the
debt was contracted and also to all who are stockholders
when the liability is enforced,' but it does not include torts
of the corporations nor judgments founded upon torts;
second, for all the debts of the corporation, if any capital
¹ Pub. Stats., ch. 223, secs. 23, 24.
2 Clark v. Sch. Dist. No. 7, 3 R. I. 199.
3 Wilson v. Cent. Bridge, 9 R. I. 590.
8
5 Pub. Stats., ch. 155, sec. 13.
Sayles . Bates, 15 R. I. 342.
4
+ Pub. Stats., ch. 137, sec. 9.
6 Pub. Stats., ch. 155, secs. 1, 2, 3, 10.
Leighton . Campbell, Index G. G., p. 46.
1832
ECONOMIC LEGISLATION.
stock is withdrawn and refunded to stockholders before
the payment of debts contracted before the record of the
required certificate of reduction of stock;' third, for all
debts existing or contracted before the annual report is
made, unless the company has become insolvent and as-
signed its property in trust for the benefit of creditors.²
A stockholder may exempt himself from this liability as
to the annual report by filing such report before February
25th, or by filing in like manner a statement under oath
that he has requested a majority of the directors or other
officers to make the required return, and that they have
neglected or refuse to do so, and that he can not make
said return; this statement must also be published in a
daily newspaper of Providence, and, if the corporation is
located in another county, in a newspaper of such county,3
but filing a certificate which is not in fact true does not
relieve from such liability."
4
Proceedings to enforce the liability of stockholders is,
by suit in equity, or in debt upon judgment obtained
against the corporation, and in either the stockholders
may contest the claim as the corporation could have done."
See under "BONDS, DEBTS, ETC.," above.
A stockholder voluntarily or by compulsion paying the
debt of the company for which he is liable, may recover
the amount in an action on the case against the company,
in which the property of the company only is liable to be
taken; or he may proceed in equity for contribution
against the other stockholders liable, and may recover
from them their proportion thereof;" this liability to con-
tribute is co-extensive with the liability for the debt."
Executors, administrators, guardians, trustees, etc., or
holders of stock as collateral, are not personally liable for
¹ Pub. Stats., ch. 155, secs. 4, 5.
3 Pub. Stats., ch. 155, sec. 14.
2 Pub. Stats., ch. 155, sec. 12.
* Congdon v. Winsor, Index H. H., p. 59.
5 Pub. Stats., ch. 155, sec. 22.
• Pub. Stats., ch. 155, sec. 23.
7 Sayles v. Bates, 15 R. I. 342.
RHODE ISLAND.
1833
:
the debts of the corporation; a pledgor is liable, and the
funds held by an executor, administrator, etc., are liable
to the same extent as the deceased, etc., would have been.'
A liability incurred by a stockholder of a manufacturing
corporation, which is the basis of a claim against his es-
tate, represented insolvent and disallowed by the commis-
sioners therein, can not be prosecuted by an action on the
case, because the statute creating the liability provides
certain remedies under which the liability of a deceased
stockholder is entitled to be proved against his estate
represented insolvent; but a claim against an insolvent
estate of such deceased stockholder is entitled to partici-
pate in the surplus, if any there be, after payment of al-
lowed claims. This liability is direct and primary, and
even if it does not survive at law, may be enforced in
equity, and devolves on his executors or administrators as
stated above, and binds the decedent's estate in their
hands not required to meet the charges especially imposed
upon it by the provisions of the statutes as to "insolvent
estates of deceased persons.'
2
A stockholder can not be imprisoned nor his property
attached on an execution issued upon judgment obtained
against the corporation in which he was a stockholder.³
The court has held that the passage of this provision af-
fects the remedy, but does not impair the obligation of
contracts.*
That the charter fees have not been paid, is no de-
fense on the part of a stockholder to avoid payment of
these liabilities, because a stockholder of a supposed cor-
poration, when pursued by a creditor, is estopped from
denying its existence; only the state can take advantage
of such neglect.
Liability of officers and directors.-The directors
¹ Pub. Stats., ch. 155, sec. 26.
3 Pub. Stats., ch. 155, sec. 25.
2 Moies v. Sprague, 9 R. I. 541.
* Penniam's Case, 11 R. I. 333; 103 U. S. 714.
5 Slocum v. Gas & Pipe Co., 10 R. I. 112; Slocum v. Warren, 10
R. I. 116; Hughesdale Co. v. Vanner, 12 R. I. 491.
VOL. II-35
1834
ECONOMIC LEGISLATION.
25-
1
and officers of a corporation are liable in equity as trustees
for a fraudulent breach of trust. They are not personally
responsible for a violation of the charter, the result of a
mistake as to their powers, provided it did not proceed
from a want of ordinary care and prudence.' Every offi-
cer or agent of a corporation fraudulently issuing stock
or certificates thereof is liable to a fine of not less than
$1,000, and imprisonment not more than ten years nor less
than one year.2
The officers and directors of manufacturing corporations.
are jointly and severally liable, (1st) in case of failure to
make and file the required certificates as to the payment.
of capital stock, original or increased, or the reduction of
the same, to the extent of all debts contracted after ten
days and until the recording of said certificates 3-but this
liability does not include torts of the corporation, or judg-
ments against the corporation founded on torts; (2d) for
declaring dividends when the corporation is insolvent, or
which will cause insolvency, they are liable for all existing
debts and those afterward created while they are direct-
ors, to an amount equal to but not greater than such divi-
dend-but any director absent, or objecting in writing
filed with the company's clerk, is not so liable;5 (3d) for
making loans of capital to stockholders, they are liable
for the debts of the corporation to an amount equal to the
loan and interest;6 (4th) for creating a debt greater than
the capital stock paid in, they are liable for all debts then
existing, or contracted while they are in office, and until
the reduction of the debt to an amount not greater than
the capital stock, to an amount equal to such excess"-but
this liability does not include torts of the corporation
committed pending such period, nor for judgments against
Hodges v. N. E. Screw Co., 1 R. I. 312.
2 Pub. Stats., ch. 242, sec. 19.
3 Pub. Stats., chap. 155, secs. 3, 4.
* Leighton v. Campbell, Index G. G., p. 46.
5 Pub. Stats., ch. 155, sec. 6.
'Pub. Stats., ch. 155, sec. 15.
6 Pub. Stats., ch. 155, sec. 7.
=
RHODE ISLAND.
1835
1
the corporation founded on such torts; (5th) if any certif
icate or public notice required by law is materially false,
those signing knowing it to be false are liable for all debts
contracted while they are officers;2 and any one to whom
they are so liable has an action on the case against them,
which may be brought notwithstanding the pendency of
an action against the company.3
Any officer or director paying the debt of the company
for which he is liable, may recover the same in an action
against the company for money paid for its use, and the
property of the company only shall be liable to be taken
thereon.
An action at law can not be maintained against an ad-
ministrator upon a liability incurred by his intestate, under
these provisions, because such liability is a tort, and does
not survive.5
The corporation is the primary party to sue for a breach
of trust, but if it refuses to sue, or is under the control
of the guilty directors, the stockholders may sue in their
individual names. 6
A corporation can not gratuitously condone or release
the fraud of an officer, except by a unanimous vote of the
stockholders. If, on request, a corporation refuses or neg-
lects to bring suit against a defaulting officer, the suit may
be brought by a stockholder for himself and his co-stock-
holders, making the corporation a party respondent.7
Reports. Manufacturing corporations are required to
file in the office of the town clerk where any factory is
located (or, if no manufactory is established in the state,
in the town where its office is located), annually on or
before February 15th, a certificate signed by a majority
of the directors or other officers, stating the amount of
¹ Leighton v. Campbell, Index G. G., p. 46.
2 Pub. Stats., ch. 155, sec. 20.
Pub. Stats., ch. 155, sec. 24.
3 Pub. Stats., ch. 155, sec. 21.
6 Hodges v. N. E. Screw Co., 1 R. I. 312.
7 Hazard v. Durant, 11 R. I. 195.
5 Moies . Sprague, 9 R. I. 541.
8 Laws, 1892, eb. 1038, 1089.
J
1836
ECONOMIC LEGISLATION.
''
capital stock actually paid in; the value of its real estate
as last assessed for town tax; the value of its personal
assets, and the amount of its debts and liabilities on De-
cember 31st next preceding. Upon failure to file this re-
port, any officer or stockholder may do so, or may exempt
himself from the resulting liability in the manner shown
above ("LIABILITY OF STOCKHOLDERS").
Every railroad corporation must make annual reports as
early as is practicable in January, to the railroad commis-
sioner, embracing such facts in relation to the corporation
as the commissioner may require, adding such facts as said
corporation may deem expedient.²
Taxation. The constitution provides that "the bur-
dens of the state ought to be fairly distributed among its
citizens,' "3 and in accord therewith the statute requires
that "All real property in the state, and all personal prop-
erty belonging to the inhabitants thereof, shall be liable
to taxation, unless otherwise specially provided.”·
Personal property, for purposes of taxation, is deemed
to include all goods, chattels, debts due from solvent per-
sons, money and effects, ships or vessels, at home or abroad,
all public stocks and securities, except those issued by the
United States, all stocks or shares in any bank, turnpike,
bridge, or other corporation, within or without this state,
except such as are exempt by this state from taxation."
4
The property of manufacturing corporations is appraised
by the town assessors where it is situated, and is there taxed."
By vote of the electors of any town or city, the property of
such corporations located therein, in consideration of this
provision, may be exempted from taxation for ten years."
The main wheel, steam engine, boilers, shafts, drums,
pulleys, wheels for running machinery, steam, gas, and
water pipes and fixtures attached to, and kettles set in
any manufacturing establishment, are real estate when
¹ Pub. Stats., ch. 155, secs. 11, 18.
3 Const., Art. I, sec. 2.
5 Pub. Stats., ch. 155, sec. 8.
2 Pub. Stats., ch. 158, sec. 41.
Pub. Stats., ch. 41, sec. 1.
6 Laws, 1892, ch. 1088.
RHODE ISLAND.
1837
2
owned by the owner of the real estate to which they are
attached.¹ All other machinery and apparatus used in a
manufacturing establishment are personal estate.2
All the above, all picking, carding, spooling, drawing,
spinning and reeling frames, dressing and warping ma-
chines, looms, tools, and machines of all sorts, propelled
by steam or water power in any factory, machine shop,
print works, or manufacturing establishment, must be
taxed to the owner in the town where they are situated,
in the same manner as if he resided there.³
Every telegraph and telephone company doing business
within the state must make annual returns to the state au-
ditor on the first Monday in July, under oath, of its gross
receipts, and must annually, on August first following,
pay to the general treasurer a tax of one per centum in
lieu of all other taxes.¹
Every corporation required by law to make returns to
the town assessors must return the par value of its stock,
its.cash market value, and the proportionate amount per
share at which its real estate and machinery, if any, were
last assessed."
A tax assessed against a corporation for personalty.
without specifying items is void."
As to the taxation of corporate property and capital
stock, movable machinery taxed in the town where situ-
ated is not thereby made nor is it to be treated as real es-
tate for purposes of taxation, but is to be deemed a por-
tion of the owner's personal estate, from the value of
which the actual indebtedness of the owner must be de-
ducted and the tax levied only on the excess.7
Of stock in hands of holders.-Stockholders are taxed
¹ Pub. Stats., ch. 42, sec. 3. See also Pub. Stats., ch. 171, sec. 1, nearly
the same.
2 Pub. Stats., ch. 171, sec. 2.
4 Pub. Stats., ch. 27, sec. 10.
3 Pub. Stats., ch. 42, sec. 11.
5 Pub. Stats., ch. 43, sec. 12.
6 Dunnell Mfg. Co. v. Newell, 15 R. I. 233.
7 Steere & T. . Walling, 7 R. I. 317; Pub. Stats., ch. 42, sec. 1laa;
Pub. Stats., ch. 171, sec. 26; Pub. Stats., ch. 42, sec. 10c.
1838
ECONOMIC LEGISLATION.
only for the difference between the cash market value of
each share and the proportionate amount per share at
which its real estate and machinery were last assessed."
A shareholder is not liable to taxation on shares in a cor-
poration within this state which is taxed here for an
amount equal to the value of its property, or any corpo-
ration out of the state which is or the shares in which are
liable to taxation in such state where located. No person
is liable to taxation on personal property, except upon
the surplus of the ratable personal estate owned by him
over and above his actual indebtedness.2
Town assessors of taxes may, by written demand, re-
quire any corporation to make return to them in writing
within twenty days of the amount and par value of their
stock owned by any one residing in that town whose
name they specify; and failure to answer subjects the.
corporation to a forfeiture of $100.3
Where a resident and tax-payer in Rhode Island owned
shares in a manufacturing corporation of Massachusetts
whose stock was assessed under the Massachusetts law at
a fair market value, and he paid the tax, and the same
year he was again taxed in Rhode Island for the same
shares, the tax was held valid here and not in conflict
with Article I, section 2, of the constitution. It was held
that the Massachusetts tax, even if valid, could not divest
Rhode Island of its jurisdiction, and the amount of tax
levied is, within reasonable limits at least, a legislative and
not a judicial question. It would seem somewhat hard that
double taxation should thus be held valid as against a cor-
poration which would not have been, as against an indi-
vidual, necessarily an inhabitant of one state only, and
yet the word "inhabitant" has been held, properly
enough, to include corporations.5 In this case, it was also
held that such a corporation is taxable in Rhode Island
1 Pub. Stats., ch. 43, sec. 12.
9 Pub. Stats., ch. 43, sec. 11.
2 Pub. Stats., ch. 42, sec. 10.
4
Dyer v. Osborne, 11 R. I. 321.
5 Tripp v. Mer. Mut. Fire Ins. Co., 12 R. I. 435.
RHODE ISLAND.
1839
for the amount of its corporate property less its declared
dividends and its debts, and that such corporate property,
although personalty, is not taxable to the members of the
corporation.
Dissolution; forfeiture, etc.-A corporation may be
dissolved by vote of the stockholders and acceptance by
the state of the surrender of the charter. It does not re-
quire a unanimous vote to surrender the charter. One
member can not prevent such surrender if it be the wish
of the great majority. But a corporation can not, even
by unanimous vote, effect its own dissolution without the
assent of the legislature.¹
Failure to organize within two years from the granting
of the charter renders the charter void,2 but failure to
hold the annual meeting does not in any way invalidate
the charter.3
When a corporation is insolvent, or when, through
fraud, negligence, misconduct, or continued absence from
the state of its executive officers, no meetings having
been held for an unreasonable time, or whose affairs have
not been attended to, and its estate is misapplied or in
danger of being lost, etc., or when a corporation is liable
to forfeiture of its charter, the supreme court may on pe-
tition of any stockholder or creditor, upon reasonable
notice, decree a dissolution of the corporation and appoint
a receiver, or appoint a receiver only.*
Corporations with charters expired or annulled by for-
feiture, etc., are continued as bodies corporate for three
years, with power to sue and be sued, to wind up busi-
ness, to convey property, and to divide the capital stock,
but not to continue business.5
Foreign corporations. So far as the question of juris-
diction is concerned, a foreign corporation is a "resident"
¹ Wilson v. Cent. Bridge, 9 R. I. 590.
2 Pub. Stats., ch. 155, sec. 18.
Laws, 1888, ch. 686, sec. 1.
3 Pub. Stats., ch. 152, sec. 7.
5 Pub. Stats., ch. 152, sec. S.
1840
ECONOMIC LEGISLATION.
of the state which creates it.¹ A foreign company doing
business in Rhode Island is a non-resident under the stat-
ute “treating of the appointment of a receiver of an in-
solvent debtor, upon petition of creditors, by the supreme
court." The powers of such a corporation are limited
by the laws of the state which created it.³
2
SUBDIVISION III.-FRANCHISES.
How obtained. The established policy of the general
assembly is to grant rights of way in public highways to
corporations only upon condition that they first obtain
permission of the city or town authorities. In 1890, a
petition to amend an old charter so as to enable the com-
pany to make gas, etc., and lay gas pipes in the cities of
Providence and Pawtucket without first obtaining the con-
sent of the city councils was refused.
The statute now provides that any town or city by vote
of council may pass ordinances or make contracts granting
rights and franchises in, over, or under the streets or high-
ways, to any corporation created by the general assembly
of this state for the purpose of distributing water; pro-
ducing, selling, and distributing currents of electricity for
light, heat, or motive power; for manufacturing, selling,
and distributing illuminating or heating gas; for operat-
ing street railways by any motive power; or for operating
telephones. And for these purposes such companies may
be authorized to erect, lay, construct, and maintain poles,
wires, pipes, conduits, rails, or cables, with the necessary
and convenient appurtenances for the conduct of their
business in, over, or under the streets of such towns or
cities.5
4
Limitations. All grants of the exercise of privileges.
in highways in this state are unlimited in respect to time,
¹ Stafford v. Am. Mills Co., 13 R. I. 310.
3 Pierce v. Crompton, 13 R. I. 312.
2 Laws, 1878, ch. 723.
4 Laws, 1891, ch. 975, secs. 1, 2. 5 Laws, 1891, ch. 975, sec. 2.
RHODE ISLAND.
1841
so far as known, except as shown below under "PERPET-
UAL AND EXCLUSIVE FRANCHISES." As shown above, all
grants are made subject to the consent of the municipal
authorities, who may regulate their use and fix the terms,
time, and manner of use, etc.
Special damages; property owners' rights. It has
been held that under a charter requiring notice to be
given to abutters prior to the laying the track of a street
railway company, that no further notice was needed upon
the change from horse power to electric power conveyed
by suspended wires; that the use of poles ancillary to the
electric motive power was not forbidden by the prohibi-
tion to “incumber any portion of the streets or highways
not occupied by said track;" that the erection and main-
tenance of such poles did not impose a new servitude on
the highway; and did not require compensation to the
abutting owner; and that the charter in omitting to pro-
vide for such compensation was not unconstitutional.'
Duration of charter.-See "PERPETUAL AND EXCLUSIVE
FRANCHISES," below.
Refusal to grant a franchise.-The state may refuse
to grant a charter to petitioners, and it occasionally does.
Taggart v. Newport Street Railway, 16 R. I. 668. In this case a cor-
poration was chartered by the name of the Newport Horse R. R. Com-
pany, which was afterward changed to the Newport St. Ry. Co. The
charter provided that notice should be given to abutting owners before
the location of tracks; that the road should be operated by “steam,
horse, or other power," as the municipal government might direct; and
that the company should "not incumber any portion of the streets or
highways not occupied by said tracks." The charter contained no men-
tion of electricity, no provision to erect poles, or to condemn property,
and no provision for compensation to abutters. Notice was given
to abutters prior to track laying, and after notice and hearing, the
city council authorized the company to locate "railroad tracks, to be
used with horse power," in certain streets. Subsequently, without
further notice, the city council authorized the company to use electric
motive power, and to erect and maintain poles for conducting wire. The
abutting owners brought a bill in equity to enjoin the erection and
maintenance of the poles and wires in the streets.
1842
ECONOMIC LEGISLATION.
so where there is good ground for such refusal. The ad-
mitted policy of the state, however, is now to grant corpo-
rate powers freely upon request, unless injury to the pub-
lic or some vested interest entitled to consideration is to
be done thereby.
Municipal authorities may and often do refuse to make
grants of these franchises or privileges. If public opinion
does not sustain such refusal, they finally yield.
Conflicting grants.-The statute provides that no grant
of exclusive rights or franchises, as shown below, can be
made by any city or town wherein at the time a corpora-
tion created for the same purpose or a person duly au-
thorized by law to use the streets for such purpose is in
the actual use and enjoyment of such rights, except to such
corporation or person; and that whenever in any city or
town more than one corporation is in actual use and en-
joyment of portions of the streets and highways, no ex-
clusive right or franchise can be granted to either with-
out the consent of the other, and that no such grant shall
prevent any town or city from permitting any person or
corporation to use the streets or highways in order to
connect or serve any two or more estates owned by such
person or corporation."
In a recent case, the court held that authority to con-
demn land for railroad purposes confers no power to con-
demn land of other railroad companies, unless power to
do so is expressly given.2
3
Perpetual and exclusive franchises.-The question
whether the general assembly can grant an exclusive
franchise has not yet been presented to the courts. No
attempt, so far as known, has been made to do so. A
proposition was submitted to the city of Providence, in
1890, by an electric light company, to construct sub-ways
in the city for electric wires, provided the company should
¹ Laws, 1891, ch. 975, sec. 2.
2 Petition of P. & W. R. R., Index H. H., p. 122.
³ See, however, under “MUNICIPAL OWNERSHIP," below.
RHODE ISLAND.
1843
have the exclusive right to control them for twenty-five
years. The measure passed the city council, but was vetoed
by the mayor, and was withdrawn by the company. It
may be doubted whether a city council has the power to
make such a contract unless authorized by the general as-
sembly. So careful has our general assembly been hitherto
not to grant a corporation an exclusive right, that it
has provided in charters granted to horse railway com-
panies that they shall maintain their tracks and run their
cars in streets in our cities, only with the consent of the
city council, and in the city ordinances granting these rights
to these companies the right has been reserved to the city
council to allow other companies the right to use such
tracks.
By a recent statute, town or city authorities may now
grant, by ordinance or contract, to water, electricity, gas,
street railway or telephone companies, created by the
general assembly of this state, the exclusive right for a
term not exceeding twenty-five years to erect, maintain,
and carry on their respective enterprises.'
See under "CONFLICTING GRANTS," above.
Charges for franchises.-Companies which accept ex-
clusive rights or franchises under the provisions stated
last above are required to make to the treasurer of the
town or city on or before the 30th day of January, April,
July, and October in every year returns under oath of the
president or treasurer of the gross earnings of such cor-
poration within such town or city for the three months
next preceding the first day of said months in the same
year.
They must at the same time pay to such town or
city treasurer in full payment for the rights and franchises
granted a special tax upon said gross earnings at a rate
not exceeding three per cent per year. In case any cor-
poration neglects to make payment as aforesaid, the town
or city treasurer may collect as other taxes are collectible
1 Laws, 1891, ch. 975, secs. 1, 2.
+
1844
ECONOMIC LEGISLATION.
double the amount of the special tax shown to be due by
the last preceding quarterly returns. In case any corpo-
ration does business in more than one town or city, and
is unable to ascertain the amount of its gross earnings in
each town, its returns of gross earnings must state the
gross earnings of its entire business and the length of its
wires, pipes, mains, or tracks in the streets or highways
of each town or city; and the gross earnings in any town
or city shall be taken to be that proportion of the whole
gross earnings which the length of its wires, pipes, etc.,
in such city or town bears to the total length of all its
wires, pipes, etc.¹
No city or town can make any charge to these corpora-
tions for the use of the streets, except under and in ac-
cordance with the provisions last above; but any city or
town may require that street railway companies continue
to conform to any existing requirements as to paving
and keeping in repair such streets and highways.2
Methods of construction.-The general assembly has
not as yet undertaken to prescribe the methods of con-
struction or the materials to be used by the corporations
which form the subject of this inquiry. Nor has it un-
dertaken to provide for the inspection of the plant and
service from time to time, unless we consider as such the
annual report of the railroad commissioner and his exam-
inations made according to law.3 Municipal authorities,
2
Laws, 1891, ch. 975, sec. 6.
¹ Laws, 1891, ch. 975, secs. 3, 4.
3 The railroad commissioner is appointed by the governor, and holds
office for one year. Every railroad corporation is required within
twenty-four hours of any accident attended with serious personal in-
jury to give notice thereof in writing to the railroad commissioner un-
der a penalty for every day of willful neglect of one hundred dollars.
The commissioner must visit the place of accident and inquire there-
into and furnish without charge to any person injured or to friends of
any one killed all information obtained and the names of his informant.
Whenever he deems it expedient, he may examine personally into the
proceedings of any railroad company authorized and established in this
state, and report to the general assembly whether such facilities and ac-
?
RHODE ISLAND.
1845
in granting their consent to the use of the streets, may
prescribe such regulations as to construction as are reason-
able. The statute specially provides that the use and en-
joyment of all rights and franchises granted under the
provisions of the act relative to exclusive franchises shall
be subject to such reasonable rules and regulations pre-
scribing the location and arrangement of tracks, poles,
wires, or conduits, and their appurtenances as are or may
be from time to time enacted by the town or city councils,
and in case any such regulation or enactments seem to any
corporation to be unreasonable, the corporation within
thirty days may file its petition in equity in the supreme
court, praying for a decision of the question whether such
regulation or order is or is not reasonable; and after no-
tice to the city or town, the court must proceed to hear
and determine the matter according to the course of
equity, and their decision and decree therein is final and
binding.¹
Regulations as to service.-The general assembly, un-
doubtedly, has authority to establish charges for service.
rendered, and to make changes therein. In charters to
horse railway companies, it has fixed the maximum fare.
commodations are furnished as are required, and may inquire into all
other acts and doings of any such corporation whereby the rights and
privileges of the state or any of its citizens may be affected. In the
discharge of his duties, he may send for papers and persons and exam-
ine witnesses under oath and issue all necessary process. He must an-
nually, and oftener if he deem it necessary, report to the general as-
sembly the conditions and proceedings of the several railroad corpora-
tions as public interest may require.
Appeal may be made to the railroad commissioner in questions of
lowering or raising the grade of highways over railroads, and after due
notice and hearing, the company must comply with his decisions and
pay the cost. If the decision be that no change is necessary, the town
pays the cost. In case of neglect or refusal, the town may carry into
effect the decision made and recover all charges and expenses in an ac-
tion against the corporation. (Pub. Stats., ch. 158, secs. 1, 18, 27, 28, 29,
30, 34.)
1 Laws, 1891, ch. 975, sec. 5.
1
1846
ECONOMIC LEGISLATION.
at five cents, but, generally speaking, it has not hitherto
attempted to regulate these services or their prices, leav-
ing them to be settled by the law of supply and demand.
The regulation of the service of these companies is left
almost entirely to the inunicipal authorities who are given
the power to regulate the use of franchises and to fix the
terms, time, and manner of the use of such privilege.
The statute now provides that no corporation, which
acquires exclusive rights or franchises under the provisions
of law stated above, can at any time during the continu-
ance thereof charge any greater price for its service than
the price actually charged by it at the time of the grant-
ing of such rights or franchises, both prices being reckoned
in United States gold coin of the standard weight and
fineness in force at the time of granting of such right or
franchise or in the equivalent thereof in actual value in
other lawful money of the United States; and the use of
all rights and franchises granted under these provisions is
subject to such reasonable rules and regulations and or-
ders controlling the extent and quality of service as may
from time to time be enacted by town or city council. In
case any such regulation seems unreasonable, relief may be
had as shown under "METHODS OF CONSTRUCTION," above."
1
The words "or other power" in a charter of a street
railway company properly include electricity, and can not
be limited to "other like power;" and under a charter
permitting a road to be operated by "steam, horse, or
other power," as the municipal government might direct,
the use of electricity may properly be allowed.³
Safety of life and property.-In all cases where death
ensues through the wrongful act of another, where but
for the death an action might have been maintained at
common law, an action on the case may be brought for
the use of the husband, widow, children, or next of kin.*
¹ Laws, 1891, ch. 975, sec. 4.
2 Laws, 1891, ch. 975, sec. 5.
Taggart v. Newport St. Ry., 16 R. I. 668. See note 1, p. 1841.
3
4
Pub. Stats., ch. 204, sec. 20.
RHODE ISLAND.
1847
This gives a right of action where there was none at com-
mon law and leaves the amount that may be recovered un-
limited. It includes corporations, and as such they are
liable in damages for death caused by carelessness or neg-
ligence of their servants, or if the wrongful act be done.
by the authority of the corporation or officer authorized to
act for it, or if the act be ratified by the corporation or
its officers; and such action may be maintained in the
state court,2 See also note 3 under "METHODS OF CON-
STRUCTION."
""
1
State and municipal aid.-See under "MUNICIPAL
OWNERSHIP," below.
Public service. See under "MUNICIPAL OWNERSHIP,
below.
Alteration, amendment, etc., of franchises.-See un-
der "AMENDMENTS, REPEALS, ETC.," Subdivision II, above.
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
But little in the nature of municipal ownership has
been attempted in Rhode Island. The constitution is
silent upon the subject, and there is little legislation and
no decisions relating thereto.
In January, 1866, the city of Providence was authorized
to buy stock in the Providence Gas Company, but no ac-
tion has been taken thereunder.
The city of Providence has introduced and uses and
sells water to its citizens under special authority of law.³
The city of Pawtucket also owns its own water-works.*
The city of Newport is supplied with water by an indi-
vidual contractor. The city of Woonsocket is supplied
by a private corporation. The towns of Bristol and War-
1 McCaughey v. Tripp, 12 R. I. 449; Chase v. American Steamboat
Co., 9 R. I. 419; same case, 10 R. I. 79; Clark v. Peckam, 9 R. I. 455;
Glavin v. R. I. Hospital, 12 R. I. 411.
2 Chase v. American Steamboat Co., 9 R. I. 419.
3 Laws, 1866, ch. 640, and supplementary acts.
* Laws, 1875, ch. 491, and supplementary acts.
1848
ECONOMIC LEGISLATION.
ren are supplied by the "Bristol and Warren Water-
works," under the authority of the act incorporating said
company, and the town of South Kingston by the Wake-
field Water Company. These are all private enterprises,
and it is believed that in some or all the municipal au-
thorities have entered into contracts granting to the re-
spective contractors the exclusive right of furnishing such
service for a term of years.
The matter of municipal ownership is regulated and
controlled entirely by the special charters of the munici-
pality, or by the act creating the particular company or
granting special privileges, and these various sources must
be examined to determine the powers and capacities of
the contracting parties.
SOUTH CAROLINA.'
EDITED BY T. MOULTRIE MORDECAI, ATT'Y, CHARLESTON, s. c.
SUBDIVISION I.-HISTORICAL.
From 1690 to 1719, South Carolina was governed by the
Lords Proprietors, and from 1719 to 1776 by the royal gov-
ernment of Great Britain. On March 26, 1776, the first
constitution was adopted, and on the 19th of March, 1778,
another constitution was made of force, the preamble of
which is as follows:
"Whereas the constitution or form of government agreed
to and resolved upon by the freemen of this country, met
in congress the 26th day of March, one thousand seven
hundred and seventy-six, was temporary only and suited
to the situation of their public affairs at that period, look-
ing forward to an accommodation with Great Britain, an
event then desired. And whereas the United Colonies of
America have been since constituted independent states,
and the political connection heretofore subsisting between
them and Great Britain entirely dissolved by the declara-
tion of the honorable Continental Congress, dated the fourth
day of July, one thousand seven hundred and seventy-six,
for the many great and weighty reasons therein particu-
larly set forth. It therefore becomes absolutely necessary
to frame a constitution suitable to that great event."
Prior to 1776, and in fact it may be said, previous to
1778, the government was practically subservient to British
¹ Unless otherwise stated, references to the constitution are to that
of 1868. References to statutes are to the general statutes of South
Carolina by section simply. The session laws are referred to as Laws"
by volume and page. As to state reports, see Appendix "A.”
VOL. II-36
((
(1849)
1850
ECONOMIC LEGISLATION.
home rule; for, though it consisted of a governor, a coun-
cil, and assembly, the council appointed by the king to
advise the governor and to assist in legislation being
intended to represent the house of lords, and the as-
sembly like the house of common consisting of represent-
atives of the people; yet, after both houses had passed
laws, and they had received the governor's approval, they
were required to be sent to Great Britain for royal approval.
The constitution of 1778, as well as the existing one,
gave to the general assembly or legislature of the state
the most ample powers of legislation over all matters ex-
cept where special charters had been granted to munici-
pal corporations hereafter referred to; but since 1841 the
charter of every corporation, whether organized under
general law or special act, is subject to alteration, amend-
ment, or repeal, unless such act shall in express terms de-
clare the contrary.
The primary objects of the change from the provincial
government to a state constitution are set forth in the
preamble before referred to. The changes wrought by the
constitution of 1868 were made necessary by the result of
the civil war and the new duties and obligations imposed
upon the state by reason of the adoption of those amend-
ments to the constitution of the United States, which fol-
lowed as a result. Both constitutions left it to the legisla-
ture to grant municipal corporations the right to make
subscriptions in aid of railroads and other public enter-
prises, and it was not until the 12th of December 1884,
that the constitution was amended limiting the bonded
debt thereafter incurred. Prior to this, however, Decem-
ber 17, 1881, the city council of Charleston was prohibited
from making further subscriptions to the capital stock of
railroad companies, plank-roads, or canal companies.
The power given to each municipality or locality is pre-
scribed in its charter, or by special act, and there is no
general act bearing upon the subject.
The first franchises granted were to ferries, bridges, and
SOUTH CAROLINA.
1851
turnpike-road companies. On December 17, 1827, an
act was passed" establishing the principles on which com-
panies shall be incorporated and the charters of ferries,
bridges, and turnpike-roads shall be hereafter granted, and
for other purposes as therein explained." This act was
very stringent in its provisions, and provided for state su-
pervision through commissioners, to be appointed as pre-
scribed in the act; reserved to the state the right to sub-
scribe to the stock; and, in case of its failure to subscribe,
gave to the legislature at any time after the expiration of
thirty-four years from the time of the first receipt of tolls
by the corporation, upon paying into a bank the par value
of the stock of the corporation, the right to become the
owner of its property and franchises, and that thereupon
ipso facto the corporation should be dissolved. It further
provided that every charter for ferry, bridge, or turnpike-
road granted to any individual or individuals, or to any
corporation by the legislature of the state, authorized
thereafter to be granted, should be subject to all the pro-
visions of the act, except such as the act creating or au-
thorizing such charter shall expressly or by necessary im-
plication exempt. The rates of toll were fixed, the per-
centage of profit was limited to double the interest paid
by the state, and the legislature had the right to reduce
the toll when the surplus of actual profits should be be-
yond the profit authorized by the act. It was further pro-
vided that whenever the public interests required a bridge
to be erected where a ferry was previously running, the
legislature might either erect said bridge and suppress the
ferry or grant a charter to erect said bridge and suppress
the ferry at any time after the expiration of one year from
the date of the act on condition that the whole capital ex-
pended in making the road and landing to said ferry, to-
gether with one hundred per cent advance, should be paid
to the owner of the property.
On December 19, 1827, an act to authorize the forma-
tion of a company for constructing a railroad or canal
1852
ECONOMIC LEGISLATION.
from the city of Charleston to the towns of Columbia,
Camden, and Hamberg was passed. This act authorized
the formation of what afterward became the South Caro-
lina Railway Company, one of the oldest and when built
the longest railroad in the world. It gave the corpora-
tion all the rights and protection granted to turnpike road
companies, and conferred the exclusive right of transpor-
tation on the railroad to be built by them, and regulated
the rate of fare for transportation of passengers and
freight; the net income of the corporation was limited to
twenty-five per cent of the cost of construction. This act
is peculiar in giving to the corporation for thirty-six years
the exclusive right to construct railroad or canal com-
munication between the city of Charleston to either of the
towns of Columbia, Camden, or Hamberg, or any point on
the Savannah river, and is thought to be the only ex-
clusive charter granted by the legislature to a corporation
where rights of way are conferred.
In this state, all gas companies operate under special
charters. The first charter granted to a gas company was
an act to incorporate the Charleston Gas Light Company,
on December 15, 1846, which conferred upon the corpora-
tion the right to go through the streets of the city of
Charleston; the only condition imposed being that said
streets and so forth should be left in as good condition as
before the time of laying the pipes and other conductors.
In 1868, the charter was amended so as to permit it to use
electricity. In 1873, when the charter of this company
was about expiring, the Enterprise Gas Light Company
was incorporated. The powers given to this corporation
were extraordinary, their right to occupy streets not being
subject to any municipal control or regulation whatsoever
and no condition being made as to the replacing of pave-
ments and so forth.
There are no special charters for electric light companies
in this state; several companies have been organized and
are in operation, but they have been incorporated under
SOUTH CAROLINA.
1853
L
the provisions of the general incorporation law to be here-
after referred to.
The first charter to a street railway company was
granted in 1861, but the first city railway built in the state
was in the city of Charleston, in 1860. There are no gen-
eral regulations regarding street railway companies; but
the question as to what streets they shall occupy, the char-
acter of the rail and so forth, is left to the municipal au-
thorities for determination, except in a few special cases
where plenary powers are given to the corporation or the
routes specified; as, for instance, in the charter of the
Enterprise Railroad Company of Charleston, where not
only is the unlimited right given to go through the streets,
but, if they see fit, they may condemn private property
for the uses of the company, it being left to the corpora-
tion at any time to determine where it will go, and how,
within certain widely extended limits. It is not custom-
ary to require the consent of adjoining owners for the
construction of street railways.
There are no statutory provisions in regard to the right
of telegraph or telephone companies to go along the high-
ways of the state. Telegraph companies are generally
regulated by the provisions of the United States Statutes
on that subject, the large majority of the public roads
of this state being post-roads of the United States, under
the decisions of the United States Supreme Court on that
subject. The telephone companies in this state do not
operate under the United States telegraph laws, as their
operations are confined exclusively to cities and adjacent
towns.
Water companies are usually incorporated under special
acts, and have only been introduced in recent years;
while permission is given to go through streets of munici-
palities, such permission is subject to the regulations re-
garding health, and the opening of streets is under the
control of the town or city council.
By existing law, the county commissioners of each
1854
ECONOMIC LEGISLATION.
county have jurisdiction over roads, highways, ferries,
and bridges.
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation, how obtained.-Companies in South
Carolina must obtain their charters either by special act
of the legislature or by complying with the provisions of
the general incorporation law regulating the formation of
certain corporations under general laws; in the former
class of cases, the regulations for election of officers, times
of meetings, and all such other corporate acts as are re-
quired to be performed, are specified in the act; where,
however, the corporation is organized under the general
law, the practice is uniform and the procedure regulating
the same will be stated.
Articles of incorporation.-When application is made
to the secretary of state for the organization of a com-
pany, carrying on any manufacturing, mining, industrial,
labor, immigration or other business, except for railroad
purposes, upon the receipt of the proper declaration
signed by two or more persons, he issues an authorization
to a board of corporators who open the books of sub-
scription, giving a specified notice.¹
Must show what.-The application must set out the
names and residences of petitioners; the name of the
proposed corporation; the place at which it proposes to
have its principal or only place of business; the general
purpose of the corporation and the nature of the business
which it proposes to do; the amount of capital stock, the
number of shares into which it is to be divided, and the
par value of each share; and any other matters which it
may be desirable to set forth in the organic law.¹
Filing. Upon the completion of the organization being
certified to the secretary of state, he issues a certificate of
incorporation, and, upon this being filed and recorded in
119 Laws, p. 541.
SOUTH CAROLINA.
1855
the office of mesne conveyances of each county in which
the company proposes to do business, it then, becomes a
body corporate, and is authorized to act as such.'
Every joint-stock company issuing scrip and certificates
of shares transferable at the will of the holder thereof
hereafter formed must, within thirty days after its forma-
tion, cause the articles of their agreement, with the names
of the share-holders as well as the number of shares held
by each in each county, to be recorded in the office of the
clerk of the court of common pleas of the county in
which it has an office or in which its business is car-
ried on.2
Organization; preliminary requirements. Under the
general law, when not less than fifty per cent of the pro-
posed capital stock has been subscribed by bona fide sub-
scribers, the board of corporators must call the subscribers
together, and, upon payment of twenty per cent of the
subscription to the treasurer, the organization may be
completed; a majority in value being present, either in
person or by proxy, they must proceed to the organization
of the company by the election of a board of directors,
from among themselves, of not less than three nor more
than nine members to manage the affairs and business of
the company for the ensuing twelve months or until their
successors are duly elected and qualified. The board of
directors thus elected must elect a president or executive
officer from their number; they must also elect such per-
son as they see fit as secretary; both are to serve for such
time and under such conditions as the company may de-
termine in the by-laws.'
Fees. The fees are six dollars to the secretary of state
for each charter. The provision of law is that the secre-
tary of state shall be entitled to such fees as are allowed
by law in other cases of like service, and his uniform
charge is as above.
1
¹ 19 Laws, p. 541.
2 Sec. 1405-1407.
ECONOMIC LEGISLATION.
1856
Amendments, repeals, etc.-All charters, whether,
under general or special act, are subject to alteration,
amendment, or repeal, unless otherwise expressly provided
in the act of incorporation."
In order to procure an amendment of a charter or arti-
cles of incorporation, recourse must be had to the general
assembly. The name of a corporation can only be
changed by application to the general assembly.
2
Powers.-Corporations created under the general law
are granted power to have perpetual succession; to sue
and be sued by the corporate name; to have a common
seal, and to alter the same at pleasure; to render the
shares or interests of the stockholders transferable and
to prescribe the mode of making such transfers; to make
contracts, loan money, and acquire and transfer property,
both real and personal, possessing the same powers in
such respects as individuals now enjoy; to establish by-
laws and make all rules and regulations deemed expedient
for the management of their affairs, not inconsistent with
the constitution and laws of this state or the United
rt
States.
The special powers of companies incorporated under the
general laws are limited to the subjects stated in the ap-
plication for the charter and the grant, as contained in the
charter certificate issued by the secretary of state, and
such companies can not engage in any other business than
that which their charter and the general law allows.²
Officers; meetings; voting; quorum, etc.-The regu-
lations for the election of officers, time of meetings, etc.,
of specially chartered companies are to be found in the
special acts creating them.
As to the first meeting and organization of companies
organized under the general law, etc., see “ORGANIZATION,”
above.
A meeting of the stockholders must be held annually in
¹ Const., Art. XII, sec. 1; Gen. Stat., sec. 1361.
2 20 Laws, p. 47.
:
SOUTH CAROLINA.
1857
this state, at such time and place and under such notice as
the by-laws may direct, for the election of directors and
for the transaction of business. The board of directors con-
sists of not less than three nor more than nine members.¹
In all meetings of stockholders, each stockholder is en-
titled to one vote for each and every share of stock held or
owned, and an absent stockholder may vote by proxy.¹
The directors chosen elect from their number a presi-
dent and such other officers as they may see fit, and may
discharge them at pleasure. In case of a vacancy in the
board of directors before the expiration of the year, the
board fills such vacancy; the directors and officers elected
hold office for one year or until their successors are elected
and qualified.'
A failure to hold meetings and elect directors on the
day appointed by the by-laws does not work a forfeiture
of the charter, but the meeting may be called by the pres-
ident in a specified manner, or, upon his failure or refusal,
one-fifth of the holders of the capital stock of the com-
pany may call a meeting by advertisement.¹
The by-laws may determine what number of stockhold-
ers, either in person or by proxy, shall constitute a
quorum, but if the quorum is not so determined, a ma-
jority in interest of the stockholders constitutes a quorum.²
Books. The books of a corporation organized under
the general law must be open to the inspection of any
stockholder at any time, and the intentional keeping of
false accounts or books by a corporation, whereby any one
is injured, is a misdemeanor on the part of those concerned
therein, and they must, upon trial and conviction, be fined
and imprisoned in the discretion of the court.3
Capital stock.-No corporation can organize under the
general law until at least fifty per cent of the capital stock
has been subscribed by bona fide subscribers, and its char-
ter can not issue until at least twenty per cent thereof has
been paid in in cash or its equivalent, and the balance se-
1 19 Laws, p. 543.
3 19 Laws, p. 545.
1858
ECONOMIC LEGISLATION.
ļ
1
cured to be paid to the satisfaction of the board of corpo-
rators.¹
Special charters provide how the capital stock must be
subscribed and paid in, or else power is given to enact by-
laws to regulate the same.
Stock can not be issued by any private corporation.
except for labor done or money or property actually re-
ceived.2
2
Increase and decrease of.-All fictitious increase of stock is
void. Any company organized under the general law may.
increase its capital stock to an amount not exceeding one
million dollars, by a vote of two-thirds of the stock in
value, had at a meeting called for that purpose after thirty
days' notice given to each stockholder. Each stockholder
has the preference of taking the increase in proportion to
the amount of original stock he may own.3
There is no provision for the reduction of the capital
stock. Special application to the general assembly for
this purpose would have to be made.
Transfer of.-Under the general law, corporations are
given power to render the shares or interests of the stock-
holders transferable and to prescribe the mode of making
such transfers.* The shares of the capital stock are
deemed personal estate, and the mode of assigning and
transferring the same must be prescribed by the by-laws
of such corporation; but no transfer is valid, except as
between the parties thereto, until the same has been regu-
larly entered upon the books of the company, so as to
show the name of the person by whom and to whom the
transfer is made, the number and other designation of the
shares, and the date of the transfer.5
No transfer of stock or shares of joint stock companies.
issuing scrip and certificates of shares transferable at the
will of the holder avails to discharge any share-holder
transferring the same from liability to third persons for
¹ 15 Laws, p. 542.
+ 20 Laws, p. 47.
219 Laws, p. 549.
5 19 Laws, p. 554.
319 Laws, p. 543.
SOUTH CAROLINA.
1859
debts contracted after said transfer until it has been re-
ported to the clerk of the court where the articles are re-
corded, and by him or his clerk entered in a column to be
kept for that purpose in connection with the list of share-
holders previously recorded.'
Company's lien on.-Corporations under the general law
have a lien on the stock of each stockholder for the amount
which may be due upon his subscription for stock; and, in
case of failure to pay any installment within thirty days
after the time appointed, the corporation, after thirty days'
previous notice or by advertisement, may, at its option, con-
solidate such subscription into as many par shares as the
money paid by the defaulting subscriber will amount to, and
issue to such stockholder a certificate thereof, and declare
the shares remaining unpaid forfeited to the corporation,
or may proceed to collect what may remain of the original
subscription by suit. No certificate of stock can be issued
by any corporation until the same is fully paid for accord-
ing to the terms of the subscription.²
Bonds, debts, etc.-Bonds can not be issued by any pri-
vate corporation except for labor done or money or prop-
erty actually received, and all fictitious increase of in-
debtedness is void.³
Any company under the general law may borrow money
for the purpose of carrying out the objects of its charter,
and make notes, bonds, and other evidences of debt, and,
by a vote of a majority of the stock had at a meeting
called for the purpose by advertisement thirty days pre-
vious, may secure the payment of such notes, bonds, and
other evidences of debt by mortgage or deed of trust on
all or any of their property and franchises, both real and
personal.
Dividends.-There is no limit upon the dividends.
which a corporation may pay, except that they must be
1 Secs. 1405-1407.
319 Laws, p. 549.
220 Laws, pp 47, 48.
4
19 Laws, p. 543.
1860
ECONOMIC LEGISLATION.
earned and not be fictitious or taken from the actual
capital.¹
Liability of stockholders.-The constitution provides
that dues from corporations shall be secured by such indi-
vidual liability of the stockholders and other means as may
be prescribed by law.²
2
Each stockholder of corporations under the general law
is jointly and severally liable to the creditors of the corpo-
ration in an amount, besides the value of his share or
shares therein, not exceeding five per cent of the par value
of the share or shares held by such stockholder at the
time that the demand of the creditor was created; but such
demand must be payable within one year, and proceedings.
to hold such stockholder liable therefor must be com-
menced within two years after the debt becomes due and
while he remains a stockholder therein, or within two
years after he has ceased to be a stockholder. Trustees,
executors, collateral security holders, etc., are exempted
from this liability, but persons pledging such stock are
liable as stockholders, and the estate or funds in the
hands of executors and administrators are made liable
in like manner and to the same extent as the deceased
would have been if living and competent to hold stock in
his own name.³
"Under a charter which provided that every stock-
holder shall be individually liable to the creditors to the
extent of five per cent upon its stock subscribed, the lia-
bility of the stockholders individually is primary, and may
be enforced by action before judgment had against the
corporation and return of nulla bona."4
Under the charter of a corporation whose stockholders
were liable to the extent of the par value of their shares
for all its debts that were to be paid within one year from
¹19 Laws, p. 547; Const., Art. XII, sec. 5; Sullivan e. Company, 14
S. C. 500.
2 Const., Art. XII, sec. 4.
* Bird & Co. v. Calvert, 22 S. C. 292.
3 19 Laws, p. 546.
SOUTH CAROLINA.
1861
the time the debt was contracted, and that were sued
against the corporation within a year after maturity, it
was held that a judgment against the corporations did not
prevent the stockholders, when subsequently sued under
this provision of the charter, from interposing a defense
to their liability on the original debt.”¹
"After a sale of the property and good-will of the cor-
poration to a new company, and the election of the officers
of the old corporations to the same offices in the new, the
officers discounted notes of the old corporation in a bank
for the purpose of raising money to pay its indebtedness;
held, that they then had no power to contract debts that
would impose an individual liability on the stockholders,
under this charter.”¹
Liability of officers and directors.-Under the gen-
eral law, any director or other officer or stockholder who
knowingly and willingly makes or causes to be made any
fraudulent misrepresentation as to the capital, property,
or other resources of the corporation is held guilty of a
misdemeanor, and may be both fined and imprisoned
therefor.2
Reports.-There is no general provision of the law re-
quiring report to be made to any public officer unless re-
quired by the special provisions in the charter, or in case
of railroads, banks and insurance companies, and except
as to telegraph and express companies regarding taxation
hereafter referred to.
Taxation. The constitution provides that the property
of corporations now existing, or hereafter created, shall
be subject to taxation, except in cases otherwise provided
for in this constitution, none of which affect the companies
under consideration.³
¹ Bank. Wando Min. & Mfg. Co., 17 S. C. 339, 340.
219 Laws, p. 547; Const., Art. XII, sec. 5; Sullivan v. Company, 14
S. C. 500.
³ Const., Art. XII, sec. 2.
1862
ECONOMIC LEGISLATION.
Any person or persons, company or corporation, en-
gaged in the business of transmitting messages to, from or
through the state, or any part thereof, must be held to be
a telegraph company, for the purposes of taxation. Any
such company having its principal office out of the state
must annually, in June, or before July 20th, by its prin-
cipal agent in the state, make out and deliver to the comp-
troller-general a statement, under oath, showing the value
of all its personal property, in the state, including poles,
wires, batteries, machinery, materials, and apparatus, and
the counties, cities, towns, and incorporated villages in
which the same may be situated, together with the gross
earnings of said company in the state, for business done
in this state, for the year ending the first day of that
month, and the company's proportion of receipts for busi-
ness done in connection with the lines of other companies.
out of this state; this statement must show the value of
said property and receipts in each county, town, city or
incorporated village in which such company has an agency;
from the aggregate must be deducted, by any such tele-
graph company, the expenses of the office in the state to
which all other agencies of the company in the state are
required to make returns, excepts rents and officers' sala-
ries; this statement must also show the aggregate value
of the property and receipts aforesaid, after making the
deduction aforesaid, in each county, city, town, and incor-
porated village in which such company may have an
agency. Such company, by its principal agent, must also,
between the 1st day of June and the 20th day of July, an-
nually, deliver to the auditor of each county in this state
in whose county such company may have an agency a
statement of the proportion of the net value of the prop-
erty and receipts aforesaid, showing the amount thereof
in each town, city, and incorporated village in which it
has any agency, and said company must be charged on the
duplicate of each of said counties with taxes on the
SOUTH CAROLINA.
1863
amount so returned in each town, city, and village afore-
said.¹
If any telegraph company fail to make and deliver to
the comptroller-general the statement required above on
or before the 20th day of July annually, such company for-
feits and must pay to the State of South Carolina five hun-
dred dollars, as a penalty, and the comptroller-general
must certify the fact of such failure to the auditor of any
county in which such company may have an office or an
agent, and the auditor must place the same upon the du-
plicate of the county. If any telegraph company fail to
make the auditor of any county the statement required on
or before July 20th of any year, such auditor must notify
the comptroller-general thereof. If any telegraph com-
pany fail to return the statement required to the comptrol-
ler-general, and the comptroller-general certifies the same
to the auditor, such auditor must proceed to ascertain the
gross receipts of each agent of said company in his county
for the year ending the 1st day of June, together with the
value of all other property of the company in his county,
add fifty per cent thereto, as a penalty, and charge the
company with taxes thereon, without any deduction for
expenses paid out by the company. If such company
have no principal office in this state, each agent thereof
must make return in the month of June of the gross
receipts of his agency, with the value of all other prop-
erty of the company in the city, town, or incorporated
village, in which his agency is situated. and the auditor
must charge the company with taxes thereon.2
All returns required to be made by telegraph companies
having their principal office out of this state, must be
made in such form as the comptroller-general prescribes,
and he is authorized to require answers upon oath to any
questions he may put to the principal or any other agent
of such companies, and to examine the agents of such
¹Sec. 189. These provisions do not apply to companies whose prin-
cipal office is in the state.
* Sec. 190.
1864
ECONOMIC LEGISLATION.
companies under oath as to the property and affairs of
such companies, and if such agent refuses or neglects to
answer any questions, he is deemed guilty of contempt of
comptroller-general, and on conviction must be fined.¹
Any company or corporation organized under the laws
of the State of South Carolina, and owning property in
any other state or country, as well as in this state, is not
required to return its capital for taxation in this state, but
must return such property as it owns in this state, and
such proportion of the value of its other property as, if
owned by the individual residents of this state, would be
taxable in this state; and if such return be made by such
company, the share-holders therein are not required to re-
turn their shares for taxation.2 A corporation organized
under the laws of this state, but owning no property in
the state, is not required to return its capital for taxation
in the state.³ All companies and corporations, whether
organized under the laws of South Carolina or not, the
manner of listing whose personal property is not otherwise
specially provided for by law, must list for taxation all
their personal and real property and effects at the same
time, in the same manner, and in the same localities, as
individuals are required to list similar property and
effects for taxation."
Any company incorporated under a joint charter granted
by this and some other state, in which the manner or
amount of its taxation, or the specific proportion of its
capital or property upon which taxes shall be assessed in
the state, is prescribed or fixed in its charter, must be
assessed for taxation as prescribed above until otherwise
legally provided.
By special act, authority is given to certain municipal
corporations to impose a license on occupations. This
tax has been held constitutional by the supreme court
of the state, but latterly the question has arisen whether
such a tax upon telegraph companies is not ultra vires and
1 Sec. 191.
2 Sec. 194.
3 Sec. 195.
• Sec. 197.
SOUTH CAROLINA.
1865
in violation of the constitution of the United States in
reference to post-roads and post-offices, and section 5263
of the Revised Statutes of the United States, and this po-
sition has been sustained in the case of Postal Telegraph
Company of New York v. City Council of Charleston,
heard on circuit in the city of Charleston, by Judge Izlar,
which case is now under appeal.
Dissolution; forfeiture.-Any corporation organized
under the general law ceases to exist by a non-user of its
franchises for five years at one time.
The attorney-general of the state may take proceedings
to have the charter of a corporation forfeited upon proper
grounds, and the stockholders may meet and by a majority
or unanimous vote resolve to surrender the charter after
the payment of debts, and thereupon the corporation will
be dissolved. A corporation may also be dissolved by ex-
piration of its charter.
Failure to hold meetings and elect directors on the days
provided by the by-laws does not work a forfeiture of the
charter.¹
SUBDIVISION III. FRANCHISES.
How obtained.-All franchises must be granted by the
general assembly. The ordinary course is by petition to
the senate and house with the proposed bill annexed to
the petition. Previous to the meeting of the general
assembly notice of such intention must be published in the
leading newspapers of the state.
There are no statutory provisions in this state in regard
to the right of telegraph companies or telephone companies
to go along the highways of the state, but, as to telegraph
companies, the same is generally regulated by the pro-
visions of the United States statutes on that subject, the
large majority of the public roads of this state being post-
roads of the United States, under the decisions of the
United States supreme court on that subject.
19 Laws, p. 543.
VOL. II-37
1866
ECONOMIC LEGISLATION.
Municipal corporations have no power to refuse the use
of streets for telegraph lines operating under United States.
telegraph laws; but street railways and other local com-
panies must first obtain permission of municipal authorities
before they can use streets unless granted such power in
their charter, which is a very unusual provision.
Control of streets.-By existing law, the county com-
missioners of each county have jurisdiction over roads,
highways, ferries and bridges. Permission is usually
given to water companies created by special acts to go
through the streets of municipalities, and such permission
is subject either to regulations regarding health and the
opening of the streets, or is under the control of the town
or city council.
Condemnation of property.-The constitution provides
that no right of way shall be appropriated to the use of
any corporation until full compensation therefor has been
first made or secured by a deposit of money irrespective of
any benefit from any improvement proposed by such cor-
poration, which compensation must be ascertained by a jury
of twelve men in a court of record as prescribed by law."
Methods of construction.-There are no general regu-
lations regarding street railway companies, but as to what
streets they shall occupy, the character of the rail, etc., is
left to the municipal authorities for determination, except.
in a few special cases where plenary powers are given to
the corporation or where the route is specified.
Regulations as to service.-The constitution provides
that all general or special laws shall regulate the public
use of all franchises which are hereafter or may have been
heretofore created or granted by or under the authority of
the state and shall regulate all tolls imposed and other
charges and demands under such laws.2
There is in South Carolina no general regulation of the
charges of local franchise companies, railroad fares, horse
and steam, are however generally regulated by the charters.
2 Const., Art. sec.
1 Const., Art.
sec. -.
SOUTH CAROLINA.
1867
{
Discrimination in service.-There is no general statute
in this state requiring either water companies or electric
light companies not to discriminate in service, but such
conditions are usually exacted by municipal corporations
either by contract or as a condition of the right to lay
pipes and wires, and sometimes the charges are also pre-
scribed, but this practice is by no means universal.
State and municipal aid.-Until the adoption of the
constitutional amendment of 1884 limiting the bonded
debt of counties and municipalities to 8 per cent of the
assessed value of all taxable property therein and the
passage of the act of December 17, 1881, prohibiting fur-
ther stock subscriptions to railroads, plank-roads or canals.
by the city of Charleston, the right of municipal corpora-
tions to subscribe, under legislative authority, to railroads
or other public enterprises was undoubted and confirmed
by the courts.
The constitution limits the taxing power, and provides
that "the general assembly shall provide for the incorpo-
ration and the organization of cities and towns and shall
restrict their powers of taxing, borrowing money, con-
tracting debts and loaning their credit."
The legislature has no power to levy a tax for the pur-
pose of assisting private individuals in carrying out
private enterprises, even though incidental advantages may
result to the public. Under Art. I, sec. 41 of the constitu-
tion of 1868, the taxing power of the legislature, even in
the absence of any express restrictions upon it, can be
exercised only for some public purpose. Authority given
to a municipal corporation to issue bonds, necessarily in-
volves the power to levy taxes for their payment.
¹ Const., Art. IX, sec. 9.
2 Feldman . City Council, 23 S. C. 57; Conner . Railway Company,
23 S. C. 427.
"A large portion of the city of Charleston having been laid waste by
fire, the legislature authorized the city council to issue its bonds and
lend them to persons who desired to rebuild in the burnt district.
Bonds of said city called the 'fire loan bonds' were accordingly issued
1868
ECONOMIC LEGISLATION.
Townships having assented to a railroad subscription (a
public purpose) under a void statute, the legislature may
impose this debt, and the issued bonds as its representa-
tives, upon such townships.¹
Townships may tax themselves for a purpose that is a
corporate as well as a public purpose, but the legislature
may impose a tax upon a township for any public pur-
pose, such as a railroad.²
Public service.-Contracts with cities must be in ac-
cordance with the charter provisions and no special rule
can be laid down in any case, as each charter is peculiar
in its provisions, and the ordinances of each city must be
examined before any conclusion is reached. There is no
limitation as to the length of time for which contracts
can be made.
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
There is no municipal ownership of these industries in
this state. The legislature undoubtedly has the power to
authorize such ownership whenever it sees fit.
and lent after the year 1858 and put upon the market "-held, that these
bonds were not valid obligations of the city.
Bonds issued by a city to be lent "to such applicants as will build
up and rebuild the waste places and burnt districts of said city, or erect
improvements upon their lots," are issued and lent for private purposes,
notwithstanding that advantages may incidentally accrue to the city.
In Copes v. Charleston, 10 Rich. 494, it was decided that the city
council of Charleston might under its charter subscribe to railroads
within and without the state and might tax the inhabitants for the pur-
pose of paying the subscription, and that an act confirming the sub-
scription is not unconstitutional.
¹ State v. Whitesides, 30 S. C. 000.
2 State v. Dickinson, 30 S. C. 1.
SOUTH DAKOTA.'
EDITED BY WILLIAM L. McLAUGHlin, att'y, deaDWOOD, S. DAŁ.
SUBDIVISION I.-HISTORICAL.
The act organizing the Territory of Dakota was passed
March 2, 1861. From that time until 1877, the growth
of the territory was slow and the increase in population
gradual. During 1877, the south-western portion of the
state was settled on account of the discovery of gold in
the Black Hills. From 1880, the growth and increase in
population were phenomenal. The fertile prairies east of
the Missouri river were taken up within a few years, and
towns and cities sprang up where before had been but
fields of waving grass.
Prior to 1866, the only method of obtaining a franchise
was by applying to the legislature for a special charter.
In this way, franchises were granted several individuals
and companies, principally for operating ferries and con-
structing railroads. In January, 1866, the civil code, al-
most as it now exists, was adopted, including the present
incorporation law. This did not prevent the legislature
from granting special privileges and franchises, and no re-
striction was placed on the legislature until the act of
congress approved March 2, 1867, was passed, which pro-
vided that the legislative assemblies of the several terri-
tories should not grant private charters or especial privi-
1 Unless otherwise stated, references to the constitution are to that of
1889. References to the statutes are to the Compiled Laws of 1887, by
section simply, and the Civil Code, referred to as C. C. The session
laws are referred to as "Laws" of the respective years.
Laws" of the respective years. As to state re-
ports, see Appendix "A."
(1869)
1870
ECONOMIC LEGISLATION.
leges. This provision has no application to municipal
corporations.¹
Afterward, the act of congress approved July 30, 1886,
was passed, which provided that the legislatures of the
territories of the United States then or thereafter to be
organized should not pass local or special laws (among
others) granting to any corporation, association, or indi-
vidual any special or exclusive privilege, immunity, or
franchise whatever, and that no territory of the United
States then or thereafter to be organized, or any political
or municipal corporation or subdivision of any such terri-
tory, should thereafter make any subscription to the cap-
ital stock of any incorporated company, or company or
association having corporate powers, or in any manner
loan its credit or use it for the benefit of any such com-
pany or association, or borrow any money for the use of
any such company or association.
On February 22, 1889, the omnibus bill admitting North
and South Dakota, Montana, and Washington, was ap-
proved, and at an election held on October 1, 1889, the
present constitution of the state was adopted.
Prior to 1880, there were but few towns or cities which
could boast of companies operating municipal franchises.
Those existing then and afterward were organized under
the general incorporation laws of the state.
After a company had been incorporated, either under
the general law or by special act, there was no limitation as
to the franchises which the legislature might grant, until
the acts above referred to. The common practice, how-
ever, was to organize a company under the general incor-
poration act, and then apply to the common council or
trustees of the city or town for a grant of the franchise
desired. Under the general act of 1877, the trustees of
towns and cities were given jurisdiction over any com-
mons or public grounds belonging to the town.2
¹ City of Elk Point v. Vaughn, 1 Dak. 113.
Rev. Code, 1877, ch. 24, sec. 23.
SOUTH DAKOTA.
1871
This did not interfere, however, with the right of the
legislature to grant such franchises as it chose.
In 1885, an act was passed granting the use of highways
to telegraph and telephone companies.'
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation; how obtained.-Corporations can not
be formed by special act. The legislature is prohibited
from granting to an individual, association, or corporation
any special or exclusive privilege, immunity, or franchise
whatever. And in all cases where a general law can be
applicable, no special law can be passed.³
Articles of incorporation.-Private corporations can
be formed by the voluntary association of three or more
persons, for (among other things) mining, manufacturing,
and other industrial pursuits, and the construction or ope-
ration of railroads and irrigating ditches."
The articles of incorporation must be subscribed by
three or more persons, one-third of whom must be resi-
dents of this state, and acknowledged by each before
some officer authorized to take and certify acknowledg-
ments of conveyance of real property.5
Two of the applicants must make oath or affirmation
that such corporation is not organized for the purpose of
enabling several corporations to avoid the provisions of
the act to declare certain combinations, agreements, or
trusts unlawful, and to restrain and punish the same."
1
Sec. 3025; Laws, 1885, ch. 141, sec. 3.
2 Const., Art. III, sec. 23, 9.
3 Const., Art. III., sec. 23, 11.
* Sec. 2900; C. C., sec. 383. Manufacturing and industrial pursuits" in-
cludes water, gas, electric light, and kindred companies. Railroad does
not include street railroad, because in the corporation act this language
is found, "railroad for the transportation of freight and passengers
(sec. 2972; Laws, 1879, ch. 46, sec. 1), and a street railroad does not
carry freight. While there are no decisions upon the question, the
whole tenor of the act indicates that street railroads are not included in
the provisions of the railroad corporation act.
5 Sec. 2904; C. C., sec. 388.
6 Laws, 1890, ch. 154, sec. 5.
1872
ECONOMIC LEGISLATION.
Must show what.-Articles of incorporation must set
forth the name of the corporation, the purpose for which
it is formed, the place where its principal business is to be
transacted, the term for which it is to exist (which in the
case of mining, manufacturing, and other industrial cor-
porations, can not exceed twenty years),' the number of
its directors or trustees, and the names and residences of
those who are to serve until the election and qualification
of such officers, and the amount of capital stock and the
number of shares into which it is divided.2
Filing. The articles of incorporation must be filed with
the secretary of state, who issues to the corporation over
the great seal of the state a certificate that the articles
containing the required statement of facts have been filed
in his office; and thereupon the incorporators, and their
associates and successors, are a body politic and corporate
by the name and for the purposes stated in said articles.³
Commencing business.-See under "CAPITAL STOCK."
A corporation must organize and commence business
within one year after its incorporation, otherwise its cor-
porate powers cease.*
Fees. For the examination, filing, and recording of ar-
ticles of incorporation, the secretary of state is entitled to
charge ten dollars.5
Amendments, repeals, etc.-The constitution provides
that the legislature shall have the power to alter, revise,
or amend any charter of any corporation now existing and
revocable at the taking effect of the constitution, or any
that may be created, whenever in their opinion it may be
injurious to the citizens of this state, in such a manner,
however, that no injustice shall be done to the incorporat-
ors; that no law hereafter enacted shall create, renew, or
extend the charter of more than one corporation; and
¹ Sec. 3108; C. C., sec. 511.
³ Sec. 2905; Laws, 1885, ch. 35, sec. 1.
5 Laws, 1891, ch. 62, sec. 1.
6
6
2 Sec. 2902; C. C., sec. 386.
¹ Sec. 2939; C. C., sec. 419.
Const., Art. XVII, sec. 9.
SOUTH DAKOTA.
1873
that the legislature shall not remit the forfeiture of the
charter of any corporation now existing, nor alter or
amend the same, or pass any other general or special law
for the benefit of such corporation, except upon the con-
dition that such corporation shall thereafter hold its
charter subject to the provisions of this constitution.'
The constitution prohibits the passage of any ex post
facto law or law impairing the obligation of contracts or
making any irrevocable grant of privilege, franchise, or
immunity.2
By the corporation. Any corporation for profit may
amend its certificate or articles of incorporation so as to
modify or enlarge its business or purposes, change the
number of its directors, change its name or location within
the state, increase or diminish its capital stock, or provide
any thing which might have been provided originally in
such articles of incorporation.3
Such amendments may be made at any annual meeting
of the stockholders or at any special meeting called for
that purpose by a vote of the stockholders representing a
three-fourths majority of all outstanding stock, after thirty
days' notice in writing given to each stockholder, stating
the time and place of such meeting, and the proposed
amendments to the articles of incorporation which will be
voted on at such meeting. Such amended articles must
be signed and acknowledged by a majority of the board
of directors before some person entitled to take acknowl-
edgments of conveyance of real property, and a copy
thereof, with a certificate thereto affixed, signed by the
president and secretary, and sealed with the corporate
seal, stating the fact and date of the adoption of such
amended articles and how adopted, and that such copy is
a true copy of the original amended articles, must be filed
in the office of the secretary of state; such amended arti-
3
¹ Const., Art. XVII, sec. 3.
³ Laws, 1890, ch. 55, secs. 1, 2, 3.
2 Const., Art. VI, sec. 12.
i
1874
ECONOMIC LEGISLATION.
cles take effect from the date of such filing, and thereafter
have the same force and effect as if originally adopted.'
Duration of charter.--The term of existence of corpo-
rations for mining, manufacturing, and other industrial
pursuits can not exceed twenty years.2
Objects. The purposes for which a company is formed
must be stated in the articles. There are no restrictions
on the power of a company to make a change in its meth-
ods without changing the actual objects of its service,
either in the constitution or in the statutes. A corpora-
tion is free to make any change in its methods, provided
the purpose for which it was organized is not changed.
Even this purpose may be altered by merely filing a cer-
tificate as above set forth. But such a certificate should
be filed in case any change is made, for the constitution
provides that no corporation shall engage in any business
other than that expressly authorized in its charter.³
Powers. Every corporation, as such, has power to have
succession by its corporate name for the period limited,
and when no period is limited, perpetually, to sue and be
sued; to complain and defend in any court; to make and
use a common seal, and alter the same at pleasure; to pur-
chase, hold, transfer, and convey such real and personal
property as the legitimate purposes of the corporation may
require, not exceeding in any case an amount limited by
law; to appoint such subordinate officers and agents as
the business of the corporation may require, and to allow
them suitable compensation; to make by-laws not incon-
sistent with the law of the land, for the management of
its property, the regulation of its affairs, and for the trans-
fer of its stock; to admit stockholders or members, and to
sell their stock or shares for the payment of assessments
or installments; to enter into any obligations or contracts
essential to the transaction of its ordinary affairs or for
the purposes of the corporation.
¹ Laws, 1890, ch. 55, secs. 1, 2, 3.
3 Const., Art. XVII, sec. 7.
' Sec. 3108; C. C., sec. 511.
SOUTH DAKOTA.
1875
In addition to the above enumerated powers, and to
those expressly given in any other statute under which it
is incorporated, no corporation possesses or can exercise
any corporate powers except such as are necessary to the
exercise of the powers enumerated and given.'
By-laws. Every corporation must, within one month
after filing articles of incorporation, adopt a code of by-
laws for its government not inconsistent with the laws of
the United States and of South Dakota. The assent of
stockholders representing a majority of all the subscribed
capital stock is necessary to adopt by-laws if they are
adopted at a meeting called for that purpose; and in the
event of such meeting being called, two weeks' notice of
the same, by advertisement in some newspaper published.
in the county in which the principal place of business of
the corporation is located, or if none is published therein
then in a paper published in an adjoining county, must
be given by order of the acting president. The written
assent of the holders of two-thirds of the stock is effectual
to adopt a code of by-laws without a meeting for that pur-
pose.2
A corporation may, by its by-laws, where no other pro-
vision is specially made, provide for the time, place, and
manner of calling and conducting its meetings; the num-
ber of stockholders or members constituting a quorum;
the mode of voting by proxy; the time of the annual
election for directors, and the mode and manner of giving
notice thereof; the compensation and duties of officers;
the manner of election and the tenure of office of all offi-
cers other than the directors; and suitable penalties for
violations of by-laws, not exceeding in any case one
hundred dollars for any one offense."
All by-laws adopted must be certified by a majority of
the directors and by the secretary of the corporation, and
copied in a legible hand in some book kept in the office of
3
¹ Sec. 2919; C. C., sec. 402.
* Sec. 2921; C'. C., sec. 404.
¹ Sec. 2920; C. C., sec. 403.
1876
ECONOMIC LEGISLATION.
the corporation, to be known as the book of by-laws, and
no by-law takes effect until so copied; the book of by-laws
must be open to the inspection of the public during office
hours of each day except holidays. The by-laws may be
repealed or amended, or new by-laws may be adopted at
the annual meeting of the stockholders, or meetings called
for that purpose by the directors by a vote representing
two-thirds of the subscribed stock, or the power to repeal
and amend the by-laws, and to adopt new by-laws, may,
by a similar vote at any such meeting, be delegated to the
board of directors. The power when delegated may be
revoked by a similar vote at any regular meeting of the
stockholders or members. Whenever any amendment or
new by-law is adopted, it must be copied in the book of
by-laws with the original by-laws, and immediately after
them, and does not take effect until so copied. If any by-
law is repealed, the fact of repeal with the date of the
meeting at which the repeal was enacted, must be stated
in the said book, and until so stated the repeal does not
take effect.'
Officers; meetings; voting; quorum, etc.-As to by-
laws affecting, see "BY-LAWS."
At the first meeting at which by-laws are adopted, or at
such subsequent meeting as may be then designated, di-
rectors must be elected, to hold their offices for one year
and until their successors are elected and qualified."
2
The directors of a corporation must be elected annually
by the stockholders or members, and if no provision is
made in the by-laws for the time of election, the election
must be held on the first Tuesday in June. Notice of
such election must be given, and the right to vote deter-
mined, as stated above (section 2920), for the adoption of
by-laws.3
The constitution provides that, "in all elections for di-
2 Sec. 2924; C. C., sec. 406.
¹ Sec. 2922; C. C., sec. 405.
³ Sec. 2923; C. C., sec. 406.
SOUTH DAKOTA.
1877
rectors or managers of a corporation, each member or
share-holder may cast the whole number of his votes
for one candidate, or distribute them upon two or more
candidates, as he may prefer." All elections of direct-
ors must be by ballot, and a vote of stockholders rep-
resenting a majority of the subscribed capital stock
is necessary to a choice. Each stockholder is entitled
to one vote for each share held by him at all such elec-
tions, and also at all elections at other meetings of stock-
holders.2
The corporate powers, business, and property of all
franchise corporations must be exercised, conducted, and
controlled by a board of not less than three nor more than
eleven directors, to be elected from among the holders of
stock. Directors must be holders of stock in an amount
to be fixed by the by-laws of the corporation. Unless a
quorum is present and acting, no business performed or
act done is valid as against the corporation. Whenever a
vacancy occurs in the office of director, unless the by-laws.
of the corporation otherwise provide, such vacancy must
be filled by an appointee of the board.³
Immediately after their election, the directors must or-
ganize by the election of a president, who must be one of
their number, a secretary, and treasurer. They must per-
form the duties enjoined on them by law and the by-laws
of the corporation. A majority of the directors is a suffi-
cient number to form a board for the transaction of busi-
ness, and every decision of a majority of the directors
forming such board, made when duly assembled, is valid as
a corporate act.*
No director can be removed from office unless by vote
of stockholders holding two-thirds of the capital stock, at
a general meeting held after notice of the time and place
and of the intention to propose such removal. Meetings
¹ Const., Art. XVII, sec. 5.
* Sec. 2926; C. C., sec. 407.
2 Sec. 2924; C. C., sec. 406.
* Sec. 2927; C. C., sec. 408.
1878
ECONOMIC LEGISLATION.
of stockholders for this purpose may be called by the
president, or by a majority of the directors, or by mem-
bers or stockholders holding at least one-half of the votes.
Such calls must be in writing and addressed to the secre-
tary, who must thereupon give notice of the time, place,
and object of the meeting, and by whose order it was
called. If the secretary refuse to give the notice, or if
there is none, the call may be addressed directly to the
members or stockholders and be served as a notice, in
which case it must specify the time and place of meeting.
The notice must be given as provided above for the adop-
tion of by-laws (section 2920), unless other express pro-
vision has been made therefor in the by-laws. In case of
the removal of a director, the vacancy may be filled by
election at the same meeting.'
At all elections or votes had for any purpose, there
must be a majority of the subscribed capital stock repre-
sented, either in person or by proxy in writing. Every
person acting therein, in person or by proxy or represent-
ative, must be a bona fide stockholder, having stock in his
own name on the stock books of the corporation at least
ten days prior to the election. Any vote or election had
other than in accordance with these provisions is voidable
at the instance of absent stockholders, and may be set
aside by petition to the circuit court of the county where
the same was held.
Any regular or called meeting of the stockholders may
adjourn from day to day, or from time to time, if for any
reason there is not present a majority of the subscribed
stock, or no election or majority vote had, such adjourn-
ment and the reasons therefor being recorded in the jour-
nal of the proceedings of the board of directors.2
If from any cause an election does not take place on the
day appointed in the by-laws, it may be held on any day
thereafter as is provided in such by-laws, or to which such
¹ Sec. 2930; C. C., sec. 410.
2 Sec. 2931; C. C., sec. 411.
SOUTH DAKOTA.
1879
election may be adjourned or ordered by the directors.
If an election has not been held at the appointed time,
and no adjourned or other meeting for the purpose has
been ordered by the directors, a meeting may be called by
the stockholders as provided (sec. 2920) for the adoption.
of by-laws.¹
Upon the application of any person or body corporate
aggrieved by any election held by any corporate body, or
any proceedings thereof, the circuit judge of the cirenit
in which such election is held must proceed forthwith
summarily to hear the allegations and proofs of the par-
ties, or otherwise inquire into the matters of complaint,
and thereupon confirm the election, order a new one, or
direct such other relief in the premises as accords with
right and justice. Before any proceedings are had under
this provision, five days' notice thereof must be given to
the adverse party or those affected thereby.'
The meetings of the stockholders and board of direct-
ors of a corporation must be held at its office or principal
place of business.1
When no provision is made in the by-laws for regular
meetings of the directors and the mode of calling special
meetings, all meetings must be called by special notice in
writing, to be given each director by the secretary, on or-
der of the president, or if there be none on order of two
directors.¹
Whenever from any cause there is no person authorized
to call or to preside at a meeting of a corporation, any
justice of the peace of the county where such corpora-
tion is established may, on written application of three or
more of the stockholders, issue a warrant to one of the
stockholders directing him to call a meeting of the cor-
poration by giving the notice required; and the justice.
may, in the same warrant, direct such person to preside at
such meeting until a clerk is chosen and qualified, if there
¹ Sec. 2932; C. C., sec. 412.
1880
ECONOMIC LEGISLATION.
is no other officer present legally authorized to preside
thereat.¹
When all the stockholders of a corporation are present
at any meeting, however called or notified, and sign a
written consent thereto on the record of such meeting,
the doings of such meeting are as valid as if had at a
meeting legally called and noticed. The stockholders or
members of such corporation, when so assembled, may
elect officers to fill all vacancies then existing, and may act
upon such other business as might lawfully be transacted
at regular meetings of the corporation.²
Books. All corporations for profit are required to keep
a record of all their business transactions; a journal of all
meetings of their directors or stockholders, with the time
and place of holding the same, whether regular or special,
and if special, its object, how authorized, and the notice
given thereof. The record must embrace every act done
or ordered to be done, who were present, and who were
absent, and if requested by any director or stockholder,
the time must be noted when he entered the meeting or
obtained leave of absence therefrom. On a similar re-
quest, the ayes and noes must be taken on any proposi-
tion, and a record thereof made. On a similar request, the
protest of any director or stockholder to any action or pro-
posed action, must be entered in full; all such records are
to be kept open to the inspection of any director, stock-
holder, or creditor of the corporation.3
In addition to the records above required to be kept,
corporations for profit must keep a book to be known as
the "stock and transfer book," in which must be kept a
record of all stock, the names of the stockholders or mem-
bers, alphabetically arranged, installments paid or unpaid,
assessments levied and paid or unpaid, a statement of every
alienation, sale, or transfer of stock made, the date
¹ Sec. 2932; C. C., sec. 412.
' Sec. 2937; C. C., sec. 417.
¹ Sec. 2934; C. C., sec. 414.
!
SOUTH DAKOTA.
1881
thereof, and by and to whom, and all such other records
as the by-laws prescribe. Such stock and transfer book
must be kept open to the inspection of any stockholder or
creditor.'
Capital stock.—The articles of incorporation must state
the amount and number of shares of the capital stock.2
The constitution provides that "no corporation shall issue
stock
except for money, labor done, or money or
property actually received." The statute provides that “a
corporation whose capital is limited by its charter, either
in amount or in number of shares, can not issue valid cer-
tificates in excess of the limit thus prescribed."*
3
After the secretary of state issues the certificate of in-
corporation, the directors named in the articles must pro-
ceed in the manner provided in the by-laws, or if none,
then in such manner as they may by order adopt, to open
books of subscription to the capital stock then unsub-
scribed, and to secure subscriptions to the full amount of
the fixed capital, and to levy assessments and installments
thereon, and to collect the same as assessments of stock,
are provided to be made."
6
"All corporations for profit must issue certificates of
stock when fully paid up." There is no requirement as
to the amount which must be paid in, or as to the manner
or time of making payment.
The directors are forbidden to divide, withdraw or pay
to the stockholders, or any of them, any part of the cap-
ital stock."
No corporation can appropriate its funds to any pur-
pose not distinctly and definitely specified in the articles
of incorporation, nor can it loan any of its money to any
stockholder therein.s
¹ Sec. 2987; C. C., sec. 417.
Const., Art. XVII, sec. 8.
5 Sec. 2913; C. C., sec. 396.
7 Sec. 2928; C. C., sec. 409.
VOL. II-38
2 Sec. 2902; C. C., sec. 386.
4 Sec. 2916; C. C., sec. 399.
Sec. 2915; C. C., sec. 398.
8 Sec. 3109; C. C., sec. 512.
1882
ECONOMIC LEGISLATION.
Assessments. After one-fourth of the capital stock of
any corporation has been subscribed, the directors may
levy and collect assessments for the purpose of paying ex-
penses, conducting business, or paying debts.'
No assessment can exceed ten per cent of the amount
of the capital stock named in the articles of incorporation,
except in the cases following: 1. If the whole capital of a
corporation has not been paid up, and the corporation is
unable to meet its liabilities, or to satisfy the claims of its
creditors, the assessment may be for the full amount un-
paid upon the capital stock, or if a less amount is suffi-
cient, then it may be for such a percentage as will raise
that amount; 2. The directors of railroad corporations
may assess the capital stock in installments of not more
than ten per cent per month, unless in the articles of in-
corporation it is otherwise provided.2
After an assessment is ordered, the secretary must cause
to be published a notice of assessment. This must be per-
sonally served upon each of the stockholders, or, in lieu
of personal service, must be sent through the mail, ad-
dressed to the stockholder at his place of residence, if
known, and if not known, at the place where the principal
office of the corporation is situated, and must be published
once a week for four successive weeks in some newspaper of
general circulation and devoted to the publication of gen-
eral news, published at the place designated in the articles
of incorporation as the principal place of business, and
also in some newspaper published in the county in which
the works of the corporation are situated, if a paper be
published therein.³
If any portion of the assessment mentioned in the notice
remains unpaid on the day specified therein for declaring
the stock delinquent, the secretary must cause to be pub-
¹ Sec. 2943; C. C., sec. 423.
* Sec. 2944; C. C., sec. 424.
³ Secs. 2947, 2948; C. C., secs. 427, 428.
SOUTH DAKOTA.
1883
lished, in the same papers in which the notices above
mentioned were published, a notice that the assessment is
unpaid on certain stock, and unless it is paid before the
day of sale, it will be sold to pay the assessment and
costs.¹
The notice must specify every certificate of stock, the
number of shares it represents, and the amount due
thereon, except where certificates may not have been is-
sued to parties entitled thereto, in which case the number
of shares and amount due thereon, together with the
fact that the certificates for such shares have not been
issued, must be stated. The notice, when published in a
daily paper, must be published for ten days, excluding
Sundays and holidays, previous to the day of sale. The
first publication of all delinquent sales must be at least
fifteen days prior to the day of sale.³
2
By the publication of the notice, the corporation ac-
quires jurisdiction to sell and convey a perfect title to all
of the stock described in the notice of sale upon which
any portion of the assessment or costs of advertising re-
mains unpaid at the hour appointed for the sale, but must
sell no more of such stock than is necessary to pay the as-
sessment due and costs of sale.*
On the day, at the place, and at the time appointed in
the notice of sale, the secretary must, unless otherwise or-
dered by the board of directors, sell or cause to be sold at
public auction, to the highest bidder for cash, so many
shares of each parcel of the described stock as may be
necessary to pay the assessment and charges thereon, ac-
cording to the terms of sale. If payment is made before
the time fixed for sale, the party paying is only required
to pay the actual cost of advertising in addition to the
assessment.5
¹ Sec. 2949; C. C., sec. 429.
Sec. 2951; C. C., sec. 431.
* Sec. 2953; C. C., sec. 433.
2 Sec. 2950; C. C., sec. 430.
* Sec. 2952; C. C., sec. 432.
1884
ECONOMIC LEGISLATION.
The person offering at such sale to pay the assessment
and costs for the smallest number of shares or fraction of
a share is the highest bidder, and the stock purchased
must be transferred to him on the stock books of the cor-
poration on payment of the assessment and costs.'
Increase and decrease of.-The constitution provides that
"all fictitious increase of stock . . shall be void,"
and that "the stock
of corporations shall not be
increased except in pursuance of general law, nor without
the consent of the persons holding the larger amount in
value of the stock first obtained at a meeting to be held
after sixty days' notice given in pursuance of law."2
The statute provides for the increase and decrease of
capital stock as shown above. (Sec AMENDMENTS, RE-
PEALS, ETC.")
A conflict will be observed between the provisions of
the constitution and the provisions allowing amendments
to the articles of incorporation. In the former a no-
tice of sixty days is required when the capital stock is
to be increased, while in the latter a notice of thirty days
is all that is required.
Directors are forbidden to increase or reduce their cap-
ital stock except as specially provided by law.³
3
Transfer of.-Whenever the capital stock of a corpora-
tion is divided into shares and certificates therefor issued,
such shares of stock are personal property, and may be
transferred by indorsement by the signature of the pro-
prietor, or his attorney or legal representative, and deliv-
ery of the certificate; but such transfer is not valid except
between the parties thereto, until the same is so entered
upon the books of the corporation as to show the names
of the parties by and to whom transferred, the number or
designation of the shares, and the date of transfer.
When the shares of stock in a corporation are owned
¹ Sec. 2954; C. C., sec. 434.
3 Sec. 2928; C. C., sec. 409.
' Const., Art. XVII, sec. 8.
* Sec. 2915; C. C., sec. 398. See "BookS."
+
SOUTH DAKOTA.
1885
by parties residing out of the state, the president, secre-
tary, and directors of the corporation, before entering any
transfer of the shares on its books, or issuing a certificate
thereof to the transferee, may require from the attorney or
agent of the non-resident owner, or from the person claim-
ing under the transfer, an affidavit or other evidence that
the non-resident owner was alive at the date of the trans-
fer, and if such affidavit or other satisfactory evidence be
not furnished, may require from the attorney, agent or
claimant a bond of indemnity, with two sureties satisfac-
tory to the officers of the corporation, or if not so satis-
factory, then one approved by the district judge of the
county in which the principal office of the corporation is
situated, conditioned to protect the corporation against
any liability to the legal representatives of the owner of
the shares, in case of his or her death before the transfer,
and if such affidavit or other evidence or bond be not fur-
nished when required, neither the corporation nor any of
ficer thereof is liable for refusing to enter the transfer on
the books of the corporation.'
Bonds, debts, etc.-The constitution provides that “ no
corporation shall issue
bonds except for money,
. .
labor done or money or property actually received, and all
fictitious increase of .
indebtedness shall be void.
The
indebtedness of corporations shall not be
increased except in pursuance of general laws, nor with-
out the consent of the persons holding the larger amount.
in value of the stock first obtained at a meeting to be held
after sixty days' notice given in pursuance of law." This
is the only regulation regarding the issue of bonds or other
evidences of indebtedness.
2
The directors are forbidden to create debts beyond the
amount of subscribed capital stock."
1
Dividends. The directors of corporations must not
—
¹ Sec. 2935; C. C., sec. 415.
Sec. 2928, C. C., sec. 409.
Const., Art. XVII, sec. S.
1886
ECONOMIC LEGISLATION.
make any dividend except from the surplus profit arising
from the business thereof.¹
A dividend belongs to the person in whose name the
stock stands upon the books of the corporation, on the day
when it becomes payable. See "CAPITAL STOCK," supra,
as to dividing or repaying same to stockholders.
2
;
Liability of stockholders.-Each stockholder is indi-
vidually and personally liable for the debts of the corpo-
ration to the extent of the amount that is unpaid on the
stock held by him. Any creditor of the corporation may
institute joint or several actions against any stockholders
who have not wholly paid the capital stock held by them
in such action the court must ascertain the amount that is
unpaid upon the stock held by each stockholder, and for
which he is liable; and several judgments must be ren-
dered against each in conformity therewith. The liability
of each stockholder is determined by the amount unpaid
upon the stock or shares owned by him at the time the ac-
tion is commenced, and such liability is not released by
any subsequent transfer of stock. In no other case are
the stockholders individually and personally liable for the
debts of the corporation.3
The term "stockholder," as here used, applies not only
to such persons as appear by the books of the corporation
to be such, but also to every equitable owner of stock, al-
though the same appears on the books in the name of an-
other, and also to every person who has advanced any in-
stallments or purchase-money of stock in the name of a
minor, so long as the latter remains a minor; and also to
every guardian or trustee who voluntarily invests any
trust funds in the stock. Trust funds in the hands of a
guardian or trustee are not liable under these provisions
by reason of any such investment, nor is the person for
whose benefit the investment is made, responsible in
¹ Sec. 2928; C. C., sec. 409.
2 Const., Art. XVII, sec. 7; Comp. Laws, sec. 2918; C. C., sec. 401.
Sec. 2933; Laws, 1879, ch. 9, sec. 1.
SOUTH DAKOTA.
1887
respect to the stock until he becomes competent and able
to control the same; but the responsibility of the guardian
or trustee making the investment continues until that
period. Stock held as collateral security, or by a trustee,
or in any other representative capacity, does not make the
holder thereof a stockholder within the meaning of this
provision, except in the cases above mentioned, so as to
charge him with the debts or liabilities of the corporation ;
but the pledgeor or person or estate represented is a stock-
holder as respects such liability.¹
The stockholders of corporations formed for mining,
manufacturing, and other industrial purposes, are jointly
and severally liable in their individual capacities for all
debts due to mechanics, workmen, and laborers employed
by such corporation. This liability may be enforced
against any stockholder by an action at any time after an
execution against the corporation may be returned unsatis-
fied, but such action must be commenced within four
months. If any stockholder is compelled by any such ac-
tion to pay the debts due any creditor, or any part thereof, he
has the right to call upon all the stockholders to contribute
their part of the same so paid by him, and may sue them
jointly or severally, or any number of them, and recover
in such action the ratable amount due from the persons so
sued.2
Liability of officers and directors.-Directors violat-
ing the provisions of the statute as to declaring dividends,
withdrawing, dividing, or increasing or reducing capital
stock, or creating debts in excess of the subscribed capital,
are in their individual and private capacity jointly and
severally liable to the corporation and to the creditors
thereof, in the event of its dissolution, in the full amount
of the capital stock so divided, withdrawn, paid out or re-
duced, or debt contracted, and no statute of limitations is
a bar to any suit against such directors for any sum for
1
¹ Laws, 1879, ch. 9, sec. 1; sec. 2933.
2 Sec. 3111; C. C., sec. 514.
1888
{
ECONOMIC LEGISLATION.
which they are so made liable; but those who caused
their dissent therefrom to be entered at large on the min-
utes of the directors at the time, or who were not present
at the time the same happened, are exempted from this
liability.'
Any officer of a corporation who willfully gives a certifi-
cate, or willfully makes an official report, public notice, or
entry in any of the records or books of the corporation,
concerning the corporation or its business, which is false
in any material representation, is liable for all the dam-
ages resulting therefrom to any person injured thereby;
and if two or more officers unite or participate in the
commission of any of these acts, they are jointly and sev-
erally liable.2
The officers who make any loan of the capital stock of
a corporation to its stockholders, or any misappropriation
of its stock, or who assent thereto, are jointly and sever-
ally liable to the extent of such loan or misappropriation
and interest, for all the debts of the corporation contracted
before the repayment of the sum so loaned or misappro-
priated.3
Reports. Every mining, manufacturing, or other in-
dustrial corporation must annually, within twenty days
from the first day of January, make a report which must
be published at or nearest to the place where the business.
of said corporation is to be carried on. This report must
state the capital stock and the amount thereof actually
paid in, the amount and nature of its indebtedness, and
the amounts due the corporation, the number and amount
of dividends and when paid, and the net amount of profits.
The report must be signed by the president and a major-
ity of the directors, and be verified by the oath of the
president or secretary of the corporation, and filed in the
office of the register of deeds of the county where the
¹ Sec. 2928; C. C., sec. 409.
& Sec. 3109; C. C., sec. 512.
* Sec. 2929; C. C., sec. 409.
SOUTH DAKOTA.
1889
business of the corporation is carried on. Any person
who willfully neglects or refuses to make, sign, or pub-
lish this report as provided above, is guilty of a misde-
meanor.¹
Whenever persons owning twenty per cent of the cap-
ital stock of any corporation formed for mining, manu-
'facturing, or other industrial purposes, present a written
request to the treasurer that they desire a written state-
ment of the affairs of the corporation, he must make
such statement under oath, embracing a particular account.
of all its assets and liabilities in detail, and deliver the
same to such persons within twenty days after such pre-
sentation. The treasurer must also, at the same time,
place and keep on file in his office for six months there-
after a copy of such statement, which must at all times
during business hours be exhibited to any stockholder de-
manding an examination thereof; the treasurer, however,
is not required to make or deliver such a statement oftener
than once in every six months. If the treasurer neglect
or refuse to comply with these provisions he forfeits and
must pay to the persons presenting such request the sum
of fifty dollars, and the further sum of ten dollars for
every twenty-four hours thereafter until such statement
is furnished, to be sued for and recovered in an action.
Taxation.—The provisions of the constitution in regard
to taxation are as follows: "All taxes to be raised in this
state shall be uniform on all real and personal property,
according to its value in money, to be ascertained by such
rules of appraisement and assessment as may be prescribed
by the legislature by general law, so that every person and
corporation shall pay a tax in proportion to the value of
his, her or its property. And the legislature shall provide
by general law for the assessing and levying of taxes on
all corporation property, as near as may be, by the same
methods as are provided for assessing and levying of taxes
¹ Sec. 3112; Laws, 1885, ch. 38, sec. 1. Sec. 3113; C. C., sec. 517.
1890
ECONOMIC LEGISLATION.
on individual property. The power to tax corporations
and corporate property shall not be surrendered or sus-
pended by any contract or grant to which the state shall
be a party. The legislature shall provide for taxing all
moneys, credits, investments in bonds, stocks, joint stock
companies or otherwise."1
The statute defines "personal property" as, among other
things, "all public stocks and securities, all stock in turn-
pikes, railroads, canals, and other corporations, all personal
estate of moneyed corporations whether the owners there-
of reside in or out of the state."
The property of a body politic or corporate must be
listed by the president or proper agent or officer thereof,
at the principal place of business of such corporation.
The personal property of gas and water companies must
be listed in the town where the principal works are
located; gas and water mains and pipes laid in roads,
streets or alleys are held to be personal property.
The personal property of street railway companies must
be listed and assessed in the county, town or district where
the principal place of business is located, and the tracks
are held to be personal property. Among other property
to be listed are included the value and description of every
franchise, the amount and value of bonds and stocks other
than bank stock, and the amount and value of shares of
capital stock of companies and associations not incorpo-
rated by the laws of the state.
Telegraph and telephone companies are assessed in much
the same manner as railroad companies. It is made the
duty of the president, secretary, general manager, or super-
intendent of every telegraph or telephone company doing
business in the state to furnish to the state auditor on the
first day of July, 1891, and of each year thereafter, a state-
ment under oath in such form as the auditor may prescribe
showing the total number of miles owned, operated or
1
¹ Const., Art. XI, secs. 2, 3, 4.
SOUTH DAKOTA.
1891
1
leased within the state, the number of miles in each sepa-
rate line or division thereof, together with the number of
separate wires thereon, and stating the counties through
which the same extend or in which said company does
business; the number of miles in each county, and the
number of stations and number of telegraph or telephone
instruments used in each county; the average number of
poles per mile used in constructing said lines; the value
of said wires, poles, instruments, and all other property
owned by it in the state; the number of offices maintained
by the company in this state, and the total gross and net
receipts of all said offices for the year ending April 30th
preceding the making of said statement. In case said
statement is not filed with the state auditor by the first
Monday of August of each year, he must proceed to ob-
tain the facts and information in any manner that may
appear most likely to secure the same correctly.
The statement so filed, or the information so obtained,
must be laid before the state board of assessments and
equalization, consisting of the governor, auditor, secretary
of state, state treasurer, and attorney-general of the state,
which board must review such statement or information,
and may change the valuation given, or add to said state-
ment any property omitted therefrom, and said board must
levy a tax on said property, which tax must be equal to
the average amount of state, county, school, and municipal
taxes, levied upon other property for the preceding year,
and the auditor must notify each company of the amount
of taxes so levied. Each telegraph and telephone com-
pany so assessed must, on or before the first day of March in
each year, pay to the state treasurer the amount of tax so
levied upon its property, which is in lieu of all other taxes.
Payment of its proportion of this tax to each county is
provided for.¹
The rate of taxation for state purposes is limited by
1 Laws, 1891, ch. 14, secs. 4, 7, 11, 22, 61, 62, 63, 70.
1892
ECONOMIC LEGISLATION.
the constitution to two mills on each dollar of the as-
sessed valuation of all taxable property in the state.'
The statute allows the state board of equalization to fix
the levy for state purposes within this limit of two mills
on the dollar.
For ordinary county revenue, including support of
the poor, the levy must not exceed six mills on the
dollar; for bridges, not to exceed two mills on the dol-
lar, and for roads, not to exceed four mills on the dol-
lar; for county sinking fund it is to be such rate as in
the estimation of the board of county commissioners will
pay one year's interest on all outstanding debts of the.
county with not to exceed fifteen per cent on the prin-
cipal.2
There is no limitation upon the amount which a city
may levy. It may be for general purposes sufficient to
meet the expenses of the year based upon estimates fur-
nished by the city auditor or a committee of the city coun-
cil, and in addition thereto, an addition for the interest
and sinking fund, which levy is certified forthwith to the
county auditor together with the amount levied by the
board of education of such city, if any.³
3
Of stock in hands of holder.-Stock of joint or other
companies (when the property of such company is not as-
sessed in this state) must be listed.*
Exemptions from.-Twenty-five dollars in value is ex-
empt from taxation, besides household furniture and pro-
visions."
Consolidation of companies.-The consolidation of
telegraph or railroad corporations owning competing lines
is forbidden by the constitution. As to other corpora-
tions, no provision is made.
Dissolution and forfeiture.-A corporation is dis-
solved :
¹ Const., Art. XI, sec. 1.
3 Laws, 1890, ch. 37, art. 10, sec. 7.
5 Laws, 1891, ch. 14, sec. 5, par. 5.
2 Laws, 1891, ch. 14, sec. 73.
* Laws, 1891, ch. 14, sec. 7.
Const., Art. XVII, sec. 7.
*
SOUTH DAKOTA.
1893
1. By the expiration of the time limited by the articles.
of incorporation.¹
2. Involuntary dissolution.—An action may be brought
by any district attorney in the name of the state, on leave
granted by the circuit court or judge thereof for the pur-
pose of vacating the charter or the articles of incorpora-
tion, or for annulling the existence of a corporation, other
than municipal, whenever such corporation has: 1st. Of-
fended against any of the laws creating, altering, or re-
newing such corporation; 2d. Has violated the provisions
of any law, by which such corporation has forfeited its
charter or articles of incorporation by abuse of its pow-
ers; 3d. Whenever it has forfeited its privileges or fran-
chises by failure to exercise its powers; 4th. Whenever
it has done or omitted any act which amounts to a sur-
render of its corporate rights, privileges, and franchises;
5th. Whenever it has exercised a franchise or privilege
not conferred upon it by law.
It is the duty of any district attorney, whenever he
has reason to believe that any of these acts and omissions.
can be established by proof, to apply for leave, and upon
leave granted to bring the action, in every case of public
interest, and also in every other case in which satisfactory
security is given to indemnify the state against the costs
and expenses to be incurred thereby."
Leave to bring the action may be granted upon the ap-
plication of any district attorney; and the court or judge
may, at discretion, direct notice of such application to be
given to the corporation or its officers previous to grant-
ing such leave, and may hear the corporation in opposition
thereto.3
When a defendant, whether a natural person or a cor-
poration, against whom such an action has been brought,
is adjudged guilty of usurping or intruding into or unlaw-
2 Sec. 5346; Code Civ. Proc., sec. 532.
¹ Sec. 2938; C. C., sec. 418.
3 Sec. 5347; Code Civ. Proc., sec. 533.
1894
ECONOMIC LEGISLATION.
fully holding or exercising any office, franchise, or priv-
ilege, judgment must be rendered that such defendant
be excluded from such office, franchise, or privilege, and
also that the plaintiff recover costs against such defend-
ant. The court may also, in its discretion, fine such
defendant in a sum not exceeding five hundred dollars,
which fine, when collected, must be paid into the treasury
of the state.¹
If it is adjudged that a corporation against which an
action has been brought pursuant to these provisions.
has, by neglect, abuse, or surrender, forfeited its corpo-
rate rights, privileges, and franchises, judgment must be
rendered that the corporation be excluded from such cor-
porate rights, privileges, and franchises, and that the cor-
poration be dissolved.²
If a judgment is rendered in such action against a cor-
poration, or against a person claiming to be a corporation,
the court may cause the costs therein to be collected by
execution against the person claiming to be a corporation,
or by attachment or process against the directors or other
officers of such corporation.3 When such a judgment is
rendered against a corporation, the court has power to
restrain the corporation, to appoint a receiver of its prop-
erty, and to take an account and make distribution
thereof among its creditors, and the district attorney
must, immediately after the rendition of such judgment,
institute proceedings for that purpose.*
Upon the rendition of such judgment against a corpo-
ration, the district attorney must cause a copy of the
judgment to be forthwith filed in the office of the secre-
tary of state, whose duty it is to record the same."
3. Voluntary dissolution.-This may be effected in the
following manner:
A corporation may be dissolved by the circuit court of
¹ Sec. 5356; Code Civ. Proc., sec. 542.
2 Sec. 5357; Code Civ. Proc., sec. 543.
3 Sec. 5358; Code Civ. Proc., sec. 544.
* Sec. 5359; Code Civ. Proc., sec. 545.
5 Sec. 5360; Code Civ. Proc., sec. 5+6.
SOUTH DAKOTA.
1895
the county where its principal place of business is situ-
ated, upon its voluntary application for that purpose.¹
The application must be in writing, and must set forth
that at a meeting of the stockholders called for that pur-
pose the dissolution of the corporation was resolved upon
by a two-thirds vote of all the stockholders, and that all
claims and demands against the corporation have been
satisfied and discharged.'
The application must be signed by a majority of the
board of directors, trustees, or other officers having the
management of the affairs of the corporation, and must
be verified in the same manner as a complaint in a civil
action.¹
If the court is satisfied that the application is in con-
formity with this article, it must order the application to
be filed, and that the clerk give not less than thirty nor
more than fifty days' notice of the application by publica-
tion in some newspaper published in the county, and if
there is none such, then by advertisement posted up in
five of the principal public places in the county. At any
time before the expiration of the time of publication any
person may file his objections to the application.'
After the time of publication has expired, the court
may, upon five days' notice to the persons who have filed
objections, or without further notice if no objections have
been filed, proceed to hear and determine the application;
and if all the statements therein made are shown to be
true, the court must declare the corporation dissolved.'
The application, notices, and proof of publication, ob-
jections (if any), and declaration of dissolution, constitute
the judgment roll, and from the judgment an appeal may
be taken in the same manner as in other actions.¹
Unless other persons are appointed by the court, the di-
rectors or managers of the affairs of such corporation at
the time of its dissolution are trustees of the stockholders
¹ Sec. 2938; C. C., sec. 418.
1
1896
ECONOMIC LEGISLATION.
or members of the corporation dissolved, and have full
powers to settle the affairs of the corporation, and to col-
lect and pay debts, and divide among the stockholders
the property which remains after the payment of debts.
and necessary expenses; and for such purposes may main-
tain or defend actions in their own names by the style of
the trustees of such corporation dissolved, naming it; and
no action whereto any such corporation is a party abates
by reason of such dissolution.' Such trustees are jointly
and severally responsible to the creditors, stockholders,
and members of the corporation, to the extent of its prop-
erty in their hands.²
A corporation once dissolved can be revived only by the
same power by which it could be created.3
Foreign corporations.-The constitution provides: "No
foreign corporation shall do any business in this state
without having one or more known places of business,
and an authorized agent or agents in the same upon whom
process may be served."
No corporation created or organized under the laws of
any other state or territory can transact any business within
this state, or acquire, hold, and dispose of property, real,
personal, or mixed, within this state, until such corpora-
tion shall have filed in the office of the secretary of state a
duly authenticated copy of its charter or articles of incor-
poration and shall have complied with these provisions."
Such charter or articles of incorporation must be recorded
in a book to be kept by the secretary of this state for that
purpose.
Such corporation must appoint an agent, who must re-
side at some accessible point in this state, in the county
where the principal business of the corporation is to be
carried on, duly authorized to accept service of process,
¹ Sec. 2940; C. C., sec. 420.
* Sec. 2942; C. C., sec. 422.
5 Sec. 3190; C. C., sec. 567.
² Sec. 2941; C. C., sec. 421.
• Const., Art. XVII, sec. 6.
6 Sec. 3191; C. C., sec. 568.
SOUTH DAKOTA,
1897
!
and upon whom service of process may be made in any
action in which said corporation may be a party; and
service upon such agent shall be held and taken as due
service upon such corporation. A duly authenticated copy
of the appointment or commission of such agent must
be filed and recorded in the office of the secretary of state
and register of deeds of the county where said agent re-
sides, and a certified copy thereof by the secretary or
register of deeds is conclusive evidence of the appoint-
ment and authority of such agent.¹
1
SUBDIVISION III.-FRANCHISES.
How obtained. The constitution prohibits the legisla-
ture from enacting any private or special laws granting to
an individual, association, or corporation any special or ex-
clusive privilege, immunity, or franchise whatever.
Any company organized under the general law, or any
association of persons organized for the purpose of manu-
facturing illuminating gas or electricity to supply cities or
the inhabitants thereof with the same, has the right by
the consent of the city council, subject to existing rights,
to erect gas or electric light works, and lay down pipes or
string wires on poles in the streets or alleys of any city in
this territory, subject to such regulations as the city may
by ordinance impose.2
The constitution provides that no street passenger rail-
way or telegraph or telephone lines shall be constructed
within the limits of any village, town, or city without the
consent of its local authorities, and that no law shall be
passed by the legislature granting the right to construct
and operate a street railroad within any city, town, or in-
corporated village without requiring the consent of the
local authorities having the control of the streets or high-
ways proposed to be occupied by said street railroad.“
¹ Sec. 3192; Laws, 1885, ch. 36, sec. 1.
2 Laws, 1890, ch. 37, art. 5, sec. 1, par. 13.
Const., Art. X, sec. 3.
VOL. II-39
Const., Art. XVII, sec. 10.
1898
ECONOMIC LEGISLATION.
The owners of any telephone or telegraph line are
granted the right of way over lands and real property,
and the right to use public grounds, streets, alleys, and
highways, subject to the control of the proper municipal
authorities as to what grounds, streets, alleys or highways
said lines may run over or across, and the places where
the poles to support the wires may be located.'
Powers of municipalities as to.-City councils have
the power to regulate the use of the streets, alleys, ave-
nues, sidewalks, wharves, parks, and public grounds; to
provide for lighting the same; to regulate the openings
therein for the laying of gas or water mains and pipes, and
the building and repairing of sewers, tunnels, and drains,
and the erecting gas or electric lights; to permit, regulate
or prohibit the locating, constructing or laying of tracks,
of horse railways in any street, alley or public place. But
city councils have no power to grant the use or right to
lay down any railroad tracks in any street of the city to
any steam or horse railway company except upon a peti-
tion of the owners of the land representing more than one-
half of the frontage of the street, or so much thereof as is
sought to be used for railroad purposes.2
Some of the cities in the state are organized under spe-
cial charters, and as to these, the provisions above quoted
do not apply. In towns there are no restrictions placed
upon the power of the governing body with respect to
franchises.
The conditions upon which the franchise will be granted
rest in the discretion of the city council. They may make
conditions for insuring the safety of life and property, se-
curing proper rendering of the service and establishing
charges for services rendered.
No limitations are placed upon the city council except
as set forth above, and they can make such terms as they
¹ Sec. 3025; Laws, 1885, ch. 141, sec. 3.
2 Laws, 1890, ch. 37, art. 5, sec. 1, sub. 9, 11, 13, 24, 71.
SOUTH DAKOTA.
1899
please with the corporation, association or individual at-
tempting to procure the franchise.
Limitations. The constitution provides that the legis-
lature shall not delegate to any special commission, private
corporation or association any power to make, supervise
or interfere with any municipal improvement, money,
property, effects, whether held in trust or otherwise, or
levy taxes or to select a capital site or to perform any mu-
nicipal functions whatever.¹
Control of streets.-The fee of the streets is in the ad-
jacent property owners unless under peculiar circumstances
it is vested elsewhere.
The city council has power to prevent and remove ob-
structions and encroachments upon the streets; to provide
for their lighting and cleaning; to regulate the openings
therein for the laying of gas or water mains and pipes,
and the building and repairing of sewers, tunnels, and
drains, and erecting gas or electric lights; to regulate the
use of sidewalks, and to require same to be kept free from
snow and other obstructions; to regulate and prevent
throwing ashes, garbage, etc., into streets; to regulate and
prevent use of streets for signs, awnings, telegraph or tele-
phone poles, etc.2
Special damages; property owners' rights. See
("CONDEMNATION," following.)
Condemnation of property. The constitution pro-
vides that private property shall not be taken or damaged
for public use without just compensation as determined
by a jury, which shall be paid as soon as it can be ascer-
tained and before possession is taken. No benefit which
may accrue to the owner as the result of an improvement
made by any private corporation shall be considered in
fixing the compensation for property taken or damaged.
The fee of land taken for railroad tracks or other high-
¹ Const., Art. III, sec. 23, sub. 26.
2 Laws, 1890, ch. 37, art. 5, secs. 10-21.
1900 ·
ECONOMIC LEGISLATION.
ways shall remain in such owners, subject to the use for
which it was taken.'
It also provides that municipal and other corporations
and individuals invested with the privilege of taking
private property for public use shall make just com-
pensation for property taken, injured, or destroyed by the
construction or enlargement of their works, highways, or
improvements, which compensation shall be paid or se-
cured before such taking, injury, or destruction. The leg-
islature is prohibited from depriving any person of an ap-
peal from any preliminary assessment of damages against
any such corporation or individuals made by viewers or
otherwise, and the amount of such damages in all cases of
appeal shall, on the demand of either party, be determined
by a jury as in other civil cases.2
In condemnation proceedings, the corporation or indi-
vidual seeking to condemn must file a petition in the cir-
cuit court of the county where the property to be taken
or damaged is situated, praying that the just compensa-
tion to be made for such property may be ascertained by
a jury.
This petition must name the corporation or individual
desiring to take or damage private property as the plaint-
iff, and all persons having interests in or liens upon the
property affected by the proceedings as defendants, so far
as they shall be known at the time of filing the same. It
must contain a description of the property to be taken or
damaged, and in all cases where any resolution or ordi-
nance or other proceeding of any corporation is required
by law before taking private property, a copy of such
resolution, ordinance, or proceeding must be attached to
such petition. The purpose for which the property is to
be taken or damaged must be clearly set forth in the peti-
tion. It is not necessary to specify the interests or claims
of the several defendants. The petition must be verified,
* Coust., Art. XVII, sec. 18.
¹ Const., Art. VI, sec. 13.
SOUTH DAKOTA.
1901
and must contain the statement that the proceeding is in
good faith for the purposes specified in the petition.
Provision is made for filing a lis pendens in the office of
the register of deeds of the county, which is notice to all
subsequent purchasers or incumbrancers of the property.'
No pleadings are necessary except the petition filed by
plaintiff and such as may become necessary to enable the
court to determine conflicting claims to the compensation
or some part thereof.'
In all cases of taking or damaging private property by
a municipal corporation, the jury must take into consid-
eration the benefits which may accrue to the owner
thereof as the result of the proposed improvement. The
only issue to be tried is the amount of compensation to be
paid for the property taken or damaged; but in case there
shall be adverse claimants for such compensation or for
any part of the property, the court may require such ad-
verse claimants to interplead, so as to fully determine the
rights and interests in such compensation. After the re-
turn of the verdict, the court must order the same to be
recorded, and shall enter such judgment thereon as the
nature of the case may require; and the plaintiff must
pay to the persons entitled thereto the amount of such
compensation as shall be ascertained by such verdict, or
deposit the same, as the court shall direct. As to all de-
fendants not served before trial, the proceedings may be
continued, as the court may direct, for the purpose of
serving the summons on said defendants."
The constitution provides that the exercise of the right
of eminent domain shall never be abridged, or so con-
strued as to prevent the legislature from taking the prop-
erty and franchises of incorporated companies and sub-
jecting them to public use, the same as the property of
individuals.2
The right of way over real property granted to telegraph
1
Laws, 1891, ch. 92.
* Const., Art. XVII, sec. 4.
1902
ECONOMIC LEGISLATION.
and telephone companies may be acquired in the same
manner and by like proceedings as provided for railroad
corporations."
Duration of franchise.-The franchises granted by
municipalities to horse railways can not be for a longer
period than twenty years.²
Refusal to grant a franchise. From the provisions
above stated, it will be seen that the power to grant or re-
fuse a franchise rests with the municipality itself, untram-
meled by any conditions except such as are pointed out
above.
Perpetual and exclusive franchises.3-The constitu-
tion prohibits the legislature from granting to an individ-
ual, association, or corporation, by special or private act,
any special or exclusive privilege, immunity, or franchise ;*
from making any irrevocable grant of privilege, franchise,
or immunity whatever;5 from passing any law granting
to any citizen, class of citizens, or corporation, privileges
or immunities which upon the same terms shall not
equally belong to all citizens or corporations.º
From these provisions it will be seen that the legislature
can grant no exclusive franchise. Cities can grant per-
petual franchises if they so choose, except in the case of
street railways, to which permission to construct or lay
tracks can be granted for twenty years, as shown above.
Discrimination in service.-The constitution provides.
that the exercise of the police power of the state shall
never be abridged, or so construed as to permit corpora-
tions to conduct their business in such manner as to in-
¹ Sec. 3025; Laws, 1885, ch. 141, sec. 3.
Laws, 1890, ch. 37, art. v, sec. 1, sub. 24.
3 The constitution provides that all existing charters or grants of
special or exclusive privileges, under which a bona fide organization
shall not have taken place and business been commenced in good faith
at the time this constitution takes effect, shall thereafter have no valid-
ity.
(Const., Art. XVII, sec. 2.)
• Const., Art. III, sec. 23, par. 9.
6 Const., Art. VI., sec. 18.
5 Const., Art. VI, sec. 12.
SOUTH DAKOTA.
1903
fringe the equal rights of individuals or the general well-
being of the state; and that no law shall be passed
granting to any citizen, class of citizens, or corporation,
privileges or immunities which upon the same terms shall
not equally belong to all citizens or corporations.2
State and municipal aid.-The constitution provides
that neither the state nor any county, township or munici-
pality, shall loan or give its credit to, make donations to
or in aid of any individual, association or corporation, ex-
cept for the necessary support of the poor, nor subscribe
to or become the owner of the capital stock of any asso-
ciation or corporation, nor pay or become responsible for
the debt or liability of any individual, association, or cor-
poration.3
Alteration, amendment, etc., of franchises.-See
"AMENDMENTS, REPEALS, ETC.," SUBDIVISION II, supra.
Consolidation of franchises.-See "CONSOLIDATION OF
COMPANIES," SUBDIVISION II, supra.
Forfeiture of franchises.-See "DISSOLUTION; FORfeit-
URE," SUBDIVISION II, supra.
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
Historical. There is but little to be said in regard to
this branch of the subject. In all the cities of the state
the industries herein considered have been conducted by
private corporations.
Power to erect or purchase. The power of munici-
palities to carry on these industries is limited by the con-
stitutional limitation upon their powers to incur indebt-
ness and levy taxes.
The constitution requires that the legislature shall re-
strict the power of municipal corporations to levy taxes
and assessments, borrow money and contract debts, so as
to prevent the abuse of such power, and that except as
¹ Const., Art. XVII, sec. 4.
3 Const., Art. XIII, sec. 1.
' Const., Art. VI, sec. 18.
1
1904
ECONOMIC LEGISLATION.
otherwise provided, no tax or assessment shall be levied or
collected, or debts contracted by municipal corporations,
except in pursuance of law, for public purposes specified
by law; nor shall money raised by taxation, loan, or as-
sessment, for one purpose, ever be diverted to any other.¹
The constitution provides that the debt of any county,
city, town, school district, or other subdivision, shall never
exceed five per centum upon the assessed value of the tax-
able property therein. In estimating the amount of in-
debtedness which a municipality or subdivision may incur,
the amount of indebtedness contracted prior to the adop-
tion of this constition must be included.2
The constitution prohibits the state from engaging in
any work of internal improvement.³
¹ Const., Art. X, secs. 1 and 2.
› Const., Art. XIII, sec. 1.
2 Const., Art. XIII, sec. 4.
TENNESSEE.¹
EDITED BY ROBERT L. MORRIS, ATT'Y, NASHVILLE, TENN.
SUBDIVISION I.-HISTORICAL.
Prior to the year 1790, Tennessee was a part of the
State of North Carolina. During that year, North Caro-
lina having ceded to the United States the territory west
of the Alleghany mountains to the Mississippi river, it
was organized by congress into a territory under the name
of "The Territory South of the Ohio," it then having no
more disinctive or peculiar name. From 1790 to 1796 it
had a territorial form of government.
In February of the year 1796, it was organized into a
state, and a constitution adopted for its government. On
the first day of June of the same year it was admitted to
the union of states. The party which organized Tennessee
into a state was that one which had for its head and domi-
nant chief, Thomas Jefferson. The framers of its consti-
tution were men of hardy mold, lovers of freedom, and
with clear and well defined ideas regarding civil and re-
ligious liberty. In the first article of that constitution
embodying a declaration of rights it was declared, "That
perpetuities and monopolies are contrary to the genius of a
free state, and shall not be allowed."
Almost without exception in the early history of the
state, the building of turupikes, toll bridges and ferries,
was undertaken by individuals and not by corporations.
¹ Unless otherwise stated references to the constitution are to that of
1870. The session laws are referred to as Laws" of the respective
years. As to state reports, see Appendix "A."
(1905)
1906
ECONOMIC LEGISLATION.
Prior to the year of 1825, there scarcely existed any
corporate business whatever in the state, and the few
charters that were granted were framed in the crudest
manner, and contained scarcely any powers or privileges.
In 1809, a water company was chartered for each of the
towns of Franklin, Columbia, and Knoxville. These
charters contained about two or three sections, and were
inexpressibly crude and informal. Their main object
seemed to have been to protect the pipes already laid by a
few individuals from interference and harm. To interfere
with them was declared to be a misdemeanor. They were
not authorized to exercise the right of eminent domain, or
to fix and charge rates. The existence of these rights
seemed to have been taken for granted.
At this time the government of the state was quite pa-
ternal in character. Few general laws existed, and the
legislature was appealed to for the settlement of many
private rights. By an act of 1825, one of the treasurers
of the state-there were several holding office in different
sections and at the same time-was instructed to loan
Robt. H. Dyer $3,000, to aid him in cutting a canal from
Forked Deer river into the Mississippi river, and to take
from him a bond and security for its payment.
The legislature was supreme in its power, for under the
constitution of 1796 the supreme court was not made a
separate and independent arm of the government, and for
its temerity in declaring some of the legislative enact-
ments unconstitutional, it came very near being swept out
of existence. It was not until the amended constitution
of 1834 was adopted, that it was declared that the powers
of the government should be divided into three distinct
departments, and that no person belonging in one depart-
ment should exercise any of the powers properly belong-
ing to either of the others. It is this feature of our fed-
eral and state governments that has received such com-
mendation from that great English statesman, Mr.
Gladstone.
TENNESSEE.
1907
|
The first real business charter granted by the state, such
as would approximate the ideas of a modern incorporator,
was that of the Nashville and Columbia Turnpike Com-
pany, passed November 19, 1825. This was the first of
what might be termed modern charters. The others were
mere tentative, informal affairs. Often the charters of the
earlier corporations of a private character were limited to
forty or fifty years. Seldom, indeed, was the right to alter
or repeal a charter reserved by the legislature.
The Nashville Gas Light Company was chartered No-
vember 21, 1849, and the Knoxville company, March 2,
1854. The Knoxville Water Company was chartered
February 24, 1870, with the right of succession for forty
years.
Under the charter of the Nashville Gas Light Company,
the city of Nashville was allowed to purchase it at any
time after January 1, 1870, the price to be determined by
arbitration, otherwise it was to continue as a body politic
and corporate so long as the terms of its charter were ful-
filled; its charge for gas per thousand feet "to be regu-
lated by the prices in other south-western cities." A
maximum price was also fixed.
The first street railway company chartered was the Mc-
Gavock and Mt. Vernon Horse Railroad Company, of
Nashville, Tennessee. The consent of the city author-
ities, expressed by ordinance, was first required to be ob-
tained before any street could be used. They were allowed
to operate by animal power, and might "take toll on said
road," how much was not fixed by the charter, nor regu-
lated by city ordinance.
The first electric light company chartered was the Brush
Electric Light and Power Company, of Nashville, char-
tered December 1, 1881.
The constitution of 1834 provided that the legislature
might grant such charters of incorporation as they might
deem expedient for the public good. Under this constitu-
1908
ECONOMIC LEGISLATION.
tion, as also that of 1796, retrospective laws, and laws im-
pairing the obligation of contracts, were prohibited.
It was the policy of the state to encourage and foster
that class of corporations relating to internal improve-
ments, such as turnpikes and railroads, and by an act
passed February 19, 1836, the state was authorized to sub-
scribe for one-third of the stock of such companies, and
to issue its bonds to pay for the same, the companies to pay
the interest on the bonds. The counties and towns were
likewise empowered to subscribe for stock therein.
Under this policy, a forced and rapid development took
place in the construction of turnpikes and railroads. An
indebtedness amounting to millions of dollars was created
by the state and proportionally so by many of the towns
and counties. Much corrupt practice was resorted to by
manipulators and promoters of such corporations, and the
state was oftentimes badly cheated. So large did the in-
debtedness become, and so flagrantly unjust were many of
the issues of bonds, that the state, emerging in poverty
from the long civil war of 1861-5, was compelled to scale
her debt, both as to amount of bonds and rate of interest,
and this, after selling the roads on which the bonds were
liens, as they brought but a small portion of the indebted-
ness. Such practice turned the people against corpora-
tions in a great degree.
When the last constitution was adopted, in the year
1870, the state was not thereafter allowed to lend or give
its credit to any person or corporation, or become a stock-
holder therein, nor was the credit of any city or town al-
lowed to be given or loaned in aid of any person or cor-
poration, except upon an election first held, and the assent
of three-fourths of those persons voting obtained. The
following provision was also adopted: "No corporation
shall be created or its powers increased or diminished by
special laws, but the general assembly shall provide by
general laws for the organization of all corporations
hereafter created, which laws may, at any time, be al-
TENNESSEE.
1909
tered or repealed, and no such alteration or repeal shall
interfere with or divest rights which have become.
vested."
The policy of the state, if it can be said to have one,
is to discourage the creation of corporations. Charters
can be obtained only under the act of 1875 and amend-
ments thereto, and no charter can be obtained except for
some one of the purposes mentioned in that act or its
amendments.
Several efforts have been made before the legislature
to pass a general incorporation law allowing individuals
to incorporate for any business of a lawful character, but
without success. The governor, in his first message to the
general assembly, which convened in January, 1891, re-
commended that the incorporation laws be not enlarged
to cover any business or enterprise that individual capital
or work could accomplish.
SUBDIVISION II.-FRANCHISE COMPANIES.
1
Incorporation, how obtained. The constitution pro-
vides that "no corporation shall be created or its powers.
increased or diminished by special laws, but the general
assembly shall provide by general laws for the organiza-
tion of all corporations hereafter created." The legisla-
ture has power to create corporations independently of
any constitutional grant, but under this provision the
manner of doing so must be by a general and not by a
special law.
2
Pursuant to this constitutional mandate the general as-
sembly, in chapter 142, acts of 1875, and in subsequent
amendments thereto, has provided the only existing au-
thority for the grant of private corporate franchises. The
method of securing the same is very simple; the direc-
tions of the statute properly followed lead to incorpora-
2
'Const., Art. XI, sec. S.
Hope v. Deadrick, S Hump. 1; Nichol v. Mayor. of Nashville, 9
Hump. 252: Trigally . Mayor and Aldermen of Memphis, 6 Cold. 382.
1910
ECONOMIC LEGISLATION.
tion, and no further or other legislative sanction is needed.
No kind of a corporation can be formed except such as
is specially provided for and named by statute.
The following franchise companies may be incorpor-
ated: Street railways, propelled by steam, electricity, cable
or animal power; electric light and power companies; gas
and water companies; telegraph and telephone companies;
refrigerating or cold storage companies. No provision
has been made for steam-heating companies.
Articles of incorporation.-Any five or more persons
over the age of twenty-one desiring to form a corporation
must copy the form of charter adapted to the purpose,2
and append to the same an application in these words:"
We, the undersigned, apply to the State of Tennessee, by virtue¯of
the laws of the land, for a charter of incorporation, for the purposes
and with the powers declared in the foregoing instrument.
"Witness our hands, the
แ
¹ Laws, 1875, ch. 142.
day of —, 18—.
"[To be signed by the applicants.]"
2 The statutory form of a charter for a street railway is as follows:
'STATE OF TENNESSEE-CHARTER OF INCORPORATION.
"Be it known, that [here copy the names of five or more corporators
not under the age of twenty-one years] are hereby constituted a body
politic and corporate, by the name and style of [here insert the name],
for the purpose of constructing a street railroad in the incorporated
town of [here insert the name of the town], commencing at [here insert
the initial terminus] and ending at [here insert the terminus and the
general route of the road].
The general powers, etc., of said incorporators are " [here insert the
powers as declared by statute].
The statutory form of a charter for electric light and electric light
and power companies is as follows:
"STATE OF TENNESSEE-CHARTER OF INCORPORATION.
"Be it known, that [here insert the names of five or more persons
above the age of twenty-one years] are hereby constituted a body politic
and corporate, by the name and style [here insert the names of the cor-
poration], for the purpose of manufacturing electric light, motive power,
electrotyping, etc., or for the purpose of manufacturing electricity for
telephoning purposes, etc. [state fully the objects of the company,
whether one or more of the above purposes]. The general powers of
said corporation are " [here insert the powers as declared by statute].
TENNESSEE.
1911
手
​The instrument must then he acknowledged by five or
more incorporators before the county court clerk.'
Must show what.—All charters must give the name and
style of the company, and the general powers named in
the statute should be stated.¹
The charter for an electric light and power company
must, in addition, show the purpose of the incorporation,
whether for the manufacturing of electric light, electric
motive power, electrotyping, or manufacturing electricity
for "telephoning purposes." The objects of the company
should be fully stated.'
The charter for a gas company should show that its
business is "to establish and construct gas-works in or near
the town, city, or village of (here insert name), and it
shall be the duty of said company to build, furnish, and
equip a gas manufactory of sufficient capacity to supply
with gas the corporate authorities and inhabitants of said
town, city, or village." All other provisions of a general
character prescribed by the statute as part of the form
of the charter should be included. These relate to
charges, power to lay down pipes, provisions regarding
health of inhabitants, and to the injuring and destruction
of its property by any person.'
That of a street railway company should give name and
style of company, that it is constituted a body politic and
corporate for the purpose of constructing a street railway
in the corporated town of The termini and general
route of the road should be stated, also the kind of power
to be used, with other general provisions stated in the
act.¹
The form of charter for a telephone company is the
same as that of an electric light company. The legisla-
ture, at the time this form of charter was prescribed, evi-
dently had very vague ideas of these things, and think-
ing, no doubt, that elecricity was the prime basis of both
¹ Laws, 1875, ch. 142.
1912
ECONOMIC' LEGISLATION.
electric light and telephone companies, considered one
form of charter with like powers and duties as sufficient.
The charter of a water-works company is in substance
the same as that of a gas company.
Publication of.-No other publication of the articles of
incorporation need be made than the registration of the
charter in the county register's office and that of the sec-
retary of state.¹
The secretary of state must have published and bound
with the acts of each general assembly a certified list of
all corporations organized since the last publication, giv-
ing the name and date of organization of each corpora-
tion, and such publication is legal evidence of the existence
of such corporations."
Filing. The charter or articles of association, together
with the application, probate, and certificates, must be
registered in the county where the principal office of the
company is situated, and also in the office of the secretary
of state, and a certificate of such registration, under the
great seal of the state, when registered in the register's
office of said county with the fac simile of said seal, com-
pletes the formation of the company as a body politic, and
the validity of the same in any legal proceeding can not
be collaterally questioned. If the corporation establishes
agencies in any other county, the instrument must be
registered there also. The registration of the certificate
of the secretary of state and the seal is essential to the
validity of the corporation.3
Organization; preliminary requirements.-The sub-
scribers to the stock of the company may organize the
company at any time or place they may see proper. The
statute is silent as to any preliminary requirements other
than formally taking out the charter.
No public notice of organization is necessary. The
subscribers may be notified verbally or in writing of the
Laws, 1875, ch. 142.
2 Laws, 1875, ch. 142, sec. 20.
' Brewer v. State, 7 Lea, 683; Tillery v. State, 10 Lea, 36.
TENNESSEE.
1913
time and place of the meeting for the organization by a
temporary secretary or by a promoter of the company.
Commencing business.-The entire capital stock ought
to be subscribed as a preliminary requirement to com-
mencing business, but it is not essential that it should be.
A company may organize and begin work with less than
the required amount, but no subscriber or stockholder is
bound by this action unless he consents thereto or waives
his right to object by continuing to act as a stockholder."
Fees. The same fees for the registration of the charter
are paid to the county register as for probate of deeds,
and to the secretary of state $3.00.
Amendments, repeals, etc.—The constitution provides
that all laws for the organization of corporations "may at
any time be altered or repealed, and no such alteration or
repeal shall interfere with or divest rights which have be-
come vested, and that the power of no corporation can be
increased or diminished by special laws."2
The general incorporation act of 1875 reserves to the
legislature the right to "repeal, anuul, or modify" any
charter taken out under its provisions, but upon the fol-
lowing conditions: that if it is repealed, or if the amend-
ment proposed, being not merely auxiliary, but funda-
mental and rejected by a vote representing more than
half of the stock, the corporation shall continue to exist
for the purpose of winding up its affairs, but not to enter
upon new business.3
If the amendments or modifications being fundamental
are accepted by the corporation in a general meeting to be
called for that purpose, any minor, married woman, or
other person under disability, or any stockholder not
agreeing to the acceptance of the modification, ceases to
be a stockholder, and the corporation is liable to pay said
withdrawing stockholders the par value of their stock, if
1 Anderson r. Middle & East Tenn. Railroad Co. (see MSS.; not yet re-
ported).
2 Const., Art. XI, sec. 8.
VOL. II-40
Laws, 1875, ch. 142.
1914
ECONOMIC LEGISLATION.
it is worth so much; if not, then so much as may be its
real value in the market on the day of withdrawal of said
stockholder, but the claims of all the creditors are to be
paid in preference to the withdrawing stockholders.'
The effect of this reservation upon the part of the legis-
lature has been to do away with the contractual idea once
existing between the state and chartered companies, and
to render of no value a long line of decisions based on the
Dartmouth College case.²
2
By the corporation.-A corporation desiring to change
its name, increase its capital stock or obtain other powers
granted in the charter act, has a right to do so by the
board of directors of said corporation copying the amend-
ment and making an application in these words:
"State of Tennessee-Act of Incorporation.
"We, the undersigned, comprising the board of directors of (here in-
sert the name of the corporation) apply to the State of Tennessee, by
virtue of the general laws of the land, for an amendment to said charter
of incorporation, for the purpose of investing said corporation with the
power (here state the clause in the general law aforesaid which is de-
sired as an amendment, or, if it be simply to change the name, so state
the fact).
day of
"Witness our hands the
(to be signed by the di-
rectors, to be probated and registered same as an original charter).”
Under the above provision regarding amendments, etc.,
a company may change its methods of service, such as a
gas company furnishing also electric light, and vice versa.
A street railway company may change to the use of
electricity from steam or cable or the reverse. It has been
held that the state may authorize a corporation to alter
its original enterprise, and exercise franchises to any ex-
1 Laws, 1875, ch. 142.
2 Under a constitutional provision against laws impairing the obliga-
tion of contracts a charter of incorporation has been held to be a con-
tract which could not be impaired. (Union Bank v. State, 9 Yerg. 490;
Hagan e. Union Bank, 1 Sneed, 115.) These decisions are in line with
the Dartmouth College case.
1
TENNESSEE.
1915
tent without impairing any contract with the corporation.'
The effect of such a law is merely permissive, and takes
away no existing power and effects no existing right.
Duration of charter.-All charters are perpetual, sub-
ject to the right of repeal existing in behalf of the legis-
lature.
Powers. The powers of all franchise companies are as
follows: To sue and to be sued by the corporate name; to
have and use a common seal, and alter the same at pleas-
ure, if no common seal, then the signing of the name of
the corporation by any duly authorized officer is legal and
binding; to purchase and hold, or receive by gift, in ad-
dition to the personal property owned by said corporation,
any real estate necessary for the transaction of the corpo-
rate business, and to purchase or accept any real estate in
payment, or part payment, of any debt due the corpora-
tion, and sell realty for corporation purposes; to establish
by-laws, and make all rules and regulations, not incon-
sistent with the laws or the constitution, deemed expedi-
ent for the management of corporate affairs; to appoint
such subordinate officers and agents, in addition to the
president, secretary, or treasurer as the business of the
corporation may require; to designate the name of the
office and fix the compensation of the officers; to borrow
money and issue notes or bonds upon the faith of the cor-
porate property, and to execute mortgages as further secur-
ity for the repayment of money thus borrowed.2
By no implication or construction can a corporation be
deemed to possess any powers except those above ex-
pressly given or necessarily implied from the nature of the
business for which the charter is granted, and by no in-
ference whatever can a corporation possess the power to
discount notes or bills, deal in gold or silver coin, issue any
evidence of debts as currency, buy and sell any agricultural
products, deal in merchandise, or engage in any business
outside of the purpose of the charter.2
State v. Butler, 13 Lea, 400.
2 Laws, 1875, ch. 142.
1916
ECONOMIC LEGISLATION.
By-laws. See under "POWERS;" "OFFICERS; MEETING;
VOTING; QUORUM, ETC." and "CAPITAL STOCK."
Officers; meetings; voting; quorum, etc.-There must
not be less than five directors, but may be as many more
as the corporation may elect to have. A failure to elect
officers at the proper time does not dissolve the corpora-
tion, but those in office hold until the election or appoint-
ment and qualification of their successors.¹
The terms of office of officers, not to exceed two years,
may be fixed by the by-laws of the corporation. See
"POWERS" above as to subordinate officers, names of offices,
and compensation of officers.¹
The directors may be elected by stockholders present or
holding proxies and by a majority of the votes cast, each
share representing one vote. No cumulative voting is
permitted. A majority of the board constitutes a quorum,
and may fill all vacancies until the next election. The first
board of directors must consist of the five or more corpo-
rators, who may apply for and obtain the charter.¹
Books. The books of the corporation must show the
original and subsequent stockholders, and their respective
interests.
Capital stock.-The corporation may by by-laws fix
the amount of capital stock to be invested in the enter-
prise, and the application for the charter need not express
what the capital stock is to be; the by-laws may also
regulate the time and amount of subscription for stock.
An issue of stock beyond the amount authorized is il-
legal. The company may by by-law make regulations
concerning the subscription for stock, the time required for
payment, and the amount to be called at any one time.¹
Stock is personal property, and is subject to levy and
sale by execution. No actual manual subscription on the
books of the company is necessary to bind a subscriber
for stock. Conditional subscriptions should not be en-
¹ Laws, 1875, ch. 142.
2
2 Nelson v. Haywood County, 87 Tenn. 781.
TENNESSEE.
1917
couraged, says the court, and stipulations of doubtful im-
port are rather construed as independent covenants.'
A stipulation in the contract of subscription, that the
subscriber shall receive first mortgage bonds to the full
amount of his subscription in addition to his stock shares
for a like amount is ultra vires, and absolutely void, and
the corporation may repudiate such illegal stipulation
without releasing the subscriber from his subscription.2
An innocent purchaser for value of stock in trust is not
liable in damages to the beneficiary, or for the return of
the stock.³ 3
If a party hold stock as collateral security for payment
of a debt, and assign it to a sub-pledgee to secure loaned
money, the sub-pledgee may hold it to the extent of the
consideration.*
1
A corporation whose shares are transferable only on its
books becomes the custodian of such shares, and a trustee
for share-holders, and is compelled to exercise due dili-
gence to protect them from unauthorized transfers.³
Increase and decrease of.-The method of increasing the
capital stock after being once fixed by by-laws, is by an
amendment made by the board of directors as indicated.
above.
A corporation has no power to reduce the amount of its
capital stock by purchase of its own shares for cancellation."
Transfer of. The transfer of stock may be regulated by
the by-laws. Stock is usually transferable only on
the books of the company. An assignment for value of
a certificate of stock in due course of trade with blank
power of attorney to transfer indorsed thereon, passes the
whole title. The title passes in this way as by transfer on
the books of the company.
6
¹ Railroad v. Parks, 86 Tenn. 554.
2 Morrow . Iron & Steel Co., 87 Tenn. 262.
3 Caulkins v. Gas Light Co., 85 Tenn. 683.
Cherry v. Frost, 7 Lea, 1.
5 Cartwright v. Dickinson, 4 Pickle, 476.
Bank v. Fanington, 13 Lea, 333.
1918
ECONOMIC LEGISLATION.
›
Company's lien on.-No statutory lien is given the com-
pany on unpaid stock for balance due thereon, but the
amount of any unpaid stock due from a subscriber is de-
clared to be a fund for the payment of any debts due from
the corporation, and the transfer of the stock by any sub-
scriber does not relieve him from payment, unless his
transferee has paid up all or any of the balance due on
said original subscription.'
Preferred stock.-No provision has been made by statute
for the issuance of preferred stock.
After the usual issue of stock has been made and it is
desired to make an issue of preferred stock, under Tennes-
see practice, and in the absence of a statute authorizing
it, the usual mode is to obtain the unanimous consent of
all stockholders, call in the certificates first issued and
cancel them, thereupon issue new certificates, stating upon
their face whether they are common or preferred stock,
the entire amount of each class issued, and whether divi-
dends are cumulative or not. The issue then becomes a
matter of contract and any future buyer of the stock is
affected with notice of the kind of paper purchased by him.
Bonds, debts, etc.-Corporations are empowered to bor-
row money for corporate purposes and issue notes and
bonds upon the faith of the corporate property, including
their franchises, and also to execute a mortgage as further
security. Street railways may issue bonds for purposes of
construction and repair of road, and mortgage all prop-
erty, including the franchises of the company.²
Dividends.-See under "LIABILITY OF OFFICERS AND DI-
RECTORS," below.
Liability of stockholders.-The transfer of stock by
any subscriber does not not relieve him from payment un-
less his transferee has paid up all or any balance due on
said original subscription.'
Intentional fraud in failing to comply substantially with
¹ Laws, 1875, ch. 142, sec. 5.
2
Laws, 1875, ch. 142.
TENNESSEE.
1919
the articles of incorporation, or in deceiving the public or
individuals in relation to their liabilities, subjects all stock-
holders knowingly participating therein to the penalties
of a misdemeanor and to damages at the suit of the party
injured thereby."
A bona fide purchaser of stock, without notice that sub-
scription is unpaid, can not be held liable to the corpora-
tion therefor.2
In all manufacturing companies the stockholders are lia-
ble to laborers for wages, but not in any of the corpora-
tions under discussion. The statutes expressly name the
class of corporations in which the stockholder is liable un-
der certain conditions to payment of wages to laborers, but
none of the companies here treated of are included, and
could not, for that reason, be classed by the courts as
manufacturing companies, in the sense of charging the
stockholder with wages due laborers; nor is it probable
that they would be adjudged manufacturing companies for
the purposes of taxation.
Liability of officers and directors.-Directors of a
corporation are not mere figure-heads; they are trustees
for the company, for the stockholders and creditors.
They must use, not only good faith, but care, attention
and circumspection in the affairs of the corporation, and
particularly in the keeping and disbursement of funds
committed to their custody and control. If they misap-
propriate them, or allow others to do so, they must answer
individually for it. Ignorance will not excuse them when
they have the means of knowledge.³
As agents they are primarily liable to the corporation,
both for nonfeasance and misfeasance, but they may be
proceeded against in equity by stockholders or creditors,
in proper cases, who will be subrogated to the rights of the
¹ Laws, 1875, ch. 142.
2 W. N. Planing Mill v. Savings Bank, 86 Tenn. 252.
3 Shea v. Mabry, 1 Lea, 343.
HorM
1920
ECONOMIC LEGISLATION.
corporation. They are not liable for mere mistakes where
they act in good faith and with reasonable care and dil-
igence, but they should show reasonable capacity for the
position.2
The diversion of the funds of the corporation to other
subjects than those mentioned in the charter of incorpo-
ration, the payment of dividends, which leaves insufficient
funds to meet the liabilities of the corporation; the keep-
ing of false books of accounts whereby any one is in-
jured, and the making and publishing of false reports
are such frauds as will subject those actively concerned
therein to the penalties named, and the participation
therein of the board of directors, as a board, works a for-
feiture of the charter.3
Reports. The board of directors are required to make
an annual statement of receipts and disbursements which
must be copied on the minutes, subject at all times to the
inspection of any stockholder. No public or published re-
ports are required to be made by any of the corporations.
here discussed.
Taxation. The constitution provides that all property,
real, personal or mixed, shall be taxed, and that it shall
be taxed according to its value, that value to be ascer-
tained in such manner as the legislature shall direct, so
that taxes shall be equal and uniform throughout the
state, and the legislature is given the power to levy a
tax upon incomes derived from stocks and bonds that
are not taxed ad valorem. The constitution also provides
that the general assembly shall have power to authorize
the several counties and incorporated towns to impose
taxes for county and corporation purposes, respectively,
in such manner as shall be prescribed by law, and all
¹ Shea v. K. & K. R. R. Co., 6 Bax. 277; Moses v. Ocoee Bank, 1 Lea,
398.
2. Vance v. Phoenix Ins. Co., 4 Lea, 389.
* Const., Art. II, sec. 28.
3 Laws, 1875, ch. 142.
Maoll
TENNESSEE.
1921
property shall be taxed according to its value upon the
principles established in regard to state taxation."
Under these provisions, the legislature has placed the
state tax on every one hundred dollars worth of property
at forty-five cents, of which thirty cents is for state pur-
poses and fifteen cents for school purposes. Counties are
authorized to levy annually a tax not exceeding the state
tax, and exclusive of the tax for public roads, schools, in-
terest on county debts, and other special purposes. In
addition, a privilege tax is levied upon all corporations
herein mentioned.
Privilege taxes on corporations are charged as follows:
On electric light companies-In cities or towns of 30,000
inhabitants or over, $100 per annum. On gas com-
panies-In cities or towns of 30,000 or over per annum,
$600; from 8,000 to 30,000, $400; from 5,000 to 8,000,
$100; 500 and less than 5,000, $25. Street car com-
panies In cities or towns of 30,000 per annum, $350;
from 8,000 to 30,000, $150; under 8,000, $50. Telephone
companies-For each telephone box per annum, 50 cents.
All bonds, stocks, and other securities are assessable for
taxes. All corporations of the character here treated of
are required to pay an ad valorem tax upon the full value
of their capital stock (including their franchises, ease-
ments, and incorporeal rights and corporate property, as
part of such capital stock), which in no case can be held
or deemed to be less than the actual value of all their
shares of stock together with the actual value of their in-
debtedness; but the shares of stock are not to be assessed
for taxation; their value may be looked to, however, in
arriving at the value of the capital stock.²
For the purpose of such an assessment, the assessor is
required to inspect all property, real, personal, and mixed,
owned or used by such corporation in its business, and to
cause the president or other chief officer operating the
¹ Const., Art. II, sec. 29.
2 Laws, 1889, ch. 96.
1922
ECONOMIC LEGISLATION.
same to answer, under oath and in writing, the following
questions:
1. What amount of money has been invested in real
estate, buildings, machinery, engines, rights of way,
tracks, motive power, rolling stock, and other property
and equipments used in operating the business of the cor-
poration?
2. What is the amount of the
debts of the corporation, if any?
terest? Is the interest paid or in
fault, how long?
bonded or mortgaged
What the rate of in-
default, and if in de-
3. What amount of stock has been issued, and what can
the stock be sold for in the market?
4. What dividends have been paid on the stock within
the last two years?
And the assessor may examine under oath any other
person or persons touching the amount and value of the
business done by such corporation, and after informing
himself of the subject, he must assess the corporation for
taxation as required above, and return the said affidavit to
the county clerk for preservation.¹
Of stock in the hands of holders.-The courts of the state
have repeatedly held that a statute which imposes a tax
upon the value of the property owned by the corporation,
and also upon the value of the stock of the same corpora-
tion, owned by its stockholders, is not double taxation,
and violates no constitutional mandate. The latest expo-
sition of the law upon this proposition is to be found in
the case of the Street Railroad Company v. Morrow, 87
Tenn. 406. Such holding of the courts is so manifestly
unjust and so shocking to common sense and justice, that
the legislature of 1889 undertook to correct it, and pro-
vided that shares of stock are not to be assessed for taxa-
tion, but their value may be looked to in arriving at the
value of the capital stock.'
¹ Laws, 1889, ch. 96.
TENNESSEE.
1923
Exemptions from.-The only other exemption of stock
from taxation than that just named would be found in a
clause of the assessment law, exempting personal property
to the amount of one thousand dollars.
An effort was made to compel the city of Nashville,
which supplied water to its own citizens and made charge
therefor, to pay a privilege tax under the revenue law of
1887, assessed against water companies doing business in
cities and towns, but the supreme court, in the case of
Smith v. Nashville, 88 Tenn. 464, held that water-works
owned and operated by a city under authority conferred
by its charter, and supplying water to those residing
within the corporate limits, were exempt from taxes im-
posed by the general provision of the revenue laws, and
liable only for taxes when expressly included within the
statute levying them, and that such use of the corporate
property was for public purposes: and that, although the
city realized a considerable revenue in excess of the ex-
penses of operating the water-works, which surplus was
applied to city purposes, this did not defeat the implied
exemption of the water-works from taxation.
To meet this decision of the court, the act of 1889, chap-
ter 130, was passed, amending the act of 1887 so as to make
its provisions relating to a privilege tax on water compa-
nies to apply to all municipal corporations operating
water-works and charging citizens for water.
Consolidation of companies.-Gas companies, electric
light companies, street railway companies, and telephone
companies are forbidden to acquire in any mode or man-
ner the franchises or property of any other similar corpo-
ration located or carrying on operations in the same town
or city, except by and with the consent and approval of
the municipal authorities officially expressed in writing,
and then only on such terms and conditions as the city
government may prescribe. Subject to these provisions,
¹ Laws, 1889, ch. 70.
1924
ECONOMIC LEGISLATION.
telephone and electric light companies may consolidate
or co-operate with each other in such manner as the re-
spective corporations may determine.' Water companies
are practically prohibited from leasing, selling, or con-
solidating with another company, as it is forbidden where
they are competing companies.2
The question of the assignability of corporate fran-
chises is of little practical value under the existing state
of the law relating to private or quasi public corporations
chartered since the constitution of 1870. The legislature
being forbidden to create a corporation except by general
statute, and franchise companies of similar character being
cast in the same mold and enjoying precisely the same
powers, it is only necessary that a new company be formed
and purchase the visible property of the other.
3
Trusts, etc.-An act passed in 1891, aimed at trusts,
pools, etc., forbids all contracts, arrangements, combina-
tions, trusts, and pools, which tend to prevent full and free
competition, or to create a monopoly in any article of "pro-
duction or manufacture." If gas or electricity can be
said to be an article of production within the meaning of
this act, then a sale or consolidation of franchises is pro-
hibited where the same tends to prevent competition or to
create a monopoly.
Dissolution; forfeiture.-A violation of the prohibition.
against consolidation subjects the company consenting, to
a forfeiture of its charter and franchises, to be enforced
at the suit of the state by its proper officer, or at the in-
stance of any other person who may elect to enforce the
same by a suit in his own name for such purpose. And
the court declaring the forfeiture must wind up the affairs
of such corporation.*
The participation of the board of directors, as a board,
in the diversion of the funds of the company, the pay-
ment of dividends which leaves insufficient funds to meet
3
¹ Laws, 1883, ch. 232,
³ Laws, 1891, ch. 218.
2 Laws, 1889, p. 3, ch. 166.
* Laws, 1889, ch. 70.
TENNESSEE.
1925
the liabilities, keeping of false books or accounts, and the
making and publishing of false reports, works a forfeiture
of the charter. The failure to elect officers at the proper
time does not dissolve the corporation.
No dissolution is allowable to a corporation that has
ceased to use its franchises or powers, or which has been
assigned to others, unless all the corporate property has
been appropriated to the payment of its debts.'
All corporations whose charters expire by limitation or
are annulled by forfeiture or dissolved for any other cause,
exist as bodies corporate for the term of five years after such
dissolution, for the purpose of settling up their business.²
Upon the dissolution, the managers of its business at the
time of dissolution, by whatever name known, become the
trustees for the stockholders and creditors, and are author-
ized to settle the affairs of the company.3 On application
to a chancery court the time may be extended beyond
five years to such length of time as the court may judge
necessary. The remedy in equity to administer the assets
of insolvent corporations is clear, and a company may
cease to exist in this manner.
5
Foreign corporations. -The laws of Tennessee provide
that only foreign corporations organized to do a mining or
manufacturing business may become incorporated in this
state or employ their franchises here without incorpora-
tion, after complying with certain named conditions, but
no provision is made for the corporations here discussed.
They may by the comity of states make contracts here, but
the general franchises conferred by their charters can not
be exercised."
SUBDIVISION III.-FRANCHISES.
How obtained. The constitution provides that no
corporation shall be created or its powers increased or
¹ Code, 1858, sec. 1492.
* Code, 1858, sec. 1496.
2 Laws, 1887, ch. 197. ³ Code, 1858, sec. 1494.
5 Railroad v. Kyle, 9 Lea, 696, and other cases.
6 Ohio Life Insurance Co. r. Merchants' Ins. Co., 11 Hum. 25; Lane
v. Bank, 9 Heis. 436.
1926
ECONOMIC LEGISLATION.
diminished by special laws, but the general assembly
shall provide by general laws for the organization
of all corporations hereafter created.¹ While munici-
palities can not confer corporate franchises, there are cer-
tain grants of power commonly called municipal franchises,
which may be and are conferred by municipal au-
thorities.
Gas companies are authorized and empowered to lay
down pipes and extend conductors through the streets, etc.,
in such a manner, however, as to produce the least incon-
venience to the city or inhabitants, and to take up pave-
ments and sidewalks, and they must repair the same with
the least possible delay; but it is provided that no one of
the streets or alleys of the city can be entered upon or
used by the company for laying pipes or otherwise until
the consent of the municipal authorities has been obtained,
and an ordinance has been passed prescribing the terms on
which the same may be done.2
Street railways, electric light companies, and telephone
companies are authorized to carry on their business, but
in every instance the consent of the city authorities by
ordinance must first be obtained before the streets and
alleys are used, and the consent of the county authorities
where the extension is made beyond the city limits.
Water companies, before taking out a charter, are first
required to obtain the consent of the corporate authorities
of the city or town in which it is proposed to operate,
that they may do so, and such leave must be certified by
the mayor and recorder upon the application for the char-
ter, and registered with it.3
Powers of municipalities as to.-Nearly all of the
cities and towns in the state have been specially chartered.
The constitutional provision prohibiting the creation of
any corporation by special law has been declared not to
apply to municipal corporations; therefore, in determin-
1 Const., Art. XI, sec. 8.
3 Laws, 1877, ch. 104.
4
2 Laws, 1875, ch. 142.
* State v. Wilson, 12 Lea, 247.
TENNESSEE.
1927
ing the limitations upon the power of any municipality,
the charter must be looked to-it has the right to exercise
all the powers delegated by the charter. Any act done by
those acting under the charter, inconsistent with the pro-
visions of the charter, the constitution, or the laws of the
land, is void.¹
The charter of a city is its constitution, and the rule of
strict construction prevails in regard to the power of a
city thereunder. It is well settled in this state that a mu-
nicipal corporation can exercise no powers but such as are
expressly granted to it, and such as are the result of nec-
essary and proper implication.2
Limitations.-The right of granting a franchise or an
exclusive privilege to individuals is by the constitution of
the state vested in the legislature, and it can not delegate
it to a municipality.'
Cities and towns may consent to the exercise of such
franchises as may by general law have already been given
to franchise companies, but they can not clothe such com-
panies with new and additional franchises. They may re-
fuse their consent to the exercise of franchises granted,
or modify and control their use.
Control of streets.-Every municipality is the proprie-
tor of the public streets, which it holds as easements in
trust for the convenience of the citizens.3 It can not alien
them, and no laches on its part or on that of its officers
can defeat the right of the public thereto.*
In the use of the police power given to towns and
cities to control the use of their streets and alleys, they
may make reasonable laws for the regulation of the speed
of travel, the route, or streets over which street rail-
ways may run, on which electric and telephone wires may
1
Memphis City R. R. Co. v. Mayor, etc., of Memphis, + Cold. 414.
2 Mayor, etc., v. Dixon, 8 Heis. 869; Memphis . Gayoso Gas Co., 9
Heis. 533.
3 Humes v. Mayor, etc., 1 Hum. 403; Mayor, etc., v. Brown, 9 Heis. 2.
' Dennis v. Rainey, 8 Bax. 504.
ECONOMIC LEGISLATION.
1928
be strung or laid, duration of the grant to use the streets,
and such other regulations as the public safety and con-
venience may require.
Special damages; property owners' rights.—As to
gas and water companies the statute provides that nothing
in the charter shall be so construed as to absolve the com-
pany, its officers or agents, from any legal proceedings to
restrain or abate any nuisance arising from such works or
operation.¹
The use of streets by telephone, electric light compa-
nies, and street railway companies operated by animal or
cable power or by electricity, does not create an additional
burden or servitude upon the street, for which abutting
owners, or the owners of the ultimate fee, may be entitled
to recover for damages. But in the case of a street rail-
way whose cars are propelled by a dummy steam engine,
it is an additional burden or servitude upon the street, and
a party owning the ultimate fee, or whose line extends to
the center of the street and not to its margin, may recover
compensation as for a taking of his property for public
use.³
Condemnation of property.-Street railway companies.
are empowered to condemn a right of way over any road
or turnpike leading into the city, but not nearer than one
fourth of a mile to a toll-gate on said turnpike, or road, and
they must conform to the grade already established by the
turnpike. They also possess the same power of eminent
domain as to private property of individuals outside of
the city limits as are enjoyed by steam railroads and turn-
pikes.5
4
Duration of franchise.-The cities and, towns may
make such limitations as to the time for which a company
may exercise its franchises as they may deem proper. The
' Laws, 1877, ch. 176; Laws, 1875, ch. 142.
* Smith v. Street Railroad, 87 Tenn. 626.
3 Street Railway Co. v. Doyle, 88 Tenn. 747.
* Laws, 1887, ch. 15.
5 Laws, 1889, ch. 149.
TENNESSEE.
1929
right to use its streets for a given time may be granted for
a consideration, and at the expiration of the time the right
to a renewal upon other and different considerations may
be required.
Refusal to grant a franchise.-A municipality may
refuse to grant a right of way over or through its streets
and alleys to a gas company, electric light company, street
railway, and water-works company, and without this per-
mission such companies are powerless to proceed.
The city legislature, it is believed, are the sole judges as
to the propriety of the refusal to grant a right of way to
the companies named, and their action is not the subject
of judicial revision.
1
Perpetual and exclusive franchises.-The present
constitution of the state prohibits perpetuities and monop-
olies. This provision was likewise found in the two pre-
vious constitutions, and received judicial construction in
the case of the City of Memphis . The City of Memphis
Water-Works Company, 5 Heis. 529.
The legislature by special act chartered the Memphis
Water-Works Company, granting to it succession for
ninety-nine years, and the exclusive privilege of supplying
the city and citizens of Memphis with water for thirty
years. In a legal contest with the city, these provisions.
of the charter were declared not to contravene the article
of the constitution above named.
The statutes now in force nowhere provide for granting
exclusive franchises to any class of corporations. The
legislature may, in its discretion, clothe any city or town
with authority to grant an exclusive municipal franchise;
but without this direct authority it can not be done.
The right of succession in corporations created under ex-
isting laws is perpetual, subject, nevertheless, to the right
of the legislature to repeal all, or any class of charters by
general enactment; whether the charter of any particular
¹ Const., Art. I, sec. 22.
VOL. II-41
1930
ECONOMIC LEGISLATION.
private corporation can be singled out and repealed by
special enactment, is doubtful, in view of the constitu-
tional provision that the powers of no corporation shall be
increased or diminished by special laws; whether an out
and out repeal of the charter would be a diminution of its
powers within the meaning of this clause, is yet a subject
for future judicial construction.
Conflicting grants.-Charters are frequently taken out
by rival companies, allowing for the use of the same streets
or territory. Inasmuch as the consent of the cities and
towns must first be obtained before any of the franchise.
companies under discussion can be allowed to work their
franchises they thus become the arbiters for such compa-
nies and determine which shall have the right to exercise
its franchises.
In many of the ordinances made by the city of Nash-
ville relating to these companies in case of conflict, the
board of public works and affairs are made the arbitra-
tors. Telephone and electric light companies are made to
use, in some instances, the same poles.
Charges for franchises.-The state exacts no consid-
eration for the grant of corporate franchises to the class
of companies under discussion; the various cities and
towns exact such terms as they see proper, and as the com-
panies will submit to, for the grant of municipal fran-
chises. The city of Nashville, in the matter of street rail-
ways, has been quite exacting and thrifty. The compa-
nies pay so much per car operated; they have been
required to build new and expensive streets, to maintain
the street between the rails and for one foot on each side;
and to maintain a certain number of electric lights along
the line of road, among other considerations.
Methods of construction. The statute with reference
to gas and water companies requires that the works and
operations of the company shall be so constructed and
managed that no annoyance shall accrue therefrom to the
health and comfort of the inhabitants of the town where
į
TENNESSEE.
1931
located, and nothing in the charter is to be so construed
as to absolve the company, its officers or agents from any
legal proceeding to restrain or abate any nuisance arising
from such works or operation. Gas companies, in laying
down their pipes, etc., through the streets, must do so in
such a manner as to produce the least inconvenience to
the city or the inhabitants, and must repair all pavements
and sidewalks taken up with the least possible delay.¹
The weight and kind of rail to be used by an electric
railway may be determined by it, subject to the consent
of the city authorities, and the track must be so laid as
not to obstruct or interfere with the passage of vehicles.
when crossing the tracks of said company;2 all other
street railways are required to use the tram rail, of such
description as to obviate danger of injuring wheels or
axles of vehicles passing along and crossing said railroad
tracks. The right is reserved to the city to regulate the
position of the switches in such manner as not to inter-
fere with public travel.³
1
Very many conditions are imposed by the cities as to
manner of construction, material used, etc., by street rail-
ways, telephone and electric light companies. The city
of Nashville has a regular code of rules regarding electric
light and electric power service and a city electrician
making constant inspection; the kind of wire and char-
acter of insulation used is under the control of the board
of public works and the city electrician. Memphis, Knox-
ville, and Chattanooga have likewise more or less restric-
tive regulations governing street railways, electric light
and telephone companies.
Regulations as to service.-It is declared to be the
duty of gas and water eompanies to build works of
sufficient capacity to supply the corporate authorities.
and inhabitants of the town or village where located.'
Laws, 1875, ch. 142.
9 Laws, 1889, ch. 70.
2 Laws, 1891, p. 34 ch. 9.
1932
ECONOMIC LEGISLATION.
"
This provision is regarded as directory and not manda-
tory.
A penalty of $500.00, besides the payment of all dam-
ages, is imposed for injuring or destroying any portion of
the property of a gas company, or willfully opening a
communication into the street or other gas or water pipe,
or letting on gas or water after it has been stopped by the
company. Provisions are also made against the pollution.
stream or reservoir from which water is obtained
1
of
any
or carried.
Gas companies, in addition to the manufacture of gas
from coal, are authorized and empowered to manufacture
and vend gas made from any and all the substances or
combinations thereof from which inflammable gas is now
or may hereafter be obtained.²
4
Street railway companies are authorized to use animal
power or steam dummy engine,3" cable car power," elec-
tricity, or may use a stationary steam engine; but the
city's consent must be obtained before a change can be
made from the use of one to another. The limitation to
the use of the dummy engine is that it must not give off
either smoke or steam so as to annoy or frighten either
persons or animals; the company is at liberty to choose
the gauge of the road, but only passengers and their per-
sonal baggage can be transported.5 Priority of possession.
of the track is always given fire engines and apparatus;
all other vehicles must, at a proper signal, yield the right
of way, and any willful obstruction by any person is made
a misdemeanor.5
Gas companies are authorized to charge a reasonable
price for gas, not higher than that charged by compa-
nies chartered prior to the act of 1875, and in any event
not more than one cent per cubic foot, as may be indicated
by meter, or "computed by the ordinary rules in such
¹ Laws, 1875, ch. 142, sec. 35.
'Laws, 1875, ch. 142.
5 Laws, 1891, p. 34, ch. 9.
2 Laws, 1889, ch. 240.
Laws, 1877, ch. 65.
TENNESSEE.
1933
cases;" nor are they allowed to charge the municipal
authorities more per cubic foot than they are getting at
the same time from the people.¹
No statutory limit has been placed upon the prices to
be charged by electric light and power companies or by
telephone companies. Street railway companies are re-
quired to carry passengers and personal baggage at a uni-
form price per head, which must not exceed the sum of
ten cents or the fractional part thereof from one to the
other terminus of the road.2
Water companies may contract with municipal authori-
ties and with the inhabitants of the city or town for the
use of water, and charge such rates as may be mutually
agreed upon, and consumers are subject to all reasonable
rules and regulations made by the company respecting the
use and waste of water. This right of mutual contract
is, however, subject to the right of the municipal authori-
ties at any time to regulate by ordinance the price of water
supplied by the company.¹
It is lawful for the legislature to empower the cities.
and towns of the state to regulate by ordinance the price
charged by all the foregoing mentioned companies that
have been or may be chartered since the passage of the
"charter act" of 1875. As yet no such power has been
given.
Discrimination in service; refusal to render service.
Equality is law in the matter of service by the street rail-
way companies, and they are not allowed to discriminate.
Special or wholesale rates may be made. by gas, electric
light, telephone, and water companies, as they may see
proper.
No company may refuse to render service to a citizen
under similar conditions as rendered to other citizens.
The common law prevails, and a company performing
service for the public must perform that service for any
¹ Laws, 1875, ch. 142.
2 Laws, 1875, ch. 142, sec. 13.
1934
ECONOMIC LEGISLATION.
!
individual member of it who is willing and offers to com-
ply with their terms.
In the matter of extending lines or mains into new ter-
ritory, it is left to the discretion of the companies. An
exception to this would probably be found in gas and
water companies, if it were shown that they had the
financial ability to make the extension, and could not offer
other valid excuse for the refusal.
Safety of life and property.-The cities and towns, in
granting the use of their streets and alleys, make such
conditions regarding the protection of life and property
as they deem material and best, and frequently they are
quite exacting and restrictive in character.
State and municipal aid.-The constitution provides
that the state shall not lend or give its credit to any per-
son or corporation, or become a stockholder therein, and
that the credit of no city or town shall be given or loaned
to any corporation except upon an election held and the
assent of three-fourths of the votes cast at said election;
nor shall any city or town become a stockholder with
others in any company or corporation except upon a like
election and the assent of the like majority.'
Public service.-The statutes of the state are silent on
the subject of the length of time a contract can be made
for public service between a municipal corporation and a
private corporation. To determine this, the charter of
each city and town must be closely studied. The power
conferred upon a municipal corporation is in trust for the
benefit of all the citizens of the town, and must be ex-
ercised with discretion.2
Contracts for public service should be made by ordi-
nance regularly passed by the city legislature and approved
by the mayor. The contract and ordinance should show
2
¹ Const., Art. II, sec. 29.
* Memphis v. Adams et al., 9 Heis. 524; Mayor, etc., v. Hagan, 9 Bax.
:
496.
TENNESSEE.
1935
the necessary conditions to be complied with by the con-
tracting company.
See also under "POWERS OF MUNICIPALITIES AS TO."
Alteration, amendment, etc., of franchises.-See
under "AMENDMENT, REPEALS, ETC.," above. Regarding
municipal franchises, these are mainly the subject of con-
tract between the cities and incorporated companies, and
may be altered, repealed, or modified as they may mutu-
tually agree.
In many of the grants made to franchise companies by
the municipalities of this state, the right of forfeiting or
repealing the grant is reserved, and such an ordinance ac-
cepted by the company makes the reservation a part of
the contract.
Assignment of franchise.-The franchise to be a cor-
poration is not the subject of sale and transfer, unless by
some positive provision of the statute law, pointing out
the mode in which the transfer may be made.¹ The fran-
chises to build or own and manage a railroad and take
tolls thereon are not necessarily corporate rights. They
are capable of existing in and being enjoyed by natural
persons, and there is nothing in their nature inconsistent
with their being assignable.
In the case of The State v. Butler et al., 15 Lea, 104,
which was a proceeding by a back tax collector to recover
taxes from what was known as the Bank of Commerce,
and which was claiming an exemption from all taxes ex-
cept a tax of one-half per cent on its capital stock by vir-
tue of its charter, granted February 23, 1856, the court
held that such a franchise was not assignable without the
consent of the grantor, the state, but that where franchises
conferred on corporations appertain to the use of particu-
lar property, every fair presumption will be made in favor
of the grant of authority by the legislature to transfer
franchises of this character in connection with the prop-
¹Ragan & Buffet v. Aiken, 9 Lea, 614.
1936
ECONOMIC LEGISLATION.
erty to which they belong, and cited with approval Mora-
witz on Private Corporations, sec. 540, to the same effect.
Under the general powers granted by the corporation
act of 1875 to franchise companies to execute a mortgage,
it has always been regarded by the public, and so consid-
ered by the courts, that a company could mortgage its
franchises, and under a foreclosure sale the vendee might
acquire them.
Consolidation of franchise.-See "CONSOLIDATION OF
COMPANIES."
SUBDIVISION IV.—MUNICIPAL OWNERSHIP.
Historical.—It was not until about the year 1815 that
Tennessee began to incorporate any of its cities and
towns.
Prior to that time, they were first governed by special
commissioners appointed by the legislature, and later by
the county courts. These commissioners were given the
authority to levy taxes for town purposes, and little other
power. In many instances the commissioners of the va-
rious towns were empowered to bring water into the
towns from the vicinity, and likewise to sink wells and
maintain pumps. The following clause was usually con-
tained in all acts creating commissioners: "That no ap-
propriation of money shall be made by said commissioners,
except for the benefit or improvements of said town agree-
able to the directions of this act."
The city of Nashville, the first town incorporated,
being desirous of bringing water into the town, got per-
mission from the legislature to raise money for this pur-
pose by a lottery scheme, and her aldermen, to insure its
success, on the same day, had a law passed making it a
misdemeanor to create a private lottery. Up to this time,
namely, 1809, and for a good many years afterward, in
fact up to the adoption of the constitution of 1834, which
contained a clause prohibiting lotteries, it was very com-
mon, when a public improvement was needed, to raise the
TENNESSEE.
1937
money by a lottery to pay for it. In this way many of
the jails were built. The city of Nashville also, in 1827,
got permission to build water-works and provide a town
clock, and to raise the money was allowed to work a lot-
tery, and again, to insure its success, on the same day,
had a law passed making it a misdemeanor to create a
private lottery.
The town of Franklin was incorporated October 9, 1815,
and its charter is a fair sample of those granted by the
legislature at that time. The corporation of Franklin was
given power and authority to enact and pass laws and or-
dinances necessary to preserve the health of the town, pre-
vent and remove nuisances, establish night watches, locate
streets and alleys; to regulate auctions; to prohibit gaming,
regulate theatricals; to pave and keep in repair streets; to
erect and regulate markets, fire companies, sweeping chim-
neys; "to erect and regulate pumps on the public square,
streets, and alley, or convey water from the vicinity into
the town; to impose fines, regulate tippling houses, levy
and collect taxes for corporate purposes, and pass all laws
and ordinances necessary to carry the intent and meaning
of the act into effect."
The town of Chattanooga, now a growing city, was in-
corporated December 20, 1839. As regards lights, the in-
corporation was empowered to erect, and maintain street
lamps, evidently having reference to the use of oil lamps.
As to water, it was empowered to dig wells and otherwise
to erect and regulate pumps in the streets.
A very common provision found in the charter of nearly
all towns was that empowering the town authorities to
compel the sweeping of the chimneys of the houses.
No opposition has ever been made in this state to grant-
ing cities and towns the right to construct and own their
water-works, or works having for their objects the light-
ing of the streets and public buildings. Many of the ear-
lier charters gave the right to establish water-works.
1938
ECONOMIC LEGISLATION.
The charter of the Nashville Gas Company, granted
November 21, 1849, provides that the city of Nashville
may become the purchaser of the works at any time after
January 1, 1870.
Municipal ownership of gas or electric light works is
not a favored principle in Tennessee, judging from the
very small number of cities and towns that have asked for
the privilege. The ownership of water-works is not un-
common.
The town of Pulaski, by an act of March 27, 1891, is
given power to erect gas or electric light works, and to
furnish lights to its citizens for domestic, business, and
church uses.
The town of Gallatin, by an act of March 24, 1891, is
given authority to issue bonds and build electric light
works, "to be used in lighting the towns with electricity,
but no other purpose." The towns of Athens, Harriman,
and Greenfield, by acts of March, 1891, were empowered
"to provide for lighting the streets or public grounds by
gas or electricity, and to erect lamp posts, electric towers,
or other apparatus." This would legally justify municipal
ownership.
The towns of Cumberland Gap, Lynchburg, and Ruth-
erford were empowered by acts of March, 1891, to pro-
vide for lighting the streets and public buildings and
places. This power would impliedly admit of the con-
struction and ownership of its own works.
The city of Jackson, by the act of March 18, 1891, was
given the power to issue bonds and to purchase with the
proceeds an electric light plant for the city. The city of
Nashville was, by the legislature of 1891, empowered to
issue bonds, and build gas and electric light works and
operate them. It would seem, however, from the wording
of the two acts, that the works can only be used for public
lighting, and not to supply private consumers.
The town of Paris, by act of March 20, 1891, was em-
powered to issue bonds and build gas or electric light plant
TENNESSEE.
1939
for lighting the city, with consent of three-fourths of the
votes cast at an election to determine whether the bonds
shall be issued and works built.
The legislature of 1891 rather marks an era in grants
of powers to cities and towns for the construction of gas
and electric light works. With the exception of the grant
to the town of Pulaski, all the others seem to limit the
authority to supply for municipal purposes alone, and do
not include the right of supplying the citizens. The un-
usual liberality of the legislature of 1891 is due largely
to the fact of a warfare existing between the gas com-
pany and the city and citizens of Nashville, which was
waged during the sitting of the legislature. The question
of the city owning its own plant was agitated through the
public press, and the idea proved to be contagious with
the smaller towns.
1
Power to erect and purchase.-The charter of a city
is its constitution, and the rule of strict construction pre-
vails in regard to the powers of a city thereunder. It is
well settled in this state that a municipal corporation can
exercise no powers but such as are expressly granted to it,
and such as are the result of necessary and proper impli-
cation. While the rule of strict construction prevails in
regard to the powers of a municipal corporation, the
courts may be regarded as pretty liberal in deciding what
objects are within corporate purposes. The leading case
in the state is that of Nichol v. Mayor of Nashville, 9
Hum. 268, the opinion of the court having been prepared
by the most distinguished jurist that has ever ornamented
the bench of the state, Judge Turley. He says: “Corpo-
ration purposes are or may be made as numerous and di-
versified as may be found requisite by experience to pro-
mote the peace, health, comfort, and prosperity of its
1
¹ Mayor, etc., v. Dixon, 8 Heis. 869; Memphis v. Memphis Gayoso Gas
Co., 9 Heis, 533.
ECONOMIC LEGISLATION.
1940
""
corporators, and any thing which promotes these things
is or may be constituted a legitimate corporate purpose.'
In this case a subscription to a steam railroad was held
good.
1
2
The erection of water-works has been held to be for:
corporate purposes; so also money appropriated in aid
of a college situated on land adjoining the city, and
the erection of hospitals and pest-houses outside of the
city.
The court, in the case of the City of Memphis v. The
Memphis Water Company, 5 Heis. 528, said that "the
erection of water-works, to supply a city and inhabitants
with water, falls naturally and legitimately within the
ordinary powers of its charter of incorporation; and the
exercise of this power within the limits of its charter needs
no enabling act by the legislature. It is therefore one of
the powers of the corporation subject to amendment, modi-
fication, limitation or revocation by the legislature," the
city having failed to avail itself of its charter privilege,
the legislature granted to the Memphis Water Company
the exclusive right for thirty years of supplying water to
the citizens, and thereby repealed or revoked the power
of the city itself to do so.
The act of 1875, chap. 92, provides for the incorporation
of towns of not less than 5,000 and not more than 20,000
inhabitants. It is a general statute, and all corporations
organized under it are given power to build water-works,
and gas or electric light works for strictly municipal pur-
poses; while gas and electric light works are not specifi-
cally named, yet under the powers mentioned for the erec-
tion and lighting lamps in public buildings and elsewhere,
the courts would no doubt construe these as giving the
right to erect works for that purpose.
No city can make a valid issue of bonds without previous
¹ Memphis v. Memphis Water Co., 5 Heis. 525.
2 East Tenn. University v. Knoxville, 6 Bax. 167.
TENNESSEE.
1941
legislative sanction from the state, and in granting per-
mission it is frequently required that the consent of three-
fourths of the voters casting ballots be first obtained. The
municipality can only issue bonds of such denomination
and at such rate of interest as the legislature may author-
ize; bonds for a greater denomination or for an increased
rate of interest would be void. A law authorizing the
issuance of bonds must be strictly construed and pursued;
it has been held that an act of the legislature authorizing
a municipal corporation to subscribe for stock in a rail-
road, and "to lay and collect taxes to pay interest on the
bonds which may be issued" does not confer authority to
issue bonds.¹
1
A municipal corporation is not limited to the same rate
of taxation as fixed by the state, and the money to pay for
public improvements may be raised by taxation if deemed
advisable. The power of contracting for such public im-
provements as gas, water or electric light works can only
be exercised by the governing legislative body of such
corporation, or by other agents of such corporation, in
pursuance of authority given from such governing body in
the form of an ordinance, or legislative enactment of such
body, or in the pursuance of powers granted or conferred
in the charter by the legislature.2
Power to appropriate property for. The right of
eminent domain belongs in general to municipal corpora-
tions to be exercised in the same mode prescribed for the
state.3
The measure of damage for the taking of private prop-
erty under the power of eminent domain is the fair cash
value of the land taken as if the owner were willing to
sell and the corporation to buy that particular quantity at
that place and in that form.*
¹ Milan v. Railroad, 11 Lea, 330.
¹ Mayor v. Hagan, 9 Bax. 495; Nashville v. Toney, 10 Lea, 651.
Memphis v. Bolton, 9 Heis. 508.
• Woodfolk . N. & C. R. R., 2 Swan, 437.
&
1942
ECONOMIC LEGISLATION.
No power exists on the part of a municipal corpora-
tion under the right of eminent domain to condemn,
and take for public use the property of private parties
or corporations, carrying on a similar industry or business
to that desired to be carried on by the municipal corpo-
ration.
Examples of the exercise of ownership.-No city or
town in Tennessee owns or operates a street railway.
Nashville is the only city that owns its water-works.
Memphis, Knoxville, Chattanooga, and Jackson are sup-
plied by private companies.
The smaller towns either have no water-works at all or
are supplied by individuals or companies.
No city in the state owns a lighting plant. Pulaski, a
town of about 3,000 inhabitants, has within the past year
constructed an electric light plant for municipal lighting
and private consumption.
Economic results.-The first water-works built by the
city of Nashville was in 1832-population at that time
about 6,000. The present population is 80,000 or more.
A new water-works system has been built within the
past three years, and in its entirety has been in operation
only a few months. The entire bonded indebtedness on
the plant, which represents its cost, is $1,400,000 secured
by a mortgage upon the works; the interest upon these
bonds amounts to $72,000 per annum, while the operating
expenses in round numbers is $52,000 per annum, making
a total charge of $124,000. The revenues from the water-
works for the year ending October 1, 1891, amounted in
round numbers to $124,500.
A critical examination of the disbursements will in all
probability show that the amount here given for operating
expenses is much too low, and that the works are not really
self-sustaining; however, in the estimate of receipts, the
actual cash revenue is given, and no charge or allowance
is made for water supplied for municipal services, or to
TENNESSEE.
1943
¡
many charitable institutions and churches which are given
water free of cost. The supply is liberal and of good
quality.
It is not the policy of the city to exact a greater tax or
charge from the inhabitants than will pay the operating
expenses, interest upon bonds, and a reasonable fund for ex-
tensions. The charge to a family consisting of a half dozen
persons using bath-tub, etc., is about $28.00 per annum.
In addition to this a property tax is levied, to pay inter-
est on bonds; out of a levy of fifteen mills upon the assessed
value of all property, three mills are set aside for a sinking
fund, and to pay interest upon bonds. The water-works
bonds constitute about one-half of the entire bonded in-
debtedness, so in addition to the direct consumption tax, a
property tax of about one and one-half mills is required of
the inhabitants to support the water-works.
As regards the efficiency and management of the water-
works we can not probably do better than to quote from
the report of an English expert recently made, on a tour
of inspection of water-works in the United States:
(6
Surrounding circumstances considered, the present
water supply of the city of Nashville, Tenn., is surpassed
by only two in the United States and one in Europe; and
from the present indications and improvements contem-
plated, bids fair to stand without a rival.
66
My observation has been that the secret of the failure
of municipal corporations throughout the United States.
to successfully operate water-works arises from the fact
that its management is more frequently made subservient
to partisan manipulation than public service. The com-
missioners, superintendents, and others in control are se-
lected more for their political prestige than executive or
mechanical ability, and the entire workings of the depart-
ment are subject to complete revolution with each suc-
ceeding election. Happily, however, for the public, the
city of Nashville is an exception to the rule, and the work-
ings of the department, so far as I can judge, show a degree
1944
ECONOMIC LEGISLATION.
of capability and strict attention to duty by all connected
therewith equal to that exacted by the most conservative
private water companies."
Regarding the economical results obtained by the opera-
tion of an electric light plant by the town of Pulaski,
nothing can as yet be said, as it has been in operation only
about three months. The total cost of the plant was about
$10,000, for which bonds were issued.
F
TEXAS.¹
EDITED BY WILLIAM M. WALTON, ATT'Y, AUSTIN, TEXAS.
SUBDIVISION I.—HISTORICAL.
Prior to 1821, Texas, as a part of Mexico, belonged to
the monarchy of Spain.
From 1812 to 1821, Mexico was in revolution against
Spain. In the later year its independence was achieved,
and on the 4th of October, 1824, the federated states of Mex-
ico adopted a constitution. At this time Texas was fed-
erated with Coahuila, and together they constituted one
of the Mexican states.
From 1832 to 1836, Texas was, independent of Coahuila,
in revolution against Mexico, and on the 2d of March, 1836,
made a formal declaration of its independence of Mexico,
and on the 16th of the same month the constitution of
the Republic of Texas was adopted. On the 21st of
April following, the battle of San Jacinto was fought and
won, which ended the revolution, and Texas was soon aft-
erward acknowledged to be independent by England,
France, the United States of the North, and other
countries.
Texas remained an independent republic until the 29th
of December, 1845, at which time it was admitted into the
sisterhood of states of the American Union under the con-
stitution of August 27, 1845. This constitution, with a
few amendments, continued in force until the ordinance of
¹ Unless otherwise stated, references to the constitution are to that of
1876. References to the statutes are to the Revised Statutes of Texas,
edited by John Sayles, by article simply. As to state reports, see Ap-
pendix "A.”
(1945)
VOL. II-42
1946
ECONOMIC LEGISLATION.
secession from the United States, preparatory to joining the
Southern Confederacy, in February, 1861. On March 5,
1861, Texas formally, by ordinance, applied for admission
into the Southern Confederacy, under its constitution of
1861. This constitution, adopted in 1861, made but slight
changes from that of 1845, simply to conform to its new
surroundings.
After the war, in 1866, the constitution of that year
was adopted, conforming as nearly as the temper of the
times would permit, to the policy of reconstruction pro-
mulgated by President Johnson.
On March 2, 1867, the reconstruction acts were passed,
which, in connection with military orders, dismantled the
state government and placed it under military authority.
This condition of things continued until the constitution.
of July, 1869, was adopted under the auspices of the mili-
tary of the United States. Under this constitution the
affairs of state were conducted until February 15, 1876,
when the present organic law went into force, which, with
some amendments thereto, is the constitution of Texas at
this time.
Prior to 1871, charters were granted only by the legis-
lature. In that year, a general act was passed and incor-
porated into the statutes, authorizing, governing, and lim-
iting charters for private purposes. In 1876, a similar stat-
ute was enacted in regard to railroads. In this state there
has been no particular or fixed policy in regard to corpora-
tions; therefore, there could have been no material change
of policy. In the past, as at the present, the practice has
been to grant charters liberally, with enlarged powers, for
long periods, but at the same time throwing around them
guards, limitations, and restrictions, having in view a dual
purpose: 1st. Guarding them in their corporate rights;
and, 2d. Restraining them inside the powers, conferred
by law.
TEXAS.
1947
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation, how obtained. The constitution pro-
vides that no private corporation shall be created except
by general laws; and that general laws shall be enacted
providing for the creation of private corporations, and
shall therein provide fully for the adequate protection of
the public and the individual stockholders.'
Under these provisions the Revised Statutes of Texas,
the statutory laws now in force, were enacted.
2
Articles of incorporation.-Private corporations may
be created by the voluntary association of three or more.
persons for the purpose, among other things, of construct-
ing telephone and telegraph lines, supplying water to the
public, manufacturing and supplying gas, or supplying
light and heat to the public, by any means, constructing
and maintaining street railways.3
The charter or articles of association must be subscribed
by at least three persons, two of whom must be citizens
of the State of Texas; and must be acknowledged by the
signers before an officer authorized to take acknowledg-
ments of deeds. (Such as notaries public, clerks of courts
of record, etc.)*
Must show what.-The charter or articles of incorporation
must set forth the purpose for which the corporation is
formed, the place or places where its business is to be per-
formed, the term for which it is to exist, the number of its
directors or trustees, and the names and residences of those
who are appointees for the first year, the amount of its capi-
tal stock, and the number of shares into which it is divided."
Filing. The charter when so framed is filed in the
office of the secretary of state, where it must be recorded,
and the original kept as an archive of the office. Copies
of the charter duly certified are admissible in evidence in
all the courts of the state."
¹ Const., Art. XII, secs 1, 2.
Art. 568.
2 Art. 565.
9 Art. 566.
• Art. 567.
• Arts. 569, 570.
1948
ECONOMIC LEGISLATION.
Organization; preliminary requirements.-The ex-
istence of the corporation commences from the date of the
filing of the charter in the office of the secretary of state.'
The existence of the corporation, or the legality of the
corporate organization, can not be denied in any collateral
proceeding. Thus, if one contract with an ostensible cor-
poration, he may not deny its legal existence when sued
on the contract.³
2
Commencing business.-Active work under the char-
ter must begin within three years after filing the articles
of incorporation.
Fees. For each charter of incorporation, amendment
thereof, or supplement thereto, intended for mutual profit.
or benefit, a fee of $25 is provided; if the authorized cap-
ital stock exceed $10,000, an additional $5 for each addi-
tional $10,000 of authorized capital stock or fractional
part thereof is required.*
For every charter, amendment thereof, or supplement
thereto, for a magnetic telegraph line or street railway, a
fee of $100 is provided; but if the capital stock exceeds
$100,000, it must pay $25 additional for each additional
$100,000 of authorized capital stock or fractional part
thereof.¹
Amendments, repeals, etc.-The power to amend or
repeal the charters of corporations is not reserved to the
legislature in this state.
It is held in this state that a charter of a corporation is
not a contract within the meaning of the clause of the con-
stitution which prohibits the passage of any law impairing
the obligation of contracts.5
Charters may be amended by filing the amendments
desired with the secretary of state, authenticated in the
¹ Arts. 569, 570.
2 Art. 598.
3 Stubbs v. The City of Galveston, 3 Texas Ct. App. Civil Cases; secs.
143, et seq., bottom p. 183.
* Art. 2374a.
5 State v. S. P. R. R. Co., 24 Texas, 80 et seq.
TEXAS.
1949
same manner as if the application were for a charter in
the first instance.¹
If the amendments are to a charter granted by the leg-
islature (when that body had the power to grant charters),
the orginal charter and all legislative amendments thereto
must also be filed with the new amendments proposed;
all of which must be recorded in the office of the secretary
of state, and will be of force from their filing.¹
Amendments must be germane to the objects of the
original charter, or they will be of no effect. There can
be no change of object, though there may be a change of
method of accomplishing objects, such as substituting
electricity or steam for animal or water-power, or vice
versa.¹
Duration of charter.-Corporate existence is limited
to a period not to exceed fifty years, but unless the time
is stated in the articles, the life of the company can not
exceed twenty years.2
Objects. The articles of incorporation must state the
purposes for which it is formed. As to change of these ob-
jects, etc., see under "AMENDMENTS, REPEALS, ETC.," above.
Powers.-A company incorporated under the general
law acquires thereby no other rights than corporate exist-
ence, and no powers except those the law declares the
corporation may exercise, and such as are necessary and
proper for the carrying on the business contemplated and
authorized by the charter.3
Every corporation, as such, has power to have succes-
sion by its corporate name for the period limited; to main-
tain and defend judicial proceedings; to make and use a
common seal; to hold, purchase, sell, mortgage, or other-
wise convey such real and personal estate as the powers
of the corporation may require; and also to take, hold,
and convey such other property, real, personal, and mixed,
as may be requisite for such corporation to acquire in or-
1 Arts. 571, 572.
2 Art. 575.
9 Fort Worth Ry. e. Rosedale Ry., 68 Texas, 169.
1950
ECONOMIC LEGISLATION.
der to obtain or secure the payment of any indebtednes or
liability due or belonging to the corporation; to appoint
and remove such subordinate officers and agents as the
business of the corporation requires, and allow them a
suitable compensation; to make by-laws and regulations
for the management of its business, not inconsistent with
the existing state laws; to enter into all obligations or
transactions essential to the transaction of its authorized
business; to increase or diminish its board of directors or
trustees to not less than three nor more than thirteen;¹ to
increase the capital stock and borrow money, as shown
below.2
No corporation can employ its stock, means, assets, or
other property, directly or indirectly, for any other pur-
pose whatever than to accomplish the legitimate objects
of its creation.3
All bodies corporate may sue for, recover, and receive
from their respective members, all arrears or other debts,
dues, or other demands, which now are or hereafter may
be owing to them, in like mode, manner, or form as they
might sue for, recover, and receive the same from any per-
son not a member of their body.'
No misnomer of a corporation defeats or vitiates any
gift, grant, conveyance, devise, or bequest to the same."
Conveyance of land by a corporation may be made un-
der its corporate seal and signature of its president or
presiding officer, which, when acknowledged, is entitled
to record and has the same effect as deeds between indi-
viduals.6
By-laws. Every corporation has the power to make
by-laws and regulations for the management of its busi-
ness, not inconsistent with the laws of this state. All
by-laws are to be adopted by a majority of the directors,
¹ Art. 575.
2 Arts. 576, 577. See under "CAPITAL STOCK," and "Bonds, Debts,
ETC."
3 Art. 589.
• Art. 593.
5 Art. 598.
6 Art. 600.
7 Art. 578.
TEXAS.
1951
but may be amended at any general meeting called for the
purpose.¹
Officers; meetings; voting; quorum, etc.—Corpora-
tions have power to appoint and remove such subordinate
officers and agents as the business of the corporation may
require, and allow them a suitable compensation.2
A majority of the directors or trustees constitutes a
quorum and is competent to fill vacancies in the board
and to transact all business of the corporation. An an-
nual election must be held for directors or trustees at
such time and place as the by-laws of the corporation
require.3 The president, secretary and treasurer are elected
from the body of the directory.*
If, for any cause, a new directory is not elected at the
time appointed, a new time may be fixed and a legal elec-
tion then had in the manner prescribed by the by-laws."
The directors have the general management of the af
fairs of the corporation and may dispose of any residue
of capital stock (unsubscribed for) in such manner as the
by-laws may prescribe."
The void election of one claiming under it to exercise
official functions for a corporation may be attacked col-
laterally.
3
The principal office of the corporation must be kept
in the state. A meeting of stockholders or any corpo-
rate act, as distinguished from the duties performed by
directors or agents, held or performed out of the state, is
of no effect and void; and directors elected at such meet-
ing are not de jure officers of the corporation. The legal
existence of a corporation is restricted to the limits of the
state, but this does not prevent it from transacting such
business beyond the state in which it had it origin, as is
usually performed by the agents of a corporation.7
1 Art 582.
5 Art. 583.
2
↑ Art. 575.
6 Art. 565.
3 Art. 579.
+ Art. 580.
7 Franco-Texan Land Co. v. Laigle, 59 Texas, 339.
8 Art. 597.
}
1952
ECONOMIC LEGISLATION.
Books. The directory of corporations must keep a
record of all their proceedings.'
The records of domestic corporations or certified copies.
thereof, signed by the president and secretary, are compe-
tent evidence in all courts where the corporation is a
party to the proceedings.2
Capital stock. The constitution provides that no cor-
poration shall issue stock, except for money paid, labor
done or property actually received.3 Corporations have
the power to open books of subscription to capital stock
when all its capital stock has not been subscribed for in
good faith. The books may be opened for receiving sub-
scriptions at such times and places as the majority of the
directors or trustees may determine, after giving at least
thirty days notice in a newspaper published or generally
circulated in one or more counties where the said books
are to be opened. The books may be kept open until all
the capital stock is subscribed for.*
The board of directors may require those who subscribe.
for stock to pay therefor in such manner and in such in-
stallments as the by-laws direct.5
If any stockholder neglect to pay any installment, as
required by the board of directors, the directors may de-
clare his stock and all previous payments forfeited to the
use of the company, but no stock can be forfeited until
the directors or trustees have caused a notice in writing,
to be served on him personally, or by depositing the same
in the post-office properly directed to him at the post-
office nearest his usual place of residence, stating that he
is required to make such payment at the time and place
specified in said notice, and that if he fails to make the
same, his stock and all previous payments thereon will be
forfeited to the use of the company, which notice must be
served at least thirty days previous to the day on which
such payment is required to be made.
1 Art. 586.
2 Art. 601.
3 Const., Art. XII, sec. 6.
• Art. 578.
5 Art. 590.
6 Art. 592.
TEXAS.
1953
Increase and decrease of.—The constitution declares that
all fictitious increase of stock shall be void.¹
1
All corporations have power to increase the capital stock
to any amount not exceeding double the amount of its au-
thorized capital, by a majority vote of the stockholders, in
conformity with the by-laws, that may have been adopted,
to govern the subject of voting. The increase of stock
must be duly certified to the secretary of state, and from
the date of filing the certificate the increase of stock be-
comes part of the capital stock.2
Transfer of.—Stock is personal property and is trans-
ferable only on the books of the corporation in such
manuer as the by-laws may prescribe.3
Bonds, debts, etc.-The constitution provides that no
corporation shall issue bonds except for money paid, labor
done or property actually received, and that all fictitious
increase of indebtedness shall be void.¹
Under the statute every corporation has power to hold,
purchase, sell, mortgage, or otherwise convey such real
and personal estate as the powers of the corporation may
require, and also to take, hold and convey such other
property real, personal or mixed, as is requisite to acquire,
in order to obtain or secure the payment of any indebted-
ness or liability due or belonging to the corporation; to
borrow money on its bonds or promissory notes not to ex-
ceed its authorized capital stock, and to pledge, as se-
curity therefor, its property and income.
4
The ordinary rules governing the contracts of individ-
uals apply equally to incorporated companies.³
5
Corporations are liable for the wrongful acts of agents,
servants, etc., within the scope of their employment, the
same as natural persons, upon the same ground, in the
same manner, and to the same extent."
Material misrepresentations made by an agent will avoid
¹ Const.. Art. XII, sec. 6.
Art. 577.
2 Art. 576.
³ Art. 590.
" Henderson v. R. R. Co., 17 Texas, 560.
1954
ECONOMIC LEGISLATION.
contracts though they were not made with intent to de-
ceive.¹
1
The property of corporations may be attached or gar-
nisheed under the general law the same as that of indi-
viduals, but the corporate franchise is not subject to sale
under execution.3
2
The individual members of a corporation are deemed
strangers, and may maintain their rights by action in the
same manner as those not members.¹
Dividends.--When required by one-third of the stock-
holders, the directors must make such dividends out of the
profits of the business of the corporation as they deem
expedient or as the by-laws may prescribe. As to illegal
dividends, see under "LIABILITY OF OFFICERS AND DIRECT-
ORS," below.
Liability of stockholders.-Stockholders are liable in
Texas, by statute, for the debts of the corporation, the
same as at common law, that is, for the balance of their
unpaid stock subscriptions.5
Execution may issue against any of the stockholders
for an amount equal to his unpaid stock where no prop-
erty of the corporation can be found whereon to levy such
execution; but this may not be done except under the
order of the court in which the judgment was rendered,
after notice in open court and other reasonable notice in
writing has been given to such stockholders, or such judg-
ment creditor may bring his action against the stock-
holder, basing his action on the judgment against the cor-
poration, alleging the existence of the fact that money is
due on his stock; and if the fact be established, have his
judgment for the amount due on his stock, with execution
therefor.
The act of subscribing creates a mutuality of contract
¹ Henderson v. R. R. Co., 17 Texas, 560.
* Art. 152, et seq.; Art. 183, et seq.
• Sec. 587.
350 Texas, 538.
5 Walker v. Lewis, 49 Texas, 123.
6 Arts. 595-6.
:
TEXAS.
1955
that renders the subscribers liable to the company after
incorporation.'
If an act of a corporation be absolutely void, participa-
tion in such act by a stockholder would not give it vitality
even as to him, and he would not be estopped to deny its
legality.2
If one stockholder pay more than his pro rata share of
the debt or debts he may call on his co-stockholders for
contribution, but the liability for the debts and liability to
contribution depend on the main fact, viz, their indebted-
.ness to the corporation for unpaid purchase-money on the
stock they own.³
Liability of officers and directors.—If the directors
of any corporation knowingly declare and apply any divi-
dend when the corporation is insolvent, or any dividend
which will render the corporation insolvent, they are
jointly and severally liable for all the debts of the corpo-
ration then existing, and for all that may thereafter be
contracted, as long as they respectively continue in office.
The amount for which they are so liable can not exceed the
amount of such dividend, and if any of the directors are
absent at the time of making the dividend, or object
thereto at the time of making or declaring the dividend,
and file their objections in writing with the secretary or
other officer of the corporation having charge of the books,
they are exempted from said liability.*
Where the creditor of a corporation becomes such by
reason of any species of fraud enacted by any director said
director becomes personally liable to such creditor, whether
the fraud be personally directed to him or the public at
large; and this is so whether the false practices of the di-
rectors were known by them to be false or not, provided
they might by the use of ordinary care have known the
falsity thereof.5
1
An individual stockholder in a corporation may main-
Compress Co. v. Saunders, 70 Tex. 699.
9 Sec. 609.
• Art. 594.
2 See 59 Texas, 339.
5 Sealer. Baker, 70 Texas, 283.
1956
ECONOMIC LEGISLATION.
tain an equitable action against directors for misconduct
in office when the corporation, through fraud or collusion,
omits to sue; and, when the directors are charged with
fraud, it is not necessary to first apply to them for the use of
the corporate name in bringing the suit.' If a corporation
refuses to sue and is still under the control of directors
sought to be charged, a stockholder may maintain an
equitable proceeding to protect the interest of the corpo-
ration as the trustee for all the stockholders and cred-
itors.2
Reports. When required by one-third of the stock-
holders thereof present, the directors must make reports
in writing of the situation and amount of business of the
corporation.3
Taxation.-All property of both natural and artificial
persons is taxable in proportion to value, to be ascertained
in the mode prescribed by law. Income taxes may be lev-
ied on persons and corporations, except municipal corpo-
rations. Occupation tax is also leviable, save on munici-
pal corporations and persons engaged in mechanical and
agricultural pursuits.5
4
The heaviest tax ad valorem that can be levied by the
state for any one year (save to pay the public debt and for
school purposes) can not exceed thirty-five cents on the
one hundred dollars."
The county and town or city taxes can not exceed one-
half that levied for the state, save for school purposes,
municipal improvements, sea walls, break waters, sanitary
purposes, etc., and on this special power there is a limita-
tion that it shall never for any purpose for any one year
exceed two and one-half per cent of the valuation of the
property.7
¹ Mussina v. Goldthwaite, 34 Texas, 125.
2 Evans v. Brandin, 53 Texas, 56.
3 Art. 587.
An occupation tax is a tax for the privilege of doing business, as an
occupation tax on wholesale or retail merchants, liverymen, barbers, etc.
5 Const., Art. VIII, sec. 1.
7 Const., Art. IX, sec. 5.
• Const., Art. VIII, Secs. 4, 9.
TEXAS.
1957
All property of private corporations, except in cases
where some other provision is made by law, and there is
none in regard to corporations herein treated of, is assessed
in the name of the corporation, and in collecting the taxes
on the same all the personal property of such corporation is
liable to be seized whenever the same may be found in the
county and sold in the same manner as property of indi-
viduals may be sold for taxes.
All statements and lists made by corporations that are
required to be sworn to must be verified by the affidavit
and signature of the secretary of said corporation, and if
they have no secretary, the officer who discharges the
duties of secretary of said corporation.'
The city council has power to assess and collect the
ordinary municipal taxes upon city or horse railways.2
Of stock in the hands of holders.-The stocks or bonds or
shares in incorporated companies are taxed in the hands
of the owners.3
Exemptions from.-To exempt corporations from taxa-
ation is prohibited to the legislature."
Consolidation of companies. The consolidation of
telegraph companies is permitted either by purchase or a
lease. Other companies may consolidate when not par-
allel or competing lines.
5
Dissolution; forfeiture.-A corporation is dissolved
by the expiration of the time limited in its charter, or by
a judgment of dissolution rendered by a court of compe-
tent jurisdiction."
If a corporation fail, within three years after filing its
charter, to commence active operations on its line of char-
ter right, it is dissolved and its charter becomes void.
A corporation is not necessarily dissolved by insolv-
ency; a surrender of its franchise will not be presumed,
so long as it has power to continue its business; and a sale
¹ Arts. 4669, 4688.
' Arts. 4669, 4671.
5 Art. 627.
2 Art. 415.
7 Art. 604.
• Const., Art. VIII, secs. 4, 9.
• Art. 4246, secs. 1 and 2.
* Art. 605.
1958
ECONOMIC LEGISLATION.
of all its visible property by a corporation to pay debts,
and a temporary suspension of business, will not work a
forfeiture of its charter, if new stockholders purchase and
resume business under the old charter, or if capital is
called in by subscribers and business resumed.¹
It is not necessary for the institution of a suit in the
name of the state to forfeit the charter of a corporation,
that it be authorized by a general or special statute.
Where facts show an abuse of a franchise, either by the
wrongful act of the corporation or by embarrassments
such as preclude progress as contemplated by the charter,
to the detriment of the public, the district attorney may,
in the name of the state, bring suit to forfeit the charter.2
The business of the corporation is closed through the
machinery of the courts by the hands of a receiver, if one
be appointed, or through the president and directors or
managers by whatever name called, who become trustees
of the creditors and stockholders, with full power to settle
the corporate affairs, collect the outstanding debts, and
divide the moneys and other property among the stock-
holders, after paying all debts existing at the time of the
dissolution, as far as the assets will permit; and, in dis-
charging their duties, they may bring and defend any ju-
dicial proceedings. Such directors are severally responsi-
ble to the creditors and stockholders to the extent of the
corporate assets that come into their hands.3
On dissolution of the corporation, stockholders are liable
to creditors, but only limitedly, as above noted (see “LIA-
BILITY OF STOCKHOLDERS "), to the extent owing on the cap-
ital stock.4
In 1879, the legislature, in pursuance of the requirement
of the constitution, that "the legislature shall pass laws
to correct abuses and prevent unjust discrimination and
extortion in the rates of freight and passenger tariffs on
1 ¹ Savings Bank v. Sachtleben, 67 Texas, 420.
2 State v. S. P. R. R. Co., 24 Texas, 80 et seq.
⁹ Arts. 606, 607.
4
¹ Art. 609.
TEXAS.
1959
the different railroads in this state (now in operation or
hereafter to be constructed), and from time to time pass
laws establishing reasonable maximum rates of charges
for the transportation of passengers and freight on said
railroads, and enforce all such laws by adequate penal-
ties," passed a law whereby the attorney-general, district
or county attorney, was authorized to institute proceed-
ings to forfeit charters when the corporation was not le-
gally incorporated or when it did any act detrimental to
the public, not authorized by the charter, or omitted any
material act its charter required it to do, or does or omits
to do any act which amounts to a surrender or forfeiture
of its rights and privileges.²
The proceedings under this act are summary in charac-
ter, after notice. It is yet in force. As against railroads,
it has been resorted to several times, but has not been in-
voked as against the lesser corporations.
SUBDIVISION III.-FRANCHISES.
How obtained.-Corporations are subject to the per-
mission of the municipalities in the use of streets, parks,
waters, etc., and can be restricted to specific parts and
portions of the public grounds, ways, etc.
The constitution provides that no law shall be passed by
the legislature granting the right to construct and operate
a street railway within any city, town, or village, or upon
any public highway, without first acquiring the consent
of the local authorities having control of the street to be
occupied by such street railway.3
Telegraph and telephone companies may set their poles,
piers, abutments, wires, and other fixtures along, upon,
and across any of the public roads, streets, and waters
of the state, provided the public is not incommoded
thereby.
Powers of municipalities as to.-The city councils
¹ Const., Art. X, sec. 2.
2 Art. 4098i.
S
Const., Art. X, sec. 7.
1960
ECONOMIC LEGISLATION.
are specifically given power and authority to restrict
street railways and designate lines of travel.
Control of streets.-Cities and towns have the exclu-
sive control and power over the streets, alleys, and public
grounds and highways of the city, to regulate drains and
grading, and to remove incumbrances and obstructions,
etc.¹
Special damages; property owners' rights. When
permission is granted to a street railway corporation to
construct and operate a street railway in and upon the
streets of a city by the local authorities having control of
said streets, the abutting property owners can not obtain
damages for the use of said streets; but if said construc-
tion depreciate the usus fructus of said property, they may
obtain compensatory damages.2
Condemnation of property.-The right of eminent
domain is not exercisable by street railway companies, and
the power to construct and operate is dependent upon the
favor of the municipal corporations.
3
Telegraph and telephone companies may enter on all
lands, public or private, for the purpose of making pre-
liminary surveys and examinations, and may from time to
time appropriate (condemn) so much of said lands as may
be necessary to erect their fixtures.
No owner of land can grant the exclusive use thereof
to any such company. Other companies may condemn
and cross or run with the land.
Conflicting grants.-The grant or privilege to use a
street or highway given to one street railway does not
raise an exclusive right, but a like privilege may be granted
to other companies, provided the second grant does not
operate to destroy the first grant.
A special grant has preference over a general one,
1 Art. 375.
2 Odum v. H. & T. C. Ry. Co., 53 Texas, 343.
3 "Public," in the sense here used, does not mean streets, alleys, etc.,
in towns and cities, but rural property that belongs to the State of Texas.
TEXAS.
1961
though the general one be prior in time when the road is
constructed."
Perpetual and exclusive franchises.-No perpetual or
exclusive franchise is grantable in this state. See under
“CONFLICTING GRANTS," above.
Charges for franchises.-Municipalities have no legal
right to exact considerations from franchise companies for
the exercise of its rights within municipal boundaries,
save to require the payment of an occupation tax,² if such
be levied by the state, and save that they by contract may
stipulate for a consideration for the use of its streets, etc.,
but this would be a voluntary contract, based, however,
upon a sufficient consideration, as thus: the municipality
can stipulate for free light, free heat, free water, etc., to
the public buildings, for the privilege of using the streets,
etc., by such companies, but the consideration could as
well be for money.
Methods of construction.-Methods of construction,
material to be used, inspection of plant, efficient and reg-
ular service, and changes in construction can be forced
after completion of works, provided the demands for
change are reasonable of themselves and conducive to
public convenience, etc.
The city council has power in case of street railway
companies to compel them to keep their roads in repair,
and to make them conform to the grades of the streets
upon which their tracks may be laid, whenever said streets
have been graded by the city. The city council may en-
force these regulations by proper ordinances, with suitable
penalties for any violation of said ordinances,³ and the local
authorities are vested with power to restrict such compa-
nies to designated lines of travel.
In cities, the municipal authorities may direct where
the fixtures of telephone and telegraph companies may be
¹ Ft. Worth Railway Co. v. Rosedale Railway Co., 68 Texas, 170.
* See "TAXATION," note 4.
VOL. II-43
3 Art. 415.
1962
ECONOMIC LEGISLATION.
placed, the material to be used, and the height at which
wires may be strung.
1
Regulations as to service.-The constitution provides.
that the right to authorize and regulate freights, tolls,
wharfage, or fares, levied and collected or proposed to be
levied and collected, by individuals, companies, or corpo-
rations, for the use of highways, landing wharves, bridges,
and ferries devoted to public use, has never been and shall
never be relinquished or abandoned by the state, but shall
always be under legislative control and dependent upon
legislative authority;2 that a mode of procedure shall be
provided by the first legislature under this constitution,
whereby the attorney-general, district and county attor-
neys, in the name and in behalf of the state, shall prevent
and punish the demanding and receiving of any and all
charges as freight, wharfage, fares, or toll for the use of
property devoted to the public, unless the same shall have
been specially authorized by law ;3 and that all laws grant-
ing the right to demand and collect freight, fares and toll,
or wharfage, shall at all times be subject to amendment,
modification, or repeal by the legislature.*
The public service, that is the undertaking under the
franchise, must be actively operated and with reasonable
efficiency. The city council of municipalities is given
power to compel street railway companies to supply ample
and convenient accommodation for the safe and convenient
travel of the public on the streets where their tracks may
run, and to restrain the rate of speed so as not to exceed
seven miles per hour.5
Maximum rates of charges can be fixed by the local au-
thorities, and may be changed from time to time. The
fixing of a rate is not an establishment of such maximum
rate for any given period. While this power exists, it
1 Art. 622 et seq.
9 Const., Art. XII, sec. 4.
• Art. 415.
2 Const., Art. XII, sec. 3.
• Const., Art. XII, sec. 5.
TEXAS.
1963
has seldom been exercised, save in regard to street railway
charges.¹
Discrimination in service; refusal to render.-No
discrimination in service is allowed; equal service, equal
charges to all, on compliance with reasonable regulations
of the company, is required; and companies may adopt and
enforce reasonable regulations. Refusal to comply with
rules and regulations justifies refusal to serve the recal-
citrant.
As to constitutional provisions affecting discrimination,
etc., by railroads, see "DISSOLUTION; FORFEITURE," Sub-
division II.
Safety of life and property.-Franchise companies are
liable for the neglect of their agents and servants to
strangers, and to their agents and servants for accidents
that arise from defective machinery, appliances, etc.²
State and municipal aid.—Municipal corporations can
not become stockholders in any private corporations or as-
sociations or make any appropriation or donation to same,
or in any wise loan its credit thereto.3
Public service.-Contracts may be made by corporations.
with municipal corporations for all legitimate purposes,
such as supplying water, light, etc., but such municipality
can not make such contract as would disable it from con-
trolling in the future, as it might deem best, municipal
affairs to which the contract refers. It may be accepted
as a rule that municipal authorities may contract bindingly
in law in regard to water, light, etc., but may not conclude
their successors from acting on the same subject-matter."
Alteration, amendment, etc., of franchise.-The con-
stitution provides that all laws granting the right to de-
mand and collect freight, fares, and toll or wharfage, shall
¹ See amendment to Const., Art. X, sec. 2, and Laws, 1891, p. 55, for
provisions relative to rates, discrimination, etc., on the part of steam
railroads, but not applicable to street railways.
4
2 Art. 574.
3 Const., Art. XII, sec. 3.
City of Brenham v. Brenham Water Co., 67 Texas, 542.
1964
ECONOMIC LEGISLATION.
at all times be subject to amendment, modification, or re-
peal by the legislature.'
Forfeiture of franchises.-See under "DISSOLUTION;
FORFEITURE," Subdivision II.
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
Municipal corporations, while unable to become stock-
holders or aid franchise companies in any way, may use their
credit or money for corporate purposes, such as for water,
light, heat, etc., when these industries are maintained and
carried on by themselves. Bonds for such purposes çan
not bear over ten per cent per annum, or run less than ten
years nor more than fifty years. The indebtedness for such
purposes must never exceed six per cent of the value of
the property in the corporation, subject to ad valorem tax.
There are some exceptions to above regulation, but it is
not practicable to recite them here.²
When bonds are authorized a tax must be laid to pay
accruing interest, and to raise a sinking fund to redeem
bonds when mature.
¹ Const., Art. XII, sec. 5.
2 Title 17, ch. 4, art. 368, et seq.
C
VERMONT.
SUBDIVISION I.-HISTORICAL.
The constitution of Vermont was adopted in 1777, fol-
lowing largely that of Pennsylvania, some of the provis-
ions of which were taken from the charter of privileges.
granted by William Penn in 1701, and from the "frames
of government" granted by him in 1682 and later, and
even from the charter granted to Penn by Charles the
Second in 1681. This constitution, amended somewhat in
1786, continued during the fourteen years of the "inde-
pendent sovereignty" of Vermont, and until 1793, when
it was still further amended, the mode of amendment be-
ing such that the present constitution is spoken of as the
"constitution established in 1793." Amendments have
since been made, but practically Vermont has had but one
constitution, that of 1777, with amendments. The con-
stitutional provisions more especially touching the subject-
matter of this consideration are those recognizing the
right to take private property for public use, but only
upon paying an equivalent therefor; the special delegation
of powers to the general assembly to grant charters of in-
¹ The attorney employed to edit the Vermont section having failed to
complete his work in time for publication, this statement of the law of
that state is substituted as the best that can be furnished within the
allotted time. It is believed that it presents a practically correct state-
ment of the Vermont law as related to franchise companies.
Unless otherwise stated, references to the constitution are to that of
1793 and its amendments. References to the statutes are to the Revised
Laws of Vermont by section simply. The session laws are referred to
as Laws" of the respective years by number of the act. As to state
reports see Appendix "A."
(1965)
1966
ECONOMIC LEGISLATION.
corporation and to constitute various municipalities; and
that provision which states that government is instituted
for the common benefit, protection, and security of the peo-
ple, nation, or community, and not for the particular
emolument or advantage of any single man, family, or set
of men who are a part only of that community.
This provision has never been invoked in the courts
against any of the corporations that the general assem-
bly has seen fit to charter, which is indeed creditable to
the legislature, for it has given the sanction of its special
charters to enterprises of widely variant pith and moment,
from cornet-bands to a Tehuantepec Railway Company
and a "Maritime Canal Company of Nicaragua."
Vermont was declared independent under the name of
New Connecticut, and, though this title was dropped in
a few months, and before the adoption of the constitu-
tion, it often happened that early laws were enacted "as
said act stands in the Connecticut law book." The first
substantial body of printed law for the state, published in
1779, shows the influence in legislation of the settlers from
Connecticut.
In 1779, the magistrates, selectmen, and constables of
the several towns were by the general law authorized to
appoint proper persons and places for ferries, and to regu-
late the prices according to the profits; and by general
law highways were provided for as a public charge.
1
In 1791, an act was passed giving William Page and
Lewis R. Morris the exclusive privilege of constructing
locks on or by Bellows Falls, on the west bank of the
Connecticut, and providing for incorporating them and
their associates into a body politic. The rates of toll were
limited by the act. At the end of thirty-two years, the
judges of the supreme court were to examine into the
costs and profits of the enterprise, and, if more than twelve
per cent a year profit should have been made, the judges
¹ Laws, 1779, p, 42.
VERMONT.
1967
might reduce the toll, but not so as to bring the profit be-
low twelve per cent. This was the first business corpora-
tion to which exclusive privileges were given. Ferry priv-
ileges to individuals for terms of years are soon after found
upon the statute books, and continue to be granted to the
present time. About 1792, the exclusive right to run
stages between certain points began to be granted for a
term of years.
The first private corporation was chartered in 1780,
when persons who were "erecting a seminary of learning"
in Bennington, were created a body politic by the name
of the "Trustees of Clio Hall."
In 1796, the "First Vermont Turnpike Corporation
was chartered to build a turnpike from Bennington to
Wilmington, and was given the same power of eminent
domain for its right of way that selectmen were given for
public highways. The act regulated the tolls to be charged
and the state was given the right to dissolve the corpora-
tion and take its property for its own whenever the tolls
should have paid the corporators their capital invested, to-
gether with twelve per cent a year profit thereon. The
same year, the legislature authorized towns to tax them-
selves, within a percentage limited by the act, to become
stockholders in the Northern Inland Lock Navigation
Company (canal from Hudson's river to Lake Champlain).
After this, numerous turnpike companies were chartered,
and were given the right of using existing highways and
of exercising the right of eminent domain where needed;
proper service of the public was made obligatory, and reg-
ulation of tolls was provided for, as also the vesting of the
corporate property in the state, if it should so elect, after.
a given term of years, provided the corporation had re-
ceived back its capital, with twelve per cent interest.
These provisions for state ownership were also attached
to some of the early railroad charters. There is in them
the principle on which Paris is dealing with its gas and
electric light companies, as described by Albert Shaw, in
1968
ECONOMIC LEGISLATION.
the July, 1891, Century; but the principle was not car-
ried, as there, into the field of profit sharing, while still
leaving the ownership and business control with the cor-
poration. Nothing came of these provisions, as the rail-
road and other causes made the turnpike charters and
property of little value, and most of the turnpikes were
finally surrendered to the state for highways, the compa-
nies being glad to be relieved from the care of them. Toll
bridge companies were likewise not uncommon.
The first aqueduct company was chartered November 6,
1800. This act merely gave the owners of an aqueduct in
the East parish of Rutland the powers of a corporation-
no privileges whatever were granted except corporate ex-
istence. Aqueduct companies were frequently chartered
for the next thirty-five years, but had no special powers
given them; in 1835 they were permitted to be organized
under the general law. In 1849 the Burlington and Bel-
low Falls aqueduct companies were granted the use of
highways and streets, and the power to have land con-
demned for other necessary rights of way. These features
were afterward common in aqueduct charters.
In 1872, an act was passed incorporating the St. Johns-
bury Aqueduct Company, and containing a grant of the
right "to take the waters of any pond or stream," with-
out provision for payment. In 1874, this too broad grant
was corrected by limiting the taking so that it should not
be to the extent of depriving those interested of what
they needed for agriculture and domestic use, and by pro-
viding for a proper condemnation of their rights in the
water. This act also gave the right to condemn lands
needed for reservoirs. In 1874, too, the charter of the
village of Fairhaven was amended so as to give the village
the right to take water as well as lands by proper con-
demnation; and since that time, water acts for both vil-
lages and private corporations have contained in substance,
the eminent domain clause of the two last named charters,
as well as the grant of the use of highways and streets.
VERMONT.
1969
The charter of the Bennington Water Company, 1886,
is noticeable as having been drawn with care as to impos-
ing in terms the duty of supplying inhabitants; outside
of this charter, there has been little attempt to regulate
the exercise of the privileges granted, and it is thought
the common form of water company charters has helped
to popularize municipal ownership, though greater factors
to that end are local facilities for supply and the knack
of the small municipalities in drafting inhabitants of good
business ability into their service.
The first horse railroad (Winooski and Burlington) was
chartered in 1872, and given the right to use highways
and streets; the Rutland Street Railway Company in 1882,
with the same right. In 1888 the Brattleboro Street Rail-
road Company was chartered, and the supreme court
given the right to reduce fares, but not to make reduction
to less than six per cent.
The first telegraph companies were chartered in 1847,
and the same year a general law was passed giving mag-
netic telegraph companies the right to use the sides of
highways to set their poles. In 1874, by general law, the
officers of cities were authorized to permit any person to
construct telegraph lines along highways, and in 1886,
towns were, by general law, authorized to have the same
privileges as to electric light wires as were given them in
1874 as to telegraph lines. In 1880, town authorities were
given authority to direct about the placing of telegraph
and telephone wires on poles already erected by other per-
sons; this is the first reference to telephones in the statutes
of Vermont. At the next session (1882) the first tele-
phone company was chartered, as also the Middleburg
Electric Light and Power Company, the first of its kind;
no privileges were given in either case beyond corporate
existence. Telephone and electric light company char-
ters, with right to use highways and streets, are frequent
after 1882.
In 1888, telegraph and telephone companies were, by
1970
ECONOMIC LEGISLATION.
general law, authorized to construct lines on any highway,
and telephone companies were compelled to provide ser-
vice without discrimination; and electric light, heat, and
power companies were added to those permitted to be
formed by articles of association.
The first charter of a gas-light company was in 1852,
when the Rutland and Burlington companies were incor-
porated. They and the many other companies since char-
tered, were given the right to use the highways and streets.
In 1886, the Burlington company was authorized to gen-
erate electricity and to sell light made in any way; and in
1888, by general law, any gas company chartered by the
legislature was authorized to establish and run an electric
light plant or to consolidate with an electric light com-
pany. In 1888, the selectmen of towns were also author-
ized to contract with any person or corporation to light,
by means of electricity or otherwise, any covered bridge
or highway, when the safety or convenience of the public
requires it.
The first general incorporation law was passed in 1800;
by its provisions any number of persons were authorized
to form themselves into bodies corporate as social library
societies for purchasing and maintaining libraries-this act
being the precursor of the various acts now consolidated.
in chapters 153 and 164 of the Revised Laws. The gen-
eral law (chap. 153, R. L.) for the formation of private
corporations by voluntary association has been in force.
since 1853; this includes of franchise companies, only those
formed for the purpose of furnishing electric light, electric.
heat, and electric power, unless a gas-light company is
deemed to carry on a manufacturing or mechanical busi-
ness; no company gets a "highway" franchise by virtue
of incorporation under its provisions. Telegraph, tele-
phone, and electric light companies obtain the "highway
franchise" by chapter 163, as amended in 1886 and 1888.
Chapter 164, which provides for incorporating "religious.
and other societies," includes aqueduct associations, but
1
NOTE.-A recent act relating to corporations was received at too late
a date to embody in this section; it is given as an appendix on page 2455.
(p. 1971.)
VERMONT.
1971
the associates get no "highway right" unless by special
charter.
It should be remembered that, by general law, all acts of
incorporation passed since 1851 are subject to alteration,
amendment, or repeal (except so far as the special terms,
nature, or circumstances of a particular charter and acts
performed thereunder create a contract obligation).
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation, how obtained.-In Vermont all legis-
lative power (originally the people's) is in the general as-
sembly, restricted only by the United States constitution
and laws made in pursuance thereof, and by the state con-
stitution.
•
The constitution provides that "the supreme legislative
power of this state shall hereafter be exercised by a senate
and house of representatives, which shall be styled the
General Assembly of the State of Vermont,'" and that
"the general assembly
shall have power to
and
grant charters of incorporation, constitute towns,
boroughs, cities and counties,
. . shall
have all other powers necessary for the legislature of a
free and sovereign state."2
The companies under consideration herein, except aque-
duct and electric light, heat, and power companies, must.
obtain their charters from the legislature. No notice that
a charter will be applied for is necessary in these cases.
A representative or senator introduces a bill of incorpora-
tion, and it follows the regular course of legislation.
Electric companies (telephone, telegraph, and electric
light and power companies) may be organized under the
general law, and when once organized have the " high-
way franchise" by general law. Aqueduct companies
may be organized under the law for the formation of re-
¹ Const., Articles of Amendment, Art. II.
2 Const., ch. 2, sec. 9.
1972
ECONOMIC LEGISLATION.
ligious and other societies (ch. 164), filing their articles in
the town clerk's office, but so organized they can hold but
little real estate, and do not obtain the highway franchise
except by special act.
Articles of incorporation.-Any three or more per-
sons may, by articles of association in writing, associate
themselves together under the provisions of the general
law for the purpose of carrying on, among others, any
manufacturing, mercantile, mechanical, or mining busi-
ness, or for the purpose of furnishing electric light, elec-
tric heat, and electric power; or for constructing, improv-
ing, and beautifying roadways, sidewalks, bridges and
parks, with the right to do such business as is incident
thereto; and upon complying with its provisions, with
their successors and assigns, constitute a body politic and
corporate, under the name assumed by them in their arti-
cles of association. The name assumed must indicate
that it is a corporation, and can not be that of another
corporation in the state.¹
Gas-light companies have been organized under this
law, as have been telegraph, telephone, and aqueduct
companies. Aqueduct companies may be organized by
articles of association recorded in the town clerk's office,
under the same regulations as religious societies; but this
matters little for the purposes considered in this work, as
they get no highway rights.
2
Must show what.-The articles of association must be in
substance as follows: "We, the subscribers, hereby asso-
ciate ourselves together as a corporation under the laws
of the State of Vermont, to be known by the name of
for the purpose of
in the county of
"
into
this
,
,
at
in said state, with a capital stock of, divided
dollars each. Dated at
shares of
day of
A. D.
2
23
Publication of.-Before a corporation commences busi-
¹ Sec. 3276.
R. L., ch. 164.
3 Sec. 3277.
VERMONT.
1973
ness, it must cause a certified copy of its articles of asso-
ciation to be published at length, in a newspaper of the
county where it is located.¹
Filing. The articles of association signed by the corpo-
rators must be transmitted to the secretary of state, who
must thereupon, if the articles are made and executed in
compliance with law, record the same in a book to be kept
for that purpose, and return to the corporators a certified
copy thereof, which record and certified copy have the ef
fect of a special charter.¹
2
Organization; preliminary requirements.-Before any
private corporation commences business, the president
and directors must make a certificate verified by their
oaths, stating the amount of capital actually paid in, which
must be filed in the office of the secretary of state. The
publication shown above must also be made, and, in the
case of the contracting of debts before so doing, the presi-
dent and directors are liable as shown below.
3
When persons have associated, according to the provis-
ions of the general law, two of them may call the first meet-
ing of the corporation, at such place in the county where
the corporation is located and is to have its principal place
of business, and at such time as they appoint, by giving
personal notice to each of the stockholders at least ten
days before the time so appointed.5
As to commencing business, see under "CAPITAL STOCK,'
post.
Fees.-The fees for incorporation under the general law
¹ Sec. 3278.
* The term "private corporation," as used in the general law, is de-
fined to mean any corporation created for the purpose, among others,
of making a turnpike road, railroad, or canal, for carrying on any branch
of manufacture, for mining, and other corporations which, from their
object, suppose a division of profits among the stockholders. ( (Sec.
3251.)
³ Sec. 3253.
* Sec. 3253. See "LIABILITY OF OFFICERS AND DIRECTORS," post.
5 Sec. 3280.
1974
ECONOMIC LEGISLATION.
are two dollars to the secretary of state for recording and
returning the certified copy.' There are no fees for incor-
portion by special charter; a certified copy of the charter
act may be obtained from the secretary of state upon pay-
ment of fee for copying.
Amendments, repeals, etc.-The statute provides that
acts passed by the general assembly creating, continuing,
altering, or renewing a corporation may be altered,
amended, or repealed, when the public good requires it.
The term "corporation," as here used, includes associa-
tions or joint stock companies having any of the powers.
or privileges of corporations not possessed by individuals
or partnerships.2
3
The general assembly may also, for just cause, vacate or
annul the powers of a corporation created pursuant to the
provisions of general law. There is no constitutional
provision to this effect. These statutory reservations.
are binding on a succeeding legislature only so far as
it may choose to conform to them, and, if it so intends,
an irrepealable legislative contract may be made. As
to any charter of incorporation granted since 1851, the
intent of the legislature must be sought, not only in the ex-
isting general law, but in the terms of the special charter,
in the circumstances attending it, in the consideration for
it, and in the nature of the things to be done under it; in
this way, it must be determined whether the granting leg-
islature intended the right to repeal or change, to inhere
in, and be a part of the contract. Where a charter is
subject to change by future legislation, that change may
be made as well by general law as by special amendment.*
Aside from these statutory provisions the doctrine of the
Dartmouth College case is fully recognized. The latest
Vermont case, kindred in principles, is Franklin County ·
Grammar School v. Bailey, 62 Vt. 467. It is not necessary
³ Sec. 3298.
¹ Sec. 3278.
2 Sec. 3257.
• St. Albans v. Nat'l Gas Co., 57 Vt. 68.
VERMONT.
1975
that the contract rights arise from the charter, subsequent
enactment may bring a case within these principles.'
Objects. As to statement of objects, see "ARTICLES OF
INCORPORATION," supra. No provision is made for change of
objects. Gas companies incorporated by the legislature
may run an electric light plant or consolidate with an elec-
tric company.2
As to restrictions on the power of a company to change
its methods of service without changing its objects there
are no special provisions; but legislative grants to use
new methods, and specific grants in many charters to use.
enumerated methods indicate a legislative intent to con-
fine grantees to the methods specified.
Powers. Private corporations established and organized
under the general law may sue and be sued, plead and be
impleaded, and appear and prosecute to final judgment in
any court; may have a common seal and alter the same at
pleasure; may elect, in such manner as they determine,
necessary officers, and determine their compensation and
define their duties; may establish by-laws for the govern-
ment of their affairs and may alter or repeal the same;³
and may, by the corporate name, acquire and hold such
real and personal property as is necessary for their pur-
poses, and such as is taken in payment of or as security
for debts, and may manage and dispose of the same.¹
.3
Private corporations formed in pursuance of law, prior
to the enactment of the present general law, by voluntary
association for any of the purposes specified, have the
benefits and privileges conferred by the present general
law, and are subject to the liabilities imposed thereby."
By-laws.-Corporations organized under the general
law are authorized to establish by-laws for the govern-
ment of their affairs, and may alter or repeal the same."
Franklin Co. Grammar School . Bailey, 62 Vt. 467; Caledonia Co.
Grammar School v. Burt, 11 Vt. 632.
• Sec. 3282.
2 Laws, 1888, No. 123.
• Sec. 3297.
³ Sec. 3281.
6 Sec. 3281.
1976
ECONOMIC LEGISLATION.
!
Officers; meetings; voting; quorum, etc.-The stock,
property, and business affairs of corporations organized
under the general law must be managed by not less than
three directors, who must be stockholders, and one of
them must reside in the state. They must be chosen an-
nually by the stockholders, at such time and place as is
provided in the by-laws, and hold their offices one year and
until others are chosen.'
2
The directors of such corporation must elect one of
their number president, and must appoint a clerk and
treasurer; the clerk must reside in this state. The di-
rectors may fill any vacancy in their board occurring dur-
ing the year.³
A majority of the directors of corporations formed
under the general law convened according to the by-
laws, constitutes a quorum, and a majority of the stock-
holders present at a meeting may transact the business
of such meeting; each share entitles the holder to
one vote.¹
4
6
As to corporations generally, no person is eligible to
or can hold the office of president or director in any
private corporation unless in good faith a stockholder."
Any private corporation neglecting for six months to
appoint and have a clerk residing in this state, forfeits
fifty dollars to the person injured, to be recovered in an
action on the case. The clerk has the custody of the by-
laws and records, and must at seasonable times exhibit the
same to any stockholder, his agent or attorney, on de-
mand, and must give certified copies of such by-laws and
records when required, on a reasonable compensation
therefor being tendered to him.8
1 Sec. 3283.
5 Sec. 3252.
2 Sec. 3284.
³ Sec. 3285.
Sec. 3286.
• The term "clerk of a corporation," as used here, means the record-
ing officer, whether he is styled clerk, secretary, cashier, or however
designated (Sec. 3256).
↑ Sec. 3267.
8 Sec. 3268.
VERMONT.
1977
1
Books. A corporation organized under the general law
must cause a book to be kept by its clerk in the town
where it is located and has its principal place of business,
containing a record of the articles of association, the
names of the holders of stock, their places of residence,
the number of shares held by each, the amount actually
paid in by each, the time when they respectively became
owners of such shares, and a record of the transfers of
shares; this book must, during the usual business hours
of each day, be open for the inspection of stock-
holders. All books of such corporations containing their
accounts, must at each annual meeting of the stock-
holders, and at other reasonable times, be open for their
inspection.2
Every private corporation must, by its clerk, keep a
record of its corporate action, in which the shares of the
capital stock of the corporation must be designated by
numbers, and also a record of the name of each owner of
stock, and the number and description of the shares of
such owner.³
Capital stock. The amount of capital stock of cor-
porations organized under the general law must be de-
termined in the articles of association, and can not be less
than five hundred dollars, nor more than one million dol-
lars, and must be divided into shares not exceeding one
hundred dollars each. One-half of the capital stock must
be paid in before the corporation contracts debts, and no
part of it can be withdrawn or diverted from the proper
business of the corporation.5
4
Before a private corporation commences business, the
president and directors must make a certificate verified by
their oaths, stating the amount of capital actually paid in,
which certificate must be filed in the office of the sec-
retary of state."
¹ Sec. 3294.
3 Sec. 3270.
2 Sec. 3295, as amended, Laws, 1884, No. 105, sec. 2.
* Sec. 3288.
5 Sec. 3291.
• Sec. 3253. As to the term "private corporation," see note 2, p. 1973.
VOL. II-44
1978
ECONOMIC LEGISLATION.
When commissioners are appointed by an act of incor-
poration to open books for subscriptions to the capital
stock, they must give notice by publication in a newspa-
per, of the time and place where such books will be
opened, at least thirty days before the time of opening such
books.¹
1
When a proprietor in any private corporation does not
pay a tax or assessment imposed by such corporation,
agreeably to the by-laws, the treasurer2 may sell at public
auction the shares of the delinquent, under such regula-
tions as the corporation by its by-laws directs; and the
purchaser, on producing a certificate of sale from the treas-
urer to the clerk of the corporation, with the number of
shares so sold, and causing the same to be recorded by the
clerk, becomes the proprietor thereof; the excess, if any,
after paying the tax or assessment and charges, must be
paid by the treasurer to the delinquent, on demand.³ Such
sale must be made at the office of the clerk of the corpo-
ration upon a notice published three weeks successively in
a weekly or daily newspaper.*
Stock may be taken and sold on execution like other
personal property, and the purchaser must cause an at-
tested copy of the execution and officer's return thereon to
be left with the clerk of the corporation within twelve
days after the sale, and the title of the stock so sold vests
in the purchaser. When a share of stock is attached,
a copy of the attachment must be left with the clerk of
the corporation.5
The capital stock of any private corporation is also liable
to attachment and sale on execution against the corpora-
tion, and any number of shares of one or more members
may be taken and sold (sufficient to satisfy such execution
with the charges thereon) in the same manner as on execu-'
¹ Sec. 3259.
2 The term "treasurer," as used here, means the officer who has the
care and custody of the funds, by whatever name he is designated.
³ Sec. 3260.
' Sec. 3261.
5 Sec. 3262.
:
t
VERMONT.
1979
tion against such person, and such sale transfers title to
the purchaser.¹ A person whose stock is thus attached
and sold may have an action on the case against the
corporation, and may recover the damages sustained
thereby.2
When a certificate of shares of the capital stock of a
corporation is lost or destroyed, and the owner desires to
obtain a new certificate, he must advertise the loss or de-
struction, with a description of the certificate, in two
newspapers published, one in the vicinity of the residence
of the owner, and one in the vicinity of the place of busi-
ness of the corporation, for at least five weeks successively;
and a notice of the loss, with a description of the certifi-
cate, must be posted in the office of the corporation for
the same length of time; three months after such publica-
tion and notice, if no other person claims the shares, the
corporation must issue to the owner a new certificate,
which must state that it is issued in lieu of one lost or
destroyed; and the corporation is not liable thereafter on
account of such original certificate. If a person claims
such shares by virtue of such original certificate before
the issuing of such new certificate, or if the corporation
refuses to issue a new certificate, a person interested may
petition the court of chancery for relief, which may at any
time, on such petition and notice, in a summary manner,
make such order in the premises as the case requires.¹
3
Increase and decrease of.—A corporation organized under
the general law may increase the capital stock and the
number of shares at a meeting of the stockholders warned
for that purpose, but the whole amount when so increased
must not exceed the amount authorized as shown above.
It may reduce its capital stock, but not so that its debts
exceed two-thirds thereof. When such corporation de-
sires to increase its capital stock, a certificate of such
increase, signed by the president and directors, must be
5
¹ Sec. 3263. ¹ Sec. 8264. 3 Sec. 3265. + Sec. 3266.
Sec. 3289.
1980
ECONOMIC LEGISLATION.
!
filed with the secretary of state and recorded by him and
a certified copy returned and published as prescribed in
the case of the original articles of association. Upon
an increase of capital stock of any private corporation, a
certificate must be made by the directors and president
similar to that required before commencing business.2.
Transfer of.—The capital stock of a private corporation
is personal estate, and may be transferred as provided by
its by-laws. See "Books," supra.
3
Company's lien on.-A corporation organized under the
general law has a lien upon the stock of its members, and
their property invested therein, for debts due from them.*
Bonds, debts, etc.-No debts can be contracted by a
corporation organized under the general law exceeding in
amount two-thirds of the capital stock actually paid in."
If the property of a private corporation is attached on
a writ in favor of a director, and the same property is aft-
erward attached at the suit of a creditor who is not a
director and before the time when the first attachment
should be returned, the attachment made by such director
must be postponed, and such subsequent attachment holds
the property against it.º
Dividends. See under "LIABILITY OF OFFICERS AND
DIRECTORS," below.
Liability of stockholders.-The stockholders of a cor-
poration formed under the general law are individually
liable to creditors to an amount equal to the amount of
stock held by them respectively, for contracts and debts
made by such company, until the whole amount of stock
fixed by the company is paid in. If the capital stock of
such a corporation is withdrawn and refunded to the
stockholders before the payment of its debts, each stock-
holder is personally liable to pay a creditor whose claim
remains unpaid, to the amount so refunded to him. If
¹ Sec. 3290.
2 Sec. 3253. See "ORGANIZATION," supra.
5 Sec. 3291. 6 Sec. 3254.
³ Sec. 3258. * Sec. 3296.
7 Sec. 3292.
VERMONT.
1981
any stockholder is compelled to pay such debt of a cred-
itor, or part thereof, he may by bill in equity compel the
stockholders, to whom any part of said capital stock has
been refunded, to contribute their proportional share of
the sum paid.¹ .
2
Liability of officers and directors.-The president
and directors of a corporation organized under the gen-
eral law become personally liable for debts contracted be-
fore the provisions relative to formation and organization
are complied with. The directors of such a corporation
declaring and paying a dividend from its property and
assets, when insolvent, or which would render it insolv-
ent, knowing such fact, are jointly and severally liable for
the debts due from such corporation at the time of such
dividend; and any director assenting to the creation of
any indebtedness exceeding the amount limited by law, is
personally liable for the excess.*
3
The clerk of any private corporation willingly neglect-
ing or refusing to exhibit the by-laws and records in his
possession, as required above (see "OFFICERS; MEETINGS;
VOTING; QUORUM, ETC.," supra), and every clerk or officer
of corporations organized under the general law, who
neglects or refuses to show the books or submit the state-
ment at annual meetings, or to stockholders applying
therefor, forfeits teu dollars for each twenty-four hours he
so neglects or refuses.5
Reports. The clerk or other officer of corporations or-
ganized under the general law must prepare and submit
to the stockholders at each annual meeting a statement, in
writing, of all receipts and expenditures, including salaries
of the preceding year, with its assets and liabilities."
Taxation. Telephone and telegraph companies report
annually to the commissioner of taxes and the state treas-
urer, upon blanks furnished by the commissioner, and for-
1 Sec. 3293.
2 Sec. 3279.
³ Sec. 3287.
• Sec. 3291.
5 Sec. 3269; sec. 3295, as amended, Laws, 1884, No. 105, sec. 2.
Sec. 3295, as amended, Laws, 1884, No. 105, sec. 2.
1982
ECONOMIC LEGISLATION.
3
feit one hundred dollars for each day's neglect. Corpora-
tions paying taxes to municipalities return annually to,
the listers of the town a sworn inventory of their prop-
erty, making the same upon a blank formulated by the
secretary of state; on neglect to make an inventory, or
on making a false one, the ascertainable property of the
corporation is "doubled" by the listers (and it may be
still further increased), and the corporation list for taxes
made up in this way.
Telephone companies are taxed three per cent annually
on the gross receipts of their business earned wholly
within this state, including rentals for instruments and de-
ducting amounts paid to any telegraph company for the
transmission of messages; telegraph companies are also
taxed ten per cent of gross receipts earned wholly in this
state.¹
All other franchise companies considered in this work
are taxed like ordinary business corporations on the
"grand list" by municipalities; that is, their tangible
property is taxed where situated, and their stock is taxed
in the hands of the owners. In listing the value of stock
for taxation, the value of the real estate and personal
property taxed to the corporation is deducted from the
value of the stock and the remaining value only listed to
the stockholders. The stock held by resident stockhold-
ers is listed to them where they reside; the stock of per-
sons out of the state is listed to them where the corpora-
tion is located. The amount of taxes assessed on the
grand list (the grand list is one per cent of the assessed
valuation) varies in different municipalities. The average
taxation for all purposes is in the region of one hundred
and twenty-five cents on the dollar of the grand list, or, as it
would be stated in other states, twelve and one-half mills
on each dollar of assessed valuation.
Of stock in hands of holders.-The stock of all franchise
companies, except telephone companies and telegraph
¹ Laws, 1890, Act 3.
VERMONT.
1983
companies, is taxed in the hands of owners, as shown last
above.¹
1
Exemptions from.-Aid has been given new manufactur-
ing establishments for a quarter of a century by exempt-
ing them from taxation for periods of five and ten years,
sometimes absolutely, and later when the town where the
business is situated so votes.
Consolidation of companies.-Any gas company char-
tered by the legislature is authorized to consolidate with
an electric light company.2
Dissolution; forfeiture.-Private corporations whose
charters expire by their own limitation, or are annulled
by forfeiture, or otherwise, to enable them gradually to
close up their business, to dispose of their property, to di-
vide their capital stock, and to prosecute or defend suits,
are continued bodies corporate for three years, and until
such suits and the subject-matter thereof are fully disposed
of, but not for the purpose of continuing the business for
which established.3
The court of chancery, upon the application of a cred-
itor, stockholder, or member, within the time prescribed
above, may appoint a receiver for such corporation, who
must take charge of the estate and effects thereof, collect
the debts and property due and belonging to the corpora-
tion, prosecute and defend such suits as are necessary and
proper, in the name of the corporation or otherwise, and
do such other acts necessary for the settlement of its un-
finished business as might be done by the corporation, if
in being; the powers of the receiver may be continued as
long as the court judges necessary; such court must, upon
application, require ample security to protect the rights
of parties interested, before such extension is made or a
receiver appointed. Notice of the application must be
given by publication in a newspaper at least two weeks
before the time set for hearing the same. Such receiver
¹ Laws, 1890, Act 3.
³ Sec. 3272.
2 Laws, 1888, Act 123.
• Sec. 3273.
1984
ECONOMIC LEGISLATION.
must pay the debts due from the corporation, if the funds
in his hands are sufficient; if not, he must distribute the
same ratably among the creditors who prove their debts.
as directed by an order or decree of the court; and, if
there is a balance after the payment of debts, he must dis-
tribute and pay the same to those who are entitled thereto
as stockholders or members of the corporation, or their
legal representatives.¹
SUBDIVISION III.-FRANCHISES.
How obtained.—The legislative authority to grant fran-
chises is full; municipal authority is such as is conferred
by the legislature. Said Redfield, J., in delivering the
opinion of the court in the case of Thorpe v. R. & R. R.
Co., 27 Vt. 178: "It has never been questioned, so far as
I know, that the American legislatures have the same un-
limited power in regard to legislation which resides in the
British parliament, except where they are restrained by
written constitutions. That must be conceded, I think,
to be a fundamental principle in the organizations of the
American states. We can not well comprehend how,
upon principle, it should be otherwise. The people must,
of course, possess all legislative power originally. They
have committed this in the most general and unlimited
manner to the several state legislatures, saving only such
restrictions as are imposed by the constitution of the
United States or of the particular state in question. I
am not aware that the constitution of this state contains
any restrictions upon the legislature in regard to corpora-
tions, unless it be that where any person's property is
taken for the use of the public, the owner ought to receive
an equivalent in money;' or that there are any such re-
strictions in the United States constitution, except that
prohibiting the states from 'passing any law impairing the
obligation of contracts.'
¹ Sec. 3275.
6
VERMONT.
1985
"The theory upon which our political system rests ís,
that all sovereignty exists originally in the people. They
ordained the federal government, and delegated to it sov-
ereign power over certain subjects; they also created state
governments, and conferred upon them the residue of
sovereign power, so far as they allow it to be exercised at
all. A state legislature has all the power necessary for
the legislation of a sovereign, independent state, and pos-
sesses all the law-making power of the people, except so
far as it is withheld by the constitution itself. Plenary
power in the legislature is the rule, restricted power the
exception." 1
No company obtains a highway franchise by virtue of
incorporation under the general law. Telegraph, tele-
phone, electric light, heat, and power companies, when
once legally organized, have the highway rights by stat-
utory provision, but no power of eminent domain is ex-
ercisable without a special charter.
2
By statute magnetic telegraph companies are granted
the right to use the sides of highways to set their poles,3
and the officers of cities and towns are authorized to per-
mit any person to construct such lines along the highways."
Towns have by general law the same powers to permit the
construction of electric light wires as they possess as to
telegraph lines.³
Aqueduct associations or water companies organized
under the statute for the incorporation of religious and
other societies, as stated above (see "ARTICLES OF INCORPO-
RATION"), obtain no highway rights exept by special grant.
Powers of municipalities as to.-Municipalities are
created by special charters. They are instituted as an
auxiliary of the state in the regulation and establishment
of its government. "The rights and franchises of such
1 Powers, J., in opinion of the court, Bennington v. Park et al., 50 Vt.
178 (1877).
2 Sec. 3633; Laws, 1886, No. 89; Laws, 1888, No. 32.
' Laws, 1847.
'Laws, 1874.
Laws, 1886.
1986
ECONOMIC LEGISLATION.
municipal corporations can never become vested rights, as
against the state.
So far as their public and mu-
nicipal franchises and existence are concerned, it has be-
come a well-settled principle in the courts of this country
that the legislature may exercise over them exclusive con-
trol, and constitutionally may enlarge, restrain and even
destroy their municipal existence as the public interests
may require. Such act defeats no vested right, nor does
it impair the obligation of any contract. (Memphis v.
South Memphis, 11 Hump. 558.) They have also under
their control the disposition of the corporate property,
or that which is held for municipal and corporate pur-
But while this legislative power may be
poses.
exercised over public and municipal corporations, it has
as uniformly been held that towns and other public corpo-
rations may have private rights and interests vested in
them under their charter, and as to those rights, they are
to be regarded and protected the same as if they were the
rights and interests of individuals, or of private corpora-
tions; and grants of property to them, in trust for other
purposes than corporate and municipal use, are no more
the subject of legislative control than are the private and
vested rights of individuals."¹
"" 2
Condemnation of property.-No power of eminent
domain is exercisable without a special charter. The con-
stitution provides that "private property ought to be sub-
servient to public uses when necessity requires it, never-
theless, whenever any person's property is taken for the
use of the public, the owner ought to receive an equivalent
in money.
It is agreed by all the authorities that the
legislature may empower railroad corporations to take the
lands of the citizen for their use by making just compensa-
tion therefor, but such taking of private property in virtue
of the sovereign right of eminent domain, is only war-
rantable on the ground that it is a taking for a public use.³
1 Montpelier v. East Montpelier, 29 Vt. 12. 2 Const., ch. 1, art. 2.
3 Powers, J., in Bennington v. Park et als., 50 Vt. 178 (1887).
VERMONT.
1987
Rowell, J., in the case of Barre Water Co., 62 Vt. 27,
says:
"The theory of the right of eminent domain is,
that all lands are held mediately or immediately from the
state, upon the implied condition that the eminent domain,
the superior dominion, remains in the state, authorizing it
to take the same for public uses when necessity requires
it, by paying therefor an equivalent in money.
"But this theory does not embody the idea of an im-
plied condition authorizing the state to take private prop-
erty for private uses without the consent of the owner,
even by paying an equivalent in money; and the constitu-
tion, by declaring only that private property ought to be
subservient to public uses when necessity requires it, by
implication declares that it ought not to be subservient to
any other uses without the consent of the owners, for here
the maxim is justly applicable that the express mention
of one thing implies the exclusion of another.
"But to say what a public use is with sufficient compre-
hensiveness and accuracy to meet the exigencies of all
cases, is, to say the least, difficult. Nor is it easier to de-
fine the limit of legislative power in respect of the right
of eminent domain. This power must have some degree
of elasticity, that it may be exercised to meet the demands
of new conditions and improvements, and the ever vary-
ing and constantly increasing necessities of an advancing
civilization. The circumstances and requirements of the
particular case, and the practice of other states and gov-
ernments where constitutional limitation is placed on leg-
islative action in this respect, must be our guides in de-
termining what is and what is not a public use.
'It is sometimes easier to say what is not than to say
what is. It is so in this case. To say that this proposed
use (the use of water to run motors for the lighter
kinds of machinery, and its rental for that purpose) is not
a public use, is easy. It has none of the elements of a
public use. To enter upon an extended discussion of the
subject is unnecessary, for this court has laid down the law
1988
ECONOMIC LEGISLATION.
of it fully and clearly in Tyler v. Beacher, 44 Vt. 648, in
which the flowage acts were held unconstitutional. That
was an attempt to flow the defendant's land for the benefit
of the plaintiff's grist mill, which was found to be an un-
doubted public benefit. But because the mill was private
property, and there was no law to compel the plaintiff and
his successors to grind for the public, nor any part of it,
but they were free to do as they pleased about it, and be-
cause the public benefit found by the commissioners ap-
pertained to the plaintiff in his private business instead of
to the defendants in theirs, and could not accrue from any
use the public would have of the flowage or of the mill,
but only from the use the plaintiff and his successors might
make of it; and because said benefit, such as it was, was
not in any way secured to the public, either by legislative
enactment or the proceedings in the case; and because the
attempt was not to take the property of the defendants for
the grist mill as long as the plaintiff and his successors
should maintain and operate it, but to take the right for-,
ever, without limitation, express or implied, except that
probably the use would be limited to the purposes for which
the taking could be had under the acts; the court said the
attempt was to take the property of the defendants for
the use of the plaintiff, and not for the use of the public.
Tested by that case, it is entirely clear that the use here
proposed is not a public use, but the merest private use.
Nor is this case so strong as that in the facts, for here is
no finding of a public benefit.”
Refusal to grant a franchise. The legislature has
full authority to refuse franchises, as have municipalities
except where the legislature may impose the duty of grant-
ing them.
Perpetual and exclusive franchises.-The constitu-
tion states that government is instituted for the common
benefit, protection, and security of the people, nation, or
community, and not for the particular emolument or ad-
vantage of any single man, family, or set of men, who are
VERMONT.
1989
a part only of that community.' This provision has never
been invoked in the courts against any of the corporations
that the general assembly has seen fit to charter. Aside
from this provision the legislature has full legislative
power.
Charges for franchises.-Consideration for the granting
of franchises other than by taxation is unknown in this
state.
Methods of construction.-Town authorities are given
power to direct about the placing of telegraph and tele-
phone wires on poles already erected by other persons.2
Regulations as to service.-Regarding the regulation
of franchises, it should be kept in mind that laws made
by a state in the proper exercise of its police power, in con-
servation of the public health, safety, and morals, are not
within the provision of the federal constitution forbiding
the impairment of the obligation of a contract.³
By general law any gas company chartered by the legis-
lature is authorized to establish and run an electric light
plant.*
5
Telegraph companies are compelled to provide service
without discrimination. Aside from these provisions,
franchises are governed by the special act granting them,
or by the contracts made with municipal authorities.
State and municipal aid.-Aid has been given new
manufacturing establishments for a quarter of a century
by exempting them from taxation, as shown above. See
"TAXATION-Exemption from,” p. 1983.
Said Powers, J., in the case of Bennington v. Park, 50
Vt. 178: "It is agreed on all hands that the money of the
citizen can be taken under the guise of taxation only when
it is appropriated to a public purpose. The restriction is
clearly and with practical directness expressed in article 9
of our Bill of Rights, as follows: 'And previous to any law
¹ Const., Art VII, part 1.
2 Sec. 3645.
3 See Thorpe v. Rutland, etc., R. R. Co., 27 Vt. 140.
* Laws, 1888, No. 123.
5 Laws, 1888, No. 124.
1990
ECONOMIC LEGISLATION.
being made to raise a tax, the purpose for which it is to be
raised ought to appear evident to the legislature to be of
more service to the community than the money would be
if not collected.' The public welfare is the ultimate end
to be subserved by taxation, and if the building of a rail-
way will promote that, the money of the citizen may be
rightfully applied to its aid.
But it is said that
the aid authorized by the act in question inures to the
benefit of a private corporation. This objection might
be raised to almost every species of taxation that is war-
ranted by law; some private individual or corporation
reaps a special benefit; but if a general public benefit is
accomplished, the money appropriated is made of 'more
service to the community than it would be if not collected.'
The right of taxation depends upon the public character of
the object for which the fund is appropriated, and in no
sense upon that of the person selected to apply it."
Public service.-The power of municipalities to con-
tract for services depends in each instance upon their re-
spective charters.
In 1890, by Act No. 87, the village of Enosburg Falls
was given the right to contract for lighting the streets with
electric lights for a term of years not exceeding ten at a
time, and in case of the formation of a company or part-
nership to carry out the objects of the act to contribute
thereto by gift or loan.
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
Historical.—The state reserved in early days the right
of reversion or purchase of some franchises granted by
it-turnpike franchises, for example; but at the present.
time, municipal ownership in Vermont is confined to
water-works. In 1788, the city of Vergennes was given
a charter by which its common council might make
by-laws relative, among other things, to the streets and
VERMONT.
1991
highways, to walks and buildings, to sweeping of chim-
neys and preserving the city from fire, and to the public
lights and lamps of said city. This was the first munic-
ipal charter.
In 1852, Rutland village was given power to contract
with the aqueduct company, and the village afterward en-
larged the works and became the first municipal owner of
a system of water-works. Burlington, incorporated as a
city in 1864, purchased the rights of the Burlington Aque-
duct Company in 1866, and, in 1867, constructed works of
its own. Vergennes established its system in 1869. Since
then, water-works have been constructed by municipal
authorities or private companies to supply more than
twenty Vermont villages.
In 1874, the charter of the village of Fairhaven was
amended so as to give the village the right to take water,
as well as lands, by proper condemnation, and since that
time water acts for villages have contained, in substance,
this eminent domain clause as well as the grant of the use
of highways and streets.
In 1890, the charter of the village of Enosburgh Falls
was amended, giving the village full power as to a water
system and the right to purchase an electric light plant,
and to contract for power and service to run it for any
number of years thought best.
In 1874, by general law, towns and cities were given the
right to construct telegraph lines along the streets and
highways. In 1886, towns were by general law given the
same privilege as to electric light wires as was given them
in 1874 as to telegraph lines. It is believed that advantage
has not been taken of these provisions by any municipali-
ties of this state.
Powers of municipalities to erect or purchase.-
There is full authority in the legislature to provide for
municipal ownership and conduct of plants for public
service. Towns and cities are empowered by general law
1
1992
ECONOMIC LEGISLATION.
to construct telegraph and electric light wires along the
streets and highways.'
>
Economic results. For many years small aqueduct
companies were organized under special charters or gen-
eral law, and some of these in the larger villages grew to
have important plants which, in some cases, were the basis
of later municipal ownership. As a rule, water-works
have been profitable undertakings in this state, and, where
municipal ownership of them has been tried, it has proved
popular in the communities affected. The early aqueducts.
were built by private corporations. The tendency of late
years has been to municipal ownership.
Water is supplied to the following towns by private
corporations: Barre, Bennington, Brattleboro, Hyde
Park, Island Pond, Northfield, Springfield, Waterbury,
Winooski, Woodstock.
The municipal water-works are operated as follows:
Barton, Bellows Falls, Brandon, Burlington, Fairhaven,
Middlesburg, Montpelier, Newport, Richford, Rutland, St.
Albans, St. Johnsbury, Swanton, Vergennes, West Ran-
dolph, Windsor.
Many of these works are from gravity supply, the one
at Montpelier, for instance, being from Berlin pond (Crys-
tal lake), four miles distant, with a head of 361 feet and
pressure of 156 pounds to square inch, and supply of water
so great that with this pressure the rental for use of mo-
tors for the lighter kinds of manufacturing is so common
as to make this use, which any person may have on pay-
ment of a small rental, in practice and in law almost a
public use.
1
¹ Laws, 1874; Laws, 1886.
VIRGINIA.¹
1
EDITED BY WYNDHAM R. MEREDITH, ATT'Y, RICHMOND, va.
SUBDIVISION I.—HISTORICAL.
The original territory of Virginia was almost commensu-
rate with that of the United Colonies at the time of the
Revolutionary War. Its first charter was granted by King
James I, and was dated April 10, 1606. The second char-
ter, dated May 23, 1609, extended the limits of the planta-
tion to four hundred miles of sea coast and westward
throughout from sea to sea. Subsequently, by the treaty
between Great Britain and France in 1763, the western
border was limited to the middle of the Mississippi. Vir-
ginia soon relinquished any rights it might have possessed
to territory lying within the limits of any of the original
colonies, and, by the splendid donation of its north-west-
ern territory, assumed the proportions which were re-
tained until the lopping off of the present State of West
Virginia. The first of the colonies in territorial extent,
it was also the first to adopt a constitution. In May,
1776, there assembled at Williamsburg, then the capital
of the colony, "delegates from the counties and corpora-
tions in the Colony of Virginia." On the 28th of the fol-
lowing June, the results of their deliberations were
adopted as the first constitution of the rebellious colony.
It was chiefly the work of one man; for though the pre-
amble was from the pen of Mr. Jefferson, the constitution
¹ Unless otherwise stated, references to the constitution are to that of
1869. References to the statutes are to the Code of Virginia of 1887, by
section simply. The session laws are referred to as "Laws" of the re-
spective years. As to state reports, see Appendix A.
(1993)
VOL. II-45
1994
ECONOMIC LEGISLATION.
itself, like the Virginia bill of rights, was from the com-
petent hand of George Mason. The next constitution
of the state was adopted January 14, 1830. This was fol-
lowed by the constitution ratified August 1, 1851. In
1864, the union citizens of Virginia that were within the
union lines assembled through their delegates at Alexan-
dria, and adopted a constitution on April 11th, which,
however, was never ratified by the people. The present
constitution was adopted July 6, 1869. It has since been
amended in some respects not necessary to be noticed.
None of the constitutions contained any express refer-
ence to corporations, except the present one, which, being
passed after the close of the civil war and for the purpose
of readmitting Virginia into the union, provided that all
rights of bodies corporate and all charters of incorpora-
tion should continue. To the pecuniary limitation of the
jurisdiction of the supreme court of appeal to cases in-
volving at least $500, there are express exceptions in con-
troversies concerning the title or boundaries of land or
concerning a roadway. It would seem, therefore, that,
where suits concerning the "highway franchises" involve
the question of what title there is in the public and what
in the abutting owner to the highway, there is no limita-
tion to the right of appeal so far as the amount involved
is concerned.
2
Certain clauses, however, which were inserted for the
first time in the constitution of 1869, have a significant
bearing upon the question of the advisability of state aid
to or ownership of private corporations. From 1850 to
1860, the state rushed eagerly into all forms of internal
improvements, into the building of turnpikes, tunnels,
canals, railroads, etc. With lavish hand, its aid was given
to almost every enterprise, and it subscribed to all the
great works by which it was sought to unite its territory
and extend its commerce. In about fifteen years, the
The Nation," Vol. II, p. 107.
2 Const., Art. VI, sec. 2.
VIRGINIA.
1995
•
state had subscribed to forty million dollars of the stock
of internal improvement companies, upon which it had
paid about thirty-five million dollars. As a return for
this enormous sum, it can show to-day only the retention
of $275,200 of the stock of one-paying company out of
the hundreds to which it subscribed, and an enormous
debt, which remains unsettled and is a source of political
and commercial anxiety to the people.
This lesson in the danger of state aid to private corpo-
rations resulted in the adding to the constitution of 1869
several clauses, by which the state is prohibited from loan-
ing its credit to any person or corporation or subscribing
to the stock of such corporation. The experience of the
state in the matter of giving aid to private corporations.
has not had the effect of causing the prohibition of local
municipal and county organizations from subscribing to
the stock of such companies. On the contrary, express
permission is given to cities and counties to subscribe to
the stock of any internal improvement company which
has been incorporated by the general assembly. The
only limitation put upon the opportunity thus afforded
of piling up a large local debt for assisting work that
could better be done by individual and corporate energy,
is that the indebtedness of cities or towns must not exceed
seventeen per cent of their real and fifteen per cent of
their personal property.*
3
It was in a case construing the Virginia act appropriat-
ing the glebe lands, that the supreme court of the United
States first declared that the charter of a private corpora-
tion was a contract within the meaning of Article I, sec.
10, of the constitution of the United States. This case,
however, was overshadowed by the much more celebrated
Dartmouth College Case. Nor does the doctrine therein
expressed seem to have had any immediate effect upon
5
'State Documents of 1865-6; Report of Second Auditor, pp. 25-30.
2 Const., Art. X, secs. 12, 14, 15, 17.
3 Secs. 1243-1252.
+ Sec. 1039.
Terrett et als. v. Taylor et als., 9 Cr. 53.
さ
​1996
ECONOMIC LEGISLATION.
the legislation of the state, since it was not until July 11,
1870, that a general statute was passed giving the legisla-
ture the right to amend or repeal, after fifteen years from
its passage, every charter granted by it, except those of
internal improvement companies.'
It is not surprising that so little is found in the consti-
tution of Virginia that bears upon the subject of corpora-
tions; for the state constitution is merely a limitation
upon, not a grant of authority to, the legislature. "In
the exercise of the legislative powers of this common-
wealth, the legislature is supreme, and may in its wisdom
do any act not forbidden in express terms by the consti-
tution, which is the higher law, or which is not therein
forbidden by necessary implication.
وو
2
It is then the statute law and city ordinances that must
be looked to for the manner in which and the conditions
upon which companies are chartered. The first acts of
incorporation were those passed from time to time to asso-
ciate subscribers for making turnpike or artificial roads.3
At an early period some attention was also given in Vir-
ginia to the improvement of internal navigation. Several
acts were passed for cutting canals in the year 1772. In
1784 the legislature granted to James Rumsey the privilege
for ten years of constructing and navigating boats invented
by him that would greatly facilitate navigation against the
current of a rapid river. A similar privilege was in 1787
granted to John Fitch, of Pennsylvania."
5
4
The first railway using horses, though it is usually
spoken of as a railroad, was built about the year 1828 in
the county of Chesterfield. This was followed by the first
steam railroad, which was built about 1830.8
¹ Secs. 1069, 1240.
2 State Female Normal School v. The Auditors, 79 Va. 237.
3 Laws, 1795-6, p. 25, et seq.
* 8 Hen. Stats., pp. 556, 564-2, and 570.
6 12 Hen. Stats., p. 616.
8 Laws, 1829-30, p. 59, ch. 62.
5 11 Hen. Stats., p. 502.
7 Laws, 1827-8, p. 59; Laws, 1828-9, p. 85.
7
VIRGINIA.
1997
Street car companies are usually given the powers of
corporations at common law and under the general stat-
utes of the state. It is generally provided that they can
exercise the highway franchise by and with the consent
of the city council and the county judge or board of su-
pervisors of the county. These parties are also generally
authorized to impose upon them such other and additional
restrictions and conditions as they may think fit. They
are generally allowed to use horses and mules or such other
motive power as the before-mentioned authorities may per-
mit within their respective limits.'
The first water-works, those of the city of Richmond,
were established by the city about 1832, the charter hav-
ing been granted January 29, 1829.2 The water-works of
Lynchburg were chartered February 28, 1827, but at first
the privilege was owned by private persons.
Richmond may, it is thought, claim to be the first city in
America to be lit with gas. As early as the beginning of
this century a tower some forty feet in height was erected,
and the numerous jets that surmounted it were lit from
gas generated below by the process of a man named Hen-
frey. It proved to be of no commercial value. It was not
until March 9, 1841, that the first gas company was incor-
porated in Virginia.3
294
By act of March 20, 1847, Samuel F. Morse and his as-
sociates were granted the right to erect a line of telegraph
along the road-bed of certain railroads, and were incorpo-
rated under the name of "The Washington and New Orleans
Telegraph Company." The first telephone company was
chartered about 1880, whilst the first electric railway, be-
ing the second one ever built and operated in the United
States, was completed in the city of Richmond in the year
1888.
¹ Laws of extra session, 1887, pp. 34, 81, 94, 149, 205, 308, 365; Laws of
1889-90, pp. 27, 39, 87, 222, 436, 497.
2 Laws, 1828-29, p. 127.
* Laws, 1846-7, p. 79.
3 Laws, 1840-1, p. 141.
1998
ECONOMIC LEGISLATION.
The charters of most franchise companies are generally
obtained from the legislature. The provisions usually
made as to gas and fuel companies include, besides the
rights corporations usually have at common law and un-
der the general laws of this state, the right to manufacture
and furnish gas or electric light or both, and the right to
erect and maintain poles and wires in the public streets
and alleys, and to place pipes or conduits thereunder upon
such terms and subject to such conditions as may be agreed
upon between the municipal and county authorities and
the company. For these purposes the light and fuel com-
panies are usually empowered to enter upon lands and ac-
quire by condemnation, according to the laws of Virginia,
the lands and rights of way required.²
1
There are but few private water companies in the state.
They are generally granted the usual powers of corpora-
tions at common law and under the general statutes of the
state. They are authorized to construct the necessary res-
ervoirs and machinery, and to lay pipes, main and lateral,
to convey the water; to contract with the owners of lands
for the purchase or use thereof, and, when necessary, to
condemn land in accordance with the provisions of the
code of 1887; to issue bonds or certificates of indebted-
ness, and to secure the same on the property of the com-
pany.
See also SUBDIVISION IV, "MUNICIPAL OWNERSHIP."
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation, how obtained. There are two gen-
eral methods by which charters of incorporation are
granted in Virginia. The first is by the legislature, the
second is by the circuit courts of the commonwealth,
under a general law.
The method by which charters are secured from the leg-
islature is the same as that pursued to enact any law. A
¹ Roanoke Gas Co. v. Roanoke, 16 Va. Law Jour. 306.
2 Laws, 1853-4, pp. 86-7; Laws, 1889-90, pp. 13, 181, 344.
VIRGINIA.
1999
bill is introduced by a member and passes through the
usual course of the legislation of both branches of the
general assembly and has to be signed by the gov-
ernor.
Circuit courts may charter any five or more persons that
wish to carry on any lawful business, except to construct
a turnpike to be constructed beyond the limits of the
county, or a railroad or canal, or to establish a bank of
circulation; but such charter does not invest the company
with the power to have land or any other thing con-
demned for its use or benefit under any of the provisions
of the Code. It will thus be seen that, though electric
light, gas, telephone, and even street car companies are
sometimes incorporated in this way, yet the safer and bet-
ter method is to obtain such a charter from the legis-
lature.
2
Articles of incorporation.-Under the general law
any five or more persons may make, sign and acknowledge
before a notary or other proper officer a certificate of arti-
cles of incorporation in writing, which must be presented
to the circuit court of the county or the circuit court or
corporation court of the municipal corporation wherein
the principal office of the company is to be located, or to
the judge thereof in vacation. The said court, or judge
in vacation, has the discretion to grant or refuse to said
persons a charter of incorporation upon the terms set
forth in the said certificate, or grant it upon such other
terms as may be adjudged reasonable.'
Must show what.-The certificate or articles of incor-
poration must set forth the name of the company; the
purpose for which it is formed; the capital stock, which
is limited, as shown below, and its division into shares;
the amount of real estate proposed to be held by it; the
place at which its principal office is to be kept; the chief
business to be transacted; and the names and residences of
2 Sec. 1146.
¹ Sec. 1145.
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ECONOMIC LEGISLATION.
the officers, who, for the first year, are to manage the
affairs of the company.¹
Filing.-If granted, the charter must be recorded by
the clerk of the said circuit court, and also in the office
of the secretary of the commonwealth.¹
After the "registration tax" has been paid and the
charter has been lodged in the office of the secretary of
the commonwealth, the persons signing said certificate are
a body politic and corporate, with all the powers given
under the general law, so far as it is applicable and not.
inconsistent with such charter.2
Organization; preliminary requirements.-When, by
a special act incorporating a joint stock company, com-
missioners are appointed to receive subscriptions to the
capital stock thereof, public notice for thirty days must.
be given by them of the time and places at which books
will be opened for subscriptions, and the subscriptions.
must be in shares of $100 each.³
The books for subscription must be kept open for ten
days. If within that time more than the whole capital be
subscribed, the commissioners at the place first named in
the act must reduce the subscriptions so as to have the
amount of such capital stock, and no more; deducting
the excess from the largest subscriptions in such manner
that no subscription is reduced while any one remains
larger.*
When it appears to the commissioners at the place first
named in the act that so much of the capital stock is sub-
scribed as is sufficient to incorporate the subscribers, they
must give notice thereof by publication in a newspaper
for not less than two weeks, and call a general meeting
of the subscribers at a certain time and place, which time
must not be less than fourteen nor more than thirty days
from the first day of such publication. The subscribers,
their executors, administrators, or assigns stand incorpo-
1 Sec. 1145.
2 Sec. 1146.
³ Sec. 1106.
• Sec. 1110.
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i
rated from the time of such meeting, unless in said meet-
ing it be determined otherwise. If any such company be
not organized by the appointment of a president and di-
rectors within two years from the passage of its act of in-
corporation, its corporate rights and privileges cease.2
In case of corporations organized under the general
law, after the minimum amount of capital stock has been
subscribed and at least two dollars a share paid in on said
subscriptions, the subscribers become stockholders, and
must proceed to organize the company by the election of
a board of directors and such other officers as they deem
proper, and to adopt or order the preparation of suitable.
by-laws.3
—
Fees. The clerk as well as the secretary of the com-
monwealth, for recording charters granted by the circuit
courts, receive double the fees paid for recording deeds;
that is, they receive six cents for every thirty words.*
4
There is also a "registration tax" imposed upon all
charters, those granted by the circuit court as well as by
the legislature. It is a graduated tax, according to the
maximum capital stock allowed by the charter. If the
maximum capital stock is $5,000 or uuder, the tax is five
dollars; if it is over one million dollars, the tax is two
hundred dollars. Until paid, the charter is wholly inop-
erative.6
The only tax or fee to be paid upon a special charter
before it becomes a valid charter is the "registration
tax."
¹ Sec. 1112.
* Secs. 1151, 3505, p. 836.
2 Sec. 1141.
³ Secs. 1107, 1144.
ap-
The attorney-general, in 1890, held that the "registration tax
plied to charters granted by the circuit court, as stated above, but in the
case of Combined Saw & Planer Co. v. Flournoy, 16 Va. Law Jour. 273,
the supreme court held that such companies were not so liable, The
statute has been amended so that now the "registration tax " applies to
companies chartered by the circuit court as well as those chartered by
the legislature. (Laws, 1891-92, p. 393.)
6 Laws, 1889-90, p. 98, ch. 124.
空
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ECONOMIC LEGISLATION.
Amendments, repeals, etc.-The earlier special char-
ters, particularly of internal improvement companies, were
"close" charters. All charters granted by the circuit
courts can now be amended and repealed at pleasure of the
legislature. The charter of every railroad or other in-
ternal improvement company chartered since March 11,
1837, may be amended or repealed by any future legisla-
ture, as may seem to it proper, but no law can be passed
for taking from a company its works or property without
making to it just compensation, or for changing its tolls
without its assent. The charter of every manufacturing
or mining company, and of every other company char-
tered by the general assembly, may be amended or re-
pealed after fifteen years from its passage.3
2
Any charter granted to a company under the provisions
of the general law by a court or judge thereof in vacation
may be altered or amended, or the corporate name of the
company may be changed, by the said court or a judge in
vacation, on the application of the company authorized
by a majority of the stockholders in general meeting.*
Powers.-Corporations created by special act have all
the general powers which the common law gives to corpo-
rations.5
No incorporated company can hold any more real estate
than is proper for the purposes for which it is incorpo-
rated; nor employ its capital, money, or effects, or other-
wise engage in transactions or business not proper for
those purposes.
Corporations, unless the authority is expressly given,
are not allowed to charge more than legal interest; nor
can a corporation plead usury.
Officers; meetings; voting; quorum, etc.—In every
meeting of the stockholders of any company organized
under the general law, each stockholder is entitled to cast
¹ Sec. 1146.
3 Secs. 1143, 1069.
• Sec. 1145.
• Sec. 2825.
5 Sec. 1068; 1 Minor's Institutes (ed. 1876), pp. 521 and 534.
2 Sec. 1240.
6 Laws, 1889-90, pp. 50-1.
7 Sec. 2826.
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one vote for each share of stock held by him in said com-
pany. Cumulative voting is not permitted.²
The annual meeting of stockholders must be held on
such day as is or may be prescribed by law, or if none be
so prescribed, on such day as the stockholders may in gen-
eral meeting from time to time appoint.3
A general meeting of stockholders may be held at any
time, upon the call of the board of directors or of stock-
holders holding together one-tenth of the capital stock,
upon their giving notice of the time and place of such
meeting, for thirty days, in a newspaper published in or
near the place at which the last annual meeting was held."
To constitute a meeting of stockholders, there must be
present those who can give a majority of all the votes
which could be given by all the stockholders."
There must be for every company a president and di-
rectors, who are a board to have all things done that are
proper to be done by the company, except so far as may
be otherwise provided by any law of the state, or any
by-law or regulation of the stockholders. The stock-
holders may, in a general meeting, prescribe the number
of directors by a by-law, to take effect at the next annual
meeting; but unless a different number be prescribed,
there must be five directors besides the president. The
directors, and where it is not otherwise provided, the
president also, must be elected by the stockholders in
general meeting.
The stockholders, in general meeting, or other appoint-
ing power, as the case may be, may remove any director
and fill the vacancy caused by such removal; but unless
so removed, the directors continue in office until the next
annual meeting of the stockholders, and until their suc-
cessors are appointed. Should the number of directors
be at any time reduced below the number necessary to
1
¹ Laws, 1889-90, pp. 56-7, ch. 73.
• Sec. 1114.
2 Sec. 1116.
3 Sec. 1113.
5 Sec. 1115.
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ECONOMIC LEGISLATION.
hold a meeting of the board, the stockholders, or other
appointing power, may fill the vacancies.¹ No member
of the board can vote on a question in which he is person-
ally interested.2
Books. See under "REPORTS."
Capital stock. The minimum capital of every fran-
chise company organized under the general law must
be not less than five hundred dollars, nor must the maxi-
mum exceed twenty times the minimum capital, and the
same proportion must be preserved for greater sums.³
Subscriptions to stock may be paid in money, land or
other property (real, personal, or mixed), leases, options,
mines, minerals and mineral rights, rights of way and other
rights or easements, labor or service. And it is lawful for
the company to call for and demand from the stockholders,
respectively, all sums of money by them subscribed, at
such time and in such proportions as it may deem proper,
and the company may enforce payment by all the reme-
dies provided by law in respect to other incorporated com-
panies. Each certificate of stock in any such company
must set forth truly the actual capital of the company;
the nominal value of each share of stock, and the amount
actually paid on each share by the holder of such cer-
tificate.³
Upon every subscription for shares in any joint stock
company, created by special act, there must be paid upon
each share two dollars at the time of subscribing, and
the residue thereof, as required by the president and di-
rectors. The sums payable at the time of subscribing
must be paid to the commissioners. This is required also
of every company for manufacturing or mining incor-
porated by the general assembly.5
4
It seems from the above statement that where a com-
pany is incorporated by the legislature two dollars at the
¹ Sec. 1118.
¹ Sec. 1107.
2 Sec. 1122.
³ Laws, 1889-90, ch. 73, pp. 56–7.
5 Sec. 1144.
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time of subscription must be paid upon each share of
stock so subscribed; but where the charter is granted by
the circuit court, subscriptions may be called for at such
time and in such proportions as the company may deem
proper.¹
Transfer of Shares of stock are deemed personal estate,
and as such pass to the personal representative or assignee
of a stockholder. A book must be kept by the company
in which the shares may be assigned.2
3
If a person disposes of his shares of paid up stock
with power of attorney authorizing the transfer, the
title of the vendor is completely divested; upon the
return of the certificate and its cancellation and filing
in the company's office, new certificates will be issued.*
If a certificate has been lost, a new certificate will be is-
sued when the party to whom the old certificate was issued
files an affidavit as to the loss, and proof of having adver-
tised the loss in a newspaper once a week for two suc-
cessive months, together with a proper bond conditioned
to indemnify all persons."
A foreign personal representative of a person domiciled
out of the state at the time of his death may, on motion
before the circuit court, have an order that, upon filing
with the company the original certificate of stock of de-
cedent, the same may be transferred to him. Said motion
can only be made two months after the personal repre-
sentative has advertised the fact that he intends to make
said motion, once a week for two months in a newspaper
published in the state in which he qualified and in two
newspapers published at the seat of government of this
state."
Company's lien on.-No stock can be assigned on the
books without the consent of the company until all the
¹ Sec. 1107; Laws, 1889-90, ch. 73.
³ Sec. 1133.
5 Sec. 1135.
2 Sec. 1125.
• Sec. 1134.
• Sec. 2627.
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ECONOMIC LEGISLATION.
money which has become payable thereon has been paid;
and on any assignment the assignee and assignor are
severally liable for any installments which have accrued,
or which may thereafter accrue, and may be proceeded
against in the manner before provided.¹
Stock in other companies.-One company can not sub-
scribe to, or otherwise acquire the stock of another com-
pany unless specially authorized by act of the legisla-
ture, or by the terms of a decree of the court, or order of
the judge incorporating the company or amending the
charter thereof. If any company acquires stock in any
other company contrary to this provision it can not vote
such stock in any general or special meeting of stock-
holders.2
Bonds, debts, etc.-Unless expressly authorized by its
charter, no company organized to carry on a work of in-
ternal improvement can borrow money until the whole
amount of capital stock has been paid up.3
4
There is no present limitation upon a suit brought to
enforce the lien of a deed of trust or mortgage given by a
corporation; but all conductors, brakesmen, engine driv-
ers, etc., storekeepers, mechanics, etc., and all persons fur-
nishing railroad iron, engines, cars, etc., and all other sup-
plies necessary to the operation of any railway, etc., or of
any mining or manufacturing company, have a prior lien
on the franchise, gross earnings, and property of said
company, and no mortgage, deed of trust, or sale defeats
or takes precedence over said lien.5
Dividends.-The stockholders, in general meeting, of
any company incorporated for manufacturing or mining,
and out of debt, may order dividends of the capital stock.
But before such dividend is made, notice of the order
must be posted at the front door of the court-house of the
county or municipal corporation wherein the general
meeting was held, on the first day of three successive
¹ Sec. 1130.
• Sec. 2935.
2 Laws, 1889-90, p. 50-1, ch. 65.
5 Sec. 2485.
³ Sec. 1232.
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courts, or published for three successive months in a news-
paper circulating in the neighborhood.¹
Liability of stockholders.-There is no individual lia-
bility of stockholders beyond the unpaid subscriptions to
stock.2
Reports. The board of directors must make a report of
the condition of the company to the stockholders at their
annual meeting. Accompanying the report, there must
be statements of the receipts and disbursements for a year
ending on such day as the by-laws may prescribe, and a
statement of the surplus or contingent fund then on hand.
Within thirty days next before such meeting, the records
of the proceedings of the board must be open to the in-
spection of three or more stockholders holding together
one hundred shares of the capital stock, and such records.
must be produced to the stockholders when demanded by
them at any meeting.3
4
Taxation. The constitution provides that taxation,
whether imposed by the state, county, or corporate bodies,
shall be equal and uniform, and all property, both real and
personal, shall be taxed in proportion to its value; but
this provision applies to taxation for revenue purposes,
and not to assessments by municipalities for local in-
provements. It also provides that the capital invested in
all business operations shall be assessed and taxed as other
property; and that assessments upon all stock shall be ac-
cording to the market value thereof."
5
The statute provides that the charter of any company
shall be forfeited unless its taxes are paid in current money
of the United States."
The machinery of a mining or manufacturing company
is taxed as an improvement on real estate where the com-
pany owns both the real estate and the machinery; but if
¹ Sec. 1139.
2
Laws, 1889-90, pp. 56-57, ch. 73.
4 Const., Art. X, sec. 1.
6 Const., Art. X, sec. 4.
3 Sec. 1123.
Norfolk City . Ellis, 26 Grat. 224.
7 Secs. 403-405.
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ECONOMIC LEGISLATION.
the company only owns the machinery, then it must be
taxed against the owner thereof as personal property.'
Internal improvement companies, like street railway
companies, are assessed by the board of public works as
to the value of their property. To this board, the compa-
nies make returns showing the value of their real and per-
sonal property. This the board may accept or change.
The board also fixes the value of the roadway and track.
The state tax upon all the real and personal property of a
corporation is forty cents on every one hundred dollars.
Every railroad (and this would doubtless include street
railways) must also pay to the state an income tax of one
per centum per annum, which income tax must be ascer-
tained by deducting the costs of operation, repairs, and
interest on indebtedness from the gross receipts.2
Telegraph or telephone companies are required to re-
port to the board of public works for taxation. If such
a company fails to make proper return, then the auditor
of the state requires the commissioner of the revenue of
the county or town wherein its works or line is located to
assess their lines, rating each mile at $125 for one wire per
mile and $25 for each additional wire per mile. In addi-
tion, each telegraph company pays a license tax of $250
and one per centum of its gross earnings. Telephone
companies whose gross receipts are over $1,500 pay a
license tax of one dollar and fifty cents on each trans-
mitter.*
Telegraph and telephone companies are required to re-
port annually the number of miles of line in the whole
state, and in each county or corporation; the number of
wires per mile in excess of one in the whole state, and in
each county and corporation; real and personal property
in the whole state, and showing particularly in what
county or corporation located; the gross earnings and re-
1 Sec. 485.
2 Laws, 1889-90, pp. 208-9.
* Laws, 1889-90, pp. 212-13.
3 Sec. 1294.
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ceipts in this state for the twelve months next preceding
the first day of February.¹
Gas, water, and electric companies are taxed as individ-
uals are taxed. The capital stock and the shares of the
capital stock are distinct things. Both may be taxed, and
it is not double taxation.2
Local taxation varies in amount, but is laid upon the
real and personal property of each corporation. In the
matter of street railways, the tax is usually a certain
percentage upon net or gross receipts, and this in lieu
of all other taxes. The local rate of taxation is gener-
ally less than a dollar and a half on a hundred dollars of
value.
3
The council of the city of Richmond has authority, un-
der the charter of the city, to impose a license tax upon a
foreign telegraph company having an agency in the city
and doing business therein. And there is nothing in the
constitutions and laws of the state or of the United States
which forbids such a tax, if it is equal and just in its pro-
visions. Though the ordinance of the city imposing
taxes speaks only of persons or firms doing business in
the city, yet it imposes a tax in terms on telegraph com-
panies, and obviously intends to include incorporated
companies as well as individuals. It is probable that this
decision in 26 Grattan, in the light of recent decisions of
the supreme court of the United States, would now be re-
versed. The companies are, however, paying a reasonable.
local license tax.
3
Dissolution; forfeiture.-If any company created by
special act be not organized by the appointment of a pres-
ident and directors within two years from the passage of
its act of incorporation, or, though so organized, if it sus-
1 Laws, 1889-90, p. 211.
2 State Bank of Virginia v. City of Richmond, 79 Va. 113.
3 Western Union Telegraph Co. v. The City of Richmond, 26 Grat. 1.
4 Leloup v. The Port of Mobile, U. S. Sup. Ct., Oct., 1887.
VOL. II-46
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ECONOMIC LEGISLATION.
pends its operations for two years, its corporate rights and
privileges, in each of these cases, cease.¹
It is also provided that the charter of any company
shall be forfeited unless its taxes are paid in current money
of the United States.²
SUBDIVISION III.-FRANCHISES.
How obtained.-Before discussing what rights a com-
pany acquires, when authorized to exercise the highway
franchises, it will be proper to point out the reasons that
justify the statement that all corporations desiring to
exercise such rights should apply for and obtain their
charters from the legislature and not from the circuit
courts.
3
5
As has been stated, companies that wish to exercise the
right of eminent domain ³ or to have the power or right to
have land or any other thing condemned for their use or
benefit can not be incorporated by the circuit courts.*
Therefore gas, water, and other like companies generally
obtain their charters from the legislature, as this power to
condemn land or other thing is usually necessary to the
proper exercise of their franchises. It will be shown
hereafter that the public easement in most if not all of
the streets of the cities and in all the highways of the
counties is a mere right of passage, and does not include
the right, without compensation to abutting owners, to
erect poles or lay rails even with legislative or municipal
authority. In order to so occupy the streets or highways
the company must be empowered to condemn the same as
they would other land, and this right of condemnation
can only be given by special act.
No company can cross or occupy with its works the
streets or alleys, public or private, of any city or town
without the assent of the corporate authorities thereof,
¹ Sec. 1141.
5
• Sec. 1146.
2 Secs. 403-405.
3 Secs. 1073-1093.
See note "A" p. 2024.
VIRGINIA.
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2
unless such assent be dispensed with by special provision
of law. Telephone and telegraph corporations are the
only ones given the right by general statutes to use the
"highway franchise." These companies are all owned
by private corporations. The accompanying references
will show the usual provisions required of and the fran-
chises granted to such companies.3
The legislative acts incorporating street railway com-
panies usually provide that they can exercise the highway
franchise by and with the consent of the city council and
the county judge or board of supervisors. Richmond and
Petersburg are two cities in the commonwealth whose city
councils are authorized to grant franchises to street rail-
way lines.5
Control of streets.-The highways of this common-
wealth can be divided into two classes-county roads, and
streets of a town or city.
The manner in which land is condemned for the purpose
of a county road is fully set forth in the code of 1887.
The only corporations that are authorized to use these
roads as well as the streets of a city with the consent
of the council thereof, are telegraph and telephone com-
panies.6
The right of the legislature to confer the power upon
these companies to use the county roads without additional
compensation to abutting owners has not until very lately
been doubted. As a result, hundreds of miles of telegraph
lines have been erected along the county roads. In March,
1890, however, the supreme court of appeals decided the
case of the Western Union Telegraph Company v. Will-
iams, 86 Va. 696; [14 Va. Law Jour. 263]. This was a
suit for damages brought by an adjoining owner against
¹ Sec. 1093.
2 Secs. 1287-90.
3 Laws extra session, 1887, pp. 195, 218, 280, 332, 370.
Laws extra session, 1887, pp. 34, 81, 94, 149, 205, 308, 365; Laws,
1889-90, pp. 26, 39, 86, 222, 436, and 497.
5 Laws, March 20, 1860.
6 Secs. 1287-1290.
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ECONOMIC LEGISLATION.
!
the telegraph company for erecting its polls on the public.
road abutting on his premises without paying or offering
to pay additional compensation. The telegraph company
justified by pleading the statute above cited.
The court held that the provision of the statute author-
izing any telegraph company to construct and operate its
lines along any public road in the state, provided the use
of such highway is not obstructed, in so far as it fails to
provide for additional compensation to abutting land-own-
ers, violates the constitutional prohibition of the taking of
private property for public use without compensation.
That the public have, as regards a highway, merely the
right of passage along and over it, the absolute property
remaining in the owner of the soil, from whom the right
of passage was acquired, and the erection of poles and
the stringing of wires along such highway by a telegraph
company is an additional servitude, and constitutes a tak-
ing of private property for public uses.'
The effect of this decision seems to be to require every
gas, electric light, telegraph, and telephone company, and
even perhaps street railway companies, before they can use
the highway franchise, so far at least as the same applies
to county roads, to pay to the abutting owners additional
compensation for the use of such roads. That the public
¹ The general holding of the court in this case of Western Union Tel.
Co. v. Williams, as to the fee of the streets, etc., was considered in the
recent case of Page v. Belvin et al., 16 Va. Law Jour. 238, where the
court says:
"This question was a good deal discussed at the hearing in
this court, but it can not be considered any longer open for discussion
by the court. In the recent case of the Western Union Telegraph Com-
pany v. Williams, 86 Va. 700 (14 Va. Law Jour. 263), this question was
elaborately discussed, and the cases in this court upon the question cited
to which we refer, and also in the still more recent case of Hodges v. S. &
R. R. R. (16 Va. Law Jour. 109), and which was twice heard and ably and
fully argued at each hearing and which decided this question in accord-
ance with the cases in this court which have gone before, and we refer
to the decision of that case and the cases cited in the opinions filed at
each hearing upon this question; and we do not consider that it can be
profitable to again discuss the subject."
VIRGINIA.
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had only an easement in the county roads had, however,
been previously decided by the supreme court.'
What rights to the use of the streets of a city or town
are conferred upon a company by the "highway franchise "
is involved in much more obscurity. Until the code of
of 1849, the streets of a town were like any other land in
the commonwealth so far as the right of condemnation
was concerned.2 But after the enactment of the code of
1849, the assent of the corporate authorities of cities and
¹ The earliest case on this point was decided in 1798. It is the case
of Home v. Richards, 4 Call. 441. Richards applied for permission to
erect a mill upon certain land. Home resisted the application. The
court held that the land passed to Richards, but subject to the ease-
ment or right to have extended through said land a certain road. This
did not prevent Richards from exercising the rights of ownership over
said land. 'The grant of a right of way does not convey the soil, but
the privilege of a way to be conveniently located only. It does not
hinder the proprietor from exercising his rights as owner of the land."
The next case, involving the easement obtained by the establishment
of a county road, is that of Bolling v. Mayor, etc., of Petersburg, 3 Rand.
(Va.) 563. Bolling sued the town for one tenement containing two-
fifths acres. It was proven to have been the property of his father,
but subject to the easement of the public road afterward a street) es-
tablished by order of the county court. The city had subsequently es-
tablished a wharf on it, and it was argued that the principles of pub-
lic policy required that this additional use should be sustained by the
court. Judge Carr said: "This is an argument for the legislature. We
must construe the law as it is, especially when it concerns the taking
away the property of the citizen. I have looked into our statutes and
I find nothing there to countenance the idea that when a road is es-
tablished the fee in the soil, either simple or base, is vested in the com-
monwealth. On the contrary, I think it is obvious that a right of way
is all that the public acquires, leaving the whole fee in the owner of
the soil. We see from the language of the statute that it is for the use
only of the land that the owner is compensated."
2 James River & Kanawha Canal Co. v. Anderson et als., 12 Leigh,
278. This case was decided in 1841. The company was proceeding to
use the streets of the city of Richmond for canal purposes. The ad-
joining owners sought to enjoin the work. The company proved that
it had a right to condemn land. The right to condemn land was held
by the court to include the right to condemn and use the streets of the
city.
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ECONOMIC LEGISLATION.
1
towns was necessary unless such assent be dispensed with
by special provision of law. Until the code of 1849,
therefore, it would seem that the streets of a city stood
upon exactly the same footing as the roads of the coun-
ties so far as the right to condemn the same for the use
of internal improvement companies and other corpora-
tions were concerned, and that an easement and not the
fee simple was acquired. It seems that the public rights
in a majority of the streets of the commonwealth had
been acquired by dedication,2 or else had originally been
condemned as county roads, and were subsequently used
as streets. This view of the interest of the public in the
streets being only an easement was always coupled with
strong expressions of opinion though no direct decision
that such easement differed from that in a county road
in its quantity if not in its quality. The easement in the
street was of a much more enlarged and extensive char-
acter. These opinions that the easement in the streets
of the cities was of a more extensive character than that
in the county roads seem to have been accepted and acqui-
3
¹ Sec. 1093.
2
Taylor . Commonwealth, 29 Grat. 780; Harris v. Commonwealth,
20 Grat. 833; Norfolk City v. Chamberlaine, 29 Grat. 534.
3 Bolling v. City of Petersburg, 3 Rand. (Va.), 563.
Thus in the case already cited from 12 Leigh, 307, Judge Allen
said: "If the fee in the street is in the original proprietor, subject to
the easement, then there is a proprietor who is provided for by the act.
If it is in the city corporation (and I incline to think that there is,
and from necessity must be, a difference between streets in cities and
towns and an ordinary highway, and that the fee of the streets should
be held to be in the city or town authorities), then the corporation is
the proprietor, and can proceed under the act for compensation." And
in the subsequent case of Warwick & Barksdale v. Mayo, Mayor of Rich-
mond, 15 Grat. 545, the same judge said: "The easement comprehends
no interest in the soil. The dedication or laying out of a street within
a corporation does not affect the ownership, and however enlarged the
easement may be when within the limits of the corporation in order to
the beneficial use of it, and to effect the purposes intended when the
easement was created: subject to such use, whether enlarged or lim-
ited, the title remains in the owner."
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esced in. At least, pipes have been laid, and poles erected,
and rails of street cars put down, in the streets where only
an easement existed without any claim that such use was
an additional servitude, or that the adjoining owners were
entitled to compensation.
By the code of 1849, two additions were made to the
statute law upon this subject. The first is as follows:
"No company shall occupy with its works the streets of
any town until the corporate authority of the town shall
have consented to such occupation, unless such assent be
dispensed with by special provision of law." 1
The second is as follows: "The company, county or
town, when such judgment is rendered against it, shall
thereafter have no right to possession of the land until
the judgment is satisfied. From the time of such satis-
faction by the payment of the money to the persons
entitled thereto, or into court, or from the time of the
confirmation of the subsequent report, if no additional
compensation be thereby ascertained, or from the time
of the termination of the proceedings, if they be deter-
mined without such confirmation, the title to the land
shall be absolutely vested in the company, county or town
in fee simple.
>> 2
By the first, as has been seen, the assent of the local
authorities was made necessary in order to occupy the
streets of the town. By the other (and this continues to
be the law) the title acquired to the streets of the city in
condemnation proceedings is declared to be in fee simple
and not a mere easement. It seems, therefore, that as to
all streets condemned under this provision from 1849 to
the present time the assent of the city council to their use
is all that is necessary, and that the adjoining owners will
not be entitled to compensation when rails are laid, wires
strung or poles erected. The question, however, has not
¹ Code, 1849, ch. 56, sec. 23;
* Code, 1849, ch. 56, sec. 15;
Code, 1887, sec. 1093.
Code, 1887, secs. 1079, 1083.
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ECONOMIC LEGISLATION.
}
been decided as to the corporations with which this work
is particularly concerned, though the right of a railroad
company to lay its rails in the streets of a city without
compensation to abutting owners has been decided ad-
versely to the railroad company by the special court of
appeals.¹
1
Between 1849 and 1874-5, the title to all streets con-
¹ This was the case of the Petersburg R. R. Co. v. Burtons, 5 Va. Law
Journal, p. 460. In this case the plaintiff sued the defendant railroad
for damages for putting down its track and running its cars thereon in a
street of the city of Petersburg on which plaintiff's house abutted. The
track was put down with the consent of the common council. The
court said: “It does not appear when the street was dedicated to pub-
lic uses, but it may be fairly inferred that it was many years ago, and
that the public only took an easement, a usufruct in the street to be
used for the ordinary purposes of travel. The fee simple thus remained
in the owners of the lots fronting on the street." The plaintiffs' ver-
dict for damages was accordingly sustained. It will be seen from
this extract that the question of the title to the street was not proven
or apparently discussed, but it was simply inferred that the public had
only an easement in the street. The act in the code of 1849, giving a
fee simple in streets condemned for public use, does not seem to have
been referred to.
In the recent case of Hodges v. Seaboard & Roanoke R. R., 16 Va. Law
Journal, p. 109, the railroad company sought to lay its tracks in the
public streets of Portsmouth. The plaintiff enjoined it. Held:
1st. The abutting owners own the fee in the land to the middle of the
street, subject to the easement of the public for the purpose of travel.
2d. The occupation of the street by a railroad company is an addi-
tional burden and a taking of private property for public use without.
compensation.
3d. Injunction is the proper remedy in all cases where there has been
an unlawful imposition of a railroad upon private property.
4th. By section 1072, an internal improvement company is prohibited
from invading a dwelling-house or the space within sixty feet without.
the consent of the owner. (R. & Y. R. R. Co. v. Wicker, 13 Grattan, 375.)
By the act of January 15, 1875, code of 1887, section 1093, it is provided
that no company shall occupy the streets of a town without the assent.
of the corporate authorities; and in case any lots thereon shall by such
occupation be impaired in value, such company shall, before occupying
such streets, make compensation. It seems to be true that this latter
act by necessary implication repeals section 1072. But the defendant
company, not having proceeded under this latter act, can not in this.
proceeding be aided by such repeal.
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1
!
demned for the use of towns seems to be beyond ques-
tion that of a fee simple. But at that date the code of
1849 was changed so as to read as follows: "No company
shall cross or occupy with its works the streets or alleys,
public or private, of any city or town without the assent
of the corporate authorities thereof, unless such assent be
dispensed with by special provision of law; and in case
any lot or lots along the line of such streets or alleys shall,
by such occupation or crossing be impaired in value, such
company shall, before crossing or occupying such streets
or alleys, make compensation therefor to the owner of the
same; said compensation, if the parties can not agree upon
the same, to be ascertained in the mode prescribed by this
chapter.¹
What the effect of this provision for compensation is, it
is impossible to say. The section has not been judicially
construed other than the reference to it in Hodges v. S. &
R. R. R. Co. (supra). It would seem, in the absence of
such construction, that it did not apply at all to lots abut-
ting on streets to which the fee simple title has been
acquired, but only to such as were condemned prior to
1849, or the easement in which has alone been dedicated
to the public either before or after that date.
Since the statute allowing the city to acquire the fee
simple title to streets and land has been held constitu-
tional, it would seem that the adjoining owners having
been paid in full would have no right to exact additional
2
¹ Sec. 1093; Laws, 1874-5, pp. 35-6..
2 In Roanoke City . Berkowitz, SO Va. Rep., p. 616, the constitutionality
of section 1079 of the code of 1887 was sustained. This was an appeal
from the report of commissioners appointed to assess the damages for a
certain piece of land required by the city. They reported a certain
sum, if only an easement was acquired, and a larger sum if the land
was vested in the city in fee simple. The court held: 1st. Corporations
condemning land under code of 1873, chap. 56, sec. 11, must take and
pay for the fee simple and not merely an easement, except it be a turn-
pike company. 2d. This statute requiring the condemnation of the fee
simple is not repugnant to the constitution.
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ECONOMIC LEGISLATION.
compensation for their land whatever might be the use
to which the city might put it. The latter statute is
probably intended to refer to damages for obstructing in-
gress and egress, lights, for the noise, smoke, etc., rather
than compensation for land strictly.
The last and most important act on this subject was
passed by the last legislature, which provides that "The
acknowledgment and recording of such plat¹ shall operate
to create a public easement or right of passage over such
portion of the premises platted as is on such plat set apart
for streets or other public use, and shall be equivalent to a
deed in fee simple to such portion thereof as is therein
dedicated to charitable, religious or educational purposes;
provided, that nothing herein contained shall prevent the
persons who set apart such lands for streets and alleys,
their heirs and assigns, where otherwise they have the
right and power, to erect, put down, and maintain gas,
water, and electric works, pipes, wires, and fixtures, to
erect, put down, and maintain the same along or under
the portions so set apart; provided, however, that they
shall not obstruct or hinder passage over such streets or
alleys further than is reasonably necessary while laying
down, erecting or repairing such works, pipes, wires, and
fixtures." 2
This seems to be a return to the old idea of a simple
easement, but its language shows it only applies to such
streets as have been laid off in a plan or plat which has
been recorded, and the streets thus dedicated to the use
of the public. This act will be largely confined to the
numerous booming towns that have sprung up within the
last five years in Virginia. The city will still acquire a fee
simple title to all streets which have been condemned for
such a purpose.
To sum up the past acts and decisions and thus deter-
¹ The plat referred to is the one usually recorded when a new town is
laid off, and on which are shown the streets and alleys.
2 Laws, 1889-90, p. 35, ch. 45.
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mine the present interest or title which the public have in
the highways of the state, and what rights corporations.
can exercise that have the "highway franchise" bestowed
upon them, it may be said:
1. That, in respect to county roads, the public have
only an easement limited to the right of passage; that
the fee is in the abutting owners or in the heirs of the
original grantor; that a company erecting poles, laying
pipes, etc., is liable to pay compensation to adjoining
owners; that there may be an exception in favor of the
use of the road by a street car company.
2. That all streets which have been dedicated, unless
by an express dedication that passed the fee simple title
and not merely an easement, or all streets laid off or oth-
erwise used prior to the year 1850, are still the property
of the abutting owner, subject to this right of passage.
A company using such a street would be liable for dam-
ages, unless the court should hold that such use was in-
cluded in the more extensive easement which the public
acquires in the streets of a town.
3. All streets condemned since 1850 can, upon proper
authority, be used by a corporation erecting poles or lay-
ing pipes without compensation to the adjoining owners.
4. But, even since 1850, in a street laid out or otherwise
dedicated but not condemned, the public would only have
an easement and a corporation would be liable to pay
damages to abutting owners, provided its use was shown
to be an additional servitude.
5. As to streets dedicated by plat and coming within
the provisions above given (chapter 45, Laws, 1889-90), it
is expressly provided that only an easement is conveyed.
Additional damages, however, for the use of these streets
by a corporation duly authorized can only be obtained by
showing that such use is an additional servitude.
Special damages; property owners' rights.-See
under “CONTROL OF STREETS," above.
Condemnation of property.-Charters granted by the
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ECONOMIC LEGISLATION.
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2
circuit court under the general law do not invest the com-
pany with the power to have land or any other thing con-
demned for its use or benefit under any of the provisions
of the code. The manner and conditions upon which an
internal improvement company, county or town, can have
land condemned for the purposes of the corporation, where
the terms of purchase can not be agreed upon with the
owners, are prescribed by statute. Provision is made for
the appointment of five disinterested freeholders (any
three of whom may act) by the court of the county or cor-
poration in which such land lies. Notice must be given
of the application for such appointment. The duty, oath
and mode of procedure of such freeholders and the action
of the court thereon is prescribed. The corporation may
proceed with the work upon paying the damages assessed,
and no injunction can be awarded to stay these corpora-
tions in the prosecution of their work.2
No law can be passed for taking from a railroad or in-
ternal improvement company³ its works or property with-
out making to it just compensation.*
See also under " CONTROL OF STREETS," above.
Charges for franchises.-See under " TAXATION."
Methods of construction.-Among the conditions
usually attached by the city council in the granting of
street railway franchises is that the company shall pave,
1 Sec. 1146.
2 Sec. 1073-93.
3 It has never been decided in this state that a street railway is a rail-
road or an internal improvement company. But street railways are
assessed and taxed as if they were both, and it may be, with much con-
fidence asserted that they would be so held to be when the question
arises. An internal improvement company is generally held to be one
that is allowed to charge public tolls for its services. (Sec. 1185.) Un-
der this head street railways would certainly come, and doubtless gas,
electric light companies, etc. The point as to whether a street railway
is both a railroad and an internal improvement company will be passed
upon by the supreme court of appeals of Virginia in the case of Lang-
horne v. Richmond City Railway Company, to be argued at the October
term, 1892, or the January term, 1893.
* Sec. 1240.
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}
repair and repave the streets between the tracks and two
feet on each side. All street railways in Virginia are
owned by private corporations.
Regulations as to service.—It is provided that no law
can be passed by the legislature changing the tolls of any
railroad or internal improvement company without its
consent.¹
1
A telegraph company is liable for alteration of a message,2
and for failure to send a cipher message. The telegraph
company is liable for all the direct damages which both par-
ties would have contemplated as flowing from the breach of
the contract or violation of the duty, if, at the time, they
had bestowed proper attention to the subject and had
been fully informed of all the facts. Telegraph compa-
nies are not public carriers, in the strict sense of the term,
yet, on account of the public nature of their employment,
they have in many cases been held to a very similar re-
sponsibility.³
The councils of every city and town, with other general
powers, are given the right to prevent the pollution of the
water and injuries to water-works, and for this purpose
their jurisdiction extends to a mile above the same.'
Some gas companies have authority to distribute electric
light.5
Safety of life and property.-In the case of the Pied-
mont Electric Ill. Co. v. Patterson's Adm'r, 84 Va. 747,
which was an action by the administratrix of decedent
against an electric light company for negligently killing
an employe, who was sent to look for a break in the cir-
cuit whilst the current was on, and took with him a de-
fective shunt-cord. It was held that, where the defects in
the shunt-cord used by intestate which caused his death,
were visible to him, and yet he chose it for himself without
1 Sec. 1240; see (C
CONDEMNATION OF PROPERTY," note 3.
Washington & New Orleans Telegraph Co. v. Hobson, 15 Grat. 122.
3 Western Union Telegraph v. Reynolds Bros., 77 Va. 173.
• Sec. 1038.
5 Laws, extra session, 1887, p. 468.
A
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ECONOMIC LEGISLATION.
necessity or direction, he was guilty of contributory negli-
gence and there can be no recovery.
In the case of the Richmond City Railway Co. v. Scott,
86 Va. 902, where the company stopped its car along side
of an excavation dug by the city, and the plaintiff, in
alighting, stepped into the ditch and was injured, it was
held: 1. That it was sufficient for declaration to show the
relation of passenger and carrier, the circumstances out
of which the particular duty owing to plaintiff arose
and the breach of duty. 2. Such carriers bind themselves
to carry safely those whom they take into their coaches,
to the utmost care and diligence of very cautious persons;
and this contract includes the duty of giving passengers
a reasonable opportunity to alight in safety from the train,
and a violation of such duty is culpable negligence.¹
State and municipal aid.-The constitution prohibits
the state from loaning its credit to any person or corpora-
tion or to subscribe to the capital stock of such cor-
poration.2
3
But express permission is given to cities and counties to
subscribe to the stock of any internal improvement com-
pany which has been incorporated by the general assem-
bly. The only limitation put upon the opportunity thus
afforded for extending municipal aid is that in the case of
cities and towns indebtedness must not exceed seventeen
per cent of their real and fifteen per cent of their personal
property.*
Public service.-A municipality may contract with
franchise companies for service in the same manner a pri-
vate individual would. The city of Richmond has re-
cently contracted with a private electric light company to
furnish it with five hundred arc lights for two years for
the purpose of lighting its streets. Where the lights shall
1 Richmond City Railway Co. v. Scott, 86 Va. 902.
Const., Art. X, secs. 12, 13. 14, 15, 17.
3 Secs. 1243-1252; see CONDEMNATION OF PROPERTY," note 4.
* Sec. 1039.
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}
:
be placed, the character of the poles, etc., are to be de-
termined by the city engineer. The city is to have every
facility given it by the company to measure the current to
see whether the two thousand candle power called for by
the contract is furnished.
Alteration, amendment, etc., of franchises.-The
general assembly has the power to amend or repeal the
sections giving the highway franchise to telephone and
telegraph companies at pleasure.'
1
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
There are few charters granted to private corporations
to build water-works in this state. Most of those thus
built have been acquired by the cities to supply which
they were erected.
In 1849, the council of every city and town, together
with other general powers, was given the right to light
the streets, walks, and alleys, and to provide in or near
the city or town water-works; to prevent the pollution of
the water and injuries to the water-works, for which pur-
pose their jurisdiction shall extend to a mile above the
same. The following cities own their own water-works:
Norfolk; Petersburg; Lynchburg; Charlottesville; Rich-
mond.
2
The following have water-works operated by private
companies: Fredericksburg (is supplied by two compa-
nies, one owned by the city, the other by a private corpo-
ration); Alexandria; Roanoke (this company was char-
tered by the circuit court; the city, after twenty years.
and upon one year's notice, has the right to purchase for
a price to be fixed by non-resident appraisers).
In the case of the Richmond & Alleghany R. R. v. City
of Lynchburg, 81 Va. 473, the provisions of the charter
of Lynchburg empowering the council, when water mains
are laid in the street, to levy an annual special assessment
¹ Sec. 1290. See note "A" p. 2024.
2 Sec. 1038.
2024
ECONOMIC LEGISLATION.
3
on the real estate on both sides of such street to meet the
expenses of the water-works, and further authorizing it to
exempt from such assessment any property to which water
is supplied and water rates charged, were held not to be
repugnant to the state constitution.
The following cities have their gas supplied by private
corporations: Roanoke (charter was obtained from the
circuit court; this company has been held to be exempt
from taxation under the charter of the city, granted Janu-
ary 31, 1884); Staunton; Lynchburg; Norfolk; Freder-
icksburg; Petersburg. The following cities own their gas-
works: Charlottesville; Alexandria; Richmond. Some
cities owning their gas-works have had the power to man-
ufacture electric light added.' Staunton and Alexandria
are the only two cities in the commonwealth that own
their electric plants.
1 Laws, 1889-90, p. 584; Laws, Extra Session, 1887, p. 197.
Note "A."-In the case of Wheat v. Alexandria, 16 Va. L. J. 99, it was
held that full authority over streets and highways belongs to the legisla-
ture, unless restrained by the constitution; that the privilege of opening
them for gas and water pipes is a franchise which can be granted only
by the legislature or by the city under legislative authority; and that a
city ordinance, making the right granted by charter to a company to
open streets, dependent upon the will of the mayor and street commit-
tee was ultra vires; but it was further held that the city council may
prescribe regulations touching the opening and repair of streets by the
company, if not inconsistent with the essential rights granted by the
company's charter, such as due precautions against accidents, and rea-
sonable notice to the city authorities before digging up the streets, etc.
In the case of Roanoke Gas. Co. v. Roanoke, 16 Va. L. J. 306, it was
held that the power to lay out, grade, and improve its streets expressly
conferred on the city council is a delegated power which is continuing
and inalienable; that though a city may have contracted to allow a
company to lay gas and water pipes in its streets, yet, if in lawfully low-
ering the grade of streets the pipes become exposed and obstruct the
safe passage along the streets, the municipal corporation may, of right,
require their removal or may itself remove them as nuisances; that the
power of grading streets, etc., is vested in the municipal corporation
which is the judge of its necessity or expediency, and not the courts;
and that except by special provision a municipality is not liable to prop-
erty owners for consequential damages, resulting from either establish-
ing a grade or changing one established, although improvements were
made in conformity with the first grade.
WASHINGTON."
EDITED BY F. M. ELLSWORTH, ATT'Y, COLFAX, WASHINGTON.
SUBDIVISION I.-HISTORICAL.
Prior to the year 1890, Washington was controlled by
the organic act of congress governing the territories and by
the several acts of the legislature on the subject of corpo-
rations. The statutes of the United States provide that
the legislative assemblies of the several territories shall
not grant private charters or special privileges, but they
may, by general incorporation acts, permit persons to asso-
ciate themselves together as bodies corporate for mining,
manufacturing, and other industrial pursuits, or the con-
struction or operation of railroads, wagon roads, irrigation
ditches and the colonization and improvement of lands in
connection therewith, or for colleges, seminaries, churches,
libraries or any benevolent, charitable or scientific associ-
ations.2
Under the territorial government no special charter
could be granted, and no special privileges, and all corpo-
rations were required to be formed under general laws
enacted by the legislature. The legislature therefore en-
acted a general statute authorizing the formation of cor-
porations for manufacturing, mining, milling, wharfing
and docking, mechanical, mercantile, building, and farm-
ing purposes; for the building, equipping, and managing
¹Unless otherwise stated, references to the constitution are to that of
1890. References to the statutes are to the Code of 1881, by section
simply, and to Hill's Code of 1891, designated as "H. C." The session
laws are referred to as Laws" of the respective years. As to state
reports see Appendix “A."
(C
2 U. S. Rev. St., sec. 1851.
VOL. II-47
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ECONOMIC LEGISLATION.
water flumes for the transportation of wood and lum-
ber; for the purpose of building and equipping and running
railroads; and for engaging in any other species of trade
or business. Under the last clause of this provision, tele-
phone, electric light, street railways, and many other cor-
porations were formed and operated. This act was passed
soon after the organization of the territory, and has re-
mained in force, with few immaterial changes, up to the
present time.
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation, how obtained.-Corporations in this
state can be formed only under general laws. The consti-
tution forbids the legislature from granting corporate pow-
ers or privileges by special act.²
The general law provides that corporations for manu-
facturing, mining, milling, wharfing and docking, me-
chanical, banking, mercantile, improvement, and building
purposes; or for the building, equipping, and managing
water flumes for the transportation of wood and lumber; or
for the purpose of building, equipping, and running rail-
roads;³ or constructing canals; or engaging in any other
species of trade or business, may be formed according to
the provisions of this chapter; such corporations and the
members thereof being subject to all the conditions and
liabilities herein imposed, and to none others; provided
that no such corporation shall commence business or in-
stitute proceedings to condemn land for corporate purposes
until the whole amount of its capital stock has been sub-
scribed; and provided, further, that the provisions of the
4
¹ Ch. 185, sec. 2421, et seq.; H. C., sec. 1497, et seq.
2 Const., sec. 1, Art. XII.
Railroad" is understood in this state to include "street railway."
"This chapter" is chapter 185 of the code of 1881, the provisions of
which, as modified by subsequent legislation, are embodied in chapter
1, title 18, and in secs. 1534 and 1587, of Vol. 1, of general statutes,
Hill's Code, sec. 1491 et seq., and is the entire act of March 7, 1891, and
was enacted as amended, reading: Of sec. 2421, of the code of 1881.
WASHINGTON.
2027
foregoing proviso shall not apply to corporations engaged
exclusively in loaning money on real estate.'
Articles of incorporation.-Two or more persons de-
siring to form a corporation for the purposes above set
forth must prepare, subscribe, and acknowledge written
articles of incorporation in triplicate.2
Persons may organize themselves into a corporation for
purposes other than those enumerated above, with all the
powers they would enjoy, if they had been incorporated
for the purposes there set forth, but this provision only
affects the purposes of the organization, and it must not
be inconsistent with the organic act.³
The constitution provides: That all existing charter
franchises or exclusive privileges under which an actual
and bona fide organization shall not have taken place and
business have been commenced in good faith at the time
of the adoption of the constitution, shall thereafter have
no validity.*
Must show what.-The articles of incorporation must
specify the corporate name of the company; the objects
for which formed; the amount of its capital stock; the
time of corporate existence, not to exceed fifty years; the
number of trustees and the names of those who are to
manage the company temporarily until trustees are elected
by the corporation, for a time not less than two nor more
than six months; and the name of the place where the
principal business of the company is located.³
Filing. One of the copies of the articles must be filed
in the office of the secretary of state, and one in the office
of the county auditor of the county in which the principal
place of business of the company is to be located, and one
remains in the office of the corporation. The articles, after
being so filed, are received in evidence in all of the courts
of the state as prima facie of the facts therein stated."
¹ Sec. 2421; H. C., sec. 1491.
³ Sec. 2445.
2 Sec. 2422; H. C., sec. 1498.
'Const., Art. XII, sec. 2.
5 Secs. 2423, 2424; H. C., secs. 1499, 1500.
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ECONOMIC LEGISLATION.
Commencing business. See under "INCORPORATION,
HOW OBTAINED," supra, and "CAPITAL STOCK," post.
Amendments, repeals, etc.-The constitution provides.
that all laws relative to corporations may be altered,
amended or repealed by the legislature at any time, and
all corporations doing business in this state may, as to
such business, be regulated or restrained or limited by
law."
1
The articles of incorporation may be amended by filing
supplemental articles in the same manner as the original.2
When a corporation desires to remove its principal place
of business from one county to another in the state, certi-
fied copies of its certificates of incorporation must be filed
in the office of the county auditor of the county to which
it desires to move its principal place of business. If it
desires to remove its principal place of business from a
city, town or locality to another in the same county, no-
tice of such removal by publication must be given at least
once a week for four weeks in a newspaper published
nearest to the city or town or location to which the prin-
cipal place of business of such corporation is to be
moved.3
Duration of charter.-Corporations may be organized
for any period of time less than fifty years, but their char-
ter can not be renewed beyond the time fixed in their
articles of incorporation; but supplementary articles may
be filed at any time.2
Powers.-Corporations have power to sue and be sued;
to have a seal and alter the same at pleasure; to appoint
officers, agents, and servants to transact the business of
the company and define their powers and fix their com-
pensation; to require of them security for the faithful
performance of their duties and remove them at will, ex-
cept a trustee, who can only be removed by a two-thirds
¹ Const., Art. XII, sec. 1.
Sec. 2444; H. C., sec. 1520.
2 Sec. 2445.
WASHINGTON.
2029
vote of the stockholders; to make by-laws not inconsist-
ent with the law; to manage its property, regulate its
officers and the transfer of its stock, and carry on all
kinds of business within the objects and purposes as ex-
pressed in its articles of incorporation.'
Corporations legally organized under the laws of this
state can contract with one of its trustees in the absence
of any statutes to the contrary.2
Officers; meetings; voting; quorum, etc.-The pow-
ers of a corporation are exercised by a board of trustees
of not less than two, who must be stockholders and a ma-
jority of them citizens of the United States and residents
of the state; before entering upon their duties, they must
be sworn to support the constitution of the United States
and the constitution of the state, and to faithfully perform
the duties of the office of trustee for such company.³
A majority of the whole number of the trustees consti-
tutes a quorum to transact business.*
After the first set of trustees, trustees must be elected
by ballot by the stockholders, at such time and place and
upon such notice and in such manner as prescribed by the
by-laws. Each stockholder is entitled to one vote in per-
son or by proxy for each share of stock held or repre-
sented by him, and the persons receiving a majority are
the trustees, but the corporation may by their by-laws
limit bona fide stockholders to a single vote or one vote for
every full share of paid up stock or its equivalent in as-
sessable stock, disregarding the number of shares he may
own. To illustrate: if a stockholder owning four shares
has paid twenty-five per cent on each, he is entitled to one
vote; if he has paid fifty per cent on each share, to two
votes; but this limitation must be fixed by by-laws.
3
Two-thirds of the stockholders may at any time remove
a trustee and elect his successor, after due notice, as pre-
¹ Sec. 2424; H. C., sec. 1500.
2 Budd v. Walla Walla, P. & P. Co., 2 Wash. 347.
'Sec. 2425; H. C., sec. 1502.
Sec. 2427; H. C., sec. 1504.
2030
ECONOMIC LEGISLATION.
scribed by the by-laws of the company; and the trustees
may at any time fill any vacancy in the board of trustees
that may be caused by death, resignation, or otherwise,
except removal by the stockholders, which vacancy must
be filled by a vote of the stockholders.¹
If the board of trustees are not elected on the day desig-
nated in the by-laws, the corporation is not dissolved, but
such trustees may be elected on any other day that may be
provided for by the by-laws of the company, and the acts of
the trustees are valid until their successors are elected and
qualified.²
The first meeting of the board of trustees must be called
by a notice signed by one or more of the trustees named
in the articles, designating the time and place of the meet-
ing, and published in a county newspaper published in the
county where the principal place of business of the com-
pany is located, or, if there be none in the county, then
the nearest thereto in the state.³
When shares are held by a person as executor, adminis-
trator, guardian, or trustee, he is deemed a stockholder,
and entitled to represent the stock at all meetings of the
company. Any stockholder may pledge his stock by a
delivery of the certificate or other evidence of his interest
and still be entitled to represent the same at all meetings
of the company, and vote as any other stockholder."
Books. The trustees must keep a book containing the
names of all the stockholders, alphabetically arranged;
the number of shares held by each, and the time when
each owner became such. This book, during the business
hours, Sundays and holidays excepted, must be open for
the inspection of stockholders and creditors of the com-
pany, and any creditor or stockholder has the right to
take extracts from the same at any time.6
¹ Sec. 2525; H. C., sec. 1502.
³ Sec. 2428; H. C., sec. 1505.
• Sec. 2432; H. C., sec. 1509.
2 Sec. 2426; H. C., sec. 1503.
* Sec. 2431; H. C., sec. 1508.
Sec. 2436; H. C., sec. 1513.
WASHINGTON.
2031
The clerk or person in charge of such books must make
certified copies of any entries or any papers on file in the
office of the company when demanded by any stockholder
or creditor, which certified copy is presumptive evidence
in all courts of the state in an action against the company
or any stockholders.' If, at any time, the clerk or person
having charge of the books of such corporation makes
any false or improper entry, or refuses or neglects to ex-
hibit the books of the company, or to allow any stock-
holder or creditor to inspect the books and records, or to
take extracts therefrom, or refuses to give a certified copy
of any entry in the books, he is guilty of a misdemeanor,
and liable to the injured party in a penalty of not less
than $100 nor more than $1,000, and, in addition, to all
damages resulting therefrom. This penalty and the dam-
ages are recoverable in any court of competent jurisdic-
tion. In addition to this penalty, the corporation forfeits
to the people $100 for every day it neglects to keep its
books open for inspection, which is recoverable in the
name of the people in the proper court of competent ju-
risdiction.2
2
Capital stock.-There is no limit to the amount of
capital stock prescribed by statute; but no corporation.
cau commence business or institute proceedings to con-
demn land for corporate purposes, until the whole amount
of its capital has been subscribed.³
The stockholders may in the by-laws prescribe the time,
manner, and amounts of payment on stocks; but, in case
the by-laws do not prescribe for payments, the board of
trustees have power to demand and call in from the stock-.
holders the sums by them subscribed, at such times and in
such manner as they deem proper. In all cases of assess-
ments, however, notice of each assessment must be given
to the stockholders personally, or by publication of a no-
¹ Sec. 2436; H. C., sec. 1513.
3 Sec. 2421; H. C., sec. 1534.
2 Sec. 2437; H. C., sec. 1514.
2032
ECONOMIC LEGISLATION.
tice in the county paper of the county where the corpora-
tion has its principal place of business, and in case no
newspaper is published in the county, then in a newspaper
nearest in the state. After notice has been given, if any
stockholder fails to make payments of his assessments on
the stock held by him, so many of his shares may be sold
as are necessary for the payment of the assessments on
the stock held by him. The sale must be made as pre-
scribed by the by-laws of the company, at public auction
to the highest bidder, after four weeks' notice served per-
sonally on the stockholders or by publication, but in no
case at the office of the company. The person paying the
assessment, together with the expenses, for the smallest
number of shares or portion of a share, must be deemed
the highest bidder.'
Trustees have no power to divide, withdraw, or in any
manner pay to the stockholders any part of the capital
stock.2
Increase and decrease of.—A corporation may increase or
diminish its capital stock to any amount deemed proper for
the purposes of the corporation; but before it can dimin-
ish its capital stock, if its debts and liabilities exceed the
sum to which the capital is proposed to be reduced, the
debts and liabilities must be reduced so as not to exceed
the amount of capital stock so reduced.³
When a corporation desires to increase or diminish its
capital stock, a meeting of the stockholders must be
called, and a notice given signed by a majority of the
trustees, published at least eight weeks in some newspaper
published in the county where the principal place of busi-
ness of the company is located, or if no newspaper be
published in the county then in a newspaper nearest
thereto in the state, which notice must specify the object
of the meeting, the time and place where it is to be held,
¹ Sec. 2430, as amended, Laws, 1885, p. 84; H. C., sec. 1507.
2 Sec. 2423; H. C., sec. 1510.
3 Sec. 2438; H. C., sec. 1515.
WASHINGTON.
2033
and the amount to which it is proposed to increase or di-
minish the capital.'
A vote of two-thirds of all the stockholders is necessary
to increase or diminish the amount of the capital stock.¹
If the stockholders vote in favor of such increase or
diminution, certificates of the proceedings in triplicate,
showing a compliance with the provisions of the statute,
the amount of capital stock actually paid in, the whole
amount of the debts and liabilities of the company, and
the amount to which the capital stock is proposed to be
increased or diminished, must be made, signed, and veri-
fied by affidavit of the chairman and secretary of the
meeting, and certified to by a majority of the trustees; one
must be filed in the office of the secretary of state, one in
the office of the county auditor of the county in which
the principal place of business of the company is located,
and one in the office of the company, and when so filed,
the capital stock of the corporation must be increased or
diminished to the amount specified in the certificate."
Trustees have no power to reduce the capital stock ex-
cept in the manner above stated.³
Transfer of.-Stock is personal property, and must be
transferred in the manner prescribed by the by-laws, but
any transfer is invalid (except between the parties) unless
the same be entered on the books of the company so as to
show the names of the parties, to whom sold, the number
and designation of the shares, and the date of such transfer.'
Bonds; debts, etc.-Corporations, which term includes
all associations and joint stock companies having any
powers or privileges of corporations not possessed by in-
dividuals or partnerships, are not authorized to issue
bonds, notes, bills, or other evidences of indebtedness for
circulation as money, except railroad companies, which
may issue bonds not to exceed double the amount of the
¹ Sec. 2439; H. C., sec. 1516.
* Sec. 2433; H. C., sec. 1510.
* Sec. 2438; H. C., sec. 1515.
• Sec. 2429; H. C., sec. 1506.
2034
ECONOMIC LEGISLATION.
1
paid up capital stock, and guarantee bonds issued by ir-
rigation companies. This exception it is believed applies
as well to street railways as to any other railways. While
the statute does not mention street railways, except where
it is mentioned in connection with the granting of city
charters, there seems to be no reason why a railroad run
by electric motor or other power is not a railroad as much
as one operated by steam or other power.
Dividends.-The trustees have not the power to make
or declare any dividends except from the net profits aris-
ing from the business of the company.2
Liability of stockholders.-Stockholders are person-
ally liable to the creditors of the company to the full
amount of unpaid capital stock held by them, or to the
full amount of unpaid subscription to the capital stock.
Persons holding stock as executors, administrators,
guardians, or trustees, or in pledge, or as collateral se-
curity, are not personally liable as stockholders, but the
person pledging the stock is considered as the holder of
the same.
The estate and funds in the hands of an exec-
utor, administrator, guardian, or trustee, are liable, how-
ever, to the same extent as though the testator, intestate,
ward, or person interested in the trust fund were living
and competent to act.³
Liability of officers and directors.-Trustees violating
the provisions of the statute as to dividends, withdrawing,
dividing, or reducing the capital stock (except those who
have their dissent entered at large on the minutes of the
board of trustees or those not present), are individually liable
both jointly and severally, to the corporation and the
creditors of the corporation, in the event of its dissolu-
tion, to the full amount so divided, reduced, or paid out.
This, however, does not apply to prevent a division of the
capital stock which remains after the payment of all debts
¹ Const., Art. XII, sec. 5; Code, sec. 2434, as amended Laws, 1886; H.
C., secs. 245, 1511.
2 Sec. 2433; H. C., sec. 1510.
j
Sec. 2435; H. C., sec. 1512.
WASHINGTON.
2035
upon the dissolution of the corporation, or at the expira-
tion of its charter.'
As to liability of clerk for neglect of duty, etc., see
"Books," supra.
Reports. Any person, company, or corporation, using
or operating a telegraph, telephone, or electric light line
in this state, must annually, in the month of April, return
to the county assessor a schedule or statement, under
oath, showing the amount of capital stock authorized, the
number of shares into which divided, the amount of cap-
ital stock paid up, the market value, or, if no market
value, then the actual value of the shares of stock, the
total amount of all indebtedness except current expenses
for operating the line, the length of lines operated in each
county and the total length in the state, and the total as-
sessed value of its tangible property in this state. Such
schedule must give the date, character, extent, and value
of such franchise, the number of poles per mile, and the
number of wires; and every electric light company must
give the kind of light and the number of each kind sup-
plied, the location and value of each electric plant, whether
the ground is owned or leased, and, if leased, the owner's
name, and the value of the plant separate from the
grounds.?
Taxation.—All property, real and personal, owned by
any person, company, or corporation using or operating
telegraph, telephone, or electric light lines, and situated in
this state, must be listed and assessed for taxation, and is
subject to the same levies as the property of individuals
and the same rules that govern other companies and cor-
porations.2
If any person or corporation gives a false or fraudulent
list, or fails or refuses to deliver to the assessor, when
called on for that purpose, a list of the taxable personal
property which he is required to list, he or it is liable to a
¹ Sec. 2433; H. C., sec. 1510.
2 Laws, 1891, p. 294, sec. 39.
2036
ECONOMIC LEGISLATION.
penalty of not less than $10 nor more than $2,000, to be
recovered in any proper form of action in the name of
the State of Washington, on the complaint of any person;
such fine, when paid, to be paid into the county treasury
to the credit of the general fund.¹
2
Of stock in hands of holders.-The statute provides that
stock shall be deemed personal property, and that execu-
tors or administrators holding such property shall repre-
sent the same at meetings of stockholders.3 The question
of its taxability in the hands of the holder has not been
raised in the courts of this state; it is believed, however,
that the holder of stock on the first day of April of each
year
is liable for the assessment of taxes.
Dissolution; forfeiture.-Any corporation may be dis-
solved by presenting to the judge of the superior court of
the county or counties in which the principal office of the
company is located a petition to that effect, accompanied
by a certificate of its proper officers, setting forth that at
a meeting of the stockholders called for the purpose it was
decided by a vote of two-thirds of all the stockholders to
dissolve the incorporation. Notice of such application
must be given by the clerk, setting forth the nature of the
application and specifying the time and place at which it
is to be heard. This notice must be published in some
newspaper of the county in which the court is held once
a week for eight weeks, or, if no newspaper be published
in the county, in some newspaper nearest in the state. At
the time and place designated, or at any time to which it
may be postponed by the court or judge, the court must
proceed to consider the application, and, if satisfied that
the corporation has taken the necessary preliminary steps.
and obtained the necessary vote to dissolve itself, and that
all claims against the corporation are discharged, he must
enter the order declaring it dissolved.*
¹ Laws, 1891, p. 295, sec. 40.
3 Sec. 2431; H. C., sec. 1508.
2 Sec. 2439; H. C., sec. 1506.
* Sec. 2442; H. C., sec. 1519.
WASHINGTON.
2037
Upon dissolution, the trustees at the time are trustees
of the creditors and stockholders, and have full power and
authority to sue for and recover the debts and property of
the corporation, in the name of the trustees, to collect
and pay the outstanding debts, to settle all its affairs, and to
divide among the stockholders the moneys and other prop-
erty that remains after payment of debts and necessary
expenses.'
Foreign corporations.-Any corporation incorporated
under the laws of any state or territory of the United
States or any foreign country for the purposes for which
domestic corporations are authorized under the laws of
this state, have full power to sue and be sued in any court
of competent jurisdiction in this state, to acquire, purchase,
hold, mortgage, sell, convey, or otherwise dispose of (in
the name of the corporation) all real estate or personal
property necessary or convenient to carry on the objects
and purposes of the company, and also any interest in real
estate by mortgage or otherwise, to do and transact every
kind of business within this state, in the same manner
and to the same extent as though they were organized un-
der the laws of this state; but they can not transact busi-
ness on more favorable terms than are prescribed by law
for similar corporations under the laws of this state.²
A majority of the stockholders must be citizens of the
United States, or must have declared their intention to
become such before it can have the right to acquire or
hold any lands except lands for mining, or where they are
acquired under mortgage in good faith in the ordinary
course of business in the collection of debts, or necessary
to carry on the business for which such corporation is or-
ganized.³
Before a foreign corporation is authorized to transact
¹ Sec. 2441; H. C., sec. 1518.
¹ Secs. 2478-79, as amended, Laws, 1890; H. C., secs. 1524.
³ Secs. 2480, 2527, as amended, Laws, 1890; H. C., sec. 1524.
2038
ECONOMIC LEGISLATION.
business in this state, it must file in the office of the secre-
tary of state a certified copy of its charter or articles of
incorporation, certified to by the officer who is the cus-
todian of the same according to the laws of the state, ter-
ritory, or country where incorporated, and who is author-
ized by the laws of the state, territory, etc., to issue such
certificates of incorporation, which, articles or certificates
must be attested by the officer certifying the same under
his hand and seal; and when so attested they are received
as prima facie proof of the facts stated and the genuine-
ness of the signature of the certificate; but, in case such
officer or company has not a seal, the fact must be stated,
and the secretary of the state or territory must certify to
the genuineness of the signature of the officer making
such certificate, and that he held the office described in
the certificate, and in the case of a corporation from a
foreign country, this certificate must be made by the consul-
general, vice-consul, deputy consul, consular agent, or
commercial agent of the United States nearest the place
where the certificate is made.¹
Foreign corporations must appoint an agent, who must
reside at the principal place of business in the state; such
appointment must be in writing, signed by the president.
or chief officer of the corporation, and must name the
place where the principal place of business is to be, and
must authorize such agent to accept service of process in
any action or suit. The signature of such officer is suffi-
cient proof of his appointment, which appointment must.
be filed for record in the office of the secretary of state, and
be there recorded. Corporations must at all times, while
transacting business in this state, have such an agent, and
service of any process, pleading, notice, or other paper,
on such agent, is service on such corporation. The cor-
poration may change such agent or such place of business,
from time to time, by filing and recording new appoint-
¹ Secs. 2480, 2527, as amended, Laws, 1890; H. C., sec. 1525.
ļ
WASHINGTON.
2039
ments, stating the change of such agent or place of busi-
ness.¹
1
SUBDIVISION III.-FRANCHISES.
How obtained. The legislature has no power to grant
franchises, or the highway right by special act. Franchise
companies obtain their right to use and occupy the streets by
and through the municipal authorities. Any telegraph or
telephone company has the right to construct and maintain
all necessary lines of telephone or telegraph for public
traffic along and upon any public road, street, or highway,
or along or across the right of way of any railroad, and may
erect poles, piers, abutments, and posts for supporting the
insulators, wires, and other necessary fixtures of their
lines, in such manner and at such points as not to incom-
mode the public use of the railroad or highway, or inter-
rupt navigation; but if such right of way has been ac-
quired by or through any grant or donation from the
United States or this state or any town, city, or county
therein, then the right to construct and maintain such
lines must be secured by the exercise of the right of em-
inent domain as provided by law; and where the right of
way is within the incorporated limits of any incor-
porated city, the consent of the city council must be first
obtained.2
Powers of municipalities as to.-Cities of the first
class have the power to authorize or prohibit the locating
and constructing of any railways or street railways in
any street, alley, or public place in such city, and to pre-
scribe the terms and conditions upon which such railways
shall be located or constructed, and to provide for the al-
teration, change, or removal thereof, regulate the moving
and operation of trains, cars, and locomotives within the
limits of the city, and to provide by ordinance for the pro-
tection of all persons and property against injury in the
¹ Sec. 2481, as amended, Laws, 1890; H. C., sec. 1526.
Laws, 1889, p. 573, sec. 5; H. C., sec. 1561.
2040
ECONOMIC LEGISLATION.
use of such railways or street railroads;¹ to authorize or
prohibit the use of electricity at, in, or upon any of the
streets or for other purposes, and to prescribe the terms
and conditions upon which the same may be used, and to
regulate the use thereof; to provide for lighting the streets
and public places, and for furnishing the inhabitants
thereof with gas or other lights, to authorize the erection
and maintenance of such works as may be necessary and
convenient therefor, and to regulate and control the use
thereof; and to prohibit or authorize the use of electricity
in the streets and public places.
The city council of cities of the second class has power
and authority to make and pass all by-laws, ordinances,
and resolutions not repugnant to the constitution of the
United States and of the State of Washington, or to the
provisions of law, necessary for the municipal government
and the management of the affairs of the city; to fix and
collect a license on and to regulate express companies, per-
sons engaging in the transmission of packages, railroads,
stage, and steamboat companies.2 This carries with it
the power to contract with such corporations, and to grant
permits for electric lines, street railways, telephone lines,
and all other conveniences necessary for the convenience
and use of the inhabitants of a city.
Cities of the second class have power to permit the use
of the streets for railroad purposes, and to make all con-
tracts for the use and benefit of the city.3
Cities of the third class have power to permit under
such restrictions as they may deem proper, the laying
of railroad tracks and the running of cars drawn by
horses, steam, or other power thereon, and the laying of
gas and water-pipe in the public streets, and to permit the
construction and maintenance of telegraph, telephone, and
electric lines therein.*
1 Laws, 1890; H. C., vol. 1, sec. 520.
' Laws, 1891; H. C., vol. 1, sec. 38.
3 Laws, 1891; H. C., vol. 1, sec. 558.
4 Laws, 1891; H. C., vol. 1, sec. 636, sub. 13. No power seems to be
WASHINGTON.
2041
Condemnation of property.-Telegraph and telephone
companies organized under the laws of this state, or doing
business in the state, are granted the right of eminent do-
main.¹ The statute is silent as to electric light, gas, and
water companies. All railroads in this state must allow
telephone and telegraph companies to construct and main-
tain telegraph and telephone lines along the right of way
of such railroads.2
Methods of construction.-See “POWERS OF MUNICI-
PALITIES AS TO," supra.
Regulations as to service.-All telegraph and tele-
phone companies are declared by the constitution to be
common carriers, and must receive and transmit mes-
sages without discrimination.3 They must receive, ex-
change, and transmit each other's messages without delay
or discrimination, under a penalty of from $100 to $500.5
Any person who injures or destroys, through want of
care, any necessary or useful fixture of any telegraph or
telephone company, is liable to the corporation for all
damages sustained thereby. Any vessel which, by drag-
granted to cities to exercise any municipal control over these companies
except to cities of the first class. It is believed that the city government
has no control over the business affairs of organized corporations, or indi-
viduals furnishing electric light, after they have obtained the right to erect
and maintain their works. They may sell their lights and control their
business the same as other individuals, and the city has no authority to re-
strict their prices or contracts. Electric light companies and other cor-
porations organized under the general laws of the state are governed en-
tirely by the acts of the legislature, and they are not subject to any mu-
nicipal authority, except when expressly made so by the legislature.
It is believed that the several acts of the legislature granting charters
to cities of the second and third class do not give them any control
over such corporations, and that the act granting cities of the third class
power to regulate and control the use thereof, has reference only to such
electric light and telegraph and telephone lines as may be erected by
the city. (See H. C., sec. 585, 636).
¹ H. C., sec. 1547.
2
Laws, 1889, p. 573, sec. 5; H. C., sec. 1561.
3 Const., Art. XIX, sec. 12. See also Laws, 1889, p. 65, sec. 2.
A Laws, 1889, p. 65, sec. 2.
Laws, 1889, p. 293, secs. 2, 8; H. C., sec. 1564.
VOL. II-48
2042
λ
ECONOMIC LEGISLATION.
ging anchor or otherwise, breaks, injures, or destroys the
subaqueous cable of a telegraph or telephone company,
subjects its owner to the damage. Any person who will-
fully or maliciously does any injury to any telegraph or
telephone company's property, is liable to the company
for five times the amount of actual damage sustained, to
be recovered in any court of competent jurisdiction; this
only applies to injury or destruction of the wires, posts,
and fastenings.2
3
Railroads can grant special rates, and fix a low rate of
traffic to individuals or companies, during the construction
of such lines, but these rates will be open to all persons
during the time that they are in force; and no discrimina-
tion can be allowed in favor of any company or person,
during the construction of such lines, or at any other
time afterward. No railroad company can allow any tele-
graph or telephone company or any individual, facilities,
privileges, or rates for the transportation of men or mate-
rial, or for repairing their lines, not allowed to all tele-
graph and telephone companies and individuals.*
See "POWERS OF MUNICIPALITIES AS TO," supra.
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
Power to erect or purchase.-Cities of the first class
are given authority to provide for the lighting the streets
and public places, and for furnishing the individual with
gas or other lights, and to erect or otherwise acquire, and
to maintain the same.5 Cities of the third class are also
authorized to construct and maintain telegraph, telephone,
and electric lines therein.6
¹ Laws, 1889, p. 573, sec. 6;
H. C., sec. 1562.
2 Laws, 1889, p. 573, sec. 7; H. C., sec. 1563.
3" Railroad" is understood in this state to include "street railway."
Laws, 1889, p. 573, sec. 5; H. C., sec. 1561.
5 Laws, 1890; H. C., vol. 1, sec. 520, sub. 15.
6 Laws, 1891; H. C., vol. 1, sec. 636, sub. 13.
WEST VIRGINIA.
1
EDITED BY JOHN A. HUTCHINSON, ATT'Y, PARKERSBURGH, w. va.
SUBDIVISION I.-HISTORICAL.
Before the formation of the State of West Virginia, the
counties now composing it were under the jurisdiction of
Virginia. On the 20th of June, 1863, the first constitution
of the new state went into operation, and for the first time
in the policy of the people, the legislature was required to
pass general laws "whereby any number of persons asso-
ciated for mining, manufacturing, insuring, or other pur-
poses useful to the people, except banks of circulation and
the construction of works for internal improvements, may
become a corporation on complying with the terms and
conditions thereby prescribed;" by its provisions no special
act incorporating or granting particular privileges to any
joint-stock company or association not having in view the
issuing of bills to circulate as money or the construction
of some work of internal improvement could be passed,
and no charter could be granted under general laws with-
out the right be reserved to alter or amend such charter
at the pleasure of the legislature to be declared by general
laws, and no act to incorporate any bank of circulation or
internal improvement company, or to confer additional
privileges on the same could be passed unless public notice
of the intended application of such act was given in ac-
1 Unless otherwise stated references to the constitution are to that of
1872. References to the statutes are to the Code of 1891 by chapter and
section simply. The session laws are referred to as "Laws" of their
respective years. As to state reports, see Appendix "A."
(2043)
2044
ECONOMIC LEGISLATION.
cordance with such regulations as should be prescribed by
law.¹
The first legislature, October 26, 1863, enacted such a
general law, the substance of which was enacted into the
code of 1868,2 and under its provisions many charters were
issued.
3
The constitution of 1872, which went into effect August
22d of that year, requires that "the legislature shall pro-
vide for the organization of all corporations thereafter to
be created by general laws, uniform as to the class to
which they relate," but that no corporation should be
created by special law; and provided that "all charters or
grants of special or exclusive privileges under which or-
ganization shall not have taken place, or which shall not
have been in operation within two years" from the time
the constitution took effect, should thereafter have no va-
lidity or effect whatever, but that this should not prevent
the execution of any bona fide contract theretofore lawfully
made in relation to any existing charter or grant in this
state. It further provided that "no law shall be passed
granting the right to construct and operate a street rail-
road within any city, town, or incorporated village with-
out the consent of the local authorities having control of
the street or highway proposed to be occupied by such
street railroad." This provision limiting the powers of
the legislature reversed the policy that had long been pur-
sued by the commonwealth of which the new state had
been a part. That policy had required application to the
general assembly, in order to obtain charters, by special
enactment for all classes of internal improvement compa-
nies, roads, bridges, and of other incorporated bodies. A
charter under the ancient mode was a direct emanation
from the sovereign will of the people; and franchises were
±
¹ Const., 1863, Art. XI, sec. 8.
2 Laws, 1863; Code, 1868, ch. 53, 54.
9 Const., Art. XI, secs. 1-3.
* Const., Art. XI, sec. 5.
WEST VIRGINIA.
2045
carefully guarded and embodied in a special act in each
instance.
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation, how obtained. The constitution pro-
vides that no corporation shall be created by special law,
and that "the legislature shall provide for the organiza-
tion of all companies thereafter to be created by general
law uniform as to the class to which they relate."¹
Articles of incorporation.-Every corporation having
a joint stock or capital divided into shares owned by
stockholders respectively is a joint-stock company, in this
state. By the general law, any number of persons not less
than five desiring to become a corporation for any of the
purposes embraced in the general description set forth in
the code (see under "OBJECTS"), may do so by signing an
agreement which must be acknowledged by the several
corporators before a justice, notary, or judge; and two,
at least, of the corporators named in the agreement must
make their affidavits to the effect that the amounts therein
stated to have been paid on the capital have been in good
faith paid in for the purpose and business of the intended
corporation, without any intention or understanding that
the same may be withdrawn therefrom before the expira-
tion or dissolution of the corporation.2
The articles of railroad companies must be adopted,
signed, and acknowledged by the incorporators.³
Must show what.-The articles of incorporation must set
forth the name; the purpose and character of the business
intended to be carried on; the principal office or place of
business; the duration of the corporation; the amount of
capital stock prescribed, and the amount paid in, which must
not be less than ten per cent; and may express the desire.
to increase the capital stock by the sale of additional
' Ch. 54, sec. 6.
¹ Const., Art. XI, secs. 1, 2.
Ch. 54, secs. 32, 35; see "OBJECTS" note 1, and note 2 below.
2046
ECONOMIC LEGISLATION.
shares to a sum to be named. The articles must also state
the amount into which the shares of the capital stock is
divided, and how such shares are held by those who sub-
scribed the agreement, and how the capital thereafter sold
is to be divided.¹
The articles of railroad companies must contain in sub-
stance the names of the parties subscribing to the agree-
ment, the name of the corporation proposed, the termini
of the railroad route, the principal business office and
where located, the amount of capital stock, its shares and
how divided, and the names and places of residence of the
persons forming the corporation, and the number of shares
of stock subscribed by each.2
¹ Ch. 54, secs. 6, 8. The following is the prescribed form for corpora-
tions other than railroads:
The undersigned agree to become a corporation by the name of
for the purpose of (here describe fully and particularly the purpose for
which the corporation is to be formed, and the kind of business intended
to be carried on by it).
at
Which corporation shall keep its principal office or place of business
in the county of and State of and is to expire on the
day of
And for the purpose of forming the said corporation,
we have subscribed the sum of dollars to the capital thereof, and
have paid in on said subscription the sum of dollars, and desire the
privilege of increasing the said capital, by the sale of additional shares
from time to time, to
dollars in all.
The capital so subscribed is divided into shares of dollars each,
which are held by the undersigned respectively, as follows, that is to
say: By
(giving name and residence and number of shares).
And the capital to be hereafter sold is to be divided into shares of the
like amount.
Given under our hands, this day of
(Signatures.)
18-.
2 Ch. 54, secs. 31, 32. The statute, ch. 54, sec. 31, uses the term rail-
road without any qualifying words. So far as appropriate to the char-
acteristics of a street railway, or other road of like character, it must be
held to embrace them.
The following is the prescribed form for articles of incorporation of
railroad companies under the general law:
We, whose names are hereto subscribed, desiring to become a corpo-
ration for the purpose of constructing and operating a railroad in the
WEST VIRGINIA.
2047
!
·
Filing. When duly acknowledged and accompanied
by the affidavits as above stated, the articles are delivered
to the secretary of state, who issues to the corporators
his certificate, under the great seal of the state, reciting
the agreement, and referring to the affidavits, and declar-
ing that the corporators named in such agreement, and
who have signed it, and their successors and assigns, con-
stitute a corporation by the name and for the purposes set
forth in the agreement; such certificate of the secretary
of state constitutes the charter of the corporation from the
date of the certificate until the time designated in the
agreement for the expiration thereof, unless the corpora-
tion is sooner dissolved according to law. This certificate
is receivable as evidence of the existence of the corporation.
in all courts. The agreement and certificate are recorded
in the office of the secretary of state, who is required to
carefully preserve such agreement. At the end of every
regular session of the legislature, he must deliver to the
clerk of the house of delegates an accurate abstract of ev-
ery certificate of incorporation not before reported, which
the clerk is required to have printed and bound with the
acts of the session. A copy of the certificate printed
1
State of West Virginia, do hereby adopt these articles of incorporation
for that purpose:
company.
First. The name of the corporation shall be the
Second. The railroad which this corporation proposes to build, will
and run thence by the
commence at or near
in the county of
most practicable route, to a point at or near
1
in the county of
Third. The principal business office of this corporation will be at
in the county (or city) of
.
in the State of
Fourth. This corporation shall continue perpetually.
Fifth. The capital stock of this company shall be
into shares of
dollars each.
dollars, divided
Sixth. The names and places of residence of the persons forming this
corporation, and the number of shares of stock subscribed by each, are
as follows: A- B-, county (or city) of -, State of
>
>
shares (and so on, giving the names and residences of all the parties, and
the number of shares of stock subscribed by each.
¹ Ch. 54, secs. 11, 17.
2048
ECONOMIC LEGISLATION.
1
with the acts of the legislature is made evidence equiva-
lent to the original.¹
Within three months after the certificate has been issued
or a copy certified, the company must deliver the same
for record to the clerk of the county in which the princi-
pal office or place of business is, and the clerk of such
court must record the same in his office. If the company
fail to do this, it is liable to a fine not exceeding one thou-
sand dollars.2
The articles of railroad corporations, when executed as
prescribed, are to be filed and recorded in the office of the
secretary of state and to be preserved therein. Thereupon
the secretary of state issues his certificate to the corpora-
tion named in the articles of incorporation under the
great seal of the state which, when issued and delivered,
constitutes the corporation a body corporate.³
It has been held that where the statute requires that,
before a corporation can do any business, it shall record
in a certain place the certificate of incorporation, this is a
condition precedent, and until such condition is complied.
with the corporation has no power to transact any business
and has really no existence."
Organization; preliminary requirements.—When the
certificate of incorporation is issued in the manner pre-
scribed above, the incorporators named in the agreement,
or a majority of them, must appoint the time and place
for holding the general meeting of the stockholders, at
which to elect a board of directors, make by-laws and
transact any other business which may lawfully be done by
stockholders in general meeting. The time for the meet-
ing thus appointed must not be less than twenty-one nor
more than ninety days from the date of the certificate,
and notice of the meeting must be given by advertising
the same once a week, for two weeks, at least, in some
newspaper of general circulation, published near the office
1 Ch. 54, secs. 18, 19.
Childs v. Hurd, 32 W. Va. 98.
2 Ch. 54, sec. 20.
3 Ch. 54, secs. 34, 35.
WEST VIRGINIA.
2049
or place of business of the company. A company must
be organized and commence its proper corporate business
within one year from the date of the certificate, otherwise
the certificate is of no effect."
The first general meeting for purposes of organization
may be held out of this state, but no meeting may be held
out of this state without the concurrence of persons hold-
ing a majority in value of the stock of the company, nor
without reasonable notice.2
The first meeting of stockholders of a railroad com-
pany must be held for organization (and such proceedings
may be had as might be taken at an annual meeting) at
such time and place as the corporators, or a majority of
them, may designate, of which time and place notice must
be published at least once a week for four successive
weeks, in some newspaper of general circulation published
near the place of such meeting, and in two other newspa-
pers published in the vicinity of the proposed railroad in
this state for a like period. The stockholders, or such of
them as are the owners of the majority of shares of its
capital stock subscribed up to that date, may, at the time
and place mentioned in such notice, elect a temporary
board of directors consisting of such number as they may
see proper, who hold their offices until their successors
are appointed. Before any such meeting is held the cor-
porators must open books of subscription at such place
and under the direction of such persons as the majority
of them may direct, for the purpose of receiving subscrip-
tions to the capital stock of such company. At least one-
twentieth of the stock, including the shares subscribed by
the corporators, must have been subscribed for, and ten
per cent actually and in good faith paid in on each share
of stock so subscribed. A majority of the directors
elected at such meeting constitutes a quorum, and as soon
as practicable after their election, must meet and organize
by the appointment, from their own body, of a president
1 Ch. 53, secs. 6, 7; ch. 54. sec. 15. 2 Ch. 53, secs. 49, 50.
:
2050
ECONOMIC LEGISLATION.
and such other officers as they may deem necessary, who
hold their offices until the election of a board of directors
at the annual meeting of the stockholders of such corpo-
ration. The stockholders, at the first meeting thus pro-
vided for, appoint the time and place at which the first
annual meeting of such stockholders shall be held, and
designate the place at which the principal office or place
of business shall be kept until otherwise ordered, and
may do and perform all business necessary and proper to
be done under the law at a stockholders' meeting.'
Fees.-The secretary of state may charge a fee of four
dollars for every certificate of incorporation issued by
him, and for recording the original or issuing a certified
copy, he is entitled to a fee of fifty cents, or instead
thereof, fifteen cents for every hundred words, which fees
must be paid at the time the service is rendered by the
person at whose instance it is done. The county clerk is
entitled to a fee of fifty cents, or three cents for every
thirty words for recording the charter.³
3
An annual license tax of ten dollars, to be paid on or
before the first day of May of each year, or at the time of
obtaining the charter or certificate of incorporation, to the
auditor of the state, is chargeable upon every corporation
deriving its powers from this state, and which has its
principal office in this state. Where the principal office
is out of the state, the license is fifty dollars.5
4
Amendments, repeals, etc.-All charters issued since
the 22d of August, 1872, are, by constitutional provision,
subject to the right of the legislature to alter or repeal the
same or to alter or repeal any law relating to any joint-
stock company, but in no case can such alteration or re-
peal affect the right of the creditors of the company to
have the assets applied to the discharge of its liabilities, or
of the stockholders to have the surplus which may remain
1 Ch. 54, sec. 36.
Ch. 32, sec. 86.
2 Ch. 54, secs. 18, 19.
Ch. 32, sec. 87.
9 Ch. 137, sec. 7.
WEST VIRGINIA.
2951
after discharging its liabilities and the expenses of wind-
ing up its affairs, distributed in proportion to their re-
spective interests.¹
By the corporation.-Any corporation organized for man-
ufacturing or mining, or for any other proposed business.
useful to the public for which a co-partnership may be
lawfully formed in this state, may, by resolution concurred
in by a majority of all the stockholders representing the
majority of the capital stock and entered upon its records,
at a meeting subsequently called for the purpose, of which
all stockholders must have had notice, agree to and adopt
a new agreement so as to enlarge or diminish the objects
and purposes within the limits of the provisions relative
to their creation; or so as to increase or diminish the
number of its shares of capital stock, as shown under
"CAPITAL STOCK-Increase and decrease of." These changes
enlarging or diminishing the purposes of the corporation,
or increasing or diminishing the number of shares of stock
or the par value of it, must be certified to the secretary of
state substantially in the manner prescribed in relation to
the general agreement for incorporation, who issues his
certificate under his hand and the great seal of the state,
and a record is kept of the same in his office.³
2
In like manner, authority is given to joint-stock compa-
nies to change their names, but no joint-stock company
can adopt the same name which is being used at the time
by another corporation of this state. If the stockholders
desire to change the name of the company, they must pass
in general meeting, a resolution to that effect, stating the
name by which it is intended the corporation shall there-
after be known, and must cause such resolution to be
adopted under the common seal and signature of its presi-
dent, and to be filed with the secretary of state, who must
issue under his hand and the great seal of the state a cer-
¹ Const., Art. XI, sec. 8.
3 Ch. 54, secs. 21, 22.
2 Ch. 54, sec. 10.
2952
ECONOMIC LEGISLATION.
tificate setting forth the resolution and declaring the
changed name of the corporation, and the corporation.
will thereafter be known by the name so adopted. Notice
of every such change of name must be published by the
corporation in some newspaper of general circulation in
the county where the principal office of the corporation is,
once a week for four successive weeks, and the provisions
of the statute relative to the publication and recordation
and effect of the certificate of incorporation mutatis mu-
tandis apply to such change of name. No contract,
right, or liability previously existing or inchoate, nor any
motion or proceeding then pending is affected by any such
change of name.¹
The principal office or place of business, as has been
seen, must be set forth in the agreement constituting the
charter of incorporation; if that is changed, it will require
a resolution of the stockholders in like manner as the
change of name.2
Duration of charter.—If no time is limited in the char-
ter, corporations may be perpetual, but no corporation
formed under the general law except, among others, rail-
roads (which have perpetual succession) and other works
of internal improvement, can continue for more than fifty
years from the date of its certificate of incorporation.
Any incorporation formed under the general laws of this
state, in existence at the time that the present general law
took effect, may extend the time of its continuance beyond
that limited in the agreement for its formation for such
additional time not exceeding fifty years.*
5
Objects. The articles of incorporation must set forth
the purpose and character of business intended to be car-
ried on, and such objects may be changed, enlarged or
diminished as shown above. (See "AMENDMENTS, REPEALS,
ETC.") The purposes for which corporations may be formed
by the general law, so far as germane to this discussion
2 Ch. 54, sec. 23.
1 Ch. 53, secs. 11, 12, 13, 14.
3 Ch. 52, sec. 1.
Ch. 54, sec. 11.
5 Ch. 54, secs. 6, 8.
WEST VIRGINIA.
2053
are for manufacturing or mining; for constructing and
maintaining lines of magnetic telegraph, telephones, lines
of pipe or tubing for the transportation of oils or other
fluids and carrying on the business properly pertaining to
such works and improvements; for establishing gas-works,
water-works, and transacting the business properly per-
taining thereto; for railroad or other works of internal
improvements, and for any other purpose or business use-
ful to the public for which a firm or copartnership may
be lawfully formed in this state.¹
Powers. Every corporation must have a common seal,
which it may renew or alter at pleasure. It may sue and
be sued, plead and be impleaded; contract and be con-
tracted with by simple contract or specialty; purchase,
hold, use and grant estate, real and personal; appoint
officers and agents, prescribe their powers, duties and lia-
bilities, take bonds and security from any of them, and fix
and pay their compensation; make ordinances, by-laws,
and regulations for the government of its council, board,
officers and agents, and for the management and regula-
tion of its property and business; but the powers of the
corporation are limited by the purposes for which it is in-
corporated, and no corporation can engage in transactions
or business not proper for those purposes, nor exercise its
corporate powers in violation of any laws of the state.²
A mining, manufacturing, oil, salt or internal improve-
ment company may lay out a town not to include more
than 640 acres at or near their works and sell lots therein.
Any corporation may take real estate, stocks, bonds, and
securities in payment for any debt bona fide owing to it or
as security therefor, or it may purchase the same, if deemed
necessary, to secure payment of any such debt in whole or
1 Ch. 54, sec. 2. For these objects corporations may be formed under
chapter 54 of the code, and are subject in general to the provisions of
chapters 52, 53 of the code. By chapter 54, section 31, etc., the mode of
incorporation of railroad companies is provided.
2 Ch. 52, secs. 1, 2; ch. 53, sec. 3.
2054
ECONOMIC LEGISLATION.
in part, and it may manage, use, and dispose of such real
estate, or of what has been taken or purchased in said con-
dition, as a natural person might do. A corporation may
compromise or purchase its own debt, and establish and
manage a sinking fund for that purpose.¹
A railroad company upon due incorporation has per-
petual succession, and the right to sue and be sued, plead
and be impleaded with such other general powers as relate
to all corporate bodies.²
2
The legislature has prescribed the general powers of
railroad corporations.3 It will suffice to state that railroad
and other improvement companies have power to purchase
all the real estate and other property which may be neces-
sary for the construction and use of their business and the
stations and accommodations necessary to accomplish the
objects of their incorporation, and to sell and convey such
property when it is not required for use.*
By-laws.-Every corporation may make such ordi-
nances, by-laws, and regulations for its government and
the management of its property as may be deemed proper
and within the limits of the purpose for which it is incor-
porated. Such by-laws, however, must be in harmony
with the constitution and laws of the state."
The by-laws of a railroad corporation, when adopted
by the stockholders, duly certified, must be recorded as
provided for the recordation of the articles of incorporation,
and amendments and additions to such by-laws must also
be recorded within ninety-days after the adoption thereof."
Officers; meetings; voting; quorum, etc.-As to
meetings for organization, see "ORGANIZATION," above.
Every corporation must have at least five stockholders.
If at any time the number is reduced below that number,
and remains so for six months continuously, the corpora-
tion is dissolved."
¹ Ch. 52, sec. 4.
2 Ch. 54, secs. 34, 35.
* Ch. 54, sec. 50.
5 Ch. 52, sec. 1.
Laws, 1881, ch. 17.
6 Ch. 53, secs. 17-20.
WEST VIRGINIA.
2055
Every corporation must also have a board of directors,
which has the power to do or cause to be done all things
that are proper to be done by a corporation. Stockholders.
in general meeting may by by-laws prescribe the number
of which the board shall consist, but unless a different
number is prescribed, there must be five. The by-laws
may prescribe the qualifications of the directors, but if it
be not otherwise provided in the by-laws, every director
must be a resident of this state and a stockholder. The
directors must be elected at each annual meeting of the
stockholders, or as soon thereafter as may be practicable,
and hold their offices until their successors are elected and
qualified. Stockholders in general meeting may remove
any director and fill the vacancy. Any vacancy not
caused by such removal may be filled by the board.¹
A majority of the board constitutes a quorum, unless it
be otherwise provided in the by-laws. If the number of
the board be reduced below the proper number, a general
meeting of the stockholders may be called to elect new
directors and to take such action in the premises as may
be proper. The board of directors may choose one of
their own body president of the corporation, who acts
until his successor is qualified, without ceasing, however,
to be a member of the board.¹
No member of the board can vote on any question in
which he is interested otherwise than as a stockholder,
except the election of the president, or be present while
the same is being considered; but if his retiring from the
board in such case, reduces the number present below a
quorum, the question nevertheless can be decided by those
who remain. On any question, the names of those voting
each way must be entered on the record of the proceed-
ings, if any member, at the time, requires it. Unless al-
lowed by the stockholders, no compensation can be al-
lowed for services rendered by the president or any di-
¹ Ch. 53, secs. 49, 50.
2 Ch. 53, sec. 82.
i
2056
ECONOMIC LEGISLATION.
1
rector. The board, in the exercise of its powers, is sub-
ject to such by-laws and regulations, not inconsistent
with the laws of the state, as the stockholders may pass
from time to time in general meeting. The property and
funds, books, correspondence, and papers of the corpora-
tion are to remain in the possession or control of the offi-
cers or agents of the corporation, subject to inspection, as
stated under "Books," below.2
3
The annual meeting of the stockholders of every corpo-
ration must be held at such time and place as may be pre-
scribed by the by-laws. If there is no such by-law, then
at the principal office or place of business of the company
and on the fourth Tuesday of January. A general meet-
ing of the stockholders may be called at any time by the
board of directors, or by any number of the stockholders
holding together at least one-tenth of the capital stock.
Notice of the annual or any other general meeting must
be given in such manner as the by-laws may direct; or,
if there be no such by-law, by advertising the same once
a week for two weeks at least in some newspaper of gen-
eral circulation published near the general office or place
of business of the company. The number of stockholders
or the amount of stock necessary to constitute a quorum
at a meeting of stockholders, and the mode of transacting
business at such meeting, may be prescribed by the by-
laws. If there is no such by-law, a majority of the stock-
holders must be present, in person or by proxy, to consti-
tute a meeting. If a sufficient number do not attend at
the time and place appointed, those who do attend may
adjourn from time to time until a meeting is regularly
constituted. Every meeting of stockholders may be ad-
journed until its business is completed. A list of stock-
holders, showing the number of shares and votes to which
each is entitled, must, for one month before every annual
meeting, be hung up in the most public room at the prin-
1 Ch. 53, sec. 53.
2 Ch. 53, sec. 82.
³ Ch. 53, secs. 41-45; Cross v. R. R. Co., 34 W. Va. 742.
WEST VIRGINIA.
2057
1
cipal office or place of business of the corporation; but
the failure to do so will not affect the validity of the pro-
ceedings of such meeting. In all elections for directors
of incorporated companies, every stockholder has the right
to vote, in person or by proxy, for the number of shares
of stock owned by him, for as many persons as there are
directors or managers to be elected, or to cumulate such
shares and give one candidate as many votes as the number
of directors multiplied by the number of his shares of stock
may equal, or to, distribute them on the same principle
among as many candidates as he thinks fit; and directors
On
or managers can not be elected in any other manner.
any other question to be determined at any meeting of the
stockholders, if a vote by stock be demanded upon such
question by any stockholder, every stockholder may, in
person or by proxy, give one vote for every share of
stock held in such company. No officer or director of
the corporation can vote as the proxy of a stockholder
thereof.¹
Books. The board of directors of every corporation.
must keep a record of its proceedings, which must be
verified by the signature of the president or president
pro tempore, and must cause regular and correct books of
account to be kept and to be settled and balanced once at
least every six months. A book known as a transfer
book must be kept by the corporation, in which the shares.
of stock must be assigned under such regulations, if there
be any, as may have been prescribed by the by-laws.²
2
The books of the corporation, correspondence, and
papers in the possession or control of any officer or agent
must at all times be subject to the inspection of the board
or committee appointed by the board for the purpose, or
of any committee appointed for the purpose by the gen-
eral meeting of the stockholders. The minutes of the
resolutions and proceedings of the board must for thirty
1 Ch. 53, secs. 41-45; Cross v. R. R. Co., 34 W. Va. 742.
* Ch. 53, sec. 52.
VOL. II-49
!
I
2058
ECONOMIC LEGISLATION.
days before the annual meeting of the stockholders be
open for the inspection of any stockholder, and must be
produced when required by the stockholders at any gen-
eral meeting.¹
Capital Stock.-The articles of incorporation must state
the amount of the capital stock, the amount (not less than
ten per cent) paid in, the amount of shares and how held,
etc., and may express the desire to increase the capital to
a sum named by the sale of additional shares.2 As to sub-
scription to stock of railroad companies, see "ORGANIZA-
TION."
amount.
Capital stock of a corporation may be divided into
shares of such amount as may be prescribed by the charter
of the corporation. Every share must be of the same
If a corporation acquire shares of its own stock.
it may either extinguish or sell the same; if extinguished
it operates to that extent as a reduction of the amount of
its capital stock. No vote can be given on any stock while
owned by the corporation. The persons in whose name.
shares of stock stand on the books of the corporation are
deemed the owners thereof so far as the corporation is con-
cerned. A share is deemed personal estate, and as such
passes to the legal representative or transferee of the stock-
holder and is subject to legal process.3
No stock can be regarded as taken or the person sub-
scribing therefor entitled to the same until the first install-
ment is paid, or at least ten per cent of the par value of
each share must be paid at the time of the subscription.
If a stockholder fails to pay any installment on his shares
when required by the board of directors the shares held
by him may be sold by order of the board at public auc-
tion for cash after four weeks' notice in a newspaper of
general circulation in the county of the principal office or
place of business of the corporation. The corporation,
1 Ch. 53, secs. 46-48.
2 Ch. 54, secs. 6, 8, 34, 35. See note 4, "Articles of INCORPORATION."
3 Ch. 53, secs. 17-20.
WEST VIRGINIA.
2059
when the stock is not fully paid up, may require by its
-by-laws that each stockholder give security for the pay-
ment of his stock at such times and by such installments
as the board may direct; such security may be by bond or
by pledge of other stock, or by deed of trust or mortgage
on real estate, or in any other satisfactory mode. The
board may from time to time require other security for the
payment of stock when it deems the security for the
payment of stock already taken insufficient. When a
stockholder has failed to give security satisfactory to the
board for the unpaid residue of his stock, the corporation.
may recover by motion on ten days' notice, or by action,
the whole unpaid residue of the stock, with interest at the
rate of ten per cent per annum from the time of such failure
until the payment, or the board may declare, at their op-
tion, after giving two weeks' notice to the stockholders,
that the stock as to which the failure occurred is forfeited
to the corporation. If any stockholder, after having
given security, fails to pay the unpaid residue of his stock,
the corporation may recover. the amount in arrear, with
interest at ten per cent per annum, from the persons lia-
ble as security, or by a sale of the stocks pledged, or by
enforcement or foreclosure of the deed of trust or mort-
gage; and the corporation may proceed in any of the
modes prescribed until the entire amount is recovered.¹
2
Increase and decrease of.-All fictitious increase of the
capital stock of a corporation is void. Any corporation
organized under the general law may increase or diminish
the number of shares of its capital stock by amendment,
as shown above, by consolidating or subdividing; but in
no case can fractional shares or shares of unequal value be
created; and any such corporation may by resolution, at
any general or special meeting of its stockholders, make
such increase or reduction in the number of shares of its
capital or the par value of each share as may be decided
2 Ch. 54, secs. 21, 22. 3 Ch. 54, sec. 10.
1 Ch. 53, secs. 26–34.
2060
ECONOMIC LEGISLATION.
1
upon by such stockholders, a majority of the stock being
represented by the holders thereof, and such holders being
present either in person or by proxy and voting for such
increase or reduction; notice must be given by advertise-
ment published for four successive weeks in some news-
paper of general circulation printed in this state, of the
intention to offer such resolution.'
When such increase or reduction has been made, the
president of the company must, under his signature and
common seal of the company, certify the resolution to the
secretary of state. The secretary of state then, under his
hand and the great seal of the state, issues to the company
a certificate reciting the resolution and declaring the pro-
posed increase or reduction to be authorized by law,
which certificate is receivable in all courts and places as
evidence.2 See under "AMENDMENTS, REPEALS, ETC."
The capital stock of a railroad corporation, if it be in-
sufficient for the purpose for which it was incorporated,
may be increased to such an amount as may be deemed
necessary, at any annual meeting of its stockholders, or
special meeting called for the purpose by the board of di-
rectors, if at such meeting two-thirds in amount of all the
stock of the corporation, represented by the holders
thereof in person or by proxy, agree to such increase.
Notice of the time and place of any such special meet-
ings and of the purpose for which called, must be pub-
lished at least once a week for four successive weeks in
some newspaper of general circulation published in the
vicinity of the principal office or place of business of the
corporation, and in like manner and for a like period in at
least two other newspapers published in the vicinity of
the line of such railroad within this state. No other
business can be presented at such special meeting than
that for which it was called; but the power to increase
the capital stock under this provision of the statute may
1 Ch. 54, secs. 21, 22.
2 Ch. 54, sec. 22.
WEST VIRGINIA.
2061
be exercised at any meeting of the stockholders called or
assented to in writing by all the stockholders. Every
such order or resolution must be recorded in the office of
the secretary of state in the manner provided for record-
ing the general articles of agreement to form a railroad
corporation.¹
Transfer of.-The stock of a railroad corporation is
deemed personal property, and is transferrable in such
manner as may be prescribed in the by-laws of the com-
pany.2
No share of stock in any corporation can be transferred
without the consent of the board of directors until the
same is fully paid up or security given to the satisfaction
of the board for the residue remaining unpaid. And
when bond and security have been given to the corpora-
tion for any sum remaining unpaid upon stock, no transfer
will affect the validity of such bond and security.3
Companies' lien on.-Since no share can be transferred
without the consent of the board of directors until it is
fully paid up or security given for the unpaid balance, and
since the corporation may sell the shares of stock where
the stockholder has failed to pay any installment upon his
shares when required by the board of directors, or has
failed to give the security demanded by the board, the
corporation has a lien on the stock, which may be en-
forced by sale of the shares of the stockholder in default,
after four weeks' notice in a newspaper by general circu-
lation wherein the office or place of business of the corpo-
ration is situated. Such sale must be at public auction.
for cash, and the stock thus sold may be transferred
by such persons as the board may appoint for the pur-
pose. When stock is so sold, after payment of expenses
of advertising and selling, and the amount due and un-
paid upon the stock, the surplus, if any, is paid to the de-
linquent stockholder."
1 Chap. 54, sec. 45.
2 Ch. 54, sec. 44.
9 Ch. 53, secs. 21-22.
* Ch. 53, secs. 29, 30.
2062
ECONOMIC LEGISLATION.
Preferred stock.-Stockholders in general meeting may
by resolution or by-law provide for or authorize the issu-
ing of preferred stock, on such terms and conditions,
and with such regulations respecting the preference to be
given to such stock over the other stock in relation to fu-
ture dividends or otherwise, as they may deem proper,
but the maximum capital of the corporation must not be
exceeded, and notice must first be published at least once
a week for four successive weeks in some newspaper of
general circulation in the county of the principal office of
the intention to offer such resolution or by-law.'
Stock in other companies.—Any manufacturing company
may, with the assent of the holders of two-thirds of its
stock had at a stockholders' meeting, subscribe for the
purchase of stock, bonds, or securities of any corporation
formed for the purpose of manufacturing or producing
any article or material used in the business of such joint-
stock company, or dealing in any articles or materials
manufactured or produced by such joint stock company,
or constructing a railroad or other work of internal im-
provement so constructed through or into the county in
which the principal office or place of business of such
joint-stock company may be operating a railroad or other
work of internal improvement, and may with like assent
become surety for or guarantee the debts of such corpora-
tion, or in any manner aid it in carrying on its business."
Bonds, debts, etc.—A mining, manufacturing, oil, salt
or internal improvement company may contract debts and
liabilities within certain limits, and may contract and be
contracted with.3
Where railroad corporations and other internal improve-
ment companies, under general powers given them, from
time to time, borrow such sums of money as may be nec-
essary in completing, finishing, improving or operating
any railroad, etc., they may issue bonds, bills of credit or
• Ch. 52, secs. 1, 3, 4.
¹ Ch. 53, sec. 16.
2 Ch. 52, sec 4.
WEST VIRGINIA.
2063
indebtedness and preferred stock, and dispose of the same.
for any amount so borrowed, and mortgage the corporate
property and franchises to secure the payment for any
debts contracted for such purpose, but the concurrence of
the holders of two-thirds in amount of the stock of the
corporation to be expressed in the manner and under all
of the conditions provided for increasing the capital stock
of railroad corporations is necessary to the validity of such
mortgage, and the order or resolution for the mortgage
must be recorded in the office of the secretary of state;
the directors of such corporation, empowered in pursuance
of the order or resolution, may confer on any holder of
any such bond for money so borrowed the right to con-
vert the principal due or owing thereon into stock of such
company at any time not exceeding ten years after the
date of such bond, under such regulations as may be pro-
vided by the by-laws of the corporation, and such com-
pany may mortgage its property, real and personal, and
its franchises to secure any bonds or stock issued by the
corporation for land, money, labor, property or other ma-
terials to be used for the purpose for which the corporation
was formed, and especially in the construction and equip-
ment of its railroad. In case it be found necessary to do so,
a corporation may sell and dispose of its bonds or stocks or
both at less than par value. But it can not issue any
stock or declare any stock dividend except for any sum
which may exceed the net earnings of the corporation,
and which has been actually and in good faith applied
and invested in and for the purpose of the corporation;
other stock dividends and all fictitious increase of the
capital stock and indebtedness of such corporation are
void.¹
A corporation may contract debts with its individual
corporators, and is as much bound to pay or secure such
debts as debts that may be due to strangers, and the mere
¹ Ch. 54, secs. 50, 52.
2064
ECONOMIC LEGISLATION.
fact that a deed of trust has been given on the corporate
property to secure debts due to members of a corporation
will not render it fraudulent unless fraudulent intent be
alleged and proven.¹
See under "POWERS," above.
Dividends. The board of directors may from time to
time declare dividends of so much of the net profits as
they may deem it prudent to divide. If any stockholder
be indebted to the corporation, his dividend, or so much
of it as is necessary, may be applied to the payment of
the debt, if it be then due and payable. The board can
not declare a dividend by which the capital of the corpo-
ration is diminished.2
Liability of stockholders.-By the constitution, the
stockholders of all corporations and joint-stock companies,
except banks and banking institutions created by the laws
of this state, are liable for the indebtedness of such corpo-
ration to the amount of their stock subscribed or unpaid
and no more.3 This applies to a subscriber to the stock
of any railroad corporation who is individually liable to
the creditors thereof for any sum remaining unpaid on
the stock subscribed for by him, and for no sum for the
payment of any debts and liabilities of such corporation.
A person holding any such stock by purchase or assign-
ment from another, or who purchases any stock at a pub-
lic sale, or who receives any such stock on the payment.
of any debt or demand against such corporation, is not liable
to the creditors of the company for any sum whatever
which may be due on such stock or any part thereof due
from another. And no person holding stock in such cor-
poration, his executor, administrator, guardian or trustee,
and no person holding such stock as collateral security, is
personally subject to any liability as stockholder of such
1
443.
Hope v. Salt Co., 25 W. Va. 189; Sweeney v. Sugar Co., 30 W. Va.
3 Const., Art. XI, sec. 2.
2 Ch. 53, secs. 39, 40.
WEST VIRGINIA.
2065
corporation, but a person pledging stock is considered as
holding the same, and is liable as a stockholder accord-
ingly.'
Every stockholder who has received any dividend by
which the capital stock is diminished is liable to the cred-
itors for the amount of capital so received by him.²
Liability of officers and directors.-Officers and di-
rectors of corporations are liable criminally for embezzle-
ment or other offenses against the corporations or stock-
holders. If the directors or trustees of a corporation,
when dealing with corporate property, obtain an interest.
in or control over it for their own benefit or advantage,
either with or without the consent of the other members
of the board, the transaction will be scrutinized with jeal-
ousy, and upon slight grounds will be set aside by a court
of equity at the instance of those standing in relation to
the corporation as beneficiaries of the property. A di-
rector of a corporation claiming to be a creditor thereof,
having obtained from his co-directors a deed of trust or
mortgage upon the corporate property to the exclusion of
other creditors, the transaction will be presumed to be
fraudulent, but this presumption may be rebutted by clear
and convincing evidence that the dealing was fair and
reasonable, and wholly free from all taint of fraud or un-
fairness.3
The directors present and not dissenting or causing their
dissent to be entered on the records from the declaring of
any dividend which will diminish the capital stock are
jointly and severally liable to the creditors of the corpora-
tion for the amount of the capital diminished, and may be
decreed against therefor or a bill in equity filed by any
creditor.2
Reports.-The board of directors of a corporation are
required to make a report to the stockholders at the
¹ Ch. 54, secs. 46, 47.
² Ch. 53, secs. 39, 40.
Hope v. Salt Co., 25 W. Va. 189; Sweeney v. Sugar Co., 30 W. Va.
443.
2066
ECONOMIC LEGISLATION.
annual meeting of the condition of the corporation. The
report must show the property and the funds belonging to
the company and the estimated value thereof; the debts
due it, distinguishing such as are deemed to be good from
those considered doubtful or hopeless; the debts and lia-
bilities of the corporation; the amount of the capital paid
in; the estimated surplus or deficiency as the case may be;
the amount of dividends declared and losses incurred or
the profits arising during the preceding year. Each
stockholder is entitled to a copy of such report, and
the board must print each stockholder a true copy of
the same, together with a list of the stockholders and
their places of residence when required by any stock-
holder.¹
Every corporation subject to the general law, including
joint-stock companies, is required to exhibit its books,
papers and property to such agents or committees as the
legislature may from time to time appoint to examine the
same, and when required by the legislature, must report
thereto a full, fair and detailed exhibit of its property and
liabilities and condition, by the oath of the president and
of the secretary or principal director.²
Taxation.—In this state, incorporated companies are
assessed for the purpose of taxation, upon the actual value
of the capital employed or invested by them in their trade
or business, exclusive of real estate and property exempt
by law from taxation. Real estate of such companies is
assessed as in other cases. The value of the capital is es-
timated by taking the aggregate value of all personal
property of the company, not exempt from taxation,
wherever situated, including their money, credits and in-
vestments, whether in or out of this state, and deducting
from them what they owe as principal debtors. The as-
sessment is made in the district where the principal office
for transacting its financial concerns is located. If there
¹ Ch. 53, secs. 46, 48.
2 Ch. 53, sec. 60.
WEST VIRGINIA.
2067
•
is no such office, then in the district where its operations
are carried on.¹
2
The rate of tax for general state purposes is twenty-five
cents on the one hundred dollars valuation, on real and
personal property, and ten cents on such valuation for the
support of free schools. In each district of the several
counties of the state, the board of education may levy an
annual tax for primary schools, the rate of which must
not exceed fifty cents on every one hundred dollars value
of property.³ The county court of each county may levy
an annual tax for county purposes, but these levies must
not exceed ninety-five cents on the one hundred dollars
valuation of property, except for the support of free
schools, for payment of indebtedness existing at the time
of the adoption of the constitution, and for the payment
of any indebtedness, with the interest thereon created,
under the provisions of the constitution, shown under
SUBDIVISION IV" POWER TO ERECT OR PURCHASE."
Following the language of the constitution the rates of
taxation that may be imposed by municipalities under the
statute are as follows: A city of more than twenty thou-
sand inhabitants may impose not to exceed two per cent
on the assessed value of property for state purposes, be-
yond a tax for railroad purposes, not exceeding three per
cent. If the population be more than ten thousand and
less than twenty thousand, the rate must not exceed one
dollar and fifty cents on every hundred dollars value. If
the population be more than three and less than ten thou-
sand, the tax can not exceed one dollar and twenty-five
cents on the hundred dollars. If the population is less
than three thousand, the tax can not exceed fifty cents.
These rates may be increased not exceeding sixty per cent
if submitted to a vote of the people and approved by three-
fifths of the qualified voters therein voting on the question.5
Municipal corporations may be authorized by the legisla-
3 Ch. 45, sec. 40.
5 Acts, 1872-73, ch. 141; Code, p. 1018.
¹ Ch. 29, sec. 64.
• Ch. 39, sec. 29.
2 Ch. 32, sec. 51.
2068
ECONOMIC LEGISLATION.
ture to assess and collect taxes for corporate purposes, but
such taxes must be uniform with respect to persons and
property within the jurisdiction of the authority imposing
the same.¹
The council of every municipal corporation annually
makes up and enters on its journal an estimate of all sums
which are, or may become, lawfully chargeable on it, and
such as ought to be paid within one year, and orders a
levy of so much as may, in its opinion, be necessary to pay
such sum. The levy so ordered must not exceed one dol-
lar on every one hundred dollars valuation of the real and
personal property subject to state and county taxes within
the municipality.²
As to power of municipalities to create indebtedness,
see Subdivision IV.
Consolidation of companies.-There is no provision
in this state for the consolidation of corporations gen-
erally, but a railroad corporation organized under the
general laws of this state, or deriving its franchises there-
from, or organized under special charter, may consolidate
its stock with other roads. Without statutory authority,
no consolidation of corporations can take place.*
3
Dissolution; forfeiture.-If the number of stockhold-
ers, at any time, is reduced below five, and remains so for
six months continuously, the corporation is dissolved," and
if a joint-stock company, whether organized under special
charter or general law, suspend its proper corporate busi-
ness at any time for two years continuously, its corporate
rights and privileges cease, but a railroad corporation is
not dissolved by reason of its failure to elect directors on
the day designated by the by-laws, if within six months
thereafter such election be made, as provided by law."
6
A corporation may be dissolved by voluntary action of
¹ Const., Art. X, secs. 7, 8, 9.
³ Ch. 54, sec. 53.
5 Ch. 53, secs. 17-20.
'Ch. 53, secs. 36-41.
2 Ch. 47, secs. 30, 31.
Ricketts v. R. R. Co., 33 W. Va. 433.
Ch. 54, sec. 15; ch. 53, secs. 6, 7.
ๆ
!
WEST VIRGINIA.
2069
its stockholders. The majority of the capital stock being
represented in a general meeting of the stockholders, and
voting in favor of the discontinuance of the business of
the corporation, may pass a resolution to that effect and
divide the property and assets that may remain after pay-
ing all debts and liabilities of the corporation. Public
notice of such resolution must be given by advertisement
in some newspaper of general circulation, published near
the principal office or place of business of the company,
once a week for six weeks, at least, before any dividend
of the capital can be made. The resolution must be forth-
with certified by the president, under his hand and com-
mon seal of the corporation, and the secretary of state
must preserve the same in his office and deliver a copy to
the clerk of the house of delegates, to be printed and
bound with the acts of the legislature. As soon as prac-
ticable after the adoption of such resolution, the stock-
holders must set apart ample funds and assets, either in the
hands of the trustees or otherwise, to secure the payment
of all debts and liabilities of the corporation. Any cred-
itor who supposes his claim not to be sufficiently secured,
whether such claim be then due or thereafter to become
due, may, on a bill in chancery, sufficient cause being
shown therefor, obtain an injunction to prevent the distri-
bution of the capital and a decree against any stockholder
for the amount of the capital received by him. If neces-
sary or proper in the cause, a court may appoint a receiver
to take charge of and administer the property and assets
of the corporation. Under this provision, a majority of
the stockholders have an absolute right to discontinue the
business of the company, subject to the terms and condi-
tions stated.2
Where not less than one-third in interest of the stock-
holders desire to wind up the affairs of their company,
they may apply by bill in chancery to the circuit court of
¹ Ch. 53, sec. 56.
2 Hurst v. Coe, 30 W. Va. 166.
2070
ECONOMIC LEGISLATION.
1
the county in which the principal office or place of busi-
ness of the corporation is situated; or, if there be no such
office or place of business in this state, to the circuit court
of the county in which the other stockholders or any one
or more of them reside or are found, or in which the
property of the corporation or any part of it may be.
The bill in such case must set forth the grounds of their
application, and the court may thereupon proceed accord-
ing to the principles and usages of equity, and, if sufficient
cause thereafter be shown, may decree a dissolution of the
corporation and make such orders and decrees and award
such injunction in the cause as justice and equity may re-
quire. The corporation is a necessary party to such bill,
and it is necessary that one-third or more of the stock-
holders present sufficient cause for a dissolution of the
corporation; the court can not decree a dissolution in such
a suit, even though a majority of the stockholders are
plaintiffs, unless sufficient cause is shown therefor.2
When a corporation is alleged to exist either in law or
in fact, and that it has abandoned its corporate business and
failed to maintain its corporate existence by the election
of directors and the appointment of officers to manage
its affairs, a stockholder may bring suit on behalf of him-
self and the other stockholders against the corporation
and others having assets belonging to it for the protection
of his rights.3
After the dissolution of a corporation, or after its char-
ter has been declared forfeited, the stockholders occupy
the relation of deferred creditors to it. In such case,
they may sue as any other creditor to have its assets ad-
ministered.3
After suit for dissolution has been properly brought,
upon sufficient cause being shown therefor, the court hav-
ing jurisdiction of the cause may, on application of a
creditor or stockholder, appoint one or more persons to
1 Ch. 53, sec. 57.
2 Hurst v. Coe, 30 W. Va. 158.
³ Crumlish v. R. R. Co., 26 W. Va. 623.
WEST VIRGINIA.
'2071
be receivers to take charge of and administer the assets
of the corporation, and may make such orders and decrees
and award such injunction in the case as justice and equity
may deem right. The court may exercise this power over
corporations chartered by any state which may have done
business and acquired property or contracted debts in this
state, and any of whose creditors or stockholders or other
personal representatives reside herein. The circuit court
of any county wherein such creditor, stockholder, or per-
sonal representative may reside, or where such assets or
property or part thereof may be, or where the persons
owing any such debts or having such property in posses-
sion may reside, may afford this relief.¹
When a corporation has expired or is dissolved, its
property and assets, under the direction of the board of
directors then in office, or any proper receiver, are sub-
ject to the payment of all liabilities of the corporation
and expenses of winding up its affairs. If there be any
surplus, it is distributed among stockholders according to
their respective interests. So far as may be necessary or
proper for collecting debts and claims due the corporation,
converting its property into money, enforcing its liabili-
ties, and paying over and distributing its property and as-
sets or the proceeds thereof to those entitled, the corpora-
tion is deemed to continue in existence, and suits may be
brought, continued, or defended. Its property, real or
personal, may be conveyed or transferred, under the com-
mon seal or otherwise, and all lawful acts may be done in
the corporate name in like manner and with like effect as
before such dissolution or expiration.2
A corporation forfeits its charter to the state if it fails,
within thirty days after organizing, to appoint some
person residing in the county where its principal office
and place of business is, as attorney in fact, authorized to
¹ Ch. 53, sec. 58; Rathbone v. Gas Co., 31 W. Va. 810.
2 Ch. 53, sec. 59.
2072
ECONOMIC LEGISLATION.
accept service on behalf of the corporation and, upon
whom service may be made with any process or notice,
and to make return on behalf of the corporation to the
assessor of the county and district of its property for taxa-
tion. This applies to every corporation having its princi-
pal office or place of business in or out of the state having
a charter from this state. Such power of attorney must
be recorded in the office of the clerk of the county court
of the county, and be filed and recorded in the office of the
secretary of state. In addition to the forfeiture of its
charter, the corporation is subject to a fine of not less than
two hundred dollars nor more than five hundred dollars,
and may be deemed a non-resident defendant.¹ So, also,
any corporation which fails to pay its license tax (see
"FEES") forfeits its charter to the state.2
The forfeiture of a corporate charter can not be taken
advantage of or enforced against a corporation collaterally
or incidentally, or in any other manner than by direct
proceedings for that purpose.3 The charter of a corpora-
tion does not expire by reason of acts of omission or com-
mission on the part of the company, even where they
constitute a sufficient ground for declaring a forfeiture;
but the franchises continue in full force until a forfeiture
is claimed by the state granting them; and this can be
done only in a proper legal proceeding, by which the
cause of forfeiture is ascertained and a dissolution ad-
judged.¹
Foreign corporations.-Corporations duly incorpo-
rated by the laws of any state, territory or district of the
United States, or of any foreign country, unless it be oth-
erwise expressly provided, may hold property and trans-
act business in this state by complying with the require-
ments of the statutes, and not otherwise. Every such
corporation must file with the secretary of state a copy
¹ Ch. 54, sec. 24.
³ Lumber Co. v. Ward, 30 W. Va. 43;
'Moore v. Schoppert, 22 W. Va. 283.
2 Ch. 32, sec. 88.
Childs v. Hurd, 32 W. Va. 98.
WEST VIRGINIA.
2073
of its articles of association and of the law and authority
under which it is incorporated. Upon doing this, the sec-
retary of state issues to every such corporation complying
with the provisions of the statute, a certificate of the fact
of its having done so, which certificate must be recorded
in the office of the clerk of the county court of the county,
or one of the counties in which its business is conducted;
a copy of its charter must also be filed in the clerk's office
of such county court, to be kept and preserved therein.
No corporation which has a charter or any corporate au-
thority from any other state can do business in this state
as the lessee of the works, property or franchises of any
other corporation or person, or otherwise, or bring or
maintain any action, suit or proceeding in this state until
it has, in addition to the preceding requirements, filed in
the office of the secretary of state, a writing duly executed
under its corporate seal accepting the provisions of the stat-
ute of this state and agreeing to be governed thereby, and its
failure to do so may be pleaded in abatement of any action,
suit or proceeding; but these provisions are not to be con-
strued as lessening the liability of any corporation which
does not comply therewith upon any contract or for any
wrong. Any corporation doing business in this state with-
out complying with these provisions, is guilty of a misde-
meanor and subject to a fine of not less than one thousand
dollars for each month of its failure. It has been held that
so much of the above provision as relates to foreign rail-
road corporations, which provides that in all suits and
legal proceedings they shall be held and treated as do-
mestic corporations in this state, and which requires them
to file an agreement to that effect, so far as it attempts.
to deprive such corporation of the right to remove to
the federal courts suits brought by or against it in the
courts of this state, cases where it would otherwise be
entitled to such right, is inoperative and void. Nor does.
¹ Ch. 54, sec. 30.
VOL. II-50
1
2074
ECONOMIC LEGISLATION.
this statute make contracts made in this state by foreign
corporations before compliance by them with the pro-
visions of this statute absolutely void and not enforceable
in the courts of this state.¹
Foreign corporations are subject to the provision of
the license tax, to which reference has already been made.
(See "FEES.")
SUBDIVISION III.-FRANCHISES.
How obtained.-Upon the adoption of the constitution
of 1872, it was provided that all charters or grants of
special or exclusive privileges under which organization.
had not taken place or which had not been in operation
within two years prior thereto, should have no validity or
effect whatever.2
The legislature may grant the right to any railroad cor-
poration or internal improvement company to occupy the
streets or alleys or public grounds of any municipal corpo-
ration, but the constitution provides that no law shall be
passed by the legislature granting the right to construct
and operate a street railroad within any city, town or
incorporated village, without requiring the consent of the
local authorities having control of the street or highway
proposed to be occupied by such street railway, and the
statute provides that no railroad or work of internal im-
provement can be constructed upon or across any street
in the inhabited portion of a city or incorporated town
or village, without the assent of the city, town or village
corporation."
A railroad may construct its road across, along and
upon any stream of water, water-course, street, highway,
road, turnpike or canal which intersects or touches the
route of such railroad, but the construction of any railroad
upon or across any street in the inhabited portion of the
¹ Toledo Co. v. Thomas, 33 W. Va. 566.
3 Const., Art. XI, sec. 5.
2 Const., Art. XI, sec. 3.
• Ch. 54, sec. 50, par. 6.
WEST VIRGINIA.
2075
city or incorporated town or village must be authorized
by the consent of the municipal corporation.' The con-
sent of the lawful authorities having control of the high-
ways, roads, turnpike or canals which are intersected or
touched must first be obtained, or the right to cross the
same must be condemned, as provided by law.
Powers of municipalities, as to.-Municipal corpora-
tions in this state can exercise the following powers and no
others: Those granted in express words by its charter or
the general statutes under which it is incorporated; those
necessarily or fairly implied under or incident to the powers
thus expressly granted; and those essential to the de-
clared purposes of the corporation; not simply convenient
but indispensable.²
Incorporated cities, towns or villages are by statute in-
vested with the power to authorize or prohibit the erection
of gas works, electric light works or water-works within
their bounds, and have full power to pass all proper ordi-
nances or resolutions relative thereto."
3
Control of streets.-Generally the council of a munic-
ipal corporation in this state has control, for public pur-
poses, of the roads, streets, alleys, side-walks and public
grounds of a corporation, and the power to improve and
light the same, to regulate the mode and manner of their
use and occupation.*
Streets or public highways under the control of the mu-
nicipal corporation are subject always to the paramount
authority of the city. Whether in any case the fee of the
street is in the municipal corporation or in the owners of
the adjoining lots is a question of law and fact in each
particular case, but so far as the regulation of the streets
is concerned it will make no difference whether the fee is
in the city or town or in the adjacent proprietors.5
1 Ch. 54, sec. 50, par. 6.
2 Charleston v. Reed, 27 W. Va. 681.
4 Ch. 47, sec. 28.
3 Ch. 47, sec. 28, as amended, Laws, 1891.
5 Spencer v. R. R. Co., 23 W. Va. 407.
1
2076
ECONOMIC LEGISLATION.
In the control of its streets, the town or city has for all
police purposes full power and authority, notwithstanding
the license or assent given to an internal improvement
company to occupy the same.¹
A city may lose control of its streets by adverse posses-
sion. The statute of limitations, in the absence of express
provision to the contrary, runs against a municipal copo-
ration the same as against a natural person.2
Where the owner permits the use of his lands as a pub-
lic road, street or alley for a long time, such user will not
be presumed to be a mere license, but a dedication to the
public and the acceptance of the public authorities need
not be proved as a matter of record, but may be inferred
from acts of recognition or acceptance.³
Special damages; property owners' rights.-Ample
authority exists in the state by which the assent of a town
or city may be given for the construction of a street or
other railroad upon any of the streets of such city or
town, and if the railroad company, with the consent of
the council of the town, place its road upon the street
thereof, the fee being in the adjoining owners, the railroad
company, it is held, does not take the property of the lot-
owners but only an easement from the council, a right
of way so long as the council has an easement and the
right to use it as a street; and the lot-owner is not enti-
tled to an injunction against the railroad company to pre-
vent it from occupying the street in such case; his remedy
is by action at law to recover such damages as might have
been recovered in a common law action.*
A municipal corporation may transfer the use of a por-
tion of a street to a railroad company for the purpose of
constructing a railroad thereon, and this is not such a taking
¹ Fox v. R. R. Co., 34 W. Va. 466.
2 Wheeling v. Campbell, 12 W. Va. 36.
3 Yates v. Grafton, 33 W. Va. 508.
4
Spencer v. R. R. Co., 23 W. Va. 407, which is a leading case, and has
been recognized in subsequent cases as controlling authority.
WEST VIRGINIA.
2077
of the property without the consent of the owner of the
fee as is contemplated in the constitution upon the subject
of eminent domain.¹ Such use as a means of travel and
transportation is not an abandonment or perversion of the
street from its general purpose.2
A property owner adjoining the street on which a rail-
road has been constructed may bring an action to recover
damages under the constitution as compensation for per-
manent injury to real estate by the construction of a rail-
road upon a street adjacent to his property, and may
recover for permanent damages, although when the injury
occurred he was not in the actual occupation of the prop-
erty, but was in constructive possession of the same
through his tenant; it is held, in such case, he may re-
cover damages necessarily resulting from the ordinary
and proper use by a railroad company of its track in the
street, and, estimating the permanent damages, the jury
may inquire into the value of the property and establish
evidences of its rental value or an offer to purchase it
which the plaintiff has refused.³
3
Condemnation of property.-The constitution provides
that private property shall not be taken or damaged for
public use without just compensation, nor shall the same
be taken by any company incorporated for the purpose of
internal improvement until just compensation shall have
been paid or secured to be paid to the owner; and when
required by either party such compensation shall be ascer-
tained by an impartial jury of twelve freeholders.*
The property of incorporated companies as well as that
of individuals may be condemned for public use.5
As to what does not constitute a taking, see "SPECIAL
DAMAGES; PROPERTY OWNERS' RIGHTS."
Conflicting grants.-As to railroads, it is provided that
1 Yates v. Grafton, 33 W. Va. 508.
2 Arbenz v. R. R. Co., 33 W. Va. 11.
Fox v. R. R. Co., 34 W. Va. 466.
• Ch. 42, secs. 1, 2.
• Const., Art. III, sec. 9.
2078
ECONOMIC LEGISLATION.
1
they may cross at grade or over or along, join, intersect,
and unite their roads and upon the grounds of such other
railroad companies, and the two railroads must unite in
forming such intersections and connections; if they can
not agree upon the compensation or the points or manner
of such crossings and connections, it must be ascertained
or determined as provided by law.'
Perpetual and exclusive franchises.-Upon the adop-
tion of the present constitution, it was provided that all
charters of special or exclusive privileges under which or-
ganization had not taken place, or which had not been in
operation within two years from the time the constitution
took effect, should thereafter have no effect or validity.
whatever.2
The license or privilege of occupying the streets or the
grant of any other franchise by municipal corporations
can not be exclusive. Thus in the case of Gas Company
v. Parkersburg, where the city by an ordinance granted to
the gas company the exclusive privilege of using the
streets, alleys, and public grounds for the purposes of the
gas company for the term of thirty years, it was held that
neither the charter of the city nor the general statutes of
the state conferred the power to delegate to a private cor-
poration the exclusive privilege of using the streets and
alleys of the city for laying gas-pipes and furnishing the
city and its inhabitants with gas for thirty years.³
3
Methods of construction.-A railroad company must.
restore any stream, water-course, street, highway, road,
turnpike or canal intersected or touched to its former
state so as to not unnecessarily impair its usefulness, and
must keep such crossing in repair.*
Regulations as to service.-The railroad act provides
1 Ch. 54, sec. 50.
2 Const., Art. XI, sec. 3.
' Gas Co. v. Parkersburg, 30 W. Va. 433; Arbenz v. R. R. Co., 33 W.
Va. 46.
* Ch. 54, sec. 50, par. 6.
WEST VIRGINIA.
2079
that railroads may be operated by steam, animal or any
mechanical power.¹
State and municipal aid.--It has been held that the
provisions of the statute relative to municipal indebted-
ness (see SUBDIVISION IV" POWER TO ERECT OR PURCHASE")
does not authorize the issuing of bonds for the purpose
of donating them in aid of manufacturing or private en-
terprises.2
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
Historical.-Prior to the formation of the state, it had
been cautiously intimated that municipal corporations
might own water-works and gas works and other plants.
and apparatus for the convenience, comfort, and protec-
tion of their inhabitants. As far back as 1850, the city
of Wheeling was authorized by the general assembly of
Virginia to purchase the plant of the Wheeling Gas Com-
pany at the end of twenty years from the commencement
of the operations of that company, which right the city
exercised, and became the owner of the plant and has op-
erated it for several years. The policy of the legislature
of West Virginia has been to authorize incorporated
towns and cities to erect and operate their own water-
works.
3
So far as known, there are but few instances in this
state where any plants other than water-works are owned
and controlled by municipal corporations.
Power to erect or purchase.-By statute, incorporated
cities, towns, or villages are invested with the power to
erect gas-works, electric light works, or water-works
within their bounds, and have full power to pass all proper
ordinances or resolutions relative thereto."
1 Ch. 54, sec. 50.
2 Iron Works v. Moundsville, 11 W. Va. 1; Parkersburg ". Brown,
106 U. S. 487; Kaufle v. Delany, 25 W. Va. 410.
³ Gas Co. v. Wheeling, 8 W. Va. 320.
* Ch. 47, sec. 28, as amended, Laws, 1891.
2080
ECONOMIC LEGISLATION.
A limitation upon the power of municipalities to erect
or purchase the industries under consideration is neces-
sarily found in their ability to contract indebtedness and
to levy taxes. The constitution imposes a clear and posi-
tive limitation on the power of municipal corporations to
create indebtedness. It provides that they shall not be
allowed to become indebted in any manner for any pur-
pose to an amount, including existing indebtedness, in the
aggregate exceeding five per centum of the value of the
taxable property therein, to be ascertained by the last as-
sessment for state and county taxes previous to the incur-
ring of such indebtedness; nor without at the same time
providing for the collection of a direct annual tax, suffi-
cient to pay annually the interest on such debt and the
principal thereof within and not exceeding thirty-four
years; but no such debt can be contracted unless all ques-
tions connected with the same shall have been first sub-
mitted to a vote of the people, and after securing three-
fifths of all the votes cast for and against the same.'
2
Soon after the adoption of the constitution, it was held
that this provision was not intended to and does not inter-
fere with or prevent the annual levying and expenditure-
of taxes for municipal purposes and to do whatever is
proper for that purpose. This includes the making of
contracts and the like. In such case, no vote of the peo-
ple would be required. In a more recent case, the court
holds that the effect of this section of the constitution is
to prohibit the creation of indebtedness in any manner or
for any purpose, unless there is a fund in hand applicable
to such debt, or a levy is made within the limitation pre-
scribed to pay such debt. And the court declares that the
term "indebtedness" embraces any and every species of
liability arising out of a promise or contract.³
As just observed, the constitution restricts the right of
¹ Const., Art. X, sec. 8.
2 List v. Wheeling, 7 W. Va. 504.
3 Spilman v. Parkersburg, 14 S. E. Rep. 279; s. c. 35 W. Va.
WEST VIRGINIA.
2081
!
taxation, and when a municipal corporation is up to the
limit of its indebtedness fixed by the constitution it can
not carry on its operations upon credit within the mean-
ing of the constitution, in any manner or for any purpose,
but must pay during the current year with funds on hand
or with funds already properly levied. A city thus in-
debted can not increase its indebtedness beyond the con-
stitutional limits by any contract, and such indebtedness
being forbidden the contract is also forbidden.'
The indebtedness referred to in the constitution includes
every kind of indebtedness, no matter in what manner
created or voluntarily brought about or for what purpose;
whether it be for municipal self-preservation or not,
whether for pure air, pure water, good light, clean and
convenient and safe streets; whether it be payable now or
hereafter; payable quarterly or annually or at any date.
running on for thirty-four years; whether for current ex-
penses or indefinite debts or charges; whether for personal
or real property, leasehold or freehold.¹
The court, in the above case, holds that current expenses
or matters actually included within that phrase are as ab-
solutely prohibited as indebtedness created in any other
manner or for any other purpose; it holds that the provis-
ion of the constitution limiting the rate not exceeding five
per centum on the value of the taxable property is in-
tended to fix a maximum limit in any event; it is intended
to protect posterity as to the limit as well as to the time.
Therefore no such indebtedness can be contracted unless
all questions connected with the same have been first sub-
mitted to a vote of the people and after receiving three-
fifths of all votes cast for and against the same.¹
Municipal bonds.-Municipal corporations in this state,
for the government of cities, towns, and villages, are au-
thorized to issue their bonds and sell the same, provided
the aggregate of the debt of such corporation of every
¹ Spilman v. City of Parkersburg, 14 S. E. Rep. 279.
2082
ECONOMIC LEGISLATION.
kind whatsoever is not made to exceed five per centum
on the value of the taxable property therein. But no such
bonds can be issued, unless the constitutional requirement
of submitting to the qualified voters all questions con-
nected with the subject be complied with. Bonds must
be sold at not less than their par value.¹
This statute aims to provide the details of the method
by which the authority and limitations of municipal cor-
porations in creating indebtedness may be executed and
secured.
Power to appropriate property for.-A city, town or
village may exercise the right of eminent domain for the
purpose of constructing public streets, alleys, and bridges
for public use, as well as for public buildings for the use
of the municipal corporation."
The property of individuals and corporations is subject
to this right of eminent domain.
Economic results.-Experience in West Virginia has
not been of an extent sufficient to warrant any confident
conclusions whether it is better that the municipality
should or should not own its works for supplying water,
heat or light to its inhabitants or the contrary. Good
sense, integrity, and financial capacity in municipal gov-
ernment are essential factors in determining the result of
the economic problem of municipal ownership.
¹ Laws, 1872-3, ch. 141; Code, p. 1018.
' Ch. 42, sec. 2.
WISCONSIN."
EDITED BY HENRY M. LEWIS, ATT'Y, MADISON, WIS.
SUBDIVISION I.-HISTORICAL.
The revised statutes of the Territory of Wisconsin of
1839 contained a chapter entitled "An act concerning cor-
porations," the last section of which read as follows:
"Every act of incorporation which shall be hereafter
passed shall at all times be subject to amendment, altera-
tion, or repeal, at the pleasure of the legislature; pro-
vided, that no act of incorporation shall be repealed un-
less for some violation of its charter or other default,
when such charter shall contain an express provision lim-
iting the duration of the same."
Nearly all acts of the legislature of the Territory of
Wisconsin granting charters to private corporations con-
tained the following or similar provisions: "If said com-
pany shall misuse or abuse the privileges hereby granted,
the legislature may resume all and singular the rights and
privileges vested in said company by this act."
In many of the charters granted by the territorial legis-
lature, the provisions above quoted from the general act
concerning corporations, giving to future legislatures the
power to amend, alter, or repeal the same, were made a
part of the enactment.
¹ References to the constitution are to that of 1848. Amendments
since adopted are noted in their appropriate places. References to the
statutes are to the Revised Statutes of Wisconsin (Sanborn and Berry-
man's Annotated Statutes of 1889), by chapter and section. The session
laws are referred to as "Laws" of the respective years. As to state re-
ports, see Appendix "A."
(2083)
2084
ECONOMIC LEGISLATION.
Under the territorial government, there were no gen-
eral statutes authorizing municipal corporations to grant
franchises to private corporations or persons for the use
of streets, highways, etc.
Upon the organization of the state government, the
constitution adopted by the people contained the follow-
ing provision in regard to corporations as section 1 of Ar-
ticle XI, viz: "Corporations without banking powers or
privileges may be formed under general laws, but shall
not be created by special act, except for municipal pur-
poses, and in cases where, in the judgment of the legisla-
ture, the object of the corporation can not be obtained
under general laws. All general laws, or special acts en-
acted under the provisions of this section, may be altered
or repealed by the legislature at any time after their pas-
sage."
This section really left the whole question of granting
special charters to the judgment of the legislature, the
provisions being construed as directory merely.'
Constant applications were made to the legislature for
special charters, which were seldom refused, although a
general law had been enacted and incorporated in the re-
vision of 1849 providing for the organization of private
corporations.
The abuse became so great, and so much of the time
of the several legislatures was taken up with the con-
sideration of these special enactments, that in 1871 an
amendment to the state constitution was adopted, to be
known as sections 31 and 32 of Article IV, limiting the
powers of the legislature. Section 31 prohibited the legis-
lature, among other things, from enacting any special or
private laws for granting corporate powers or privileges,
except to cities; and section 32 required that "the legis-
lature shall provide general laws for the transaction of any
business that may be prohibited by section 31 of this arti-
¹ Clark v. City of Janesville, 10 Wis. 136, 175.
1
WISCONSIN.
2085
cle, and all such laws shall be uniform in their operation
throughout the state.”
In pursuance of these constitutional amendments, gen-
eral laws have been enacted by the legislature for the or-
ganization, maintaining, conducting, and regulating pri-
vate and economic corporations for nearly all kinds of
business. Such references will hereafter be made to these
statutes as the nature of the subject under consideration
may require.
It will be observed from this historical sketch, that the
people of Wisconsin have, from the first organization of
their territorial government to the present time, shown a
disposition to retain complete control over corporations
and corporate franchises.
It is not believed that there are within this state any
corporations operating under charters granted by the ter-
ritorial legislature; but if any such do exist, and their
charters do not contain a clause permitting future legisla-
tures of the territory or state to alter, amend, or repeal
them, the question might arise as to what effect the pro-
visions in the general act concerning corporations in the
revised statutes of 1839, before alluded to, might have
upon them.¹
¹ This question was before the supreme court of Wisconsin in Att'y-
Gen'l v. Railway Cos:, 35 Wis. 605. It arose in this way. The charter
of the Milwaukee & Waukesha R. R. Co., which afterward became in-
corporated into the Chicago, Milwaukee & St. Paul Railway Co. system,
was granted by the territorial legislature, February 11, 1847. It con-
tained no provision authorizing future legislatures to alter, amend, or
repeal its charter. By chapter 273 of the laws of 1874, a maximum rate
of charges for passengers and freight was fixed for all railroads operat-
ing in this state. This was conceded to be an act in fact amending the
charters of these railroad companies, and the suit in question was an
action brought by the attorney-general of the state against the railway
companies to enjoin them from exacting tolls from the carriage of passen-
gers or freight in excess of the rates established by that act. It was
contended by the St. Paul company that as to that part of the line in-
corporated as aforesaid under said territorial acts, that the act of 1874
}
2086
ECONOMIC LEGISLATION.
:
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation, how obtained.-The constitution pro-
hibits the legislature from granting corporate powers or
was not applicable under the rule adopted in the Dartmouth College
case.
Ryan, C. J., in passing upon this question, said: "On the argument
of the principal motion, it was not suggested at the bar, and it wholly
escaped our attention, that a general act concerning corporations in the
territorial revision of 1839, reserved to the territorial legislature power
to amend, alter, or repeal all subsequent acts of incorporation. This
act remained in force until the first state revision in 1849, when it, with
many others, was repealed; the repeal to take effect January 1, 1850,
with a saving clause that the repeal should not affect any right accrued
under any of the statutes so repealed. The attorney-general has now
called our attention to this act. And it was argued that the reserved
right to amend, alter, or repeal the territorial charter entered into and
became a part of the contract of the charter when accepted; and thus
became a right accrued, which was not affected by the repeal; that the
repeal could not take effect as to the territorial charter, so long as the
charter itself remained unrepealed; the reserved power continuing so
far to exist, by force of the charter itself, as a contract. These are nice
questions not necessary to the disposition of this motion, and on which
we shall, therefore, express no opinion."
The court held that the corporation under consideration did not in
fact organize under their charter, and therefore did not accept the same,
until after the adoption of the state constitution, and so came under the
provisions of section 1 of Article XI, supra.
It is
The question left undecided by the court is an interesting one.
a rule of construction of statutes, that if a subsequent statute clearly
intends to prescribe the only rules which should govern, it repeals the
former. (Davis . Fairburn, 3 How. U. S. 636.)
Section 20 of the charter of the Milwaukee & Waukesha R. R. Co.
provided that, "in case of violation by the company of any of the pro-
visions of that act, the legislature of the Territory or State of Wisconsin
may resume all and singular the rights hereby granted to said com-
pany.' The supreme court of Wisconsin, in Attorney-General r. Kail-
road Companies, supra, held that this section does not give the legisla-
ture a right to alter or amend, but simply to repeal, and the right to re-
peal is made dependent on violation of its charter; that this violation
must first be established, which is a judicial function; and added: "We
need not stop to inquire whether the territorial legislature could have
exercised such a function under such a clause, and thereupon repeal the
WISCONSIN.
2087
privileges by special or private laws,' and requires "that
the legislature shall provide general laws for the transac-
tion of any business that may be prohibited" by the pre-
ceding provision, and that all such laws must be uniform
in their operation throughout the state.2
Articles of incorporation.-Three or more adult per-
sons, residents of this state, may form a corporation for
any lawful business or purpose whatever, except the busi-
ness of banking, insurance, building or operating public
railroads or plank or turnpike roads, in the manner here-
inafter stated.³ Street railway companies are formed un-
der these provisions of the general law, and are not in-
cluded in this exception. The persons so desiring to form
such corporation must make, sign and acknowledge writ-
ten articles of association.5
4
Must show what.-The articles of incorporation must
state the purpose of forming a corporation under the pro-
charter, nor whether the state legislature could do it now.
any case, the power reserved is simply one of repeal."
In
It would seem to have been the intent of the legislature to have sec-
tion 20 of the charter supersede section 15 of the general act concern-
ing corporations, and that its charter should not be altered or amended,
but that it might be repealed if the company should violate its pro-
visions.
It has been repeatedly decided by the courts that one legislature can
not make an act irrepealable by another legislature, except it assumes
the form and substance of a contract (Bloomer v. Stolley, 5 McLean, U.
S. Cir. Ct. 158); nor bind a future legislature to a particular mode of
repeal or amendment. (Kellogg v. City of Oshkosh, 14 Wis. 626; Bright-
man v. Kirner, 22 Wis. 54; Oleson v. Green Bay & Lake Pepin Ry. Co.,
36 Wis. 383.)
Had the company been organized so it could have accepted its charter
prior to the adoption of the state constitution, it is probable that the
supreme court would have held that so much of the Chicago, Milwau-
kee & St. Paul Railway system as was operating under the charter of
1847, could not have been brought under the provisions of chapter 273
of the laws of 1874, notwithstanding said section 15 of the general act
of 1839 concerning corporations.
¹ Const., Art. IV, sec. 31.
3 Sec. 1771.
2 Const., Art. IV, sec. 32.
* Sec. 1862, as amended, Laws, 1881, ch. 219.
5 Sec. 1772.
2088
ECONOMIC LEGISLATION.
visions of the general law; the business or purpose for
which formed; the name and location of such corpora-
tion, but such name must not contain the names of indi-
viduals in the manner in which they are ordinarily used
in partnership, or business names, and no corporate name
will be held illegal because of the omission of the word
"limited;" the capital stock, the number of shares and
the amount of each share; the designation of general
officers and of the number of directors, which must not
be less than three, and the directors may be required to
be classified into three classes, so that one-third shall hold
their offices for one year, one-third for two years, and one-
third for three years, in which case all directors elected
subsequent to the first hold their offices for three years,
except when elected or appointed to fill vacancies; the
principal duties of the several general officers respectively;
such other provisions or articles, if any, not inconsistent
with law, as they may deem proper to be therein inserted
for the interests of such corporation or the accomplish-
ment of the purposes thereof including, if desired, the
duration of its existence.¹
Filing. The original articles, or a true copy thereof,
verified as such by the affidavits of two of the signers
thereof, must be recorded in the office of the register of
deeds of the county in which the corporation is located;
and no corporation, until such articles are so left for rec-
ord, has legal existence. A like verified copy must, within
thirty days, be filed with the secretary of state, and for a
failure so to do, each signer of any such articles forfeits
twenty-five dollars.'
Organization; preliminary requirements.-The first
meeting may be held whenever one-half of the capital
stock has been subscribed.2 Until the directors or trust-
ees are elected, the signers of the articles of organization
have direction of the affairs of the corporation, and make
¹ Sec. 1772.
2 Sec. 1773.
WISCONSIN.
2089
such rules as may be necessary for perfecting its organ-
ization, accepting members, or regulating the subscription
to its capital stock.
In stock corporations, the first meeting may be held at
any time after one-half of the capital has been subscribed,
and may be called by any two signers of the articles, at
such time and place as they may appoint, by giving ten
days personal notice thereof in writing to each subscriber
of stock, or by publishing notice thereof for at least two
weeks before such meeting, in some newspaper published
at or nearest to the designated place of location of the cor-
poration; such meeting may be held without previous no-
tice, if all the subscribers are present in person or by duly
authorized attorney.
Commencing business.-No business can be transacted
by the corporation, except with its members, until at least
one-half of its capital stock has been subscribed for and
at least twenty per cent thereof actually paid in. A cor-
poration otherwise contracting has no right of action
upon a contract so made. The existing stockholders, how-
ever, become personally liable thereon.¹
Fees. For filing articles of incorporation with the sec-
retary of state and issuing a certificate of corporation, the
corporators must pay the sum of ten dollars, and for filing
with the secretary of state an amendment to articles al-
ready filed, the sum of five dollars, and no articles or
amendments can be filed unless such fees are first paid, and
such sums must be paid into the state treasury by the sec-
retary of state. The fee for recording the articles with
the register of deeds of the county is ten cents per folio.
Amendments, repeals, etc.-See under "SUBDIVISION
I-HISTORICAL," above.
The constitution provides that all general laws or special
acts relative to corporations may be altered or repealed by
the legislature at any time after their passage;³ but char-
1 Sec. 1773.
VOL. II-51
2 Sec, 1772.
³ Const., Art. XI, sec. 1.
2090
ECONOMIC LEGISLATION.
ters granted under the general law can not be modified by
special enactment.' It has been repeatedly held by the
supreme court of this state that all special acts of incor-
poration granted by the legislature are subject to modifica-
tion and repeal.2
The reservation of the right to alter or repeal the char-
ter is a qualification of the grant, and the subsequent ex-
ercise of the power reserved is not within the prohibition
of the federal constitution as impairing the obligation of
contracts; the power so reserved is limited only by the
words used to express the limitation; a corporate charter
of one kind can not be changed into one of an entirely
different kind, under the power to alter, but may be
changed in detail, so long as the general identity of the
corporation remains. Where the charter permits a cor-
poration to exact tolls at its discretion, an act of the legis-
lature restricting the corporation to prescribed maxi-
mum rates is an alteration within the scope of such re-
served power. Valid alterations of its charter are obliga-
tory upon a private corporation, without its assent thereto.
It must accept or discontinue its operations as a corporate
body.3
See also "ALTERATION, AMENDMENT, ETC., OF FRANCHISES,
Subdivision III.
>>
By the corporation.-Any corporation organized under
the general law may, at any meeting of its members, by a
¹ Stevens Point Boom Co. v. Reilley, 44 Wis. 295.
2 Pratt v. Brown, 3 Wis. 603; Madison, etc.. Plank Road Co. v. Rey-
nolds, 3 Wis. 287; Blair v. Milwaukee, etc., R. R. Co., 20 Wis. 254; State
v. Milwaukee Gas. Light Co., 29 Wis. 454; West Wis. Ry. Co. v. Super-
visors, 35 Wis. 257; Attorney-General v. Railroad Cos., 35 Wis. 425;
Hinckley . Chicago, etc., R. R. Co., 38 Wis. 194; Ackley v. Chicago,
etc., Ry. Co., 36 Wis. 252.
3 West Wis. Ry. Co. v. Supervisors, 35 Wis. 257; Attorney-General v.
R. R. Cos., 35 Wis. 425. In this latter case, Ryan, C. J., in a very able
and exhaustive opinion, discusses the whole question of the right of the
legislature to alter, amend, modify or repeal the rights, powers, privi-
leges and franchises granted to a corporation by legislative authority
by subsequent legislative acts.
WISCONSIN.
2091
vote of the owners of at least two-thirds of all the stock
then outstanding, unless a greater vote is required in its
articles, amend the articles of organization so as to modify
or enlarge its business or purposes, change its name or lo-
cation, increase or diminish its capital stock, change its
officers or the number of directors, or provide any thing
which might have been originally provided in such arti-
cles. Such amendment must be adopted only in accord-
ance with the articles of organization, if a mode of amend-
ing the same has been therein prescribed.¹
When adopted, a copy of such amendment, with a cer-
tificate thereto affixed, signed by the president and secre-
tary, or, if none, the corresponding officers, and sealed with
the corporate seal, if any there be, stating the fact and
date of the adoption of such amendment, and that such
copy is a true copy of the original, must be recorded in
the office where the original articles are recorded; and
the register must note on the margin of the record of such
original the volume and page where every such amend-
ment is recorded; no amendment is of effect until so
recorded. Within thirty days, such officers must file
a like certified copy with the secretary of state, and
in case of failure so to do, each forfeits twenty-five
dollars.¹
Whenever the corporate name is changed, the secretary
must publish a notice thereof in a newspaper published at
or nearest to the place of location of such corporation for
three weeks, and if he fails for two months so to do, he
forfeits twenty-five dollars.
No change of location of any corporation, if beyond the
limits of the county, is valid until the articles of organ-
ization and all amendments have been recorded in the
office of the register of deeds of the county to which the
same is changed.' Under this provision it is held that any
amendment to articles of incorporation is inoperative until
¹ Sec. 1774.
2092
ECONOMIC LEGISLATION.
the certificate thereof is left for record in the office of the
register of deeds.'
2
Objects. The articles of association must state the
-business and purposes of the company. It is held by the
supreme court, however, that a general description of the
purposes of the corporation is sufficient, and that the cor-
poration may then exercise the usual necessary powers of
similar corporations not in conflict with the laws of the
state.³ Changes in the objects for which the corporation
is formed are accomplished by amending its articles of in-
corporation as provided above.
No restrictions exist upon the power of a corporation to
change its method of operation without changing the act-
ual objects of its service. Such change is made by amend-
ing the articles of organization when necessary. It will
often be feasible to so draw the original articles of incor-
poration as to render their modification unnecessary in the
event of a change in the method of operation, but as the
process of amendment is plain and simple it is deemed
advisable to adopt it whenever there is any question as to
the rights of the company under its original articles of
incorporation. A change in the methods of operation,
such as the use of electric motive power instead of horses,
by a street railway company, would necessitate a change
in the ordinance and contract by which the particular
franchise was granted, unless the latter was broad enough
to cover the change.
Powers.
See "BY-LAWS."
Every corporation organized under the general law be-
comes a body corporate by the name designated in its
articles, and has the powers conferred by statute, which
are necessary or proper to conduct the business or accom-
plish the purposes prescribed by its articles, but no other
or greater. It may take by gift, devise, purchase or oth-
erwise, and may manage, hold, convey, mortgage, lease or
¹ Wood v. Union Gospel Church Association, 63 Wis. 9.
2 Sec. 1772.
3 Wendel v. State, 62 Wis. 300.
WISCONSIN.
2093
otherwise dispose of at pleasure such real or personal
property as may be necessary for its business or purposes,
or for the protection or benefit of its property held or used
for the corporate purposes, and such as may be taken in
payment or as security for debts.¹
Any street railway corporation, foreign or domestic,
which owns or controls a street railway operated by
electric power, or which makes the purchase herein de-
scribed for the purpose of being so operated, has au-
thority to purchase, take, and hold all or any part of the
real and personal property, rights, privileges, ordinances,
and franchise of any other street railway company, foreign
or domestic, operating or to operate a street railway by
electric power, or of any corporation, foreign or domestic,
formed for the purpose of manufacturing, creating or gen-
erating electricty for power or light or heat or any other
purpose; and is authorized to purchase, take, and hold
stock in, and in its corporate capacity to become a sub-
scriber to the capital stock of any other similar street rail-
way or any electrical company, foreign or domestic; the
terms of such purchase must be assented to by the holders
of three-fourths of the capital stock of each company at
any general or special meeting of said stockholders; the
consideration may be paid in stock or in bonds, or in both,
of the purchasing company, and the conveyance of the
property may be by deed, or bill of sale or both, in the
¹ Section 1775, as amended, Laws, 1881, ch. 133; Laws, 1883, ch. 70;
Laws, 1891, ch. 234, 283, 403.
Conveyances of land or any interest therein must be executed in the
presence of two witnesses; such conveyances, when made by a corpora-
tion, must be signed by the president or other authorized officers of the
corporation, sealed with the corporate seal, and countersigned by the
secretary or clerk. Such conveyances must be duly acknowledged.
(Sec. 2216, as amended, Laws, 1880, ch. 129.) A conveyance executed
only by the president and not by the secretary is void, and a subse-
quent ratification will not affect a subsequent judgment lien accruing
before such ratification. (Galloway v. Hamilton, 68 Wis. 651.) A scroll
seal is good as to individuals, but not as to corporations having a cor-
porate seal. (Sec. 2215.)
2094
ECONOMIC LEGISLATION.
usual form, and the transfers of stock must be by indorse-
ment in the usual form. The electric power so acquired
may be sold or leased by the purchasing company for
power, light, heat, or other purpose to all persons and
corporations for cash or for the stock or bonds or both of
any corporation to which the same is furnished. Electric
light companies, foreign or domestic, have all the rights,
powers, and privileges conferred by the above provisions
on street railway companies.¹
By-laws.-Among the general powers conferred upon
corporations is that of electing or appointing in such
manner as may be fixed by their by-laws, "all necessary
officers, agents, and servants, define their duties and obli-
gations, fix their compensation, and fill vacancies therein."
A corporation also has power "to make, amend, and re-
peal by-laws and regulations, not inconsistent with law
or its articles of organization for its own government,
for determining the manner of calling and conduct-
ing its meetings, the manner of appointing and mode of
voting by proxy, and the tenure of office of its several
officers and such others as shall be necessary or convenient
for the accomplishment of its purposes." 2
Officers; meetings; voting; quorum, etc.-The arti-
cles of incorporation must designate the general officers
and the number of directors, which must not be less
than three, and the directors may be required to be class-
ified into three classes, so that one-third shall hold their
offices for one year, one-third for two years, and one-third
for three years; in which case, all directors elected subse-
quent to the first hold their offices for three years, except
when elected or appointed to fill vacancies. The articles
of association must also state the principal duties of the
several general officers respectively. Changes in officers
or the number of directors must be made as stated above
under "AMENDMENTS, REPEALS, ETC."
3
3
¹ See note on preceding page.
2 Sec. 1748.
3 Sec. 1772.
WISCONSIN.
2095
The by-laws may provide for the manner of electing or
appointing all necessary officers, agents, and servants, de-
fine their duties and obligations, fix their compensation,
and fill vacancies therein, and may determine the manner
of calling and conducting its meetings, the mode of voting
by proxy, the manner of appointing, and the tenure of
office of its several officers.¹
When not otherwise specially provided by law or by the
by-laws of any corporation, the directors or trustees thereof
must call and order the election of the officers of such
corporation annually; and if they refuse so to do,or, if from
any other cause it happens that an election of directors or
trustees does not take place at the annual meeting, the
corporation is not deemed dissolved thereby, but the former
officers continue to act as such until their successors have
been elected and qualified; a special election may be
called by the proper officers of a corporation for elect-
ing such officers by giving such notice as is required for the
annual election; but if the officers refuse or neglect to
call such special election for ten days after the time fixed
for the annual election, or if there be no officers author-
ized to call such special election, then any two or more
members of such corporation may call a special meeting
for the election of officers in the manner prescribed for
the first meeting as shown under " ORGANIZATION: PRELIMI-
NARY REQUIREMENTS." When the day fixed for the annual
election of officers or other meetings of a corporation falls
on Sunday or on a legal holiday, such election or meeting
must be held on the next succeeding secular day.2
Every stockholder of any corporation is entitled to one
vote for each share of stock, held and owned by him, at
every meeting of the stockholders, and at every election
of officers, and may vote either in person or by proxy at
such elections, and by proxy at other meetings when so
provided by the by-laws; every executor, administrator,
¹ Sec. 1748.
2 Sec. 1762.
2096
ECONOMIC LEGISLATION.
guardian, or trustee, may represent the shares of stock in
his hands at all meetings of the stockholders, and may
vote thereat as a stockholder.¹
The circuit court has jurisdiction over directors, man-
agers, trustees, and other officers of corporations to com-
pel them to account for their official conduct in the man-
agement and disposition of the funds and property com-
mitted to their charge; to order and compel payment by
them to the corporation which they represent and to its
creditors of all sums of money and of the value of all
property which they may have acquired to themselves or
transferred to others, or may have lost or wasted by any
violation of their duties as such directors, managers, trust-
ees, or officers; to suspend any such director, trustee, or
other officer from exercising his office, whenever it appears
that he has abused his trust; to remove any such director,
trustee, or officer from his office, upon proof or conviction of
gross misconduct; to direct, if necessary, new elections to
be held by the body or board duly authorized for that pur-
pose, to supply any vacancy created by such removal; in
case there be no such body or board, or all the members
of such board be removed, then to report the same to the
governor, who is authorized to fill such vacancies; to set
aside all alienations of property made by the directors,
trustees, or other officers of any corporation contrary to
the provisions of law, or for purposes foreign to the law-
ful business and objects of such corporation, in cases
where the person receiving such alienation knew the pur-
poses for which it was made; and to restrain and prevent
any such alienation in cases where it may be threatened or
there may be good reason to apprehend that it is intended
to be made.2
It is held under Wisconsin statutes that a judgment
creditor, whose execution has been returned unsatisfied,
may maintain an action to have a receiver appointed and
1 Sec. 1760.
2 Sec. 3237.
WISCONSIN.
2097
the property of the corporation sequestered in order to
fairly divide the assets among all creditors. Other cred-
itors may be enjoined from pursuing their own remedies,
and officers of the law may be compelled to deliver to the
receiver all property of the corporation held on attach-
ment or execution.'
Books. Every corporation must keep a correct and
complete record of all its proceedings, including such as
relate to the election of its officers, and such record may be
kept in any other than the English language, when so
provided in its articles of organization. Every corporation
must also keep a book containing the name of all the
stockholders or members, since its organization, showing
the place of residence, amount of stock held, time of ac-
quiring stock or becoming a member, time of transfer of
stock or cessation of membership of each respectively. If
any officer, agent, or servant of any corporation omits to
make any entry in the books or records thereof, which it
is his duty to make as such officer, agent, or servant, he
forfeits not less than twenty-five nor more than one thou-
sand dollars, and is liable for all damages thereby sustained.2
The books of every corporation containing the stock sub-
scriptions and accounts must, at all reasonable times, be
open to the inspection of the stockholders.³
Capital stock.-The articles of incorporation must state
the amount of the capital stock, the number of shares, and
the amount of each share.¹
No limitation exists as to the amount or capital that
may be invested by the corporation, and the capital stock
divided into shares is deemed personal property." At
least one-half of the capital stock must be subscribed for
and twenty per cent thereof actually paid in before com-
mencing business.º
"The object of this statute seems to be to prevent fic-
titious and fraudulent corporations from extorting money
¹ Bullin v. Loeb, 78 Wis. 404.
* 1772.
2 Sec. 1759.
• Sec. 1757.
* Sec. 1751.
• Sec. 1773.
2098
ECONOMIC LEGISLATION.
from confiding stockholders, and obtaining credit when
they have no real basis of capital to do business upon and
no resources to meet their liabilities.
We think
that it is within the intention of this statute that no call
or assessment upon the shares of stock already taken,
subsequent to the first one for preliminary purposes shall be
made until one full half of the capital stock has been sub-
scribed, and twenty per cent thereof has actually been
paid in."1
No corporation can issue any stock or certificate of
stock except in consideration of money or labor or prop-
erty estimated at its true money value, actually received
by it equal to the par value thereof, and all stock issued
contrary to these provisions is void; but any corporation.
whose stock has been admitted to the stock exchange of
Chicago, New York, Boston, or Philadelphia, or of either
of said cities, may sell such stock so admitted at the best
price or prices, current for the time being, obtainable there-
for on any of the said exchanges at which the same may
be offered for sale.2
Subscribers to whom capital stock has been issued upon
payment of less than the par value thereof may be com-
pelled to pay the full par value for the benefit of creditors.
The complaint in an action brought for this purpose need
not allege that credit was given the corporation in the
belief that full value had been paid for the stock.3 Under
this provision, a subscriber for stock under an agree-
ment that it shall be issued to him at less than its par
value is in pari delicto with the corporation and can not
maintain any action upon the contract or recover money
paid under it. Inventions and the prospective patents
thereon are "property" within the meaning of this pro-
vision, in consideration of which stock may be issued."
4
¹ Anvil Mining Co. v. Sherman, 74 Wis. 226.
3
2 Sec. 1753.
Gogebic Investment Co. v. Iron Chief Mining Co., 78 Wis. 427.
* Clark v. Lincoln Lumber Co., 59 Wis. 655.
• Whitehall v. Jacobs et al., 75 Wis. 474.
WISCONSIN.
2099
1
A corporation may take a note and mortgage in pay-
ment for stock, although not specially authorized to do so.
Corporations may employ the usual and necessary means
to accomplish the purposes of their organization, and will
not be restrained by a narrow and illiberal rigor in the
choice of such means. A court of equity has jurisdiction
of an action by a stockholder to procure the cancellation
of stock illegally issued, and incidentally to restrain the
holders of such stock from voting thereon.2
1
The capital stock of a corporation is a trust fund, the
proper application of which courts of equity will enforce by
virtue of their inherent jurisdiction over trusts and frauds.³
Increase and decrease of.—The capital stock of any cor-
poration may be increased or diminished by amendments
to the articles of incorporation under the provisions of
the statute already stated under "AMENDMENTS, REPEALS,
ETC."
All stock dividends or other fictitious increase of stock
is void.¹
Transfer of.-The delivery of stock certificates of a cor-
poration to a bona fide purchaser or pledgee for value, to-
gether with a written transfer of the same, signed by the
owner of the certificate, his attorney or legal representa-
tive, is a sufficient delivery to transfer the title as against
all parties; but no such transfer affects the right of a cor-
poration to pay any dividend due upon the stock, or to
treat the holder of record as the holder in fact, until such
transfer is recorded upon the books of the corporation, or
a new certificate is issued to the person to whom it has
been so transferred.5
Stock in other companies.-Any corporation heretofore
¹ Clark v. Farrington, 11 Wis. 306; Cornell v. Hichens, 11 Wis. 353;
Blunt v. Walker, 11 Wis. 334.
2 Wood v. Union Gospel Ass'n, 63 Wis. 9.
³ Nazro v. Merchants' Mut. Ins. Co., 14 Wis. 295; Adler v. M'f'g Co.,
13 Wis. 57.
* Sec. 1753.
' Sec. 1751, as amended, Laws, 1891, ch. 414.
2100
ECONOMIC LEGISLATION.
formed or organized, or such as may hereafter be formed
or organized, under or in pursuance of any general or
special law of this state, for the purpose of mining, smelt-
ing, quarrying, or any mechanical or manufacturing pur-
poses, upon and with the assent of three-fourths of the
capital stock of both the corporation proposing to take
such stock and the corporation in which it is proposed to
be taken, has power, in its corporate capacity, to subscribe
for, purchase, take, and hold stock in any corporation,
foreign or domestic, formed for the purpose of manufac-
turing, creating, or generating any kind of power or light,
to be used as a mechanical agency, when such power or
light is to be used wholly or in part in facilitating the opera-
tion of such mining, smelting, quarrying, or any other
mechanical or manufacturing company, or the transaction
of its business.¹
Any corporation organized for the purpose of locating,
building, encouraging, and establishing manufactories and
manufacturing establishments in any city or town in this
state, upon the assent of three-fourths of the capital
stockholders, has authority to purchase, take, and hold
stock in, and, in its corporate capacity, to become a sub-
scriber to the capital stock of any corporation so aided
and encouraged, to the amount and extent of the actual
cash paid or other property contributed to any such man-
ufacturing corporation.'
As to the power of street railways and electric light and
power companies to own stock in other companies, see
under "POWERS," above.
Except as above provided, no corporation can take or
hold stock in any other corporation.'
Bonds, debts, etc.-No corporation can issue any bonds
or other evidence of indebtedness except for money, labor,
or property, estimated at its true money value, actually
received by it, equal to seventy-five per cent of the par
¹ Sec. 1775, as amended, Laws, 1881, ch. 133; Laws, 1883, ch. 70; Laws,
1891, ch. 234, 283, 403.
WISCONSIN.
2101
value thereof, and all bonds issued contrary to these pro-
visions are void; but corporations whose bonds have been
admitted to the stock exchange of Chicago, New York,
Boston, or Philadelphia, or of either of said cities, may
seli such bonds at the best price or prices current for the
time being obtainable therefor on any of the said ex-
changes at which the same may be offered for sale.¹
See under "OFFICERS, MEETINGS, VOTING, QUORUM, ETC.,'
as to alienations of property and control of courts over
the same.
Dividends. No dividends can be paid out to stock-
holders of any corporation until the capital stock has
been fully paid in, and no dividend can thereafter be de-
clared or paid by the directors of any corporation except
out of the net profits properly applicable thereto, and
which must not in any way impair or diminish the capital;
and if any such dividend be paid, every stockholder re-
ceiving the same is liable to restore the full amount thereof,
unless the capital be subsequently made good.2 Divi-
dends may be paid to the stockholder of record.³
Liability of stockholders.-The statutes provide that,
"If any stock shall be transferred which is not fully paid,
the corporation may, by agreement, to be noted on its
stock book, discharge the stockholder making such trans-
fer from liability to it for the unpaid part of his stock
subscription, and accept that of the person to whom the
stock is transferred in his place; but the person transfer-
ring such stock shall be liable for the amount unpaid
thereon to the then creditors of such corporation, and
those who may become such within six months after such
transfer, or to any lawfully appointed receiver or assignee
of the corporation for their use."
In actions by or for the benefit of any creditor against
stockholders to recover under this provision the stock-
¹ Sec. 1753.
2 Sec. 1765.
3 Sec. 1751, as amended, Laws, 1891, ch. 414.
* Sec. 1756.
2102
ECONOMIC LEGISLATION.
holder can only be credited with such sums as have been
actually paid in in money or its equivalent in value on
account of such stock, and not with any dividend which
may have been declared and applied to such stock.¹ A
purchaser of stock which has not been fully paid for be-
comes liable for the balance due thereon.2
The stockholders of every corporation other than steam
railroad corporations are "personally liable to an amount
equal to the stock owned by them respectively in such
corporation for all debts which may be due and owing to
its clerks, servants, and laborers for services performed for
such corporation, but not exceeding six months' service in
any one case." 3 The voluntary dissolution of a corpora-
tion or its ceasing to act as such does not relieve stock-
holders from this liability. Nor is a judgment against the
corporation a condition precedent to action against the
stockholder under this statute. This liability is additional
to the liability under the foregoing provisions (secs. 1751,
1756), and if stock is held by a person in his own name,
and it so appears on the books of the corporation, he is
liable thereon, whether he holds it as collateral security or
absolutely. The right of an employe to enforce his claim
for services against the stockholders personally is assign-
able.5
Every stockholder receiving a dividend before the cap-
ital stock has been fully paid in or a dividend paid from
other than the net profits properly applicable thereto, is
liable to restore the full amount thereof, unless the capital
be subsequently made good.
Whenever the capital stock of any corporation is dimin-
ished by any corporate vote, the stockholders are liable for
the payment of all debts then remaining unpaid in an
¹ Sec. 1758.
2 Herdegen v. Cotzhausen, 70 Wis. 589.
3 Sec. 1769. (An exhaustive note to section 1769, citing authorities
from other states, may be found on page 1049 of Sanborn and Berry-
man's Stats.
* Sleeper v. Goodwin, 67 Wis. 577.
5
Day v. Vinson, 78 Wis. 198.
6 Sec. 1765.
WISCONSIN.
2103
1
action by any creditor or lawfully appointed assignee or
receiver of such corporation to an amount equal to the
sum respectively refunded to them or credited upon their
debts for unpaid stock or both. And the stockholders
voting for such diminution are jointly and severally liable
to any creditor whose debt then remains unpaid to an
amount equal to the whole amount refunded to the stock-
holders or credited upon their debts for unpaid stock or
both; but all stockholders are liable for contribution to
every stockholder compelled to discharge corporate debts
under this provision proportionally to the amount so re-
funded or credited to them respectively.¹
Where a corporation issues full paid stock in considera-
tion of property received by it, the holders of such stock.
can not be charged with a debt of the corporation on the
ground that the stock was not fully paid for, unless credit
was given in the belief that the stock was fully paid, and
unless there was actual fraud in the transaction.2
Stockholders are personally liable upon contracts made
by a corporation, except with its members, before at least
one-half of its capital stock has been subscribed for and
twenty per cent thereof actually paid in.3
Liability of officers and directors.-The directors of
any corporation paying any dividend before the capital
stock is fully paid in or paying any dividend when the
corporation is insolvent or in danger of insolvency, not
having reason to believe that there are sufficient net
profits properly applicable thereto to pay the same with-
out impairing or diminishing the capital, are jointly and
severally liable to the creditors of the corporation, at the
time of declaring such dividend, to the amount of their
debts.¹
Any director, officer or manager of any body corporate
or public company who as such receives or possesses him-
¹ Sec. 1755.
3 Sec. 1773.
2 Whitehill v. Jacobs, 75 Wis. 474.
• Sec. 1765.
2104
ECONOMIC LEGISLATION.
self of any money or other property of the company oth-
erwise than in payment of a just debt or demand; or who,
with intent to defraud, omits to make or cause to be made
a full and true entry thereof in the books or accounts of
such company, or destroys, alters, mutilates or falsifies any
of the books, papers, writings or securities belonging to
such company, or makes or concurs in making any false
entry or any material omission in any book of records,
accounts or other documents of such company; or who
makes, circulates, publishes or concurs in making, circu-
lating or publishing any written or printed statement or
account which he knows to be false in any particular, with
intent to deceive or defraud any share-holder or creditor
of any such company, or with the intent to induce any
person to become a share-holder or partner therein, or to
intrust or advance any money or property to or to enter
into any security for the benefit of such company, and
any person who receives any money, chattel or valuable
security which has been fraudulently obtained or disposed
of as aforesaid, knowing the same to have been so fraudu-
lently obtained or disposed of, is liable to imprisonment
in the county jail for not more than one year, or to a fine
not exceeding five hundred dollars.'
1
Any president, cashier, treasurer, secretary or other of
ficer, or any agent of any railroad, manufacturing or other
corporation who willfully and designedly signs with intent
to issue, sell or pledge, or to cause the same to be done,
any false, fraudulent or simulated certificate or other evi-
dence of the ownership or transfer of any share of the
capital stock of such corporation, or any certificate or
other evidence of such ownership or transfer, the signing,
issuing, selling or pledging of which by such president,
cashier, treasurer or other officer or agent, is not author-
ized by the charter and by-laws of such corporation, or by
some amendment thereof, is liable to imprisonment in the
¹ Sec. 4435.
WISCONSIN.
2105
state prison, not more than ten nor less than one year, or
to a fine not exceeding five thousand dollars."
As to penalty for failure to properly keep records, etc.,
see "ВOOKS.” As to jurisdiction of courts over officers,
etc., see "OFFICERS; MEETINGS; VOTING; QUORUM, ETC."
Reports. At least once in each year, each stock corpo-
ration must make and file in its principal office, and keep
on file there, for the use of its stockholders, a statement
and abstract of its assets and liabilities and of its financial
transactions for the previous year, which statement must
be verified by the affidavit of the treasurer, or other proper
officer of such corporation, and must contain a brief state-
ment of the sources of its receipts, stated in classes, and a
similar statement of its expenditures, showing the amount
disbursed for each class of objects and purposes.2
Creditors of a corporation must be informed at any
time of the amount of capital stock subscribed; the
amount paid in; who the stockholders are; the number
of shares owned by each, and the amount paid upon such
shares; and, if any shares not fully paid for have been
transferred within six months of the time of the inquiry,
the name of the person who transferred them, and the
amount due at the date of transfer. The officers of the
corporation must furnish creditors correct information as
to the above points, and any officer refusing when re-
quested so to do, is liable for any damage caused thereby.3
No report or accounting is required to be made to the
state by the corporations under consideration, but "the
attorney-general, whenever required by the governor, shall
examine into the affairs and condition of any corporation
in this state, and report such examination in writing, with
a detailed statement of the facts to the governor, who
shall lay the same before the legislature, and for that pur-
pose the said attorney-general shall have power to admin-
ister all necessary oaths, and to examine any person in re-
lation to the affairs and condition thereof, and to examine
³ Sec. 1757.
¹ Sec. 4436.
2 Sec. 1750.
VOL. II-52
1
2106
ECONOMIC LEGISLATION.
the vaults, books, papers and documents belonging to such
corporation, or pertaining to its affairs and condition; and
the legislature, or either branch thereof, shall have full
power to examine into the affairs and condition of any
corporation in this state at all times; and for that purpose
any committee appointed by the legislature, or either
branch thereof, may examine any person in relation to the
affairs and condition of any corporation and its vaults,
safes, books, papers and documents, and compel the pro-
duction of all keys, books, papers and documents by sum-
mary process, to be issued on application to any court of
record, or any judge thereof, under such rules and regula-
tions as the said court may prescribe."¹
Taxation. The state constitution provides that "the
rule of taxation shall be uniform and taxes shall be levied
upon such property as the legislature shall provide." 2
The revenues of the state are almost wholly raised by
requiring railroad, insurance and telephone companies to
pay a percentage on their gross income, and telegraph
companies a fixed amount per mile on lines operated.
The taxing power is largely delegated. The state is di-
vided into taxing districts, as county, town, city, village,
road and school districts, each clothed with the power to
tax for such purposes as are public to the district. Local
machinery is used to collect state taxes proper, and upon
the same assessment of valuation. The corporations un-
der consideration are subject to the same rates of taxation
that individuals are upon their property. Their residence
for taxing purposes is in the assessment district where
their principal office or place of business is located.3
As corporate franchises are subject to taxation only
when expressly mentioned, and as such franchises are not
specified, except in the case of ferry-boats, they are not
taxable in this state.
The statutes of Wisconsin do not expressly classify such
2 Const., Art. VIII, sec. 1.
1 Sec. 1766.
3 Sec. 1041.
WISCONSIN.
2107
property as street railway tracks, water mains and gas
mains.
Of stock in hands of holders.-Stock, as such, is not sub-
ject to taxation, since the corporation itself is required to
pay taxes upon its property.
Alienation of property.-See under "POWERS" and
"OFFICERS, MEETINGS, VOTING, QUORUM, ETC."
Consolidation of companies.-As to powers of street
railway and electric light companies to unite with other
companies, see "POWERS."
Dissolution; forfeiture.—An action may be brought
by the attorney-general, or by any private party, in the
name of the state, on leave granted therefor by the su-
preme court, upon cause shown, for the purpose of vacat-
ing the charter, or annulling the existence of any corpora-
tion created by or under the laws of this state, except a
municipal corporation, whenever such corporation has of-
fended against any of the provisions of any law, by or
under which it has been created, altered or renewed; has
violated the provisions of any law, by which such corpo-
ration has forfeited its charter by abuse of its powers;
whenever it has forfeited its privileges or franchises by
failure to exercise its powers; whenever it has done or
omitted any act which amounts to a surrender of its cor-
porate rights, privileges or franchises; whenever it exer-
cises franchises or privileges not conferred upon it by law.¹
In State ex rel. v. Madison Street Railway Co., 72 Wis.
612, the supreme court held that, under the statute au-
thorizing such grant, a municipal ordinance granting to
a street railway corporation a franchise to occupy and use
public streets for the purposes of its railway, has the force
and effect of a statute of the state; and for a violation of
the provisions of such ordinance an action may be main-
tained under the preceding provisions to vacate the char-
ter or annul the existence of such corporation.
¹ Sec. 3241.
2
2 Sec. 1862. See under "PowERS OF MUNICIPALITIES AS TO."
2108
ECONOMIC LEGISLATION.
Foreign corporations.-See under "PoWERS."
SUBDIVISION III.-FRANCHISES.
ར
How obtained. The constitution prohibits the legis
lature from granting corporate powers or privileges by
special or private laws.¹
The methods of securing franchises for right of way,
the privilege to use highways, streets, and public 'grounds
by all franchise companies, is by application to the mu-
nicipal authorities, the board of trustees of villages, the
common council of cities, and, in some instances, the
board of supervisors of counties.2
By statute any corporation formed for the manufacture
of inflammable gas, in order to light any city or village,
or streets or public places or buildings therein, or for heat-
ing, culinary or manufacturing purposes, may, by the con-
sent of and in the manner agreed upon with the proper
authorities of such city or village, use any streets, alley, lane,
park or public grounds for laying gas pipes or any other
purpose; provided no permanent injury be done to the
same.3
Any street railway corporation, authorized to construct
its line as shown under "POWERS OF MUNICIPALITIES AS TO,"
below, may extend its railway to any point within any
town adjoining such municipal corporation, and for such
purpose may, with the written consent of a majority of
the supervisors of such town, lay and operate the railway
upon, across, and along any highway, but not so as to ob-
struct the common public travel thereon. Corporations
may be formed and governed in like manner as street rail-
¹ Const., Art. IV, sec. 31.
² Sec. 1862, as amended, Laws, 1881, ch. 219.
³ Sec. 1780; Laws, 1882, ch. 208, sec. 1780a. Section 1780a extends the
rights, powers, and privileges above granted to companies empowered
to manufacture and sell gas for illuminating purposes to such companies
for the purpose of manufacturing and selling such gas for heating, culi-
nary, and manufacturing purposes.
WISCONSIN.
2109
។
way companies, for the purpose of building and maintaining
railways with rails of wood or iron in any village or town,
or to extend from any point in one village or town to, into
or through any other village or town, and for running of
cars propelled by animals, or other power, for the carriage
of either passengers or freight; and for that purpose, with
the consent of the board of trustees of any village and with
the written consent of a majority of the supervisors of
any town in, into or through which such railway or tram-
way may extend, may lay and operate their railways or
tramways upon, across, and along any highway, but not so
as to obstruct the common public travel thereon. In any
village, the consent of the board of trustees must be given
by ordinance, and upon such terms and subject to such
rules and regulations, and the payment of such license
fees, as the law may prescribe.¹
Any corporation formed for the purpose of constructing
or operating water-works in any city or village may, by
the consent of and in the manner agreed upon with the
proper authorities of such city or village, use any street,
alley, lane, park, or public grounds, provided no perma-
nent injury is done to the same.²
2
Powers of municipalities as to.-The supreme court
has held that, when any subject of a legislative or admin-
istrative character is intrusted to a county board, such
board acquires the right to pass any ordinance necessary
or convenient for the purpose of disposing of such subject,
and that they have all the powers which the legislature
itself would have had over the same subject, unless the
legislature, in conferring such power, has restricted the
power of such board, or directed that it should be done in
a certain way. This manifestly defines the powers of mu-
nicipal boards as well as those of counties.
3
The board of trustees of villages and the common coun-
¹ Sec. 1863, as amended, Laws, 1891, ch. 387.
3
2 See note 3, on preceding page.
Supervisors of La Points v. O'Malley, 47 Wis. 332.
2110
ECONOMIC LEGISLATION.
cil of cities are authorized to grant franchises for right of
way, and the use of streets for the tracks, switches, and ap-
purtenances of street railways, the laying of pipes for gas
and water-works companies, the erection of poles and the
stringing of wires of telegraph and telephone companies
within their respective municipalities.'
As to street railways, the statute authorizes. any munic-
ipal corporation or county to grant to any corporation or
to any person, for constructing, maintaining, and operat-
ing street railways, the use of any streets or bridges within
its limits, upon such terms as the proper authorities may
determine, for the purpose of laying single or double
tracks and running cars therein for the carriage of freight
and passengers, to be propelled by animals or such other
power as may be agreed on, with all the necessary curves,
turnouts, switches, and other conveniences.2
As to power of municipalities to enter into contracts,
etc., see under "PUBLIC SERVICE," below.
Duration of franchise; renewal of.-The franchises
of gas companies are limited to a period not exceeding
fifty years. As to other companies there is no period
limited.
3
66
See under " MUNICIPAL OWNERSHIP" for statement as to
times for which franchises have been granted in various
cities.
Refusal to grant a franchise. It is wholly within the
discretion of county and municipal authorities to grant
or deny to any individual or company a franchise for the
purposes aforesaid.
Perpetual and exclusive franchises.-The municipal
¹ Secs. 1778, 1780, 1862.
2 Sec. 1862, as amended, Laws, 1881, ch. 219. The statute now pro-
vides: "All such grants heretofore made shall not be deemed invalid by
reason of any want of power in such municipal corporation, or such
person, to take the same; but, as to such respects, are hereby con-
firmed."
³ Sec. 1780; Laws, 1882, ch. 208, sec. 1780a. See note 3, "How Oв-
TAINED," above.
WISCONSIN.
2111
authorities of cities and villages are authorized to grant
by contract with any gas company an exclusive right to
manufacture and sell gas for light, heating, culinary, or
manufacturing purposes, and to lay gas-pipes within such
city or village or a designated part thereof for such pe-
riod, not exceeding fifteen years, and upon such terms as
may be agreed upon, and such company thereafter has
and enjoys such exclusive right according to such con-
tract. Every such gas company heretofore organized con-
tinues to enjoy the rights given by the law under which it
was formed, except that it can not, under any circum-
stances, have any exclusive right to manufacture and sell
gas as against any person or corporation which has manu-
factured and sold gas within the same city or village pre-
vious to its organization.¹
Before the amendment of the state constitution prohib-
iting the legislature from granting corporate powers or
privileges to private corporations by special act, the legis-
lature could have granted a perpetual and exclusive fran-
chise, subject only to the constitutional reservation of
power to subsequent legislatures to alter or repeal such
grant. Cole, J., in delivering the opinion of the court in
State v. Milwaukee Gas Light Company, 29 Wis. 454,
"It was claimed or rather suggested upon the ar-
gument, that even the legislature could not confer this ex-
clusive right upon the defendant to manufacture and sell
gas in the city of Milwaukee. But we are not aware of
any constitutional principle which is violated by the legis-
lature granting such an exclusive franchise. The whole
matter, under our constitution, is under the control of the
legislature, which can take from the defendant this exclu-
sive privilege whenever it sees fit to do so." 2
says:
Except as stated above relative to gas companies, there
appears to be no constitutional or statutory restrictions, in
¹ Sec. 1780; Laws, 1882, ch. 208, sec. 1780a. See note 3, “How OB-
TAINED," above.
2 See also Chapin r. Crusen, 31 Wis. 209.
2112
ECONOMIC LEGISLATION.
this state, upon the granting of perpetual and exclusive fran-
chises to street railway, water-works, telegraph, telephone,
and electric light and power companies, although it is
probable that the last named would come under the re-
strictions of gas companies as to the time for which an ex
clusive privilege could be granted to them.
Unless the charter of the municipality expressly con-
ferred the right to grant a perpetual and exclusive fran-
chise to a corporation within its limits, an attempted exer-
cise of such power on the part of the municipal authori-
ties would probably be held invalid as against public pol-
icy and as ultra vires.
In State v. Milwaukee Gas Co., 29 Wis. 454, the charter
of the defendant gas company' provided, "that said com-
pany shall have power and full and exclusive authority to
manufacture and sell gas for the purpose of lighting the
city of M., the streets,
and to erect all necessary
works and apparatus, and to lay pipes for the purpose of
conducting gas in any of the public streets, avenues,
in said city;" and it was held by the supreme
court that the act conferred the exclusive right therein.
described without any limitation of time; and that if such
grant became oppressive, the legislature, under the consti-
tution of this state, has power to revoke it. Cole, J., in
his opinion, distinguished this case from that of the State
v. The Cincinnati Gas Co., 18 Ohio St. 262, and refused to
follow the decision of the supreme court of Connecticut
in Norwich Gas Light Co. v. The Norwich City Gas Co.,
25 Conn. 20, cases referred to in Dillon's Municipal Corpo-
rations, secs. 692, 693, 694.
Charges for franchises.-The statute provides that.
street railway companies shall be subject to the payment
of such license fees as the proper municipal authorities
may by ordinance from time to time prescribe.2
There are no constitutional or statutory provisions in
¹ Laws, 1852, ch. 159, sec. 4.
2 Sec. 1862.
WISCONSIN.
2113
this state in regard to the right of a municipal corpora-
tion to exact a consideration in money or other beneficial
advantages for granting franchises, and the question does
not seem to have arisen in the courts for adjudication;
but it is thought that municipal authorities would have
the right, in the interest of their respective municipalities,
upon granting to any corporation a valuable franchise, to
demand a money consideration therefor. It is believed.
this right would be implied under the several statutes
hereinbefore referred to authorizing the grant of fran-
chises by municipal corporations for street railway, gas,
water-works, electric light and power companies, upon
such terms as, with the consent of such company, may be
prescribed by such municipal authorities.
The mode of collecting such consideration for a fran-
chise would be according to the contract or agreement
made between the parties; and such consideration, if in
money, would become a part of the general fund for mu-
nicipal purposes.
Methods of construction.-Under the general police
and other powers given to municipal authorities, they
have the right to prescribe methods of construction, ma-
terials to be used, etc., by all companies to which fran-
chises are given to use the streets for street railway tracks,
laying gas or water pipes, etc., to erect and maintain
buildings or plants to generate power or to manufacture.
inflammable gas, and for electric light and power, and to
provide for the inspection of the plant, buildings, and
service, and to authorize and compel reasonable changes
in their construction after completion. This is especially
so if, by their manner of construction, or from lack of
proper repairs or care, they become dangerous to life, the
'public health, or to property.
Street railway companies may lay such single or double
tracks, curves, turnouts, switches, and other conveniences
as are necessary. Their road must be constructed upon
the most approved plan for such roads, and must be sub-
2114
ECONOMIC LEGISLATION.
ject to such reasonable rules and regulations as the authori-
ties may by ordinance from time to time prescribe.' This
statutory provision is merely declaratory of the common
law, and the duty does not stop with the original con-
struction of the road, but the most approved plans must
be maintained; but the clause which makes such street
railways subject to such rules and regulations as the mu-
nicipal authorities may from time to time prescribe, does
not confer upon such authorities power to repeal this stat-
ute by ordinance.2
See "How OBTAINED" as to rails, etc., of street railways
extended beyond corporate limits.
Regulations as to service.-It is usual, in granting a
franchise to gas, water-works, and electric lighting com-
panies, to fix in the ordinance granting the same a
maximum rate of charges for services, and where there is
such a contract, the companies would be bound thereby.
The charges must be reasonable in all cases, and what
would be in any given case a reasonable charge, in the
absence of rates established by contract or statute, would
be for the courts to determine.³
It has been held that where a charter permits a corpora-
tion to exact toll at its discretion, an act of the legislature
restricting a corporation to maximum rates prescribed is
within the power of the legislature under the reservation
to alter or amend.*
Street railway companies may use such motive power as
may be agreed upon by the municipalities.2
Discrimination in service; refusal to render service.
There are no statutory prohibitions against franchise com-
panies making special rates with customers for services,
and there are no decisions of the courts directly deciding
these points; aside from the ordinances and contracts
¹ Sec. 1862, as amended, Laws, 1881, ch. 219.
2 Fitts v. Cream City R. K. Co., 59 Wis. 323.
3 Att'y-Gen'l v. R. R. Co., 35 Wis. 588–9.
¹ Att'y-Gen'l v. R. R. Co., 35 Wis. 425.
WISCONSIN.
2115
under which they are erected or established, they would
be governed by the common law, except as stated in the
next paragraph.
All companies obtaining franchises from municipal au-
thorities, whose business is in the nature of common car-
riers, must render service to all citizens upon equal terms.
This is especially declared by statute in regard to tele-
phone companies. A similar statute in Nebraska was de-
clared by the supreme court of that state to be declaratory
of the common law. It has assumed the responsibility
of a common carrier of news.2
1
In Shepard v. Milwaukee Gas Light Co., 5 Wis. 539,
the supreme court of this state decided that the grant-
ing to that company the exclusive right to manufact-
ure and sell gas in that city raised an implied obliga-
tion on the part of the company to furnish the city and
citizens with a reasonable supply of gas, and upon reason-
able terms, and that they were bound to furnish gas to a citi-
zen who had made all the necessary preparations to receive
and use the same in his store or residence along the line
of the company's pipes upon compliance with such reason-
able terms as the company may rightfully impose.
Franchise companies are authorized to make reasonable
rules and regulations as conditions for rendering service,
and if these rules are reasonable, they are authorized to
refuse to render service unless they are complied with. If
such rules and regulations are unreasonable, the citizen
may require the service to be rendered without complying
with them; and if the company refuse to render such serv-
ice, he can recover of the company by suit such damages
as he may have sustained in consequence of such refusal.3
State and municipal aid.-As to the right of munici-
pal corporations to use public funds or the credit of their
municipalities for the purpose of aiding persons or com-
¹ Sec. 1791a.
2 State ex rel. Nebraska Tel. Co., 22 N. W. Rep. 273.
3 Shepard v. Milwaukee Gas Light Co., 15 Wis. 318.
2116
ECONOMIC LEGISLATION.
7
panies in constructing or operating franchise works, the
statute provides that any county, town, village or city may
in accordance with the provisions of the statute "issue
its negotiable corporate bonds for the purpose of paying
for any authorized subscription to the stock or mortgage
bonds, or both, issued by any corporation or company,
organized for building any railroads, whether of broad, or
ordinary, or narrow guage, or made of iron, steel, or
wooden rails. The supreme court has held that if this
power is specifically granted, then such municipality may
engage in such enterprises, if the power is exercised in
conformity to the legislative authority.2 Aid to a railroad
corporation must be by subscription to capital stock, and an
act of the legislature authorizing a municipal corporation
to donate a sum of money to be raised by taxation in aid
of the construction of a railroad is invalid.3
As to the issue of bonds, etc., see under "POWER TO
ERECT OR PURCHASE," Subdivision IV.
Public service.-The statute provides that water com-
panies may make and enter into any contract with village
or city authorities to supply such city and village with
water for fire and other purposes, upon such terms and
conditions as may be agreed upon, and that any such city
or village may by contract duly executed by the proper
authorities acquire a right to use the water supplied by
such corporation or such portion thereof as it may desire
upon such terms and conditions as may be agreed upon
by such corporations and the authorities of such city or
village.*
The common council of cities organized under the gen-
eral law, and it would probably be held to apply to all
cities unless their charter provided otherwise, are author-
ized to provide for lighting the streets, public grounds
1 Sec. 942.
2 Bushnell v. Beloit, 10 Wis. 195; Hasbrouck v. Milwaukee, 13 Wis. 37;
Clark v. Janesville, 10 Wis. 136.
3 Whiting v. S. & F. L. R. R. Co., 25 Wis. 167.
* Sec. 1780.
WISCONSIN.
2117
1
and buildings with gas or otherwise; and for such pur-
poses to contract, by ordinance or otherwise, with any per-
son, company or corporation, for a term not exceeding ten
years at any one time, at such price and on such terms and
subject to such limitations as may be prescribed by ordi-
nance or contract. This provision is in apparent conflict
with section 1780 (see "PERPETUAL AND EXCLUSIVE FRAN-
CHISES "), relating to gas companies, wherein such compa-
nies are authorized to contract, etc., with the municipal
authorities for the exclusive privilege of lighting the
streets, buildings, etc., of any city or village for a period
not exceeding fifteen years. These provisions are to be
construed so as to give the municipal authorities in any
city or village where there is no existing corporation for
manufacturing or selling inflammable gas, the power to
grant an exclusive franchise for a period not exceeding
fifteen years to a corporation organized for that purpose,
to enable it to so manufacture and sell inflammable gas in
such city or village, or some designated part thereof,
but the municipal authorities are not authorized to enter
into a contract with such corporation to light streets, pub-
lic grounds and buildings belonging to the municipality,
and to be paid from the municipal treasury, for a period
exceeding ten years at one time.
Except these provisions in regard to gas companies, and
the power given to the common council of cities to pro-
vide for lighting streets, public grounds, etc., there are no
limitations in this state as to the length of time for which
a contract may be made with a municipal corporation for
public service. As to electric light and power companies,
see under "PERPETUAL AND EXCLUSIVE FRANCHISES.
To enable a city or village to enter into a valid contract,
the subject-matter, terms, and conditions of the contract
must be within the powers expressly granted to such city
or village by its charter or arising by necessary implica
¹ Sec. 425i, sub. 34.
Į
2118
ECONOMIC LEGISLATION.
tion therefrom. Most of the cities in this state are organ-
ized and existing under special charters granted to them
by the legislature, varying greatly in the powers conferred,
so that no general rule can be stated as expressly defining
the powers of the municipal authorities of the several
cities of this state to enter into contracts. A careful ex-
amination of the charter of the particular city or village
to ascertain whether it has authority under its charter to
make a contract should first be made. Again these special
charters have, in many instances, been held by the supreme
court to have been modified, altered or repealed by gen-
eral statutes, statutes passed subsequent to the enactment
of such charters, and the general statutes relating to cities
and villages should be examined and considered in con-
nection with such special charter. Every one contracting
with a municipal or other corporation does so at the peril
of the contract being on the part of such corporation ultra
vires and consequently void. Especially is this true in this
state as to contracts, by which any municipality will con-
tract an indebtedness or incur pecuniary obligations be-
yond the constitutional limitation in that respect.
The constitution provides that "No county, city, town,
village, school district or other municipal corporation shall
be allowed to become indebted in any manner or for any
purpose to any amount, including existing indebtedness,
in the aggregate exceeding five per centum on the value
of the taxable property therein, to be ascertained by the
last assessment for state and county taxes previous to the
incurring of such indebtedness. Any county, city, town,
village, school district or other municipal corporation in-
curring any indebtedness as aforesaid shall, before or at
the time of doing so, provide for the collection of a direct
annual tax sufficient to pay the interest on such debt as it
falls due, and also to pay and discharge the principal
thereof within twenty years from the time of contracting
the same.'
22 1
¹ Const., Art. XI, sec. 3, amendment of 1874.
WISCONSIN.
2119
Under this provision of the constitution, where a county
or municipality is already indebted in a sum exceeding
five per cent of the value of the taxable property therein,
it can not incur a further indebtedness (in this case for
building a court-house) for any purpose, and a tax levied
to pay such further indebtedness is void.'
Parties entering into contracts with municipal author-
ities, by which any indebtedness will be incurred, must, at
their peril, ascertain the then existing indebtedness of the
city or village, and whether the proposed liability to be
incurred by making the contract will make the aggregate
of indebtedness of such city or village greater than the
said constitutional limit computed upon the last assess-
ment of taxable property for state and county taxes. If
it will increase the indebtedness beyond such constitu-
tional limit, the contract on the part of the municipal au-
thorities would be ultra vires.
In cases where a city or village would incur an indebt-
edness under the contract for which it would be required
¹ Hebard v. Ashland, 55 Wis. 145.
Mr. Justice Orton, in delivering the opinion of the court, says: "The
language of that provision could not be made plainer, and will not ad-
mit of any construction beyond its ordinary meaning.
This is
the first case in which this court has been called upon to consider and
apply this constitutional provision, and at this time it is inconceivable
how diverse opinions can be formed as to its meaning; but the scrutiny,
ingenuity, and ability for critical analysis of the bar may hereafter dis-
cover some possible meaning beyond what now appears to be so clearly
expressed. Arguments of convenience, of public policy, or of present
necessity should not be allowed by loose construction to weaken the
force or limit the extent of a constitutional prohibition so necessary and
so beneficently intended. The same provision is in the constitution of
the State of Iowa and that of the State of Illinois, and we fully concur
in the decisions of the supreme courts of those states as to the extent of
the prohibition, but, in doing so, we neither concur in nor dissent from
the decisions of those courts as to the power of a municipal corporation,
notwithstanding the prohibition, to pledge or anticipate the revenue
already provided for by the levy of taxes, as that question is not before
us." The question reserved in the above decision has not been decided
by the court.
2120
ECONOMIC LEGISLATION.
to issue its bonds for payment, the proposition must, in
the first instance, be submitted to the qualified electors of
the municipality for their approval or rejection, unless
otherwise provided in their respective special charters.¹
Parties dealing with municipalities are bound to know
whether they have authority to act, but not as to the reg-
ularity of their action on the subject.2
A contract void for want of capacity in one or both of
the contracting parties to enter into it is as no contract;
it is as if no attempt at an agreement had ever been made;
where the supposed contract of a public corporation is ab-
solutely void for want of capacity to enter into it, a subse-
quent legislative ratification or recognition of it is not
sufficient proprio vigore to make the contract obligatory
without evidence that such ratification or recognition was
procured at the instance or with the assent of the corpo-
ration, or that the corporation had subsequently confirmed
it.'
"3
The statute enacting general charters for villages pro-
vides that "every contract, conveyance, commission, li-
cense or other written instrument shall be executed on the
part of the village by the president and clerk, sealed with
the corporate seal, and in pursuance only of authority
therefor from the village board." This provision seems.
to be mandatory so far as villages are concerned. As to
the execution of contracts on the part of cities, the stat-
ute provides that "All contracts shall be signed by the
4
¹ Sec. 943. See under "POWER TO ERECT OR PURCHASE," Subdivision IV.
2 Veeder v. Town of Lima, 19 Wis. 280.
3 Hasbrouck v. Milwaukee, 13 Wis. 37. In the above case, special acts
of the legislature authorized the mayor and common council of the city
of Milwaukee to issue bonds, etc., to construct a harbor, the expense of
which should not exceed $100,000, and the authorities entered into con-
tracts for the construction of such harbor, which provided for a greater
expenditure than the sum they were so authorized to expend, and the
court held that the contracts were void as to the excess for want of cor-
porate power in the city to make such contracts.
* Sec. 891.
WISCONSIN.
2121
mayor and clerk, unless otherwise provided by resolution
or ordinance. Provided, however, that no contract shall
be executed on the part of the city until the city comp-
troller shall have countersigned the same and made an in-
dorsement thereon, showing that sufficient funds are in
the city treasury, or that provision has been made to pay
the liability that will accrue under such contract. It is
believed that very few cities in this state have an officer
called comptroller, and to those cities not having such an
officer the proviso above quoted would not appear to be
applicable. Except as above prescribed by statute the
common law prevails as to the manner of executing con-
tracts on the part of municipal corporations.
When the mode of contracting is specially and plainly
prescribed and limited, that mode is exclusive and must
be pursued, or the contract will not bind the corporation.2
All corporations should, by ordinance, resolution or vote
of their governing bodies, authorize the contract to be
made on their behalf by their proper officers, agents or
committee, and such authorization should be made a mat-
ter of record in the usual record of their transactions and
proceedings. If the by-laws of a private
private corporation,
dealing with a municipal corporation, prescribe the method
of executing or making a contract, the method so pre-
scribed should be followed. Municipal corporations are
liable upon implied contracts, if intra vires,³ and the doc-
¹ Laws, 1889, ch. 326, sec. 93; sec. 925m, sub. 93.
2 Dore v. Milwaukee, 42 Wis. 108. In Kneeland v. Milwaukee, 18 Wis.
411-17, the court say: "As in all cases where special power is conferred
and the manner in which it is to be exercised is prescribed by statute,
the validity of the acts of the commissioners depends upon their having
proceeded, step by step, in strict conformity to the statute. They had
no authority to dispense with any provisions deemed essential by the
legislature to the proper exercise of the power; and neither have the
courts. The making and filing of the plans and specifications are con-
ditions precedent to the power of the commissioners to award the con-
tract." To the same effect, Myrick v. La Crosse, 17 Wis. 442.
3 Paul. City of Kenosha, 22 Wis. 266; Kneeland v. Gilman, 24
Wis. 39.
VOL. II-53
2122
ECONOMIC LEGISLATION.
trine of estoppel in pais is applicable to these as well as to
persons and private corporations.¹
Alteration, amendment, etc., of franchises.-A vari-
ation in the methods of operation, such as the use of
electric motive power instead of horses, by a street rail-
way company, would necessitate a change in the ordi-
nance and contract by which the particular franchise was
granted, unless the latter was broad enough to cover the
change.
The fact that the legislature may confer upon a city or
county the power to grant to an existing corporate body
a franchise, or to create a corporation with certain fran-
chises and powers, does not take away the power of the
legislature to recall the powers so granted to the city or
county, or to alter or repeal the acts of the city or county
done under such delegated authority, and such alteration
or amendment may be effected by a general law. The
fact that the franchise is granted by the state through the
action of municipal authority does not change the na-
ture of the thing granted so as to change the power of
the legislature to alter or repeal the grant.²
2
A statute conferring a franchise is not to be construed
as a contract on the part of the state, unless it is plain
that such was the intention of the legislature.3
See also under AMENDMENTS, REPEALS, ETC.," Subdi-
vision II.
Forfeiture of franchises.-See "DISSOLUTION; FOR-
FEITURE."
وو
¹ Veeder v. Town of Lima, 19 Wis. 292; Ballard v. City of Apple-
ton, 26 Wis. 67; Hasbrouck v. City of Milwaukee, 21 Wis. 217; Knee-
land v. Gilman, 24 Wis. 39; Houfe v. Town of Fulton, 34 Wis. 608.
2 State ex rel. v. Hilbert, 72 Wis. 184-92.
3 Chapin v. Crusen, 31 Wis. 209.
WISCONSIN2123
NSIN.
.
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
Historical.—As has been previously stated, the charters
of nearly all the cities and villages in this state, as well as
the general law under which cities and villages may or-
ganize, authorize such municipalities to erect and main-
tain water-works for the extinguishment of fires and for
other purposes, or to contract with any person or corpora-
tion to whom a franchise is given to construct such water-
works in such city or village, for a supply of water, and to
provide for the lighting of streets, public places and build-
ings with gas or otherwise. Under the powers thus con-
ferred, the cities and villages in this state have, in a ma-
jority of cases, contracted for a supply of water for mu-
nicipal purposes, and for lighting streets, public places and
buildings owned by the municipality or occupied for mu-
nicipal purposes, with some corporation to whom a fran-
chise has been given to erect and maintain water-works
therein, or to erect and maintain works for manufacturing
inflammable gas for illuminating purposes, or electric light
companies.
Several of the cities and villages in this state have
erected their own water-works, and perhaps the tendency
is toward the ownership of water-works by municipali-
ties.
Water-works have been erected and are owned by the
following cities in this state, viz: Black River Falls, Dar-
lington, Hudson, LaCrosse, Neillsville, Madison, Milwau-
kee, Stoughton, and Wausau, the village of Mazo Manie,
and the town of Rhinelander.
Where water-works have been erected by other than
the municipal authorities, franchises have been granted to
the person, company or corporation constructing the same
for periods of twenty years, as in Appleton, Fon du lac,
Janesville, Kenosha, Manitowoc, Marinette, Portage; for
twenty-five years, as in Depere, West Depere, and Racine;
2124
ECONOMIC LEGISLATION.
thirty years in Baraboo, Green Bay, Mazo Manie, Merril,
and Oshkosh; and fifty years in Ashland.
No data is at hand as to whether the franchise is lim-
ited for a definite period in the other cities and villages
of the state where water-works have been established by
private companies or corporations or not, but it is be-
lieved that in most cases the franchise is unlimited as to
duration.
Where water-works have been erected in pursuance of a
contract with the municipal authorities by private persons
or corporations, a clause has usually been inserted in such
contract giving the municipality an option to purchase the
water-works upon some agreed basis of estimating their
value, such option to be exercised at definite periods, as
at the end of each of five or ten years, or at the expiration
of the time for which the franchise has been given, if the
time of the franchise has been limited.
Where water-works have been erected by the munici-
palities themselves, the funds for their construction have
usually been raised by the sale of bonds of such municipal
corporation, and in nearly all cases it is claimed that, where
the water-works are owned by the municipality, they
have better and cheaper service than in those cities and
villages where they are owned by private persons or cor-
porations, and these water-works have generally afforded
a fair and adequate surplus over and above operating ex-
penses.
None of the cities or villages in this state own gas-works
or electric plants for lighting purposes.
Powers of municipalities to erect or purchase.-Mu-
nicipal authorities are restricted in this state in using pub-
lic funds or in levying taxes to strictly public or municipal
purposes, and they can not engage in commercial under-
takings for public account, or by use of the public funds
assist in such undertakings. And where a statute pur-
ports to confer a power on a municipal corporation, the
WISCONSIN.
2125
public use or purpose must appear affirmatively from the
statute.¹
1
Attorney-General v. Eau Claire, 37 Wis. 400. By chapter 333, Laws
of 1875, the city of Eau Claire was authorized to construct a dam across
the Chippewa river within the limits of the city; to construct water-
works; to open and construct drains, sewers, and mains for the same;
to establish water rents, and to provide for their collection. The city
was required to construct booms and piers in the slack water of the
dam, for protecting the navigation of the river, and for assorting the
logs, etc., and was authorized to lease the water power of the dam for
manufacturing purposes, except so much as might be needed by the city
for hydraulic purposes, and to lease the piers and booms, and fix the
rates of boomage, storage, etc. The dam was required to be constructed
with a lock for steamboats, and with chutes for logs, lumber, etc. Other
provisions related to the manner of construction, the navigation of the
river, etc., and the act required an election to accept the power, and, in
case of such acceptance, authorized the issue of bonds by the city in aid
of the works, providing for their payment out of the revenue of the
works and a tax to supply deficiencies.
Information for a writ of injunction was brought in the supreme court
by the attorney-general against the city of Eau Clare, its mayor, alder-
men, etc., to restrain them and their successors in office from entering
upon the construction of the works by said act, and it was held by the
court: 1st. That, on the face of the statute, the power to erect the dam
and piers, booms, etc., incident to it, and the power to establish water-
works, are entirely distinct and independent powers. 2d. That, the
power to erect and maintain such dam not being made dependent on
any public use, the city takes no authority under the act to build such
a dam across a public river, or to borrow money or levy taxes for the
purpose. 3d. The legislature could empower a city to improve the nav-
igation of a river within its limits, and the power would not be impaired
by the fact that the work so authorized would improve the navigation
outside the city. But the power conferred on the city by said act can
not be supported on that ground, there being nothing in the act indicat-
ing that its object was the improvement of the river, but the contrary
being implied by its terms. 4th. If the building of the dam mentioned
in the statute would in fact improve the river, this would not support a
power not granted for that purpose nor authorize the court to impute
to the legislature an intention in the act nowhere indicated by it. 5th.
The legislature may empower a city to establish water-works for its use
(that being a public and municipal purpose), and may also confer any
legitimate power in aid thereof, such as the power to construct and
maintain a dam, not obstructing the navigation of a public river or vio-
lating any other public or private right; and where the city is author-
2126
ECONOMIC LEGISLATION.
"Any city or village may borrow money and issue its
negotiable bonds for any of the following purposes, viz:
The purchase or erection of public buildings; the pur-
chase of fire engines or any apparatus for the extinguish-
ment of fires; the purchase or erection of pumps, water
mains, reservoirs, or any other water-works; the grading,
macadamizing, or paving of streets; the laying out, alter-
ing, or widening thereof, or of public grounds or parks;
the purchase or improvement of cemeteries; the construc-
tion of school buildings; or in exchange for or compro-
mise of any bonds previously issued and outstanding,
provided that the principal of such new bonds shall not.
exceed the principal of the old bonds; or to accomplish
any other purpose in the lawful power of such corpora-
tion."
"1
No bonds can be in any case issued by any town, village,
or city, until the proposition for their issue for the special
purpose thereof has been submitted to the people of such
municipality, and adopted by a majority voting thereon;
or, if to be issued to aid the construction of a railroad,
until the proposition for the issue thereof has been ac-
cepted in one of the modes provided therefor; nor can any
such bonds be issued payable after a period of twenty
years, nor until an ordinance or resolution has been law-
fully passed, directing that there shall annually be levied
ized to erect and maintain a dam for a public municipal use, the legis-
lature may also empower it to lease any surplus water-power created by
such dam. 6th. But the maintenance of a dam for the purpose of leasing
the water to private persons for private use is not a municipal or public
purpose for which a municipal corporation can be authorized to exer-
cise the power of borrowing money and levying taxes. And quaere
whether such a corporation could be empowered to erect and maintain
a dam for such a purpose independently of taxation. 7th. A statute
which undertakes to empower a city to erect a dam, leaving it optional
with the city whether the dam should be used for a public or private
purpose, is invalid.
¹ Sec. 942.
WISCONSIN.
2127
a tax, in addition to all other taxes, sufficient to pay when
due the interest annually to grow due on such bonds, and
also to pay and discharge the principal thereof by the
time the same shall be due; and every such tax is, after
the issue of such bonds, irrepealable, and must be annu-
ally levied and collected on all the taxable property on the
assessment roll of such municipality; and the money
raised thereby must be kept as a separate fund irrevoca-
bly pledged to such purpose, and can not be employed in
any other.¹
Unless the record of such an election shows that it was in
all essential matters conducted in the manner prescribed
by law, the bonds issued in pursuance thereof will be void,
even in the hands of innocent holders; and although the
bonds themselves recite that all the prerequisites to their
issuance were complied with. Bonds issued without au-
thority of law are void, even in the hands of innocent
holders for value.3
As to the right of municipal authorities to use public
funds or the credit of their municipalities for the purpose
of owning and operating industrial works for public ac-
count, the supreme court has declared the law of the state
to be that a municipal corporation does not possess the
power to engage in works of internal improvement, such
as the construction of railroads, canals, harbors, and the
like, unless the power is specifically granted by the legis-
lature. If the power is specifically granted to a city to
engage in works of internal improvements, such as the
construction of a harbor, to aid in the construction of a
railroad, and the like, then such municipality may engage
4
1 Sec. 943.
3 Veeder v. Town of Lima, 19 Wis. 280.
3 Rochester v. Alfred Bank, 13 Wis. 432; Bushnell v. Beloit, 10 Wis.
195; Bulmer v. Waterloo, 14 Wis. 378; Veeder v. Lima, 19 Wis. 280.
* Knowlton v. Supervisors, etc., 9 Wis. 410; Soens v. Racine, 10 Wis.
271; Hasbrouck v. Milwaukee, 13 Wis. 37; Whiting v. S. & F. R. R. Co.,
25 Wis. 216; Fisk v. Kenosha, 26 Wis. 23.
2128
ECONOMIC LEGISLATION.
in such enterprise, if the power is exercised in conformity
to the legislative authority.'
See also under "PUBLIC SERVICE," above.
¹ Bushnell v. Beloit, 10 Wis. 195; Hasbrouck v. Milwaukee, 13 Wis..
42; Clark v. Janesville, 10 Wis. 136.
WYOMING.'
EDITED BY CHARLES N. POTTER, ATT'Y, CHEYENNE, WYO.
SUBDIVISION I.-HISTORICAL.
On July 25, 1868, the act of congress organizing Wyo-
ming as a territory was approved, but its organization did
not become complete until the 19th of May, 1869, at which
time the governor, secretary, and judicial officers had all
qualified. The first territorial legislature convened on the
12th day of October, 1869.
The organic act conferred upon the territory, legislative
power over all rightful subjects of legislation consistent.
with the constitution of the United States and the provis-
ions of the organic act. Congress, however, retained the
right to legislate directly for this as well as all other terri-
tories, and to annul any acts passed by the territorial as-
sembly; and from time to time the right of direct legisla-
tion was exercised.
On July 10, 1890, Wyoming was admitted as a state,
under a constitution which had been theretofore framed
and adopted by the people.
No special or private corporate charters have ever been
granted in Wyoming, except that, prior to 1887, cities
were created by special enactment of the legislature. In
1871, a general act for the incorporation of cities and
towns was passed, but was repealed in 1873. It was not
taken advantage of.
¹ Unless otherwise stated, references to the constitution are to that of
1890. References to the statutes are to the Revised Statutes of 1887, by
page or section. Session laws are referred to as Laws" of the re-
spective years. As to state reports, see Appendix “A.
(2129)
2130
ECONOMIC LEGISLATION.
The laws of the United States governing the territories
prohibited the legislative assemblies of the several territo-
ries from granting private charters or special privileges,
but permitted the enactment of general incorporation acts
for mining, manufacturing, and other industrial pursuits.
and for conducting the business of insurance, banks of
discount and deposit (but not of issue), loan, trust, and
guarantee associations, and for the construction and oper-
ation of railroads, wagon roads, irrigating ditches, and
the colonization and improvement of lands in connection
therewith, and for colleges, seminaries, churches, libraries,
or any other benevolent, charitable, or scientific associa-
tion. By subsequent enactment, it was provided that
these restrictions should not be construed as prohibiting
the legislative assemblies of the several territories from
creating municipal corporations, and providing for the
government of the same, and conferring upou them the
corporate powers and privileges necessary to their local
administration, either by general or special acts; and all
previous acts of territorial legislatures creating municipal
corporations were confirmed and ratified. The supreme
court of the territory had theretofore upheld such legisla-
tion.3 Subsequently, however, congress restricted the
right of the legislature of the territories to pass local or
special laws, and prohibited them from incorporating
cities, towns, or villages, or changing or amending the
charter of any city, town, or village, by local or special
act.4
2
Since 1887, therefore, the legislature could not incorpo-
rate cities or towns by special act, and has not done so.
Prior thereto, several cities or towns had been created by
special charter, and still exist thereunder, except as such
charters are amended by various general enactments. In
1 U. S. Rev. Stat., sec. 1889.
2 Vol. I, Supplement to U. S. Revised Stats., page 337.
9 Wagner v. Harris, 1 Wyo. 194.
4 24 U. S. Stat. 170.
WYOMING.
2131
1886, the legislative assembly enacted a general law provid-
ing for the organization of towns, but its provisions are
hardly ample for a populous municipality.
The congressional restriction respecting the enactment
of special laws is retained by the constitution, which
further provides that a general law shall be enacted classi-
fying and providing for the incorporation of municipal
corporations, but there has, as yet, been no enactment of
this character, except that the law respecting towns is in
force, and some general provisions have been made appli-
cable to all municipalities.
The first legislative assembly of the territory (1869) en-
acted a general law for the creation and regulation of cor-
porations which still remains in force, with amendments.
All private corporations, therefore, of the territory have
been required to organize under the general incorporation
acts.
Prior to the limitation placed by congress upon the right
of the legislature to create municipal corporations by spe-
cial act, six cities had been created, and their govern-
ment regulated by special charters. They are as follows:
Cheyenne (Rev. Stat., 1887, p. 104); Laramie (Rev. Stat.,
1887, p. 120); Evanston (Rev. Stat., 1887, p. 140); Buffalo
(Rev. Stat., 1887, p. 149); Sheridan (Rev. Stat., 1887, p.
156); Rawlins (Rev. Stat., 1887, p. 169).
Although each charter as originally enacted differs some-
what from the others, a marked similarity in form, and in
many of the privileges granted, is apparent. The first
charter granted to the city of Cheyenne was enacted in
1869, and the charter for Laramie followed in 1873. Since
that time, in 1877 and 1884, respectively, in the case of
both cities, new charters were granted.
The first charter granted to Cheyenne conferred upon the
city the power to provide for the construction of water-
works, gas-works, street railways, and such other public
improvements as may, from time to time, be deemed nec-
essary, or as may be required by the interests of the city,
2132
ECONOMIC LEGISLATION.
either directly or by contract with private persons, com-
panies, or corporations, and provision was made for raising
funds for such purposes.¹
Laramie had authority to construct and preserve reser-
voirs, wells, pumps, and other water-works, and regulate
the use thereof. The later charters to the more populous
cities conferred upon the corporate authorities more in de-
tail, rights to grant certain franchises, and to own public
works.
By reason of the local conditions of the territory, the
water supply question was one of the first to engage the
consideration of the citizens, and, naturally enough, of the
legislature. The earliest charters to municipalities con-
ferred upon them the right to secure water for domestic
purposes and for the extinguishment of fires. The issue
of bonds for the construction and operation of water-works
has frequently been authorized. And the constitution ex-
cepts, from the provisions thereof limiting the amount of
indebtedness to be created by municipalities, debts con-
tracted in supplying cities and towns with water.
In a new and comparatively unsettled region, where
towns are not populous, it can be well understood that the
question of franchises and municipal ownership of public
works will have received attention only in regard to those
matters which may be considered related more or less
closely to the necessities of the people, and these various
questions with respect to Wyoming are better and more
fully illustrated by the consideration of the question of the
legislation and customs respecting a water supply.
The city of Cheyenne has, by ordinance, granted rights
of way to telegraph companies, telephone and electric light
companies, for their poles and wires, but has retained the
right to regulate the method of placing the same, as well
as, in some instances, the right to require that they shall be
placed under ground, if the convenience or safety of the
public shall demand it.
1
Compiled Laws, 1876, p. 171.
WYOMING.
2133
There are no express or special provisions respecting
telephone companies to be found in the statute, but it has
been customary to permit the placing of poles and string-
ing of wires and use of telephones in the various towns
throughout the state.
SUBDIVISION II.—FRANCHISE COMPANIES.
Incorporation, how obtained.-All companies must
be incorporated under the general act. The constitution
requires the legislature to provide by general law for the
organization of corporations.'
Articles of incorporation.—Any three or more per-
sons desiring to form a company for any purpose permitted
by statute, are required to make, sign, and acknowledge
before some officer competent to take acknowledgments
of deeds, duplicate certificates in writing.2
Must show what. The articles of incorporation must
state the corporate name of such company, the object for
which the company is formed, the amount of the capital
stock, the term of existence (not to exceed fifty years), the
number of shares of which the stock is to consist, the
number of trustees (not less than three nor more than nine),
and their names, who are to manage the concerns of the
company for the first year, and the name of the town and
county in which the operations of the company are to be
carried on.2
Filing. One of these certificates must be filed in the
office of the county clerk of each county wherein the
business of the company is to be carried on, and one copy
thereof must be filed in the office of the secretary of
state. Such certificates are to be recorded in each office.
Amendments, repeals, etc.-The constitution provides
that: "All laws regulating corporations may be altered,
amended, or repealed by the legislature at any time, when
necessary for the public good and general welfare; and all
corporations doing business in this state may, as to such
Const., Art. X, sec. 1.
Sec. 501 as amended
2134
ECONOMIC LEGISLATION.
business, be regulated, limited, or restrained by law not in
conflict with the constitution of the United States." The
general incorporation act also provides that: "The legis-
lature may at any time alter, amend, or repeal this chap-
ter, but such amendment or repeal shall not take away or
impair any remedy given against or in favor of any such
corporation, its stockholders or officers, for any liability
which shall have been previously incurred."1
By the corporation.-Provision is made by law for ex-
tending or changing the business of a corporation. Such
change or extension is effected at a meeting of the stock-
holders, in the same manner as is provided for increasing
capital stock.
Duration of charter. The articles of incorporation
must state the term of corporate existence, which can not
exceed fifty years.2
2
Objects. The articles of incorporation must state the
objects for which the company is formed; and the busi-
ness of the corporation may be extended or changed by
amendment, as shown above.
By-laws. It is customary in articles of incorporation,
and is permissible by statute, to provide that the trustees
shall have power to make by-laws as they may deem
proper for the management and disposition of the stock
and business affairs of the company, not inconsistent with
the laws of the state, and prescribing the duties of offi-
cers, artificers, and servants that may be employed, for
the appointment of all officers, and for carrying on all
kinds of business within the objects and purposes of the
company.
is
Officers; meetings; voting; quorum, etc.—The stock,
property, and concerns of every incorporated company
required to be managed by not less than three nor more
than nine trustees, who must be stockholders in the com-
pany, and who must (except the first year) be annually
elected by the stockholders at such time and place as may
¹ Sec. 518.
2 Sec. 501 as amended
WYOMING.
2135
!
be directed by the by-laws of the company.¹ The names
of the trustees to manage the concerns of a company for
the first year are required to be specified in the certificate
of incorporation.
In case it should happen at any time that an election of
trustees is not had on the day designated by the by-laws,
the company for that reason is not to be dissolved, but it
is lawful on any other day to hold an election, in such
manner as is provided for by the by-laws, and all acts of
the trustees are valid and binding against the company
until their successors are elected. It is customary with
corporations organized under the laws of the state to pro-
vide that in such case the trustees shall, within sixty days
after the time when the trustees should have been elected,
call a meeting for that purpose.
Each company is required to have a president, who
must be designated from the number of the trustees, and
also such subordinate officers as the company may by its
by-laws designate, who may be elected or appointed, and
are required to give such security for the faithful perform-
ance of the duties of their offices as the company may by
its by-laws require.²
The by-laws of the various domestic corporations usually
provide that the term of office of the respective officers of
the company shall be one year.
Capital stock. The articles of incorporation must state
the amount of the capital stock of the company and the
number of shares of which the stock is to consist.
There is no statutory limitation on the amount of the
capital of any of the companies considered in this article.
Assessments on capital stock as fixed and limited by the
trustees must all be paid in, ten per cent thereof within
one year; the balance is payable in installments as re-
quired by the trustees, who must give six weeks' notice by
publication of the time and place for the payment of the
It is lawful for the trustees to call in and demand
same.
¹ Sec. 505.
2 Sec. 507.
2136
ECONOMIC LEGISLATION.
from the stockholders respectively all such sums of money
by them subscribed at such time and in such payments or
installments as they may deem proper, not to exceed ten
per cent in any one month, under the penalty of forfeiting
the shares of stock subscribed for and all previous pay-
ments made thereon, if payment is not made by the stock-
holders within sixty days after a personal demand or
notice requiring such payments has been published for six
successive weeks in a newspaper nearest the place where
the business of the company is carried on as aforesaid.
The trustees of any incorporated company may purchase
property necessary for their business, and issue stock to
the amount of the value thereof in payment therefor, and
the stock so issued must be declared and taken to be full
stock, and not liable to any further calls. Neither are the
holders thereof liable to any further payments under the
provisions of the statute providing for assessments upon
stock, or providing for the liability of stockholders; but
in such cases, in all statements and reports of the com-
pany, such stock must not be stated or reported as issued
for cash paid in to the company, but must be reported in
that respect according to the facts.¹
The president and a majority of the trustees within thirty
days after the payment of the last installment of the cap-
ital stock as fixed and limited by the company, are re-
quired to make a certificate stating the amount of the
capital so fixed and paid in, which certificate must be
signed and sworn to by the president and a majority of
the trustees, and within said thirty days must be recorded
in the office of the register of deeds of the county wherein
the business of the company is carried on.2
Increase and decrease of.-Capital stock may be increased
or diminished by any company to any amount that may be
deemed sufficient and proper for the purposes of the
corporation, but before a company is entitled to diminish
¹ Sec. 513.
2 Sec. 514.
WYOMING.
2137
+
the amount of its capital stock, if the amount of its debts
and liabilities exceed the amount of capital to which it is
proposed to be reduced, such amount of debts and liabilities.
must be satisfied and reduced so as not to exceed such
diminished amount of capital.¹
The method of increasing or diminishing the capital
stock is briefly as follows: Whenever the owner or owners
of a majority of the shares of the capital stock of any com-
pany desire an increase or diminution of the amount of the
capital stock, they may make application in writing to the
president or other chief officer of the company, to call a
meeting of the stockholders, which application is required
to state the purpose or purposes for which said meeting is
desired. The officer to whom such notice is made is
thereupon required to publish a notice, signed by him, in
a newspaper of the county wherein is situated the prin-
cipal office of the company in the state, at least four suc-
cessive weeks, and to deposit a written or printed copy
thereof in the post-office, addressed to each stockholder at
his usual place of residence, at least fifteen days previous to
the date fixed for holding such meeting, specifying the
object of the meeting, the time and place, when and where
such meeting will be held, and the amount to which it
is proposed to increase or diminish the capital stock; a
vote of at least two-thirds of all the shares of stock law-
fully issued and outstanding is necessary to such increase
or diminution.2
At the meeting so called there must be represented not
less than two-thirds of all the shares of stock legally is-
sued and outstanding. The meeting must organize by
choosing one of the stockholders chairman and another
secretary of the meeting, and proceed to a vote of those
present in person or by proxy; if on canvassing the votes
it appears that a sufficient number of the votes has been
given in favor of increasing or diminishing the amount
¹ Sec. 519.
VOL. II-54
* Sec. 520.
2138
ECONOMIC LEGISLATION.
of the capital stock a certificate of the proceedings, show-
ing a compliance with these provisions, the amount of cap-
ital actually paid in, the whole amount of the debts and
liabilities of the company, and the amount to which
the capital stock is to be increased or diminished must be
made out, signed, and verified by the affidavits of the
chairman and secretary of said meeting; said certificate
must also be acknowledged by such chairman and secre-
tary, and filed and recorded as required for filing of the
original certificate of incorporation. When so filed and
recorded, the capital stock must be considered to be in-
creased or diminished to the amount specified in such cer-
tificate.
Transfer of.-Stock of an incorporated company is
deemed personal property, and is transferable in such man-
ner as may be prescribed by the by-laws of the company;
provided, that such by-laws are just and reasonable, and
not in conflict with law.
Stock in other companies.-A company is prohibited from
using any of its funds in the purchase of stock in any
other corporation, or in its own, except that it may in its
discretion, purchase, hold, and own any stock, and to any
amount, in any other company that is or may be subsidiary
or tributary to, and that does contribute to its objects and
purposes.¹
Bonds, debts, etc.-The indebtedness of any com-
pany, must not at any time exceed the amount of its cap-
ital stock.2
Dividends.-The trustees or directors of any company
are forbidden to declare or pay any dividend when the
company is insolvent, or which will diminish the amount
of its capital stock.3
Liability of stockholders.-All stockholders of every
company incorporated under the general laws of the state
are severally and individually liable to the creditors of the
1 Sec. 510.
2 Sec. 523.
9 Sec. 515.
!
WYOMING.
2139
company in which they are stockholders, to the amount
of unpaid assessments on the capital stock held by
them respectively, and no other or further amount,
for all debts and contracts made by such company, until
the whole amount of assessments as fixed and limited by
the trustees is paid in.¹
Liability of officers and directors.-The trustees or
directors of the corporation become jointly and severally
liable for all the debts of the company then existing, and
for all that are thereafter contracted while they respectively
continue in office, if they illegally declare and pay any
dividend when the company is insolvent, or which would
diminish the amount of its capital stock. But if any of
the trustees object to the declaring of such dividend, or to
the payment of the same, and, at any time before the time
fixed for the payment thereof, file a certificate of their ob-
jection in writing with the clerk or secretary of the com-
pany, and with the register of deeds within the county,
they thereby become exempt from such liability
2
The trustees or directors of any company assenting to
the creation of an indebtedness exceeding the amount of
its capital stock, are personally and individually liable for
such excess to the creditors of such company.3
The treasurer of the corporation who neglects or re-
fuses to comply with the request for a report of the com-
pany, as shown below, is liable to forfeit and pay to the
person presenting the same, the sum of $50, and the fur-
ther sum of $10 for every twenty-four hours thereafter
until such statement is furnished, to be sued for and re-
covered in any court having cognizance thereof.
Reports. No public reports of the companies under
consideration are required by statute, but in case of any
incorporated company, any person or persons owning fif-
teen per cent of the capital stock may present a written
request to the treasurer thereof that they desire a state-
¹ Sec 512.
2 Sec. 515.
³ Sec. 523.
2140
ECONOMIC LEGISLATION.
ment of the affairs of the company, and thereupon it be-
comes the duty of such treasurer to make a statement of
the affairs of the company under oath, embracing a par-
ticular account of all its assets and liabilities in minute de-
tail, and deliver such statement to the person or persons
who presented such written request within twenty days of
the date of such presentation, and he is also required at
the same time to place and keep on file in his office for six
months thereafter, a copy of such statement, which must
at all times during business hours, be exhibited to any
stockholder of the company demanding an examination
thereof; such treasurer, however, is not required to de-
liver such statement as aforesaid oftener than once in every
six months.
Consolidation of companies.-The constitution pro-
vides that "There shall be no consolidation or combina-
tion of corporations of any kind whatever to prevent com-
petition, to control or influence productions or prices
thereof, or in any other manner to interfere with the pub-
lic good and general welfare.” ¹
2
Dissolution; forfeiture. The powers, rights, and priv-
ileges of any and all corporations may be forfeited by wil-
full neglect or abuse thereof. A company is not dissolved
by reason of failure to hold the annual election of trustees
on the day designated by the by-laws.
SUBDIVISION III.-FRANCHISES.
How obtained. The constitution prohibits local or
special legislation granting to any corporation, associa-
tion or individual, the right to lay down railroad tracks,
or any special or exclusive privilege, immunity, or fran-
chise whatever, or amending any existing charter for such
purpose.3
With regard to the rights of franchise companies within
the limits of municipalities, the constitution declares that:
¹ Const., Art. X, sec. 8.
3 Const., Art. III, sec. 27.
2 Const., Art. X, sec. 2.
WYOMING.
2141
"No street passenger railway, telegraph, telephone, or
electric line, shall be constructed within the limits of any
municipal organization without the consent of its local
authorities." 1
There is no general statutory provision regulating the
method of obtaining franchises within a municipality,
without some act on the part of the city; the method,
therefore, must be looked for in the general provisions
conferring powers upon municipal corporations, or in the
special charters with respect to the particular cities exist-
ing thereunder. Such franchises must at present, there-
fore, be obtained from the municipality itself, and are
usually granted by ordinance.
Gas and electric lighting.-The general laws relating to
the incorporation of towns, authorize the town council
to provide for and regulate the lighting of the streets and
the erection of lamp posts; and any company organized
under the general laws of the state, or any association of
persons organized for the purpose of supplying gas, or
supplying natural gas for general purposes to any town,
or the inhabitants thereof, has the right, by the consent
of the town council (subject to existing rights), to erect
gas factories, and lay down pipes in the streets or alleys
or public places of any such town, subject to any such
regulations as any such town may by ordinance impose.²
Water-works.-The city or town council of any incorpo-
rated city or town has power to grant to any corporation or-
¹ Const., Art. XIII, sec. 4.
* Laws, 1888, p. 95. The charter of the city of Cheyenne permits the
corporate authorities to make contracts with and authorize any person,
company or association, to erect gas-works in said city. (Rev. Štats.,
p. 109.)
The Laramie charter grants to the corporate authorities the right to
make contracts with and authorize any person, company, association or
corporation, to erect gas-works or electric light works, or steam heating
works and apparatus, and to grant to the same the right of way for lay-
ing or erecting pipes, mains, wires, or electrical apparatus. (Rev. Stats.,
p. 126.)
The corporate authorities of the city of Buffalo are authorized by
•
2142
ECONOMIC LEGISLATION.
ganized under the laws of Wyoming for such purpose, the
right to construct, maintain, and operate a system of water-
works within the corporate limits of such city or town, and
for that purpose the corporation acquiring such right or fran-
chise has the right to use the streets and alleys within the
corporate limit to put down all pipes, fire plugs, hydrants,
and other appliances necessary to the complete operation
of such works, subject, however, to the supervision and
control of the municipal authorities of such city or town.¹
Street railways.-Some of the special charters expressly
granted to the corporate authorities the right to permit
and regulate the building of street railways within the
corporate limits. It is believed, however, that the only
city taking advantage of such provisions is Cheyenne.
The first state legislature, by an act approved January
24, 1891, expressly conferred upon each incorporated city
and town in the state the power to permit and license the
building and operation of street railways; and for such
purposes, to grant rights, franchises, and privileges for
limited periods of time, not to exceed ten years.²
Telegraphs; telephones.-The city of Cheyenne has by
ordinance granted rights of way to telegraph and tele-
their charter to provide for and regulate the lighting of the streets and
the erection of lamp posts.
The other special charters contain no express provision with reference
to gas or other lighting companies, but each charter confers upon the
corporate authorities of the respective cities general jurisdiction and
power over the streets, alleys, and public ways within the corporate
limits, and some of them contain what is known as the "general wel-
fare clause."
¹ Laws, 1890, page 51. This act legalized and declared valid all fran-
chises theretofore granted by the proper authorities for the supply of
water to any city or town within the then territory (now state). The
special charters of some of the other cities theretofore created and
special acts relating solely to them had contained provisions authorizing
the granting of limited franchises to water companies; but the above
act deals with the question more in detail, and applies to all cities and
towns in the state, whether incorporated under special charters or
otherwise.
2 Laws, 1890-91, ch. 102, page 403.
WYOMING.
2143
phone and electric light companies for their poles and
wires, but has retained the right to regulate the method
of placing the same, as well as, in some instances, the
right to require that they shall be placed underground, if
the convenience or safety of the public shall demand it.
There are no express or special provisions respecting
telephone companies to be found in the statutes, but it has
been customary to permit the placing of poles and string-
ing of wires and use of telephones in the various towns
throughout the state.
When properly incorporated, a telegraph company is
authorized to construct its line or lines from point to
point, by the erection of the necessary wires, poles, and
apparatus for the necessary lines; provided, however, that
the same shall not incommode the public in the use of
such highways; but it is not probable that such lines
could be constructed without municipal authority.
Limitations.-Franchises to water companies are re-
quired to be granted upon the express condition that the
city or town shall have the right and privilege of pur-
chasing the same and all the appurtenances within twenty
years from the date of the franchise, upon such reason-
able terms as may be agreed upon between the two con-
tracting parties. Franchises for water-works can not be.
granted until the question has been submitted to the
electors of the city or town, and if approved by a majority
of all the votes cast at such election, the city or town
council may pass an ordinance granting the franchise.
The election submitting the question to the people must
be called under and by virtue of an ordinance passed for
such purpose.¹
Control of streets.-Special charters confer upon the
corporate authorities of the respective cities general juris-
diction and power over the streets, alleys, and public ways
within the corporate limits, and some of them contain what
¹ Laws, 1890, p. 51. Newcastle, and possibly some other towns, have
taken advantage of these provisions.
2144
ECONOMIC LEGISLATION.
is known as the "General Welfare Clause." The gen-
eral town incorporation act provides that towns incorpo-
rated thereunder may lay out, widen, extend, grade or
otherwise improve the streets, alleys, sidewalks and cross-
ings, remove encroachments therefrom; regulate and pro-
vide for the passage of railways through the streets and
public grounds; regulate crossings of railway tracks; reg-
ulate running of railway engines, cars, and trucks within.
the town limits.¹
Condemnation of property.-A franchise is subject to
éminent domain, under the provisions of the constitution,
and such franchises may be subjected to public use the
same as property of individuals.2 Road, railroad, ditch,
telegraph, flurning, and water companies may obtain lands
for right of way by condemnation.
Duration of franchise.-Water-works companies may
be granted a franchise for a period not longer than twenty
years at one time. Franchises of street railway compa-
nies are limited to ten years.*
¹ Sec. 95. Cheyenne charter authorizes the city to pass ordinances to
provide for and regulate the passage of railways through the streets and
public grounds of the city; to remove all obstructions from sidewalks,
curbstones, gutters and cross-walks; to prevent accidents at crossings.
and on tracks of railways; to prevent and remove all encroachments.
into and upon all sidewalks, streets and alleys; to open, widen or other-
wise improve streets. (Rev. Stat., pp. 110, 111.)
Laramie and Buffalo have practically the same powers. (Rev. Stat.,
sec. 222; Rev. Stat., sec. 335.)
Evanston has power to lay out, open, grade and otherwise improve
the streets, alleys, sidewalks and crossings, and keep them in repair and
vacate the same (Rev. Stat., sec. 285); to superintend the grading, pav-
ing and improving of streets. (Rev. Stat., sec. 304.)
Sheridan is given authority to lay out, widen, extend, grade or other-
wise improve the streets, alleys, sidewalks and crossings, keep them in
repair and vacate the same, and remove all encroachments therefrom.
Rawlins has the power to open and improve streets and alleys, and
regulate the passage of railways through the streets and public grounds.
2 Const., Art. X, sec. 9.
Laws, 1890, p. 51.
* Laws, 1890–91, ch. 403, p. 107.
WYOMING.
2145
Perpetual and exclusive franchises.-The constitu-
tion provides that "perpetuities and monopolies are con-
trary to the genius of a free state, and shall not be allowed.
Corporations being creatures of the state, endowed for
the public good with a portion of its sovereign powers,
must be subject to its control."
Methods of construction. See under "How OBTAINED."
Regulations as to service.-It is declared in the con-
stitution that "all powers and franchises of corporations
are derived from the people, and are granted by their
agent, the government, for the public good and general
welfare, and the right and duty of the state to control and
regulate them for these purposes is hereby declared. The
powers, rights, and privileges of any and all corporations
may be forfeited by willful neglect or abuse thereof. The
police power of the state is supreme over all corporations
as well as individuals." 2
The city or town council of any incorporated city or
town is given full power and authority to grant to the
corporation to which such franchise has been given the
right and authority to collect and receive all water rents
and charges due from consumers of water, but such
charges and rates must be established by the corporation
subject to revision and amendment by the municipal au-
thorities, and in establishing such rates the authorities are
required to take into consideration the cost of the con-
struction of the water plant, and to so adjust the rates to
be charged upon such basis that equity will be done to all
parties. When such rates are so fixed, they are not subject
to revision oftener than once in two years, without the
consent of the corporation constructing the water-works.3
Municipal authorities are empowered to permit the use
of any and all kinds of motive power usually or ordina-
rily employed for the operation of street railways, and in-
cluding such kinds of motive power as may hereafter be
2 Const., Art. X, sec. 2.
¹ Const., Art. I, sec. 30.
8 Laws, 1890, p. 51.
2146
ECONOMIC LEGISLATION.
invented or adopted. The municipality may regulate the
operation of such railways in such manner as to secure
the safety of the public, and to prevent, prohibit and pun-
ish any and all acts or omissions interfering with or ob-
structing the tracks, cars, or works of such railways, or
their free operation.'
Discrimination in service; refusal to render service.
The constitution declares "all corporations engaged in the
transportation of persons, property, mineral oils and min-
eral products, news or intelligence, including railroads,
telegraphs, express companies, pipe lines, and telephones,"
to be common carriers.2 "Railroad and telegraph lines
heretofore constructed, or that may hereafter be con-
structed in this state, are hereby declared public highways,
and common carriers, and as such must be made by law
to extend the same equality and impartiality to all who
use them, excepting employees and their families and
ministers of the gospel, whether individuals or corpora-
tions.'
"75
State and municipal aid.-By constitutional provis-
ion, a municipality is prohibited from loaning or giving
its credit, or making donations to or in aid of any indi-
viduals, association or corporation, except for the support.
of the poor, and is also prohibited from subscribing to or
becoming the owner of the capital stock of any associa-
tion or corporation.*
Public service.-The general laws relating to the in-
corporation of towns authorize the town councils to pro-
vide for and regulate the lighting of the streets and the
erection of lamp posts.
¹ Laws, 1890-91, ch. 102, p. 403.
³ Const., Art. X, sec. 2, sub. Railroads.
' Const., Art. X, sec. 7.
* Const., Art. XI, sec. 6.
5 Laws, 1888, p. 95. The charters of the cities of Cheyenne and Lara-
mie permit the corporate authorities to give any person or company the
exclusive privilege of furnishing gas, or gas or electric light respectively,
to light the streets, lanes, and alleys, for any length of time not ex-
ceeding ten years. (Rev. Stats., pp. 109, 126.) And the corporate au-
WYOMING.
2147
Any city or town council may contract with a corpora-
tion for the supply of water to the municipality for pro-
tection from fire, the sprinkling of streets, and such other
purposes as may be necessary to the health and safety of
the city or town, and its inhabitants, upon such reasonable
terms as may be agreed upon and assented to by the cor-
porate authorities for a period not longer than ten years
at any one time.¹
Alteration, amendment, etc., of fanchises.-See un-
der "AMENDMENTS, REPEALS, ETC.," above.
Any special provisions respecting alterations in fran-
chise privileges must be found in the ordinances of the
various municipalities granting the franchise.
SUBDIVISION IV. MUNICIPAL OWNERSHIP.
Historical. The history of municipal ownership in
this state is confined to water-works.
As has already been indicated (see SUBDIVISION I-HIS-
TORICAL), cities have possessed the right to own and ope-
rate water-works for municipal benefit and for domestic
purposes, such powers being more or less limited; and
some of the larger cities have exercised that right, and
now own and operate a system of water-works. Promi-
nent among such municipalities are Cheyenne, Laramie, ·
and Evanston. The city of Rawlins has lately instituted
a movement in this direction, and its electors have author-
ized the issue of bonds for the same.
thorities of the city of Buffalo are authorized by their charters to provide
for and regulate the lighting of the streets and the erection of lamp posts.
The other special charters contain no express provisions with reference
to gas or other lighting companies, but each charter confers upon the
corporate authorities of the respective cities general jurisdiction and
power over the streets, alleys, and public ways within the corporate
limits, and some of them contain what is known as the "general welfare
clause." It is believed that the general welfare clause could be so con-
strued as to grant the right to municipalities to contract for service, but
it is doubtful whether the other general powers could. There are no
state decisions determinative of the matter.
1 Laws, 1890, p. 51.
2148
ECONOMIC LEGISLATION.
It is believed that no city or town in the state owns or
operates at public expense any gas, electric light works, or
railroads of any character.
The
The water-works at Cheyenne, with the improvement
now in the course of construction, will have cost a sum of
money exceeding $260,000, much of which has been pro-
vided for by the issue of bonds, and the remainder paid
for as the work has progressed from time to time either
from funds received from taxes or from water rents.
city of Evanston has expended $24,000 in the construction
of its water system, of which sum $20,000 was received
from the sale of its municipal water bonds. The city of
Laramie has lately authorized the issue of $100,000 of
bonds for the purpose of improving the water-works in
that city.
Prior to 1888, the legislature had authorized and em-
powered the city of Cheyenne to own and control a water
system for the city, and to issue coupon bonds for the
purpose of providing funds with which to construct such
water system.¹ The city, under the charter of 1878, had
power to establish and regulate wells, cisterns, and aque-
ducts, and to provide for filling the same, and also to pro-
vide the city with water.2
Laramie city, in 1887, was authorized to exercise con-
trol of the water-works and supply of water for said city,
and was given power to provide for the protection and re-
pair of water mains, and to protect and extend its water
system, in such manner as the council shall deem most ex-
pedient, by the construction of mains and lateral ducts
and the construction of additional mains and ducts, and to
establish hydrants or other works to aid in the use of the
water supply of said city.
Perhaps the policy of the state respecting municipal
ownership of water-works can not be better illustrated
than by reference to the constitutional provisions respect-
1 Rev. Stats., page 117.
2 Secs. 108, 109.
WYOMING.
2149
ing the limitation upon the incurring of public indebted-
ness. While a city is prohibited from incurring any in-
debtedness in excess of two per cent upon the assessed
valuation of its taxable property, and an additional four
per cent for the purpose of constructing sewerage therein,
debts contracted by it for water-works are expressly ex-
cepted from the constitutional limitation upon the amount
of debt permitted to be contracted.
Power of municipalities to erect or purchase.-
Under the provisions of the laws now in force respecting
municipal ownership of water-works, full and complete
power has been granted to incorporated cities and towns
to construct and maintain water-works and borrow money
therefor, within the constitutional or statutory limit of in-
debtedness, and to obtain a water supply by purchase or
condemnation, or otherwise, as well as to fix and collect
water rents, and to use the proceeds derived from such
sources in the maintenance and extension of the water sys-
tem, and pay the interest and principal of the debts incurred
in the construction, extension, and maintenance thereof.¹
The municipality may, like individuals, acquire rights
by prior appropriation and otherwise, to the use of water
for domestic and municipal purposes, and the legisla-
ture is required to provide by law for the exercise upon
the part of incorporated cities, towns, and villages, of the
right of eminent domain for the purpose of acquiring from
prior appropriators upon the payment of just compensa-
tion, such water as may be necessary for the well-being
thereof, and for domestic purposes.'
It will be understood that the doctrine peculiar to the
arid regions, and known as the right to acquire title to the
use of water by prior appropriation prevails in this state,
and is recognized by the constitution, the acts of the leg-
islature, and the courts.
This doctrine, in opposition to the common law, permits
¹ Const., Art. XIII, sec. 5.
2150
ECONOMIC LEGISLATION.
a permanent right to the use of the water of a natural
stream to be acquired for beneficial purposes; a prior ap-
propriator may thus acquire the right to divert, use, and
consume a quantity of water from the natural flow of such
stream which may be necessary for the purpose of his
operations in the irrigation of lands, mining, milling, and
manufacturing. This right also applies to domestic and
municipal purposes; the appropriator thereby becomes the
owner of such right of user. The laws of Wyoming pro-
vide a complete and elaborate system for acquiring such a
right, making a record thereof, and determining the
priorities between the several appropriators from the same
stream.
Franchises to water companies can be granted only upon
the express condition that the city or town shall have the
right and privilege of purchasing the same and all the ap-
purtenances within twenty years upon such reasonable
terms as may be agreed upon; nor can they be granted
until the question has been submitted to the electors of
the city or town.'
The general law governing the incorporation of towns,
authorizes them to contract for the making of any public
improvements for water supply to be paid for in whole or
in part by a special assessment, and any public work, when
the expense thereof shall exceed five hundred dollars, is
required to be let to the lowest responsible bidder, in a
manner to be prescribed by ordinance.2 They have power
to provide for the supply of water for municipal purposes
and domestic uses, by the boring and sinking of artesian
wells, or by the construction and regulation of wells,
pumps, cisterns, aqueducts, and water-works, and to bor-
row money for such purposes, and a town exercising such
power is permitted for the purpose of establishing or sup-
plying water-works to go beyond its territorial limits, to
take hold and acquire property by purchase or otherwise,
1 Laws, 1890, p. 51.
2 Laws, 1888, p. 96.
WYOMING.
2151
and to condemn all necessary lands and property therefor.
The town is given jurisdiction to prevent and punish any
pollution or injury to the source of its water supply, or to
its water-works, although the injury may have occurred
outside of the corporate limits.
A municipality exercising such powers is expressly
granted the right to make rules and regulations for the
use of the water, and to do all acts and make rules for the
protection of such water-works, and of all property con-
nected therewith, and to enact ordinances for the proper
management of such water-works, and to fix water rates
and water taxes, and to collect water rents.
Power is also conferred upon the corporate authorities
to levy a general tax for the construction, maintenance,
and management of such water-works, and to appropriate
money therefore.
All water rents or taxes collected under the provisions
of the act granting this general right to incorporated
towns, save and excepting such amount as are necessary
to pay the expenses of maintaining, extending, man-
aging and improving the water-works, are required to be
applied to the payment of the principal and interest upon
the bonds which may be issued by such cities or towns to
enable them to secure the water supply.¹
Each incorporated city and town is given the power
to construct, purchase, extend, maintain, and regulate
highway viaducts and a system of water-works; and to
establish, construct, purchase, maintain, and regulate a
system of ditches, aqueducts and reservoirs for supplying
water to its inhabitants, streets, parks, and public grounds
for irrigating purposes, and to issue bonds therefor.2
The statute authorizing the issuance of bonds for con-
structing water-works limits the amount to be issued in
case of cities containing a population in excess of three
thousand to ten per cent, and in case of cities containing
1 Laws, 1888, p. 97.
2 See Laws, 1890, p. 9; Laws, 1890-91, ch. 97, 13.
2152
ECONOMIC LEGISLATION.
a population of less than three thousand, to eight per cent
of the assessed valuation of the taxable property therein,
to be determined according to the last preceding general
assessment for taxation. Cities having a population of
three thousand or over, to issue bonds, must have an
assessed valuation of half a million dollars, according to
the last preceding annual assessment.
The constitution prohibits the creation of any public
debt in excess of the taxes for the current year, unless the
proposition to create such debt has been submitted to and
approved by the people.
UNITED STATES.¹
EDITED BY WM. B. WEBB, ATT'Y, WASHINGTON, D. C.
SUBDIVISION I.-CORPORATIONS.
Definition of.—A corporation is a mere creature of the
law, deriving all its powers from the act incorporating it,
and can exercise the same only in the manner therein au-
thorized.2
The attributes generally found in corporations for pecu-
niary profit which are deemed essential to their corporate
character are: 1. It has a distinctive and artificial name,
by which it can make contracts. 2. It has a statutory pro-
vision by which it can sue and be sued in the name of one
of its officers as the representative of the whole body,
which is bound by the judgment rendered in such suit.
3. It has provision for perpetual succession by the transfer
and transmission of the shares of its capital stock, whereby
new members are introduced in place of those who die or
sell out. 4. Its existence as an entity apart from the
¹ References, so far as made to the United States Statutes, are by sec-
tion, preceded by the abbreviation "U. S. Rev. Stat.;" references to
the session acts or Statutes at Large, are made by volume and page, as
"U. S. Stats." As to United States Reports, see Appendix “A."
The character of the discussion of franchise companies and their
rights in the light of the decisions of the United States courts must of
necessity be more or less fragmentary. It can, in fact, be but little more
than a digest of the holdings under the various topics considered. This
follows necessarily from the fact that these decisions have been ren-
dered upon cases arising not from the legislation and policy of one state,
but of many, as well as from the fact that the questions arising under
this discussion are, so far as the federal government is concerned, for
the most part incidental questions arising from the peculiar relation-
ship between the states and the federal government.
2 Head v. Providence Ins. Co., 2 Cranch, 127.
VOL. II-55
(2153)
2154
ECONOMIC LEGISLATION.
share-holders is recognized by the act of legislation which
enables it to sue its share-holders and be sued by them.¹
A corporation aggregate retains its identity through all
the changes that may take place in its individual member-
ship.²
Creation of. The power of establishing a corporation
is not a distinct sovereign power or end of government,
but only the means of carrying into effect the powers
which are sovereign.³
A charter declaring that four persons and such others
as may be associated with them "shall be and are hereby
incorporated and made a body politic and corporate," and
giving them power to exercise all the corporate powers of
said body until the first election of the directors of said
company shall be held, takes effect immediately upon its
acceptance by the persons named. When a legislature
has full power to create a corporation, its act recognizing
as valid an existing corporation, whether private or mu-
nicipal, operates to cure all defects in its organization,
and make a de jure out of what was only a de facto corpo-
ration.5
The Georgia constitution having conferred upon the
legislature the exclusive power to charter telegraph com-
panies, a charter granted to a telegraph company by the
superior court is void."
1
Amendments, repeals, etc.-Article I, section 10, of
the constitution of the United States, provides that " no
state shall
law impairing the
obligation of contracts." This provision of the constitu-
tion, under the various decisions of the supreme court,
pass any
¹ Liverpool Ins. Co. v. Massachusetts, 10 Wall. 574.
2 Railroad Co. v. Soutter, 13 Wall. 517.
3 McCulloch v. Maryland, 4 Wheat. 316.
Frost v. Frostburg Coal Co., 24 How. 278.
5 Comanche County v. Lewis, 133 U. S. 198.
6 Doboy & Union Island Tel. Co. v. De Magathias, 25 Fed. Rep. 697.
UNITED STATES.
2155
limits the power of the various states to amend or repeal
charters.
Charters of private corporations are contracts protected
from invasion by the constitution of the United States."
Every valuable privilege given by the charter of a private
corporation which conduced to its acceptance and an
organization under it, is a contract which can not be
changed by the legislature, where the power to do so is
not reserved in the charter.2 Where the charter of a cor-
poration is granted without a reserved right to alter or re-
peal, it is not affected by subsequent changes in the stat-
utes of the state.³
It is not the charter, but only the contract which the
charter may contain, which is protected by Article I, sec-
tion 10. If there is no contract, there is nothing in the
grant on which the constitution can act. The contracts
which the constitution protects are those that relate to
property rights, not governmental.*
Private charters are held to be contracts, because they
are based for their consideration on the liabilities and du-
ties which the corporators assume by accepting the terms
therein specified. Therefore the grant of the franchise
can not be resumed by the legislature, or its benefits di-
minished, without the assent of the corporators, unless
the right to do so is reserved in the act of incorporation, or
in some general law of the state which was in operation
at the time the charter was granted.5
1
Binghampton Bridge Case, 3 Wall. 51; Dartmouth College v. Wood-
ward, 4 Wheat. 518; Davis v. Gray, 16 Wall. 203.
2
Piqua Bank v. Knoop, 16 How. 369; Providence Bk. v. Billings, 4
Pet. 514.
3 Dodge v. Woolsey, 18 How. 331; Mechanics & Traders' Bank v.
Thomas, 18 How. 384; Jefferson Bank v. Skelly, 1 Bl. 436; Franklin
Bank v. Ohio, 1 Bl. 474; Henry Co. v. Nicholay, 95 U. S. 619; N. O. Gas
Co. v. Louisiana L. & H. Co., 115 U. S. 650; N. O. Water-works v. Rivers,
115 U. S. 674.
'Stone v. Mississippi, 101 U. S. 814.
5 Pennsylvania College Cases, 13 Wall. 214.
2156
ECONOMIC LEGISLATION.
Exemption from legislative interference, given by a
charter, must appear by such clear and unmistakable lan-
guage that it can not be reasonably construed consistently
with the reservation of the power by the state.¹
A constitutional provision that the general assembly
shall have no power to grant corporate powers and privi-
leges, with certain exceptions, does not take away the
power to amend the charters of existing corporations by
modifying or enlarging their powers.2
Charters may be altered, modified, or amended, in all
cases where the power to do so is reserved in the charter,
or in some antecedent general law. The reservation is
equally valid and effectual, whether it exists in the con-
stitution of the state or in a prior general law.*
Where the charter of a corporation reserves to the leg-
islature an unconditional power to alter or repeal the act,
the corporation can not complain that a subsequent re-
pealing act is passed without adequate reasons.
The leg-
islature may repeal the charter arbitrarily. But where a
charter provides that "if the corporation shall at any
time misuse or abuse" its franchise, the legislature may
revoke the grant, the power of revocation is thereby made
conditional upon the fact of some misuse or abuse; and
this fact must be proved upon some inquiry giving the
corporation an opportunity to be heard in defense, before
the charter can be revoked. It seems that a proper mode
for the legislature to institute the necessary preliminary
inquiry into the fact of misuse, would be to pass a resolu-
tion directing the attorney-general to institute the proper
proceedings in the courts to ascertain the fact, and that if
1
¹ Georgia R. & B'nk'g Co. v. Smith, 128 U. S. 174.
2 Jones v. Habersham, 107 U. S. 174.
³ Pennsylvania College Cases, 13 Wall. 190; Miller v. State, 15 Wall.
478.
* Pennsylvania College Cases, 13 Wall. 190; Miller v. State, 15 Wall.
478; Holyoke Water Power . Lyman, 15 Wall. 500; Greenwood v.
Union F. R. R., 105 U. S. 13; Shields v. Ohio, 95 U. S. 319.
UNITED STATES.
2157
in such proceeding the charge is found true, the charter
shall be revoked.¹
Where a reservation of the right to alter or repeal every
charter exists, a corporation is, from the moment of its
creation, subject to the legislative power of alteration, and
if deemed expedient, of absolute extinguishment as a cor-
porate body.2
While a general law is in force, subjecting all charters
to alteration, a charter is not exempt from alteration, al-
though it expressly conveys such rights, privileges and
immunities, as are enjoyed by another corporation, whose
charter is not subject to alteration.3 A state, under a
general law existing when the charter of a corporation.
was granted, authorizing it to amend or repeal charters,
may subject the said corporation to taxation, from which
it was previously exempt.*
If a legislature had the power to repeal the statute un-
der which a company was organized, it can charter a new
company and confer the same powers upon it as the other
possessed, and as far as the property or franchises of the
old company are necessary to the public use, it can author-
ize the new company to take them on making due com-
pensation therefor.5
Where the charter of a railroad company was subject to
alteration and repeal, an amendment, giving a municipal
corporation owning stock in said company, the right, in
consequence of the failure of a large number of the sub-
scribers to the stock to make good their subscription,
and the necessary reduction of the stock and shortening
of the route, to elect seven instead of four of the di-
Mayor, etc., of Baltimore v. Pittsburg & Connellsville R. R. Co., 1
Abbot's Circuit, 9.
2 Spring Valley Water-works v. Schottler, 110 U. S. 347; Greenwood v.
Union F. R. R. Co., 105 U. S. 13.
3 Hoge v. R. & D. R. R., 99 U. S. 348.
* Charlestown v. Branch, 15 Wall. 470; Tomlinson v. Jessup, 15 Wall.
454.
5 Greenwood v. U. F. R. R. Co., 105 U. S. 19.
2158
ECONOMIC LEGISLATION.
rectors, as originally provided, is not a violation of the
contract.¹
1
A grant, by the constitution of a state, of a privilege to
a corporation is not subject to repeal or change by the
state legislature.2
The Kentucky act of February 14, 1856, provided that
all privileges and franchises thereafter granted to corpora-
tions, should be subject to amendment or repeal. The L.
& P. R. Co. had theretofore been incorporated, and un-
der its charter had built and operated a street railroad on
Bank street, Louisville. Thereafter, in 1866, the C. P.
Ry. Co. was incorporated, and by its charter empowered
both to build and operate street railways, with the consent
of the city council, and to lease or purchase the L. & P.
railroad, its franchises and all property. It thereupon
purchased the L. & P. R. Co., its franchises and prop-
erty, and operated the road on Bank street. The corporate
life of the L. & P. R. Co. was without limit; that of the
C. P. R. Co. was limited to thirty years. Thereafter, in
1872, the L. & C. Ry. Co., which was incorporated in 1864,
purchased from the C. P. Ry. Co., all of its roads, prop-
erty, and franchises. Held: That the corporate existence
of the L. & P. Ry. Co., and its right as a corporation to
operate its road, did not pass by the sale to the C. P. Ry.
Co., nor by that to the L. & C. Ry. Co.; that the corporate
life of the C. P. Ry. Co. was not extended beyond thirty
years by the purchase from the L. & P. R. Co.; that the C.
P. Ry. Co., and the L. & C. Ry. Co., each operated its road
under its own charter; that each of said charters, having
been granted subsequent to the act of 1856, was subject to
the provisions of that act, and that their amendment or
repeal was constitutional.3
The history of the reservation clause in acts of incorpo-
ration supports the position that whatever right, fran-
1 Miller v. The State, 15 Wall. 478.
' New Orleans v. Houston, 119 U. S. 265.
3 Henderson v. Central Passenger Ry. Co., 21 Fed. Rep. 358.
UNITED STATES.
2159
chise, or power in the corporation depends for its existence
upon the grauting clause of the charter is lost by its re-
peal.¹
In Turnpike Co. v. State, 3 Wall. 210, Davis, J., said :
"We have supposed, if any thing was settled by an un-
broken course of decisions in the federal and state courts,
it was that an act of incorporation was a contract between
the state and the stockholders. All courts at this day are
estopped from questioning this doctrine. It received its
ablest exposition in the case of Dartmouth College v.
Woodward (4 Wheat. 418), which case has ever since been
considered a landmark in the profession. When there is
no contract in the charter of a company, no exclusive
privileges conferred, either in express terms or by neces-
sary implication, whatever may be the injurious effects or
consequences of rivals, they are not the subject of legal
redress."
The prohibition in the constitution of the United States
against the passage of laws impairing the obligations of
contracts applies to the constitution as well as the laws of
each state.2
Where power was given to a corporation to make by-
laws, etc., provided that the same be not repugnant to the
constitution and laws of the United States or repugnant
to the act of incorporation; and the board of directors
was given the power to establish such rates of toll for the
conveyance of persons or property upon the same, as they
shall from time to time by the by-laws determine, it was.
held that this power to act by by-laws did not release the
company from restrictions upon the amount of rates con-
tained in general and special statutes of the states.³
3 The
charter of a railroad corporation is a contract within the
meaning of the federal constitution, and the corporation
may be protected by its charter against absolute legislative
¹ Greenwood v. Freight Co., 105 U. S. 21.
2 New Orleans Gas Co. v. Louisiana Light Co., 115 U. S. 650.
3 Ruggles v. Illinois, 108 U. S. 526.
2160
ECONOMIC LEGISLATION.
control in the matter of rates for the carriage of passen-
gers and freight.' When the charter is granted subject to
such regulations as the legislature, from time to time, may
provide, or subject to the authority of the legislature to
alter or repeal it, in either of such cases the legislature
has the same power over rates or tolls that it had when
the charter was granted.2
A legislative grant of an exclusive right to supply gas
to a municipality and its inhabitants, through pipes and
mains laid in the streets; and upon condition of the per-
formance of the service by the grantee, is a grant of a
franchise vested in the state, in the consideration of the
performance of public service, and after part performance
by the grantee, is a contract protected by the constitution.
against state legislation to impair it.³
4
A state which, after granting a charter exempting the
property of a corporation from taxation, subsequently
passes an act taxing its property, passes a law violating
the obligation of a contract, and the same is void under
the constitution. But the power of the state legislature
to make a contract of such a character that, under the pro-
vision of the constitution, it can not be changed or abro-
gated, does not extend to subjects affecting public health
or public morals, so as to limit the future exercise of leg-
islative power on those subjects to the prejudice of the
general welfare, or cause the state to part with its police
power over such corporations, so as to allow them to be-
come nuisances.5
Chicago, Burlington & Quincy R. R. Co. v. Iowa, 94 U. S. 155; Peik
v. Chicago & N. W. R. Co., 94 U. S. 164; Winona & St. Peter R. R.
Co. v. Blake, 94 U. S. 180.
2 Ruggles v. Illinois, 108 U. S. 526.
3 New Orleans Gas Co. v. Louisiana Light Co., 115 U. S. 650; New Or-
leans Water Co. v. Rivers, 115 U. S. 674; Louisville Gas Co. v. Citz. Gas
Co., 115 U. S. 683.
* Home of Friendless v. Rouse, 8 Wall. 430; Washington University
v. Rouse, 8 Wall. 439.
5 Butchers U. Co. v. Crescent City Co., 111 U. S. 746; Beer Co. v.
Massachusetts, 97 U. S. 25; Patterson v. Kentucky, 97 U. S. 501; N. O.
UNITED STATES.
2161
1
Duration of charters.-The period for the existence
of a corporation can not be extended by implication be-
yond the time prescribed for its existence, except for the
purposes contained in its charter, and a grant to a corpo-
ration whose existence is limited by its charter to a term
of years, without words of perpetuity annexed, creates an
estate only for the existence of the corporation. Thus,
where the charter of a company gave it the right to erect
certain toll-gates and collect certain tolls for twenty-five
years, or as much longer as the state should fail to redeem
the franchise so granted by paying the cost of the work,
it was a contract relating only to the turnpike thus au-
thorized to be built; and where, after the term for which
the company was chartered had more than half expired,
the state gave it the new and additional privilege of erect-
ing a bridge and dike, etc., this can not be presumed to be
a perpetual privilege.'
See under "AMENDMENTS, REPEALS, ETC.," p. 2158.
Powers.-Corporations have no other powers and privi-
leges than such as are granted by their charters, or as are
necessary to carry into effect the powers expressly granted."
They possess only the powers conferred by the statute
creating them, and those necessarily implied. These
powers are restricted by the nature and objects of the cor-
poration, and are determined by the law in force when it
came into being.5
When a corporation is organized through articles of as-
Gas Co. v. La. Light Co., 115 U. S. 650: Boyd . Alabama, 94 U. S. 645 ;
Stone v. Miss., 101 U. S. 814; Bartemeyer v. Iowa, 18 Wall. 129; Louis-
ville Gas Co. v. Citizens Gas Co., 115 U. S. 683.
1 St. Clair Tpk. Co. v. Illinois, 96 U. S. 63.
2 City of Wheeling . Mayor of Baltimore and B. & O. R. R., 1 Hughes
C. C. 90; Thomas v. R. R. Co., 101 U. S. 71.
³ Huntington v. Nat. Savings Bank, 95 U. S. 388; Beaty v. Knowler,
4 Pet. 152; Runyan . Coster, 14 Pet. 122; Perrine . C. & D. Canal Co.,
9 How. 172; Tappan v. C. C. & C. R. R., 1 Flip. 174; Pullan v. C. & C.
Air Line, 4 Biss. 35.
Koru v. Mut. Assur. Society, 6 Cranch, 192.
5 Ches, & O. R. R. v. Miller, 114 U. S. 176.
1ģ
2162
ECONOMIC LEGISLATION.
sociation entered into under general laws, the memoran-
dum of association can not exceed the powers enumerated
therein; but those enumerated and claimed, which are not
warranted by statute, are void for want of authority.'
The charter of a company formed under the general in-
corporation law, can not create any privilege unknown to
the law of the state, unless the power was expressly given
in the general law. Grants by legislation to corporations
give only such powers as are expressly mentioned or
necessarily implied.³
2
Persons dealing with the managers of a corporation
must take notice of the limitations imposed upon their
authority by the act of incorporation. Corporations can
act only by their agents or servants."
The gift of new powers to a corporation does not de-
stroy its identity, nor change it into a new being. It is
not the province of a court to enlarge the powers of a
corporation beyond the limits of its charter because cir-
cumstances have changed."
When a charter power is once fully exercised by a cor-
poration, and exhausted, it is, in respect of further con-
tracts and rights, as though it had never been granted.8
A corporation has no rights of property except such
as are derived from its charter. It holds its property only
for the purposes for which it was created. Its rights are
measured by its charter and not by the common law.?
The power of a corporation to agree with the owner for
the purchase of lands includes the power to determine the
price by reference."
1
¹ Oregon R. R. v. Oregonian R. R., 130 U. S. 1.
2 New Orleans Nat'l Bank Ass'n . Wiltze, 10 Fed. Rep. 330.
3 Minturn v. Larue, 23 How. 436.
Pearce ». M. & I. R. R. Co., 21 How. 441.
5 Maxwell v. District of Columbia, 91 U. S. 557; Barnes v. D. C., 91 U.
S. 540; Dant v. D. C., 91 U. S. 557.
6 Central R. R. Co. v. Georgia, 92 U. S. 665.
7 Perrine v. C. & D. Canal Co., 9 How. 172.
8 E. Tenn. R. R. e. Frazier, 139 U. S. 288.
9 Alexandria Canal Co. e. Swan, 5 How. 83.
UNITED STATES.
2163
In the absence of an enabling statute, either general or
special, a railroad or other corporation can not purchase
and hold real estate indefinitely without regard to the uses
to be made of it.¹
Corporations may recover as plaintiffs for injuries done
to their property by a nuisance, and where the corporation
plaintiff is a religious corporation, and its members suffer
personal discomfort and apprehension of danger in the use
of the corporate property, the corporation may recover
for injuries. A religious corporation has the same right
to the comfortable enjoyment of its church for its own.
purposes that a private individual has to the comfortable
enjoyment of his house.²
Construction of.-The franchise of a corporation is lim-
ited strictly by its charter, and it can claim no right or
privilege which is not set out in its charter or which can
not be clearly implied therefrom; and, when the powers
of a corporation are enumerated in its charter, such enu-
meration excludes all other powers. When the words of
a charter of incorporation are plain and interpret them-
selves, extrinsic facts can have no bearing upon its mean-
ing.*
3
The rule of construction is strict against the corpora-
tion and in favor of the public, and nothing will be held
to have been surrendered by the public, unless expressed
in plain terms in the charter."
Ambiguities or doubts arising out of the terms of a
charter are to be construed most strongly against the cor-
poration and in favor of the public, and, where a right or
¹ Case v. Kelly, 123 U. S. 21.
6
2 Baltimore & Potomac R. R. v. Fifth Baptist Church, 108 U. S. 317.
3 Thomas . West Jersey R. R. Co., 101 U. S. 71; Charles River Bridge
Co. v. Warren Bridge, 11 Pet. 420.
Ruggles v. Illinois, 108 U. S. 536.
5 Jefferson Branch Bankv. Skelly, 1 Black. 436; Turnpike Co. v. Illinois,
96 U. S. 63; Fertilizing Co. v. Hyde Park, 97 U. S. 660.
6 Minturn v. Larue, 23 How. 435; St. Clair Co. Turnpike Co. v. Illinois,
96 U. S. 63; Oregon R. & Nav. Co. v. Oregonian R. Co., 130 U. S. 1.
2164
ECONOMIC LEGISLATION.
privilege is claimed by a corporation from its charter, it
will fail unless conceded to it by its charter, or unless it
can be clearly implied by the words thereof, used in their
natural and obvious meaning.' Thus, where the charter
of a railroad corporation empowers its directors to make
such agreements, "as the construction of their railroad or
its
management, and the convenience and interests of the
company and the conduct of its affairs may, in their judg-
ment, require, and also to build and run steamboats, etc.,"
a contract with a steamboat company, by which the rail-
road corporation guarantees a certain amount of receipts
from a line of boats to run in connection with the road,
is within the powers of such a corporation, and not ultra
vires.2
}
The grant of powers to a corporation by the legislature
to do certain things, i. e., to a railroad company to bring
its tracks into a city, does not carry with it immunity from
damages for injuries arising directly from the exercise of
such powers.³
Ultra vires.-The doctrine of ultra vires has no applica-
tion in favor of corporations for wrongs committed by
them.* Ultra vires means beyond the powers conferred
upon it by the legislature, and varying from the objects of
its creation as declared in the law of its organization. A
lease by a passenger transportation company of all its cars
and other property to another corporation, was held void,
because ultra vires and an abandonment of its duty to the
1 ¹ N. W. Fertilizing Co. v. Hyde Parke, 97 U. S. 659; Rice v. Minnesota
& N. R. R. Co., 1 Bl. 358; The Binghampton Bridge Case, 3 Wall. 51;
The Delaware Tax Case, 18 Wall. 206; Green Bay & M. R. R. Co. v.
Union Steamboat Co., 107 U. S. 98; Hill v. Memphis, 134 U. S. 198;
Farmers' L. & T. Co. v. Galesburg, 133 U. S. 156; Kelly v. Milan, 127 U.
S. 139; Norton v. Dyersburg, 127 U. S. 160.
2 Green Bay & M. R. R. Co. v. Union Steamboat Co., 107 U. S. 98. See
Pittsburg, C. & St. L. R. R. v. K. & H. B. Co., 131 U. S. 371.
3 B. & P. R. R. Co. v. Fifth Baptist Church, 108 U. S. 317.
* National Bank v. Graham, 100 U. S. 699.
UNITED STATES.
2165
2
public.¹ A lease made by one railroad to another, either of
which is not expressly authorized by law to enter into the
lease, is ultra vires and void. But where the charter of a
railroad corporation or the general laws applicable to it
manifest the intention of the legislature for the purpose of
securing a continuous line of transportation, of which the
road forms a part, to confer the power upon it of making
contracts with other railroad or steamboat corporations
to promote that end, such contracts are not ultra vires.³
3
Corporations are presumed to contract within their
powers, unless the contrary is shown. The doctrine of
ultra vires should not prevail where it would defeat the ends
of justice or work a legal wrong.*
Power to contract.-A corporation can make no con-
tracts and do no acts, either within or without the state
which created it, except such as are authorized by its
charter, and in such a manner as the charter authorizes,
and whenever a corporation makes a contract, it is a con-
tract of the legal entity, and not the contract of the indi-
vidual members, and the only rights it can claim are those
given to it as a legal entity. A corporation can have no
legal existence outside the boundaries of the state which
created it, but its residence in one state does not necessa-
rily prevent it from contracting in another state.
5
6
One who has contracted with a de facto corporation,
either by making a subscription or otherwise, is estopped
to deny its regular organization."
¹ Cent. Trans. Co. v.Pullman Co., 139 U. S. 24.
Pennsylvania R. R. Co. v. St. Louis R. R., 118 U. S. 290, 630; Thomas
v. R. R. Co., 101 U. S. 71; Oregon Ry. v. Oregonian R. R. Co., 130
U. S. 1.
3 R. R. Co. v. Steamboat Co., 107 U. S. 98; Branch . Jessup, 106
U. S. 468.
* Ohio & Miss. R. Co. v. McCarthey, 96 U. S. 258; Express Co. v. W.
N. & C. R. R., 99 U. S. 191.
5 Bank of Augusta v. Earle, 13 Pet. 519.
Bank of Augusta v. Earle, 13 Pet. 519; Runyan v. Coster, 14 Pet.
122; Christian Union v. Yount, 101 U. S. 352.
7 Chubb . Upton, 95 U. S. 665; Frost v. Frostburg Coal Co., 24 How.
2166
ECONOMIC LEGISLATION.
That ancient doctrine that a corporation must, in mat-
ters of contract, act under seal, has been departed from by
modern decisions, and it is now held that the agents of a
corporation may in many cases bind it and subject it to an
action in assumpsit.¹
It is not essential for a corporation to contract under
seal, and a corporation may bind itself by a simple con-
tract, except where the law requires the use of the corpo-
rate seal.2 But the mere fact that a deed has a corporate
seal attached does not make it the act of the corporation
unless the seal was placed there by some one duly author-
ized.³ A contract in writing may be binding on a corpora-
tion though a private seal of one of its officers was used
instead of the corporate seal, and though no record may be
found authorizing the officer to make such a contract, if
other evidence proves that he had such authority or that
it was afterward ratified.*
An assignment which purports on its face to be the con-
tract of the company, and is signed by the president for
the company, is the company's contract."
The authority of an agent is left to be inferred from the
powers usually exercised by such agent, and it is enough
if the transaction in question involves precisely the same
general powers, though applied to a new subject-matter."
The evidence that certain powers are habitually exercised
by an agent, with the consent of the corporation, pro-
vided they are such as can be conferred upon such agent,
278; Douglas Co. v. Bolles, 94 U. S. 104; Leavenworth Co. v. Barnes, 94
U. S. 70; Casey v. Gali, 94 U. S. 673; Close v. Glenwood Cemetery, 107
U. S. 466.
¹ Chesapeake & Ohio Canal Co. v. Knapp et al., 9 Pet. 564; Bank of
Metropolis v. Guttschlick, 14 Pet. 19.
2 Gottfried v. Miller, 104 U. S. 521; Bank of Metropolis v. Guttschlick,
14 Pet. 19; Keckner v. Bank of U. S., 8 Wheat. 338.
3 Koehler v. Black River Falls Iron Co., 2 Black, 715.
Eureka Co. v. Bailey Co., 11 Wall. 488.
• Gottfried v. Miller, 104 U. S. 521.
6 Merchants' Bank v. State Bank, 16 Wall. 604.
UNITED STATES.
2167
defines and establishes the powers of such agent, and binds
the corporation by his acts.¹
A corporation is responsible for the acts done by its
agents, either ex contractu or ex delicto, in the course of its
business and of their employment, in the same manner as
an individual would be under similar circumstances.²
When the president of a corporation executes in its be-
half and within the scope of its charter, a contract which
requires the concurrence of the board of directors, and the
board knowing that he has done so, does not dissent within
a reasonable time, it will be presumed to have ratified the
act. And if made by an agent of a corporation for a
purpose, authorized by its charter, and the corporation
receives the benefit without objection, it is presumed to
have authorized or ratified the contract of its agent.³
4
Like an individual, a corporation may ratify the acts of
its agents done in excess of authority, and such ratifica-
tion may, in many cases, be inferred from acquiescence in
those acts as well as from express adoption. Where the
officers of the corporation openly exercise powers affecting
the interests of third persons, which presupposes a dele-
gated authority for the purpose, and other corporate acts
subsequently performed show that the corporation must
have contemplated the legal existence of such authority,
the acts of such officers will be deemed rightful, and the
delegated authority will be presumed."
¹ Merchants' Bank v. State Bank, 16 Wall. 604.
2 Philadelphia, Wilmington & Balto. R. R. Co. v. Quigley, 21 How.
210; Orleans v. Platt, 99 U. S. 676; Salt Lake City v. Hollister, 118 U. S.
256.
Rolling Mill v. R. R., 120 U. S. 256; Bank of Columbia v. Patterson,
7 Cranch, 299; Bank of U. S. v. Dandridge, 12 Wheat. 64; Zabriskie v.
R. R., 23 How. 381; Mining Co. v. National Bank, 96 U. S. 640; Pneu-
matic Gas Co. v. Berry, 113 U. S. 322; Ry. Co. v. Keokuk Bridge Co.,
131 U. S. 371.
4 Supervisors Marshall Co. v. Schenck, 5 Wall. 772; see C. R. 1. & P.
R. R. v. Howard, 7 Wall.-392; Pittsburg, C., etc., R. Co. v. K. & H.
Bridge Co., 131 U. S. 371.
5 Supervisors Marshall Co. v. Schenck, 5 Wall. 782.
2168
ECONOMIC LEGISLATION.
Where a corporation, like a railroad company, has
granted to it a franchise intended to be exercised for the
public good, any contract which disables the corporation
from performing those functions or which transfers to
others the right and powers conferred by charter (as by
lease) is a violation of the charter with the state, and is
void as against public policy.¹
A corporation can not disable itself by contract from
the performance of public duties which it has undertaken,
and thereby make public accommodation or convenience
subservient to its private interests. See also "BONDS,
DEBTS, ETC.," post.
2
A corporation may make a valid contract with its pres-
ident, renewing, extending and increasing the rate of in-
terest upon its own past due bond held by him, the con-
tract being a fair and equitable one.³
Officers, directors, etc.-Directors of corporations and
all persons who stand in a fiduciary relation to other par-
ties and are clothed with power to act for them are not
permitted to occupy a position which will conflict with the
interests of parties they represent and are bound to protect; ·
they can not as agents or trustees enter into or authorize
contracts on behalf of those for whom they are appointed
to act and then personally participate in the benefit. Their
dealings with corporations are viewed with jealousy, and
may be set aside on slight grounds.5
The provision in a charter "that the directors shall
have power to do whatever shall appear to them to be
necessary and proper to be done for the well ordering of
the interests of the proprietors, not contrary to the laws
of the state,” was not intended to give unlimited power,
¹ Thomas v. R. R. Co., 101 U. S. 71.
2 Gibbs v. Baltimore Gas Co., 130 U. S. 396.
Bradley v. Williams et al., 3 Hughes C. C. 26.
Wardell v. R. R. Co., 103 U. S. 651.
5 Twin Lick Oil Co. v. Marbury, 91 U. S. 587.
UNITED STATES.
2169
but the exercise of a discretion within the scope of the au-
thority conferred.¹
The degree of care required of directors depends on the
subjects and matters to which it is to be applied, and each
case is to be determined in view of the circumstances.2
Individuals elected and serving as officers of a corpora-
tion may incur statutory liability for corporate debts, al-
though some irregularities may have occurred in their
election.3
The president of a railroad company is not personally
liable for losses, alleged to have resulted to the purchasers
of its bonds, through fraudulent representations contained
in circulars of the company signed by the president.
There is no privity or trust relation existing between the
president of a railroad company and the purchasers of its
bonds. For any improper or fraudulent appropriation of
the proceeds of the bonds, the president is only liable to
the company or its stockholders, unless it be to a judg-
ment creditor with an execution returned nulla bona.¹
The relation existing between the president of a cor-
poration and the corporation does not preclude his pur-
chase of a bond of the corporation from a receiver of said
corporation, where the transaction is made in good faith."5
But the directors and officers of a corporation, owing
duties to its stockholders and creditors, can not combine
to obtain the corporation's property at a sacrifice by
means of a judicial sale hurriedly conducted or by other
similar means.6
When an officer of a railroad construction company has
full charge for it of location and construction, and is au-
thorized to draw checks and drafts, and is charged with
1
¹ Beaty v. Knowler, 4 Pet. 152.
1
2
Briggs v. Spaulding, 141 U. S. 132.
'Providence S. E. Co. v. Hubbard, 101 U. S. 188.
• Van Wirt v. Winston, 115 U. S. 288.
'M'f'g Co. v. Bradley, 105 U. S. 175.
• Jackson v. Sudeling, 21 Wall. 616.
VOL. II-56
}
2170
ECONOMIC LEGISLATION.
the management of its business, notes given by him to pay
a debt for the construction of the road is authorized.¹
A board of directors of a corporation, to whom the
president communicates his execution of a contract for
the corporation, which is within its corporate powers, but
unauthorized by the board, will be presumed to have rati-
fied the act unless it dissents within a reasonable time. A
delay of six months is an unreasonable delay."
2
A court of equity has jurisdiction, at instance of stock-
holders in a corporation, to restrain the corporation and
those who have the control and management thereof, from
acts tending to the destruction of its franchises, from the
violations of the charter, from misuse or misappropriation
of the corporate powers or property, and from other acts
prejudicial to the stockholders amounting to a breach of
trust.
3
Bonds, debts, etc.-Private corporations may borrow
money or become parties to negotiable paper, in the trans-
action of their legitimate business, unless expressly pro-
hibited.*
The subsequent ratification, by the legislature of differ-
ent states, of the illegal act of a corporation, which is
domiciled in each of the states, in executing a mortgage,
is equivalent to a previous authority granted.5
When a corporation has power, under any circumstances,
to issue negotiable securities, the bona fide holder has a
right to presume they were issued under the circum-
stances which gave the requisite authority, and they are
no more liable to be impeached for any infirmity in the
hands of such a holder than any other commercial paper."
1
¹ Fitzgerald, etc., Co. v. Fitzgerald, 137 U. S. 98.
2 I. R. M. Co. v. St. Louis, etc., R. R., 120 U. S. 256; Pittsburg R. R.
v. Keokuk Bridge Co., 131 U. S. 371.
3 Pond v. Vt. Valley R. R., 12 Blatch. 280; Blackburn v. S. M. & U. R.
R., 2 Flip. 525.
6
C. R. I. & P. R. R. v. Howard, 7 Wall. 392.
5 Graham v. B. H. & E. R. R. 118 U. S. 161.
Supervisors v. Schenck, 5 Wall. 772; Knox v. Aspinwall, 21 How.
539; Bissell v. Jeffersonville, 24 How. 299.
UNITED STATES.
2171
It is within the power of a legislature which creates a
corporation and grants franchises to it, to authorize it to
sell its franchises. A corporation which is authorized to
sell its franchises is authorized to mortgage them.' It has
been held that the Iowa law authorizing a railroad com-
pany to lease its railway, and providing that the lessee
company shall be liable to the same extent as the lessor
company was, does not discharge the lessor company from
any of its corporate liabilities. See "Powers to contract,"
p. 2165.
A corporation which has the exclusive right to the hy-
draulic powers and privileges created by the water which
it takes from a river, and to "use, rent, or sell the same
or any portion thereof, as it may deem expedient," has a
right to mortgage such powers and franchises.'
3
There is nothing in the nature of a corporate franchise
under the laws of Louisiana which forbids its transfer with
other property of the corporation. But immunity from
taxation is not such a franchise of a railroad corporation.
as will pass by a sale under a mortgage or statutory lien
on the property and franchises of the company.*
In the case of the W. U. Tel. Co. v. Union Pac. R. R.,
50 Fed. Rep. 28, it was held that under the general rule
that the grant of a franchise of a public nature is personal
to the grantee, and can not be alienated without the con-
sent of the government, the privilege granted to the Union
Pacific Railway Company by the acts of 1862 and 1864, of
constructing and operating a telegraph line along its right
of way for public and commercial uses, carried with it a
corresponding obligation on the part of the company to
¹ Willamette Manufacturing Co. v. Bank of British Columbia, 119 U.
S. 191.
2 C. & N. W. R. R. Co. v. Crane, 113 U. S. 424.
³ N. O., etc., R. R. v. Delamore, 114 U. S. 501.
4 Morgan . Louisiana, 93 TT. S. 217; E. Tenn. R. R. v. Hamblen Co.,
102 U. S. 273; Wilson v. Gaines, 103 U. S. 417; Memphis & Little Rock
R. R. v. Berry, 112 U. S. 609; L. & N. R. R. v. Palmes, 109 U. S. 244; C.
& O. R. R. v. Miller, 114 U. S. 176.
2172
ECONOMIC LEGISLATION.
itself operate such line; and it had no authority to trans-
fer its franchise to any other corporation;¹ that such au-
thority could not be inferred from section 19 of the act
of 1862, which authorized the company in discharge of its
obligations, in the first instance, to make an arrangement
with the companies owning the then existing telegraph
line between San Francisco and the Missouri river, whereby
that line might be removed and placed upon the railroad
right of way, the company having failed to make such an
arrangement, and having accepted the whole franchise by
constructing a new line of its own; and that in view
of the fact that the telegraph franchises, granted by the
Union Pacific Acts, were inalienable by the grantees, and
also in view of the express reservation therein of the
right to add to, alter, amend, or repeal, congress had full
power to pass its act of August 7, 1888, directing the rail-
road and companies which received government aid to
henceforth operate their telegraph lines by themselves
alone and through their own officers and employees.
2
A corporation is liable for torts committed or contracts
made by its servants and agents, by its authority, express
or implied; but a railroad corporation is not responsible.
for an injury done to a passenger in one of its trains by
the conductor of the train, if the act is done in self-defense
against the passenger, and under a reasonable belief of
immediate danger.³
It has been held that the doctrine of punitive damages
should apply in a case where a corporation, by its control-
ling officers, wantonly disturbed the peace of the commu-
nity, and by the use of violent means endangered the
lives of citizens in order to maintain rights for the vindi-
cation of which, if they existed, an appeal should have
¹ See also W. U. Tel. Co. v. U. P. R. R., 3 Fed. Rep. 1.
'Salt Lake City v. Hollister, 118 U. S. 256; Denver, etc., R. R. v. Har-
ris, 122 U. S. 597; Hot Springs R. R. v. Williamson, 136 U. S. 121.
'N. O. & N. W. R. R. v. Jopes, 142 U. S. 18.
UNITED STATES.
2173
been made to the judicial tribunals of the country. That
where the governing officers of a corporation were in actual
command and directing the movements of what one of
the witnesses described as the "Denver and Rio Grande
forces," which were avowedly organized for the purpose of
driving the other company and its employees, by force,
from the possession of the road in question, the company
directed that to be done, within the meaning of the rule
holding corporations responsible for the misconduct of their
servants in the course of its business and of their employ-
ment.¹
1
A mortgage by a railroad corporation of "all the pres-
ent and future to be acquired property of the company,
including the right of way and land occupied, and all rails
and other materials used therein or procured therefor," in-
cludes the rolling stock of the road.2
Where an incorporated company would be the proper
complainant in a chancery suit, but refuses, or elects not
to bring the suit, when required by the stockholders so
to do, and the controversy is between the different classes
of stockholders, a court will entertain a bill brought by a
stockholder to settle such controversy.3
When during the pendency of a suit, a corporation sur-
renders its charter, which is accepted by the legislature, it
becomes defunct, and the suit abates, unless the legislature
by some act saves the right of action against the corpora-
tion.*
The original certificate of incorporation of a chartered
company, taken in connection with other evidence, and
especially the record of a former case, in which the cor-
poration recovered judgment against the same defendant,
¹ Denver & Rio Grande R. R. v. Harris, 122 U. S. 610; Minneapolis &
St. Louis R. R. Co. v. Beckwith, 129 U. S. 26.
2 Pullan v. Cincinnati Air Line, 4 Biss. 35.
3
City of Wheeling v. Mayor of Baltimore and B. & O. R. R., 1 Hughes,
C. C., 90.
* Greeley et al. v. Smith et al., 3 Story, 657.
2174
ECONOMIC LEGISLATION.
without objection being taken to its capacity to sue, is
competent and sufficient between those parties, to prove
that the plaintiff had in good faith attempted to legally
organize as a corporation, and had long acted as such,
and was at least a corporation de facto; which is all that is
necessary to enable it to maintain an action against any
one, other than the state, who has contracted with the cor-
poration or has done it a wrong.¹
While nul tiel corporation, or that the plaintiff is not,
and never was a corporation, is a good plea in bar, because
it goes to show that the plaintiff can never maintain any
action whatever; yet misnomer or mere mistake in
the name of a corporation plaintiff, which does not
affect its capacity to sue in the right name, is plead-
able in abatement only, and is waived by pleading to
the merits.2
The railroad company and not the owner of all its stocks
and bonds, own its right of way; and the latter can not
maintain an action in relation thereto.3
Taxation. The power to tax exists in the states inde-
pendent of the federal government, and no investments
which corporations may make can impair its exercise.*
The franchises of a private corporation are subject to
taxation, even though the corporation has made invest-
ments in federal securities. The fact that a particular tax
bears heavily upon a corporation or a class of corpora-
tions is not enough of itself to render the tax unconstitu-
tional."
Where the charter of a railroad corporation provides
¹ Baltimore & Potomac R. R. Co. v. Fifth Baptist Church, 137 U. S.
568; Bank of U. S. v. Dandridge, 12 Wheat. 64; Conrad v. Atlantic Ins.
Co., 1 Pet. 386; Chubb v. Upton, 95 U. S. 665.
2 Baltimore & Potomac R. R. Co. v. Fifth Baptist Church, 137 U. S.
568; Society for Propagating the Gospel v. Pawlet, 4 Pet. 480.
3
³ Fitzgerald v. Missouri Pac. Ry. Co., 45 Fed. Rep. 812.
• Providence Ins. v. Massachusetts, 6 Wall. 611.
"Society for Savings v. Coite, 6 Wall. 594.
• Veazie Bank v. Fenno, 8 Wall. 533.
UNITED STATES.
2175
that said corporation shall pay the same annual license
tax on each car run by it as is paid by the other railroad
corporations in the city, said tax being thirty dollars per
car, it does not constitute a contract that the annual tax
per car shall never exceed said sum of thirty dollars, and
is not protected by the constitution of the United States,
and a subsequent act of the legislature raising this annual
tax to fifty dollars is not unconstitutional.'
A state law requiring certain corporations to pay an-
nually a tax on the excess of the market value of their
capital stock over the value of their real estate is not a
property tax, but a franchise tax, and is valid.2
A tax can be just and equal on railroad corporations only
by taxing the profits.³
The provision of an act requiring that every gas com-
pany shall pay an annual tax of one-half of one per
cent upon its gross receipts, and five per cent upon
dividends earned and declared in excess of four per cent by
way of a license for the right to continue and act as a cor-
porate association, and for its failure to do so shall be
restrained from the exercise of its corporate franchise
until payment is made, imposes a license fee for the exer-
cise of its corporate franchise, and not a tax upon its
property, within the terms of a lease, whereby one gas
company granted to another its works and property for
the term of twenty years, at a certain rental, with the con-
dition that the lessee should pay "all assessments and
taxes lawfully assessed or levied upon its real or personal
property, franchises, capital stock, or gross receipts" of
the lessor during the time."
The legislature of the State of Illinois can constitution-
ally assess and tax the capital stock of gas companies,
¹ Union Pass. R. Co. v. Philadelphia, 101 U. S. 528.
2 Hamilton M'f'g Co. v. Mass., 6 Wall. 632; Provident Ins. Co. v. Mass.,
6 Wall. 611.
3 Paine v. Wright et al., 6 McLean, 395.
* Jersey City Gas-light Co. v. United Gas Imp. Co., 46 Fed. Rep. 264.
2176
ECONOMIC LEGISLATION.
{
while it exempts the stock of purely manufacturing com-
panies from such taxation.¹
1
Under the Public Statutes of Massachusetts, chap. 13, sec.
40, which provides that every railroad and telegraph com-
pany shall pay annually a tax upon its corporate franchise,
at a valuation thereof equal to the aggregate value of the
shares in its capital stock, after deducting from such valua-
tion such portion as is proportionate to the length of the line
lying without the state; and also an amount equal to the
value of the real estate and machinery located and subject
to local taxation within the state, it was held, that the right
to tax telegraph companies under this statute is not im-
paired by Rev. St. U. S., secs. 5263-5266, conferring cer-
tain privileges on telegraph companies.2 These provisions
are constitutional, as applied to a corporation of another
state doing business there.³
The exercise of the authority which every state pos-
sesses to tax its corporations and all their property, real
and personal, and their franchises, and to graduate the
tax upon corporations according to their business or in-
come or the value of their property, when this is not done
by discriminating against rights held in other states, and
the tax is not on imports, exports, or tonnage, or trans-
portation to other states, can not be regarded as conflict-
ing with any constitutional power of congress.*
The legislature has power to establish a municipal cor-
poration and to confer on it a power of taxation, and the
circuit courts will not enter upon an inquiry as to whether
the defendant, who is taxed by it, is benefited or not by
being included within the corporate limits, with a view
of determining the validity of the tax. That inquiry is
properly a legislative and not a judicial one.
¹ Williams v. Rees, 2 Fed Rep. 882.
2 Atty. Gen. v. W. U. Tel. Co., 33 Fed. Rep. 129.
3 Mass. v. W. U. Tel. Co., 141 U. S. 40.
5
♦ Minot v. Philadelphia, Baltimore & Wilmington R. R., 15 Wall. 206.
Gold Hill v. California S. M. Co., 5 Sawyer, 575.
UNITED STATES.
2177
The circuit court will give relief under the laws of the
state the same as the state court, and in the construction
of the tax laws, the circuit court will follow the supreme
court of the state.¹
2
Exemption from.-Legislatures unrestrained by some
constitutional limitation have full power to provide in an
act creating a corporation for an exemption of its property
from taxation, and such a provision in the charter of a
corporation constitutes a contract which the state may not
subsequently impair. The legislature of a state may ex-
empt particular parcels of property or the property of par-
ticular persons or corporations, or may limit the amount
or rate of taxation to which said property shall be sub-
jected, and, when such immunity is conferred, it becomes
a part of the contract and is equally inviolate with its
other stipulations. But, before such exemption or limita-
tion can be admitted, the intent of the legislature to con-
fer it must be clear beyond a reasonable doubt, and must
be expressed in the charter in clear and unmistakable lan-
guage.³
Where the purposes for which a corporation may hold
property are specified in connection with its exemption
from taxation, only such property as is acquired for the
purposes specified is so exempted.*
A statute exempting all the property of a corporation
(railroad) from taxation exempts not only its real estate,
plant (rolling stock), but also its franchise, but immunity
from taxation is not of itself a franchise of a corporation
¹ Paine v. Wright et al., 6 McLean, 395.
5
2 East Tenn. V. & G. R. R. Co. v. Pickerd, 24 Fed. Rep. 614; Home of
the Friendless v. Rouse, 8 Wall. 430; Washington University v. Rouse,
8 Wall. 439; Wilmington & W. R. R. Co. v. Reid, 13 Wall. 264; R. & G.
R. R. Co. v. Reid, 13 Wall. 269.
³ Minot v. Philadelphia, Baltimore & Wilmington R. R., 15 Wall. 206.
• Bank of Commerce v. Tennessee, 104 U. S. 493.
5 R. & G. R. R. Co. v. Reid, 13 Wall. 269; W. & W. R. R. Co. v. Reid,
13 Wall. 264.
2178
ECONOMIC LEGISLATION.
(railroad in this case) which passes without .other descrip-
tion to a purchaser of its property.'
Whether a corporation has by non-user forfeited its
title to an exemption from taxation must be tried by a di-
rect proceeding by the public authorities, and not by a suit
between the parties.2
Where a state granted a charter to a railroad corpora-
tion, and subsequently amended such charter by exempt-
ing the property of said corporation from taxation, a sub-
sequent corporation, created by said state with all the
powers and privileges of the first, possesses the same im-
munity from taxation.³ But a grant to one company of the
powers and privileges of another for the purpose of mak-
ing and using a railroad does not carry with it the exemp-
tion from taxation enjoyed by the other road, but only
such privileges and powers as were essential to the opera-
tions of the company."
Where the legislature of New York, on April 5, 1866,
provided that the property of the N. Y. & O. M. R. R.
should be exempt from taxation until a certain event
should happen; but for a term not exceeding ten years,
and on April 29, 1874, and, as was alleged, before such event
aforesaid had happened, the legislature passed an act tax-
ing the property of said corporation, it was held: 1st.
That the provisions found in the act of 1866 constituted
amendments of the charter of the corporation. 2d. That
the provisions of that act taken together, including the
provisions for exemption from taxation, constituted a con-
Morgan v. Louisiana, 93 U. S. 217; R. R. Co. v. County of Hamblen,
102 U. S. 273; Wilson v. Gaines, 103 U. S. 417; Memphis R. R. v. Com-
missioners, 112 U. S. 609; C. & O. R. R. v. Miller, 114 U. S. 176; L. & N.
R. R. v. Palmes, 109 U. S. 244.
2 Mackall v. C. & O. Canal Co., 94 U. S. 308.
3 Humphrey v. Peques, 16 Wall. 244; Tenn. v. Whitworth, 117 U. S.
139.
4
Memphis, etc., R. R. v. Gaines, 97 U. S. 697; Annapolis, etc., R. R. Co.
v. Anne Arundel Co., 102 U. S. 1.
UNITED STATES.
2179
tract, and one and the same contract. 3d. That the pro-
visions for exemption from taxation could not, as against
the corporation and the stockholders, be abrogated by the
state without impairing the obligations of the contract,
unless the right to do so was reserved by the state as part
of the same contract. 4th. That, by reservations in the
constitution and the statutes of the state, the legislature
had the right to amend the charter of the corporation, by
repealing such exemptions from taxation.'
The legislative grant of a privilege to erect gas-works
and make and vend gas in a municipality for a term of
years does not exempt the grantees from the imposition
of a license tax for the use of the privileges conferred. In
order to establish a legislative contract to exempt from
taxation, the statute must be explicit and unmistakable,
and without doubtful words.2
A bank, by its charter, was authorized to hold a lot of
ground as a place of business, and was also to pay a tax
of one-half of one per cent upon its property. It after-
ward purchased, under a deed of trust taken by it to se-
cure a debt, other portions of the property. Held, that
the last property was subject to the general tax and not
the tax fixed by the charter.3
Where the State of Ohio chartered a bank in 1845, and
stipulated therein that a certain amount of taxation in
lieu of all other taxes should be imposed, etc., and, in
1852, passed another act levying a greater tax on a differ-
ent principle; the latter act was held to be an act im-
pairing the obligation of a contract, and therefore void.
The fact that Ohio adopted a new constitution in 1851,
which declared that taxes should be imposed upon banks, as
was done by the act of 1852, does not alter the case or re-
2
1 Hewitt, Trustee, v. N. Y. & O. M. R. R. Co., 12 Blatch. 452.
Memphis Gas-Light Co. v. Taxing District of Shelby Co., 109 U. S.
398.
3 Bank v. Tennessee, 104 U. S. 493.
2180
ECONOMIC LEGISLATION.
lease the state from liabilities imposed upon it by the con-
stitution of the United States.¹
1
Consolidation of companies.-Where an act of con-
solidation provided that the new company should "for its
government be entitled to all the powers and privileges,
and be subject to all the restrictions and liabilities con-
ferred and imposed" upon another company, the phrase,
"for its government," is held to have been intended, not
as a limitation of its powers, but for its regulation and
control.2
3
The usual effect of the consolidation of two railway
companies is to extinguish the two constituent companies
and make them one new company. But where the two
corporations existing in different states are consolidated
by one selling its franchises and property to the other,
the latter becomes the consolidated corporation, and its
citizenship is to be determined in determining its rights
to sue in the federal courts.*
To effect a consolidation of railroad companies subsist-
ing under special charters not providing therefor, the con-
sent of every stockholder must be given, and any one dis-
senting stockholder is entitled to an injunction against
such consolidation.5
Where two corporations are created by adjacent states
with the same name to construct a canal, etc., and after-
ward their interests are united by subsequent acts of the
states respectively, this does not merge the separate cor-
porate existence of such corporations, but creates a unity
of stock and interest only. Every act of incorporation
must be construed in such a manner, if possible, as not
1
¹ Dodge v. Wolsey, 18 How. 331; Mechanics' Bank v. Thomas, 18 How.
384; Jefferson Branch Bank v. Skelly, 1 Black, 436; Franklin Branch
Bank v. Ohio, 1 Black, 474.
2 Tennessee v. Whitworth, 117 U. S. 139.
Ridgway Township v. Griswold et al., 1 McCrary, 151. See Clear-
water v. Meredith, 1 Wall. 25; Tomlinson v. Branch, 15 Wall. 460.
* Antelope Co. v. C. B. & Q. R. R., 4 McCrary, 46.
5 Mowbry v. Cincinnati & Indianapolis R. R. et al., 4 Biss. 78.
UNITED STATES.
2181
to exceed the sovereignty of the legislature in granting it.
It ought not therefore to be deemed to authorize any act
to be done which would exceed the jurisdictional power of
the state or interfere with rights of other states, as to con-
struct a canal, etc., in another state.¹
The act of consolidation works a dissolution of the old
companies. If one of the old companies has a contract
to do an act, it is not binding on the new company, the
new company being an entirely different company.2
Where two corporations are consolidated, they become a
new and entirely distinct corporation from the old ones,
and become subject to the law in existence at the time of
their consolidation. If the former corporations enjoyed
privileges and immunities prohibited by the laws in exist-
ence at the time of their consolidation, these privileges and
immunities are lost unless specifically reserved in the new
charter.3
4
Dissolution; forfeiture.-A private corporation, created
by the legislature, may lose its franchises by a misuser or
non-user of them. The grant of a corporate franchise is
of necessity subject to the condition that its privileges
will not be abused, or used to defeat the ends for which
they were granted; and if they are abused or misused
they may be withdrawn by due process of law.5
The establishment before a judicial tribunal, in which
an opportunity for defense is offered it, that a corporation
is insolvent, or that it has in any way exceeded or violated
the rules or restrictions prescribed by law, constitutes a
¹ Farnum v. Blackstone Canal Co., 1 Sumn. 46. See Bank of Augusta
v. Earle, 5 Pet. 519; Runyan v. Coster, 14 Pet. 122; N. & L. R. R. v. B. &
L. R. R., 136 U. S. 356.
2 Pullman Palace Car Co. v. Mo. P. Ry. Co., 115 U. S. 537.
3 R. R. Co. v. Georgia, 98 U. S. 359; Shields v. Ohio, 95 U. S. 319; R.
R. Co. v. Maine, 96 U. S. 499.
* Terrett v. Taylor, 9 Cr. 43.
5
Chicago Life Ins. Co. v. Needle, 113 U. S. 574; Terrett v. Taylor, 9
Cr. 43.
2182
ECONOMIC LEGISLATION.
sufficient reason for the state which created it to withdraw
its franchise; and an adjudication, after a fair trial, that
a corporation shall no longer enjoy its corporate fran-
chises, does not deprive it of its property without due
process of law, or deny it the equal protection of the
law.2
The legislature may provide that a corporation shall
cease to exist, or forfeit a particular right or privilege, un-
less it does certain things within a given time, and in case
of such failure, the prescribed consequences will follow of
course, without the intervention of a court, or any pro-
ceeding to declare or establish the same.3
A right of way may be lost by abandonment; and a
non-user for more than ten years is sufficient evidence of
abandonment. Abandonment is to be more readily pre-
sumed where the easement is granted for the public bene-
fit, than where it is held for private use. When such a
right has been so abandoned, the state may grant it to an-
other corporation.*
An injunction will be granted to prevent a franchise of
a corporation from being destroyed, as well as to prevent
a party from violating it by attempting to participate in
its exclusive privileges."
6
Foreign corporations-Citizenship.-A corporation is
a citizen of the state which created it, and can have
no legal existence out of the bounds of sovereignty by
which it is created; for as it exists only in contemplation
of law, therefore when that law ceases to operate, the cor-
poration can have no existence, and, although it may be
1 Chicago L. Ins. Co. v. Needles, 113 U. S. 583.
2 Terrett v. Taylor, 9 Cr. 43.
Hughes v. N. P. R. R., 18 Fed. Rep. 106.
• Henderson v. Central Passenger R'y Co., 21 Fed. Rep. 358.
5 Osborne v. Bank of U. S., 9 Wh. 738.
St. Louis v. Wiggins Ferry Co., 11 Wall. 423; Chicago & N. W. R. R.
Co. v. Whitton, 13 Wall. 270; Miller v. Dow, 94 U. S. 444.
'Bank of Augusta v. Earle, 13 Pet. 519; Ohio, etc., R. R. Co. v. Wheeler,
1 Black, 286; Myers v. Dorr, 13 Blatch. 22.
UNITED STATES.
2183
2
permitted to transact business, where its charter does not
operate, yet it can not by that means acquire a residence
there;' thus a Maryland corporation by taking from a
Virginia corporation with the assent of Virginia, a lease
of a railroad in Virginia, did not make itself a corpora-
tion of Virginia. And this, too, even when a corporation
is organized under the laws of one state and authorized
by the laws of another state to extend its road into the
latter; it does not become a citizen of the latter state by
exercising this authority unless the statute giving the per-
mission must necessarily be construed as creating a new
corporation of the state which grants this permission. A
corporation created by a territorial legislature becomes,
after the admission of the territory, a corporation of the
state.*
A corporation organized under the laws of one state is
a citizen thereof, and although afterward incorporated
under the laws of another state, it is not shorn of its
qualities as a corporation of the state under which it is
organized, and may elect to sue in the United States
court.5
A corporation, made up of several distinct companies,
chartered by the legislatures of different states, with a
capital stock which is a unit, and with only one set of
share-holders, who have an interest in all of its property,
wherever situated, being in its organization, management,
and in the ownership of its property one corporation,
having one board of directors, has a domicile in each state,
and in relation to each state is a separate corporation gov-
erned by the laws of that state. The corporators or share-
¹ Germania Fire Ins. Co. v. Francis, 11 Wall. 210; B. & O. R. R. Co. v.
Koontz, 101 U. S. 5.
2 B. & O. R. R. Co. v. Koontz, 104 U. S. 5.
3 Penn. R. R. Co. v. St. Louis, A. & T. H. R. R. Co., 118 U. S. 290;
Goodlet v. L. & N. R. R., 122 U. S. 391.
* Kansas Pac. R. R. Co. v. Atchinson, etc., R. R. Co., 112 U. S. 794.
5 Missouri, K. & T. Ry. Co. v. Texas & St. L. Ry. Co., 10 Fed. Rep. 497.
2184
ECONOMIC LEGISLATION.
holders, in the absence of any statute to the contrary, can
hold a meeting in any one of the said states and transact
business, so as to bind the corporation in respect to its
property every-where, without being put to the necessity
of holding repeated meetings in each of the states.¹
Railroad corporations created by two or more states,
though joined in their interests in the operation of their
roads, in the issue of their stock, and in the division of
their profits, so as practically to be a single corporation, do
not lose their identity; but each has its existence and its
standing in the courts of the country only by virtue of
the legislation of the state by which it was created, and
the union of name, of officers or business, and of prop-
erty does not change their distinctive character as sepa-
rate corporations. Thus where separate corporations,
having the same name, were incorporated in the States
of New Hampshire and Massachusetts, and were after-
wards, by the legislatures of both states, united into
one corporation, etc., and were for many years under
the same management, it was held that the New Hamp-
shire corporation was a citizen of that state, and allowed
to go into the circuit court of Massachusetts and bring an
action against a citizen of that state."
The fact that two railroad corporations organized in
two different states are consolidated under the laws of
those states, and have afterward operated the entire road
by virtue of that consolidation, does not prevent one of
the corporations from suing the other in the federal courts,
they being citizens of different states. A railroad com-
pany created by the laws of Iowa is in Iowa an Iowa
corporation, although it has been consolidated with a
company of Missouri."
¹ Graham v. B. H. & E. R. R., 118 U. S. 161.
3
2 Nashua & Lowell R. R. v. Boston & Lowell R. R., 136 U. S. 356.
3 St. L., A. & T. H. R. R. v. I. & St. L. R. R., 9 Biss. 144.
* Muller v. Dows, 94 U. S. 444; N. & L. R. R. v. B. & L. R. R., 136 U.
S. 356. See M. & C. R. R. Co. v. Alabama, 107 U. S. 581.
UNITED STATES.
2185
In the case of the United States v. Johns, 1 Wash. C.
C. 370 (April, 1806), the question is raised whether a cor-
poration is a person within an act of congress making it
an offense to destroy a vessel to the prejudice of the under-
writer, etc. Justice Washington does not deem it nec-
essary to decide the question, and in the syllabus of
the case, it is simply stated thus: "Quere, whether a
corporation is a person within the meaning of the act
of congress."
This question has since that time been settled, and it
has been denied that a corporation is a person within the
meaning of the 14th amendment of the constitution of the
United States for certain purposes, and not for others.¹
The term "inhabitant" as used in the first section of
the judiciary act, includes a foreign corporation engaged in
business in the district in which it is sued, according to the
laws thereof.2
The position of a corporation, as a citizen so far as ap-
plies to its right to sue and be sued in the courts is now
settled; at one time the supreme court held that a corpo-
ration aggregate can not be a citizen, and can not litigate
in the courts of the United States, unless in consequence
of the character of the individuals who compose it;3
which character must appear by proper averments on the
record; but that a suit by or against a corporation in its
corporate name must be presumed to be a suit by or
against citizens of the state which created the corporate
body, and no averment or evidence to the contrary is ad-
¹ Ins. Co. v. N. O., 1 Woods, 85; Pembina Mining Co. v. Pen., 125 U.
S. 181; Santa Clara Co. v. S. Pac. R. R. 118 U. S. 394; M. & St. L. R. R.
v. Beckwith, 129 U. S. 26; Missouri R. R. v. Mackey, 127 U. S. 205; M.
& St. L. R. R. v. Herrick, 127 U. S. 210.
2 Gilbert et al. v. New Zealand Ins. Co., 49 Fed. Rep. 884.
3 Hope Ins. Co. v. Boardman, 5 Cranch, 57; Bank of U. S. v. Deveaux,
5 Cranch, 61; Commercial & R. R. Bank of Vicksburg v. Secomb, 14
Pet. 60.
VOL. II-57
2186
ECONOMIC LEGISLATION.
missible for the purpose of withdrawing the suit from the
jurisdiction of a court of the United States.¹
In the case of Ohio & Miss. R. R. v. Wheeler, 1 Black.
295, Taney, C. J., said: “In the case of Bank of Augusta
v. Earle (13 Pet. 512), the court held, that the artificial
person or legal entity known to the common law as a
corporation can have no legal existence out of the bounds
of the sovereignty by which it is created; that it exists
only in contemplation of law and by force of law; and
where that law ceases to operate, the corporation can have
no existence. It must dwell in the place of its creation.
"It had been decided, in the case of the Bank v. Deveaux,
(5 Cr. 61), long before the case of the Bank of Augusta v.
Earle came before the court, that a corporation is not a
citizen, within the meaning of the constitution of the
United States, and can not maintain a suit in a court of
the United States against the citizens of a different state
from that by which it was chartered, unless the persons
who compose the corporate body are all citizens of that
state. But if that be the case, they may sue by their cor-
porate name, averring the citizenship of all the members;
and such a suit would be regarded as the joint suit of the
individual persons, united together in the corporate body,
and acting under the name conferred upon them for the
more convenient transaction of business, and consequently
entitled to maintain a suit in the court of the United States
against the citizens of another state.
"This question as to the character of a corporation, and
the jurisdiction of the courts of the United States in cases
wherein they are sued or have brought suit in their cor-
¹ Ohio, etc., R. R. Co. v. Wheeler, 1 Black. 286; Louisville, etc., R. R.
Co. v. Letson, 2 How. 497; Marshall v. B. & O. R. R. Co., 16 How. 314;
Covington Drawbridge Co. v. Shepherd, 20 How. 227; Bank of N. Y. v.
Nicholas, 4 Biss. 315; Fargo v. L. N. A. & C. R. R., 10 Biss. 273;
Williams v. M. K. & T. R. R., 3 Dill. 267; Eaton v. St. L. & U. S. Co., 2
McCrary, 262; M. K. & T. Ry. Co. v. T. & St. L. Ry. Co., 10 Fed. Rep.
497; St. L. A. & T. H. R. R. v. St. L. Ry. Co., 9 Biss. 144.
UNITED STATES.
2187
porate name, was again brought before the court in the
case of the L. C. & C. R. R. Co. v. Letson (2 How. 497),
and the court in that case, upon full consideration, de-
cided that, where a corporation is created by the laws of
the state, the legal presumption is that its members are
citizens of the state in which alone the corporate body has
a legal existence; and that a suit by or against a corpo-
ration in its corporate name, must be presumed to be a
suit by or against citizens of the state which created the
corporate body; and that no averment or evidence to the
contrary is admissible for the purpose of withdrawing the
suit from the jurisdiction of a court of the United States.
"The question, however, was felt by this court to be
one of great difficulty and delicacy, and it was again argued
and maturely considered in the case of Marshall v. B. & O.
R. R. (16 How. 314), and the decision in the case of the
L. C. & C. R. R. v. Letson reaffirmed.
"And again in the case of Covington Drawbridge Co.
v. Shepherd et al. (20 How. 232), the same question of
jurisdiction was presented and the rule laid down in the
two last-mentioned cases fully sustained. After these suc-
cessive decisions, the law upon this subject must be re-
garded as settled, and a suit by or against a corporation
in its corporate name is a suit by or against citizens of
the state which created it.
"A corporation having a charter from two different
states is not one and the same in both states. It has no
legal existence in either state, except by the law of the
state. Neither state could confer upon a corporation ex-
istence in the other, nor add to or diminish the power to be
there exercised. It may indeed be composed of and repre-
sent, under the corporate name, the same persons. But
the legal entity or person which exists by force of laws,
can have no existence beyond that of the state or sovereignty
which brings it into life and endues it with its faculties and
powers."
The principal place of business is no test of residence,
2188
ECONOMIC LEGISLATION.
whether of a corporation or a natural person, as a person
may reside in one state and have his principal or sole
place of business in another.'
A corporation can not be a resident of a state, within
the meaning of the act of Congress of 1887, other than
that in which it was incorporated. But one state may
make a corporation of another state its own.3
It is competent for the state, by its legislation, to deter-
mine the mode of creating corporations within its limits,
and it may, therefore, declare that a foreign corporation
shall become a corporation of the state by building a
railroad therein and filing a copy of its articles of incor-
poration with the secretary of state. It is the right of
each state in which a corporation transacts business to
require it to become a corporation of the state under and
by virtue of its own laws.*
It may not be easy, in all cases, to distinguish between.
the purpose to create a new corporation, which shall owe
its existence to the law or the statute under consideration,
and the intent to enable the corporation already in exist-
ence under the laws of another state to exercise its func-
tions in the state where it is so received. To make such
a company a corporation of another state, the language used
must imply creation or adoption in such form as to confer
the power usually exercised over corporations by the state
or by the legislature, and such allegiance as a state corpo-
ration owes its creator. The mere grant of privileges or
powers to it as an existing corporation, without more,
does not do this, and does not make it a citizen of the
state by conferring such powers.5
¹ Guinn v. Iowa Cent. R'y Co., 14 Fed. Rep. 323.
2 Miller ". Wheeler & Wilson M'f'g Co., 46 Fed. Rep. 882; see Camp-
bell v. Duluth S. S. & A. R'y Co., 49 Fed. Rep. 241.
3 Baltimore & O. R. R. v. Harris, 12 Wall. 63; N. & L. R. R. v. B. & L.
R. R., 136 U. S. 356.
* Stout v. Sioux City & Pac. R. R. Co., 3 McCrary, 1.
5 Penn. R. R. Co. v. St. Louis, Alton & Terre Haute R. R. Co., 113 U,
S. 290; Memphis & Charleston R. R. Co. v. Alabama, 107 U. S. 581; R.
UNITED STATES.
2189
Where a suit against a corporation was removed from a
state to a federal court, on the ground that the parties
were citizens of different states, the plaintiff residing in
the state where the suit was brought, and it was moved
to remand the suit, on the ground that the parties were
citizens of the same state, it was held that the burden of
proof was on the corporation to prove that it is not a citi-
zen of the same state as the plaintiff.¹
Where some of the stockholders of a corporation are
citizens of other states than that in which the corpo-
ration has its place of business, they may seek relief in
the circuit courts against an illegal taxation of their prop-
erty by that state, although there is no allegation that the
tax is in violation of the constitution and laws of the
United States; and in such case, the corporation may be
made a defendant.2
An act of the State of Georgia, which provides that a
certain railroad company of that state should have the
power to sell its railroad within the state to any corpora-
tion of another state, authorized by that state to buy it,
and that the company so buying should have all the rights,
privileges, etc., of the seller, does not, upon the said pur-
chase being made, constitute the latter a corporation of
the State of Georgia.³
Power to act outside of state. A corporation can make
contracts outside of the limits of its jurisdiction, which
will be binding, if such acts are authorized by its charter
and are performed by such officers and agents and in such
manner as the charter authorizes. A corporation is in-
deed a mere artificial being, invisible and intangible, yet
it is a person for certain purposes in contemplation of law
and has been recognized as such by the decisions of the
R. Co. v. Vance, 96 U. S. 450; R. R. Co. v. Harris, 12 Wall. 65; R. R. Co.
v. Wheeler, 1 Black. 286; Goodlett v. Louisville R. R. Co., 122 U. S. 391.
Copeland v. M. & C. R. R., 3 Woods, 651.
2 Paine v. Wright & I. B. R. R., 6 McLean, 395.
3
' Morgan & Graham v. East T. & V. R. R., 4 Woods, 523.
2190
ECONOMIC LEGISLATION.
courts, and like natural persons may make contracts in
countries where they do not reside and where they are not
personally present when the contract is made, and the va-
lidity of such contracts can not be doubted, provided
they are made in conformity with the laws of the place.'
Although a corporation must live and have its being in
the state where it is created, yet it does not follow that
its existence there will not be recognized in other places,
and its residence in one state creates no insuperable ob-
jection to its contracting in another. The corporation must
show that the law of its creation gave it authority to make
such contracts, yet, as in the case of a natural person, it is
not necessary that it should actually exist in the sovereignty
in which the contract is made. It is sufficient that its ex-
istence as an artificial person in the state of its creation
is acknowledged and recognized by the state or nation
where the dealing takes place, and that it is permitted by the
laws of that place to exercise there the powers with which
it is endowed. Every power, however, which a corporation
exercises in another state, depends for its validity upon
the laws of the sovereignty in which it is exercised; and
a corporation can make no valid contract, without the
sanction, express or implied, of such sovereignty; unless a
case should be presented in which the right claimed by a
corporation should appear to be secured by the constitu-
tion of the United States.2
If the policy of the state or territory does not permit
the business of a foreign corporation in its limits, or al-
low the corporation to acquire or hold real property, it
must be expressed in some affirmative way, it can not be
inferred from the fact that its legislature has made no
provision for the formation of similar corporations, or
allows corporations to be formed only by general law.
Telegraph companies did business in several states before
¹ Bank of Augusta v. Earle, 13 Pet. 519.
2 Runyan v. Coster, 14 Pet. 129.
UNITED STATES.
2191
their legislatures had created or authorized the creation
of similar corporations, and numerous corporations exist-
ing by special charter in one state are now engaged with-
out question in business in states where the creation of
corporations by special enactment is forbidden.¹
A corporation dwells in the place of its creation, but
may do business wherever its charter allows, and local
laws do not forbid.²
A corporation can not migrate, but may exercise its au-
thority in a foreign territory upon such conditions as may
be prescribed by the law of the place. One of these con-
ditions may be that it shall consent to be sued there. If
it do business there it will be presumed to have consented,
and will be bound accordingly.3
A corporation of one state, by going into another, as-
sents, as a prerequisite condition of its admission within
the jurisdiction of that state, to any license fee which that
state may thereafter impose upon the corporations of other
states doing business within its boundaries.*
5
A corporation created by a state can exercise none of
the functions and privileges conferred by its charter out-
side of that state and within the boundaries of any other
state except by the comity and consent of the latter, and
by general comity corporations created by one state are
allowed to carry on any lawful business in another and
to hold property, etc., therein. By the law of comity
among nations a corporation created by one sovereign
power is permitted to make contracts in another and sue
in its courts, and the same law prevails among the several
sovereignties of this Union. The comity between states
1
¹ Cowell v. Colorado Springs Co., 100 U. S. 59; Christian Union .
Yount, 101 U. S. 356.
' Canada Southern R. R. Co. v. Gebhard, 109 U. S. 527.
Ry. Co. v. Harris, 12 Wall. 65; Ex parte Schollenberger, 96 U. S. 377.
Philadelphia Fire Assn. v. N. Y., 119 U. S. 110.
5 Liverpool Ins. Co. v. Oliver, 10 Wall. 566; Runyan v. Coster, 14 Pet.
122.
2192
ECONOMIC LEGISLATION.
extends even to cases where the state is prohibited from
granting like charters to its own corporations; and foreign
corporations may transact a business in a state which, of
itself, can not authorize the like business.¹
Upon the principles of comity, the corporations of one
state are permitted to do business in another, unless it
conflicts with the law or interferes unjustly with the
rights of the citizens of the state into which it comes.2
Where there is no prohibitory legislation or action by a
state excluding foreign corporations, individual citizens.
can not complain because a foreign corporation is doing
business in the state."
Under a statute of Oregon providing that a foreign cor-
poration, before doing business in the state, must duly
execute a power of attorney appointing an agent upon
whom all process may be served in suits against such cor-
poration, it was held, that such a corporation, before com-
plying with said act, had no power to contract or sue in
the state; that the act was prohibitory, and any thing
done by the corporation contrary to it was illegal and
void. A party to a contract with a foreign corporation,
made in violation of the law of a state in relation to for-
eign corporations, is not estopped to show its illegality for
the purpose of preventing a recovery on it.3
A foreign corporation has the right to hold and occupy,
as lessee or otherwise, such property as is necessary or
convenient for the transaction of its business.¹
Power of state to limit or exclude.-The only limitation
upon the power of a state to exclude foreign corporations
from doing business within its limits, or having offices for
that purpose, or to exact conditions for allowing the cor-
¹ Bank of Augusta v. Earle, 13 Pet. 519; Tombigbee R. R. Co. v. Knee-
land, 4 How. 16; Cowell v. Colorado Springs Co., 100 U. S. 59.
2 Pensacola Tel. Co. v. W. U. Tel. Co., 96 U. S. 13.
³ In re C. B. Comstock & Co., 3 Sawyer, 218; Semple v. Bank of British
Columbia, 5 Sawyer, 88.
♦ Northern Transportation Co. v. Chicago, 7 Biss. 45.
UNITED STATES.
2193
poration to do business there, arises where the corporation
is in the employ of the federal government, or where its
business is strictly commerce, interstate or foreign. The
control of such commerce, being in the federal govern-
ment, is not to be restricted by state authority.¹
A state may prescribe the terms upon which a foreign
corporation may carry on its business in the state, but may
not impose limitations upon the power of a corporation
created under the laws of another state, to make contracts
within the state for carrying on commerce between the
states. This violates the clause of the constitution giving
congress this power of regulating the commerce between
states. A state may impose as a condition upon which a
foreign corporation shall be permitted to do business
within its limits, that in any litigation arising out of
transactions in the state it will accept as sufficient the
service of process on its agents or persons specifically
designated, and the condition would be eminently fit and
just. And such condition may be implied as well as ex-
pressed.2
A state has power to discriminate between its own cor-
porations and those incorporated by another state, and can
determine the degree of such discrimination, subject only
to such limitations on its sovereignty as may be found in
the fundamental law of the union; this is clearly estab-
lished.³ A law imposing a higher tax upon foreign cor-
porations doing business within a state, than upon domes-
tic corporations, is not in violation of the state constitution,
which declares that "taxation shall be equal and uniform
throughout the state."
¹ Pembina Mining Co. v. Pennsylvania, 125 U. S. 181.
2 St. Clair v. Cox, 106 U. S. 350; Cooper Mfg. Co. v. Ferguson, 113 U.
S. 727.
3 Ducat v. Chicago, 10 Wall. 410; Augusta v. Earle, 13 Pet. 519; Paul v.
Virginia, 8 Wall. 168; Ducat v. Chicago, 10 Wall. 410.
* Ins. Co. v. N. O., 1 Woods, 85; see Pembina Mining Co. v. Pennsyl-
vania, 125 U. S. 181.
2194
ECONOMIC LEGISLATION.
1
States may exclude foreign corporations altogether, or
they may exact security for the performance of their con-
tracts. But the statute of a state which provides that a
foreign corporation shall not transact business within its
borders unless it agrees beforehand not to remove suits,
brought against it by citizens of that state, into the fed-
eral courts, is void; and the agreement of the corporation,
made in conformity thereto, is also void.²
Where the statutes of a state prohibit a foreign corpo-
ration from transacting business within the state, until it
appoints a resident agent therein, it is not intended to
prevent such corporations from maintaining a suit in the
state courts, and it is not in the power of the state to pre-
vent it from maintaining a suit in the federal courts.3
Whether a foreign corporation is carrying on business in
a state must be determined by what it has done or is do-
ing, rather than what it may hereafter do, under powers
reserved to it in existing contracts, but not yet exercised.
For one person to supply the means to another to do busi-
ness with, is not the doing business by the former.*
A corporation organized under the laws of one state
does not by doing a single act of business in another state,
with no purpose of doing any other acts there, come
within the provisions of a statute of the latter forbidding
foreign corporations to carry on business within it, except
upon filing certificates showing their place or places of busi-
ness, their agents, and other matters required by the statute.5
Transactions such as the American Bell Telephone Com-
pany has had with the licensed corporations of Ohio, at its
place of business in Boston, and not elsewhere, is not the
carrying on of business by it in Ohio; nor are such li-
¹ Ducat v. Chicago, 10 Wall. 410; Paul v. Virginia, 8 Wall. 168; Liver-
pool Ins. Co. v. Oliver, 10 Wall. 566; Home Ins. Co. v. Augusta, 93 U.
S. 116.
2 Home Ins. Co. v. Morse, 20 Wall. 445.
'Orange Nat'l Bank v. Traver, 7 Sawyer, 210.
4 U. S. v. Am. Bell Tel. Co., 29 Fed. Rep. 17.
5 Cooper Manufacturing Co. v. Ferguson et al., 113 U. S. 727.
UNITED STATES.
2195
censed corporations its "managing agents." The con-
tracts between the American Bell Telephone Company
and the local telephone corporations create the relations
of licensor and lessor on the one side and licensee and les-
see on the other.¹
What laws govern; suits by and against.-See "Citizen-
ship," supra.
A corporation of one country doing business in another
country is subject to the laws of its own country. Any
thing done in that country under the authority of such
law, which discharges it from liability there, discharges it
every-where. Every person who deals with it any-where
impliedly subjects himself to such laws of its own country
affecting its power and obligations, as the known and es-
tablished policy of that government authorizes. And any
thing done at the legal home of the corporation which
releases it from liability, etc., at home, releases it every-
where. But a corporation of one state, when operating,
a railroad in another state as lessee, subjects itself, as to
that road, to all the local laws which the lessor would have
been amenable to, if the lease had never been made.3
2
4
A corporation doing business in a foreign territory con-
sents to be sued there, and so does a company which, in
pursuance of the laws of any state, appoints an attorney,
with power to receive service of process in any suit
against it. A corporation authorized by statute in a
state, and doing business there as if organized there, is
estopped, when sued in the federal courts, from denying
that it is duly organized under the laws of that state."
5
Personal service of citation on the party, or his voluntary
appearance is, with some exceptions, essential to the juris-
¹ U. S. v. Am. Bell Tel. Co., 29 Fed. Rep. 17.
* Canada Southern R. R. Co. v. Gebhard, 109 U. S. 527.
3 Railroad Commission Cases, 116 U. S. 347.
B. & O. R. R. v. Harris, 12 Wall. 65.
• Gilbert et al. v. Zealand Ins. Co., 49 Fed. Rep. 884.
• Blackburn v. S. M. & M. R. R., 2 Flip. 525.
2196
ECONOMIC LEGISLATION.
diction of the court. This doctrine applies in all its force
to personal judgments of state courts against foreign cor-
porations. The courts rendering them must have ac-
quired jurisdiction over them by personal service or vol-
untary appearance, whether the party be a corporation or
a natural person. There is only this difference: a corpo-
ration being an artificial being, can act only through
agents, and process therefore must be served on them.¹
When, after suit was begun by service upon an agent
duly authorized to receive service on a foreign corporation
as required by statute, the company was in contempt, and
the agent concealed himself, it was held that this was a
concealment of the corporation, and service on the at-
torney of record was sufficient thereafter.2
The fact that a corporation was organized under the
laws of another state does not, where its president was a
party to the litigation, relieve it from the rule which gov-
erns purchasers of property pending litigation about the
title.3
An Ohio judgment against an Indiana corporation, al-
lowed by Ohio laws to do business in that state, and to
receive service of process on its resident agent upon a
contract made in Ohio, is entitled to the same faith and
credit in Indiana as in Ohio, under the laws and con-
stitution of the United States. It is entitled to the same
faith and credit in Indiana as if the corporation had its
habitat in Ohio, and notice to the resident agent of such
corporation is notice to the corporation.*
The statute of limitations begins to run as against a
foreign corporation from the time it has a person within
the state upon whom process to begin a suit may be
served.5
¹ St. Clair v. Cox, 106 U. S. 350.
2 Eureka Lake Co. v. Yuba Co., 116 U. S. 410.
3 Whiteside v. Haselton, 110 U. S. 296.
4 Lafayette Ins. Co. v. French, 18 How. 404.
6 U. S. Express Co. v. Ware, 20 Wall. 543.
UNITED STATES.
2197
A corporation is conclusively presumed to be a resident
and inhabitant of the state under whose laws it is created,
and an employee, a citizen of a foreign state, can not
maintain an action for damages against a railroad corpo-
ration, in a state other than that under whose laws it was
organized merely because its agents are there found en-
gaged in its business.¹
A corporation can have no citizenship out of the state
by which it was created, and under section 11, of the ju-
diciary act of September 24, 1789, can not be made a party
to a civil suit, in a circuit or district court, by original
process in any other district than a district of the state by
which it was created. But where a company is incorpo-
rated by two states, a citizen of one of the states may sue
it in the other state in which it is incorporated.³
2
A foreign corporation may be "found" in the sense in
which that word is used in the judiciary act in a state
other than that by whose law it was created. Where, by
a local law, a foreign corporation is amenable to a suit in
the state courts, by service on its agent in said state, the
federal courts may be regarded as state courts, and may
take jurisdiction upon such service as would be good in
the state courts. But federal courts have no jurisdiction
in the absence of a local law conferring jurisdiction on the
state courts, though the corporation does business through
an agent, and has an office within the district where the
court is held.5
If a foreign corporation sued in a state court appear
there and remove the suit to the federal court, under the
12th section of the judiciary act, it is too late to object to
the jurisdiction of the state court, or to take any excep-
3
1 Campbell v. Duluth S. S. & A. Ry. Co., 49 Fed. Rep. 241.
2 Meyers v. Dorr, 13 Blatch. 22.
City of Wheeling v. Mayor, etc., Baltimore et al., 1 Hughes, 90.
* Knott v. Life Ins. Co., 2 Woods, 479. See Blackburn v. Selma,
Marion & Memphis R. R., 2 Flip. 525.
5 Eaton v. St. L. S. M. & S. Co., 2 McCrary, 363.
1
2198
ECONOMIC LEGISLATION.
tion to the process by which the corporation was brought
into court; and it is not a valid objection that, not being
an inhabitant or found within the district, the suit could
not have been commenced in this court.¹
A corporation which has a legal existence in any one
state can sue in the federal courts of any other state. It
is not necessary that it be a corporation created by the
laws of that state.2
A railroad company incorporated in a state in whose
courts it is sued by a citizen thereof can not remove the
suit into the United States circuit court, although it was
previously incorporated in another state.³
3
SUBDIVISION II.-FRANCHISES.
What are.-Franchises are special privileges conferred
by government upon individuals, and which do not belong
to the citizens of the country generally of common right.
It is essential to the character of a franchise that it should
be a grant from the sovereign authority; and in this coun-
try no franchise can be held which is not derived from a
law of the state.¹
The manufacture of gas and its distribution is not an
ordinary business in which every one may engage, as of
common right, but it is a franchise relating to matters of
which the public may assume control, and, when not for-
bidden by the organic law of the state, may be granted
by the legislature, as a means of accomplishing public
objects, to whomsoever and upon what terms it pleases.5
A grant by a county court (under section 26 of the cor-
¹ Sayles v. N. W. Ins. Co., 2 Curt. C. C. 212.
2 Ohio, etc., R. R. Co. v. Wheeler, 1 Black, 286; Bank of N. Y. v.
Nichols, 4 Biss. 315; Fargo v. L. N. A. & Ch. R. R., 10 Biss. 273; M. K.
& T. Ry. Co. v. T. & St. L. Ry. Co., 10 Fed. Rep. 497; St. L., Alton &
Terre Haute R. R. v. I. & St. L. Ry. Co., 9 Biss. 144; Williams v. M. K.
& T. R. R., 3 Dill. 267; Eaton v. St. L. S. U. & S. Co., 2 McCrary 262.
3 M. & C. R. R. Co. v. Alabama, 107 U. S. 581.
Bank of Augusta v. Earle, 13 Pet. 519.
5 N. O. Gas-Light Co. v. Louisiana L. & H. Co., 115 U. S. 650.
UNITED STATES.
2199
poration act, Oregon Laws, 530) of the use of a street to
a railway corporation, for the purpose of constructing and
operating a railway thereon, is a grant of a franchise, and
the order or agreement making the same must be con-
strued most strongly against the corporation and in favor
of the public, so that nothing shall pass thereby but what
clearly appears to have been intended."
Interpretation and construction of.-In the case of
Charles River Bridge v. Warren Bridge, 11 Peters, 544, the
rules of construction known to English common law were
adopted and applied to the interpretation of legislative
grants, and the principle was recognized that charters are
to be construed most favorably to the state, and that in
grants by the public nothing passes by implication. The
principle is this, that all rights which are asserted against
the state must be clearly defined, and not raised by infer-
ence or presumption, and if the charter is silent about a
power, it does not exist.2
When a statute makes a grant of property, powers, or
franchises to a private corporation, or to a private individ-
ual, the construction of the grant, in doubtful points,
should always be against the grantee and in favor of the
government, and this general rule of construction applies
with still greater force to articles of association organizing
a corporation under general laws.3
Where a contract with a municipal corporation is sus-
ceptible of two meanings, the one restricting and the
other extending the powers of the corporation, the con-
struction is to be adopted which works the least harm to
the state.¹
A contract with a municipal corporation, whereby the
corporation grants to the contractor the sole privilege of
¹ Burns". Multonomah Railway Co., 8 Sawyer, 543.
'The Binghampton Bridge Case, 3 Wall. 51.
Oregon R. R. Co. v. Oregonian R. R. Co., 130 U. S. 1.
* Stein v. Bienville Water Co., 141 U. S. 68. See Binghampton Bridge
Case, 3 Wall. 51.
2200
ECONOMIC LEGISLATION.
supplying the municipality with water from a designated
source for a term of years is not impaired, within the
meaning of the contract clause of the constitution, by a
grant to another party of a privilege to supply it with
water from a different source.¹
Under the statutes of Kansas, a railroad company is
forbidden to construct and operate its roads upon the
streets of an incorporated city "without the assent of the
corporate authorities." Under this statute, the city au-
thorities may prescribe conditions upon which they will
give their assent; and, if they are lawful and proper, and
are accepted by the railroad company, they are binding
upon the parties.2
A railroad is, under the statutes of the United States, a
post-road, and, accordingly, the act of congress of July
24, 1866, giving to all telegraph companies alike the right
to construct, maintain, and operate lines along all post-
roads of the United States is paramount over any agree-
ment made by a railroad company securing to a tele-
graph company the sole use of its line of road for its wires.³
Under a general law of Illinois for the incorporation of
cities and villages in the state, providing that the city
council in cities should have authority to license hackmen,
draymen, omnibus drivers, cabmen, expressmen, etc., and
all others possessing like occupations, and prescribe their
compensation, it was held that street railways were in the
purview of the statute.*
Municipalities.—A municipal corporation is but a sub-
ordinate branch of the government; it represents the state
sovereignty in a limited district for specified purposes,
which are local government and police. A municipal
¹ Stein v. Bienville Water Co., 141 U. S. 68. See Binghampton Bridge
Case, 3 Wall. 51.
² Pacific R. R. Co. v. Leavenworth City, 1 Dill. 393.
3 W. U. Tel. Co. v. B. & O. Tel. Co., 19 Fed. Rep. 660.
4 Allerton v. Chicago, 6 Fed. Rep. 555.
' Chisholm v. City of Montgomery, 2 Woods, 584.
3
UNITED STATES.
2201
corporation possesses no powers except such as are given
expressly or by necessary implication by its charter, or by
law.¹
Dissolution of municipality.—Municipal corporations can
not be dissolved by the courts for non-user or misuser of
their powers or franchises.2
A municipal corporation, being a mere agent of the
state, stands, in its governmental or public character, in no
contract relation to its sovereign, at whose pleasure its
charter may be amended, changed, or revoked without
the impairment of any constitutional provision, but such
a corporation, in respect of its private or proprietary
rights and interests, may be entitled to constitutional pro-
tection.3
Powers and liabilities of.—See “STREETS-Liability of mu-
nicipalities as to," p. 2204, post.
A municipal corporation has the right to determine how
and in what manner and upon what conditions a telegraph
company shall enter the city and pass through it for the
purpose of communication or allowing the citizens of the
country to communicate by telegraph with each other.
But, where a telegraph company erects its poles within
the city limits, under a city ordinance which provides that
said privilege shall expire within a certain time, the mayor
of said city has no right of his own motion and without
the express authority or direction of the city council and
without notice to the company to cut and remove the
poles and wires after the expiration of the said limited
time, and he will be liable as a trespasser for so doing;
but, notwithstanding that fact, an injunction will not be
granted to restrain the city authorities from preventing
¹ Chisholm v. City of Montgomery, 2 Woods, 584; City of N. O. v.
Morris, 3 Woods, 103; Lewis v. City of Shreveport, 3 Woods, 205; Scott
Ex'rs v. City of Shreveport, 20 Fed. Rep. 714. See Coulson et al. v. City
of Portland, 1 Deady, 481.
2 Welch v. St. Genevieve, 1 Dill. 130.
³ N. O. v. N. O. Water-Works, 142 U. S. 79.
VOL. II-58
2202
ECONOMIC LEGISLATION.
the company from replacing the wires, etc., because this
would enable it to do what it has no legal right to do
under the ordinance.¹
Where a municipal corporation seeks to enforce its pri-
vate rights as distinguished from rights belonging to the
public, it may be defeated by the statute of limitations;
but in all cases wherein the corporation represents the
public at large or the state or is seeking to enforce a right
pertaining to sovereignty, the statute of limitations as
such can not be made applicable. In such cases, however,
the courts may apply the doctrine of estoppel in pais, and
by means thereof, when justice and right demand it, pre-
vent wrong and injury being done to private rights.²
The officers of a municipal corporation should be held
to a rigid accountability in the discharge of their duty in
regard to contracts of such corporation; and in all cases
of contracts to run for years, the authority to make them
should be clear, because they involve pecuniary liability,
which will be a tax upon future property holders of the city.3
A municipal corporation has a right to enter upon a
street or tunnel under a street for the purpose of making
public improvements, and also has a right for the same
purpose to enter upon, occupy, and obstruct a portion of
the river front and construct a coffer-dam there, if neces-
sary, in order to enable it to construct the tunuel.*
Where the council of Portland authorized a contractor to
lay a sewer in one of its streets, in pursuance of a power
contained in its incorporation, and in so doing the con-
tractor infringes upon the patent of another for making
sewer pipe, the act being a corporate one for the benefit
of the corporation, it is liable for such infringement, the
same as a private corporation or person."
2
¹ Mutual Union Tel. Co. v. City of Chicago, 16 Fed. Rep. 309.
Simplot v. C. M. & St. P. R. R., 5 McCrary, 158; 16 Fed. Rep. 350.
³ Garrison v. Chicago & People Gas-Light Co., 7 Biss. 480.
* Northern Transportation Co. v. Chicago, 7 Biss. 45. A somewhat
similar point was decided in Barney v. City of Keokuk et al., 4 Dill. 593.
5 M'f'g Co. v. Hepp et al., 14 Sawyer, 96.
!
UNITED STATES.
2203
Streets-Control of.-A corporation having power to
grade streets, etc., necessarily has power to make con-
tracts respecting the same, in regard to the work to be
done, and the compensation to be paid; for where a prin-
cipal power is given, every incidental power necessary to
give effect to the principal one is included.¹
A water company laying its pipes in the streets of a
city, under a contract with the city, does so subject to the
right of the city to construct sewers in said streets when-
ever and wherever public interest demands; and, if in con-
sequence of the exercise of this right, the company is
compelled to relay its pipes, it can maintain no claim
therefor against the city, unless the action of the city is
unreasonable or malicious. An allegation that the sewer
might have occupied other space in the street is not equiv-
alent to an allegation that the city acted unreasonably or
maliciously.2
The grant of the proprietors of land to a town of all
the proprietors' ways, called highways, conveys only such
ways as are in existence at the time, and not such as the
proprietors reserved a right to lay out, but never laid out.³
Where a charter gave the council power to make, amend,
and repeal any ordinance deemed desirable for lighting the
streets and taking charge of them, but did not expressly
confer exclusive power over them, it was held that it did
not, by implication, give the city control of the streets to
the exclusion of the sovereign power of the state; and
that an ordinance granting exclusive use of the streets for
wires, poles, etc., for electric lights, for fifteen years, was
ultra vires.*
A railroad company which wrongfully lays its tracks in
a public street, being in effect a mere trespasser, will not
¹ Sturtevants v. City of Alton, 3 McLean, 393.
* National Water Co. v. City of Kansas, 28 Fed. Rep. 921.
3 Borden v. Manchester, 4 Mason, 113.
4
* Grand Rapids E. L. & P. Co. v. Grand Rapids E. E. L. & F. G. Co.,
33 Fed. Rep. 659.
}
2204
ECONOMIC LEGISLATION.
be protected by a restraining order against the mayor of
the city, who is proceeding to tear up the track.¹
Where a telegraph company is organized under a char-
ter which is void, a cable laid by it across a navigable
river is an unauthorized obstruction, and damages for in-
juries to it can not be recovered.2
3
Liability of municipality as to.—A corporation holding
a voluntary charter as a city or village is responsible-
for its mere negligence in the case of its streets; it is oth-
erwise as to a quasi corporation like a county, town, or
district. In Rhode Island the statute requiring highways
to be kept safe and convenient applies to towns as well as
to cities and covers sidewalks when a part of the high-
way. Corporations and cities having the exclusive care
and control of streets, and upon which the duty is im-
posed of constructing and keeping the streets and bridges
in repair are liable for damages for their neglect to do so,
and are obliged to see that they are kept safe for passage.5
No certain duration of a dangerous condition of a public
highway operates as a notice."
A city has a remedy over against a private party, who
has obstructed the street and caused an injury for which
the city has had to pay damages,' but if the corporation
and the private individual are both at fault, there can be
no remedy over, and such a private individual can show
that it was not his duty to keep the streets in a safe con-
dition, and that it was not through his fault that the acci-
dent happened.8
2
If the authorities treat a place as a street, they are
¹ Cent. Trust Co. v. Wabash, St. L. & P. R'y Co., 29 Fed. Rep. 546.
Doboy & Union Island Tel. Co. v. De Magathias, 25 Fed. Rep. 697.
3 Barnes v. District of Columbia, 91 U. S. 540.
• Providence v. Clapp, 17 How. 161.
5 Nebraska City . Campbell, 2 Black. 590; Chicago v. Robbins, 2:
Black, 418.
6
• D. C. v. Woodbury, 136 U. S. 450.
8
7 Robbins v. Chicago, 4 Wall. 657.
Chicago v. Robbins, 2 Black. 418.
1
2205
UNITED STATES.
responsible for its condition, as if it were one. In a suit
against a municipal corporation for damages sustained by
one falling from a causeway erected by a bridge company,
but not provided with a guard, the question whether the
corporation treated the causeway as a street is for the
jury. A municipal corporation is liable in damages for
the defective condition of its streets to an individual suf-
ering injury from that condition, under certain circum-
stances, which liability is not affected by the fact that the
street in which the injury was received is in the proprietor-
ship of a private corporation.³
The local law of a state concerning the right to recover
from a municipal corporation for injuries caused by de-
fects in its highways and streets is binding upon the courts
of the United States within the state.*
In the absence of statutory provisions, a municipal cor-
poration or its agents are not responsible for conse-
quental damages, which are necessarily done, in the exer-
cise of reasonable care, to adjoining land not taken for
public use, in the execution of a public work imposed by
the legislature upon the corporation for the benefit of the
public; nor for the unlawful acts of its officers, committed
ultra vires, and not colore officio, in the known and willful
violation of the law.
5
It is the law in Michigan that the failure of a municipal
corporation to keep in repair a sidewalk in a public street
when this duty is imposed upon it by statute, does not
confer upon a person injured by a defect in said sidewalk,
caused by the negligence of the corporation to perform
its duty, a right of action against the corporation for
damages.*
1 Mayor v. Sheffield, 4 Wall. 189.
2 Manchester v. Ericsson, 105 U. S. 347.
3 Ericsson v. City of Manchester, 3 Hughes, C. C. 191; Northern Trans-
portation Co. v. Chicago, 7 Biss. 45; Ware v. St. Paul Water Co., 1 Dill. 465.
* Detroit v. Osborne, 135 U. S. 492.
'Cheever v. Shedd, et al., 13 Blatch. 258.
6 Hart v. City of Bridgeport, 13 Blatch. 289.
2206
ECONOMIC LEGISLATION.
Special damages.-Under a state constitution forbid-
ding the taking or damaging of private property without
compensation, a railroad company constructing its road in
a public street, under a sufficient public grant, is yet liable
to abutting owners for injuries to their property resulting
therefrom.¹ An abutter on a street in the city of New
York may recover against a company constructing an ele-
vated railroad and station-house in front of his building,
damages for the discomforts and inconveniences in the
occupation of the building, caused by the erection of the
defendant's structure, independently of the running of
trains thereon.2
When the town of Dubuque was laid out by the acts of
congress, the United States caused a reservation of a strip
of land fronting on the Mississippi River, the same being
dedicated to the public use forever, "for the purposes of a
highway and for other public uses." In 1853, the United
States gave this land to the city of Dubuque, providing,
however, that this grant should "in no manner affect the
rights of third persons therein or to the use thereof, but
should be subject to the same.¹ This strip was known as
Front street, and was used as a highway and for levee
purposes, and was also occupied by several railroads. In
1874, the C. H. & St. Paul R. R. laid its track over a tri-
angle forming part of Front street as originally laid out.
At that time there was no building, fence, etc. The
plaintiffs had been in possession of this triangle for ten
years, and had paid taxes thereon, with full knowledge
that it was part of this public reservation. They claimed
title on account of adverse possession, under the statutes
of limitation and equitable estoppel, and because of an
adjudication of the district court of Dubuque county,
in their favor, and claimed damages from the railroad
under the provisions of the code of Iowa. It was held,
¹ Hot Springs R. R. Co. v. Williamson, 136 U. S. 121.
2 N. Y. Elevated R. R. v. Fifth Nat'l Bank, 135 U. S. 434.
UNITED STATES.
2207
that as the city of Dubuque was incorporated under
a special charter, the provisions of the code were not
applicable, and that the owner of land abutting on a high-
way or street along which a railroad track was laid, could
not recover damages unless he owned the fee in the soil
over which the tracks passed, and as the city owned this
land, as trustees for the furtherance of public uses and
benefits to which it had been dedicated originally, title
could not be obtained by adverse possession. That the
act of a city for the collection of taxes was for its own
benefit alone, and could not work an estoppel as against
the general public to whom the triangle was dedicated.
That as the railroad company did not acquire its sole right
to use the streets for the tracks from the city, but by vir-
tue of the original act of congress, in dedicating this track
to public uses, it was not bound by the decision and judg-
ment against the city in the district court, to which it was
not a party.
The laying out of a highway at the common law and
under the highway acts of Massachusetts does not deprive
the owner of the fee, but only subjects it to the easement.¹
The use of a public highway by a telegraph company
erecting poles and wires thereon is an additional burden,
and where the fee is in the adjacent owner, the lines can
not be erected without his consent or by statutory proceed-
ings in which he is entitled to compensation.²
Under the conflicting interest arising out of two grants,
one to operate a horse railway and the other to operate a
cable road, it was held that the plaintiff was entitled to
damages from the defendant, not on account of the injury
it sustained by reason of the competition, but by reason
of defendant's interfering with the ingress and egress of
plaintiff's passengers, and the defendant's tracks crossing
plaintiff's tracks.3
1 ¹ U. S. v. Harris, 1 Sumn. 91.
2 Pacific Postal Tel. Cable Co. v. Irvine et al., 49 Fed. Rep. 113.
3 Omaha Horse Ry. Co. v. Cable Tramway Co., 30 Fed. Rep. 324.
2208
ECONOMIC LEGISLATION.
Where, under an act of a state legislature, a railroad
company erects an elevated railroad over a street, the fee
of which is in the city, an abutting lot-owner holds his
easement in the street subordinate to the rights of the
public therein; and unless the new structures erected on
the street injure it as a thoroughfare for travel, and it is
permanently subjected to a new use which is subversive
of the original use, such abutting owner, though he may
suffer inconvenience, is not legally injured and entitled to
damages.¹
The jury are not justified in finding that a new and in-
consistent use has been imposed upon the street, unless
travel is practically impeded, or light in the traveled way
is sensibly diminished, or the street is, at the point com-
plained of, made inconvenient for the accommodation of
persons or vehicles.¹
In an action for damages for the erection of an elevated
railroad and station house in front of a banking house,
plaintiff is entitled to recover for the injury to that part
of the building occupied for banking purposes, and it may
be submitted to the jury to find how much less that part
is worth for such purposes on account of such structure,
and evidence of damages accruing after the commence-
ment of the action and down to the time of trial is ad-
missible, if the adverse party has not thereby been misled.2
Under Mansfield's Digest, Arkansas, sections 754, 755,
authorizing cities to contract for the construction of street
railroads, a city may authorize a street railroad to be
operated by steam motors, and the operation of such road
in a public street is not an additional servitude and affords
to the abutting owner owning the fee of the street no
ground for injunction.3
Where a county court declares a road to be open as soon
¹ Fifth Nat'l Bank of N. Y. v. N. Y. Elevated R. R. Co., 24 Fed. Rep.
114.
2 Fifth Nat'l Bank v. N. Y. Elevated R. R. Co., 28 Fed. Rep. 231.
3 Williams v. City Electric St. Ry. Co., 41 Fed. Rep. 556.
UNITED STATES.
2209
as certain fences are set and other conditions complied
with, and the proposed road is left with railroad tracks,
fences and embankments crossing it for eleven years
thereafter, and there is no proof that any of the said con-
ditions were ever fulfilled, the county authorities have no
right to grant a street car company permission to lay its
track along such road without the consent of the railroad
company, and the laying of such track may be enjoined at
the suit of the railroad company.'
Condemnation of property.-The Fifth Amendment
of the Constitution of the United States provides that
no person shall be deprived of property without process
of law; nor shall property be taken for public use with-
out just compensation. Section 1 of the Fourteenth
Amendment provides that no state shall deprive any
person of property without due process of law. Private
corporations are persons within the first section of the
Fourteenth Amendment, and are entitled so far as their
property is concerned to the equal protection of the laws.2
Whatever the character of the proceeding by which
one is deprived of his property, whether judicial or ad-
ministrative, and whether it takes the property directly, or
creates a charge or liability which may be the basis of
taking it, the law directing the proceeding must provide
for some kind of notice, and offer to the owner an oppor-
tunity to be heard, or the proceeding will want the essen-
tial ingredient of due process of law. But the right of
entry on private property for the mere purpose of locating
a road (not taking it) may be given by law without com-
pensation other than for any injury done to it, as the right
¹ Cincinnati South. Ry. Co. v. Chattanooga Elec. St. Car Co., 44 Fed.
Rep. 470; Western & A. R. R. Co. v. Chattanooga Electric St. Car Co.,
44 Fed. Rep. 470.
2 Santa Clara Co. v. Southern Pac. R. R., 118 U. S. 394; Pembina Min-
ing Co. v. Pennsylvania, 125 U. S. 181; Minn. & St. Louis R. R. v. Beck-
with, 129 U. S. 26; Missouri R. R. Co. v. Mackey, 127 U. S. 205; Minn.
& St. L. R. R. v. Herrick, 127 U. S. 210.
2210
ECONOMIC LEGISLATION.
remains in the owner, but where the divesture of the
owner's right is claimed and its transfer is necessary for
public use by a permanent appropriation of the soil, com-
pensation must be made.¹
The state possesses no power to withdraw corporations
from the guaranties of the federal constitution. What-
ever property a corporation lawfully acquires is held un-
der the same guaranties which protect the property of
natural persons from spoliation. Under the reserved
power to amend, alter, or repeal the laws under which
private corporations are formed, the state can not exercise
any control over the property of a corporation, except such
as may be exercised through control over its franchise, and
over like property of natural persons engaged in similar
business. It can not divest property or rights which have
become vested.2
A railroad corporation can not be authorized (under
section 26 of the corporation act, Oregon Laws, 530) to
appropriate a public street or road to its use, unless such
road or street has been legally established, according to
some mode prescribed by statute.3
Conflicting grants.-Where a railroad company binds
itself by contract to allow other companies to use its right
of way, under such reasonable regulations and terms as
may be agreed upon by such companies, and thereafter re-
fuses to recognize the right of another company to use
such right of way upon any terms, a court of equity has
power to enforce the contract, determine the amount of
consideration, decide upon the regulations, and settle the
details.*
Exclusive franchises.-At common law, a grant to a
¹ Bonaparte v. Camden & Amboy R. R. Co., 1 Baldwin, 205.
2 The R. R. Tax Case County of San Mateo v. South Pacific. R. R. Co.,
8 Saw. 238, 239; Burns v. Multonomah R. R. Co., 8 Saw. 543.
3 Burns v. Multonomah Ry. Co., 8 Sawyer, 543; 15 Fed. Rep. 177.
Central Trust Co. v. Wabash, St. L. L. & P. R'y Co., 29 Fed. Rep.
546.
UNITED STATES.
2211
natural person without words of inheritance creates only
an estate for life. By analogy to this, a grant to a corpo-
ration aggregate, limited as to the duration of its exist-
ence, without words of perpetuity being annexed to the
grant, would create only an estate for the life of the cor-
poration.¹
3
Exclusive rights to public franchises are not favored; if
granted, they are protected, but they are never presumed.*
The provisions of a special charter or some special author-
ity derived from the legislature, is exempt from general
legislation on the subject. The fact that certain rights
or privileges were formerly granted to the owners of a
ferry, which has been superseded by a bridge, on the pay-
ment of a sum of money to the said owners by the said
bridge company, can not be used to extend the privileges
of the said bridge company beyond the natural and legal
meaning of its charter.¹
A legislative grant of exclusive privileges, on perform-
ance of conditions by the grantee, is a contract protected by
the constitution of the United States against state legisla-
tion to impair it. When there is no contract in the char-
ter of a corporation, no exclusive privileges conferred,
either in express terms or by necessary implication, what-
1
5
¹ Turnpike v. Illinois, 96 U. S. 63. In this case, the original charter of
the company gave it the right to build a turnpike, and exact tolls for
the term of twenty-five years, or as much longer as the state failed to
redeem the franchises by paying the cost of the work. When the term
of the charter had more than half expired, the state granted to the
company the right to use a bridge and dike, and erect a toll-gate thereon,
in consideration that the company should keep them in repair. Held
that this last grant can not be presumed to be perpetual, for the com-
pany itself had but a limited period of existence.
* Wright v. Nagle, 101 U. S. 791; Ruggles ». Illinois, 108 U. S. 536.
3 State v. Stoll, 17 Wall. 425.
* Charles River Bridge v. Warren Bridge, 11 Pet. 420.
5 N. O. Water Co. v. Rivers, 115 U. S. 674; N. O. Gas Co. v. Louisiana
H. & L. Co., 115 U. S. 650; Louisville Gas Co. v. Citizens Co., 115 U. S.
683; St. Tammany Water-Works v. N. O. Water-Works, 120 U. S. 64;
Wright v. Nagle, 101 U. S. 791; Ruggles v. Illinois, 108 U. S. 536.
2212
ECONOMIC LEGISLATION.
2
ever may be the injurious effects or consequences of rivals,
they are not the subject of legal redress. Thus an act
incorporating a bridge company, in the usual form, not
granting exclusive privileges in explicit terms, and not
containing an agreement by the state to permit no other
bridge company to erect a bridge in competition, can not
be construed by implication to prevent the state from sub-
sequently granting a charter to another company to erect
a competing bridge. But where the legislature gave a
corporation all the rights and privileges enjoyed by a
former corporation, a restriction in the former's charter,
.that no bridge should be erected within two and one-half
miles, is a part of the latter's charter, and a charter given
to another company to erect a bridge within the prohib-
ited distance is a plain violation of the said contract, and
the said contract will be protected by the constitution of
the United States.3
Where an act provided that, after a certain bridge com-
pany had repaired its bridge, a ferry merely licensed
should be discontinued, the act was held to be valid; and
where, after the bridge company had complied with this
condition, an act was passed which re-established the
ferry, it was held to be void.ª
The plain reading of a provision "that it shall not be
lawful for any person or persons to erect a bridge within
a distance of two miles," is that the legislature will not
make it lawful by licensing any person or association of
persons to do it; the restraint was on the legislature
itself.3
The statute of the legislature of New Jersey, passed
A. D. 1790, by which that state gave power to certain com-
missioners to contract for the building of a bridge across
1 Wash. Turnpike Co. v. Maryland, 3 Wall. 210; Wright v. Nagle, 101
U. S. 791; Ruggles v. Illinois, 108 U. S. 536.
2 Charles River Bridge v. Warren Bridge Co., 11 Pet. 420.
3 The Binghampton Bridge Case, 3 Wall. 51.
East Hartford v. Hartford Bridge Co., 10 How. 511, 541.
UNITED STATES.
2213
*
the Hackensack river, and enacted that the contract should
be binding on the State of New Jersey as well as on the
contracting parties, and that it shall not be lawful for any
other person to erect a bridge over said river for ninety-
nine years, is a contract, whose obligation the state can
pass no law to impair. But a viaduct so built as to allow
only cars propelled by steam to pass over it, and in such a
manner as to make it impossible for man or beast to cross
except as passenger, is not a structure prohibited by the
above act.¹
Where the State of Virginia incorporated the Richmond,
Fredericksburg & Potomac R. R. Co., and pledged itself not
to allow any other road to be constructed between those
places, the probable effect of which would be to diminish
the number of passengers traveling upon that road from
one point to another, and the state afterward incorporated
another company, which crossed the R. F. & P. R. R. at
almost right angles and continued on to Richmond, it was
held not to be a contract impairing the obligation of the
first.2
Although a state may give an exclusive right for the
time being to particular persons, or to a corporation, to
establish a slaughter-house, etc., in a city, it has no power
to continue said right so that a future legislature, or even
the same body, can not repeal or modify it, or grant sim-
ilar privileges to others.³
A legislative grant of an exclusive right to supply gas
to a municipality and its inhabitants, through pipes and
mains laid in the streets, and upon condition of the per-
formance of the service by the grantee, is a grant of a
franchise vested in the state, in consideration of the per-
formance of public service, and after part performance by
the grantee, is a contract protected by the constitution
1 Bridge Proprietors v. Hoboken Co., 1 Wall. 116.
2 Richmond F. & P. R. R. Co. v. Louisiana R. R., 13 How. 71.
3 Butchers' Union, etc., Co. v. Crescent City, etc., Co., 111 U. S. 746.
--
2214
ECONOMIC LEGISLATION.
:
against state legislation to impair it. So the charter of
the New Orleans Water-Works Company, granting to
that corporation the exclusive privilege of supplying the
city and its inhabitants with water from the Mississippi
river, is a contract, which will be protected by the consti-
tution of the United States,' and the grant of the exclu-
sive privilege of the manufacture of gas and its distribu-
tion by means of pipes laid, by legislative authority, in the
streets and ways of a city is none the less a contract be-
cause the manufacture and distribution of gas, when not
subject to supervision, may work injury to the public,
for such a grant does not restrict the state from establish-
ing and enforcing regulations not inconsistent with the es-
sential right given to a company in its charter.²
A gas company chartered under the laws of Ohio for the
manufacture of gas was authorized by a city to erect such
works, and occupy its streets for the purpose of laying
pipes and gas mains. The city fixed the price of gas and
directed the manner of laying mains, as it had authority
to do, and from time to time made, contracts with the
company for lighting the streets. The last contract made
fixed the price of gas for public and private consumption
for a period of five years, and required that the company
as a condition precedent should lay pipes for public light-
ing along streets where for a long distance there was no
private consumption. It was held that, although the com-
pany had, by the authority of the city, erected works and
complied with all the requirements of the city council, as
it did not have the exclusive right to use the streets for
laying gas pipes, and the city was under no obligation to
purchase gas from the company, no vested rights of the
latter were disturbed when, on the termination of the five
years' contract, the city refused to take any more gas
1 N. O. Gas Co. v. La. Light Co., 115 U. S. 650; N. O. Water Co. v.
Rivers, 115 U. S. 674; Louisville Gas Co. v. City Gas Co., 115 U. S. 683.
2 N. O. Gas-Light Co. v. Louisiana L. & H. Co., 115 U. S. 650.
UNITED STATES.
2215
:
from the company, and determined to build its own gas-
works.¹
The exclusive right to light a city with gas for thirty
years is not legally "impaired" by a subsequent contract
with another company to light the streets with electricity.²
Authority "to cause the streets of a city to be lighted,"
and to make "reasonable regulations" with reference
thereto, does not empower the city government to grant
to one company the exclusive right to furnish gas for thirty
years.2
The action of a city in authorizing a private corporation
to erect an electric plant for the purpose of lighting the
city without a grant of exclusive rights, does not deprive
the city of the right, under said statute, to erect an electric
plant itself for the same purpose.3
The city of New Orleans has no power under its charter
from the State of Louisiana to grant to a street railway,
the sole and exclusive use of its public streets for said rail-
road purposes, and when said city has made a contract.
and granted to a certain railroad company certain fran-
chises to run and maintain a street railroad, and binds
itself not to grant similar privileges over the same streets
to any other company or persons during a certain period,
it is not thereby estopped from granting similar privileges to
other companies, etc., for running street railways across said
streets nor for short distances on said streets to make turn-
outs and connections for other lines running near by on
other streets and having different termini.*
In 1867, plaintiff company, by its charter, was given the
exclusive horse railway franchise of Omaha for fifty years.
Defendant company, under a city ordinance of 1884, un-
dertook to lay a cable tramway, and plaintiff sought for an
injunction, contending that at the date of its grant "horse
¹ Hamilton Gas Co. v. City of Hamilton, 37 Fed. Rep. 832.
2 Saginaw Gas-Light Co. v. City of Saginaw, 28 Fed. Rep. 529.
3 Thompson Houston E. Co. v. City of Newton, 42 Fed. Rep. 723.
N. O. City R. R. Co. v. Crescent City R. R. Co., 12 Fed. Rep. 308.
}
:
2216
ECONOMIC LEGISLATION.
railway" meant "street railway" (cable roads being then
unknown), and, therefore, its grant covered all forms of
street railway. Held, that all grants of franchises belong-
ing to the public, and especially those giving monopolies,
should be strictly construed against the grantees, and that
the injunction should not be granted; that even if the
grant of the "horse railway" franchise meant a grant of
the "street railway" franchise in the contemplation of
the parties, yet a grant of a monopoly contemplated was
only of such forms of transportation as were then known
and in existence, not of such as might subsequently be
devised and used.¹
Plaintiff's charter prohibited the running of locomotives
or cars propelled by steam, or the cars of any other rail-
way company on its tracks. Held, that this had not the
disjunctive force of granting to the plaintiff a monopoly
of every form of street railroad transportation except that
of cars drawn by engines, but rather is an extra precau-
tion on the part of the legislature to guard against the pos-
sibility of a railroad company running its cars over the
tracks of the plaintiff.¹
The act of June 7, 1867, giving to certain railroads the
exclusive right of laying out and operating a railroad be-
tween their termini, extending into any town named as
terminus, and for a distance of five miles each side of such
roads, and at all points between places named as " termini,"
repealed in 1871, even if it applied to street railroads, and
was of such force that the repeal divested no right that
had been acquired thereunder, gave no rights to plaintiffs,
since its line was operated within city limits, and not be-
tween two cities or towns.¹
Under Manfield's Digest, Arkansas, empowering a city
for the purpose of providing street railroads, to grant for
the time that may be agreed upon, the exclusive privileges
of using the streets and alleys for that purpose, a grant for
¹ Omaha Horse Ry. Co. v. Cable Tramway Co., 30 Fed. Rep. 324.
UNITED STATES.
2217
ninety years, of a right of way over certain streets named
and all other streets within the present or future corporate
limits, as the grantees think public necessities require,
with the exclusive privilege of using said streets for the
purpose of constructing, operating, maintaining, and own-
ing a street railway thereon, does not confer any exclusive
privilege unless gained by use. Any other construction
would render the contract utterly ultra vires, since the
council's duty of judging public necessity can not be dele-
gated.¹
In 1872, the city of Kansas passed an ordinance grant-
ing a street railroad company "the sole right, for the space
of twenty-one years to construct, maintain and operate their
railway over and along all the streets in said city," subject
to restrictions as to grade and condition of road. In
1881, the company passed to another company a part of
its road running through a certain street; and in 1883, the
city passed another ordinance granting to an elevated rail-
way company the right to construct and operate an ele-
vated railroad through certain streets, including the street
occupied by the lessee company, which filed a bill to en-
join the building of the elevated road: Held, that so much
of the ordinance of 1872 as purported to give exclusive
privileges to the lessor or to complainant was beyond the
powers vested in the city of Kansas and void, and the
complainant had no right to challenge the validity of the
ordinance of 1883, or to restrain the defendant from build-
ing its road.2
A telegraph company in the state of Texas can not ac-
quire by agreement with the railroad company, the ex-
clusive right to use its right of way for telegraph under
Rev. Stats. of Texas, 1879, Art. 624.3
Charges for. It has been held that an ordinance pre-
¹ Citizens' St. Ry. Co. ". Jones, 34 Fed. Rep. 579.
2 Jackson Co. Horse R. R. Co. v. Interstate Rapid Transit Ry. Co., 24
Fed. Rep. 306.
W. U. Tel. Co. r. B. & O. Tel. Co., of Texas, 22 Fed. Rep. 133.
VOL. II-59
1
2218
ECONOMIC LEGISLATION.
}
scribing that each street railway should pay a license of
$50 yearly for each car run in the city was a valid exercise.
of the police power of the city council under a power to
license hackmen, omnibuses, etc.¹
1
Methods of construction.-An action by a municipal
corporation to recover from a street railroad company the
cost of maintaining pavements in a street, which the com-
pany is by its charter bound to maintain, is not an action
upon a statute, but one of assumpsit.2 Sioux City, by
granting authority to a corporation to construct and oper-
ate a street railway in its streets upon the condition of
paving between the rails, did not limit its authority to make
and enforce other regulations and requirements, authorized
by the law of the state; and a subsequent requirement
that the corporation pave one foot outside of the rails,
and an assessment made for that purpose, violates no con-
tract between the corporation and the state or city.3
Where a right of way over private property or the
right of crossing a public highway has been acquired, cer-
tain common rights attach to the acquisition which may
be protected and enforced between proper parties in a court
of the United States, but until such rights of way and right
of crossing, etc., are acquired, resort must be had to the
courts of the state.*
Under the statutes of Ohio providing that a telephone
company may occupy for its poles a part of the public
highway, but not so as to incommode the public use, the
company must exercise réasonable care in the location of
its poles, so as not to incommode the public travel, but is
not required to so locate them as to provide against all
possible injuries that might happen under extraordinary
circumstances.5
1 Allerton v. Chicago, 6 Fed. Rep. 555.
2 Metropolitan R. R. v. D. C., 132 U. S. 1.
3 Sioux City R. R. v. Sioux City, 138 U. S. 98.
Mo., etc., Ry. Co. v. Texas & St. Louis Ry. Co., 4 Woods, 360.
Sheffield v. Central Union Tel. Co., 36 Fed. Rep. 164.
UNITED STATES.
2219
Regulations as to service.-See also under "AMEND-
MENTS, REPEALS, ETC.," p. 2154.
The legislature can not part with any of the police pow-
ers of the state which are matters that affect the public
peace, public health, public morals, and public conveni-
ence.¹
A corporation is subject to such reasonable regulations.
in respect to the general conduct of its affairs as the legis-
lature may from time to time prescribe, which do not pre-
vent or obstruct the enjoyment of the privileges granted
it, but serve to secure the ends for which it was created.²
A corporation (in this case, a railroad) may be protected.
by its charter against absolute legislative control in the
matter of rates for the carriage of passengers and freight.³
When the charter is granted subject to such regulation
as the legislature, from time to time, may provide or subject.
to the authority of the legislature to alter or repeal it, in
either of such cases, the legislature has the same power
over the rates or tolls that it had when the charter was
granted. In the absence of statutory regulations upon
the subject, it is necessarily implied from the occupation
of a railroad corporation that it shall exact only reasonable
compensation for carriage. A legislature has power to fix
rates for the transportation of passengers by railways, and
the extent of judicial interference is protection against un-
reasonable rates.5
4
In the case of Ruggles . Illinois, 108 U. S. 526, where
power was given to a corporation to make by-laws, etc.,
provided that the same be not repugnant to the constitu-
tion and laws of the United States or repugnant to the act
¹ Farmers' Loan & Trust Co. r. Stone, 20 Fed. Rep. 270.
2 Life Ins. Co. v. Needles, 113 U. S. 580; Sinking Fund Cases, 99
U. S. 68.
3
³ Chicago, Burlington & Quincy R. R. Co. v. Iowa, 94 U. S. 155; Peik
v. C. & N. W. R. R. Co., 94 U. S. 164; Winona & St. Peters R. R. Co. v.
Blake, 94 U. S. 180.
4 Ruggles v. Illinois, 108 U. S. 526.
5 C. & G. T. R. R. v. Wellman, 143 U. S. 339.
}
2220
ECONOMIC LEGISLATION.
of incorporation, and the board of directors was given
power to establish such rates of toll for the conveyance of
persons or property upon the same, as they shall from time
to time by the by-laws determine, it was held that this
power to act by by-laws did not release the company from
restrictions upon the amount of rates contained in general
and special statutes of the states. In the absence of direct
regulations, the rates are subject only to the common law
limitation of reasonableness; but if a maximum rate is
fixed, that maximum must be conformed to.
The 14th Amendment of the constitution does not limit
the subjects in relation to which the police power of the
state may be exercised for the protection of its citizens.'
An assessment by the statutes of South Carolina upon the
railroad corporations, owning property and operating roads
within the state, requiring them to assume the payment of
the salaries and expenses of the railroad commissioners in
that state, is not in conflict with said 14th Amendment.
It makes no distinction between the different railroads in
the state; the necessity of supervision extends to them all,
and it is a matter in which the public is directly interested,
and by which it is benefited.²
The grant of power to the president and directors of a
railroad company to establish such rates for transporta-
tion as they may deem proper, and to change them at
pleasure, leaves the state free, within the limits of its gen-
eral authority, to make laws as to the reasonableness of
such rates.3
A legislative grant to the L. & P. R'y Co. of a fran-
chise to build and operate a railroad from L. to P. along
such streets as the city council should permit, with power
1 Barbier v. Connolly, 113 U. S. 27; Soon Hing v. Crowley, 113 U. S.
703; Missouri Pacific R. R. v. Humes, 115 U. S. 512; Minneapolis & St.
Louis R. R. v. Beckwith, 129 U. S. 26.
" C., C. & A. R. R. v. Augusta R. R. Co., 142 U. S. 386.
3 Stone v. Ill. Cent. R. R. (R. R. Commission cases), 116 U. S. 347;
Ruggles v. Illinois, 108 U. S. 536.
UNITED STATES.
2221
to use passenger and burden cars, to furnish means of
transportation, to charge tolls for passengers and freights,
and" to do and perform every act and thing necessary and
proper to carry into effect the provisions of that act and
promote the design of the corporation," but, without
specifying what motive power should be used, authorized
the city council to limit the power to be used to horse
power.¹
A Massachusetts corporation, and the owner of a patent
on a telephone, licensed "B," a Missouri corporation, to
do the telephone business of St. Louis upon the condition
that "B" should not establish telephonic connection with
telegraph companies unless especially authorized by "A."
"A" permitted "B" to establish telephonic connection
with the Western Union Telegraph Company. Thereafter
the B. & O. Telegraph Co. applied for a mandamus to com-
pel "B" to permit telephonic communication between it
and the petitioner. "A" was not made a party. Held,
That "A" was not a necessary party. That all other tele-
graph companies were entitled to the same privileges
granted the Western Union Company, upon paying the
same price, and that the petitioner was entitled to the re-
lief asked.2
Municipal aid. The power of taxation is given to
municipal corporations as a means of carrying out their
purposes, and a diversion of the revenues to other pur-
poses is unlawful and ultra vires.3
The legislature of a state, in the absence of a constitu
tional prohibition, may authorize municipal corporations
to aid in the construction of railroads, and a statute to
that effect is not in conflict with the section of the state
constitution forbidding the credit of the state to be loaned
to private persons or corporations, and forbidding the state
¹ Henderson v. Cent. Passenger Ry. Co., 21 Fed. Rep. 358.
2 State of Mo. v. Bell Tel. Co., 23 Fed. Rep. 539; State ex rel. Postal
Tel. Cable Co. v. Del. & A. Tel. & Tel. Co., 47 Fed. Rep. 633.
* Chisholm v. City of Montgomery, 2 Woods, 584.
2222
ECONOMIC LEGISLATION.
1
from subscribing to the stock of any corporation, or from
being interested in internal improvements, and forbidding
any person being deprived of his property without due
process of law.¹
2
A power conferred by a statute on a municipal corpora-
tion to subscribe for stock in a railroad corporation does not
include the power to borrow money and issue negotiable
bonds to pay for such subscription. All grants to a mu-
nicipal corporation to subscribe for stock in a railroad or
other corporation are to be construed strictly, and are not
to be extended beyond the terms of the statute creating
the same. Nor does a grant to a municipal corporation
of power to appropriate moneys for the purpose of con-
structing a railroad, and directing a levy and collection of
taxes to meet such appropriation, and prescribing no other
mode of payment, authorize the issuing of negotiable
bonds for it.*
3
1 Taylor v. City of Ypsilanti, 11 Fed. Rep. 925.
2 Hill v. Memphis, 134 U. S. 198.
3 Farmers' L. & T. Co. v. Galesburg, 133 U. S. 156; Kelly v. Milan, 127
U. S. 139; Norton v. Dyersburg, 127 U. S. 160.
* Concord v. Robinson, 121 U. S. 165.
}
DISTRICT OF COLUMBIA."
EDITED BY WILLIAM B. WEBB, ATT'Y, WASHINGTON, D. C.
SUBDIVISION I.-HISTORICAL.
The constitution of the United States, among other
powers conferred upon congress, granted to it the right to
exercise exclusive legislation in all cases whatsoever over
such district (not exceeding ten miles square) as may, by
cession of particular states, and the acceptance of con-
gress, become the seat of the government of the United
States, and to exercise like authority over all places pur-
chased by the consent of the legislature of the state in
which the same shall be, for the erection of forts, maga-
zines, arsenals, dock yards, and other needful buildings,2
and to make all laws which shall be necessary and proper
for carrying into effect the foregoing powers, and all
other powers vested by this constitution in the govern-
ment of the United States, or in any department or office
thereof.3
After considerable discussion, congress, on the 16th day
of July, 1790, passed an act entitled "an act to establish
the temporary and permanent seat of the government of
the United States," by the terms of which a "district of
territory not exceeding ten miles square, to be located on
the river Potomac at some place between the mouths of
¹ References to the United States Statutes are the same as stated under
the United States section, supra. References to District of Columbia
Revised Statutes are designated as "D. C. Rev. St." As to District re-
ports, see Appendix "A."
2 U. S. Const., Art. I, sec. S, par. 17.
* U. S. Const., Art. I, sec. 8, par. 18.
(2223)
2224
ECONOMIC LEGISLATION.
the Eastern branch and Conococheague, is accepted for the
permanent seat of the government of the United States,"
provided that the laws of the state within such district
shall not be affected by such acceptance, until congress
shall by law otherwise provide.'
2
The territory thus selected for the permanent seat of
government of the United States embraced lands situated
on both sides of the Potomac river and within the juris-
diction of the states of Maryland and Virginia, and was
duly ceded to the United States by the respective state
governments. Both of these states, in the legislative
enactments making this cession, made provision under
which the laws of their respective jurisdictions should be
continued in force over the persons and property of their
citizens until congress accepted the cession of the terri-
tory made.
The ceding statutes of the States of Maryland and Vir-
ginia, the acts of congress, and the deed executed by the
original proprietors of the lands to trustees in behalf of
the general government, constitute the organic law, or,
as it were, the constitution of the Territory or District of
Columbia.
For a number of years the district was in the hands of
several municipal governments, neither of which had any
power to grant franchises. By an act approved Febru-
ary 21, 1871, entitled "an act to provide a government for
the District of Columbia," congress granted to a legisla-
tive assembly created by that act the power by general law
to create, modify, repeal or amend corporations aggregate
for religious, charitable, educational or commercial pur-
poses, and to define their powers and liabilities, the pow-
ers of such corporations to be limited to the District of
Columbia. All acts of this legislative assembly, by the
terms of the same act, were subject to repeal or modifica-
3
11 U. S. Stat. 130.
2 Davis's Laws, D. C., pp. 59, 60, 64.
B
16 U. S. Stat. 419.
DISTRICT OF COLUMBIA.
2225
:
tion by congress, and nothing in it was to be construed to
deprive congress of its power of legislation over the Dis-
trict of Columbia in as ample a manner as if it had not
been enacted. Under these provisions of the organic law,
the legislative assembly passed several laws incorporating
railroad companies and giving such companies authority
to lay tracks upon certain defined routes, issue stock, elect
directors, collect fares, and do other acts common to
such corporations. Nothing was ever done under these
acts, as far as publicly appears, and the roads authorized
in them were never built or operated. It is manifest, how-
ever, that, had such roads been built and operated as desig-
nated by those acts, if no other question intervened, the
power reserved by congress in the organic act was such
that the acts under which they were created could at any
time have been repealed and rendered of no avail by that
body. Afterward, a territorial government was created
with powers large enough to authorize the creation of lo-
cal corporations. Under this last form of government,
a few railroad charters were granted, but nothing was
done under them, whether because the authority of the
government was considered doubtful, or because the enter-
prises did not promise sufficient profit, must remain in
doubt.
In 1874, by an act approved June 20th of that year, the
government established in 1871 was abolished, and a tem-
porary government by commissioners was established;"
this in turn was, by an act approved June 11, 1878, abol-
ished, and the present, or, as it is termed in that act, “a per-
manent government for the District of Columbia," was estab-
lished.2 Neither of these last-mentioned acts contained any
provision conferring the power on any part of the govern-
ments established by them to create new corporations or in
any way control existing corporations Indeed, these acts
confer no powers of legislation of any kind, and all such
1 18 U. S. Stat. 116.
2 20 U. S. Stat. 102.
ECONOMIC LEGISLATION.
2226
powers are studiously retained by congress. Of course,
the district, under these circumstances, is relegated to its
primitive condition with regard to the matter of the forma-
tion of corporations, and, congress being its exclusive leg-
islature, recourse must be had to the acts of that body for
all information as to what has been done in the formation
of corporate bodies for all purposes.
It will thus be seen that through all the changes of gov-
ernment that have taken place in the District of Colum-
bia-and it has been a matter of common observation that
the district has been for many years the national ground
for governmental experiments-congress has retained un-
changed the original grant of exclusive legislation em-
bodied in the constitution of the United States.
From what has been said, it is manifest that all fran-
chises must have their origin in the only power competent
to create them, and that congress alone has power to make
any provisions that will authorize the exercise of any fran-
chise powers whatever. The organic act under which the
present government derives its powers designates the Dis-
trict of Columbia "a municipality," but so limits its pow-
ers that it is a municipality only in name. It has none
of the features that belong to municipal corporations
usually.
It will be apparent, then, that in the legislation of con-
gress must be found all the law that relates to the sub-
jects of this discussion.
No general statute authorizing the establishment of
organized incorporate bodies can be found in existence at
the time of the cession and adoption of the territory in
question, either among the laws of the original states or
in the laws of congress. In both Maryland and Virginia
there were special laws creating companies for particular
purposes. These were, for the most part, canal, turn-
pike and bridge companies, whose powers and privileges
extended to the territory thus selected for and dedicated
to the purposes of the general government.
DISTRICT OF COLUMBIA.
2227
Early in the history of the District of Columbia several
corporations were created by congress, some for merely
local purposes and some by way of confirmation of grants
of corporate powers and privileges within the district made
by the legislatures of Maryland, Virginia and some other
states. All of these, however, were special enactments,
and it was not until many years had elapsed and the
old methods of transportation and communication had
given way to the march of modern improvement that con-
gress took any steps to create powers of general incor-
poration in the community.
During all these years, while corporations were created
by special legislation alone, there could not be, and there
was not, much uniformity in the powers conferred or in
the methods by which they were carried into effect.
An act of congress establishing a system of general in-
corporation was approved May 5, 1870. When adopted
it contained no provision for the formation of corpora-
tions of the classes about which this treatise is concerned
except railroads (including street railways). It was after-
ward amended so as to apply to telephone companies,3
and is still in force.
Among the provisions contained in the chapter of this
general incorporation act is the following: "No railroad
shall be built under the provisions of this chapter until
the route and termini of such road shall have been ap-
proved and sanctioned by congress.
The operation of this provision has been to send all
parties seeking to build railroads in the district to seek
special charters or acts fixing or approving their roads,
at the hands of congress. Being compelled to make ap-
plication to congress for its sanction to its route and ter-
mini, it has been thought best at once to apply for a
special charter and thereby gain the advantage of ob-
taining more convenient terms of incorporation. It may
1
¹ D. C. Rev. St., pp. 63-74.
3 21 U. S. Stat. 321.
2 D. C. Rev. St., p. 74.
2228
ECONOMIC LEGISLATION.
be safely said that there is not a single railroad in operation
chartered solely and entirely under the provisions of this
general incorporation law. A great many applications
have been made under it and a great many companies
have been chartered by its terms, but they are generally
of a character having no connection with the subject of
this treatise. Such as have been thus chartered and which
come within the classes condsidered here, are not in active
operation and do not enter into the industries of the day.
This being the case, the policy of the government in re-
spect to these corporations has never changed. It has re-
mained the same and, it may be safely said, that franchise
companies are all the offspring of special legislation.
This is true, notwithstanding the several changes which
have taken place in the form of the government pro-
vided by congress for the conduct of the affairs of the
district.
Soon after the establishment of its government con-
gress' granted to companies incorporated in Virginia cer-
tain powers and privileges in the courts of the District of
Columbia, by which they were authorized to institute suits
and to obtain service of process in every respect, as though
they were local companies.
In 1808 and 1809 several acts of incorporation for bridge,
turnpike and canal companies were passed by congress.2
In 1814 a water company was incorporated in George-
town, with authority to bring water into the city of
Georgetown from any stream that it might think suit-
able; to carry it through the streets of Georgetown in
pipes, and to supply it to the citizens,3 but nothing seems
ever to have been done under it.
4
The Washington Gas Light Company was incorporated
by an act of congress approved July 8, 1848. The act
fixed the amount of stock of the corporation at fifty
¹ 2 U. S. Stat. 227.
⁹ Davis Laws, D. C., p. 295.
2 2 U. S. Stat. 485, 539.
49 U. S. Stat. 722.
DISTRICT OF COLUMBIA.
2229
ton
thousand dollars, which amount has been enlarged by
amendments made from time to time, prescribes the
method of electing officers and how the business of the
company is to be conducted. It requires the company to
light the streets of Washington City, and authorizes it to
lay pipes, erect works and buildings, subject to conditions.
to be imposed upon it by the corporation of Washing-
This company is the only gas light company in the
city of Washington, incorporated by special act, and has
for many years enjoyed a monopoly of the public and pri-
vate lighting by gas. Efforts have been made to establish
other companies in the city, from time to time, but with-
out avail. Congress has uniformly determined that it is
better for the public to confine the manufacture of gas to
one company, which shall be subject at all times to reg-
ulations to be imposed by congress.
The Georgetown Gas Light Company was incorporated
by an act approved July 20, 1854. This act is in almost
the express language of the act incorporating the Wash-
ington Gas Light Company.
It thus appears that there are in reality only two oper-
ating gas light companies, one in the city of Washington
and the other in the city of Georgetown, and these com-
panies are chartered to furnish gas for light only.
These are all the specially chartered corporations to
which any reference need be made. They show pretty
plainly what the policy of congress has been in this mat-
ter in the District of Columbia, and with what uniformity
these charters have contained the same privileges and the
same requirements throughout.
Electric light, telegraph, and telephone companies may
be properly classed together in the District of Columbia,
for the reason that there are in fact no companies of
either class in operation under charters granted by any
authority in the district. All such companies are formed
1 10 U. S. Stat. 786.
2230
ECONOMIC LEGISLATION.
under charters granted by some one or other of the states,
and there are no laws, general or specific, to which one
can look to ascertain what powers or restraints are inherent
in their organization. These companies are, nevertheless,
the frequent object of congressional attention, and as their
right to use the streets and highways can only be by au-
thority of congress, they are, in point of fact, as much
subject to congressional control in many respects as if
they were the creatures of congressional grant.
The United States Electric Lighting Company, which is
the principal electric light company in the district, is in-
corporated under a statute of the State of West Virginia,
and the Potomac and Chesapeake Telephone Company is
incorporated under the laws of the State of New York, so
far as is known. They are not incorporated by congress,
and so do not enter into the discussion of the powers
granted to local companies. The charters of these com-
panies will be found among the laws of the state by which
they were incorporated, and the conditions and restrictions
of their incorporation will be found under the head of
such states in this treatise.
In the act making appropriations for the expenses of
the government of the District of Columbia for the fiscal
year ending June 30, 1887, approved July 9, 1886,' con-
gress provided that the sum of one hundred thousand dol-
lars might be paid for lighting the streets of Washington,
and that ten thousand dollars of that sum might be used
in providing electric lights on one or more of the princi-
pal thoroughfares of the city. This item is continued in
the several appropriation acts down to the present time,
with variations in its provisions as to inspection, price of
light for public service, increase of service, and increase
of appropriation. An evident effort is being made to re-
quire the electric lighting company to put its wires under-
ground, and this is true, also, of the telegraph and tele-
1 24 U. S. Stats. 130.
DISTRICT OF COLUMBIA.
2231
phone companies. In what these efforts will result, can
not as yet be determined. There can be no question,
however, that electric lighting is thoroughly established
in the district, and that the streets, alleys, and highways
generally of the District of Columbia will, as far as they
are required, be subjected to the convenience of the elec-
tric companies for erecting such means as are best suited
to convey the electricity from place to place. And this,
it will be seen, has been and will continue to be done
under the sanction and regulation of congress.
The telegraph service in the District of Columbia is
in the hands of the Western Union Telegraph Company,
a corporation created by the laws of the State of New
York and the Postal Telegraph Cable Company. Very
special powers are granted by congress to all telegraph
companies in the United States, among which is the right
to use all post roads or routes in the United States, for the
erection of the poles upon which their wires are carried.
The public streets of the cities of Washington and George-
town have been declared, in effect, to be post routes by the
supreme court of the District of Columbia, and, under the
authority of that decision and the permit of the commis-
sioners of the District of Columbia, are used by these tele-
graph Companies.
The telephone service in the District of Columbia is
largely, if not entirely, monopolized by a company which
is chartered also by the State of New York. No special
powers belong to this company. Its right to erect or inter
wires is derived entirely from the permission of the local
authorities, and its use of the routes is controlled by the
police regulations in force in the district. The only at-
tempt at interference on the part of congress with the
proceedings of the telephone company consists in the leg-
islation which has for its purpose the removal of the poles
upon which the wires are carried along the streets, and
the interment of the wires under the surface of the streets
and sidewalks. There can be no question that, in the
!
2232
ECONOMIC LEGISLATION.
case of all these companies, their right to use the streets,
and, having occupied, to continue that occupation, de-
pends at last upon the will of congress; and no permit
from the local government can supersede or control the
reserved force of the national legislation.
The congressional legislation with respect to street rail-
roads in the District of Columbia is, to a large extent,
incorporated in the acts making appropriations for the
expenses attending the government of the district, and is
not to be found in separate acts of legislation. Of course
the result of this is that it is more difficult to ascertain
exactly what regulations congress has established in this
respect than it would be if such regulations were the sub-
jects of specific and separate legislation. The particular
requirements as to construction and service are given un-
der "METHODS OF CONSTRUCTION" and "REGULATIONS AS TO
SERVICE," Subdivision III.
It will be evident from this brief and somewhat cursory
account of the history of the law of corporations in the
District of Columbia, that congress, its special legislature
by constitutional provisions, has never parted with any of
its powers to create, control, and regulate these institu-
tions. Even the general incorporation act, to which refer-
ence has been made (which could authorize the control of
the streets by railroads under ordinary acts of incorpora-
tion), reserves such right to control the franchise that no
corporation can by any means acquire the right to use
such streets without the sanction of congress first obtained.
If the policy of congress is deduced in respect to these
matters from these acts of legislation, and there is no rea-
son why it should not be, the conclusion must be that un-
changeably congress has retained full power over all pos-
sible franchises in the District of Columbia.
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation; how obtained.-Corporations can be
DISTRICT OF COLUMBIA.
2233
organized in the District of Columbia for the most part
only by the special act of congress.
As every special charter must be obtained from the con-
gress of the United States by an enactment for that purpose,
it is, of course, necessary that application be made in each
case by petition to that body. There is no prescribed form
for such petition, it being necessary only to bring distinctly
before congress what is wanted in as much detail as may
be necessary to inform that body of the purposes contem-
plated. When the charter becomes a law, it of course has
all the force and effect of any other act of the United
States legislative power, and the privileges it confers are
entitled to the highest respect and consideration.
Under the act of congress of 1870, and its amendments,
among others, railroad (including street railways), tele-
graph, and telephone companies may be incorporated.¹
Articles of incorporation.-Under the general act of
congress, any number of persons, not less than seven,
who are owners of the stock may form a corporation for
constructing and maintaining a railroad, including street
railway, when fifty thousand dollars of the stock has been
subscribed and five per cent paid in, and this provision
has been extended to telephone companies.3 These articles
must be subscribed.
Must show what.-The articles of incorporation must
state the name of the corporation; the amount of capital
stock; the number of shares, and number and names of
the directors to manage its affairs; the place from which
and to which the said road or lines are to extend; and the
length, as near as may be, of the road or lines.¹
Filing. The articles of incorporation must be filed in
1
¹ D. C. Rev. Stats., p. 63; 21 U. S. Stats. 321.
2 D. C. Rev. Stats., p. 63. Owing to the fact that this act contains pro-
visions that require some action of congress preliminary to the operation
of the articles of association for the purpose of incorporation it is rarely,
if ever, resorted to for the formation of railroad companies. See under
Subdivision I, above.
3 21 U. S. Stats. 321.
VOL. II-60
2234
ECONOMIC LEGISLATION.
the office of the recorder of deeds of the District of Co-
lumbia, and upon such filing the persons become a body
corporate, capable of holding and conveying real and
personal property, etc.' It has been held that the neglect
of the trustees of a religious society to make the proper
record of its certificate of incorporation as provided by
the statute (section 535, R. S. D. C.) does not preclude the
society from proving its corporate existence by evidence
of acts of user,2 and that the record of a former action, in
which the plaintiff as a corporation recovered judgment
against the defendant without objection taken as to plaint-
iff's capacity to sue, is sufficient and competent as between
these parties to prove that the plaintiff was a corporation
de facto, which is all that is necessary to enable it to main-
tain an action against any one, other than the state, who
has contracted with the corporation or who has done it a
wrong.2
Amendment, repeals, etc.-Congress, in all the special
enactments granting franchises, corporate or otherwise,
retains power to repeal, modify or amend at any time.
Such power is always inherent in congress, and exists
without the necessity of any special provision to that effect.
Every grant made by congress is the result of special en-
actment, and is subject to all the conditions and restric-
tions attending the usual enactments of that body.
The general law is subject to amendment or repeal as
congress may see fit.³
Powers. It may be safely said that each of these sev-
eral companies is clothed with such powers as are nec-
essary to the full and complete performance of the busi-
ness in which it is engaged. Resort must be had to the
charter of each company to ascertain what its powers are,
but it will be found upon inquiry that these powers do not
1 ¹ D. C. Rev. Stats., p. 63; 21 U. S. Stats. 321.
2 The Fifth Baptist Church v. B. & P. R. R. Co., 5 Mack. 269. Affirmed,
137 U. S. 568.
D. C. Rev. Stat., p. 63.
DISTRICT OF COLUMBIA.
2235
materially differ and are in all cases sufficient for the ends
to be accomplished by the corporation.
Corporations organized under the general law referred
to, by such incorporation, become capable of holding and
conveying real and personal property, such as may be nec-
essary for the construction of the road or lines, and to
erect all necessary buildings. Such companies may cause
a survey to be made, and for that purpose may enter upon
lands and water, etc., belonging to persons along the line.
They are authorized to receive, hold, and take voluntary
grants of land made to aid in the construction of the road
or lines, and for that purpose only; to purchase, receive,
and take necessary lands for the construction of the roads
or lines, and for the erection of stations, etc., compensation.
for such lands to be made upon terms agreed upon between
the corporations and owners, the price so agreed upon to be
paid or deposited without delay; to lay out the road and lines
and construct them; to construct the road or lines upon any
street, alley or highway so as not to interfere with the free
use of the same, and in such manner as to afford security
for life and property; and to erect buildings, etc.¹ Such
other powers are granted to these companies as are nec-
essary, and more fully shown under Subdivision III,
below.
Officers; meetings; voting; quorum, etc.-Each char-
ter being special in its character and in itself a complete ex-
hibit of the details and methods of the government of each
company and of the manner in which its business is to be
conducted, there can be no general rules governing the
number or character of the officers, the times or modes of
their election, or the proper notices controlling meetings
either of officers or stockholders. The charters granted,
from time to time, to corporations in the district resemble
one another so nearly, however, that it will not be difficult
1
¹ D. C. Rev. St., p. 63; 21 U. S. Stats. 321.
2236
ECONOMIC LEGISLATION.
1
1
to determine about how the matters under consideration
are conducted in each company.
Every corporation, whether special or incorporated un-
der the general law, has the same provision with regard to
voting. The stockholders have as many votes each as
shares of stock; and the voting may be done, in all cases,
in person or by proxy. By the general incorporation act,
executors, administrators, guardians or trustees represent
the stock in their hands at all meetings of the company
and may vote accordingly as stockholders; and a party
who has pledged his stock as collateral security may, nev-
ertheless, represent the same at all meetings, and vote as a
stockholder.
Books. It is, by the general incorporation act, made
the duty of the trustees to keep a book containing the
names of all parties who, within six years, have been
stockholders of any company, which must always be open
to inspection by the stockholders and the creditors of the
company and their representatives, and neglect to make
proper entry in this book, or refusal to allow the same to
be inspected, is a misdemeanor, and the company must
pay to any party injured thereby a penalty of fifty dollars
for any such neglect or refusal, and all damages resulting
therefrom.¹
Capital stock. There is absolutely no provision on the
subject of capital stock that can be called general, except
that the general incorporation act requires that the capital
of companies incorporated under its provisions must be
paid in one-half within one year and the other half thereof
within two years, or the company is to be dissolved. All
charters make provision for the payment of a certain
portion of the capital stock at the time of subscription,
and for the payment of the remainder at some future day,
some of them placing these future payments entirely at the
discretion of the board of directors, others fixing a speci-
¹ D. C. Rev. St., p. 63; 21 U. S. Stats. 321.
DISTRICT OF COLUMBIA.
2237
fied time for such payment. For these particulars, refer-
ence must be had to the separate charters. Until the stock
is all paid up, or such part of it as is deemed necessary,
the corporation can do no business, and provision is com-
monly made for enforcing the payment of subscriptions.
In the general act, provision is made that com-
panies may sue for and collect installments of sub-
scription, in like manner as other debts are collected.
The directors of a company may call in and demand
from stockholders any sum of money by them subscribed,
in such payments or installments as they deem proper.
If payment is not made in thirty days after demand,
stockholders forfeit the stock subscribed for and all pre-
vious payments made thereon. Within thirty days after
the payment of the last installment of stock, the president
and a majority of the directors are required to make
certificate stating the amount of capital stock fixed and
paid in, which certificate must be signed and sworn to by
the president and a majority of the trustees or directors,
and recorded in the office of the recorder of deeds. The
act also requires that nothing but money shall be consid-
ered as payment of any part of the capital stock.'
Railway companies changing their motive power to
cable or electricity, or changing their rails in accordance
with law, may issue stock to an amount necessary to cover
the expenditure incurred in making such change.2
Increase and decrease of.—Railroad (which includes street
railways) and telegraph companies, under the general law,
have power to increase their capital stock from time to
time, if necessary, to a sum equal to the cost of construct-
ing their roads or lines, together with the right of way
and motive power, and all the appurtenances of the same.
To effect this, the company must file in the office of the
recorder of deeds a certificate stating the amount of the
1
¹ D. C. Rev. St., p. 63; 21 U. S. Stats. 321.
26 U. S. Stats. 310. See "METHODS OF CONSTRUCTION.”
2238
ECONOMIC LEGISLATION.
:
desired increase and the reason and necessity of the same,
signed by the president and a majority of the directors,
and attested by the secretary and seal of the company.'
No provision authorizes a decrease of capital stock in the
case of such companies.
Telephone companies, under the same act, may increase
or diminish their capital stock to any amount which may
be deemed sufficient and proper for the purposes of the
corporation, but no diminution of the capital stock can be
made if the amount of the debts of the corporation ex-
ceed the amount to which it is proposed to reduce the cap-
ital stock; such debts and liabilities in such case must be
satisfied and redeemed so as not to exceed such diminished
capital.2
Under the special charters governing companies in the
District of Columbia there are no provisions authorizing
an increase or diminution of the capital stock, but in ev-
ery case provision is made by which the capital is limited
in amount, the capital stock being usually fixed at one sum
with a provision that it shall in no event exceed another.
In such cases further legislation would be required to au-
thorize the company to make any change in the capital
stock.
Transfer of.—In all chartered companies, whether by
special act or by the general incorporation act, stock is
made personal property and is transferable upon the books
of the company under and in accordance with by-laws
made for that purpose. Under the general incorporation
act no shares are transferable until all calls thereon have
been paid or the stock forfeited for failure to pay.'
Bonds, debts, etc.-All incorporated companies are
endowed with power to issue bonds and secure their pay-
ment by a mortgage of their property and franchise. By
the general incorporation act, railroad (including street
railway), telegraph, and telephone companies incorporated
¹ D. C. Rev. St. 63; 21 U. S. Stats. 321.
2 21 U. S. Stats. 321.
DISTRICT OF COLUMBIA.
2239
|
under it may, from time to time, borrow money to the ex-
tent necessary for completing or operating their roads or
lines, issue bonds for the amount borrowed, and mortgage
their property and franchises to secure payment; the
directors may confer upon holders of bonds the right to
convert the principal due or owing thereon into stock of
the company, under such regulations as the company may
adopt, at any time not exceeding fifteen years from the
date of the bonds. But power to issue bonds and execute
mortgages to secure them can not be exercised until at
least one-half of the capital stock has been fully paid.¹
Liability of stockholders.-In the case of corporations
acting under special charters provision is made that the
several stockholders shall be liable for the debts of the
corporation to the amount of their respective shares of
the capital stock. The general act makes a provision
which is common to all companies incorporated under it,
and is of course applicable to street railroad and tele-
phone companies, the only companies included in that act
which are the subjects of this inquiry. By this provision,
all the stockholders of every company incorporated under
it are severally, individually liable to an amount equal to
their stock, respectively, for all debts and contracts made
by the company, until the whole amount of capital stock
fixed and limited by such company is paid in, and a cer-
tificate thereof made by the president and a majority of
the trustees or directors.¹
It seems from this provision as to the filing of the cer-
tificate of the payment of stock, that upon the full
payment of the capital stock and notice of that fact
by the filing of the certificate provided for, the indi-
vidual liability of the stockholders ceases, and creditors.
must look to the corporation alone for their security.
By further provision of this act, stockholders are jointly,
severally, and individually liable for all debts due and ow-
¹ D. C. Rev. St., p. 63; 21 U. S. Stats. 321.
2240
ECONOMIC LEGISLATION.
ing to laborers, servants, and apprentices, and this liability
seems to be unconditional; no stockholder is personally
liable in any event for any debt of the company which is
not paid within one year from the time it is due, unless
suit is brought against the company for its recovery within
one year from the time it is due; if he ceases to be a
stockholder suit must be brought within two years, and
execution against the company must have been returned
unsatisfied.¹
Liability of officers and directors.-The trustees of
corporations incorporated under the general law, if the
company fail to make the report of its condition and its
capital required by law, are jointly and severally liable for
the debts of the company then existing and all contracted
before such report is made; if any report or public notice
is false in any material representation, the officers sign-
ing the same, knowing it to be false, are jointly and
severally liable for all debts contracted by the company in
which they are stockholders, and so if said trustees
knowingly declare a dividend which would render the
company insolvent, or if the indebtedness of a company,
at any time, exceeds the amount of capital stock, the
trustees are personally and individually liable for such ex-
cess to the creditors of the company.¹
Reports. The charters of the several companies vary
with respect to the matter of making reports; in all,
reports are required to be made showing in detail the
names of stockholders, amount held by each, the general
condition of the company, its property, its earnings, its
general operations during the year, and other matters of
interest. Under the general incorporation act this report
must be made in the case of railroads (which includes
street railways) to the clerk of the supreme court of the
District of Columbia, and filed in his office; and in the
case of telephone companies it must be published in a
1 ¹ D. C. Rev. St., p. 63.
DISTRICT OF COLUMBIA.
2241
newspaper in the District of Columbia, and must be
signed by the president and a majority of the trustees,
verified by the oath of the president, and filed in the office
of the recorder of deeds.¹
Taxation.—The law regulating taxation of corporations
in the District of Columbia is in these words: "The cap-
ital stock of all corporations in said district not herein
exempted shall be appraised in bulk by the assessor, and
the corporation issuing the same shall be liable to a tax
thereon according to such value, and the shares in the
same shall not be assessed against the individual owners.
thereof; but from the appraised value of the stock shall
first be deducted the value of any real estate of said cor-
poration in said district which shall be separately taxed
against said corporation."
The roads and tracks of the railroads (including street
railways) in the district are assessed as real estate, and,
together with all personal property belonging to the com-
pany, are assessed at the rate of general taxation, one dol-
lar and fifty cents per hundred. A license tax is also re-
quired to be paid on each car belonging to the road.
Some of the companies recently incorporated are re-
quired to pay in lieu of all tax on personal property, cars,
and motive power, four per cent of their gross earnings.
In such cases the real estate is taxed as before mentioned.
2
Exemptions from.-Whenever, under a fair construction
of the legislation under which an exemption of taxation
is claimed, there is a reasonable doubt whether the claim
is made out, that doubt must be decided in favor of the
public and against the claimant. When the privileges,
rights, and powers of one company (whose property was
exempt from taxation) are granted to another, this does
not imply an exemption of its property from taxation.
Exemption from taxation is a privilege of the corporation
1 ¹ D. C. Rev. St., p. 63.
2 R. R. & Bridge Co. v. D. C., 1 Mack. 218; B. & O. R. R. Co. v. D. C.,
3 MacA. 122.
'
2242
ECONOMIC LEGISLATION.
itself, and does not pass to purchasers of its property and
franchises.¹
Where an act incorporates a company and authorizes it
to construct certain works and exempts its property from
taxation, a subsequent act (not exempting its property,
etc.) authorizing the construction of other works, not of
necessity a part of the first, these new works are not ex-
empt from taxation under the old act.¹
A bridge which lies partly in the district and partly in
Virginia can not be assessed by the district upon its entire
length. Only that portion within the district can be so
assessed; otherwise, the assessment is illegal, and a bill to
restrain sale under such illegal assessment will be sus-
tained.¹
The rule that the mere illegality of a tax is no ground
for the interposition of a court of equity, but that there
must exist in addition special circumstances bringing the
case under some recognized head of equity jurisdiction,
applies only to taxes levied by the sovereign. It would
seem not to be properly applicable to an illegal tax levied
by a municipal corporation.¹
Of stock in the hands of holders.-Shares of stock in a
corporation whose capital stock is taxed against the
corporation are not assessed
not assessed against the individual
owners.
Consolidation of companies.-The general incorpora-
tion act gives railroad, telegraph, and telephone compa-
nies the right "to cross, intersect, or join other roads,
upon conditions to be agreed upon." 2
Foreign corporations.-A corporation can have no
legal existence out of the boundaries of the sovereignty
by which it was created, and can only be sued in a
different state by express legislation authorizing such
suits against foreign corporations having agents within
1 R. R. & Bridge Co. v. D. C., 1 Mack. 218.
2 D. C. Rev. St., p. 63; 21 U. S. Stat. 321.
DISTRICT OF COLUMBIA.
2243
the state, conducting the business for which it was organ-
ized.¹
For the purpose of litigation, a corporation is to be
considered an inhabitant of the state under whose laws it
exists.2
It is competent for a state legislature to authorize the
bringing of suits against foreign corporations by service
upon the president or secretary of a foreign corporation
at its place of business, etc.3
SUBDIVISION III.-FRANCHISES.
How obtained.-Congress has retained unchanged the
original grant of exclusive legislation embodied in the
constitution of the United States. The question whether
it can delegate to any other power the right to leg-
islate for the District of Columbia in the face of this con-
stitutional provision, by which it is endowed with special
legislative powers, has been doubted.*
¹ Bank of Augusta v. Earle, 13 Pet. 588; Marshall v. B. & O. R. R., 16
How. 328; 18 How. 404; Ohio & Miss. R. R. v. Wheeler, 1 Black. 297;
Lathrup v. U. P. R. R. Co., 1 MacA. 234.
2 Lathrop v. Union Pacific R. R., 1 McA. 234. The act of congress in-
corporating the Union Pacific Railroad extended the privilege of cer-
tain land grants to the Union Pacific Railroad Company, Eastern Divis-
ion, upon the same conditions, etc., among which it was stipulated that
the company should sue and be sued in all the courts of law and equity
within the United States. Held, that the capacity of the company for
suing and being sued was not thereby enlarged, and being a corpora-
tion of the State of Kansas, it could not be sued in the District of Co-
lumbia. (Ib.)
Under a section (790, Revised Statutes) relating to the District of Co-
lumbia, an action can be brought in this court against a foreign corpora-
tion only when it has an established place of business in the district;
and the process can be served upon the agent or other person by it em-
ployed to conduct such business as it is engaged in. (Dallas v. R. R.
Co., 2 MacA. 146.)
3
Weymouth v. Wash. & Georgetown & Alexandria R. R., 1 MacA. 19.
In the case of Roach v. Van Riswick (MacA. & Mack. 171), the court
below had rendered a decree declaring a judgment at law a lien upon
an equitable interest. This was done in accordance with an act of the
2244
ECONOMIC LEGISLATION.
From what has been said, it is manifest that all fran-
chises must have their origin in the only power competent
to create them, and that congress alone has power to make
any provisions that will authorize the exercise of any fran-
chise powers whatever.
In the special acts incorporating gas companies for the
cities of Georgetown and Washington, the right to lay pipes.
for the purpose of conducting gas in any of the streets,
avenues, and alleys of these cities is granted in the fullest.
and broadest manner. The pipes are made subject to such
conditions and regulations with respect to them as shall
be made by the local authorities, and such regulations and
conditions are provided in ordinances that are very full
and explicit in their terms.
Electric lighting, telegraph and telephone companies, as
pointed out in Subdivision I, above, are all foreign compa-
nies, and are subject to such restraints as congress may
impose.
The right of a telephone company to erect or inter its
wires is derived entirely from the permission of the local
authorities, and the use of its routes is controlled by the
police regulations in force in the district. But there can
be no question that in the case of all these companies,
their right to use the streets, and, having occupied, to con-
tinue that occupation depends at last upon the will of con-
gress; and no permit from the local government can super-
sede or control the reserved force of the national legislation.
The power to make those grants to municipalities, which
are ordinarily made to city governments by the constitu-
tion and laws of a state, is, in the District of Columbia,
possessed by the congress of the United States.¹
district legislature, and was in violation of the law as it existed before
the passage of said act. It was held by the court that the legislature
had no authority to make such a law, that the constitution of the United
States had clothed congress with exclusive legislation in the District of
Columbia, and that it could not delegate that power to the legislature.
¹ Cooper v. D. C., MacA. & Mack. 250.
1
DISTRICT OF COLUMBIA.
2245
The general incorporation act gives railroad (including
street railways) and telephone companies the privilege to
lay out and construct their lines upon any road, alley or
highway so as not to interfere with the free use of the
same, and in such a manner as to afford security for life
and property, but the route and termini must be approved
by congress before the line can be constructed."
Control of streets.-See under "SPECIAL DAMAGES;
PROPERTY OWNERS' RIGHTS."
The State of Maryland, in its act of cession of territory
to the United States, provided "that all the squares, lots,
pieces, and parcels of lands within the said city which
have been or shall be appropriated for the use of the
United States, and also the streets, shall remain and be for
the use of the United States.'
3
2
In the deeds from the original proprietors of the lands
upon which the City of Washington is built, to the
trustees ³ who took them in trust for the purpose of
making a fair division of them between the public and
the said original proprietors, it is especially provided that
such streets, squares, parcels, and lots as the president of
the United States, for the time being, shall approve, shall
be conveyed by such trustees to the commission, for the
time being, appointed by virtue of the act establishing a
permanent seat of government and their successors, for
the use of the United States forever.
The Supreme Court of the United States has several
times declared that this deed, executed in conservation of
the agreement between the United States and the original
proprietors, clothed the United States with a fee simple
title in the streets of the City of Washington.*
1 ¹ D. C. Rev. Stats., p. 63; 21 U. S. Stats., p. 321.
2 Davis's Laws, D. C., p. 68.
³ See form of the deed. Davis's Laws, D. C., p. 60.
* Van Ness v. Washington, 4 Pet. 232; Potomac Steamboat Co. v. Up-
per Potomac Steamboat Co., 109 U. S. 672; District of Columbia v. Balti-
more & Potomac R. R. Co., 114 U. S. 453.
2246
ECONOMIC LEGISLATION.
?
Special damages; property owners' rights. — The
matter of the right of telegraph companies to use the
streets under the United States law has been fully consid-
ered by the local courts of the district and the Supreme
Court of the United States.¹
In Hewett v. The Telegraph Company, 4 Mackey,
425, several private individuals filed a bill alleging that
they were owners of real estate on one of the streets of the
City of Washington, and that the defendant, the telegraph
company, was about to erect poles for carrying overhead
wires along said street, and that it would thereby create a
public nuisance as well as inflict a special damage on their
property; the defendant answered that the poles in ques-
tion were to be erected in aid of the establishing of a sys-
tem of underground wires (which would not, at the time,
be completely and successfully carried into effect), and with
the permission of the commissioners of the District of
Columbia, and justified under the act of congress approved
the 24th of July, 1866, which is "an act to aid in the con-
struction of telegraph lines."
The court held: 1. That the joint resolution of con-
gress of March 3, 1863, regulating the construction of
telegraph lines in the District of Columbia, does not limit
or control in any way the act of congress of July 24, 1866,
authorizing the extension of telegraph lines over the postal
roads of the United States. The provisions of the latter
act apply to and include the District of Columbia to the
same extent that they do any other portion of the United
States.
2. A public nuisance can not arise from the exercise of
a right granted by the authority of law; but if the grant
be not exercised with a due regard to the rights of a citi-
zen, a private nuisance may be created.
3. On an application for injunctive relief against an al-
leged private nuisance, growing out of the exercise of a
¹ See United States Section above.
DISTRICT OF COLUMBIA.
2247
L
right granted by the legislature, a court of chancery will
consider all the circumstances and equities of the case,
and where, as a consequence of its interference, the hard-
ship on one side would be immeasurably greater than the
injuries sustained by the other, it will not interpose the ex-
traordinary remedy of injunction, but will leave the com- ·
plainant to his action at law.¹
A municipality charged with the duty and power to
grade and alter the streets of its city is not answerable, in
the performance of such work, for injuries resulting to a
citizen unless negligence be shown; but it is other-
wise with a private corporation, which is liable like
any other private person making a specially authorized
but extraordinary use of the street. Such uses of public
streets by private persons are lawful only because specially
authorized, and while so conducted as not to be harmless
to others, but they become trespasses whenever injury oc-
curs, whether resulting from negligence or not. Evidence,
therefore, by such a defendant to show all possible care
and diligence, if unaccompanied by any assertion of re-
sponsibility on the part of another, or want of care on the
part of the person injured, should be excluded as imma-
terial to the issue.2
The fact that a municipality grants to a private person
the right to engage in extraordinary work upon its streets
does not deprive the municipality of the right to recover
over against such person the amount which it (the munic-
ipality) has been compelled to pay to a citizen injured by
such work.2
It seems that when a party has been compelled by the
default of another (who was primarily liable) to pay dam-
ages for injuries received, he may recover in an action
over, the entire amount paid, with interest and costs in
both suits.2
1 See further in the same line of argument, Telegraph Co. v. Texas,
105 U. S. 460.
2 D. C. v. B. & P. R. R. Co., 1 Mack. 314; Barnes v. D. C., 91 U. S. 540 :
McGill v. D. C., 4 Mack. 70.
2248
ECONOMIC LEGISLATION.
The inconvenience which may result to private indi-
viduals by the careful exercise of privileges conferred by
competent authority is "damnum absque injuria."1
Condemnation of property.-If lands required by a
railroad (street railway) company can not be purchased
or acquired by voluntary grant, compensation for such
lands must be ascertained under the terms of the law
establishing condemnation proceedings. The company
must deposit with the clerk of the court descriptions of
lands taken for the use of the road, and such lands be-
long to the corporation upon proof that it has tendered
compensation for the same."
Methods of construction. The right to lay pipes for
the purpose of conducting gas in any of the streets, ave-
nues and alleys of these cities is granted to both the Wash-
ington and Georgetown gas companies, in the fullest and
broadest manner. Said pipes are made subject to such
conditions and regulations with respect to them as may
be made by the local authorities, and such regulations and
conditions are provided in ordinances that are very full
and explicit in their terms.
Where the complainant was authorized to cross with
its tracks any streets in the district, and the district
authorities gave a contract to the defendants, Gallagher
& Co., to construct a sewer which would pass under
the tracks of complainant, where they crossed one of
the streets of Washington City, who were near said
tracks and were endangering their use; and in the bill
of complainants, filed for an injunction it was not averred
that the contractors were doing anything they were
not authorized by law to do, or that they were doing their
work in a careless manner, so as to interfere with the
rights of the company, it was held that while the com-
pany had a right to lay its tracks at the intersections of
streets, etc., it was subject to the right of the district to
¹ Nietzey v. R. R., 5 Mack. 34.
2 D. C. Rev. St., p. 63.
DISTRICT OF COLUMBIA.
2249
construct a sewer under said street, if deemed necessary
for the public comfort, etc.; that the obligations of the
two parties in respect to each other was to so attend to
their business as not to interfere with each other, i. e., the
contractor in digging the sewer and the railroad com-
pany in running its trains; and that the railroad company,
not being a party to the contract for the construction of
the sewer, could not invoke the aid of the court to en-
force its provisions, especially when the contractor was
performing his contract with due.care.'
2
As to street railways, it is provided that whenever the
route of one road coincides with that of another, or con-
nects portions of such road, but one set of tracks shall be
used; and each of the companies owning or controlling
these roads shall contribute equitably to the expense of
laying and maintaining such road. If the amount to be
thus contributed can not be agreed upon, the supreme.
court of the District of Columbia must ascertain, upon ap-
plication of either party, after notice to the other, what
ought properly to be paid.
The manner of laying the tracks of such roads and of
paving the beds of such tracks are to be under the control
and supervision of the local authorities of the district;
and such track beds and the spaces between the tracks,
together with a space of two feet beyond the outer line
of the tracks, are to be kept in good condition without
expense to the United States or the District of Columbia.
Street railway companies conforming to grade may use
cobble-stones or Belgian blocks for paving as above, as
the commissioners of the district may direct. If any com-
pany refuses or neglects to pave and keep pavement in re-
pair as required, the pavement may be laid by the District
of Columbia; and if the company refuse to pay for such
pavement, the district authorities are authorized to issue
certificates of indebtedness against the property and fran-
¹ B. & P. R. R. Co. v. William Dennison et al., 3 MacA. 245.
* See "SUBDIVISION I-HISTORICAL."
VOL. II-61
i
2250
ECONOMIC LEGISLATION.
chise of the company, bearing ten per cent interest,
which constitute a lien upon such property and franchise;
and if still unpaid at the end of a year, the property and
franchise may be sold at auction, after one week's notice.
Street railway companies which use any of the new
motive powers authorized as shown below, must cause
their road-beds to be relaid with flat grooved rail and
made level with the surface of streets. If they fail for
two years to exercise this privilege—that is, of using other
motive power-they are required to cause their tracks to
be laid with flat grooved rail, and the expense must be
paid by said companies. If, after being notified by the
District of Columbia, they fail to lay rails as required, the
commissioners must cause the change to be made as soon
as practicable, and issue certificates of indebtedness, bear-
ing ten per cent interest, to be a lien upon the property
and franchises; and if the certificates are not paid in a year,
the property and franchises are to be sold, after one week's
advertisement. No rail other than that mentioned above
can be laid in the streets of Washington and Georgetown,
and all clauses of railroad charters inconsistent with this
provision are repealed.'
By the charters of certain street railway companies of
Washington and Georgetown, the companies were re-
quired to keep their tracks and the adjacent parts of the
streets at all times well paved and in good order, without
expense to the United States or to the District of Colum-
bia, the district being also bound by statute to take all
proper care of its streets and avenues. On failure of the
companies to perform this duty, the work was done and
paid for by the district, and to obtain reimbursement for
the outlay, suit was afterward brought by it against the
companies. It was held that, after the acceptance of their
charters, the companies could not be heard to object that
the provision was illegal or incapable of enforcement
1 25 U. S. Stat. 793.
DISTRICT OF COLUMBIA.
2251
against them; that the right of action grew out of and
was founded upon obligation in the charters, as well of the
district as of the companies, and that the suit was an
action founded upon those statutes; that the statutory ob-
ligation of the companies had been broken if the paving
had caused any expense to the district, and this fact would
furnish the consideration and foundation for a claim for
reimbursement; and that the action was not within any
of the enumerated actions mentioned in the first section.
of the Maryland act of 1715, chapter 23, to which the
plea of limitation would be available.¹
One section of the charters of these companies required
them to keep their tracks, etc., at all times well paved and
in good order; and by another section it was provided
that nothing in this act shall prevent the government, at
any time, from altering the grades or otherwise improving
all avenues or streets occupied by said roads, or the re-
spective cities from altering or improving the streets and
avenues, and the sewerage thereof, which may be under
their respective authority and control; and, in such event,
it shall be the duty of such company to change their said
railroad so as to conform to such grade or pavement. The
companies' charters also provided that the use and main-
tenance of said roads shall be subject to the municipal reg-
ulations of the cities of Washington and Georgetown.
The court held that the companies were bound by the
charters, not only to pave once the designated portions of
the streets, but to repair the paving and to change the
grade and lay new pavements within the prescribed limits
whenever the municipality, in its discretion, should see.
proper to make changes in the streets, rendering such
work proper to be done on the part of the companies.¹
Where, on the failure of the companies to pave, etc., as
required by their charters, the work is done by the dis-
trict, assumpsit for the recovery of the sum expended is a
¹ D. C. v. W. & G. R. R. Co., 1 Mack. 361.
2252
ECONOMIC LEGISLATION.
more appropriate form of action than debt; and the decla-
ration should charge that the sums paid were what the
work was reasonably worth, the recovery being limited to
such reasonable expenses incurred by the city as may be
ascertained by a jury. Extravagant amounts recklessly
expended in the work, without reference to its true value,
should not be allowed.¹
By the charters of the Washington & Georgetown and
the Metropolitan Railroad Companies, these companies are
required to keep their tracks "for the space of two feet
beyond the outer rail thereof, and also the space between
the tracks, at all times well paved and in good order."
Held: 1. That this language involved the obligation to
construct a pavement where one did not exist before.
2. That the district has the right to prescribe the ma-
terial of which this pavement shall be composed, and if
the pavement has already been constructed, they may order
it removed and another kind put down. 3. That when-
ever the district authorities direct the grade of a street to
be changed, it becomes the duty of the company to con-
form to the change. 4. And that this obligation does not
depend upon notice to the companies. It is incurred the
moment they have knowledge that the change is begun
or contemplated.2
Regulations as to service.-An act was passed on the
23d of June, 1874, entitled "An act to regulate gas-
works." This act fixes the illuminating power of the gas
and determines its purity. It authorizes the president of
the United States, by and with the advice and consent of
the senate, to appoint an officer who is called the inspector
of gas, and that inspector is authorized to appoint an as-
sistant, who must be a practical gas-fitter. The gas com-
pany is required to furnish a laboratory for the use of the
inspector of gas, and that officer is required to make daily
inspections of gas. He is also required to test all meters.
1 ¹ D. C. v. W. & G. R. R. Co., 1 Mack. 361.
2 D. C. v. R. R. Co., 4 Mack. 214.
18 U. S. Stats. 277.
DISTRICT OF COLUMBIA.
2253
1
that are used; and the act fixes the rates at which gas is to
be furnished to the city and to citizens, and requires such
rates to be uniform. A discount is allowed in the amount
of gas bills for prompt payment. By the terms of this act,
the gas company is required to light the streets of Wash-
ington at a certain rate per lamp, to be lighted so many
hours in the course of the year.
The gas to be furnished by the Washington and George-
town Gas Companies must be equal to sixteen candles by
the Bunsen photometer, using the English parliamentary
standard Argand burner, having a seven-inch chimney,
consuming five cubic feet of gas per hour, and must not
contain more than twenty grains of sulphur nor more than
five grains of ammonia in any form in one hundred cubic
feet; and in case it appears at any time from the report of
the inspector of gas and meters that these conditions are
not complied with, the company is subject to a penalty of
one hundred dollars, to be recovered before the proper
tribunal and paid into the treasury of the District of Col-
umbia, for each and every day such violation may con-
tinue.
Provision is also made in the charters of these compa-
nies for the appointment of an inspector of gas and meters,
whose duty it is made to inspect the gas daily and make
reports, and also to test meters upon the request of con-
sumers, under conditions specified in the act of congress
enacted for the purpose. The inspector is required to give
bond and make oath that he will faithfully discharge the
duties of his office.
Congress fixes from time to time, the price of gas to be
furnished in the City of Washington, and regulates the
number of hours per year in which the gas is to be fur-
nished to the public or street lamps; and to enable the
companies to collect for the gas supplied, authorizes them
to stop the gas from entering the premises of any person
neglecting or refusing to pay the amount due for the gas
supplied.
2254
ECONOMIC LEGISLATION.
It is made a misdemeanor, punishable with fine and
imprisonment, for any person to make or cause to be made
any pipe or contrivance for the purpose of, or to connect
the main service pipe in such manner as to supply gas to
any premises without passing the same through the
meters; and any person injuring any of the pipes, plugs,
works, reservoirs, engines, or machinery, so as to stop,
obstruct, or weaken the same, must forfeit and pay all
damage resulting from said act.
Where, on moving into his place of business, plaintiff
signed the following agreement with defendant, the gas
light company: "We, whose names are hereunto sub-
scribed, agree to take gas from the Washington Gas Light
Company upon the condition that the company reserves
to itself the right to refuse to furnish or at any time to
discontinue gas to any premises, the owner or occupant of
which shall be indebted to the company for gas or fittings
used upon such premises or elsewhere," it was held that
this contract related only to future delinquencies, and that
the defendant was liable in damages for cutting off plaint-
iff's supply of gas because of non-payment of an old bill
for gas furnished before the signing of this contract and at
another place.¹
Railroad companies under the general law are author-
ized to carry persons and property and to receive compen-
sation therefor, and to propel their cars by steam, animals,
or any mechanical power, or any combination of them; to
regulate the time and manner of transportation and the
tolls and the compensation to be paid.²
By an act approved March 2, 1889, making appropria-
tions for the next fiscal year, street car companies are au-
thorized to substitute for horses electrical batteries, or un-
derground wire, or underground cables moved by steam
power. As to relaying their tracks under this provision,
" METHODS OF CONSTRUCTION."
see
1
3
¹ Lloyd v. Washington Gas Light Co., 1 Mack. 331.
2 D. C. Rev. St., p. 63.
3 25 U. S. Stats. 793.
1
DISTRICT OF COLUMBIA.
2255
A conductor may eject a passenger who has misbehaved
himself in the car and is intoxicated, provided no more
force is used than is necessary to eject him from the car;
but a railroad is liable for the willful act of the conductor
in expelling a passenger from a street car.¹
If the conduct of a passenger in a horse car is such that
his expulsion seems to the conductor to be just and neces-
sary for the prevention of indecent conduct and the viola-
tion of good order, the conductor is justified in expelling
him, the company being liable for any abuse of this dis-
cretion or of any oppression in its exercise; and it will be
error if the court instruct the jury to leave out of consider-
ation the question as to whether the passenger furnished, by
his conduct, a reasonable cause for apprehending a breach
of good order. A sick passenger on a street car must con-
form to the reasonable regulations of the car company.
He has no prerogative to misbehave and subject the other
passengers to annoyance by his offensive conduct; and it
will be no protection against his expulsion that his conduct
is not willful or voluntary. The rule as applied to steam
cars in regard to the accommodations to sick passengers
is not a proper rule to apply to the management of streets
What might be permitted on the former during
long journeys could not be permitted on the latter, or
practiced without great inconvenience to the other pas-
sengers.2
cars.
Safety of life and property.-A principal will not be
held liable for exemplary damages for the tort of his agent,
unless he is derelict in connection with the offense of the
agent.3
Where there is abundant room inside a horse car, in
which there are pendent straps for the passenger to hold
on by, he is guilty of negligence who rides on the plat-
form; and if an injury result to him, which would not
1 Converse v. W. & G. R. R. Co., 2 MacA. 504.
2 Lemont v. Washington & Georgetown R. R. Co., 1 Mack. 180.
3 Redwood v. Metropolitan R. R. Co., 6 D. C. 302.
2256
ECONOMIC LEGISLATION.
have occurred had he been inside the car, he can not main-
tain an action for such injury. In an action for damages
for injuries sustained while riding on the platform of a
street car, the court will presume, in the absence of evi-
dence to the contrary, that the car was a good one.¹
Public service.-As to electric lighting of streets in
Washington, see "SUBDIVISION I-HISTORICAL;" as to
gas-lighting of streets, see "REGULATIONS AS TO SERVICE,"
above.
Alteration, amendment, etc., of franchises.-See un-
"AMENDMENTS, REPEALS, ETC.," above.
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
At the present time water is brought into the cities
of Washington and Georgetown from works created
by the government of the United States, the aqueduct
and reservoirs being entirely under the control of that
government. The mains by which water is carried
through the streets and other pipes and means of distri-
bution are under the control of the local authority; and
no control over these various works is in any way in the
hands of any incorporated company. In the country por-
tions of the District of Columbia, water companies have
been formed, but none of them have been incorporated by
special act, and they are simply temporary associations for
the purpose of furnishing to particular neighborhoods a
necessary supply of water from tanks.
¹ Andrews v. Capital, North O. St. & S. Washington R. R., 2 Mack..
137.
TERRITORIES.¹
EDITED BY WILLIAM B. WEBB, ATT'Y, WASHINGTON, D. C.
GENERAL PROVISIONS HAVING REFERENCE TO
ALL THE TERRITORIES.
The legislative power of every territory extends to all
rightful subjects of legislation not inconsistent with the
constitution and laws of the United States; but no law
can be passed interferring with the primary disposal of
the soil; no tax can be imposed upon the property of the
United States, nor can lands or other property of non-·
residents be taxed higher than the lands or other property
of residents.2
The legislatures of the territories of the United States
can not pass local or special laws incorporating cities,
towns or villages, or changing or amending the charter of
any town, city or village, for the assessment and collection
of taxes for territorial, county, township or road pur-
poses, or granting to any corporation, association or indi-
vidual any special or exclusive privileges, immunity or
franchise whatever, and in all cases where a general law
can be made applicable, no special law can be enacted in
any of the territories of the United States by the terri-
torial legislatures thereof.3
¹ References, unless otherwise stated, are to the Revised Statutes of
the United States, designated as "U. S. Rev. Stat.," by section simply,
and to the United States Statutes at Large, designated as "U. S. Stat.,"
by volume and page.
2 U. S. Rev. Stat., sec. 1851.
3 24 U. S. Stat. 170. Section 1889 of the Revised Statutes of the
United States provided that the legislative assemblies of the several
(2257)
2258
ECONOMIC LEGISLATION.
The statute declares that it shall be unlawful for
any corporation not created under the laws of the
United States, or of some state or territory of the United
States, to acquire, hold or own real estate or any interest
therein, in any of the territories of the United States ex-
cept such as may be acquired by inheritance, or in good
faith in the ordinary course of justice in the collection of
debts, and except where prohibited by treaty stipu-
lation.¹
No corporation or association more than twenty per
cent of the stock of which is or may be owned by per-
sons, corporations or associations not citizens of the
United States, can acquire or hold any real estate here-
after acquired in any of the territories of the United
States or the District of Columbia.¹
territories should not grant private charters or special privileges, but
'might, by general incorporation acts, permit persons to associate them-
selves together, as bodies corporate, for mining, manufacturing and
other industrial pursuits, or the construction or operation of railroads,
wagon roads, or irrigating ditches.
The act of June 8, 1878 (20 U. S. Stat. 101, Rich. Sup., p. 337, ch. 168),
provided that the words "the legislative assemblies of the several ter-
ritories shall not grant private charters or especial privileges," in sec-
tion 1889 Revised Statutes, should not be construed as prohibiting the
legislative assemblies of the several territories of the United States from
creating towns, cities, or other municipal corporations, and providing
for the government of the same, and conferring upon them the corpo-
rate powers and privileges necessary to their local administration, by
either general or special acts, and all general and special acts of such
legislative assemblies theretofore passed creating and providing for the
government of towns, cities and other municipal corporations, were
ratified and confirmed, any law to the contrary notwithstanding, sub-
ject, however, to amendment or repeal hereafter by such territorial as-
semblies. But nothing was to have the effect to create any private
right, except that of holding and executing municipal offices, or to di-
vest any such right, or to make valid or invalid any contract or obliga-
tion of said town heretofore executed, or to authorize any future obli-
gation, except such as may be necessary to the administration of such
towns or cities. In July, 1886, however, the powers of the several ter-
ritorial legislatures were fully limited, as shown above.
1 24 U. S. Stat. 476.
TERRITORIES.
2259
No corporation other than those for the construction of
railways, canals or turnpikes, can acquire, hold or own
more than five thousand acres of land in any of the terri-
tories of the United States, and no railroad, canal or turn-
pike corporation can acquire, hold or own lands other
than such as may be necessary for its business.'
It is provided that property acquired, held or owned in
violation of the preceding restrictions, shall be forfeited
to the United States, proceedings to be instituted by the
attorney-general in which the court shall determine the
very right of the matter without regard to form, joinder of
parties, multifariousness, or other matters not affecting
the substantial rights of the United States, or the other
party or parties interested.¹
No territory of the United States or any political or
municipal corporation or subdivision of any such territory
can make any subscription to the capital stock of any in-
corporated company, or company or association having
corporate powers, or in any manner loan its credit to or
use it for the benefit of any such company or association,
or borrow any money for the use of any such company or
association.2
Every contract, combination in form of trust or other-
wise, or conspiracy in restraint of trade or commerce in any
territory of the United States or the District of Columbia, or
between any such territory and any state or the District of
Columbia or with foreign nations, is declared illegal.
Every person (including corporations) making such con-
tract is guilty of a misdemeanor, and if convicted may be
punished by fine not exceeding five thousand dollars, or by
imprisonment not exceeding one year, or by both, in the dis-
cretion of the court.³
1
¹ 24 U. S. Stat. 476.
8 26 U. S. Stat. 209.
3 24 U. S. Stat. 170.
i
2260
ECONOMIC LEGISLATION.
ALASKA.
The Territory of Alaska was acquired from Russia by
the terms of a treaty made with the United States gov-
ernment on the 30th day of March, 1867. For several
years the government employed agents to look after its
interests, and in 18682 extended to the territory the laws
of the United States relating to customs, commerce, and
navigation, and established a collection district therein.
On the 17th day of May, 1884, an act of congress was
approved, entitled "an act providing a civil government
for Alaska." This act created a governor, attorney, clerk,
marshal, judge and commissioners for the proper govern-
ment of the territory.3 By the seventh section of this act
the general laws of the State of Oregon are declared to be
the law in the said territory, so far as the same may be
applicable and not in conflict with the provisions of this
act or the laws of the United States.
Under these circumstances the laws of Oregon must be
looked to for all the provisions in relation to munici-
palities, the granting of franchises, and the power and
method of forming corporations within the limits of this
territory.
ARIZONA.
4
SUBDIVISION I.-HISTORICAL.
By an act of congress, approved February 24, 1863, that
part of the then constituted Territory of New Mexico situ-
ated west of a line running due south from the point where
the south-west corner of the Territory of Colorado joins
the northern boundary line of said Territory of New Mex-
ico to the southern boundary line of said Territory of New
2 15 U. S. Stat. 240.
3 23 U. S. Stat. 24.
1 15 U. S. Stat. 539.
4 Unless otherwise stated, references to the statutes are to Rev. Stats.
of Arizona, of 1887, by sections simply. The session laws are referred
to as
"Laws" of their respective years.
TERRITORIES-ARIZONA.
2261
་
Mexico, was erected into a temporary government under
the name of the Territory of Arizona.¹
The government authorized by this, act was clothed with
executive, legislative, and judicial powers, and provided
with the officers necessary to the management of its ter-
ritorial affairs. All the enactments of the Territory of
New Mexico not inconsistent with the organic act were
extended to and continued in force in said territory until
repealed and amended by future legislation.
Immediately after this act a code of laws was adopted for
the territory, known as the Howell Code. Among its chap-
ters are provisions for forming corporations for mining
purposes, electric telegraphs, acequias, or irrigating ca-
nals, and also for the incorporation of villages. Under
the act of congress forbidding the territory to erect private
corporations, of course there were no corporations such as
are the subject of consideration in this treatise except by
general enactment.
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation; how obtained. As already indicated
under the general statement relative to territories, all cor-
porations must be formed under general laws, the laws of
the United States forbidding the passage of special acts
for such purposes.
Articles of incorporation.-Any number of persons.
may associate themselves and become incorporated for the
transaction of any lawful business by adopting articles of
incorporation, which must be signed and acknowledged
by them as deeds are required to be acknowledged.³
Any number of persons not less than five, citizens of the
territory or of a state, and owning stock in a railroad,*
2 23 U. S. Stat. 348.
3 Sec. 234.
1 12 U. S. Stat. 664.
Street railways are not mentioned in the statutes in terms, and it is
considered probable that the term "railroad" would include them.
This is also indicated from the requirement shown below, that the arti-
cles must state the motive power.
.........
2262
ECONOMIC LEGISLATION.
may be incorporated when $1,000 for each mile of the
railroad has been subscribed, and may adopt articles of
association.¹
Must show what.-The articles of incorporation of all
companies except railroads must state the names of cor-
porators; name of the corporation; the principal place of
business; the general nature of business; amount of сар-
ital stock, when and how to be paid; time, commence-
ment and termination of the corporation; the officers to
conduct the affairs of the corporation; amount of indebt-
edness to which the corporation may subject itself; and
whether private property is to be exempt from corporate
debts in the proportion that the stock of the individual
bears to the whole capital stock.²
The articles of association of railroad companies must
state the name of the corporation; number of years of its
endurance, not to exceed twenty-five; amount of stock
which is contemplated; cost of road; cost of right of way;
motive power, and every thing entering into the comple-
tion of the railroad; the place from which the road is to
run; and its length, as near as may be.3
Publication of.-A corporation must publish a copy of
its articles of incorporation for six weeks in newspapers
published in the county where its business is conducted.¹
Filing. The articles of incorporation of companies usu-
ally must be recorded in the office of the county recorder
of the principal place of business. Those of railroad
companies must be filed with the secretary of the terri-
tory. Upon such filing, the persons so associating become
a corporation, with all the powers and rights pertaining to
such bodies.5
Organization.-See under "OFFICERS, MEETINGS," etc.,
below.
Commencing business.-Corporations generally must,
¹ Sec. 296.
5 Sec. 298.
2 Sec. 234.
9 Sec. 297.
• Sec. 236.
TERRITORIES-ARIZONA.
2263
before commencing business, adopt their articles as indi-
cated above.¹
Duration of charter. The time of corporate existence
must be stated in the articles, and is limited to a period of
twenty-five years, except corporations formed for works, of
internal improvement, when the limit is fifty years, with
privilege of renewal from time to time for the same period
upon vote of three-fourths of the stockholders at any reg-
ular election held for that purpose.²
Powers. Any number of persons may associate them-
selves and become incorporated for the transaction of any
lawful business, but such incorporation confers no powers
or privileges not possessed by natural persons, except as
herein provided.
The general powers of bodies corporate are, to have per-
petual succession; to sue and be sued by the corporate
name; to have a corporate seal and alter the same at
pleasure; to render shares of stock transferable; to exempt
property of members from corporate debts; to make con-
tracts; acquire and transfer property; to establish by-laws
and make rules and regulations.3
Railroad companies are given power to have perpetual
succession; capacity to sue and be sued; to make con-
tracts; to acquire, hold, and have real estate necessary for
the road and telegraph lines and for carrying on business.
of such corporation, and generally to have all the powers
of private persons; to take, hold, and convey lands re-
ceived by voluntary grant; to purchase or by voluntary
grant to receive and take land for road, telegraph stations
and other matters necessary for its business, and such
further powers as may be necessary for the enjoyment of
the corporate franchise granted.*
Officers; meetings; voting; quorum, etc.—The arti-
cles of incorporation must state the officers who are to
conduct the affairs of the corporation."
1 Sec. 234.
5 Sec. 299.
* Sec. 238.
* Sec. 233.
• Secs. 312 and 313.
←
2264
ECONOMIC LEGISLATION.
Directors of railroad corporations must meet and organ-
ize and elect a president, who must be one of their num-
ber; a secretary and a treasurer, who must be stockholders,
and who must give bonds for the faithful performance of
their duties. Stockholders-two-thirds being present in
person or by proxy after due notice-may at a general meet-
ing remove the president and directors, and elect others
in their stead.²
Annual meetings of the stockholders of railroad com-
panies may be held after a notice of not less than twenty
days,³ and meetings of the stockholders may be called on
thirty days' notice, at which the capital stock may be in-
creased or diminished by a vote of the majority of the
stockholders.*
Persons holding shares of stock in incorporated compa-
nies as security for money loaned thereon, or as security
for other indebtedness, can not vote said shares at any elec-
tion, general or special, but the absolute right to vote re-
mains in the person making the deposit or transfer of such
stock as security for any such indebtedness."
Books. See under "LIABILITY OF OFFICERS AND DIRECT-
ORS," below.
Capital stock.-The articles of incorporation must state
the amount of capital stock, and when and how it is to be
paid."
The law also requires in the case of railroad companies
that $1,000 for each mile of railroad must be subscribed be-
fore the adoption of articles of incorporation; and that
the president and secretary, when the stock is fully paid up,
must make a certificate to that effect, and file the same
with the secretary of the territory.
8
Increase and decrease of.-The capital stock of railroad
corporations may be increased or diminished by a vote of
2 Sec. 302.
³ Sec. 300.
• Sec. 301.
Sec. 234.
7 Sec. 296.
8 Sec. 311.
1 Sec. 299.
5 Laws, 1889, p. 76.
TERRITORIES—ARIZONA.
2265
the majority of stockholders at a meeting called on thirty
days' notice.'
Transfer of.-Corporations are given the power gener-
ally to render the shares of their stock transferable.²
Bonds, debts, etc.-The articles of incorporation must
state the amount of indebtedness to which the corporation
may subject itself.3
Persons acting as corporators can not set up want of
organization by way of defense in suit brought against
them as corporators and vice versa.*
4
Liability of stockholders.-Corporations are given
power to exempt the private property of members from
corporate debts," and whether such property is to be so ex-
empted or not must be stated in the articles of incor-
poration.³
Liability of officers and directors.-Intentional fraud
in complying with articles of incorporation, or intentional
keeping of false books renders the parties guilty of it lia-
ble to punishment by fine and imprisonment.5
Consolidation of companies.-Railroad companies are
specifically given the power to unite with other railroads,
and if compensation for the use of such railroads can not
be agreed upon it may be ascertained by proceedings ac-
cording to law.6
Dissolution; forfeiture.-Corporations cease by non-
use of their franchises for five years at any one time.'
·
SUBDIVISION III.-FRANCHISES.
How obtained.-Railroad companies are specifically
given power to construct their road along streams, water-
courses, streets, avenues, and highways; across railroads,
canals, etc., and it is their duty to restore such streets, etc.,
1 Sec. 301.
5 Secs. 240, 241.
2 Sec. 233.
3 Sec. 234.
* Sec. 249.
6 Sec. 313.
7 Sec. 243.
s "Railroad" includes "street railway." See "ARTICLES OF INCORPO-
RATION," note 4.
VOL. II-62
2266
ECONOMIC LEGISLATION.
as nearly as may be to their natural condition. The con-
dition of the granting of railroad franchises is that the
company shall appoint an agent residing in the territory,
who must be authorized to accept service of process at all
times.2
3
Condemnation of property.-Railroad companies are
specifically given the power to take land for railroad,
telegraph stations, and other matters necessary for their
business; to lay out their roads, and construct the same, and
occupy lands for embankments; to take by purchase or
grant land, timber, gravel, and other material for use in
the construction of the road, and if the same can not be
purchased it may be acquired by proceedings at law; to
cause excavations and surveys to be made, and to enter
on lands for that purpose; to take possession of and oc-
cupy springs and streams for the use and purpose of the
road, with the right of way to and from such springs, to
all their buildings, for the use of the road; to unite with
other railroads, and if compensation for the use of such
road can not be agreed upon it must be ascertained by
proceedings provided by law. They are also given the
right to make use of the road-bed of other roads and con-
solidate with them.
Charges for franchises.-Municipalities are authorized
to fix the amount of license to be paid by any person, com-
pany, or corporation, for carrying on business, and pre-
scribe the manner of collecting the same for stated periods.
in advance, and to fix penalties for non-payment by fine
or imprisonment.*
Regulations as to service.—The statute gives railroad
companies the power to carry passengers and collect tolls
as compensation therefor; to regulate the time and manner
in which passengers shall be transported and the tolls and
compensation therefor; to regulate the force and speed of
³ See note 8, preceding page.
¹ Secs. 312, 313.
• Sec. 163.
2 Sec. 328.
TERRITORIES-INDIAN.
2267
1
cars and the conduct of all their employes; and to expel
persons from cars.¹
1
Public service. The board of trustees of incorporated
cities has power to raise funds by general tax to pay for
lighting the streets and public buildings.2
INDIAN TERRITORY.
By act of congress, approved May 2, 1890, certain gen-
eral laws of the State of Arkansas, in force at the close
of the session of the general assembly of that state for
1883, as published in 1884 in the volume known as Mans-
field's Digest of the Statutes of Arkansas, which are not
locally inapplicable or in conflict with this act, or with any
law of congress relating to the subject especially mentioned
in this section, are hereby extended over and put in force
in the Indian Territory, until congress shall otherwise pro-
vide.3
NEW MEXICO.*
SUBDIVISION I.-HISTORICAL.
The Territory of New Mexico, which was one of the
states of Mexico when the war with Mexico began, was in
1846 occupied by the United States troops under Brigadier-
General Stephen W. Kearney, who established a provisional
government over it, declared a bill of rights, and caused
to be prepared a code of laws for its government and con-
trol. After the Mexican war, by the terms of the treaty
of Guadaloupe Hidalgo, this territory was ceded to and
became a part of the possessions of the United States gov-
ernment. The bill of rights and code declared and pre-
pared under the authority of General Kearney were found
to be conducive to order and good government, and con-
2 Sec. 161.
3 21 U. S. 81.
¹ Secs. 312, 313.
* Unless otherwise stated, references are to the Compiled Laws of New
Mexico, edition of 1884, by section simply. The session laws are re-
ferred to as
Laws" of their respective years.
2268
ECONOMIC LEGISLATION.
J
tinued to be regarded and treated as the law of the terri-
tory after it had, by regular treaty cession, become a part
of the United States government.
SUBDIVISION II.—FRANCHISE COMPANIES.
Incorporation; how obtained.—Companies can be in-
corporated in New Mexico only under the provisions of
general laws.
Articles of incorporation.-Any three or more persons
who may desire to form a company for mining, manufac-
turing, or other industrial purposes, or the construction and
operation of railroads,' may do so by making and signing
and acknowledging before the secretary of the territory, or
some officer competent to take acknowledgments of deeds,
articles of incorporation.²
Railroad corporations may also be formed by the volun-
tary association of five or more persons, citizens of the
United States, who must subscribe and acknowledge arti-
cles of incorporation before an officer authorized to take
such acknowledgments.3
Five persons may form a company for the construction
and managing of reservoirs, pipe lines, etc., for supply-
ing water for irrigation, domestic, and other purposes,
by preparing and acknowledging articles of incorpora-
tion.*
Must show what.-The articles of incorporation generally
must state the full names of the incorporators; the corpo-
rate name of the company; the object of the company;
the amount of capital stock; the time of the existence of
the company, not to exceed fifty years; the number of
shares of which the capital stock is to consist, the num-
ber of directors, and their names, who are to manage the
affairs of the company for the first three months, and the
¹ Street railways are not mentioned in terms in the statutes, and it is
considered probable that the term "railroad" would include them.
3 Secs. 2622, 2623, 2624.
* Secs. 192, 193.
* Laws, 1886-7, pp. 29, 30.
TERRITORIES-NEW MEXICO.
2269
name of the city, town, or county in which the principal
place of business is situated."
The articles of incorporation of railroad companies
must set forth the name of the corporation; the purpose
for which formed; principal place of business; time of
existence, not to exceed fifty years; names and residences
of directors, not less than five nor more than eleven, who
must act until their successors are elected and qualified;
amount of capital stock; amount of capital stock actually
subscribed, and by whom; termini of railways and inter-
mediate branches; estimated length of railroad branches;
that at least ten per cent of capital stock subscribed has
been paid to the treasurer.2
The articles of water companies must state name of cor-
poration and names and residences of incorporators; pur-
pose; beginning point; termini of pipe line and its general
course; capital stock and number of shares; time of ex-
istence, not more than fifty years; number of directors;
name of the city or town in which is the principal place
of business.3
Filing. The articles of incorporation generally must be
filed in the office of the secretary of the territory, and a
copy in the office of the probate court of the county
where the principal place of business is situated,¹ or, in
case of water companies, in the probate court of each
town or county through which the pipe runs.*
The articles of incorporation of railroad companies ac-
companied by the affidavit of the treasurer that the re-
quired amount of capital stock has been actually sub-
scribed and ten per cent thereof paid in, must be filed in
the office of the secretary of the territory."
Upon execution and filing of the articles of incorpora-
tion, all companies become bodies corporate and politic,
with the powers and liabilities as stated herein.
2 Sec. 2623.
1 Sec. 193.
* Laws, 1886-7, p. 30.
3 Laws, 1886-7, p. 29, ch. 12, sec. 1.
5 Secs. 2626, 2627.
Sec. 195; sec. 2627; Laws, 1886-7, p. 30, sec. 4.
:
2270
ECONOMIC LEGISLATION.
Certified copies of any articles of incorporation and
changes thereof, together with all indorsements thereon,
under the great seal of the Territory of New Mexico,
must be received as prima facie evidence of the facts
therein stated.¹
Organization; preliminary requirements.-The first
meeting of the directors of corporations generally must be
called by notice, stating the time and place of meeting,
and signed by one or more of the persons named in the
certificate, delivered personally to the others, or published
in the county paper for ten days, or posted in six places in
the county.2
Commencing business.-Railroad corporations must
commence the construction of its railroad within two
years after filing articles of incorporation with the secre-
tary, and must finish within six years, under penalty of
forfeiture.3
4
Fees. The secretary of state is entitled to a fee of five
dollars for the filing of the articles of incorporation, and
three dollars upon renewal of corporate existence."
Amendments, repeals, etc.-Corporations wishing to
correct mistakes and omissions in their original articles of
incorporation may make and file an amended certificate
of incorporation.
Railroad corporations may change their place of busi-
ness, the assent in writing of the holders of two-thirds of
the capital stock being first obtained and filed. Notice
must be given for three weeks by publication in a news-
paper, if there is one in the county, or, if not, in the adja-
cent county, giving the name of place to which it is in-
tended to change the place of business."
8
Duration of charter.-The time of corporate existence
is limited to a period not exceeding fifty years. All cor-
porations heretofore organized, before the expiration of
4
¹ Sec. 222.
2 Sec. 199.
3 Sec. 2688.
* Sec. 193.
Laws, 1888-9, p. 235.
6 Laws, 1888-9, p. 163.
7 Sec. 2649.
8 Secs. 193, 2623; Laws, 1886-7, p. 29, ch. 12, sec. 1.
TERRITORIES-NEW MEXICO.
2271
their existence, may file in the office of the secretary of the
territory a resolution of the board of directors, signed by
the president and secretary of the corporation, extend-
ing corporate existence for any period not exceeding fifty
years. The secretary must file the new certificate along
with the original certificate of incorporation, and a certi-
fied copy in the probate court in the county of the princi-
pal place of business. Upon complying with these pro-
visions, the corporate existence is continued for the period
specified.¹
2
Objects. The object of the company must be stated in
the articles of incorporation. It is not lawful for a cor-
poration to become incorporated under the same name or
designation, nor for the same immediate purpose, as an
already incorporated company, but this does not apply
to mining, mechanical, or manufacturing operations.³
Powers.-Corporations formed under the general laws
are authorized to exercise their franchises and powers,
and to acquire, mortgage, and dispose of property, and to
transact business, in any place within or without the
United States. They are also given the following enu-
merated powers: To sue and be sued in any court; to use
a common seal and alter the same at pleasure; to pur-
chase, hold, and convey such real and personal estate as
the purposes of the corporation may require; to appoint
such officers, agents, and servants as the business of the
corporation may require, and to define their powers, pre-
scribe their duties, and fix their compensation; to require
security and to remove persons employed at will, but no
director can be removed except by a two-thirds vote of the
directors; and to make by-laws.5
Railroad corporations are given power of succession; to
sue and be sued; to have a common seal; to purchase,
¹ Laws, 1888-9, p. 235.
2 Secs. 193, 2623: Laws, 1886-7, p. 29, ch. 12, sec. 1.
Sec. 192; Laws, 1888-9, p. 192.
3 Sec. 214.
5 Sec. 195.
ECONOMIC LEGISLATION.
:
2272
hold and convey property; to appoint subordinate officers;
to make by-laws; to permit stockholders to sell stock for
payment of assessments; to construct and operate tele-
graph lines in connection with said railroad; to enter into
contracts; and further, to have such general powers for
constructing, running and operating its line of railroad
and telegraph as private persons might exercise;¹ to cause
surveys to be made, and to enter upon lands for that pur-
pose; to take lands by deed, grant or otherwise, and to
purchase, enter upon and possess lands for a road.²
Water companies are given powers to take and hold
real estate by grant.3 All corporations formed under the
laws of New Mexico for the purpose of supplying water
for domestic, irrigating or manufacturing purposes for
cities or towns having a population of three thousand or
more inhabitants have all the powers, and are entitled to
all the rights and privileges, as to right of way, con-
demnation of property, etc., so far as necessary for the
prosecution of the business of such corporations, con-
ferred on railroads."
By-laws.-Corporations generally are given power to
make by-laws.5
6
Railroad corporations are required within three months.
after incorporation to adopt by-laws, a majority of the
subscribed stock, at a meeting called for the purpose by
public notice at least two weeks, being present and voting
for such by-laws. These by-laws must provide as to
time, place and manner of calling meetings; number of
stockholders necessary to constitute a quorum, mode of
voting by proxy, time of election of directors, com-
pensation and duties of officers; the manner of election
of officers, other than directors, and their term of office;
fines for violation of by-laws not exceeding in any case
1 Sec. 2664.
³ Laws, 1886–7, p. 30, secs. 17, 19.
* Sec. 231.
2 Sec. 2665.
5 Sec. 195.
6 Sec. 2630.
TERRITORIES-NEW MEXICO.
2273
}
$100; and the mode and manner of collecting assess-
ments.¹ Such by-laws must be certified by a majority
of the directors and the secretary, and recorded in the
office of the company, and must be always open to in-
spection.2
Officers; meetings; voting; quorum, etc.-Articles
of incorporation, generally as shown above, must state the
number of directors and their names who are to manage
the affairs of the company for the first three months,³ and
such companies are specifically given the power to ap-
point such officers, agents and servants as the business of
the corporation may require, to define their powers, pre-
scribe their duties and fix their compensation, to require
security, and to remove persons employed at will, but no
director can be removed except by a two-thirds vote of
the directors.
The corporate powers of the corporation must be exer-
cised by a board of not less than three directors, who
must be stockholders of the corporation, and a majority
of them citizens of the United States, and at least one-
third of them residents of the territory of New Mexico.*
The special provisions relative to railroad companies,
provide that the articles must state the names and resi-
dences of the directors, not less than five, nor more than
eleven, who are to act until their successors are elected
and qualified, and that such companies must prescribe by
by-laws the number of stockholders necessary to consti-
tute a quorum, the mode of voting by proxy, the time of
election of directors, and the method of compensation
and duties of officers, the manner of election of officers
other than directors, and their term of office. The cor-
porate powers, business and property of railroad com-
panies, must be exercised and controlled by a board of
directors, not less than five or more than eleven, elected
from the stockholders." Directors hold for one year after
1 Sec. 2631.
* Sec. 196.
2 Sec. 2632.
5 Sec. 2623.
3 Sec. 193.
6 Sec. 2633.
2274
ECONOMIC LEGISLATION.
incorporation, and afterward, must be elected annually.¹
Directors may be removed from office by a vote of
the stockholders holding two-thirds of the stock, after
notice.2
Elections of such companies must be by ballot, and a
majority of the stockholders must be represented at each
meeting, each stockholder is entitled to one vote for each
share of stock.3 Shares of stock in such companies
owned by parties out of the territory are not entitled to
vote until an affidavit that the party is alive is fur-
nished to the secretary, or unless an indemnity bond with
two sureties protecting the company against liability to
the non-resident share-holder has been first filed.*
Directors of railroad companies must elect a president,
who must be one of their number, a secretary and treas-
urer; and a majority of the directors is necessary to con-
stitute the board.5
The articles of incorporation of water companies must
state the number of directors. The affairs of such com-
panies must be controlled by not less than three directors,
citizens of the United States, one-third of whom must be
residents of the territory.
Capital stock.-The articles of incorporation of all
companies must state the amount of capital stock and the
number of shares of which the capital stock is to consist.7
The articles of railroad companies must also state the
amount actually subscribed, and by whom, and that at
least ten per cent of the capital stock subscribed has been
paid to the treasurer.
The corporators of each intended railroad corporation
must have actually subscribed to the capital stock of the
corporation at least $1,000 for each mile of its road and
branches, and must have paid at least ten per cent thereof
to the treasurer.
¹ Sec. 2634.
5 Sec. 2636.
8
2 Sec. 2638.
3 Sec. 2635.
• Sec. 2654.
6 Laws, 1886-7, p. 30.
7 Secs. 193, 2623.
8 Sec. 2625.
TERRITORIES-NEW MEXICO.
2275
:
The directors of corporations generally may call from
stockholders the sums subscribed by them; notice must be
sent personally or published once a week for a month. If
default in payment is made, the directors may sell at public
auction enough shares of the delinquent stockholders to
pay the amount assessed and the expenses.¹
The by-laws of railroad companies must provide the
mode and manner of collecting the assessments upon cap-
ital stock. The directors of such companies are prohib-
ited from paying to stockholders any part of the stock.³
2
Increase and decrease of.-Corporations generally may
increase or diminish their capital stock in any amount
deemed sufficient and proper for the purpose of the cor-
poration.*
Directors of railroad companies are forbidden to reduce
or increase the capital stock,3 but such companies are
given the power to increase or diminish their capital stock
when necessary for the purposes of the corporation upon
the consent of two-thirds of the stockholders.5
The capital stock of water companies may be increased
or diminished."
Transfer of―The stock of corporations including water
companies is deemed personal estate, and is transferable
in the manner prescribed by the by-laws of the company.
The stock of railroad companies must be transferred by
indorsement, which is not valid except as between the par-
ties until the same has been entered in the transfer
book.s
Bonds, debts, etc.-Suits may be instituted and prose-
cuted by and against any corporation formed or organized
under the general corporation law in the same manner as
are cases against natural persons.⁹
9
Total debts of corporations generally can not exceed the
amount of the capital stock, and in case of violation of
¹ Sec. 201.
2 Sec. 2631.
5 Sec. 2665.
³ Sec. 2637.
6 Laws, 1886-7, p. 42, sec. 12.
7 Sec. 200; Laws, 1886-7, p. 31, sec. 8.
4
• Sec. 207.
8 Sec. 2651.
9 Sec. 221.
2276
ECONOMIC LEGISLATION.
this provision the directors are individually liable, except
those not present when the debt was incurred or those
who entered their dissent at the time upon the minutes.'
2
Directors of railroad companies are forbidden to create
debts beyond the amount of the capital stock. They are
specifically given power to borrow money on the credit
of the corporation by the unanimous consent of the di-
rectors, and to mortgage the property and franchises ³ in
possession or subsequently to be acquired as security for
the sum borrowed or for the payment of the purchase-
money of property purchased.*
3
Dividends.-Dividends can not be declared by railroad
companies except from the surplus profit.²
Liability of stockholders.-No executor, guardian, or
trustee, or person holding stock as collateral security, is
liable personally as a stockholder, but the real owner, or
the estate, or the funds of the ward are liable."
Liability of officers and directors.-As to liability of
officers, etc., where debts exceed capital stock, see "BONDS,
DEBTS, ETC."
Directors of railroad companies violating the provisions
of the statute relative to the declaring of dividends, the
payment of stock to stockholders, or the creation of debts
or reduction or increase of capital stock, are severally lia-
ble, in the event of dissolution of the company, to the
amount so illegally divided or incurred, and may be sued,
and the statute of limitations is not applicable.2
Any officer of railroad companies willfully giving a
false certificate, report, or notice, or making a false entry,
is liable for damages."
Reports.-Railroad corporations must make annual re-
ports, which must contain a statement of the capital stock,
and amount paid in; amount paid for land, buildings, en-
gines, and cars, respectively; amount and nature of in-
(
1 Sec. 205.
5 Sec. 206.
2 Sec. 2637.
6 Sec .2644.
3 Sec. 2665.
• Sec. 2700.
TERRITORIES-NEW MEXICO.
2277
debtedness and amount due the company; amount received
for passengers, property, mails, and express matter and
other services; amount of freight in tons; amount for re-
pairs of engines, cars, and other expenses of running the
road; number and amount of dividends; number of en-
gine houses and shops; number of engines, cars, and their
character.¹
2
Taxation. The property of a railroad is exempted from
taxation for six years after completion, but in no event
can any line of railway or part of railway or any part or
portion of its property, real or personal, privileges, rights,
or franchises be exempt from taxation for a larger period
than twelve years from and after the date of the com-
mencement of the construction of such railway or rail-
ways.3
Consolidation of companies.-Railroad corporations
are specifically given power to consolidate with other com-
panies, and from that time to constitute a new company,
upon the execution and filing of new articles of incorpo-
ration. They are also authorized to lease their roads and
telegraph lines, and to take leases of other roads and tele-
graph lines.*
Dissolution; forfeiture.-In general, corporate powers
cease unless the corporation organizes and commences the
transaction of its business within two years from the date
of filing its articles of incorporation, and the companies.
themselves may dissolve and disincorporate themselves by
presenting to the probate or county judge a petition ac-
companied by the certificate of its officers to the effect that
it has been decided by two-thirds of the stockholders to
dissolve; if the judge is satisfied with the proceedings he
must enter an order declaring the corporation dissolved."
Railroad and water companies may be dissolved in the
same general manner, but the petition in the case of rail-
* Secs. 2665, 2701.
¹ Sec. 2686.
5 Sec. 212.
2 Sec. 2691.
6 Sec. 211.
³ Sec. 2699.
I
2278
ECONOMIC LEGISLATION.
road companies must be filed with the district court of the
county in which the principal place of business is situ-
ated.¹
Foreign corporations.-Companies incorporated under
foreign states or any state or territory of the United States
beyond the limits of this territory, must file in the office
of the recorder of deeds in the principal place of business,
a copy of their charter of incorporation. Such company
must also file with the secretary of the territory the name
of the authorized agent or agents residing in such princi-
pal place of business, upon whom process may be served,
and such corporation has the same powers and is subject
to the same liabilities and duties as corporations organized
under the laws of this territory.2
Any association of persons incorporated under the in-
corporation act of any contiguous state or territory, for
the purpose of constructing telegraphs, railroads, or wagon
roads, desiring to extend the construction of such lines, is
required to register in the office of the secretary of the
territory, and in the office of the probate clerk of the ter-
ritory, the original or a certified copy of the articles of in-
corporation obtained from each contiguous state or ter-
ritory.³
SUBDIVISION III.-FRANCHISES.
How obtained.-Railroad corporations are authorized
and empowered to lay out railroads and branches, to con-
struct a road along streams, and to cross water-courses,
streets, and alleys.*
All corporations formed to supply cities or towns with
water may lay mains along the streets, subject to regula-
tions to be provided by law, and supplying water upon
terms to be agreed upon.
5
Any gas company of the territory has the right, by con-
sent of the city council or town trustees, but not without
¹ Sec. 2692, et seq.; Laws, 1886-7, p. 32, sec. 14.
3 Sec. 215.
* Sec. 2665.
2 Sec. 218.
Laws, 1886-7, p. 37, sec. 24.
TERRITORIES NEW MEXICO.
2279
་
such consent (subject to existing rights), to erect factories
and lay pipes in the streets or alleys, subject to regulations
imposed by ordinance.¹
Powers of municipalities as to.-The city council,
and board of trustees in towns, are given power to regu-
late the opening of streets for the laying down of gas or
water mains or pipes, and the erection of lamps; to regu-
late and prevent the use of streets, sidewalks, and public
grounds for telegraph poles; to license, regulate, and con-
trol the laying of railroad tracks; to authorize the erec-
tion of water or gas-works, but not until the majority of
the voters of the city or town, voting at a general or spe-
cial election, shall by vote approve the same.2 Any
county, city, or town in the territory, is empowered by
vote of its governing body to give, grant, or donate to
any railroad corporation formed under the laws of the
territory, the use of any of the streets or highways which
may be necessary or convenient to enable such corpora-
tions to reach such an accessible point for a depot or sta-
tion, or to pass through the same on as direct a route as
possible, so as to accommodate the traveling and commer-
cial interests of such city, county, or town.3
Limitations.-The city council, or board of trustees of
towns, have no power to grant the use of, or the right to
lay down any railroad track in any street of the city or
town to any steam or horse railroad company, except upon
the written consent of the owners of one-half of the front-
age sought to be used; and the erection of water and gas-
works must be authorized by the voters of the municipal-
ity, as shown above.
4
Control of streets.-The city council has the care, su-
pervision, and control of all public highways, bridges,
streets, alleys, and public squares within the city, and is
required to keep the same open and in repair, and free
Sec. 1622, sub. 7.
1
2 Sec. 1622, sub. 7, 11, 18, 67.
³ Sec. 2690. See "ARTICLEs of IncorpORATION," note 1.
* Sec. 1622, sub. 60.
2280
ECONOMIC LEGISLATION.
from nuisances.¹ By another provision of the statute, the
city council and board of trustees are given full control
of the streets.2
Condemnation of property.-Railroad companies are
authorized to purchase or take timber, stone, gravel, or
other materials.³
Water companies are authorized to enter upon and con-
demn property.*
Duration of franchises.-Municipal authorities are au-
thorized to grant the right to individuals or incorporated
companies to build and operate water and gas-works, for
a period not to exceed twenty-five years.5
Perpetual and exclusive franchises.-It is not lawful
for a corporation to be incorporated for the same immedi-
ate purpose as an already incorporated company; but this
does not apply to mining, mechanical, or manufacturing
operations.
6
Methods of construction.-The city council, and board
of trustees in towns, are authorized to provide for and
change the location, grade, and crossing of railroads, to
compel street railways to raise or lower their tracks to
conform to any established grade, and when tracks run
lengthwise of streets, alleys or highways, to keep their
tracks on a level with the streets."
Railroad companies are given power to erect and main-
tain buildings, stations, depots, watering-places, fixtures,
and machinery, to change the line of their road upon the
consent of a majority of their directors, but not to vary
the general line laid down in the articles of incorporation.³
Water companies are given the power to cause excava-
tions and surveys, to construct pipe lines and canals, to
divert the water from any lake or stream, to pay for prop-
erty taken, and not to interfere with other persons' rights
to water; to construct such principal or branch lines as
4
1 Sec. 1681.
2 Sec. 1622, sub 7.
* Laws, 1886-7, pp. 33-37, secs. 17-24.
6 Sec. 214.
• Sec. 2665.
' Sec. 1622, sub. 69.
7 Sec. 1622, sub. 18, 21.
i
TERRITORIES-NEW MEXICO.
2281
may be necessary. They may construct lines over the
lands of the territory, and use timber, stone, gravel, etc.2
The company must keep bridges over highways or streets
crossed by pipe lines in good repair.3
Regulations as to service.-City councils and trustees
of towns have power to regulate the speed of horses and
other animals, vehicles, cars and locomotives, within the
limits of the municipality; to prevent dangerous con-
structions and condition of chimneys, fire-places, hearths,
stoves, stove-pipes, ovens, and apparatus used in and about
any manufactory; and to regulate and prevent the carry-
ing on of manufactures dangerous in causing and promot-
ing fire. They are authorized to grant the power to com-
panies or owners of gas or water-works to charge and
collect such rent as is agreed upon between the owner and
the municipal authorities.*
Railroad companies are authorized to receive tolls, regu-
late the time of cars, manner of running cars, and fares,
not to exceed six cents per mile, or three cents for children
between the ages of six and twelve; to regulate the force
and speed of trains; and to expel from cars persons in-
toxicated and disorderly."
6
Water companies are authorized to supply water upon
terms to be agreed upon with consumers, and to furnish
water at rates prescribed by the by-laws; but equal rates
must be accorded to all consumers.'
Discrimination in service.-A railroad corporation re-
fusing passengers or baggage is liable to damages."
7
Public service.-Municipal authorities are authorized
to contract with any individual or company for a supply
of water or gas, upon such terms as may be agreed upon
between the owner and the municipality. Whether the
city or private parties construct and operate water and
gas-works, the city is authorized to assess a special tax on
¹ Laws, 1886-7, pp. 33, 34, secs. 17, 19.
3 Laws, 1886-7, p. 37, sec. 23.
• Sec. 2665.
2 Laws, 1886-7, p. 36, sec. 21.
* Sec. 1622, sub. 15, 23, 69.
7 Sec. 2721.
6 Laws, 1886-7, p. 37, sec. 24.
VOL. II-63
2282
ECONOMIC LEGISLATION.
all taxable property, not to exceed two mills on the dollar
in any one year, to pay the expense of gas and water to
the city; gas to be charged by the foot only to such as
use it, but water-main taxes to be assessed against all
abutters, vacant lots being assessed only one-half as much
as improved property.¹
SUBDIVISION IV.-MUNICIPAL OWNERSHIP.
City councils and the boards of trustees in towns have
power to erect water or gas-works, but not until the ma-
jority of the voters of the city or town voting at a general
or special election have approved of the same. They
may construct water-works outside the limits of the city,
and have jurisdiction extending five miles from the point
of taking water, to prevent pollution.2
They are authorized to contract an indebtedness on be-
half of the city and upon the credit thereof by borrow-
ing money or issuing the bonds of the city or town for
the following purposes, among others: for the purchase or
construction of water-works for fire and domestic pur-
poses; for the construction or purchase of gas-works for
the manufacture of illuminating gas or for purchasing
illuminating gas, but no debt can be created except for
water, except by the vote of a majority of the qualified
voters voting at a regular election. Cities and towns are
authorized to condemn and appropriate private property
for these purposes in the same manner as is prescribed by
law for the taking of private property for the use of rail-
roads.3
Municipal authorities have the power, by condemnation
or otherwise, to extend streets, highways, and alleys over
or across any railroad tracks, right of way or laud of any
railroad company, but where no compensation is made to
the company, the city must restore the tracks, right of
way or land to its former usefulness.¹
¹ Sec. 1622, sub. 69, 71.
* Sec. 1622, sub. 6, 70, 74.
4
2 Sec. 1622, sub. 67, 68.
* Sec. 1622, sub. 59.
TERRITORIES OKLAHOMA.
2283
4.
OKLAHOMA."
SUDIVISION I.-HISTORICAL.
The Territory of Oklahoma was ceded to the United
States by articles of cession and agreement made and con-
cluded in the City of Washington on the 19th day of Jan-
uary, in the year 1889,2 by the Muscogee Indians or Creek
Nation. The cession was without reservation or condi-
tion, and conveyed a full and complete title to the entire
western half of the domain of the said nation in the Indian
Territory.
By a proclamation of the president made on the 23d day
of March, 1889,3 the lands within this territory were de-
clared to be open to settlement under the condition of the
law governing such matters.
An act of congress was passed on May 2, 1890,*
entitled "An act to organize the Territory of Oklahoma,
to establish courts in the Indian Territory, and for other
purposes.'
Under this act certain specified chapters and provisions
of the compiled laws of the State of Nebraska, in force
November 1, 1889, in so far as they were applicable, and
not in conflict with the laws of the United States or with
the act in question, were extended and put into force in
the Territory of Oklahoma until after the adjournment of
the first session of the legislature assembled in the terri-
tory; among these was chapter 16, entitled "Corpora-
tions."
There has been, since the passage of this act, a session
of the legislative assembly of Oklahoma, at which session
a number of laws were enacted, and among others those
concerning corporations.
¹ Unless otherwise stated, references to the statutes are to Martin's
Compiled Statutes of Oklahoma, 1891, by section simply. Session laws
are referred to as laws of the respective years.
225 U. S. Stat. 757.
3 26 U. S. Stat. 2.
4 26 U. S. Stat. 81.
2284
ECONOMIC LEGISLATION.
The legislature convened August 27, 1890, and adjourned
December 24, 1890. All of this legislation is subsequent
to the act of congress which forbids the territories to pass
acts granting special franchises. As a matter of course,
the legislature of Oklahoma must confine itself to the
preparation of enactments general in their character to
the exclusion of special legislation.
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation; how obtained. - A corporation can
only be created by a statute; but the statute may be spe-
cial for a particular corporation or general for a number
of corporations.¹
In order to constitute a private corporation there must
not only be a statutory grant of corporate authority but
an acceptance of that grant by a majority of the corpora-
tors or their agents. The acceptance can not be condi-
tional or qualified. The question of the incorporation of
a company can not be attacked collaterally, but only by
inquiry or suit by the territory.3
Existing corporations desiring to continue under the
provisions of the present law may elect so to do at a meet-
ing of the stockholders specially called or by resolution of
the trustees or directors upon the written consent of the
stockholders. A majority vote of the stock is necessary,
and a certificate of the proceedings, signed by the trustees
or directors and the secretary, together with the seal of
the corporation, must be filed in the office of the secretary
of the territory; and unincorporated companies engaged
in operating any street railway, toll road, ditch for convey-
ing water, or any other improvements, are held strictly to
these provisions as well as incorporated companies, and a
failure to comply therewith works a forfeiture of their
privileges.5
4
¹ Sec. 945. This is the wording of the statute, but by act of con-
gress, as shown above, corporations can be created by general law only.
2 Sec. 953.
3 Sec. 947.
4 Sec. 1242.
• Sec. 1243.
TERRITORIES—OKLAHOMA.
2285
Articles of incorporation. The instrument under
which the corporation is organized is called "Articles of
Incorporation" or "Certificate of Incorporation.'
2
?? 1
Private corporations can be formed by the voluntary as-
sociation of three or more persons for the following pur-
poses, among others, mining, manufacturing, and other
industrial pursuits, the construction and operation of rail-
roads and irrigating ditches. The articles of incorpora-
tion must be subscribed by three or more persons, one-
third of whom are residents of the territory, and must be
acknowledged before an officer qualified to take acknowl-
edgments to deeds.3
Any number of persons not less than five may form a
corporation for the purpose of constructing, maintaining,
and operating a railroad, or running one already con-
structed, by making articles of incorporation."
4
6
Must show what.-The articles of incorporation must set
forth the name of the corporation; the purpose for which
it is organized; place of business; term of its existence;
the number of directors or trustees, and the name and resi-
dence of such of them as are to serve until the election of
such officers; the amount of capital stock; amount and
number of shares into which it is divided; and the articles
of incorporation of any railroad or wagon road created
under this provision must also state the kind of road in-
tended to be constructed; the termini of all branches; the
counties through which it is intended to be run, aud the
estimated length and cost of the road."
1
Ditch companies must specify in addition, in the articles
of incorporation, the stream, place of taking the water,
4
¹ Sec. 957.
2 Sec. 955.
³ Sec. 959.
Street railways are not mentioned in terms. It is considered proba-
ble that the term "railroad" includes them.
5 Sec. 1027.
6
Corporations must have a corporate name, but misnomer of the com-
pany in any written instrument will not invalidate the instrument if it
is clear what corporation was intended. (Sec. 948.)
7 Sec. 958.
2286
ECONOMIC LEGISLATION.
purpose for which the water is to be used, and the line of
ditch.¹
Flume and tunnel companies must specify, in addition,
the termini, the route, and the purpose for which the com-
pany is organized.2
The articles of railroad companies must state the name
of the corporation; the termini of the road; the length,
route, and name of each county through which it runs;
the amount of capital stock, number of shares, common
and preferred stock, and number of shares of each class;
name and residence of directors for the first year, not less
than five or more than thirteen.3
Filing. The articles of incorporation must be recorded
in the book of corporations in the office of the secretary
of the territory. The certificate of the secretary of the
territory issues on the filing of the articles of incorpora-
tion."
Organization; preliminary requirements.—Upon fil-
ing articles of railroad companies under the special pro-
visions relating thereto (section 1027), a patent issues,
signed by the governor and secretary of the territory, and
the subscribers to the articles become a corporation,
and possess all the powers and privileges given such com-
panies.3 When patent is issued, "books of subscription"
may be opened."
Commencing business.-Corporate powers cease if or-
ganization is not effected and transaction of business.
begun in one year after the filing of the articles of incor-
poration. Work by ditch, flume, and tunnel companies
must be begun in ninety days and be completed in two
years.
8
Amendments, repeals, etc.—Every grant of corporate
power is subject to alteration, suspension, or repeal in the
discretion of the legislature, and the general law provid-
¹ Sec. 1170.
Sec. 960.
9 Sec. 946.
9
2 Secs. 1174, 1175.
6 Sec. 1028.
↑ Sec. 994.
³ Sec. 1027.
4 Sec. 961.
* Sec. 1177.
TERRITORIES—OKLAHOMA.
2287
ing for creation and organization of corporations gener-
ally may at any time be amended by the legislative
assembly.¹
By the corporation.-Every corporation must have a cor-
porate name, which it has no power to change unless ex-
pressly authorized by law. Misnomer of a company will
not invalidate any written instrument if the intention is
clear.2
A railroad corporation may change its corporate name.
by resolution of the board of directors, ratified by a ma-
jority vote of the stock after due notice, certified by the
secretary, with the corporate seal attached, and filed with
the secretary of the territory, and by publication for three
weeks in some newspaper at the seat of government of
the territory, and upon full assumption of the old indebt-
edness.3
Duration of charter.-The articles of incorporation
must state the term of existence, and when no period is
limited, a company has perpetual succession. The term
of existence, however, of mining, manufacturing and
other industrial corporations, is limited to twenty years.5
Objects.-Articles of incorporation must distinctly set
forth the purpose of such corporation.
Powers.-Corporations have the power of succession by
corporate name for the period limited in the charter, and
when no period is limited, have perpetual succession ; the
right to sue and be sued in its corporate name, to have
and use a common seal, and to alter the same; to purchase,
hold, transfer and convey such real estate and personal
property as the legitimate purposes of the incorporation
may require, not exceeding any amount limited by law;
to appoint subordinate officers, and allow them suitable
compensation; to make by-laws, not inconsistent with the
law of the land, for the management of its property, the
regulation of its affairs, and the transfer of its stock; to
¹ Sec. 1026.
* Secs. 957, 974.
2 Sec. 948.
3 Sec. 1042.
5 Sec. 1162.
6 Sec. 1163.
• Sec. 974.
2288
ECONOMIC LEGISLATION.
!
admit stockholders and members, and to sell their stock
or shares for the payment of assessments and installments;
and to enter into any obligation or contract essential to
the transaction of its ordinary affairs.
In addition to the above enumerated powers, and to
those expressly given under any other statute under which
it is incorporated, no corporation can possess or exercise
any corporate powers, except such as are necessary to the
exercise of the powers enumerated and given.¹
Corporations for mining, manufacturing, and other in-
dustrial pursuits, can not appropriate their funds for any
other purpose, nor loan their money to stockholders.²
They may have an office outside of the territory for bus-
iness, designated in the articles of incorporation, but their
main office must be in the territory.3
Railroad corporations have perpetual succession; the
right to sue and be sued, and to have a common seal; to
make surveys, and to enter upon lands and waters for
that purpose; to take and hold real estate by voluntary
grant; to acquire real estate by purchase; to lay out a
road, not exceeding one hundred feet in width, and con-
struct the same; to construct the road along any water-
course, street, highway, wagon or plank-road, turnpike,
etc., which it may intersect; to cross, intersect, join and
unite with other railroads, and if compensation therefor
can not be agreed upon, the same must be ascertained in
the manner provided by law; to have and use ground for
tracks, switches, turnouts and sidings, upon any street,
block, alley, square or public ground, within any town or
city, any ordinance of the city to the contrary notwith-
standing; to do all the business of railroad corporations;
to erect and maintain all necessary buildings, stations,
fixtures, machinery, etc., for passengers, freight or bus-
iness.
4
By-laws.-Corporations generally are given power to
¹ Sec. 974.
2 Sec. 1163.
3 Sec. 1168.
4 Sec. 1035.
TERRITORIES—OKLAHOMA.
2289
make by-laws not inconsistent with the law of the land,
for the management of its property, the regulation of its
affairs, and the transfer of its stock.
By-laws must be adopted one month after the filing of
the articles of incorporation, assented to by a majority of
the stockholders, at a meeting duly called; or written as-
sent of two-thirds of the stockholders without such meet-
ing will suffice.' The by-laws and all repeals, amend-
ments, etc., thereof, must be certified and recorded.2 Pen-
alties for violation of by-laws can not exceed one hundred
dollars in each case.
3
See also under "OFFICERS, MEETINGS, VOTING, QUORUM,
ETC."
Officers; meetings; voting; quorum, etc.-The arti-
cles of incorporation must state the number of directors or
trustees, and the names and residences of such of them as
are to serve until the election of such officers.*
Corporations are given the power to appoint subordi-
nate officers, and allow them suitable compensation; to
admit stockholders and members; and the by-laws of the
company may provide for the time, place and manner of
calling and conducting meetings; the number of stock-
holders and members; and the number that consti-
tutes a quorum; the mode of voting by proxy, and
the time of the annual election of directors, and notice
sufficient therefor; the compensation and duties of the of-
ficers; and the election and tenure of all other officers,
save directors.³
3
The corporate powers, business and property, of all cor-
porations formed under the general law must be exercised,
conducted and controlled by a board of not less than three
nor more than eleven directors, to be elected from the
stockholders, or where there is no capital stock, from the
members. The amount of stock required for qualification
as a director in a corporation for profit must be fixed by
¹ Sec. 975.
2 Sec. 977.
$ Sec. 976.
5 Sec. 974.
* Sec. 957.
2290
ECONOMIC LEGISLATION.
the by-laws. One-third of the officers of a corporation
must be residents of the territory, and the directors must
be elected annually by the stockholders.3
The board of directors must organize and elect the
president from their own number, and a secretary and
treasurer. A majority of the board is sufficient to transact
business, and every act of a majority of the directors is
valid as a corporate act. Unless a quorum is present and
acting, no business performed or act done is valid as
against the corporation; vacancies in the board may be
filled, subject to the by-laws, by appointment of the
board.3
An unlawful meeting of a corporation may be made
valid by the consent of all the stockholders.5
The board of directors of railroad companies must
consist of not less than five or more than thirteen di-
rectors, elected in accordance with the by-laws. Stock-
holders may vote in person or by proxy, one vote for
every share.
Directors of railroad companies must be
stockholders. The directors must appoint one of their
number president, and appoint a vice-president, treasurer,
secretary, and other agents in accordance with the by-
laws Directors may be classified as to the expiration of
their term of office.
Books.-Corporations for profit must keep a record of
every thing done, all meetings, regular and special, with
full details, and also full details of stock transactions, in a
stock book.⁹
Books of account, vouchers, etc., of manufacturing,
mining, and industrial corporations, must be kept open
for the inspection of stockholders, and a statement of ac-
count must be made once a year.
10
Capital stock.-Articles of incorporation must state
the amount of capital stock and the amount and number
¹ Sec. 981
2 Sec. 952.
³ Sec. 978.
5 Sec. 989.
• Sec. 1029.
* Sec. 1030.
4 Sec. 982.
® Sec. 1049.
9 Sec. 992.
10 Sec. 1164.
TERRITORIES-OKLAHOMA.
2291
2
of shares into which it is divided.' Books must be opened
for the subscription of stock. If the capital stock is lim-
ited by the charter, an issue of any excess of stock is void.3
Subscription to stock may be enforced; and a corpora-
tion may own its own stock."
4
The articles of railroad corporations must state the
amount of capital stock, number of shares of common and
preferred stock, and the number of shares of each class."
And the directors may regulate the payment of install-
ments and arrears due on the stock, and neglect to pay in
full forfeits the stock and all payments thereon, upon no-
tice."
Increase and decrease of.-Directors can not increase or
decrease the capital stock. Every corporation may in-
crease or diminish its capital stock at a meeting called by
the directors for that purpose. Personal notice on each
stockholder and advertisement in the county paper once
a week for four weeks consecutively is required. Capital
stock must not be reduced below the amount of indebted-
ness or estimated cost of the work. Two-thirds of the
entire capital stock must be represented by a vote in favor
of the change, and the action must be certified by the
chairman and secretary of the meeting, giving full details,
and a certificate must be filed in the office of the secretary
of the territory. The written assent of three-fourths of
the stockholders is as good as a meeting held."
The capital stock of railroad companies may be in-
creased to an amount necessary for the construction and
operation of the railroad, at any meeting, after notice."
Transfer of.—The stock of corporations is negotiable,
but a transfer is not valid, except between the parties
thereto, until it has been entered upon the company's
books."
Stock in railroad companies is personal estate, transfer-
1 Sec. 957.
2 Sec. 968.
5 Sec. 972.
6 Sec. 1067.
3 Sec. 971.
¹ Sec. 1031.
9 Sec. 991.
10 Sec. 1033.
+ Sec. 967.
8 Sec. 983.
11 Sec. 970.
2292
ECONOMIC LEGISLATION.
able in accordance with the by-laws, only after all calls
are paid.¹
Bonds, debts, etc.-Directors are forbidden to create
any debt beyond the amount of the capital stock.2
To satisfy judgments against a corporation authorized
to receive tolls, its franchises and all rights and privileges
may be levied upon and sold under execution in the same
manner and with the same effect as any other property,
only without any exemptions.3 The purchaser is given a
certificate of franchise, takes possession, and must conduct
the business, subject to all liabilities, until the redemption
of the same. The purchaser has a right to recover penal-
ties for injury to the franchise or property and for any
damages occurring during the time he holds the same."
The corporation whose franchise is sold, as above pro-
vided, in all other respects, retains the same power; is
bound to discharge the same duties and is liable to the
same penalties and forfeitures as before such sale; and
may redeem the same in one year by paying full purchase
price and twelve per cent interest. The sale of franchises.
must take place in the same county in which the principal
place of business of the corporation is located.s
9
Railroad corporations are given authority to borrow
money and secure the same by deeds and mortgages; and
persons selling property to railroad companies retain a
lien thereon, to continue for ten years. The contracts
therefor must be in writing and acknowledged 10 and re-
corded in the office of the secretary of the territory."
The rolling stock of railroad companies and fuel neces-
sary for operating same are fixtures, and any additional
rights of way, depot grounds, and other real property, ac-
quired after the execution of any deed or mortgage, are
subject to the lien thereof."
The directors of railroad companies may set aside money
• Sec. 1022.
12
7 Sec. 1023.
¹ Sec. 1032.
2 Sec. 983.
3 Sec. 1019.
6
5 Sec. 1021.
9 Sec. 1036.
10 Sec. 1037.
11 Sec. 1038.
• Sec. 1020.
8 Sec. 1024.
12 Sec. 1045.
TERRITORIES-OKLAHOMA.
2293
1
2
for payment of debts, not to exceed fifty per cent of the
net earnings. No railroad corporation can set up usury
as a defense against any bond or obligation issued by it.²
Dividends.—Dividends belong to the person in whose
name the stock stands on the books of the company on
the day when they become payable. Directors are for-
bidden to declare dividends except from surplus profits,
and are not permitted to pay to stockholders any part of
the stock of the company.*
3
Liability of stockholders.-Stockholders are individu-
ally and personally liable for the debts of a corporation to
the extent of the amount that is unpaid upon stock held
at the time such action is begun.5
The word "stockholders" means not only those on the
books of the company, but equitable owners as well, al-
though the same appear on the books in the name of an-
other. It includes, also, every person who has advanced
installments on stock in the name of a minor, and every
guardian or other trustee who voluntarily invests any funds
in the stock.5
Trust funds in the hands of guardians and trustees are
not liable, nor is the cestui que trust responsible until he
becomes competent to control the same; but the responsi-
bility of the guardian or trustee continues until that pe-
riod, except that stock held as collateral security, or
trustee funds, will not make the holder liable; but the
pledgor, or person or estate, is deemed to be the "stock-
holder." 5
Executors, guardians, etc., holding stock of railroad
companies as such, are not personally liable."
Stockholders of mining and manufacturing and indus-
trial companies are jointly and severally liable in their in-
dividual capacities for all debts due to mechanics, work-
men, and laborers employed by such corporation, which
¹ Sec. 1047.
5 Sec. 988.
2 Sec. 1048.
3 Sec. 973.
6 Sec. 1034.
* Sec. 983.
}
2294
ECONOMIC LEGISLATION.
:
can be enforced after execution against the corporation is
returned "not satisfied," provided such action is begun
within four months, and stockholders paying have a right
of action for reimbusement against the others.¹
Liability of officers and directors.-Directors paying
unlawful dividends, or dividing any part of the capital
stock to the stockholders, or creating debts beyond that
allowed by law, or reducing or increasing capital contrary
to law, are severally liable, in the event of dissolution of
such corporation, to the amount of stock so involved, and
may be sued therefor, and the statute of limitations does
not apply.2
False representations by an officer of a corporation
make him liable for all damages to any person.3
Directors of corporations, in their trust capacity, upon
dissolution of the corporation, are jointly and severally
liable, to the extent of the corporate property in their
hands, to stockholders, creditors, etc.¹
Mining, manufacturing, and other industrial corpora-
tions are especially prohibited from loaning their money
to stockholders, and the officers making such loan or as-
senting thereto are liable; and directors of such corpora-
tions violating any of the provisions governing them are
jointly and severally liable in case of insolvency."
Reports. The legislative assembly, or any branch.
thereof, may examine any corporation at all times; may
administer oaths to directors, officers, and stockholders, and
examine them on oath in relation to its affairs. It may
examine safes, books, papers, and documents, and compel
the production of keys, books, papers, and documents by
summary process, to be issued on application to any dis-
trict court or any proper officer thereof, under such rules
and regulations as the court may prescribe.7
Books of account, vouchers, etc., of manufacturing,
1 Sec. 1165.
5 Sec. 1163.
? Sec. 983.
4
3 Sec. 984.
• Sec. 996.
• Sec. 1169.
7 Sec. 1025.
TERRITORIES—OKLAHOMA.
2295
!
mining, and other industrial companies, must be kept
open for the inspection of stockholders, and a statement
of account must be made once a year.¹ An annual report
must be published by such companies within twenty days
from the first day of January.2 A demand for a statement
of the affairs of such a corporation may be made by a per-
son or persons owning twenty per cent of the capital stock,
in writing, on the treasurer; and he must comply, under
oath, within twenty days, under penalty of $50, and $10
additional for every twenty-four hours thereafter that the
statement is withheld.3
The annual report of railroad companies for the year
ending the 31st of December, verified by affidavit of the
secretary, treasurer, and superintendent of the corporation,
must state, first, the length of the road, the length of single
and double tracks, and weight of rail per yard; the amount
of capital stock actually subscribed and the amount paid
therefor; total cost of road; amount and nature of in-
debtedness, secured and unsecured, and amounts due the
corporation; the amount received for transportation of
passengers, property, and mails, and from other sources;
the amount of freight in tons or usual measurement;
amount of disbursement in detail; amount of loss to cor-
poration in detail; number and amount of dividends,
when made, and how paid; amount appropriated for sink-
ing fund; number of persons killed or injured, whether
passengers or employes; whether such accidents have
arisen from negligence of the company or its servants.
This annual report is to be sent to each stockholder, and a
copy thereof is to be filed with the secretary of the terri-
tory before the 1st of February."
Consolidation of companies.-Railroad companies are
given the power to cross, intersect, join, and unite with
other railroads, and if compensation can not be agreed
upon the same must be ascertained in the manner provided
1 Sec. 1164.
2 Sec. 1166.
3 Sec. 1167.
4 Sec. 1050.
2296
ECONOMIC LEGISLATION.
by law, and such corporation may consolidate with another
corporation, and may make leases of other roads."
Dissolution; forfeiture.-Corporate powers cease, if
organization is not effected and transaction of business be-
gun in one year after the filing of the articles of incor-
poration, and non-user of corporate powers of com-
panies organized under the general law forfeits all the
rights.
2
Corporations are also dissolved by expiration of the time
limited in their charters. If a corporation wishes to dis-
solve and discontinue business, application may be made.
to the district court in writing setting forth that at a meet-
ing duly called two-thirds of all the stockholders voted
to dissolve, and that all claims are paid. The applica-
tion must be signed by a majority of the directors, trust-
ees, or officers. The court must order the application
filed, and the clerk must give not less than thirty days'
nor more than fifty days' notice by publication. Any pèr-
son may file objections to such dissolution before the
time expires, and the court upon five days' notice to ob-
jectors may proceed to hear the objections and settle the
case. These proceedings constitute the record, from which
an appeal lies.3
A corporation may be involuntarily dissolved by a judg-
ment of the court in any action, that by neglect, abuse, or
surrender the franchises are forfeited, or by a judgment
and execution levied by attachment or process against
the directors. In such cases the court may restrain the
corporation and appoint a receiver to hold the property
and render an account or make distributions to the cred-
itors.+
After dissolution the directors are trustees, unless the
court appoints others, with full power to settle every
4
¹ Sec. 1041.
2 Sec. 994.
3 Sec. 993.
* Sec. 993. These are the provisions of the Dakota Code, secs. 5357-
5359, which are quoted and directly referred to in the Oklahoma statute.
TERRITORIES OKLAHOMA.
2297
thing. A dissolved corporation can be revived only by
the same power by which it was created.²
Foreign corporations.-Foreign corporations must, be-
fore engaging in business in this territory, file with the
secretary of the territory an authenticated copy of their
charter. Such charter and articles of incorporation must
be recorded in a book kept by the secretary of the terri-
tory.*
3
Foreign corporations must have an agent resident in the
territory to accept service.5
SUBDIVISION III.-FRANCHISES.
6
How obtained.-Ditch companies have the right of
way, subject to priorities of corporations and the water
rights of miners, millmen, etc., along the route. Flume
and tunnel companies also have the right of way not in
conflict with prior rights."
Railroad corporations are authorized to pass over, oc-
cupy, and enjoy public lands under act of congress ap-
proved March 3, 1875,8 and are given the power to con-
struct their road upon any water course, street, highways,
etc., and to have and use ground for tracks, switches,
turnouts, and sidings upon any street, block, alley, square
or public ground within any town or city, any ordinance
of the city to the contrary notwithstanding. And such
corporations may adjust any differences or disputes as to
occupation hereunder according to law. If they have to
occupy any road, street, alley or public way they may
agree with the municipal or other officers or authorities
having charge thereof upon terms of such occupancy, and
failing to agree, if the directors deem it necessary, they
may appropriate so much as may be necessary, by the
same means employed for taking private property.
1 Sec. 995.
5 Sec. 1246.
2 Sec. 997.
3 Sec. 1244.
6
• Sec. 1171.
8 Sec. 1058; 18 U. S. Stat. 482.
VOL. II-64
Sec. 1245.
7 Secs. 1174, 1175.
↑
9 Sec. 1034.
10
10 Sec. 1060.
5
2298
ECONOMIC LEGISLATION.
There is granted to the owners of telegraph or tele-
phone lines the right of way on lands and real property
in the territory, and the right to use public grounds,
streets, alleys, and highways in the territory, subject
to the control of the proper municipal authorities
as to what grounds, streets, alleys or highways said
lines shall run over or across, and the place of location
of poles for supporting wires. The right of way is to
be acquired in the manner provided for railroad corpora-
tions.¹
Powers of municipalities as to.-Councils of munici-
palities are given power to contract with and authorize any
person, company or association to erect gas or electric works,
but no such right can be conditioned so as to prevent grant-
ing like privileges to other persons or companies, and all
grants must be subject to ordinances as to the use of the
streets.2 The board of trustees of cities of the second
class of less than twenty-five hundred inhabitants, and of
towns and villages, are empowered to authorize the con-
struction and maintenance of street railways, water mains
and water pipes, gas mains and pipes, electric and tele-
phone wires along and through the streets and alleys, and
to grant franchises and rights to persons, corporations or
associations for such purposes, and to regulate the same,
but no exclusive right can be granted. The use of the
streets may be granted on the same terms to all companies
desiring to compete in the business of gas, electricity, tele-
phones, electric light, water or street railway, subject to
regulations.³
Special damages; property owners' rights.-Damages
by railroad companies to possessory claimants are to be
paid by the corporation."
Condemnation of property.-Railroad companies are
authorized to condemn property for right of way, etc.
The right of way for flume, tunnel, telegraph, and tele-
1 Sec. 1079.
2 Sec. 615.
³ Sec. 686.
4
* Secs. 1058, 1176.
TERRITORIES-OKLAHOMA.
2299
phone must be acquired in each case as is provided in
regard to railway companies.¹
Private property may be taken by condemnation and
assessment of damages for public use by city councils and
by private corporations for right of way.²
2
Perpetual and exclusive franchises. See under
"POWERS OF MUNICIPALITIES AS TO," above.
Methods of construction.-Ditch companies must build
their ditches so as to protect all the rights of abutting
owners.3
Railroad companies are authorized to erect and main-
tain all necessary buildings, stations, fixtures, machinery,
etc., for passengers, freight or business. Such a corpora-
tion may extend its road and build branches connecting
its road with other roads, but record of such extension
or connection must be certified by the president and sec-
retary and filed in the office of the secretary of the terri-
tory. It may also change its route when necessary; but
no railroad can be diverted from any county or town which
has given it aid without the sanction of two-thirds of the
legal voters of such county, village or town.
5
6
Railroad corporations must restore every stream of
water, street, plank-road, highway, wagon road, or turn-
pike to its former condition; and where a street, high-
way, turnpike, plank or wagon road is crossed by a cul-
vert, the same must be constructed so as to give a clear
passage way of twenty feet, or two passage ways of four-
teen feet each.s
Railroad corporations may change the grade and loca-
tion when necessary and enter upon and take lands as
stated above; they may also lower or raise any turnpike,
etc., but must replace the same in good repair as soon as
may be. While employed in raising or lowering, as
10
¹ Secs. 1058, 1176.
6 Sec. 1039.
• Sec. 1059.
2 Sec. 621.
• Sec. 1040.
• Sec. 1173.
7 Sec. 1043.
• Sec. 1035.
8 Sec. 1044.
10 Sec. 1065.
2300
ECONOMIC LEGISLATION.
above stated, the corporation must provide temporary
ways and keep them in order.¹
Regulations as to service.—Franchises granted to gas
or electric companies are subject to ordinances of the mu-
nicipality as to the use of streets and prices paid for gas
and light.²
Parties using the water of ditch companies are responsi-
ble for any damage after the said water has left the ditch.³
Railroad companies are authorized to take and convey
persons or property over the road by force of steam or
animals or any mechanical power, and to receive compen-
sation therefor, and to do all the business of railroad cor-
porations; to regulate the time and manner in which per-
sons and property are to be transported and the compen-
sation therefor.*
6
They must start and run cars at regular times, to
be fixed by public notice, and must furnish sufficient
accommodations and must take, transport, and dis-
charge passengers, goods, and freight, on the payment of
tolls, freight, and fare. If they accept fare from a pas-
senger on any other than passenger cars, they are liable as
if the car were a passenger car. On refusal to pay fare, a
passenger may be ejected near a dwelling or at a station."
Persons having regular place of business in any town or
city have the right to deal in passenger tickets, and pur-
chasers of tickets may sell them to any person dealing
in tickets, and such business may be regulated by any
incorporated town or city.
9
Railroad company may employ policemen at their own
expense for duty at their stations or trains.10
Discrimination in service; refusal to render service.
See" REGULATIONS AS TO SERVICE," above.
Safety of life and property.-In case any passenger
upon a railroad is injured while on the platform of a car
Sec. 1066.
5 Sec. 1061.
9 Sec. 1077.
2 Sec. 615.
• Sec. 1064.
³ Sec. 1179.
7 Sec. 1075.
10 Sec. 1078.
* Sec. 1034.
8 Sec. 1076.
TERRITORIES-UTAH.
2301
in motion, in violation of a printed notice, such corporation
is not liable, provided it furnished room inside the car for
its passengers.'
State and municipal aid.—The statute provides that
the council of municipalities shall protect the city's inter-
est in railroads leading to or out of such city, but can not
subscribe to the stock.2
Public service. The councils of municipalities are au-
thorized to provide for and regulate the lighting of streets
and the erection of lamp-posts, and may make contracts
with any person, company or association, giving them the
privilege of lighting the streets for a time not exceeding
twenty-one years, "but no such right shall be conditioned
to prevent granting like privileges to other persons or
companies.'
3
Alteration, amendment, etc., of franchises.-Ordi-
nances made by the board of trustees of cities of the sec-
ond class having less than twenty-five hundred inhabitants
and of towns and villages relative to streets, railways,
electric companies, telephones, gas and water-works, are
subject to alteration by the council.¹
UTAH.S
SUBDIVISION I.-HISTORICAL.
The Territory of Utah, as originally constituted, em-
braced a very large portion of the territory west of the
Mississippi River. It was settled by the community of
people known as Mormons, who adopted a constitution,
established a general assembly, and passed a number of
ordinances. They called their territory the State of
Deseret. On September 9, 1850, the congress of the
United States passed an act to establish a territorial gov-
¹ Sec. 1063.
2 Sec. 619.
³ Sec. 615.
4
* Sec. 686.
5 Unless otherwise stated, references are to the Compiled Laws of Utah,
of 1888, by section simply. The session laws are referred to as "Laws,"
of the respective years.
2302
ECONOMIC LEGISLATION.
ernment for Utah, embracing within that term that terri-
tory hitherto called the State of Deseret.' This act of
congress provides for a full territorial government, as do
all of these so-called organic acts. Upon the completion
of its organization, the territory became subject to the
provisions of the act of congress forbidding the granting
of private charters or special privileges by any of the
territories.
SUBDIVISION II.-FRANCHISE COMPANIES.
Incorporation; how obtained. As shown above, in-
corporation in the territories of the United States can be
obtained only under the provisions of general laws.
Articles of incorporation.-Whenever any number of
persons, not less than five, one-third being residents of the
territory, associate themselves together for establishing and
conducting any mining, manufacturing, commercial, or
other industrial pursuit, or business for, among other things,
the construction and operation of wagon roads, or irrigating
ditches, or for any rightful object consistent with the laws of
the United States and the laws of the territory, they may be
incorporated for that purpose, and may become a body
corporate. They must enter into an agreement signed
by each of them, and acknowledged by at least three of
them before the probate judge of the county. To this
must be affixed the oath or affirmation of three or more
of the number that they have commenced, or that it is
their bona fide intention to commence and carry on busi-
ness, and that each party is able to pay, and will pay the
amount of stock subscribed; and such acknowledgment
must not be made until ten per cent is paid in. Where
the capital consists of property, the affidavit as to pay-
ment is not necessary.3
Any number of persons not less than ten, two-thirds of
whom must be residents of the territory, subscribers to
19 U. S. Stat. 453.
2 Sec. 2267.
³ Sec. 2268.
TERRITORIES-UTAH.
2303
1
the stock of any intended railway, may be formed into a
corporation. When stock to the amount of at least one
thousand dollars to each mile of road has been subscribed,
and ten per cent cash paid thereon, said subscribers may
adopt articles of association, and may elect not less than
five, nor more than thirteen directors.2 Each stockholder
must subscribe to the articles.3
5
Any number of persons not less than three, two-thirds
of whom must be residents of the territory, may form a
company for conducting, owning, holding and working a
line or lines of telephones in this territory. Such per-
sons under their hands must make a certificate setting
forth the provisions as shown below. This certificate
must be signed and acknowledged, and upon complying
with these provisions, the company becomes a body cor-
porate, and entitled to all the powers and privileges of
corporations, as set forth under these various provisions."
Must show what.-The articles of corporations gen-
erally must state the place and manner of association; the
time of duration not less than three nor more than fifty
years; the business; amount of stock; whether the private
property of stockholders is to be liable for its obliga-
tions or not; number of officers; qualifications and term
of office; time and manner of elections; removals, resigna-
tions, property qualifications of officers and directors; and
such additional provisions as may be necessary for con-
ducting the business."
Articles of railroad companies must set forth the name;
number of years of existence, not exceeding fifty; capital
stock; contemplated cost of construction and right of way;
mode of power, and any other appurtenance for complet-
ing and using said road; names of directors; place to and
from which it is to run, and the counties through which
it is to pass.
¹ Sec. 2315
¹ Sec. 2316.
3 Sec. 2318.
• Sec. 2428.
5 Sec. 2429.
6 Sec. 2430.
7 Sec. 2268.
8 Sec. 2317.
2304
ECONOMIC LEGISLATION.
The articles of incorporation of telephone companies
must specify the corporate name, route of lines, designat-
ing principal points to be connected thereby, amount of
capital stock, names and places of residence of principal
share-holders and number of shares held by them, period
of existence, not to exceed fifty years.'
Filing. The articles of incorporation of companies gen-
erally, together with the affidavit required as above, must
be filed with the probate clerk of the county and recorded.
Articles of railroad companies must be filed with the
auditor of public accounts of the territory, and a certified
copy filed with the secretary of the territory, who must
issue a certificate of incorporation, and thereupon the per-
sons signing have all the powers of corporations."
2
The articles of telephone companies must be filed in the
office of the secretary of the territory.¹
Organization; preliminary requirements.-The arti-
cles of incorporation of railroad companies must state the
names of the directors of the company, who must meet and
organize within twenty days, and must elect a president
and vice-president from their number, a secretary and
treasurer from their stockholders, the secretary and treas-
urer giving bonds.³
See also under "OFFICERS; MEETINGS; VOTING; QUORUM,
ETC."
Amendments, repeals, etc.-Any corporation now ex-
isting or hereafter organized may change its name or alter
the number of its directors, trustees, or officers, but in no
case can there be less than three nor more than thirteen.
The articles of agreement or incorporation may be other-
wise altered or amended provided such amendment does
not alter the original purpose of the incorporation.*
Duration of charter.-Corporations generally must have
a corporate existence of not less than three nor more than
¹ Sec. 2429.
³ Secs. 2317, 2320.
2 Sec. 2319.
• Sec. 2273.
TERRITORIES-UTAH.
2305
fifty years. Railroad and telephone companies are limited
to a term of fifty years."
Powers.-Corporations generally have power to make
contracts, to sue and be sued, to buy and sell property
necessary for their purposes, and to make by-laws; all
which corporate powers must be exercised by a board of
directors.
Telephone companies have power to purchase, take, hold,
and vend to others any patent or patents for telephoning;
to purchase, take, secure, hold, and maintain all rights,
privileges and franchises relating to the business of tele-
phoning; to build telephone lines; to purchase land and
houses necessary for carrying on business; to appoint di-
rectors, officers, and agents, and to make rules, regulations,
and by-laws, etc.2
By-laws.
See under "PoWERS " above.
Officers; meetings; voting; quorum, etc.—The arti-
cles of incorporation of companies generally must state
the number of officers; their qualifications; term of office;
manner of elections, removals, resignations, property quali-
fications, etc.
Before entering upon their duties the first or any other
officers must take and subscribe an oath, and enter into
bonds, to be approved by the probate judge, to be filed
with the clerk of said court, for the faithful performance
of their duties. The clerk upon filing such bond issues a
certificate to that effect, which must be filed with the sec-
retary of the territory, and which constitutes the associa-
tion a body corporate.3
Directors of railroad corporations may make contracts
by law and do all else that may be deemed needful and
proper.*
Annual meetings of railroad companies must be held in
one of the counties in which the road is or through
which the road passes, after notice of not less than twenty
1 Secs. 2317, 2429.
2 Sec. 2431.
Secs. 2270, 2271.
* Sec. 2326.
2306
ECONOMIC LEGISLATION.
1
2
days. Special meetings of stockholders may be held be-
tween annual meetings on thirty days' notice. At gen-
eral meetings, two-thirds being present in person or by
proxy, the stockholders may remove the president, vice-
president, or directors, and choose others in their stead.³
Books. Corporations must keep true and correct books
of all their proceedings and business.*
Capital stock. The articles of incorporation of com-
panies generally must state the amount of the capital
stock. To the articles must be affixed the oath or affirma-
tion of three or more of the number that each party is
able to pay and will pay the amount of stock subscribed,
and the acknowledgment, etc., of the articles can not be
made until ten per cent of the capital stock is paid in.
Where the capital consists of property the affidavit as to
payment is not necessary, but the property must be esti-
mated as cash.
Companies may make by-laws providing as to the
method of payment of stock, and when in money it must
be so stated. Corporations may collect from stockholders
the amounts due on stock, and have a lien on the amount
paid in and the dividends thereon for any balance due
from a delinquent.5
6
7
The directors of railway companies must open books of
subscription when deemed necessary, and no subscription
is binding until accepted by the board. The articles of
such companies must state the amount of capital stock."
Stock to the amount of at least one thousand dollars for
each mile of railroad must be subscribed, and ten per
cent of it paid thereon, before articles of railroad com-
panies can be adopted and their organization completed.Ⓡ
The articles of incorporation of telephone companies
must also state the amount of stock.⁹
2 Sec. 2323.
³ Sec. 2324.
1 Sec. 2322.
• Sec. 2279.
8 Sec. 2316.
5 Sec.
9 Sec. 2429.
6 Sec. 2321.
7 Sec. 2317.
TERRITORIES-UTAH.
2307
Increase and decrease of.-The capital stock of companies
generally may be increased or diminished within limits
fixed by law, and under regulations as to notice etc.¹
Transfer of.-Stock is personal property, and is trans-
ferable as provided in the by-laws.2
Bonds, debts, etc.-A lien in favor of workmen, etc.,
attaches to rights of water way and rights of way. In
case of corporations, the lien attaches to all the franchise.
and charter privileges that may in any manner pertain to
said specified property.³
Liability of stockholders.-If, by the agreement for
incorporation signed by the corporators, individual prop-
erty is made liable for corporate obligations, it is so liable;
if not, it is not. The property of the corporation and the
unpaid stock is always liable for debts.*
Liability of officers and directors.-The secretary of
any corporation, clerk, or other person having connection
with it, making false entries with intent to deceive, is
guilty of forgery, and may be punished according to law.5
Any officer, director, or employe misapplying the funds
or carrying away such funds, or converting the same to
his own use, is guilty of embezzlement, and punishable
according to law.
Consolidation of companies.-Companies generally
may consolidate, provided, that at a regular meeting of
said corporations, two-thirds of the stockholders vote for
it, and that the meetings be called for such purpose by
notice for thirty days in a newspaper in Salt Lake City.'
Railroad companies owning parallel or competitive lines.
can not consolidate."
Railroad corporations may be formed pursuant to the
laws of the territory for the purpose of buying any rail-
road property situated therein which may be offered for
sale.s
¹ Sec. 2273.
2 Sec. 2329.
* Sec. 2286.
5 Sec. 2281.
3 Laws, 1890, p. 26, sec. 9.
• Sec. 2282.
¹ Sec. 2360, as amended, Laws, 1890, p. 35.
• Sec. 2373.
2308
ECONOMIC LEGISLATION.
Dissolution; forfeiture.-Any corporation failing to
use its franchise for two years forfeits its charter and
privileges.¹
Corporations may be dissolved by presenting to the pro-
bate judge a statement that the act was decided upon by a
two-thirds vote of all the stockholders. Upon notice, the
probate judge must consider the same, and, if satisfactory,
make an order dissolving the corporation. When dissolved,
the corporation continues for the purpose of collecting debts
due to it and converting assets and distributing the same
among stockholders, and the court may make an order to
carry these provisions into effect.2
Foreign corporations.-Within sixty days after begin-
ning business in the territory, foreign corporations must
file their articles of incorporation with the secretary of the
territory, and with the probate judge of the county where
their principal office is. Such articles must be accompa-
nied with the corporation's designation of an agent to re-
ceive service in all suits. Amendments of the articles of
incorporation thereafter made must be filed the same as
upon beginning business.3
SUBDIVISION III.-FRANCHISES.
How obtained. The statute provides that no railroad
can use any street, alley or highway, or any land or water
within any city, town or other municipal corporation un-
less the right to use the same is granted by a majority vote
of the city, town or municipal authorities from which the
right must emanate, and that the county court must desig-
nate one road eight rods wide in each county upon which
no railroad can be built.³
Telephone companies are also given power to secure,
hold, and maintain all rights, privileges, and franchises
relating to their business; to erect lines along highways
and cross waters; to erect poles, posts, piers or abutments;
¹ Sec. 2284.
2 Sec. 2274.
3 Sec. 2333.
TERRITORIES-UTAH.
2309
to use any standing trees, except fruit or ornamental trees,
for sustaining wires; but must not incommode the use of
highways or injuriously interrupt navigation;¹ such use
is subject to such regulations as the county courts of the
several counties through which it passes may prescribe.
Powers of municipalities as to.-City councils are
given power to regulate the use of streets; to regulate the
opening thereof for the laying of water and gas mains; to
authorize the erection of gas and electric lights, but any
company organized for the purpose of manufacturing
illuminating gas or electricity to supply cities has the
right by the consent of the city council (subject to exist-
ing rights) to erect gas or electric light works, lay down
pipes, and string wires on poles in the streets and alleys
of the cities of the territory, subject to city ordinances; to
authorize the construction and maintenance of gas-works
and water-works, and electric light works, and street rail-
ways; to provide for the lighting of the streets, laying
down gas pipes, and erection of lamp-posts; to prohibit
or regulate the erection of telegraph, telephone or electric
wires and poles, and the placing of wires thereon, and to re-
quire the removal of any and all poles from the streets,
alleys, and publie grounds, and the placing underground
of all wires; to permit, regulate or prohibit the locating,
construction or laying the track of any railroad or tram-
way in any street, alley or public place.
Special damages; property owners' rights.-Persons
injured by the construction of telephone lines may apply
to the court, which must appoint commissioners to assess
damages; this application must be made within six
months.3
Condemnation of property.-Railroad companies may
cause surveys to be made of the route, enter upon lands,
etc. If they can not purchase or lease property they may
condemn under the law. 5
4
1 Sec. 2432.
2
Sec. 1755.
3 Sec. 2433.
+ Sec. 2333.
5 Secs, 2335-2348.
2310
ECONOMIC LEGISLATION.
Proceedings for condemnation are by application to the
probate court, which must give a hearing to all parties con-
cerned, and appoint three commissioners to ascertain and
assess compensation, who must, after notice to the parties,
view the land and assess the values, taking into consider-
ation the benefit, and file in the clerk's office a report of
their proceedings. Parties aggrieved may move to set
aside the report and for a new trial, and the court may for
good cause set aside and order the same or another set of
commissioners to rehear the matter. The court must
finally condemn or refuse the application.¹
Duration of franchise.-The permission granted to
railroad or tramway companies to occupy the streets or
alleys of municipalities can not be for a longer time than
twenty years.2
Charges for franchises.-The council of cities is au-
thorized to raise revenue by a license fee or tax on any
private corporation or business within the limits of the
city. All such license fees and taxes must be uniform as
to the class of companies upon which they are imposed.³
Methods of construction.-City councils are given
power to regulate the opening of streets, for the laying
of water and gas mains, and the erection of gas and elec-
tric lights; to prohibit or regulate the erection of tele-
graph, telephone or electric wires and poles, and to require
the removal of any or all poles from the streets, alleys,
and public grounds, and the placing underground of all
wires; to regulate the construction of street railways; to
provide for and change the location, grade, and crossing
of any railroad.*
All horse, cable, steam, electric or other railway compa-
nies now existing, or hereafter created in any city already
5
1 Secs. 2335-2348.
2 Sec. 1755, sub. 31.
3 Sec. 1755, sub. 89.
* Sec. 1755, sub. 13, 19, 31, 32.
5 The word companies, as used in this and subsequent paragraphs,
means and includes any persons, companies, corporations or associations
owning or operating any stree' or other railway in any city. (Laws,
1890, p. 58, sec. 2.)
TERRITORIES-UTAH.
2311
incorporated or hereafter organized, are required to pave
or repave, at their own cost, all the space between the dif-
ferent rails and tracks, and also a space of two feet wide
outside of the outside rails of the outside tracks, and the
tracks referred to include not only the main tracks, but
also all side tracks, crossings, turnouts used by such com-
panies; and where two or more companies occupy the
same street or alley with separate tracks, then each com-
pany is responsible for its proportion of the surface of the
street or alley occupied by all the parallel tracks as herein
required. Such paving or repaving by such companies
must be done at the same time, and of the same material
and character as the paving and repaving of the streets or
alleys upon which said railway's tracks are located un-
less other material be especially ordered by the board of
public works.¹
Railway companies must keep that portion of the
street which they are required to pave or repave in good
order and proper repair, using the same material as the
street upon which the tracks are laid at the point
of repair, or such other material as the board of public
works may order or require; and as streets are hereafter
paved or repaved, street railway companies must lay in
the most approved manner a rail to be approved by the
board of public works.²
The tracks of all railway companies, when located
upon the streets or avenues of a city, must be kept
in repair and safe in all respects for the use of the
traveling public; and companies are liable for all dam-
ages by reason of neglect to keep such tracks in repair,
or for obstructing the streets or avenues of a city. For
injuries to persons and property arising from the failure
of such companies to keep their tracks in proper repair
and free from obstructions, such companies are liable and
the city is exempt from liability.2
¹ Laws, 1890, p. 58, secs. 1, 2.
2 Laws, 1890, p. 58, sec. 2.
2312
ECONOMIC LEGISLATION.
In the event of the failure or refusal of a railway com-
pany to pave, repave, or repair as required in the forego-
ing provisions, when so directed by the council, the coun-
cil has power to do the same; and the cost may be collected
by levy and the sale of any property of the street railway
company, in the same manner as special taxes are now or
may be collected. Special taxes for the purpose of paying
such cost of paving, repaving, etc., may be levied upon
the track, including the ties, iron, road-bed, right of way,
side-track, and appurtenances, including buildings and
real estate belonging to any such company or person, and
used for the purpose of such street railway business, all as
one property; or upon such parts of such track, appurte-
nances, or property, or any part thereof, as may be within
the district paved, repaved, macadamized, or repaired, and
are liens upon the property levied upon from the time of
the levy until satisfied. No mortgage, conveyance, pledge,
transfer, or incumbrance of any such property, or of any
rolling stock or personal property of any such company
or person, created or suffered by the company after
the time when any street or part thereof upon which
any street railway has been laid has been ordered
paved, repaved, etc., can be made or suffered except
subject to the lien of such special taxes, if such levy
be in contemplation. The city collector has the power
and authority to seize any personal property belong-
ing to any such person or company for the satisfaction
of any such special taxes when delinquent, and to sell the
same upon advertisement and in the same manner as con-
stables now are or may be authorized to sell personal
property upon execution of law; but failure to do so in
no wise affects or impairs the lien of the tax or any pro-
ceeding allowed by law for the enforcement thereof. The
railroad track or any other property upon which such
special taxes are levied, or so much thereof as may be nec-
essary, may be sold for the payment of such special taxes,
TERRITORIES-UTAH.
2313
in the same manner and with the same effect as real estate
upon which such special taxes may be levied, may be sold.'
It is also competent for any city to bring a civil action
against any party owning any such street railway and lia-
ble to pay said taxes, to recover the amount thereof, or
any part thereof, delinquent and unpaid, in any court hav-
ing jurisdiction of the amount, and obtain judgment and
have execution therefor, and no property, real or personal,
is exempt from such execution; but the real estate can
not be levied upon by execution out of the district court
on the judgment therein, or transcript of judgment therein,
as is now or hereafter provided by law.'
No defense can be allowed in any such civil action, ex-
cept such as goes to the ground-work, equity and justice
of the tax, and the burden of proof rests upon the person
assailing the tax. In case part of such special tax be
shown to be invalid, unjust, and inequitable, judgment
must be rendered for such amount as is just and equitable.¹
It is competent for the council, upon the written appli-
cation of any company, association, corporation, or person
owning any such street railway, to provide that such
special taxes shall become delinquent and be payable in
installments, as in case of taxes upon abutting real estate;
but such application must be taken and deemed a waiver
of any and all objections to such taxes and the validity
thereof. Such application must be made at or before the
final levy of such taxes. These provisions in regard to
the levy, collection, and enforcement of special taxes to
pay the cost of paving, repaving, and macadamizing, or
repairing between the rails of street railways, apply to
such special taxes hereafter levied.¹
The council has power in paving any district, and it is
their duty, before the work of paving or repaving is done
therein, to require water, gas, and sewer connections to be
made, under such regulations and at such distances from
¹ Laws, 1890, p. 58, sec. 3.
VOL. II-65
2314
ECONOMIC LEGISLATION.
the street mains to the line of property abutting on the
street ordered paved or repaved as may be prescribed by
ordinance, and must require that such gas and water pipe
connections be made by any company owning the respect-
ive mains. Upon neglect or failure of the water or gas
company to do the same, the board of public works may
cause the same to be done; and the cost thereof must be
deducted from any indebtedness of the city to such com-
panies, and no bills can be paid to the said companies by
the city until all such expenses for pipe laying have been
liquidated.¹
Regulations as to service.-City councils are given
authority to regulate the sale and use of gas, electric, or
other lights, the charges therefor, and the rent of gas
meters within the city; to regulate the inspection thereof;
to regulate the speed of horses, cars, and locomotives.2
Railroad companies have power to take and transport
passengers and freight by the force and power of steam,
or of animals, or of mechanical power, or by any combina-
tion of them, and to collect tolls, to erect depots, to regu-
late running of cars and the tolls to be collected.3
Passengers refusing to pay fare may be put off of car
at any stopping place employes may select.* Conductors
and other officers must wear badges with name of his
office.5
Safety of life and property.-Any passenger injured
on platform of any car, who is violating the regulations
of the company, written or verbal, can not recover for
injuries.º
Public service.-City councils may make contracts
with any person, company, or association, for the furnish-
ing of light for public buildings, streets, sidewalks, and
alleys, for any length of time not exceeding three years."
2 Sec. 1755, sub. 19, 28.
¹ Laws, 1890, p. 61, sec. 4.
3 Sec. 2334.
• Sec. 2354.
7 Sec. 1755, sub. 18.
5 Sec. 2355.
• Sec. 2353.
TERRITORIES-UTAH.
2315
SUBDIVISION III.-MUNICIPAL OWNERSHIP.
City councils are authorized to construct and maintain
water-works, gas-works, electric light works, and street
railways, or to purchase any or all of said works from any
person or corporation. They are given jurisdiction over
the supply and source of water for water-works for a dis-
tance of ten miles, and have the power to exercise the
right of eminent domain."
The councils of cities have power at any time to assess
the cost of any sewer connections and also of any water
connections, when the city owns the sewer and water pipe
main, upon the property opposite such connections, and
to such depth of lots as the council, sitting as a board of
equalization, shall deem just and equitable."
A municipal corporation, whose charter imposes upon
it, and which assumes the duty of exclusively controlling
and regulating the distribution of water within its limits.
for irrigating and for other purposes, although it may not
own the water so conducted, is liable to a private individ-
ual for damages arising from carelessly performing said
duty, although no such right of action is given by its
charter. Such duty is ministerial not judicial. Although
there is no statute expressly giving the right of action.
against the defendant city for the recovery of damages,
caused by the neglect of a corporate municipal duty, yet
the liability of a city invested with its corporate powers,
involving the right of raising revenue by taxation aud
special assessments, and the expenditure of the same for
general and also for special and local purposes is greater
than that of counties or towns which are deemed auxilia-
ries to the state merely, and where corporations are of the
very lowest grade, and invested with the smallest amount
of power.3
¹ Sec. 1755, sub. 14, 15, 88.
2 Laws, 1890, p. 61, sec. 4.
3 Levy v. Salt Lake City, I. W. C. (West Coast) 310, cites Burnes ". D.
·C., 91 U. S. 540; Askeld v. Hall County, 25 Am. Rep. 730; Bigelow .
Randolph, 14 Gray, 541.
!
1
APPENDIX A.
UNITED STATES AND STATE REPORTS.
It has seemed desirable to insert in this place a statement as to the
reports of the judicial decisions of the United States and of the various
states, showing the method of citation adopted in the respective states,
and generally the dates covered by such reports. This is intended to
include all printed reports of the various states, and necessarily to be a
complete guide to the reports of the United States, the states, and terri-
tories. A list of the various law reporter systems and collections of
cases from the various courts, state and federal, are also given at the end
of the state reports.
Following this consideration of the reports of the respective states, is
given an alphabetical list of all these reports and the reporters of the
same, together with the various abbreviations by which cited by various
authorities, the citations preferred by state authorities being given first
in italics. The law periodicals, magazines, etc., are not in general
given in this list, except so far as recognized as reports of the various
states.
Every available source of information has been utilized to render
these lists complete and accurate. This feature of this work is in no
sense original, but has been compiled from sources too numerous for
specific mention. Special mention should be made, however, of the
assistance rendered by the co-editing attorneys of the respective states.
The periods of time covered by some of the reports, as well as the
names of reporters and manner of citation, in some cases varies as given
by different authorities; it has been the endeavor to follow the best
state usage in such cases. Miscellaneous, condensed, etc., reports are
given after the regular series of reports and separated from them by a
blank space. Where no number of volume is given under the column
"Cited," the reports consist of a single volume, and this is true even
where the volume may be marked "Vol. 1," as is the case in a number
of instances.
It should be observed that reports cited by the name of the reporter
are often followed by the abbreviation of the state in parenthesis, thus,
B. Mon. (Ky.). This should generally be done to avoid the confusion
which almost certainly arises from the citation simply by the name of
reporter.
(2317)
2318
ECONOMIC LEGISLATION.
į
UNITED STATES.
The United States reports consist of 145 volumes of Supreme Court
Reports; 210 volumes of Circuit and District Court Reports; 26 volumes
Court of Claims Reports; 18 volumes Bankruptcy Reports; 17 volumes
Patent Cases; 83 volumes of Decisions of Commissioners of Patents, etc.;
19 volumes Attorney-General Decisions; and 4 volumes of Inter-state
Commerce Reports.
U. S. Supreme Court.-The first 90 volumes of the Supreme Court
decisions, covering the period from 1790-1875, are cited by the name of
the reporter; the remaining 52 volumes are cited as "91-145 U. S.”
91-107 U. S. are also sometimes cited as "1-17 Otto.”
Dallas gives decisions of the United States Supreme and Circuit
Courts, and also of the state courts of Pennsylvania, and in volume 4 a
few cases of the Delaware Court of Errors and Appeals, and consequently
is given in the list of the U. S. Supreme Court Reports, U. S. Circuit
Court Reports, and Pennsylvania Reports, but is not usually given in
that of Delaware.
Peters' Condensed Reports contain the decisions given in Dallas,
Cranch, and Wheaton; Curtis's Decisions, those of Dallas, Cranch,
Wheaton, Peters, and 1-17 Howard; and Miller's Decisions those of
18-24, Howard, and all of Black.
Reports.
Dallas,
Cranch,
Wheaton,
Peters,
Howard,
Black,
Wallace,
United States,
Peters' Condensed,
Curtis' Decisions,
Miller's Decisions,
Cited.
1-4 Dall.,
Date.
1790-1800.
1-9 Cranch,
1801-1815.
1-12 Wheat.,
1816-1827.
1-16 Pet.,
1828-1842.
1-24 How.,
1843-1860.
1861-1862.
1863-1874.
1875-1892.
1791-1827.
1790-1854.
1855-1862:
1-2 Black,
1-23 Wall.,
91-145 U. S.,
1-6 Pet. Cond.,
1-22 Curt. Dec.,
1-4 Mill. Dec.,
Reporters of 91-145 U. S.:-Otto, 91-107; Davis, 108-145.
U.S. Circuit and District Courts.-The circuit and district court
reports are cited by the name of the reporter, and are given below alpha-
betically, followed by the number or abbreviation indicating the circuit
or district. This arrangement, it is believed, will prove more advan-
tageous than that usually adopted of arranging according to territory.
The circuits as originally organized were as follows: 1st, Maine, Mas-
sachusetts, New Hampshire, Rhode Island; 2d, Connecticut, New York,
Vermont; 3d, New Jersey, Pennsylvania; 4th, Delaware, Maryland, Vir-
APPENDIX A.
2319
ginia; 5th, Alabama, Louisiana; 6th, Georgia, North Carolina, South
Carolina; 7th, Indiana, Illinois, Michigan, Ohio; 8th, Kentucky, Mis-
souri, Tennessee; 9th, Arkansas, Mississippi.
As reorganized in 1866: 1st, Maine, Massachusetts, New Hampshire,
Rhode Island; 2d, Connecticut, New York, Vermont; 3d, Delaware,
New Jersey, Pennsylvania; 4th, Maryland, North Carolina, South Caro-
lina, Virginia, West Virginia; 5th, Alabama, Florida, Georgia, Louisiana,
Mississippi, Texas; 6th, Kentucky, Michigan, Ohio, Tennessee; 7th,
Indiana, Illinois, Wisconsin; Sth, Arkansas, Colorado, Iowa, Kansas,
Minnesota, Missouri, Nebraska; 9th, California, Nevada, Oregon.
Reports of the circuit and district courts may also be found in various
law periodicals and in the earlier reports of the various states, i. e.,
Monthly Reporter; American Law Register; 3, 4 Day (Conn.); 4, 16,
32, 34 Conn.; 35 Ga.; McCahon (Kan.); Smith (N. H.); 2 Martin (N. C.);
Phillips' Law (N. C.); 2. Taylor (N. C.); Carolina Legal Repository; 2
Brown (Pa.); Brewster (Pa.); Brightly (Pa.); Phila. Reports (Pa.); Pa.
Law Journal Reports; Pittsburg Reports (Pa.); Legal Gazette Reporter
(Pa.); Overton (Tenn.); Cooke (Tenn); 25 Tex.; 20-25, 29 Vt.; 6 Call.
(Va.).
Many of these reports contain one or more cases from other circuits
or districts, although usually catalogued as under a single circuit or
district, so far as not indicated below, the following examples may be
given: Bee (Dist. Mass., Pa.); Fisher Priz. Cases (Dist. Mass.); Hughes
(Dist.); 2 Paine (Dist. and Fourth Cir.); Peters' C. C. (Dist. N. J., Pa.);
Pet. Adm. (Dist. Md.).
Reports of territorial courts, while in a sense United States courts, are
-given under the various states.
As to Dallas' Reports see under "SUPREME COURT," above. Hemp-
stead's Reports are also given as forming a part of the Arkansas Reports.
See under "ARKANSAS."
Marshall's Decisions reported by Brockenbrough, and Miller's Decis-
ions reported by Woolworth, are sometimes cited as Mars. Dec." and
"Mill. Dec.," respectively; while Taney's, reported by Campbell, and
Chase's, reported by Johnson, are nearly always reported as "Taney"
and "Chase." Brockenbrough's Reports should not be confused with
"Chief Justice Marshall's Decisions," a term sometimes applied to "The
writings of John Marshall, etc., upon the Federal Constitution," consist-
ing of Chief-Justice Marshall's Supreme Court Decisions; nor should
'Miller's Decisions" be confused with "Miller's Dec." of the Supreme
Court.
Daveis' Reports of the Maine District are reprinted in 2 Ware. The
decisions of the District Court (Vt. Dist.) are reported in 20-25, 29 Vt.
Blatchford & Howland's reports, and Olcott's Admiralty, are both
sometimes cited as Bett's Decisions."
2320
ECONOMIC LEGISLATION.
Reports.
Cited.
Date.
Abbott (Cir. & Dist.),
1-2 Abb. U. S.,
1865-1871
Abbott Admiralty (Dist. N. Y.),
Abb. Adm.,
1847-1850
Baldwin (3d Cir.),
Bald.
1827-1833
Bee (Dist. S. C.),
Bee,
1792-1805
Benedict (Dist. N. Y.),
1-10 Ben.,
1865-1879
Bissell (7th Cir. & Dist.),
1-11 Biss.,
1851-1883
Blatchford (2d Cir.),
1-24 Blatch.,
1845-1888
Blatchford's Prize Cas. (Dist. N. Y.),
Bl. Pr. Cas.,
1861-1865
Blatchford & Howland (Dist. N. Y.),
Bl. & H.,
1827-1837
Bond (6th & 7th Cir. & Dist.),
1-2 Bond,
1856-1871
Brockenbrough (4th Cir.),
1-2 Brock,
1802-1836
Brown's Admiralty (Dist.),
Brown Adm.,
1859-1874
Brunner's Collected Cases (Cir. Ct.), Brunn. Col. Cas.,
1791-1860
Chase (4th Cir.),
Chase,
1865-1869
Clifford (1st Cir.),
1-4 Clif.,
1858-1878
Crabbe(Dist. Pa.),
Crabbe,
1836-1846
Curtis (1st Cir.),
1-2 Curt. C. C.,
1851-1856
Dallas (3d Cir.),
Deady (9th Cir. & Dist.),
Dillon (8th Cir.),
Federal Reporter (Cir. & Dist.),
Fisher's Prize Cases (Dist. Pa.),
Flippin (6th & 7th Cir. & Dist.),
Gallison (1st Cir.),
Gilpin (Dist. Pa.),
Hempstead (8th Cir. & Dist. Ark.),
Hoffman's Land Cases (Dist.),
Holmes (1st Cir.),
1-5 Dill.,
1-2 Flip.,
1-2 Gall.,
1-4 Dall.,
1790-1800
Deady,
1861-1869
1870-1879
1-50 Fed. Rep.,
1879-1891
Fish. Pr. Cas.,
1812-1813
1859-1880
1812-1815
Gilp.,
1828-1836
Hemp.,
1839-1855
Hoff. Land Cas.,
1853-1858
Holmes,
1870-1875
Hughes (4th Cir.),
1-5 Hugh. C. C.
1792-1883
Lowell (Dist. Mass.),
Mason (1st Cir.),
1-2 Lowell,
1865-1877
1-5 Mason,
1816-1830
McAllister (9th Cir.),
McCrary (8th Cir.),
McLean (7th Cir.),
McAll.,
1855-1859
1-5 McCrary,
1879-1883
1-6 McLean,
1829-1855
Newberry's Admiralty (Dist.),
Olcott's Admiralty (Dist. N. Y.),
Paine (2d Cir.),
Newb.,
1842-1857
Olc.,
1843-1850
1-2 Paine,
1810-1840
Peters (3d Cir.),
Pet. C. C.,
1803-1818
Peters' Admiralty (Dist. Pa.),
1-2 Pet. Adm.,
1780-1807
Sawyer (9th Cir. & Dist.), ´
Sprague (Dist. Mass.),
1-14 Saw.,
1870-1890
1-2 Sprague,
1841-1864
Story (1st Cir.),
Sumner (1st Cir.),
Taney (4th Cir.),
1-3 Story,
1839-1845
1-3 Sumn.,
1829-1839
Taney,
1836-1861
Van Ness Prize Cases (Dist. N. Y.), Van Ness,
1814
APPENDIX A.
2321
Reports.
Wallace (3d Cir.),
Wallace, Jr. (3d Cir.),
Cited.
Wall. Sen.,
Date.
1801
1-3 Wall. Jr.,
1842-1862
Ware (Dist. Me.),
1-3 Ware,
1822-1865
Washington (3d Cir.),
1-4 Wash. C. C.,
1803-1827
Woodbury & Minot (1st Cir.),
1-3 Wood & M.,
1845-1847
Woods (5th Cir.),
1-4 Woods,
1870-1881
Woolworth (8th Cir.),
Wool.,
1863-1869
U. S. Court of Claims.—
Reports.
Cited.
Devereaux,
Dev. Ct. Cl.,
Court of Claims,
1-25 Ct. Cl.,
Date.
1855-1856
1863-1890
Reporters of 1-25 Ct. Cl.:-Nott & Huntington, 1-7; Nott & Hopkins,
8-25.
U. S. Bankruptcy.-The National Bankruptcy Register was a pe-
riodical publication reporting cases only: volumes 1-4 were originally
published as The Bankrupt Register."
(C
The "
Bankrupt Court Reporter" and "American Law Times Bank-
ruptcy Reports" also contain bankruptcy cases.
Reports.
Cited.
National Bankruptcy Register, 1-18 Nat. Bank Reg.,
Date.
1867-1879
Patent Reports and Decisions.-Robb's Patent Cases is a collec-
tion of patent cases taken from the U. S. Supreme Court and Circuit
Court Reports. Whitman's from the Supreme Court alone; volume 2
was the first issued, and volumes bearing no volume mark may be ac-
cepted as copies of this volume.
The Commissioners' Decisions are designated by the year covered by
them.
Reports.
Cited.
Date.
Robb (Sup. & Cir. Cts.),
Whitman (Sup. Ct.),
Fisher (Sup. & Cir. Cts.),
Fisher's Cases (Cir. Ct.),
Banning & Arden (Cir. Ct.),
McArthur's Cases (D. C.),
1-2 Robb Pat. Cas.,
1789-1850
1-2 Whit. Pat. Cas.,
1810-1874
Fish. Pat. Rep.,
1821-1851
1-6 Fish. Pat. Cas.,
1848-1873
1-5 B. & A. Pat. Cas.,
1874-1881
MCA. Pat. Cas.,
1841-1859
COMMISSIONERS' DECISIONS, ETC.
Cranch's Opinions,
Cranch Pat. Op.,
1839-1848
Decisions of Com'r of Patents,
(22 vols.) Dec. Com. Pat., 1869-1891
Official Gazette of the Patent Office, 1-60 Pat. Off. Gaz.,
1872-1892
2322
ECONOMIC LEGISLATION.
Opinions of Attorneys-General.—
Reports.
Opinions of Attorneys-General,
Cited.
Date.
1-19 Opin. U. S. Att. Gen., 1789-1890
Reporters of 1-19 Opin. U. S. Att. Gen.:-Hall, 1-5; Andrews, 6–8;
Ashton, 9-12; Bentley, 13-16.
Inter-state Commerce Reports.—
Reports.
Inter-state Commerce,
Cited.
Date.
1-4 Int. St. Com.,
ALABAMA.
The reports of the State of Alabama consist of 112 volumes of Supreme
Court Reports. The first 19 volumes, covering the period from 1820–39,
are cited by the name of the reporter. The remaining 93 volumes, cov-
ering the period from 1840-92, are cited by volume, as "1-93 Ala." The
designation, new series," which was applied to 1-7 Ala., was dropped
in subsequent volumes.
Shepherd's Alabama Select Cases are republished in 37-39 Ala.
The first 18 volumes of the above reports are also embraced in Smith's
Condensed Reports, volumes 1-8. Some authorities give but 5 volumes.
All Alabama cases since 1886 are also reported in the Southern Reporter.
Reports.
Minor,
Cited.
Minor,
Date.
1820-1826
Stewart,
1-3 Stew.,
1827-1831
Stewart & Porter,
1-5 Stew. & P.,
1831-1834
Porter,
1-9 Port.,
1834-1839
Alabama,
1-93 Ala.,
1840-1892
Smith's Condensed,
1-5 Sm. Cond.,
1820-1839
1 Shep. Sel. Cas.,
1861-1863
Shepherd's Select Cases,
Reporters of 1-93 Ala.: Judges, 1-11; Ormond, 12-15; Cocke, 16-18;
Shepherd, 19-21; Judges, 22-23; Shepherd, 24-41; Danner, 42; Jones,
43-49; Shepherd, 50-51; Jones, 52-57; Clark, 58; Sandford, 59; Shep-
herd, 60; Jones, 61-62; Shepherd, 63-67; Shepherd & Tillman, 68; Till-
man, 69–70; Shepherd, 71-74; Tillman, 75; Shepherd, 76–79; Morrissett,
80; Hutchinson, 81; Shepherd, 82-83; Hutchison, 84; Shepherd, 85–91.
ALASKA.
(No Reports.)
ARIZONA.
Reports of the Territory of Arizona consist of 1 volume, reported by
Dann, covering the period from 1866-1884, and cited as "1 Arizona."
Reports.
Arizona,
Cited.
1 Ariz.,
Date.
1866-1884
APPENDIX A.
2323
ARKANSAS.
The reports of the State of Arkansas consist of 54 volumes of
Supreme Court Reports, covering the period from 1837-1891, and are
cited by volume, as 1-54 Ark." Some of the earlier reports will some-
times be found cited by the name of the reporter.
Hempsted's U. S. Cir. Ct. Reports (1 vol.) contain reports of the
U. S. Superior Court for the Territory of Arkansas, 1820-36; U. S. Dis-
trict Court for District of Arkansas, 1836-49, and U. S. Circuit Court for
the District of Arkansas, 1839-55.
Reports.
Hempstead,
Arkansas,
Cited.
Hemp.,
1-54 Ark.,
Date.
1839-1856
1837-1891
Reporters of vols. 1-54 Ark. :-Pike, 1-5; English, 6-13; Barber, 14–24;
Cox, 25-27; Moore, 28-34; Turner, 35-48; Mansfield, 49-51; Craw-
ford, 52-54.
CALIFORNIA.
The reports of the State of California consist of 94 volumes of Su-
preme Court Reports, covering the period from 1850-91, and are cited by
volume, as "1-94 Cal." Two volumes of the State District Court Re-
ports, reported by Labatt, issued in 1857-8 in monthly parts, and dis-
continued in the middle of the second volume, and 1 volume of Pro-
bate Court Reports, the decisions of Judge Milton H. Myrick, edited
by T. H. Rearden.
Reports.
California,
Labatt's District Court,
Myrick's Probate Court,
Cited.
1-94 Cal.,
1-2 Lab. (Cal.),
1 Myr. (Cal.),
Date.
1850-1892
1857-1858
1872-1879
Reporters of vols. 1-94 Cal. :-Bennett, 1; Hepburn, 2-4; Morris, 5;
Booraem, 6-8; Lee, 9-12; Harmon, 13-15; Bagley, 16-19; Hillyer,
20-22; Tuttle, 23-32; Hale, 33-37; Robinson, 38; Thompson, 39-40;
Tuttle, 41-51; Tuttle & Carpenter, 52; Carpenter, 53; Smith, 54-62;
Cope, 63-72; Pomeroy, 73-94.
COLORADO.
The reports of the State of Colorado consist of 16 volumes of Su-
preme Court Reports, covering the period from 1864–1891, and are cited
by volume as “1-16 Col." Volumes 1 and 2, and part of volume 3, con-
tain territorial decisions.
Reports.
Colorado,
Cited.
1-16 Col.,
Date.
1864-1891
Reporters of vol. 1-16 Col. :-Hallett, 1-2; France, 3-11; Beck, 12-16.
2324
ECONOMIC LEGISLATION.
CONNECTICUT.
The reports of the State of Connecticut consist of 69 volumes of Supreme
Court Reports. The first 8 volumes, covering the period from 1785–1813,
are cited by the name of the reporter. The remaining 61 volumes, cov-
ering the period from 1814-91, are cited by volume as "1-61 Conn.”
Kirby and Root contain cases from the Superior Court, together with a
few from the Supreme Court of Errors; the remaining reports are of the
Supreme Court. Root reports some cases decided between 1764–89.
Reports.
Kirby,
Root,
Day,
Connecticut,
Cited.
1 Kirby,
1-2 Root,
1-5 Day,
1-61 Conn.
Date.
ļ
1785-88
1789-98
1802-13
1814-92
Reporters of 1-61 Conn. :-Day, 1-21; Matson, 22-24; Hooker, 25–61.
DAKOTA TERRITORY.
(See North and South Dakota.)
DELAWARE.
The reports of the State of Delaware consist of 11 volumes of Law
Reports, covering the period from 1822-1883; 1 volume of Criminal Re-
ports, covering the period from 1856–1879; and 5 volumes of Chancery
Reports, covering the period from 1814-1866, and are cited as shown be-
low. The reporting system of Delaware dates from 1832, although some
earlier cases are reported in the first, and other volumes. The Chancery
Reports are sometimes cited as Bates' Chancery Reports. A few cases
of the Delaware Court of Errors and Appeals are reported in 4 Dallas.
Reports.
Cited.
Harrington,
Houston,
Houston's Criminal,
Delaware Chancery,
Date.
1-5 Harr. (Del.),
1822-55
1-6 Hous. (Del.),
1855-83
1 Del.,
1856-79
1-5 Del. Ch.,
1814-86
DISTRICT OF COLUMBIA.
The reports of the District of Columbia consist of 19 volumes of the
reports of the Supreme Court of the District of Columbia, covering the
period from 1801-91. Mr. Mackey has arranged these reports chrono-
logically, and suggests that they be cited as "1-19 D. C." They are for
the most part, however, usually cited by the names of the reporters.
6 Cranch contains no decisions, and is made up of an index and table
of cases contained in the other volumes, and consequently is not counted
in the list of reports.
APPENDIX A.
2325
Reports.
Cranch (Cir. Ct.),
Cited.
Date.
1-5 Cranch, C. C.,
1801-1841
District of Columbia,
6-7 D. C.,
1863-1873
MacArthur,
1-3 MacA.,
1873-1879
MacArthur and Mackey,
1 MacA. and Mack.,
1879-1880
Mackey,
1-8 Mack.,
1880-1891
FLORIDA.
The reports of the State of Florida consist of 27 volumes of Supreme
Court Reports, covering the period from 1846-91, and are cited by vol-
ume as "1-27 Fla."
Reports.
Florida,
Cited.
1-27 Fla.,
Date.
1846-1891
Reporters of 1-27 Fla.:-Branch, 1; Archer, 2; Hogue, 3-4; Papy,
5-8; Galbraith, 9-11; Galbraith & Meeks, 12; Drew, 13; Cocke, 14-15;
Raney, 16-20; Cooper, 21-24; Lamar, 25-27.
GEORGIA.
The reports of the State of Georgia consist of 92 volumes of the Su-
preme Court Reports. The first 4 volumes, covering the period from
1805-1843, and containing decisions of the Superior Court, at that time
the highest court of the state, are cited by the name of the reporter.
The remaining 88 volumes, covering the period from 1846-1891, are cited
by volume as “1-87 Ga.”
1-87 Ga." There are 2 volumes, 33 Ga. The second one
contains the cases of the March term of 1864, which, owing to the sudden
death of the reporter, were not published in their regular order. 1-3
Ga. are sometimes cited by the name of the reporter.
The Georgia Decisions consist of two separate parts, usually bound
in 1 volume.
35 Ga. contains some United States Circuit and District Court de-
cisions by Erskine, J.
Reports.
Cited.
Date.
Charlton (T. U. P.),
Char. (T. U. P.),
1805-10
Charlton (R. M.),
Char. (R. M.),
1811-37
Dudley,
Dud.,
1821-33
Georgia Decisions,
Ga. Dec.,
1842-43
Georgia,
1-87 Ga.,
1846-91
Reporters of 1-87 Ga.:-Kelly, 1-3; Kelly & Cobb, 4-5; Cobb, 6-20;
Martin, 21-30; Lester, 31-33; Lester's Sup. 33; Bleckley, 34-35; Ham-
mond, 36-44; Hammond & Jackson, 45; Jackson, 46-58; Jackson &
Lumpkin, 59-66; Lumpkin, 67-76; Lumpkin & Peeples, 77; Peeples,
78-79; Peeples & Stevens, 80-87.
2326
ECONOMIC LEGISLATION.
IDAHO.
The reports of the State of Idaho consist of 1 volume of Idaho Ter-
ritory Reports, covering the period from 1866-67, and reported by Cum-
mins, and 1 volume of Prickett's Reports, covering the period from
1866–80, and in which the cases reported in Cummins' Reports are re-
printed. There are many other decisions which are published only in
the Pacific Reporter. The legislature has made no provision for the
publication of the decisions of the Supreme Court since Idaho became
a state.
Reports.
Cummins,
Prickett,
Cited.
1 Ida. Ter.,
1 Ida. Ter. N. S.,
ILLINOIS.
Date.
1866-67
1866-80
The reports of the State of Illinois consist of 137 volumes of the Su-
preme Court Reports, covering the period from 1819-92, cited as "1-137
Ill.;" and 41 volumes of the Reports of the Court of Appeals, covering
the period from 1877-92, cited as "1-41 Ill. App."
Volumes 1-10 Ill. are sometimes cited by the names of the reporters.
The first 20 volumes of the Reports of the Court of Appeals (inferior
to the Supreme Court) were reported by A. C. Bradwell, and are often
cited by the name of the reporter abbreviated as "Brad."
Forman's Reports or "Printed Opinions," 1832-1838, in 1 volume, is a
continuation of Breese's Reports (1 Ill.); its cases are all found in 2 Ill.
(1 Scam.).
Reports.
Illinois,
Illinois Appeals,
Cited.
1-137 Ill.,
1-41 Ill. App.,
Date.
1819-92
1877-92
Illinois Condensed Reports,
1 Ill. Cond. (1–3 Ill.).
Reporters of 1-137 Ill.:-Breese, 1; Scammon, 2-5; Gilman, 6-10;
Peck, 11-30; Freeman, 31–137.
Reporters of 1-41 Ill. App.:-Bradwell, 1-20; Smith, 21-41.
INDIANA.
The reports of the State of Indiana consist of 138 volumes of Supreme
Court Reports, 2 volumes of the Court of Appeals of Indiana, and 1 vol-
ume of Reports of the Superior Courts of Marion county. The first 9
volumes of the Supreme Court Reports, covering the period from 1817-
50, and the Superior Court Reports of Marion County, covering the pe-
riod from 1871-74, are cited by the name of the reporter. The remain-
ing 129 volumes of the Supreme Court Reports, covering the period from
:
APPENDIX A.
:
2327
1848-92, are cited by volume as "1-129 Ind." Some of the earlier vol-
umes are sometimes cited by the name of the reporter. The Reports of
the Court of Appeals are cited as “1-2 Ind. App.”
Reports.
Blackford,
Smith,
Indiana,
Indiana Appeals,
Wilson's Superior Court,
Cited.
Date.
1-8 Blackf.,
1817-48
Smith (Ind.),
1848-50
1-129 Ind.
1848-92
1-2 Ind. App.,
1891-92
1 Wils. (Ind.),
1871-74
Reporters of 1-129 Ind.:-Carter, 1-2; Porter, 3-7; Tanner, 8-14; Har-
rison, 15–17; Kerr, 18–22; Harrison, 23-29; Black, 30–53; Martin, 54–70;
Dice, 71-99; Kern, 100-116; Griffith, 117–129.
Reporter of 1-2 Ind. App.:-Griffith, 1–2.
IOWA.
The reports of the State of Iowa consist of 86 volumes, covering the
period from 1839-91. The first 5 volumes covering the period from
1839-54, are cited by the name of the reporter. The remaining 81
volumes are cited by volume, as "1-81 Iowa." Morris gives territorial
cases. Bradford's Reports consist of three pamphlets of decisions pub-
lished prior to Morris; they are given in Miller's edition of Morris.
Reports.
Morris,
Greene,
Iowa,
Cited.
Morr.,
1-4 Greene,
1-81 Iowa,
Date.
1839-46
1847-54
1855-91
Reporters of 1-81 Iowa:-Clarke, 1-8; Withrow, 9-21; Stiles, 22–37;
Runnell 38-56; Hight, 57-58; Ebersole, 59-80; Raymond, 81.
KANSAS
The reports of the State of Kansas consist of 1 volume of territorial
reports (U. S. District Court) and 47 volumes of Supreme Court Re-
ports. The first volume (territorial) covering the period from 1858–61,
is cited by the name of the reporter. The remaining 47 volumes cover-
ing the period from 1862-92, are cited as "1-47 Kan."
Reports.
McCahon,
Cited.
McCahon,
1-47 Kan.,
Date.
1858-61
Kansas,
1862-92
Reporters of 1-47 Kan.:-Banks, 1-5; Webb, 6-20; Randolph, 21-47.
KENTUCKY.
The reports of the State of Kentucky consist of 89 volumes of the
Supreme Court, and subsequently of the Court of Appeals Reports.
2328
ECONOMIC LEGISLATION.
The first 77 volumes, covering the period from 1785-1879, are cited by
the name of the reporter, sometimes followed by the abbreviation
"Ky." The remaining 12 volumes, covering the period from 1880-91,
are cited as "78-89 Ky." The 3 volumes of A. K. Marshall's, the 6 of
Littell's, the 7 of T. B. Monroe's, the 7 of J. J. Marshall's, and the 9 of
Dana, are published in later editions in 2, 3, 3, 4, and 5 volumes respect-
ively. Hughes reports land cases. Sneed, in some of the earlier publi-
cations, is referred to as " Printed Decisions."
Reports.
Hughes,
Kentucky Decisions.
Cited.
Hughes,
Sneed,
Date.
1785-1801
1801-1805
Hardin,
Bibb,
Hard.
1805-1808
1-4 Bibb,
1808-1817
Marshall, A. K.,
1-3 A. K. Marsh.,
1817-1821
Littell's Select Cases,
Litt. Sel.
1795-1821
Littell,
1-5 Litt.,
1822-1824
Monroe, T. B.,
1-7 T. B. Mon.,
1824-1828
Marshall, J. J.,
1–7 J. J. Marsh.,
1829-1832
Dana,
1-9 Dana,
1833-1840
Monroe, Ben,
1-18 B. Mon.,
1840-1857
Metcalfe,
1-4 Metc.,
1858-1863
Duvall,
1-2 Duv.,
1864-1866
Bush,
1-14 Bush,
1866-1879
Kentucky,
78–89 Ky.,
1880-1891
Reporters of 78–89 Ky.:—Rodman, 78-82; Hines, 83–89.
LOUISIANA.
"1-8
The reports of the State of Louisiana consist of 94 volumes of Su-
preme Court Reports and 1 volume of the reports of the Court of Ap-
peals. The first 20 volumes of the Supreme Court Reports, covering
the period from 1809-30, are cited as "1-12 Martin, Old Style,"
Martin, New Style," usually abbreviated to "M. O. S.," "M. N. S.," re-
spectively. The next 19 volumes, covering the period from 1830-41, are
always cited as "1-19 La." The next 12 volumes, covering the period
from 1841-46, were reported by Robinson, and are cited as "1-12 R."
The last 43 volumes, covering the period from 1846-91, are cited as
"1-43 La. An." The volume of the reports of the Court of Appeals is
cited by the name of the reporter.
((
1, 2 Martin, O.S., contain territorial decisions, and are sometimes cited
as Orleans Term Reports;" the remaining volumes of Martin, O. S., are
sometimes cited "Louisiana Term Reports." 30 La. An. is bound in
two parts.
Reports.
Martin (old style),
Cited.
1-12 M. O. S.,
Martin (new style),
1-8 M. N. S.,
Date.
1809-23
1823-30
APPENDIX A.
2329
1
Reports.
Louisiana,
Robinson,
Cited.
1-19 La.
Date.
1830-41
1-12 R.,
1841-46
Louisiana Annuals,
1-43 La. An.
1846-91
McGloin, Court of Appeals,
McGloin,
1880-81
Manning's Unreported Cases,
Man. Unrep. Cas.,
1877-80
Reporters of 1-19 La.:-Miller, 1-5; Curry, 6-19.
Reporters of 1-43 La. An.:-Robinson, 1-4; King, 5-6; Randolph,
7-11; Ogden, 12-15; Glen, 16-18; Hawkins, 19-25; Gayarre, 26–28;
Robert, 29-31; Denis, 32-43.
MAINE.
The reports of the State of Maine consist of 83 volumes of Supreme
Court Reports, covering the period from 1820-91, and are cited as "1-83
Me." Greenleaf, Fairfield, and Shepley, are sometimes cited by the
name of the reporter.
Reports.
Maine,
Cited.
1-83 Me.
Date.
1820-91
Reporters of 1-83 Me.:-Greenleaf, 1-9; Fairfield, 10-12; Shepley,
13-18; Appleton, 19-20; Shepley, 21-30; Redington, 31-35; Heath,
36-40; Adams, 41-42; Ludden, 43-44; Hubbard, 45–51; Virgin, 52–60;
Smith, 61-64; Pulsifer, 65-68; Hastings, 69-70; Spaulding, 71-80; Ham-
lin, 81-83.
MARYLAND.
The reports of the State of Maryland consist of 108 volumes of Court
of Appeals Reports, and 7 volumes of Chancery Reports. The first
34 volumes of Court of Appeals Reports, covering the period from 1658-
1851, are cited by the name of the reporter. The remaining 74 volumes,
covering the period from 1851-1891, are cited as "1-74 Md." The first
3 volumes of Chancery Reports, covering the period from 1811–32, are
cited by the name of the reporter. The remaining 4 volumes, covering
the period from 1847-54, are cited as Md. Chancery.
1 Har. & McH. contains decisions of the provincial courts prior to the
revolution; Harris & McHenry's Reports are sometimes found in early
works cited as "Maryland Reports."
Reports.
Harris & McHenry,
Cited
Date.
1
1-4 Har. & McH.,
1658-1799
Harris & Johnson,
1-7 Har. & John.,
1800-1826
Harris & Gill,
Gill & Johnson,
1-2 Har. & G.,
1826-1829
1-12 Gill & John.,
1829-1842
Gill,
Maryland,
Bland,
1-9 Gill,
1843-1851
1-74 Md.,
1851-1891
1-3 Bland. Ch.,
1811-1832
f
Johnson's Decisions,
1-4 Md. Ch.,
1847-1854
VOL. II-66
2330
ECONOMIC LEGISLATION.
Reporters of 1-74, Md.:-Magruder, 1–2; Miller, 3-18; Brewer, 19–26 ;
Stockett, 27-74.
Reporters of 1-4 Md. Ch.:-Thomas & Franklin, 1; Hagner & Miller, 2;
Miller, 3-4.
MASSACHUSETTS.
The reports of the State of Massachusetts consist of 155 volumes of
Supreme Court Reports; 1 volume of criminal cases, and 2 volumes of
contested election cases. The first 97 volumes of the Supreme Court
Reports, covering the period from 1761-1867, are cited by the name of
the reporter, except the 17 volumes reported by Williams and Tyng be-
tween 1804-22, which are cited as 1-17 Mass. The remaining 58 vol-
umes, covering the period from 1867-92, are cited as "97-154 Mass."
Pickering, Metcalf, Cushing, Gray, and Allen are sometimes cited as
18-41, 42-54, 55-66, 67-82, 83-96 Mass., respectively, but this method of
citation is not sanctioned by the best usage.
The cases in 2-7 Mass., decided by Parsons, C. J., are found in "Par-
son's Decisions" or "Commentaries on American Law.”
Reports.
Quincy,
Massachusetts,
Pickering,
Metcalf,
Cushing,
Gray,
Allen,
Massachusetts,
Cited.
Date.
Quin.,
1761-1772
1-17 Mass.,
1804-1822
1-24 Pick.,
1822-1839
1-13 Met.,
1840-1847
1-12 Cush.,
1848-1853
1-16 Gray,
1854-1860
1-14 Allen,
1861-1867
97-154 Mass.
1867-1892
Thatcher Criminal Cases,
Thach. Cr. Cas.,
1823-1843
Cushing Contested Election Cases,
Cush. El. Cas.,
1780-1852
Loring & Russell "
((
Lor. & R. El. Cas.,
1853-1885
Reporters of 1-17 Mass. and 97-153 Mass.:-Williams, 1; Tyng, 2-17;
Browne, 97-109; Browne & Gray, 110-111; Browne, 112-114; Lathrop,
115-145; Kellen, 146–154.
MICHIGAN.
The reports of the State of Michigan consist of 91 volumes of Supreme
Court Reports, 2 volumes of Chancery Reports, and 2 volumes of Nisi
Prius. The first 2 volumes of the Supreme Court Reports, covering the
period fron. 1843-47, are cited by the name of the reporter. The re-
maining 89 volumes, covering the period from 1847-92, are cited as "1-
89 Mich." The Chancery and Nisi Pruis Reports are cited by the name
of the reporter.
APPENDIX A.
2331
Reports.
Douglass,
Michigan,
Harrington's Chancery,
Walker's Chancery,
Brown's Nisi Prius Cases,
Cited.
Date.
1-2 Doug. (Mich.),
1843-47
1-89 Mich.,
1847-92
Har. Ch.,
1837-42
Walk. Ch.,
1842-45
1-2 Brown,
1869-71
Reporters of 1-89 Mich.:-Manning, 1; Gibbs, 2-4; Cooley, 5-12;
Meddaugh, 13; Jennison, 14-18; Clarke, 19-22; Post, 23-36: Chaney,
37-58; Fuller, 59-89.
MINNESOTA.
The reports of the State of Minnesota consist of 47 volumes of Su-
preme Court Reports, covering the period from 1851-1892, and are cited
as "1-47 Minn. There are no reported decisions of any lower courts.
1 Minn. contains territorial cases. Atwater, Ames, and Hollingshead
reported cases prior to 1 Minn., which were published as an appendix
to the Laws of 1853, and were afterward incorporated into 1 Minn.
Reports.
Minnesota,
Cited.
1-47 Minn.,
Date.
1851-92
Reporters of 1-47 Minn.:-Officer, 1-9; Spencer, 10-20; Young, 21–47.
MISSISSIPPI.
The reports of the State of Mississippi consist of 68 volumes of the
Supreme Court Reports, 2 volumes of Chancery Reports, and 2 volumes
of Criminal Reports. The first 22 volumes of Supreme Court Reports,
covering the period from 1818-50, are cited by the name of the reporter.
The remaining 46 volumes, covering the period from 1851-91, are cited
as "23-68 Miss." The first 22 volumes are also cited as 1-22 Miss., but
the more usual method is as indicated above. 23-39 Miss. are quite
often cited by the name of the reporter. The Chancery and Criminal
Reports are cited by the name of the reporter.
Smedes & Marshall's Chancery Reports give the decisions of Chan-
cellor Buckner, and since the publication of that volume, the Chancery
Decisions are in the general state reports. In fact nearly all the decis-
ions in Freeman's Chancery and in Smedes & Marshall's Chancery are
also in the general reports. Morris's State Cases are criminal cases se-
lected from the regular state reports.
Reports.
Cited
Walker,
Howard,
Smedes & Marshall,
Mississippi,
Date.
Walk.,
1818-32
1-7 How.,
1834-43
1-14 S. & M.,
1843-50
23-68 Miss.,
1851-91
2332
ECONOMIC LEGISLATION.
Cited.
Fr. Ch.,
S. & M. Ch.,
Reports.
Freeman's Chancery,
Smedes & Marshall Chancery,
Morris' Criminal Cases,
1-2 Morris Cr. C.,
Date.
1839-43
1843
1818-71
Reporters of 23-68 Miss.:-Cushman, 23-29; George, 30-39; Reynolds,
40–42; Morris, 43-48; Harris & Simrall, 49–52; Brown & Hemingway,
53-65; Brame & Alexander, 66–68.
MISSOURI.
The reports of the State of Missouri consist of 107 volumes of the Su-
preme Court Reports, and 47 volumes of Reports of the Court of Ap-
peals of St. Louis and Kansas City. The Supreme Court Reports, cov-
ering the period from 1821-92, are cited as 1-107 Mo." The Reports
of the Court of Appeals of St. Louis and Kansas City are cited as “1–47
Mo. App."
(
1–15 Mo. have been republished by Houck, who is sometimes referred
to as the reporter.
Reports.
Missouri,
Cited.
1-107 Mo.,
Date.
1821-92
St. Louis & Kansas City Court of Appeals,
1-47 Mo. App.,
1876-92
Reporters of 1-107 Mo.:-McBride, 1; Edwards, 2-3; Napton, 4; Bay,
5-8; Stringfellow, 9-11; Robards, 12-13; Gardenhire, 14-15; Bennett,
16-21; Jones, 22-30; Jones & Barclay, 31; Whittlesey, 32-41; Post, 42-
64; Skinker, 65-79; Brown, 80-107.
Reporters of 1-47 Mo. App.:-Berry, 1-15; Berry & Mister, 16-28;
Lewis & Mister, 29-32; Lewis & Guthrie, 33-35; Goldsmith & Guthrie,
36-47.
MONTANA.
The reports of Montana consist of 11 volumes of reports of the ter-
ritorial and state supreme courts, cited as 1-11 Mont."
Reports.
Montana,
Cited.
1-11 Mont.,
Date.
1868-1891
Reporters of 1-11 Mont.:-Blake, 1; Blake & Hedges, 2; Hedges, 3-6;
Buck, 7-8; Maddox, 9-11.
NEBRASKA.
The reports of the State of Nebraska consist of 32 volumes of Supreme
Court Reports, covering the period from 1871-1892, and are cited as
"1-32 Neb." 1 Neb. contains some cases decided by the Supreme Court.
of the territory.
APPENDIX A.
2333
Reports.
Nebraska,
Cited.
1-32 Neb.,
Date.
1871-92
Reporters of 1-32 Neb.:-Woolworth, 1-2; Crounse, 3; Brown, 4-25;
Reese, 26; Campbell, 27-32.
NEVADA.
The reports of the State of Nevada consist of 20 volumes of the Su-
preme Court Reports, covering the period from 1865–1890, and are cited
as "1-20 Nev."
Reports.
Nevada,
Cited.
1-20 Nev.,
Date.
1865-90
Reporters of 1-20 Nev.:-Judges, 1-2; Helm, 3-9; Bicknell, 10-20.
NEW HAMPSHIRE.
The reports of the State of New Hampshire consist of 66 volumes of
Superior Court Reports. The first volume covering the period from
1802-1816, is cited by the name of the reporter; the remaining 65 vol-
umes, covering the period from 1816-1891, are cited as "1-65 N. H.;
13-18 N. H. are sometimes found cited as 1-6 N. H., new series; 21-31
N. H. are sometimes cited by the name of the reporter.
Reports.
Smith,
New Hampshire,
Cited.
Smith,
1-65 N. H.,
Date.
1802-16
1816-91
Reporters of 1-65 N. H.:-Adams, 1; Richardson & Woodbury, 2;
Anonymous, 3–18, (or, Richardson, 3-9; Parker, 10-18); Foster, 19;
Chandler, 20; Foster, 21-31; Fogg, 32-37; Chandler, 38-44; Hadley,
45-48; Shirley, 49-55; Hall, 56-57; Jenks, 58; Ladd, 59–64; Parsons, 65.
NEW JERSEY.
The reports of the State of New Jersey consist of 53 volumes of Law
Reports, and 48 volumes of Equity Reports. The Law Reports cover-
ing the period from 1789-1891, and the Equity Reports covering the
period from 1830-1892, are cited both as "N. J. L." and
N. J. Eq."
respectively, and also by the name of the reporter.
Reports.
Cited.
Date.
LAW.
Coxe,
Pennington,
Coxe, or
1-2 Pen., or
1 N. J. L.,
1789-95
2-3 N. J. L.,
1806-13
Southard,
1-2 South., or
4-5 N. J. L.,
1816-20
Halsted,
1-7 Hals., or
6-12 N. J. L.,
1821-31
Green,
1-3 Green, or
13-15 N. J. L.,
1831-36
1
2334
ECONOMIC LEGISLATION.
Reports.
Cited.
Date.
Harrison,
1-4 Harr., or
16-19 N. J. L.,
1837-42
Spencer,
Spencer, or
20 N. J. L.,
1842-46
Zabriskie,
1-4 Zab., or
21-24 N. J. L.,
1847-55
Dutcher,
Vroom,
1-5 Dutch., or
25-29 N. J. L.,
1855-62
1-24 Vroom, or
30-53 N. J. L.,
1862-91
EQUITY.
Saxton,
Sax., or
1 N. J. Eq.,
1830-32
Green,
1-3 Green Ch., or
2-4 N. J. Eq.,
1833-45
Halsted,
1-4 Hals. Ch., or
5-8 N. J. Eq.,
1845-53
Stockton,
1-3 Stock., or
9-11 N. J. Eq.,
1852-58
Beasley,
1-2 Beas., or
12-13 N. J. Eq.,
1858-60
McCarter,
1-2 McCart., or
14-15 N. J. Eq.,
1861-63
Green's, C. E.,
1-12 C. E. Green, or 16-27 N. J. Eq.,
1863-76
Stewart,
1-18 Stew., or
28-45 N. J. Eq.,
1877-89
Dickinson,
1-3 Dick. Ch., or
46-48 N. J. Eq.,
1889-92
NEW MEXICO.
The reports of the Territory of New Mexico consist of 4 volumes, cov-
ering the period from 1852-1889, and cited as 1-4 New Mexico.
Reports.
New Mexico,
C'ited.
1-4 N. M.,
Date.
1852-1889
Reporters of 1-4 N. M.:-Gildersleeve, 1-2; Johnson, 3-4.
NEW YORK.
The reports of the State of New York consist of 81 volumes of Com-
mon Law Reports, covering the period from 1794-1848; 38 volumes of
Chancery Reports, covering the period from 1814-47; 133 volumes of
reports of the Court of Appeals, covering the period from 1847-92, to-
gether with 19 volumes of selected reports of said Court of Appeals;
138 volumes of Supreme Court Reports, covering the period from 1847-
92, with 8 volumes of Miscellaneous Reports of said court; 58 volumes
of New York Superior Court reports, covering the period from 1828-92,
and 1 volume of Buffalo Superior Court Reports, covering the period
from 1854-75; 22 volumes of Common Pleas Court Reports, covering the
period from 1850-1891; 18 volumes of Surrogate Reports, covering the
period from 1849-92; 1 volume of Mayor's Court Reports, issued in
1803; 24 volumes of Criminal Reports, covering the period from 1776–
1890, together with 4 volumes of Miscellaneous Reports; and 264 vol-
umes of Practice and Miscellaneous Reports. The Court of Appeals Re-
ports are cited as "1-133 N. Y.;" the last 26 volumes of the Superior
Court Reports are cited as "33-58 Super. Ct.;" and the volume of the
APPENDIX A.
2335
Buffalo Superior Court is cited as "1 Buff. Super. Ct." The rest of
the reports are cited by the name of the reporter or other distinctive
title as shown below.
Up to the time of the adoption of the code, the court of last resort in
New York was the "Supreme Court and Court of Errors," the decisions
of which are designated as “Common Law” and “Chancery." Upon
the adoption of the code, in 1847, the court of last resort was designated
as the "Court of Appeals," the decisions of which are designated as
New York Reports.
Upon the adoption of the code, the Supreme Court, so called, became
a court of inferior jurisdiction, whose decisions are reported under the
designation of Supreme Court Reports, and as stated, cited by the name
of the reporter. The decisions of the Supreme Court are subject to re-
view by the Court of Appeals.
Common Law and Chancery.-" Coleman's Cases" bears the title,
"Cases of Practice, Adjudged in the Supreme Court, 1791-1800," and
is sometimes classified among the "Practice Reports."
"Caine's Cases" are also known as (C
New York Cases in Error," and
Caine's Reports as "New York Term Reports." Coleman & Caine's
Cases contains the cases of "Coleman's Cases," and others selected from
"Caine's Reports."
Lalor's Supplement is made up of decisions omitted from Hill & Denio,
and is often cited as "Hill & Den. Sup."
The Chancery Sentinel contains notes of chancery cases, published in
connection with the Saratoga Sentinel.
Reports.
Coleman,
Coleman & Caine,
COMMON LAW.
Cited.
Col. Cas.,
Col. & C. Cas.,
Johnson's Cases,
Caine,
Caine's Cases,
Johnson,
Anthon's Nisi Prius Cases,
Yates' Select Cases,
Lockwood's Reversed Cases,
Cowen,
Wendell,
Hill,
Denio,
Lalor's Sup.,
Johnson,
Hopkins.
Date.
1794-1800
1794-1805
1-3 Johns. Cas.,
1799-1803
1-3 Cai.,
1803-1805
1-2 Cai. Cas.,
1803-1805
1-20 Johns.,
1806-1823
Anth. N. P.,
1808-1818
Yates,
1811
Lock. Rev. Cas.,
1799-1847
1-9 Cow.,
1823-1829
1-26 Wend.,
1824-1841
1–7 Hill,
1841-1844
1-5 Denio,
1845-1848
Lalor, or Hill & D. Sup.,
1842-1844
CHANCERY.
1-7 John. Ch.,
Hopk.,
1814-1823
1823-1826
2336
ECONOMIC LEGISLATION.
Reports.
Paige,
Barbour,
Edwards,
Hoffman,
Clarke,
Sandford,
Cited.
Date.
1-11 Paige,
1828-1845
1-3 Barb. Ch.,
1845-1848
1-4 Edw.,
1831-1850
Hoff.,
1839-1840
Clarke,
1839-1841
1-4 Sandf. Ch.,
1843-1847
1-6 Chan. Sent.,
1841-1847
Chancery Sentinel,
Court of Appeals.-The early volumes of the Court of Appeals Re-
ports were quite generally cited by the name of the reporter, and are
still occasionally so cited.
The editor of Howard's Appeal Cases disclaims the title of reports for
his volume, but says it might be called "Reports of Counsel, or "A Book
of Briefs."
Keyes, Abbott's Decisions, Transcript Appeals, and Silvernail, each
purport to give cases not reported in the regular series. Keyes' Reports
are sometimes designated as 40-43 N. Y., Abbott reprints most of the
cases in Howard's Appeal Cases, Keyes' Reports, Selden's Notes, and
Transcript Appeals.
Selden's Notes consists of memoranda of cases reported more at
length in 7-9 N. Y.
Reports.
Howard's Appeal Cases,
Cited.
Date.
New York Court of Appeals,
1-133 N. Y.,
1847-1892
How. App. Cas.,
1847-1848
1-4 Abb. App. Dec.,
1850-1869
1-4 Keyes,
1863-1868
Seld. Notes,
1852-1854
1-7 Trans. App.,
1867-1868
Abbot's Appeal Decisions,
Keyes,
Selden's Notes (six numbers),
Transcript Appeals,
Silvernail,
1-2 Silver. Ct. App.,
Reporters of 1-133 N. Y.:-Comstock, 1-4; Selden, 5-10; Kernan,
11-14, E. P. Smith, 15-27; Tiffany, 28-39; Hand, 40-45; Sickles, 46–133.
Supreme Court.-Lansing's and Hun's Supreme Court Reports are
sometimes cited as 1-7 and 8-71 N. Y. Sup. Ct.
Thompson & Cook's Reports are sometimes cited as "8-13 N. Y. Sup.,"
and sometimes as "1-6 N. Y. Sup." Usually, however, Lansing and
Hun are intended when the Supreme Court Reports are cited as "N.
Y. Sup.," and Thompson & Cook should be cited as 1-6 Th. & C.," to
avoid confusion. Silvernail purports to give unreported cases.
Cited.
1-67 Barb.,
1-7 Lans.,
Reports.
Date.
Barbour,
1847-1875
Lansing,
1869-1873
Hun,
1-64 Hun,
1873-1892
Thompson & Cook,
Silvernail,
1-6 Th. & C.,
1874-1775
1-2 Silver. Sup. Ct.,
APPENDIX A.
2337
A
Superior Courts.-The first 32 volumes of the New York Superior
Court Reports are cited both by the name of the reporter and as 1-32
N. Y. Super. Ct. Volume 1 of Sheldon's Buffalo Superior Court Reports
bears the title, "N. Y. Superior Court Reports, vol. 43." There is a vol-
ume 43 in the regular series, reported by Jones and Spencer, and the
Buffalo Superior Court Reports should be cited as indicated in the list
below.
NEW YORK CITY SUPERIOR COURT.
Cited.
1-2 Hall,
1-5 Sandf.,
1-6 Duer,
1-10 Bosw.,
Reports.
Hall,
Sandford,
Duer,
Bosworth,
Robertson,
Sweeney,
N. Y. Superior Court,
1-7 Robt.,
1-2 Sweeney,
Date.
1828-1829
1847-1852
1852-1857
1857-1863
1863-1868
1869-1870
33-58 N. Y. Super. Ct., 1871-1892
Reporters of 33-58 N. Y. Super. Ct. :-Jones & Spencer, 33-58.
BUFFALO SUPERIOR COURT.
Sheldon's Buffalo Superior Court, 1 Buff. Super. Ct.,
1854-1875
Common Pleas. City and County of New York-
Reports.
Cited.
Date.
Smith, E. D.,
1-4 E. D. Smith,
1850-1854
Hilton,
1-2 Hilt.,
1855-1860
Daly,
1-16 Daly,
1859-1891
Surrogate Courts. Of the Surrogate Court Reports,
decisions from the various Surrogate Courts of the state. Bradford and
Redfield gives
Tucker from New York county.
Reports.
Bradford,
Redfield,
Tucker,
Demorest,
Connolly,
Mayor's Court-
Reports.
Livingston's Judicial Opinions,
Criminal Reports.-The
Cited.
Date.
1-4 Brad.,
1849-1857
1-5 Redf.,
1857-1882
Tuck.,
1864-1869
1-6 Dem.,
1882-1888
1-2 Connolly,
1888-1892
Cited.
Liv. Jud. Op.,
Date.
1803
City Hall Recorder" is the bound series
of a small monthly periodical of little value as reports.
Wheeler's Reports contain decisions of other states than New York,
as well as some of the United States Circuit and District Courts. It is
sometimes (at least vol. 1) referred to as The Criminal Recorder."
2338
ECONOMIC LEGISLATION.
}
Reports.
Wheeler's Criminal Cases,
Roger's City Hall Recorder,
Parker's Criminal,
Cowen's Criminal,
New York Criminal,
Gardiner's New York,
Cited.
Date.
1-3 Wheel. Cr. Cas.,
1776-1824
1-6 City Hall Rec.,
1816-1821
1-6 Park. Crim. Rep.,
1839-1868
1-2 Cow. Crim. Rep.,
1867-1874
1-7 N. Y. Crim. Rep.,
1881-1890
1820
1833
1819
1830
City Hall Reporter (Lomas) (only 192 pages),
New York Judicial Repository (Bacon) (6 Nos., 338 pages),
Skillman's Police Reports,
Practice and Miscellaneous Reports.-Howard's Practice Re-
ports, vols. 1-3, containing cases decided before the adoption of the
code, are sometimes known as New York Special Term Reports."
Howard and Abbott, so far as they cover the same period, give to a con-
siderable extent the same cases.
The "Code Reporter was a monthly periodical published in 1848-
1851. The cases reported in it and in vol. 1 of "Code Reports" are
largely reported in other series of New York Reports.
Reports.
Edmond's Select Cases,
New York Legal Observer,
Howard's Practice,
Cited.
Date.
Edm. Sel. Cas.,
1834-1848
1-12 N. Y. Leg. Obs.
1843-1854
1-67 How. Pr.,
1844-1884
Howard's Practice, New Series,
1-3 How. Pr., N. S.,
1883-1886
1-3 Code Rep.,
1848-1851
Code Rep., N. S.,
1851-1852
1-19 Abb. Pr.,
1854-1863
1-16 Abb. Pr., N. S.,
1863-1875
1-28 Abb. N. Cas.,
1876-1892
1-21 N. Y. Civ. Pr. Rep., 1881-1892
N. Y. Op. Att.-Gen.,
1796-1871
1-42 N. Y. State Rep.,
1886-1892
1-14 N. Y. Supp.,
1888-1892
Code Reporter,
Code Reports (New Series),
Abbott's Practice,
Abbott's Practice (New Series)
Abbott's New Cases,
Civil Procedure Reports,
Opinions of Attorneys-General,
New York State Reports,
N. Y. Supplement,
New York Monthly Law Bulletin,
New York Weekly Digest,
City Court Reports,
1-5 N. Y. Mo. Law Bul., 1879-1883
1-28 N. Y. Week. Dig. 1876-1880
1-2 City Ct. Rep.
1878-1892
NORTH CAROLINA.
The reports of the State of North Carolina consist of 49 volumes of
Law Reports, covering the period from 1789-1868; 21 volumes of Equity
Reports, covering the period from 1828-1868; all of which are cited by
the name of the reporter; and 48 volumes of "North Carolina Reports
(law and equity), which are cited as "63–110 N. C.”
The earlier volumes of the law reports are usually bound in volumes
APPENDIX A.
2339
}
as follows: 1 Hayw.; 1-2 Martin and 2 Hayw.; Taylor and Conference;
Law Repository and Term.
Martin's Reports are in two parts or volumes, the first consisting of
state cases; the second, United States cases. 2 Haywood and 65 N. C.
also contain decisions of the United States Circuit Court.
The Law Repository and Term Reports were edited by Judge Taylor,
who also edited 1 Taylor. The Law Repository was published as a
magazine. The Conference Reports were reported by Cameron &
Norwood, and consist of cases decided by the Superior Court judges in
conference before the establishment of the Supreme Court; they are
sometimes cited by the name of the reporters.
1 Hawks is sometimes cited as Ruffin & Hawks, the first part having
been reported by Thomas Ruffin.
2 Winston's Law is usually found bound with Winston's Equity.
Winston's Reports are more or less fragmentary, owing to the interrup-
tions of the civil war.
Since 1868, the law and equity cases have been reported together, and
designated as "North Carolina Reports," beginning with volume 63.
In determining the number of the first, volume of the reports issued as
"North Carolina Reports," the law and chancery reports were both
considered, the law volumes being reckoned as bound above.
Cited.
Date.
Reports.
Haywood,
1-2 Hayw.,
1789-1802
Martin,
1-2 Mart.,
1797-1806
Taylor,
Tayl.,
1799-1802
Conference,
Conf.,
1800-1804
Murphy,
1-3 Murph.,
1804-1819
Carolina Law Repository,
1-2 Law Repos.,
1813-1816
North Carolina Term,
Term,
1816-1818
Hawks,
1-4 Hawks,
1820-1826
Devereux,
1-4 Dev.,
1826-1834
Devereux & Battel,
1-4 Dev. & B. L.,
1834-1839
Iredell,
1-13 Ired. L.,
1840-1852
Busbee,
Busb. L.,
1852-1853
Jones,
1-8 Jones L.,
1853-1862
Winston,
1-2 Winst. L.,
1863-1864
Phillips,
Phil. L.,
1866-1868
EQUITY.
Devereux,
1-2 Dev. Eq.,
1828-1834
Devereux & Battel,
1-2 Dev. & B., Eq.,
1834-1840
Iredell,
1-8 Ired. Eq.,
1840-1852
Busbee,
Busb. Eq.,
1852-1853
Jones,
1-6 Jones Eq.,
1853-1863
Winston,
Phillips,
1 Winst. Eq.,
1863-1864
1 Phil. Eq.,
1866-1868
2340
ECONOMIC LEGISLATION.
Reports.
North Carolina,
NEW SERIES.
Cited.
63-110 N. C.,
Date.
1868-1892
Reporters of 63-110 N. C.:-Phillips, 63-64; McCorkle, 65; Ship, 66-
67; Hargrove, 68-75; Kenan, 76-91; Davidson, 92-110.
NORTH DAKOTA.
The reports of the State of North Dakota consist of five volumes of
the Reports of Dakota Territory, covering the period from 1867-1889,
and cited as 1-6 Dak. Ter.,-volume 4 is not published; and 1 volume
of State Supreme Court Reports.
Reports.
Dakota Territory,
North Dakota,
Cited
1-6 Dak. Ter.
1 N. Dak.
Date.
1867-1889
1890-1891
Reporters of 1-6 Dak.:-Bennett, 1; Smith, 2-3; Tripp, 5–6.
Reporter of 1 N. Dak.:-Camp, 1.
OHIO.
The reports of the State of Ohio consist of 68 volumes of Supreme
Court Reports, covering the period from 1821-1892; 6 volumes of Cir-
cuit Court Reports, covering the period from 1885-1892; 1 volume of
Common Pleas Reports, covering the period from 1816-1817; 1 volume
of Nisi Prius Reports, covering the period from 1831-1834; 4 volumes of
Cincinnati Superior Court Reports, covering the period from 1854-1859,
and 2 volumes of the reports of the same court, covering the period
from 1870-1872, and 1 volume of Probate Reports.
The first 20 volumes of the reports of the Supreme Court, covering
the period from 1821-1851, are cited as "1-20 Ohio." The remaining 48
volumes, covering the period from 1852-1892, are cited as "1-48 Ohio
State." The Circuit Court Reports published in connection with the
Weekly Law Bulletin are cited as 1-6 O. C. C. Other reports of the state
are cited by the name of the reporter. Citations are sometimes found to
the early numbers of the " Ohio Reports" by the name of the reporters.
7 Ohio is in two parts, paged separately, but bound together.
The "Ohio State" Reports begin with the adoption of the constitution
of 1851, and the code practice. The "Ohio" and "Ohio State" Reports
are published by authority; the other reports are issued as private en-
terprises. The Weekly Law Bulletin contains reports of many Ohio
cases, both of the Supreme Court and of the inferior courts, and is usu-
ally cited as "W. L. B."
Goebel's Probate Court Reports give selected cases decided in the
Probate Court of Hamilton county by Goebel, J.
}
APPENDIX A.
2341
!
Reports.
Ohio,
1-20 O.,
Cited.
Date.
1821-1851
Ohio State,
1-48 O. S.,
1852-1892
Ohio Circuit Court,
1-6 O. C. C.,
1885-1892
Tappan's Com. Pl.,
Tappan,
1816-1819
Wright's Nisi Prius,
Wright,
1831-1834
Handy's Cin. Sup. Ct.,
1-2 Handy,
1854-1855
Disney Cin. Sup. Ct.,
1-2 Disney,
Cincinnati Sup. Ct. Reporter,
Goebel's Probate Court,
1-2 Cin. Sup. Ct.,
Goebel Prob. Ct.,
1854-1859
1870-1872
1885-1890
Reporters of 1-20 Ohio:-Hammond, 1-9; Wilcox, 10; Stanton, 11–13;
Griswold, 14-19; Lawrence, 20.
Reporters of 1-48 Ohio State:-McCook, 1; Warden, 2; Warden &
Smith, 3; Warden, 4; Critchfield, 5–21; Granger, 22-23; De Witt, 24–
42; Okey, 43-45; Burgess, 46–48.
OKLAHOMA TERRITORY.
(No reports.)
OREGON.
The reports of the State of Oregon consist of 21 volumes of Supreme
Court Reports, covering the period from 1853–1891, and are cited as
"1-21 Ore." The early Oregon decisions were published as supple-
ments to the session laws, but are all reprinted in the regular series.
1 Oregon contains U. S. Dist. Court decisions, reprinted in " Deady"
(U. S. Cir., and Dist. Cts.) Volume 3 also contains State Circuit Court
decisions.
Reports.
Oregon,
Cited.
1-21 Oregon,
Date.
1853-1891
Reporters of 1-20 Oregon:-Wilson, 1-3; Bellinger, 4-8; Odeneal,
9-11; Stratton, 12-14; Holmes, 15-17; Thayer, 18-19; Burnett, 20-21.
PENNSYLVANIA.
The reports of the State of Pennsylvania consist of 214 volumes of
Supreme Court Reports, 9 volumes of Nisi Prius and Supreme Court
Reports, 6 volumes of Common Pleas Court Reports, 2 volumes of
District Court Reports, and over 300 volumes of miscellaneous reports
of various courts. It is a matter of much difficulty to make a complete
list of the reports of this state, but that given below, it is believed, in-
cludes all that are of any practical value. Although some of the reports
given in the list below cover the same period, cases as a rule are not
duplicated.
1
2342
ECONOMIC LEGISLATION.
As already explained, Dallas reports decisions of the United States
courts, as well as those of Pennsylvania. Addison reports some cases from
the "County Court of the Fifth Circuit," Yeates some Nisi Prius cases,
and Browne some U. S. District Court cases. So also the Pennsylvania
Law Journal Reports, Philadelphia Reports, Pittsburg Reports, Brewster's
Reports, Legal Gazette Reports, and Weekly Notes of Cases contain
some decisions of the federal courts.
T. J. Fox Alden's Condensed Reports (3 vols.) contain Dallas', Yeates',
Binney's, and Addison's reports.
Penrose & Watts Reports are sometimes cited as Penna. Repts.," but
this is not a desirable method of citation because of the existence of the
regular series of Pennsylvania Reports.
Grant reports Supreme Court decisions which owing to the limitation
placed upon the reporter of the regular reports, viz.: 2 volumes per
year, were necessarily omitted from the "State Reports."
>>
The regular series of Pennsylvania State Reports, vols. 1-146, Pa., are
cited by the name of the reporter, as "Pa. St., "Penn. St.,"
"Penn.,"
and "Pa.'
">
Hopkinson's Judgments contain state cases in admiralty decided be-
fore the U. S. Constitution; they are largely reprinted in Bee (U, S.
Dist. Ct.); other state admiralty cases are published in "Hopkinson's
Works."
The Pennsylvania Law Journal Reports are sometimes cited by the
name of the editor, John A. Clark. They consist of decisions taken from
the Pennsylvania Law Journal, American Law Journal, and American
Law Register.
The Philadelphia Reports give decisions originally published in the
"Legal Intelligencer," the Pittsburg Reports, those published in the
Pittsburg Legal Journal, and the Legal Gazette Reports, those published
in the "Legal Gazette." The Legal Gazette Reports are sometimes cited
Campbell's Reports." So also the Legal Chronicle Reports were re-
ported in the "Legal Chronicle," and are sometimes cited by the name
of the editor, Solomon Foster, Jr.
as
The Weekly Notes of Cases purport "to furnish a prompt record of
decisions in the Supreme Court of Pennsylvania, and the courts in Phil-
adelphia, reported in a succint form, but sufficiently complete to be use-
ful and trustworthy, when cited as authority."
PENNSYLVANIA STATE REPORTS.
Cited.
Reports.
Dallas,
Addison,
Date.
1-4 Dallas,
1754-1806
Addison,
1791-1799
Yeates,
1-4 Yeates, *
1791-1808
Binney,
1-6 Binney,
1799-1814
Sergeant & Rawle,
1-17 S. & R.,
1814-1828
Rawle,
1-5 Rawle,
1823-1835
APPENDIX A.
2343
Reports.
Penrose & Watts,
Watts,
Wharton,
Watts & Sergeant,
Grant's Cases,
Pennsylvania State,
Cited.
Date.
1-3 Pen. & Watts,
1829-1832
1-10 Watts,
1835-1841
1-6 Wharton,
1841-1845
1-9 Watts & Ser.
1841-1845
1-3 Grant,
1852-1863
1-146 Pa.
1845-1892
Reporters of 1-146 Pa.:-Barr, 1-10; Jones, J. P., 11; Jones & Mc-
Murtie, 12; Harris, 13-24; Casey, 25-36; Wright, 37-50; P. F. Smith,
51-81} (or 81*); Norris, 82-96; Outerbridge, 97-110; Amerman, 111–115;
Crumrine, 112–146.
NISI PRIUS AND SUPREME COURT.
Brightly,
Brightly,
1809-1851
Pennypacker's Supreme Court Reports, 1-4 Pennypacker,
1881-1884
Walker's Supreme Court Cases,
Monaghan,
1-2 Walker,
1-2 Mona.,
1888-1891
COMMON PLEAS.
Browne,
1-2 Browne,
1806-1814
Ashmead,
1-2 Ashmead,
1808-1841
Parson's Select Equity Cases,
1-2 Parson,
1845-1851
DISTRICT COURT.
Miles,
1-2 Miles,
1835-1840
VARIOUS COURTS.
Alden,
Clark,
1-3 Alden,
1754-1814
1-5 Clark,
1842-1861
Philadelphia,
Pittsburgh,
1-19 Phila.,
1850-1889
1-3 Pitts.,
1853-1873
Brewster,
1-4 Brewster,
1856-1871
Pearson,
Legal Gazette Reports,
Vaux, Recorder's Decision,
Weekly Notes of Cases,
Luzerne Legal Observer,
Luzerne Legal Register Rep.,
Legal Chronicle Reports,
Endlich,
Penn'a County Court Reports,
Chester County Reports,
Legal Intelligencer,
1-5 Luz. Leg. Reg.,
1-3 Legal Chron. Rep.,
1-2 Woodw. Dec.,
1-10 P. C. C. Rep.,
1-2 Pearson,
1850-1880
Legal Gaz. Rep.,
1869-1871
Vaux,
1841-1843
1-28 W. N. C.,
1872-1891
1-3 Luz. Leg. Obs.,
1860-1863'
1874-1890
1873-1875
1861-1871
1885-1892
1-2 Chest. Co. Rep.,
1883-1884
1-48 Leg. Int.,
1850-1891
Hopkins' Judgments,
Hopk. Judg.,
1785-1786
Legal Record Reports,
1-2 Legal Rec. Rep.,
1876-1883
Delaware County Reports,
1-4 Del. Co. Rep.,
1880-1891
Lancaster Law Review,
1-8 Lanc. L. Rev.,
1884-1891
2344
ECONOMIC LEGISLATION.
Reports.
Lehigh Valley Reports,
Maxwell, Northampton Co. Reports,
Wilcox, Lackawanna Co. Reports,
Montgomery County Reports,
Susquehanna County Reports,
Lackawanna Legal Record,
Lackawanna Jurist,
American Law Journal (Hill),
Journal of Jurisprudence (Hill),
Journal of Law,
American Law Register,
Legal and Insurance Reporter,
Lancaster Bar,
Legal Opinion,
Lackawanna Bar,
Susquehanna Legal Chronicle,
Common Pleas Reporter,
York Legal Record,
Pennsylvania Law Record,
Pennsylvania Law Journal,
American Law Journal,
Scranton Law Times,
Pittsburgh Legal Journal,
Legal Gazette,
Cited.
1-2 L. V. Rep.,
Lack. Jur.,
1-6 Am. L. Jour.,
Jour. Jur.,
Jour. Law.,
1-41 Am. L. Reg.,
Date:
1885-1886
1-2 Max. North. Co. Rep., 1887-1891
Wil. Lack. Co. Rep.,
1888-1889
1-6 Mont. Co. Rep.,
1885-1891
Susq. Co. Rep.,
1878-1879
Lack. Leg. Rec.,
1878-1879
1889-1890
1789-1816
1821
1831
1852-1891
From 1859
1869
1870-1873
1878
1878
1879-1888
1880-1882
1879-1880
1842-1852
1-4 Am. L. Jour.,
1-6 Scranton L. T.,
1-38 Pitt. Leg. Jour.,
1-8 Leg. Gaz.,
1866
1879-1885
1853-1891
1869-1876
1-3 Leg. & Ins. Rep.,
1-14 Lanc. Bar,
1-5 Leg. Op.,
Lack. Bar,
Susq. Leg. Chron.,
1-4 C. P. Repr.,
1-2 York Leg. Rec.
1-2 Pa. L. Rec.,
1-7 Pa. L. Jour.,
RHODE ISLAND.
The reports of the State of Rhode Island consist of 16 volumes of
Supreme Court Reports; covering the period from 1828-92, and are cited
as "1-16 R. I." Indexes to decisions have been issued since 1874, giv-
ing the decisions in advance of their publication in the regular volume
of reports. These indexes are designated by the letters of the alphabet,
thus: "Index A, or DD."
Reports.
Rhode Island,
Cited.
1-16 R. I.,
Date.
1828-1892
Reporters of 1-16 R. I.:—Angell, 1; Durfee, 2; Knowles, 3; Ames,
4-7; Ames, Knowles & Bradley, 8; Tobey, 9-10; Greene, 11-16.
SOUTH CAROLINA.
The reports of the State of South Carolina consist of 47 volumes of
Law Reports, covering the period from 1783-1868; 37 volumes of Chan-
cery Reports, covering the period from 1784-1868; and 33 volumes of
New Series Reports, covering the period from 1868–1890, since the aboli-
APPENDIX A.
2345
X
tion of the distinction between law and equity. The Law and Equity
Reports are cited by the name of the reporter, the New Series Reports
as "1-33 S. C."
The Constitutional Reports, taking their name from the Constitu-
tional Court of Appeals," whose decisions they report, end with 2 Mc-
Cord. Treadway and Mills are often cited as Constitutional Reports."
The "Constitutional Court of Appeals" was succeeded by the new
"Court of Appeals" in 1824. The law and equity reports of the re-
spective reporters are often bound together.
Bay reports "Superior Court" decisions in volume 1, and decisions of
the "Constitutional Court of Appeals in volume 2. Treadway and Mills
are the publishers, not the reporters, of the "Constitutional Reports"
bearing their names.
Brevard reprints most of the cases of Treadway, and includes some
Nisi Prius cases.
Harper is sometimes designated as "S. Carolina Reports," or Con-
stitutional Reports."
Riley is the publisher, not the reporter of the volumes designated by
his name.
12 Richardson's Eq. and 13 Richardson's Law are printed in one vol-
ume, containing both law and equity cases indiscriminately.
LAW.
Reports.
Bay,
Brevard,
Cited.
1-2 Bay,
Date.
1783-1804
1-3 Brev.,
1793-1816
Treadway,
Mill,
Nott & McCord,
McCord,
1-2 Treadw.,
1812-1816
Mill,
1817-1818
Nott & McCord,
1817-1820
1-4 McCord,
1821-1828
Harper,
Harp.,
1823-1824
Bailey,
1-2 Bailey,
1828-1832
Hill,
1-3 Hill,
1833-1837
Riley,
Riley,
1836-1837
Dudley,
Dudley,
1837-1838
Rice,
Rice,
1838-1839
Cheves,
Cheves,
1839-1840
McMullan,
1-2 McMull.,
1840-1842
Spear,
Richardson,
1-2 Spear, or Speer,
1842-1844
1-4 Rich.,
1844-1851
Strobhart,
Richardson,
1-5 Strobh.,
1846-1850
5-15 Rich.,
1851-1868
De Saussure,
Harper,
VOL. II-67
CHANCERY.
1-4 De Saussure,
Harp. Eq.,
1784-1816
1824
2346
ECONOMIC LEGISLATION.
Reports.
Cited.
Date.
McCord,
1-2 McCord Eq.
1825-1827
Bailey,
Bailey Eq.,
1830-1831
Richardson,
Rich. Eq.,
1831-1832
Hill,
1-2 Hill Eq.,
1833-1836
Riley,
Riley Eq.,
1836-1837
نا
Dudley,
Dudley Eq.,
1837-1838
Rice,
Rice Eq.,
1838-1839
Cheves,
Cheves Eq.,
1839-1840
McMullan,
McMull. Eq.,
1840-1842
Spear, or Speer,
Richardson,
Strobhart,
Spear Eq.,
1842-1844
1-2 Rich. Eq.,
1844-1846
1-4 Strobh. Eq.,
1846-1850
Richardson,
1-14 Rich. Eq.
1850-1868
South Carolina,
NEW SERIES.
1-33 S. C.,
1868-90
Reporters of 1-33 S. C.:-Richardson, 1-10; Shand, 11-33.
SOUTH DAKOTA.
The South Dakota Reports consist of 5 volumes of the reports of Da-
kota Territory, covering the period from 1867-89, and cited as "1-6 Dak.
Ter." Volume 4 is not published.
Reports.
Dakota Territory,
Cited.
1-6 Dak. Ter.,
Date.
1867-1889
Reporters of 1-6 Dak. Ter.:-Bennett, 1; Smith, 2-3; Tripp, 5–6.
TENNESSEE.
The reports of the State of Tennessee consist of 90 volumes of Su-
preme Court Reports, covering the period from 1791-1890; 3 volumes
of Chancery Reports, covering the period from 1872-1877, and 1 volume
of Miscellaneous Reports, covering the period from 1847-1869. All of
these reports are cited by the name of the reporter; and the regular
series of reports, covering the period from 1791–1890, are also cited as
from 1-90 Tennessee. The latter method of citation is of compara-
tively recent date.
Overton's and Cooke's reports contain some United States Circuit
Court decisions.
Haywood published 2 volumes of North Carolina Reports, and then 3
volumes of Tennessee Reports, which were numbered consecutively;
the Tennessee volumes are now usually cited as 1-3 Hayw. or 4-6 Tenn.
Cooper's Chancery Decisions contains decisions of Cooper, J., reported
by himself.
APPENDIX A.
2347
Cooke,
Reporter.
Overton,
1 Cooke or
Cited.
Date.
1-2 Over. or
1-2 Tenn.,
1791-1815
3 Tenn.,
1811-1814
Haywood,
1-3 Hayw. or
4-6 Tenn.,
1816-1818
Peck,
1 Peck, or
7 Tenn.,
1822-1824
Martin & Yerger,
1 Mart. & Yerg. or 8 Tenn.,
1825-1828
Yerger,
1-10 Yerg. or
9-18 Tenn.,
1832-1837
Meigs,
1 Meigs or
19 Tenn.,
1838-1839
Humphreys,
1-11 Humph. or
20-30 Tenn.,
1839-1851
Swan,
1-2 Swan or
31-32 Tenn.,
1851-1853
Sneed,
1-5 Sneed or
33-37 Tenn.,
1853-1858
Head,
1-3 Head or
38-40 Tenn.,
1858-1860
Coldwell,
1-7 Cold. or
41-47 Tenn.,
1860-1870
Heiskell,
1-12 Heis. or
48-59 Tenn.,
1870-1874
Baxter,
1-9 Baxt. or
60-68 Tenn.,
1872-1878
Lea,
1-16 Lea or
69-84 Tenn.,
1878-1886
Pickle,
1-6 Pickle or
85-90 Tenn.,
1886-1891
Cooper's Tenn. Chancery
1-3 Cooper's Ch.,
1872-1877
Thompson's Tennessee Cases,
Thomp. Cas.,
1847-1869
TEXAS.
The reports of the State of Texas consist of 84 volumes of Supreme
Court Reports, covering the period from 1840-1892, and with the excep-
tion of the first volume, which is cited by the name of the reporter, are
cited as "1-82 Texas;" 30 volumes of the Court of Appeals, covering
the period from 1876–1892, and cited as “1-30 Texas Appeals;" 4 vol-
umes of the reports of the Court of Appeals, Civil Cases, covering the
period from 1876-1892, and cited "Texas Appeals Civil Cases;" and 1
volume of unreported Texas Cases, by S. A. Posey, covering the period
from 1879-1881.
Dallam's Reports contain decisions of the Supreme Court of the Re-
public of Texas prior to its admission to the United States. There are
two volumes of the Supreme Court Reports, No. 25, cited as "25 Texas "
and "25 Texas Sup." "25 Texas Sup." contains cases decided about
the time of the civil war, and which were, in consequence thereof, un-
reported.
The "Texas Court of Appeals Reports" contain criminal cases. The
Court of Appeals is co-ordinate in jurisdiction with the Supreme Court.
Reports.
Dallam,
Texas,
Cited
Dallam,
1-82 Tex.,
Date.
1840-1844
1846-1892
1876-1892
Court of Appeals,
Court of Appeals Civil Cases,
Posey's Unreported Cases,
1-30 Tex. App..
1-4 Tex. Ct. App. Civ. Cas., 1876-1892
Unrep. Cas.,
1879-1881
2348
ECONOMIC LEGISLATION.
Reporters of 1-82 Texas :-Webb & Duval, 1-3; Hartley, 4-21; Moore
& Walker, 22-24; Walker, 25; Paschal, 25 Tex. Sup.; Robards & Jack-
son, 26–27; Paschal, 28-31; Wheelock, 32-37; Terrell & Walker, 38–51;
Terrell, 52-71; A. S. Walker, Sr., 72–82.
Reporters of 1-30 Tex. App.:-Jackson & Jackson, 1-27; A. M. Jack-
son, Jr., 28; S. A. Wilson, 29; Wilson & White, 30.
Reporters of 1-4 Texas Ct. App., Civ. Cas.:-White & Wilson, 1; S. A.
Wilson, 2-4.
UTAH.
The reports of the Territory of Utah consist of 6 volumes, covering
the period from 1851-90, and cited as “1-6 Utah.”
Reports.
Utah,
Cited.
1-6 Utah,
Date.
1871-1890
Reporters of 1-6 Utah:-Hagan, 1-2; Snow, 3; Marshall & Zane, 4;
Zane, 5-6.
VERMONT.
The reports of the State of Vermont consist of 71 volumes of Supreme
Court Reports, covering the period from 1789-1890. The first 8 volumes
are cited by the name of the reporter; the remaining 63 volumes are cited
as "1-63 Vt." Some of the decisions in N. Chipman are reprinted in D.
Chipman. 20-25 Vt. also contains reports of cases in the United States
Circuit and District Courts.
Reports.
N. Chipman,
D. Chipman.
Tyler,
Brayton,
Cited.
Date.
N. Chip.,
1789-1791
1-2 D. Chip.,
1789-1825
1-2 Tyler,
1800-1803
Brayt.,
1815-1819
1-2 Aik.,
1826-1827
1826-1891
Aiken,
Vermont,
1-63 Vt.,
Reporters of 1-63 Vt.:-Judges, 1-9; G. B. Shaw, 10-11; Weston, 12-
14; Slade, 15; Washburn, 16-23; Deane, 24-26; Williams, 27-29; W.
G. Shaw, 30-35; Veazey, 36-44; Rowell, 45-52; Palmer, 53-60; Prouty,
61-63.
VIRGINIA.
The reports of the State of Virginia consist of 87 volumes of Supreme
Court of Appeals and General Court Reports; 1 volume of Chancery
Reports; 2 volumes of Criminal Reports; and 1 volume of Special Court
of Appeals Reports. Of the Supreme Court of Appeals Reports, the first
74 volumes, covering the period from 1730-1880, are cited by the name
of the reporter; the remaining 13 volumes, covering the period from
APPENDIX A.
2349
1880-1891, are cited as 75-87 Va." The remaining reports are cited as
below.
6 Call contains some United States Circuit Court cases, also reported
in Wallace and Hughes.
Gilmer is sometimes cited as 1 Va." The " Special Court of Ap-
peals," whose decisions are reported by Patton, Jr., & Heath, was tem-
porarily established for the purpose of relieving the crowd of cases in
the "Supreme Court of Appeals."
Howison's Criminal Trials contains reports of criminal cases in the
United States and state courts, covering the period from 1850-1851. It is
not found in the usual lists of Virginia reports. The Virginia Cases also
contain for the most part criminal cases decided by the "General Court."
Volume 1 was reported by Brockenbrough & Holmes, and volume 2 by
Brockenbrough.
Cited.
Jeff.,
Reports
Date.
Jefferson,
1730-1772
Washington,
Call,
1-2 Wash.,
1792-1796
1-6 Call,
1779-1825
Hening & Munford,
1-4 Hen. & M.,
1806-1809
Munford,
1-6 Munf.,
1810-1820
Gilmer,
Gilmer,
1820-1821
Randolph,
1-6 Rand.,
1821-1828
Leigh,
1-12 Leigh,
1828-1841
Robinson,
1-2 Rob.,
1842-1844
Gratton,
1-33 Gratt.,
1844-1880
Virginia,
75-87 Va.,
1880-1891
Wythe (Chancery),
Wythe,
1788-1799
Virginia Cases,
1-2 Va. Ca.,
1789-1826
Howison's Criminal Trials,
Patton, Jr., & Heath's Spec. Ct. App.,1-2 Patt. & H.,
Reporters of 75-87 Va.:-Matthews, 75; Hansborough, 76–87.
1855-1857
Howis. Cr. Tr.,
1850-1851
WASHINGTON.
The reports of the State of Washington consist of 4 volumes of ter-
ritorial reports, covering the period from 1854-1889, and 3 volumes of
state reports.
Reports.
Washington Territory,
Washington,
Cited.
1-4 Wash Ter.,
1-3 Wash.,
Reporters of 1-4 Wash. Ter.:-Allen, 1-2; Struve, 3-4.
Reporter of 1-3 Wash.:-Kreider, 1-3.
Date.
1854-1889
1890-1892
:
2350
ECONOMIC LEGISLATION.
WEST VIRGINIA.
The reports of the State of West Virginia consist of 35 volumes of
Supreme Court of Appeals Reports, covering the period from 1863–1891,
and are cited as "1-35 W. Va."
Reports.
West Virginia,
Cited.
1-35 W. Va.
Date.
1863-1891
Reporters of 1-35 W. Va.:-Hagans, 1-5; Matthews, 6-9; White, 10-
15; Watt, 16-25; Caldwell, 26–35.
WISCONSIN.
The reports of the State of Wisconsin consist of 83 volumes of Supreme
Court Reports, covering the period from 1842-1892. The first 3 volumes,
covering the period from 1842-1852, are cited by the name of the re-
porter. The remaining 80 volumes are cited as "1-80 Wisconsin.”
Burnett's Reports (1 vol.) of the Territorial Supreme Court and
Chandler's (4 vols.) of the State Supreme Court were reprinted in 1-3
Pinney, and consequently Pinney has practically superseded them.
Reports.
Pinney,
Wisconsin,
Cited.
1–3 Pinney,
1-80 Wis.,
Date.
1842-1853
1853-1892
Reporters of 1-79 Wis.:-Smith, 1-11; Spooner, 12-15; O. M. Conover,
16-58; F. K. Conover, 59–80.
WYOMING.
The reports of the State of Wyoming consist of the 2 volumes of ter-
ritorial reports covering the period from 1870-1882, and are cited as
"1-2 Wyoming."
Reports.
Wyoming Territory,
Cited.
1-2 Wyo. Ter.,
Reporters of 1-2 Wyo. Ter.:-Thomas, 1; Riner, 2.
Date.
1870-1882
COLLECTIONS OF STATE REPORTS.
American Decisions (100 vols.),
1769-1860
American Reports (60 vols.),
1869-1888
American State Reports (25),
1886-1892
APPENDIX A.
2351
LAWYERS' CO-OPERATIVE REPORTERS.
New England Reporter (Me., N. H., Vt., Mass., R. I., Conn.),
(6),
1885-1888
Central Reporter (N. Y., N. J., Pa., Del., D. C., Md.), (12),
Western Reporter (Mich., Ohio, Ind., Ill., Mo.), (14),
The Lawyers' Reports (select cases from all the state courts
1885-1888
1885-1888
of last resort), (15),
1888-1892
U. S. Supreme Court (36),
1790-1892
U. S. Interstate Commerce (3),
-1892
NATIONAL REPORTER SYSTEM.
North-eastern Reporter (Mass., N. Y., Ohio, Ill., Ind.), (31),
1885-1892
North-western Reporter (Mich., Wis., Ia., Neb., Minn.,
N. Dak., S. Dak.), (52),
1879-1892
Pacific Reporter (Cal., Col., Kan., Ore., Nev., Mont., Wash.,
Ariz., Idaho, New Mex., Utah, Wyo.), (30),
1883-1892
Atlantic Reporter (Me., N. H., Vt., R. I., Conn., N. J., Pa., Del.,
Md.), (24),
1885-1890
New York Supplement (8),
1888-1890
South-western Reporter (Mo., Ky., Tenn., Ark., Tex.), (19),
1886-1892
Southern Reporter (Ala., Fla., Miss., La.), (11),
U. S. Supreme Court Reporter (9),
South-eastern Reporter (Va., W. Va., N. C., S. C., Ga.), (15),
Federal Reporter (50),
1887-1892
1887-1892
1880-1892
1882-1890
2352
ECONOMIC LEGISLATION.
ALPHABETICAL LIST OF REPORTS AND REPORTERS
OF THE UNITED STATES, STATE, AND TERRITO-
RIAL COURTS, AND THEIR VARIOUS CITATIONS.
This list is intended to give, alphabetically, all the reports and report-
ers referred to in the foregoing pages of this Appendix, together with
the various abbreviations by which they are sometimes cited.
The number of volumes and the state to which they belong, and, where
it seems desirable, the court whose decisions are reported, are given in
parentheses, followed by the preferred form of citation in italics. If the
preferred citation is by the state abbreviation, the number of volumes
only is given in parentheses. There doubtless are other abbreviations
which might be given, but those given are at least sufficient for all prac-
tical purposes. As already stated, it is desirable, in citing cases from
reports cited by the name of the reporter, to always follow it by the ab-
breviation of the state in parentheses. In giving the list of abbrevia-
tions, however, this is not deemed necessary.
Abbott's Admiralty (1), (U. S. Dist. Ct.), Abb. Adm.
Abbott's Appeal Decisions (4), (N. Y.), 1-4 Abb. App. Dec.; Abb. Ct.
App.; Abb. N. Y. App.
Abbott's New Cases (28), (N. Y.), 1–28 Abb. N. Cas.; Abb. New Cas.
Abbott's Practice (19), (N. Y.), 1-19 Abb. Pr.
Abbott's Practice (New Series), (16), (N. Y.), 1-16 Abb. Pr. N. S.
Abbott's Select Cases (2), (U. S. Cir. & Dist. Cts.), 1-2 Abb. U. S.; Abb.;
Ab.
Adams (2), 41-42 Me.; Ad.; Adams.
Adams (1), 1 N. H.; Ad.; Adams.
Addison (1), (Pa.), Addison; Add.; Add. Pa.
Aiken's (2), (Vt.), 1–2 Aik.
A. K. Marshall (3), (Ky.), 1–3 A. K. Marsh.; Mar.; Marsh. A. K.; A. K.
M.; A. K. Mar.
Alabama (93), 1-93 Ala.; Al.; vols. 1-7 Ala. N. S.
Alabama Select Cases (1), Shep. Sel. Cas.; Ala. Sel. Cas.
Alden's Condensed Reports (3), (Pa.), 1-3 Alden; Ald.; Ald. Cond.
Allen (14), 1-14 Allen; 83-96 Mass.; Al.; All;
Allen (2), 1-2 Wash. Ter.
Ames (1), (Minn.) (See Minnesota, p. 2331.)
Ames (4), 4-7 R. I.
Ames, Knowles & Bradley (1), 8 R. I.; Ames, K. & B.
American Decisions (100), 1-100 Am. Dec.
American Law Journal (Hill), (6), (Pa.), 1-6 Am. L. Jour.; A. L. J.
APPENDIX A.
2353
American Law Journal (New Series) (4), (Pa.), 1-4 Am. L. Jour. N. S.;
Am. L. Jour.; A. L. J.
American Law Register (41), (Pa.), 1–41 Am. L. Reg.
American Law Times Bankruptcy Reporter (U. S.), Am. L. T. Bank.
Rep.; A. L. T. Bankr.; Am. L. T. Bankr.; Bank. Rep.; B. R.
American Reports (60), 1-60 Am. Rep.
American State Reports (25), 1–25 Am. St. Rep.
Amerman (5), 111-115 Pa. St.; 1-5 Amerman.
Andrews (3), 6–8 Opin. U. S. Atty. Gen.
Angell (1), 1 R. I.; Ang.; Ang. & Dur.
Anonymous (16), 3–18 N. H. (See Richardson-Parker.)
Anthon's Nisi Prius Cases (1), (N. Y.), Anth. N. P.; Anth.
Appleton (2), 19-20 Me.; App.
Appleton & Shepley (1), 20 Me.; App.; Appleton; App. & S.
Archer (1), 2 Fla.
Archer & Hogue (1), 2 Fla.
Arizona (1), 1 Ariz.
Arkansas (54), 1–54 Ark.
Ashmead (2), (Pa.), 1–2 Ashmead; Ash.; Ashm.
Ashton (4), 9–12 Opin. U. S. Atty. Gen.
Atlantic Reporter (24), 1-24 Atl. Rep.
Atwater (1), (Minn.) (See Minnesota, p. 2331.)
Bagley (4), 16-19 Cal.; Bagl.; Bagl. & Har.
Bailey (2), (S. C.), 1-2 Bailey; Bai.; Bail.
Bailey's Equity (1), (S. C.), Bail. Eq.
Baldwin (1), (U. S. C. C.), Bald.; Baldw.
Banks (5), 1-5 Kan.
Bankrupt Court Reporter (1), Bank. Ct. Rep.
Bankrupt Register. (See Nat. Bank Reg.)
Banning & Arden Patent Cases (5), 1-5 B. & A. Pat. Cas.; B. & A.; Bann.
& Ard.; Ban. & A.
Barber (11), 14–24 Ark.; Barb.
Barbour (67), (N. Y.), 1–67 Barb.; B.; Bar.
Barbour's Chancery (3), (N. Y.), 1–3 Barb. Ch.; B. Ch.; Bar. Ch.
Barr (10), 1-10 Pa.; 1-10 Barr.
Bates' Chancery (5), 1-5 Del. Ch.; Bates' Ch.
Baxter (9), 60–68 Tenn., or 1-9 Baxt.; Bax.
Bay (4), 5-8 Mo.
Bay (2), (S. C.), 1–2 Bay.
Beasley (2), 12-13 N. J. Eq., or 1-2 Beas.
Beck (5), 12-16 Col.
Bee (1), (U. S. Dist. Ct.), Bee; Bee Adm.
Bellinger (5), 4–8 Ore.; Bell.
Benedict (10), (U. S. Dist. Ct.), 1-10 Ben.; Bened.; Bt.
Ben Monroe (18), (Ky.), 1-18 B. Mon.; B. M.; Mon. B.
2354
ECONOMIC LEGISLATION.
Bennett (1), 1 Cal.; Benn.
Bennett (1), 1 Dak. Ter.; Benn.
Bennett (6), 16-21 Mo.; Benn.
Bentley (4), 13–16 Opin. U. S. Atty. Gen.; Bent'l. Att. Gen.
Bett's Decisions (1), (U. S. Dist. Ct.), Bl. & H.; Bett's Dec.; B. &. H.
Bett's Decisions (1), (U. S. Dist. Ct.), Olc.; Olc. Ad.; Bett's Dec.
Berry (15), (Mo. Ct. App.),1–15 Mo. App.
Berry & Mister (13), (Mo. Ct. App.), 16-28 Mo. App.
Bibb (4), (Ky.), 1–4 Bibb.
Bicknell (11), 10–20 Nev.
Bicknell & Hawley (7), 10-16 Nev.; Bick. & Hawl.
Binney (6), (Pa.), 1–6 Binney; Bin.; Binn.
Bissell (11), (U. S. Cir. & Dist. Cts.), 1-11 Biss.
Black (2), (U. S.), 1-2 Black; 66-67 U. S.; Bk.; Bl.; Bla.; Black R.
Black (24), 30-53 Ind.; Bla.
Blackford (8), (Ind.), 1–8 Blackf.; Bl.; Black.
Blackwell's Condensed Illinois Reports (1), Ill. Cond., or 1-3 Ill.; Black.
Cond. Rep.; Blackw. Cond.
Blake (1), 1 Mont.
Blake & Hedges (1), 2 Mont.
Bland's Chancery (3), (Md.), 1-3 Bland's Ch.; Bla. Ch.; Bland.
Blatchford (24), (U. S. C. C.), 1–24 Blatch.; Bl.; Bl. C. C.; Blatchf.
Blatchford's Prize Cases (1), (U. S. Dist. Ct.), Bl. Pr. Cas.; Blatchf. Pr.
Cas.
Blatchford & Howland (1), (U. S. Dist. Ct.), Bl. & H.; B. & H.; Betts'
Dec.; Blatchf. & H.; Blatchf. & H. Adm.
Bleckley (2), 34–35 Ga.
Bond (2), (U. S. C. C.), 1-2 Bond.
Booraem (3), 6-8 Cal.
Bosworth (10), 1-10 Bosw.; 14-23 N. Y. Sup. Ct.; Bos.
Bradford (3), (Iowa), 1-3 Brad.; Brad. (in Miller's Ed. of Morris).
Bradford (4), (N. Y. Surrogate), 1-4 Brad.; Bradf.; Br.
Bradwell (20), 1-20 Ill. App.; App. Ct. Rep.; Br.; Brad.; Brad. App.
Brame & Alexander (3). 66-68 Miss.
Branch (1), 1 Fla.
Brayton (1), (Vt.), 1 Brayt.; Bray.
Breese (1), 1 Ill.; Br.; Breese.
Brevard (3). (S. C.), 1-3 Brev.; Br.
Brewer (8), 19–26 Md.
Brewster (4), (Pa.), 1-4 Brewster; Br.; Brewst.; Brews.
Brightly (1), (Pa.), Brightly; Br.; Bright.; Bright. N. P.
Brisbin (1), (Minn.), in 1 Minn.
Brockenbrough (2), (U. S. C. C.), Brock.; Br.; Mar.; Mar. Dec.; Marsh.;
Marsh. Dec.
Brockenbrough.(1), 2 Va. Cas.
Brockenbrough & Holmes (1) Va. Cas.
APPENDIX A.
2355
Brown (1), (Mich. Nisi Prius), 1-2 Brown; Br.; Bro.; Bro. N. P.; Brown
N. P.
Brown (26), 80-125 Mo.
Brown (22), 4-25 Neb.; Br.
Brown's Admiralty (1), (U. S. Dist. Ct.), Brown Adm.; Bro. A. & R.; Bro.
Adm.; Brown A. & R.
Brown & Hemingway (13), 53–65 Miss.
Browne (16), 97-109, 112-114 Mass.; Br.; Bro.
Browne (2), (Pa.), 1–2 Browne; Bro.; Bro. Pa.; Browne Pa.
Browne & Gray (2), 110-111 Mass.
Brunner's Collected Cases (1), (U. S. Cir. Ct.), Brunn. Col. Cas.; Brunn.
Buck (2), 7-8 Mont.
Buckner's Decisions (1), (Miss.), Fr. Ch.; Buck. Dec.; Fr. Chy.; Free.
Ch.; Freem. Ch.
Buffalo Superior Court (1), (N. Y.), Buff. Super. Ct.
Burgess (3), 46-48 O. S.
Burnett (1), 20 Ore.
Burnett (1), (Wis.), Burn. (See Wisconsin, p. 2350.)
Busbee (1), (N. C.), Busb. L.; B. N. C.; Busb.
Busbee's Equity (1), (N. C.), Busb. Eq.; B. N. C.; B. N. C. Eq.
Bush (14), (Ky.), 1-14 Bush.
Caines (3), (N. Y.), 1–3 Cai.; Cai. T. R.; Cain.; N. Y. Term.
Caines' Cases (2) (N. Y.), 1-2 Cai. Cas., C. C. E.; Cas. Err.; Cain. N. Y.
Cas. Err.
Caldwell (10), 26-35 W. Va.
California (94), 1-94 Cal.; C.; Cal. Rep.
Call (6), (Va.), 1-6 Call.
Cameron & Norwood's Conference (1), (N. C.), Conf.; N. C. Conf.; C. &
N.; Cam. & Nor.; Cam. & N. N. C.
Campbell (1), (U. S. C. C.), Taney; Camp.
Campbell (4), 27-30 Neb.; Camp.
Campbell, Legal Gazette Reports (8), (Pa.), 1-8 Leg. Gaz. Rep.; Camp-
bell, Camp.
Carolina Law Repository (2), (Raleigh, N. C.), 1-2 Law Repos.; Car. L.
Rep.; Car. L. R.
Carpenter (1), 53 Cal.
Carter (2), 1-2 Ind.; Cart.
Casey (12), 25-36 Pa.; 1-12 Casey; Cas.; Cas. R.
C. E. Greene (12), 16–27 N. J. Eq.; 1-12 C. E. Greene; C. E. Gr.; Greene,
C. E.
Central Reporter (12), 1-12 Cent. Rep.
Chancery Sentinel (6), (Saratoga, N. Y.), 1-6 Chan. Sent.; Ch. Sent.
Chaney (22), 37-58 Mich.; Cha.; Chan.
Chandler (1), 20, 38-44 N. H.; Chand.
Chandler (4), (Wis.) Chand. (See Wisconsin, p. 2350.)
ECONOMIC LEGISLATION.
2356
Charlton, T. U. P. (1), (Ga.), Charl. T. U. P.; Ch. T. U. P.; T. U. P..
Charlt.
Charlton, R. M. (1), (Ga.), Charl. R. M.; Ch. R. M.; R. M. Charlt.
Chase (1), (U. S. C. C.), Chase; John. Johns.
Chester County (2), (Pa.), 1-2 Chester Co. Rep.
Cheves (1), (S. C.), 1 Cheves; Chev.
Cheves Eq. (1), (S. C.), 1 Cheves Eq.; Chev. Eq.; Chev. Ch.
Chipman, D. (2), (Vt.), 1–2 D. Chip.; Chip., D.
Chipman, N. (1), (Vt.), 1 N. Chip.; Chip., N.
Cincinnati Superior Ct. Reporter (2), (O.), 1-2 Cin. Sup. Ct.; C. S. C. R.;
Cin. S. C. Rep.; Cin. Sup. Ct. Rep.
City Hall Recorder (Rogers), (6), (N. Y.), 1-6 City Hall Rec.; City H.
Rec.; C. H. Rec.
City Hall Reporter (Loomis), (1), (N. Y.), City H. Rep.; C. H. Rep.
City Court Reports (2), (N. Y.), 1-2 City Ct. Rep.
Civil Procedure Reports (21), (N. Y.), 1–21 N. Y. Civ. Pr. Rep.
Clark (1), 58 Ala.; Cl.
Clark's Pa. Law Journal Repts. (5), 1-5 Clark; Pa. L. J.; Penn. L. J.
Clarke (8), 1-8 Iowa; Cl.; Clarke.
Clarke (4), 19-22 Mich.; Cl.
Clarke's Chancery (1), (N. Y.), Clarke; Cl. Ch.; Clarke Ch.
Clifford (4), (U. S. C. C.), 1-4 Clif.; Cliff.
Cobb (15), 6-20 Ga.
Cocke (3), 16–18 Ala.
Cocke (2), 14-15 Fla.
Code Reporter (3), (N. Y.), 1-3 Code Rep.; C. R.; Code Repr.
Code Reports, New Series (1), (N. Y.), Code Rep. N. S.; C. R. N. S.; Code
R. N. S.
Coldwell (7), 41-47 Tenn.; 1-7 Cold.; Coldw.
Cole's Edition (8), 1-8 Iowa.
Coleman's Cases (1), (N. Y.); Col. Cas.; C. C.
Coleman & Caine's Cases (1), (N. Y.), Col. & C. Cas.; C. & C.; Col. & Cai.
Colorado (16), 1-16 Col.; C.; Colo.
Common Pleas Reporter (4), (Pa.), 1-4 C. P. Repr.
Comstock (4), 1-4 N. Y.; Com.; Comst.
Condensed United States Reports (Peters) (6), 1-6 Pet. Cond.; Cond.
Rep. U. S.
Conference (1), (N. C.), Conf.; C. N. Conf.; C. & N.; Cam. & Nor.
Connecticut (61), 1–61 Conn.; C.
Connoly (2), (N. Y. Surrogate), 1-2 Connoly.
Conover, O. M. (43), 16-58 Wis.; Con.
Conover, F. K. (22), 59–80 Wis.; Con.
Constitutional Reports (2), (S. C.), 1–2 Tread.; Const.; Const. S. C.; Const.
Rep.; So. Ca. Const.
Constitutional Reports (2), (S. C.), 1–2 Mills; Const. Rep.; Const.; Const.
N. S.; Const. S. C. N. S.
APPENDIX A.
2357
Constitutional Reports (1), (S. C.), Harp.; Const.; Const. Rep.; S. C. Rep.
Cooke (1), 3 Tenn., or 1 Cooke.
Cooley (8), 5-12 Mich.
Cooper (4), 21-24 Fla.; Coop.
Cooper's Chancery (3), (Tenn.), 1-3 Cooper Ch.; Coop.; Coop. Ch.; Coop.
Tenn. Chy.
Cope (10), 63–72 Cal.
Court of Claims (25), (U. S.), 1–25 Ct. Cl.
Cowen (9), (N. Y.), 1-9 Cow.; C.; Cow. N. Y.
Cowen's Criminal (2), (N. Y.), 1-2 Cow. Crim. Rep.; Cow. Cr.
Cox, N. W. (3), 25-27 Ark.
Coxe (1), 1 N. J. L., or Coxe.
Crabbe (1), (U. S. Dist. Ct.); Crabbe.
Cranch (9), (U. S.), 1–9 Cranch; 5-13 U. S.; Cr.
Cranch (6), (U. S. C. C.), 1-6 Cranch C. C.; 1-6 D. C.; Cr.; Cr. C. C.;
Cranch D. C.; Cranch C. Ct.
Cranch's Patent Opinion (1), Cranch Pat. Op.; Cr. Pat. Dec.
Crawford (3), 52–54 Ark.
Criminal Recorder. (See Wheeler's Reports.)
Critchfield (17), 5–21 O. S.; Critch.
Crumrine (35), 112-146 Pa.; 1-35 Crumrine.
Crumrine. (See Pittsburg Reports.)
Crounse (1), 3 Neb.
Cummins (1), Ida. Ter.; Ida.
Curry (14), 6-19 La.
Curtis (2), (U. S. C. C.), 1–2 Curt. C. C.; Cur.; Curt.; Curtis.
Curtis Decisions (22), (U. S. Sup. Ct.), 1-22 Curt. Dec.; Cur. Dec.; Curt.
Cond.
Cushing (12), 1-12 Cush.; 55–66 Mass.
Cushing's Contested Election Cases (1), (Mass.), Cush. Elec. Cas.
Cushman (7), 23-29 Miss.; Cush.
C. W. Dudley (1), (S. C.), C. W. Dud.; Dudley.
C. W. Dudley's Eq. (1), (S. C.), Dud. Eq.; C. W. Dud. Eq.
Dakota (6), 1-6 Dak. Ter.; Dak.
Dallam (1), (Tex.), Dallam; Dall. Dec.; Dall. Dig.
Dallas (4), (U. S. Sup. and Cir. Cts., Pa. Sup. Ct.), 1-4 Dall.; 14 U..S.;
D.; Dal.; Dall. S. C.
Daly (16), (N. Y. C. P.), 1-16 Daly,
Dana (9). (Ky.), 1-9 Dana; Dan.
Dann (1), 1 Ariz. Ter.
Danner (1), 42 Ala.; Dan.
Daveis (1), (U. S. Dist. Ct.), 2 Ware; Dav.; Daveis.
Davidson (19), 92-110 N. C.
Davis (38), 108-145 U. S.
Day (5), (Conn.), 1-5 Day.
Day (21), 1-21 Conn.
•
2358
ECONOMIC LEGISLATION.
D. Chipman (2), (Vt.), 1-2 D. Chip.; Chip. D.
Deady (1), (U. S. Cir. and Dist. Cts.), Deady; Dea.
Deane (3), 24-26 Vt.
Decisions of Commissioners of Patents (22), Dec. Com. Pat. (cited by
the year).
Delaware Chancery (5), 1-5 Del. Ch.; Bates Ch.
Delaware County Reports (4), (Pa.), 1-4 Del. Co. Rep.
Delaware Criminal Cases (1), Del.; Del. Cr. Cas.; Houst. Cr. Cas.
Demorest (6), (N. Y. Surrogate), 1–6 Dem.
Denio (5), (N. Y.), 1-5 Den.: D.
Denis (12), 32-43 La. An.; Den.
DeSaussure (4), (S. C.), 1-4 De Saussure; Des.; Des. Eq.; De Sau.
Devereux (1), (U. S. Ct. Cl.), Dev. Ct. Cl.; Dev. C. C.
Devereux's Law (4), (N. C.), 1-4 Dev.; Dev. L.; Dev. N. B.; Dev. N. C.
Devereux's Equity (2), (N. C.), 1-2 Dev. Eq.
Devereux & Battle (4), (N. C.), 1–4 Dev. & B. L.; Dev. & Bat.; Dev. & B.
Devereux & Battle's Equity (2), (N. C.), 1–2 Dev. & B. Eq.; Dev. &
Bat. Eq.
De Witt (17), 24-42 O. S.; De Witt.
Dice (29), 71-99 Ind.
Dickinson (3), 46–48 N. J. Eq., or 1-3 Dick. Ch.
Dillon (5), (U. S. C. C.), 1–5 Dill.
Disney (2), (0., Cin. Super. Ct.), 1-2 Disney; Disn.
District of Columbia (19), 1-19 D. C. (see under District of Columbia, p.
2324).
Douglas (2), (Mich.), 1-2 Doug.; Dougl.
Drew (1), 13 Fla.
Dudley (1), (Ga.), Dud.; G. M. Dud.; Dudley Ga.
Dudley (1), (S. C.), Dudley; C. W. Dud.; Dud. L.; Dud. S. C.; Dudley S. C.
Dudley's Equity (1), (S. C.), Dudley Eq.; C. W. Dud.; Dud. Ch.; Dud.
Eq.; Dudley S. C. Eq.
Duer (6), 1-6 Duer; 8-13 N. Y. Super. Ct.
Durfee (1), 2 R. I.
Dutcher (5), 25-29 N. J. L., or 1-5 Dutch.
Duval (2), (Ky.), 1-2 Duv.
Ebersole (22), 59-80 Iowa.
Edmond's Select Cases (1), (N. Y.), Edm. Sel. Cas.
E. D. Smith (4), (N. Y. C. P.), 1-4 E. D. Smith; E. D. S.
E. P. Smith. (See Smith.)
Edwards (2), 2-3 Mo.; Edw.
Edwards Chancery (4), (N. Y.), 1-4 Edw.; Ed. C. R.; Edw. Ch.
Endlich (2), (Pa.), 1-2 Woodward Dec.
English (8), 6-13 Ark.; Eng.; Eng. Rep.
Erskine's U. S. Circuit Court Dec., see 35 Ga.; Ersk. Dec.
APPENDIX A.
2359
1
Federal Reporter (50), (U. S. Courts), 1-50 Fed. Rep.; F. R.
Fairfield (3), 10-12 Me.; Fairf.
Fisher's Patent Cases (6), 1-6 Fish. Pat. Cas.; Fish.
Fisher's Patent Reports (1), Fish. Pat. Rep.; Fish.
Fisher's Prize Cases (1), (U. S. Dist. Ct.), Fish. Pr. Ca.; Fish.; Fish. Pr.
Cas.
F. K. Conover (21), 59–79 Wis.
Flippin (2), (U. S. C. C.), 1-2 Flip.
Florida (27), 1-27 Fla.; Flor.
Fogg (6), 32-37 N. H.
Forman (1), (Ill.), Forman's Repts.; Printed Opin.; in 2 Ill. or 1 Scam.
Foster (12), 19, 21-31 N. H.; Fost.
Foster's Legal Chronicle Reports (3), (Pa.), 1-3 Legal Chron. Rep.; Foster.
France (9), 3-11 Col.
Freeman (107), 31-137 Ill; Freem.
Freeman's Chancery (1), (Miss.), Fr. Ch.; Buck. Dec., Fr. Chy.; Free.
Ch.; Freem. Ch.
French (1), 6 N. H.
Fuller (41), 59-89 Mich.
Galbraith (3), 9–11 Fla.
Galbraith & Meek (1), 12 Fla.; Galb. & M.
Gallison (2), (U. S. C. C.), 1–2 Gall.
Gardenhire (2), 14-15 Mo.
Gardiner's New York Reports (1), Gard. N. Y. Rept.
Gayarre (4), 26–28 La. An.
G. B. Shaw (3), 10-11 Vt.; Sh.; Shaw; G. B. Shaw.
Georgia (88), 1-87 Ga.; G.; Ga.; Geo.; Ersk. Dec., in 35 Ga.
Georgia Decisions (1), Ga. Dec.; Geo. Dec.; Georg.
George (10), 30-39 Miss.
G. Greene (4), (Iowa), 14 Greene; G. Gr.
Gibbs (3), 2-4 Mich.
Gildersleeve (2), 1–2 N. M.
Gill (9), (Md.), 1–9 Gill.
Gill & Johnson (12), (Md.), 1-12 Gill. & John.; G. & J.; Gill & Johns.;
Gill. & J.
Gilman (5), 6-10 Ill.; Gil.; Gilm.
Gilmer (1), (Va.), 1 Gilmer; Gilm.; 1 Va.; Gil.; Gilmer.
Gilpin (1), (U. S. Dist. Ct.), Gilp.
Glenn (3), 16–18 La. An.
G. M. Dudley (1), (Ga.), Dud.; G. M. Dud.; Dudley Ga.
Goebel's Probate (1), (O.), Goebel Pro. Ct.
Goldsmith & Guthrie (12), 36-47 Mo. App.
Granger (2), 22–23 O. S.
Grant's Cases (3), (Pa.), 1–3 Grant; Gr.; Gra.; Grant Cas.; Grant Pa.
Grattan (33) (Va.), 1-33 Gratt.; Grat.
2360
ECONOMIC LEGISLATION.
Gray (16), 1–16 Gray; 67-82 Mass.
Green (6), 11–16 R. I.
Green, J. S. (3), 13–15 N. J. L., or 1-3 Green; Gr.; Green L.; Green N.
J.; J. S. Gr.
Green, H. W. (3), 2-4 N. J. Eq., or 1-3 Green Eq.; Gr.; Gr. Eq.; Gr. Ch.;
Green Ch.
Greene (4), (Iowa), 1-4 Greene; G.; Gr.; Green.
Greene, C. E. (12), 16-27 N. J. Eq., or 1-12 C. E. Greene; C. E. Gr.;
Greene, C. E.
Greenleaf (9), 1–9 Me.; Gr.; Green.; Greenl.
Griffiths (13) 117-129 Ind.
Griffiths' Appeals (2), 1-2 Ind. App.
Griswold (6), 14-19 0.
Hadley (4), 45–48 N. H.
Hagan (2), 1-2 Utah.
Hagans (5), 1-5 W. Va.
Hagner & Miller (1), 2 Md. Ch.; Hagn. & Mill.
Hale (5), 33-37 Cal.
Hall (5), 1-5 Opin. U. S. Att'y-Gen.
Hall (2), 56–57 N. H.
Hall (2), 1-2 Hall; 1-2 N. Y. Super. Ct.
Hallett (2), 1-2 Col.
Halsted, G. B. (4), 5–8 N. J. Eq., or 1-4 Hals. Ch.; Hals. Eq.; Hal. Ch.
Halsted, Wm. (7), 6–12 N. J. L., or 1–7 Hals.; Hal. Law.
Hamlin (3), 81-83 Me.
Hammond (9), 1–9 0.
Hammond (9), 36–44 Ga.
Hammond & Jackson (1), 45 Ga.
Hand (6), 40-45 N. Y.
Handy (2), (O., Cin. Super. Ct.), 1–2 Handy.
Hansbrough (12), 76-87 Va.
Hardin (1), (Ky.), Hard.
Hargrove (8), 68-75 N. C.; Harg.
Harmon (3), 13-15 Cal., Harm.
Harper (1), (S. C.), Harp.; S. C. R. Const.; Const. Rep.; S. C. Rep.; Ril.
Harp.
Harper's Equity (1), (S. C.), Harp. Eq.; Eq. Rep.
Harrington (5), (Del.), 1-5 Harr.; Har.; Harring.; Harr. Del.
Harrington's Chancery (1), (Mich.), Har. Ch.; Har.; Harr.; Harring.;
Harr. Mich.
Harris (12), 13-24 Pa.; 1-12 Harris; Har.; Harr.
Harris & Gill (2) (Md.), 1-2 Harr. & G.; H. & G.; Harr. & Gill; Har.
& G.
Harris & Johnson (7), (Md.), 1-7 Har. & John.; H. & J.; Harr. & J.
Harris & McHenry (4), (Md.), 1-4 Har. & McH.; H. & McH.; Harr. &
M'H.; Md. Repts.; Har. & M.
APPENDIX A.
2361
{
Harris & Simrall (4), 49–52 Miss.; Harr. & Sim.
Harrison (10), 15-17, 23–29 Ind.; Har.; Harr.
Harrison (4), 16-19 N. J. L., or 1-4 Harr.; Har.; Harr. N. J.
Hastings (2), 69-70 Me.; Hast.
Hartley (18), 4-21 Tex.
Hawkins (6), 19–25 La. An.; Haw.; Hawk.
Hawks (4), (N. C.), 1-4 Hawk; Hawks; (1 Hawk. as Ruffin & Hawk.).
Haywood (2), (N. C.), 1–2 Hayw.; Hay.; Hayw. N. C.
Haywood (3), 4-6 Tenn.; 1-3 Hayw.; Hay.; Hayw. Tenn.
Head (3), 38-40 Tenn.; 1-3 Head.
Heath (5), 36-40 Me.
Hedges (4), 3-6 Mont.
Heiskell (12), 48–59 Tenn.; 1-12 Heis.; Heisk.
Helms (8), 3-9 Nev.
Hempstead (1), (U. S. Cir. and Dist. Cts., and Ark. Ter.), Hemp;
Hem. Hempst.
Hening & Munford (4), (Va.), 1-4 Hen. & M.; H. &. M.; Hen. & Mun.
Hepburn (3), 2-4 Cal.; Hepb.
Hight (2), 57-58 Iowa.
Hill (7), (N. Y.), 1–7 Hill; H.; Hil.; Hill, N. Y.
Hill (3), (S. C.), 1–3 Hill; Hill, S. C.
Hill's Eq. (2), (S. C.), 1–2 Hill Eq.; Hill Ch.; Hill, S. C.; Hill, S. C. Eq.
Hill & Denio's Supplement (1), (N. Y.), Lalor ; Hill & Den. Sup.; Lalor
Sup.; H. & D., Hill & Den.
Hilton (2), (N. Y. C. P.), 1-2 Hilt.
Hillyer (3), 20–22 Cal.
Hines (6), 84-89 Ky.
Hoffman's Chancery (1), (N. Y.), Hoff.; Hoff. N. Y.; Hoffm. Ch.
Hoffman's Land Cases (1), (U. S. Dist. Ct.), Hoff. Land Cas.; Hoff.; Hoff.
L. C.
Hogan (2), 1-2 Utah; Utah Ter.
Hogue (2), 3–4 Fla.
Hollinghead (1), (Min.). (See Minnesota, p. 2331.)
Holmes (1), (U. S. C. C.), Holmes; Holm.
Holmes (3), 15-17 Ore.
Hooker (37), 25–61 Conn.
Hopkins (1), (N. Y.), Hopk.; Hop.; Hopk. Ch.
Hopkinson's Admiralty Judgments (1), (Pa.), Hopk. Judg.; Hopk. Adm.
Hopkinson's Admiralty Decisions (in Gilpin), Hopk. Adm. Dec.
Houck (15),.1-15 Mo.
Houston (6), (Del.), 1–6 Hous.; Houst.
Houston's Criminal (1), 1 Del.; Houst. Cr. Cas.; Del. Cr. Cas.
Howard (24), 1-24 How.; 42-65 U. S.; H.; How. S. C.; How. U. S.
Howard (7), 1-7 How.; 2-8 Miss.; How. Miss.
•
Howard's Appeal Cases (1), (N. Y.), How. App. Cas. How. App.; How.
Cas.
VOL. II-68
2362
ECONOMIC LEGISLATION.
Howard's Practice (67), (N. Y.), 1-67 How. Pr.; How.; N. Y. Spec.
Term Rep.
Howard's Practice (New Series), (3), (N. Y.), 1-3 How. Pr., N. S.
Howison's Criminal Trials (1), (Va. & U. S.), Howis. Cr. Tr.
Hubbard (7), 45-51 Me.
Hughes (5), (U. S. C. C.), 1-5 Hugh. C. C.; Hu.; Hugh.; Hughes.
Hughes (1), (Ky.), Hughes; Hu.; Hugh.; Hughes Ky.
Humphreys (11), 20-30 Tenn.; 1-11 Humph.; Hum.
Hun (64), 1-64 Hun.; 8-71 N. Y. Sup. Ct.
Hutchinson (2), 81, 84 Ala.; Hutch.
H. W. Green (3), 2-4 N. J. Eq.; or, 1-3 Green Eq.; H. W. Gr.; Gr.; Gr.
Eq.; Gr. Ch.; Green Ch.
Idaho Ter. (1), Ida. Ter.; I.; Ida.
Idaho Ter., New Series (1), 1 Ida. Ter., N. S.; Idaho.
Illinois (137), 1-137 Ill.; Ills.
Illinois Appeals (41), 1-41 Ill. App.
Illinois Condensed Reports (1), Ill. Cond.; (1–3 Ill.).
Indiana (129), 1-129 Ind.; I.; Ind. Rep.
Indiana Appeals (2), 1-2 Ind. App.
Indiana Superior Ct. (1), Wils.; Ind. Super. Ct.
Inter State Commerce (4), (U. S.), 1-4 Int. St. Com.; I. C. C.
Iowa (81), 1–81 Iowa; I.; Ia.
Iredell (13), (N. C.), 1–13 Ired. L.; Ir.; Ired.
Iredell's Equity (8), (N. C.), 1-8 Ired. Eq.; Ir. Ch.
Jackson (13), 46–58 Ga.
Jackson, A. N., Jr. (1), 28 Tex. App.
Jackson & Jackson (27), 1-27 Tex. App.
Jackson & Lumpkin (8), 59–66 Ga.
Jefferson (1), (Va.), Jeff.
Jenks (1), 58 N. H.
J. J. Marshall (7), (Ky.), 1–7 J. J. Marsh.; J. J. Mar.; Mar.; Marsh., J. J.;
J. J. M.
Jennison (5), 14-18 Mich.; Jenn.
Johnson (1), (U. S. C. C.), Chase; John.; Johns.; Johns. U. S.
Johnson (2), 3–4 N. M.
Johnson (20), (N. Y.), 1–20 Johns.; J.; J. R.; John.; Johns. Rep.
Johnson's Cases (3), (N. Y.), 1-3 Johns. Cas.; J. C.; Johns. Ct. Err.
Johnson's Chancery (4), 1-4 Md. Ch.; John.; Johns.; Johns. Ch.;
Johns. Dec.
Johnson's Chancery (7), (N. Y.), 1-7 Johns. Ch.; J. Ch.; J. C. R.
Jones (9), 22-30 Mo.; Jo.; Jon.
Jones (8), (N. C.), 1-8 Jones L.; Jo.; Jon.; Jones, N. C.; Jones.
Jones's Equity (6) (N. C.), 1-6 Jones Eq.; Jo.; Jon.
Jones, J. P., (1), 11 Pa.; Jo.; Jon.; Jones (Pa.); Jones, J. P.
APPENDIX A.
2363
Jones, T. G. (14), 43-49, 52-57, 61-62 Ala.; Jo.; Jon.
Jones & Barclay (1), 31 Mo.
Jones & McMurtie (1), 12 Pa.; Jones & McM.
Jones & Spencer (26), 33-58 N. Y. Super. Ct.; J. & S.; Jones & Sp.
Journal of Jurisprudence (1), (Pa.), Jour. Jur.
Journal of Law (1), (Pa.), Jour. L.
J. S. Green (3), 13-15 N. J. L., or, 1-3 Green.; Gr.; Green L.; Green, N.
J.; J. S. Gr.
Judges (13), 1-11, 22, 23 Ala.
Judges (2), 1–2 Nev.
Judges (9), 1–9 Vt.
Kansas (47), 1-47 Kan., Kans.; Kas.
Kellen (9), 146–154 Mass.
Kelly (3), 1-3 Ga.; Kel., Ga.
Kelly & Cobb (2), 4–5 Ga.
Kenan (16), 76–91 N. C.
Kern (17), 100-116 Ind.
Kernan (4), 11-14 N. Y.; Kern.
Kerr (5), 18-22 Ind.
Kentucky (12), 78-89 Ky.; Ken.; Kent.
Kentucky Decisions (1), Sneed: Ky. Dec.; Ken. Dec.
Keyes (4), (N. Y.), 1-4 Keyes; 40-43* N. Y.; K.; Key.
King (2), 5–6 La. An.
Kirby (1), (Conn.), Kirby; Kir.; Kirb.
Knowles (1), 3 R. I.
Kreider (3), 1-3 Wash.
Kulp (5), (Pa.), 1-5 Kulp; Luz. Leg. Reg.
Labatt (2), (Cal. Dist. Ct.), 1–2 Lab.
Lackawanna Bar (1), (Pa.), Lack. Bar.
Lackawanna Co. Reports (Wilcox) (1), (Pa.), Wil. Lack. Co. Rep.
Lackawanna Jurist (1) (Pa.), Lack. Jur.
Lackawanna Legal Record (1), (Pa.), Lack. Leg. Rec.
Ladd (6) 59-64 N. H.
Lalor's Supplement (1), (N. Y), Lalor; Hill & Den. Sup.; H. & D.; Hill
& Den.; Lalor Sup.
Lamar (3), 25-27 Fla.
Lancaster Bar (14), (Pa.), 1-14 Lanc. Bar.
Lancaster Law Review (S), (Pa.), 1-8 Lanc. L. Rev.
Lansing (7), (N. Y.), 1–7 Lans.; 1-7 N. Y. Sup. Ct.; L.
Lathrop (31), 115–145 Mass.
Lawrence (1), 20 0.
Law Repository. (See Carolina Law Repository, supra.)
Lawyer's Reports Annotated (15), 1–15 L. R. A.
Lea (16), 69-84 Tenn.; 1-16 Lea.
+
2364
ECONOMIC LEGISLATION..
Lee (4), 9-12 Cal.
Legal Chronicle Reports (3) (Pa.), 1-3 Leg. Chron. Rep.; Fost.; Foster;
Legal Chron. Rep.
Legal and Insurance Reporter (3), (Pa.), 1-3 Leg. & Ins. Repr.
Legal Gazette (8), (Pa.), 1-8 Leg. Gaz.
Legal Gazette Reports (1), (Pa.), Legal Gaz. Rep.; Campbell; Camp.
Legal Intelligencer (48), (Pa.), 1-48 Leg. Int.; Phila. Leg. Int. (See
Phila. Repts.)
Legal Opinion (5), (Pa.), 1–5 Leg. Op.
Legal Record (2), (Pa.), 1–2 Leg. Rec. Rep.
Lehigh Valley Reports (2), (Pa.), 1-2 L. V. Rep.
Leigh (12), (Va.), 1-12 Leigh.
Lester (3), 31-33 Ga.
Lester's Sup. (1), 33 Ga.; Lester Supp.; Lester & Bu.
Lewis (1), 1 Nev.
Lewis & Mister (4), 29–32 Mo. App.
Lewis & Guthrie (3), 33–35 Mo. App.
Littell (5), (Ky.), 1–5 Litt.; Lit.
Littell's Select Cases (1), (Ky.), Litt. Sel.; Lit. Sel. Ca.; Litt. Sel. Cas.
Livingston's Judicial Opinions (1), (N. Y.), Liv. Jud. Op.; Liv.; Liv.
Judic. Op.; Liv. Jud. Cas.
Lockwood's Reversed Cases (1), (N. Y.), Lock. Rev. Cas.
Loomas' City Hall Reporter (1), (N. Y.), City H. Rep.; C. H. Rep.
Loring & Russell Contested Election Cases (1), (Mass.), Lor. & R.
El. Cas.
Louisiana (19), 1-19 La.; L. R.; Lou.
Louisiana Annual (43), 1-43 La. An.
Louisiana Term Reports (10), 3-12 M. O. S.; 3-12 Martin; La. T. R.
Lowell (2), (U. S. Dist. Ct.), 1-2 Lowell; Low.
Ludden (2), 43-44 Me.
Lumpkin (10), 67–76 Ga.
Lumpkin & Peeples (1), 77 Ga.
Luzerne Legal Observer (3), (Pa.), 1–3 Luz. Leg. Obs.
Luzerne Legal Register (Kulp's), (5), (Pa.), 1-5 Kulp; Luz. Leg. Reg.
M'. See Mc.
Mac.
See Mc.
McAllister (1), (U. S. C. C.), McAll.; Macal.
McArthur (3), (D. C.), 1–3 MacA.; 8-10 D. C.; MacArth.; McAr.; Mac.
Ar. D. C.
McArthur & Mackey (1), 1 MacA. & Mack.; 11 D. C.; McAr. & Mackey.
McArthur Pat. Cas. (1), MCA. Pat. Cas.; MacAr. Pat. Cas.
McBride (1), 1 Mo.
McCahon (1), (Kan.), McCahon; McCah.
McCarter (2), 14-15 N. J. Eq., or 1-2 McCart.; McCar.
McCook (1), 1 O. S.
APPENDIX A.
2365
McCord (4), (S. C.), 1–4 McCord.
McCord's Eq. (2), (S. C.), 1–2 McCord Eq.; McCord Ch.
McCorkle (1), 65 N. C.
McCrary (5), (U. S. C. C.), 1-5 McCrary; McCr.
McGloin (1), (La. Ct. App.), 1 McGloin; McGl.
McLean (6), (U. S. C. C.), 1-6 McLean; Macl.; McL.
McMullan (2), (S. C.), 1-2 McMull.; McMul.
McMullan's Eq. (1), (S. C.), McMull. Eq.
Mackey (8), (D. C.), 1-8 Mack.; 12-19 D. C.; Mackey.
Maddox (3), 9-11 Mont.
Magruder (2), 1–2 Md.
Maine (83), 1–83 Me.; M.; Mai.
Malone (3), (Tenn.), 6, 9, 10 Heis., or 53, 56, 57 Tenn.
Manning (1), 1 Mich.; Man.
Manning's Unreported Cases (1), (La.), Man. Unrep. Cas.; Mann.
Mansfield (3), 49-51 Ark.
Marshall (2), (U. S. C. C.), 1-2 Brock.; Br.; Mar.; Mar. Dec.; Marsh.;
Marsh. Dec.
Marshall, A. K. (3), (Ky.), 1–3 A. K. Marsh.; Mar.; Marsh. A. K.; A. K.
M.; A. K. Mar.
Marshall, J. J. (7), (Ky.), 1-7 J. J. Marsh.; Mar.; Marsh. J. J.; J. J.
Mar.; J. J. M.
Marshall & Zane (1), 4 Utah.
Martin (U. S. C. C.). (See Martin N. C.)
Martin (10), 21-30 Ga.; Mart.
Martin (17), 54-70 Ind.; Mart.
Martin, Old Series (12), (La.), 1-12 M. O. S.; Mar.; Mar. La.; Mart. La.;
Vols. 3-12, La. T. R.; Vols. 1-2, Orleans Term.
Martin, New Series (8), (La.), 1-8 M. N. S.; Mar.; Mar. La.; Mar. N. S.;
Mart.; Mart. N. S.
Martin (2), (N. C.), 1-2 Mart.; Mar.; Mar. N. C.; Mart. Dec.; Mart. N.
C.; Mart. U. S. C. C.; Not. Dec.
Martin & Yerger (1), 8 Tenn.; 1 Mart. & Yerg.; M. & Y.; Mart. & Y.
Maryland (74), 1-74 Md.; M.
Maryland Chancery (4), 1-4 Md. Ch.; Johns. Dec.; Johns. Ch.; John.;
Johns.
Maryland Reports. (See Harris & McHenry.)
Massachusetts (154), 1-154 Mass.; M. (See under Massachusetts, p. 2330.)
Mason (5), (U. S. C. C.), 1-5 Mason; Mas.
Mathews (4), 6–9 W. Va.
Matthews (1), 75 Va.
Matson (3), 22-24 Conn.
Maxwell, Northampton County Reports (2), (Pa.), 1-2 Max. North. Co.
Rep.
Meddaugh (1), 13 Mich.
Meigs (1), 19 Tenn.; 1 Meigs.
2366
ECONOMIC LEGISLATION.
Metcalf (13), (Mass.), 1-13 Met.; 42-54 Mass., Metc.; Met. Mass.
Metcalfe (4), (Ky.), 1-4 Metc.; Met.; Metc. Ky.; Met. Ky
Michigan (89), 1–89 Mich.; M.
Michigan Nisi Prius (2), 1-2 Brown; Mich. N. P.
Miles (2), (Pa.), 1-2 Miles; M.; Mil.
Mills (2), (S. C.), 1-2 Mill.; Const.; Const. Rep.; So. Ca. Const. N. S.;
Const. N. S.
Miller (5), 1-5 La.; Mill.; Mil.; Mill. La.
Miller (16), 3-18 Md.; Mil.; Mill.; Mill. Md.
Miller (2), 3-4 Md. Ch.
Miller's Decisions (4), (U. S.), 1-4 Mill. Dec.
Miller's Decisions (1), (U. S. C. C.), Wool.; Mill. Dec.
Minnesota (47), 1-47 Minn.; M.
Minor (1), (Ala.), Minor; Min.
Mississippi (68), 1-68 Miss.; M. (See Mississippi, p. 2331.)
Missouri (107), 1-107 Mo.; M.; Miss.
Missouri Appeals (47), 1-47 Mo. App.
Monaghan (2), (Pa.), 1-2 Mona.
Monroe, Ben. (18), (Ky.), 1-18 B. Mon.; Mon. B.; B. M.
Monroe, T. B. (7), (Ky.), 1-7 T. B. Mon.; Mon.; Mon. T. B.; T. B. M.
Montana (11), 1-11 Mont.; Mon.; M.
Montgomery County Reports (6), (Pa.), 1–6 Mont. Co.
Moore, G. M. (7), 28–34 Ark.
Moore & Walker (3), 22–24 Tex.
Morris (1), 5 Cal.; Mor.; Morr.
Morris (1), (Iowa), Morr.; Mor. Ia.; Morr. Iowa.
Morris (6), 43–48 Miss.
Morris's State Cases (Criminal), (2), (Miss.), 1-2 Morris Cr. C.; Mor.
St. Ca.
Morrissett (1), 80 Ala.
Munford (6), (Va.), 1–6 Munf.; Mun.
Murphy (3), (N. C.), 1–3 Murph.; Mur.
Myrick's Prob. Ct. (1), (Cal.), Myr. Cal.; Myrick.
Napton (1), 4 Mo.
National Bankruptcy Register (18), (U. S.), 1–18 Nat. Bank. Reg.; N. B.
R.; Nat. B. R.
Nebraska (32), 1-32 Neb.; N.
N. Chipman (1), (Vt.), N. Chip.; Chip. N.
Nevada (20) 1-20 Nev.; N.
Newberry's Admiralty, (1) (U. S. Dist. Ct.), Newb.; Newb. Adm.
New England Reporter (6), 1–6 N. E. Rep.
New Hampshire (65), 1-65 N. H.; N. H. R.
New Hampshire, New Series (6), 13-18, N. H.; 1-6 N. H. N. S.
New Jersey Equity (48), 1–48 N. J. Eq.
(Also by reporters.)
New Jersey Law (53), 1–53 N. J. L. (Also by reporters.)
APPENDIX A.
2367
#
New Jersey Law Journal, N. J. L. J.; N. J. Law Jour.
New Mexico (4), 1-4 N. M.; N. Mex.
New York Appeals (133), 1–133 N. Y.; App. Dec.; N. Y. Rep.
New York Cases in Error (2), 1-2 Cai. Cas.; C. C. E.; Cas. Err.; Cain. N.
Y. Cas. Err.; N. Y. Cas. Err.
New York City Court Reports (2), 1-2 City Ct. Rep.
New York Civil Procedure (21), 1–21 N. Y. Civ. Pro. Rep.
New York Code Reporter (3), 1-3 Code Repr.; N. Y. Code Reptr.; N. Y.
Code Repr.; C. R.
New York Code Reports, New Series (1), Code Rep. N. S.; N. Y. Code
Rep. N. S.
New York Criminal (7), 1–7 N. Y. Crim. Rep.; N. Y. Cr.
New York Judicial Repository (6 Nos., about 338 pages).
New York Legal Observer (12), 1–12 N. Y. Leg. Obs.
New York Monthly Law Bulletin (5), 1–5 N. Y. Mo. Law Bul.
New York Special Term Reports (67), 1-67 How. Pr.; How.; N. Y. Spec.
Term Rep.
New York State (42), 1-42 N. Y. State Rep.
New York Superior Court (58), 33–58 N. Y. Super. Ct.; 1-32 by report-
ers. (See Sheldon, post.)
New York Supplement (14), 1-14 N. Y. Supp.
New York Supreme Court (71), 1–71 N. Y. Sup. Ct. (See p. 2336.)
New York Term Reports (3), 1–3 Cai.; Cai. T. R.; N. Y. Term.
New York Weekly Digest (28), 1–28 N. Y. Week. Dig.
Norris (15), 82-96 Pa.; 1-15 Norris.
North Carolina (48), 63-110 N. C.
North Carolina Conference Reports (1), Conf.; N. C. Conf.; C. & N.; Cam.
& Nor.
North Carolina Term Reports (1), Term; N. C. T. Rep.; N. C. Term.
North Dakota (1), 1 N. Dak. (See Dakota Territory.)
Northampton County Reports (2), (Pa.), 1-2 Max. North. Co. Rep.
North-eastern Reporter (31), 1-31 N. East. Rep.; N. E. Rep.; N. E.
North-western Reporter (52), 1-52 N. W. Rep.; N. W.
Nott & Hopkins Court of Claims (18), 8-25 U. S. Ct. Cl.; N. & Hop.; Nott
& Hop.
Nott & Huntington Court of Claims (7), 1-7 U. S. Ct. Cl.; N. & H.; Nott
& Hunt.
Nott & McCord (1), (S. C.), Nott & Mc.C.; N. & Mc.; Nott & M.
Notes of Decisions (2), (N. C.), 1-2 Mart.; Mar.; Mar. N. C.; Mart. Dec.;
Mart. N. C.; Mart. U. S. C. C.; Not. Dec.
Odeneal (3), 9-11 Ore.
Officer (9), 1-9 Minn.
Official Gazette of the Patent Office, (18), 1-18 Pat. Off. Gaz.
Ogden (4), 12-15 La. An.
Ohio (20), 1–20 O.; Ohio.
Ohio Circuit Court (6), 1-6 O. C. C.
2368
ECONOMIC LEGISLATION.
Ohio Law Journal (28), 1-28 W. L. B.; Ohio L. J.
Ohio State (48), 1–48 O. S.; O. St.; Ohio St.
Okey (3), 43-45 O. S.
Olcott's Admiralty (1), (U. S. Dist. Ct.), Olc.; Bett's Dec.; Olc. Adm.
O. M. Conover (43), 16-58 Wis.
Oregon (21), 1-21 Oregon; O.; Or.; Oreg.; Ore.
Orlean Terms Reports (2), 1–2 M. O. S.; 1-2 Martin La.; Or. T. Rep.
Ormond (4), 12-15 Ala.
Opinion of U. S. Attys. Gen. (19), 1-19 Opin. U. S. Att. Gen.
Opinion of New York Attys. Gen. (1), N. Y. Op. Att. Gen.
Otto (17), 91-107 U. S.; O.; Ott.; Otto.
Outerbridge (14), 97–110 Pa.; 1-14 Outerbridge; Out.
Overton (2), 1-2 Tenn.; 1-2 Over.; Over. Tenn.; Overt.
Pacific Reporter (30), 1-30 Pac.; Pac. Rep.
Paige's Chancery (11), (N. Y.), 1-11 Paige; Pai.; Pai. Ch.; Paige Ch.
Paine (2), (U. S. C. C.), 1-2 Paine; Pai.; Paine C. C.
Palmer (8), 53–60 Vt.
Papy (4), 5–8 Fla.
Parker (9), 10–18 N. H.
Parker's Criminal (6), (N. Y.), 1-6 Park. Cr. Cas.; P. C. R.; Park.; Parker
Cr. Rep.
Parsons (1), 65 N. H.
Parson's Decisions (1), Par. Dec.; in 2-7 Mass.
Parson's Equity Cases (2), (Pa.), 1-2 Parson; Par. Eq. Ca.; Pars. Eq. Cas.
Pascal (5), 25 Tex. Sup., 28-31 Tex.
Patent Office Gazette (18), 1-18 Pat. Off. Gaz.
Patton, Jr. & Heath's Special Court of Appeals (2), (Pa.), 1-2 Patt.
& H.; P. & H.; P., Jr. & H.; Pat. & H.
Pearson (2), (Pa.), 1-2 Pearson; Pears.
Peck (20), 11--30 Ill.
Peck (1), 7 Tenn.; Peck.
Peeples (2), 78-79 Ga.
Peeples & Stevens (8), 80-87 Ga.
Pennington (2), 2–3 N. J. L., or 1-2 Pen.; Penn.; Penning.
Penrose & Watts (3), (Pa.), 1-3 Pen. & Watts; P. R.; P. & W.; Penr. &
W.; Penn. & W.; R. P. & W.; Penna. Repts.; Penn. Rep.; Pa.
Pennsylvania County Reports (10), 1-10 P. C. C. Rep.; Pa. Co. Ct.
Pennsylvania Law Journal (7), (Pa.), 1–7 Pa. L. Jour.
Pennsylvania Law Journal Reports (5), 1-5 Clark; P. L. J.; Pa. L. J.;
Penn. L. J. R.; Pa. Law Jour. Rep.
Pennsylvania Law Record (2), (Pa.), 1-2 Pa. L. Rec.
Pennsylvania State (146), 1-146 Pa.; P.; P. S. R.; Pa. St.; Penn.; Penn.
Rep.; Penn. St.; Penn. St. R. (See, also, Penrose & Watts.)
Pennypacker (4), (Pa.), 1–4 Pennypacker; Penn.; Penny.; Pennypacker,
S. C. Rep.
!
APPENDIX A.
2369
Peters (16), (U. S.), 1-16 Pet.; 26-41 U. S.; P. S. C. U. S.; Pet. S. C.
Peters (1), (U. S. C. C.), Pet. C. C.; Pet.; P. C. C.; Pet. C. Ct.
Peters's Admiralty (2), (U. S. Dist. C. C.), 1–2 Pet. Adm.; P. A. D.; Pet.;
Peters' Adm.
Peters's Condensed (6), (U. S. Sup. Ct.), 1-6 Pet. Cond.; Cond. Rep. U. S.
P. F. Smith (32), 51–81 or 81* Pa.; 1-32 P. F. Smith; P. F. S.
Philadelphia Legal Intelligencer (48), 1-48 Leg. Int.; Phila. Leg. Int.
Philadelphia Reports (19), (Pa.), 1–19 Phila.; Phil. Rep. (See Legal In-
telligence.)
Phillips (1), (N. C.), Phil. L.; Phil.; Phil. Law; Phil. N. C.; Phill.
Phillips (2), 63-64 N. C.; Phil.; Phil. Law; Phil. N. C.
Phillips's Equity (1), (N. C.), Phil. Eq.; Phill. Eq.
Pickering (24), 1–24 Pick.; 18–41 Mass.; P.
Pickle (5), 85–89 Tenn.; 1-5 Pickle.
Pike (5), 1-5 Ark.
Pinney (3), (Wis.), 1-3 Pinney; Pin.; Pinn.
Pittsburg Legal Journal (38), (Pa.), 1-38 Pitt. Leg. Jour.
Pittsburg Reports (3), (Pa.), 1-3 Pitts.; Crumrine; Pitts. Rep.
Pomeroy (22), 73-94 Cal.
Porter (9), (Ala.), 1–9 Port.
Porter (5), 3-7 Ind.
Posey's Unreported Cases (1), (Tex.), Unrep. Cas.; Tex. Unrep. Ca.
Post (14), 23–36 Mich.
Post (23), 42-64 Mo.
Prickett (1), 1 Ida. Ter. (N. S.)
Printed Decisions (Sneed's), (1), (Ky.), Sneed; Ky. Dec.; Pr. Dec.; Prin.
Dec.
Printed Opinions (1), Forman's Repts.; Pr. Opin.; Forman; in 2 Ill. or 1
Scam.
Prouty (3), 61–63 Vt.
Pulsifer (4), 65–68 Me.
Quincy (1), (Mass.), Quin.; Quincy.
Randolph (27), 21-47 Kan.; Rand.
Randolph (5), 7-11 La. An.; Rand.
Randolph (6), (Va.), 1-6 Rand.
Raney (5), 16–20 Fla.
Rawle (5), (Pa.), 1-5 Rawle.; R. Raw.
Rawle, Penrose & Watts (Pa.). See Penrose & Watts.
Raymond (1), 81 Iowa.
Reardon. (See Myrick's Probate.)
Redfield (5), (N. Y. Surrogate), 1-5 Redf.; Red.
Redington (5), 31–35 Me.
Reese (1), 26 Neb.
Reese (2), (Tenn.), 5, 11 Heis.; 52, 58 Tenn.
2370
ECONOMIC LEGISLATION.
Reports of Const. Court S. C. (See Treadway, Mill, or Harper.)
Reynolds (3), 40–42 Miss.
Rhode Island (16), 1-16 R. I.
Rhode Island Indexes. Index "A-HH."
Rice Law (1), (S. C.), Rice.
Rice's Equity (1), (S. C.), Rice Eq.; Rice Ch.
Richardson (7), 3–9 N. H.
Richardson's Equity (1), (2), (14), (S. C.), Rich. Eq.; 1-2 Rich. Eq.; 1-14
Rich. Eq.; Rich. Ch.; Rich. Eq. Cas.
Richardson's Law (15), (S. C.), 1–15 Rich.
Richardson (New Series) (10), 1-10 S. C.; Rich. N. S.
Richardson & Woodbury (1), 2 N. H.; Rich. & W.
Riley (1), (S. C.), Riley; Ril.
Riley's Equity (1), (S. C.), Riley Eq.; Ril. Ch.; Ril.
Riley's Harper (S. C.), (See Harper S. C.)
Riner (1), 2 Wyo. Ter.
R. M. Charlton (1), (Ga.), Charl. R. M.; Ch. R. M.; R. M. Ch.; R. M. Charlt.
Robards (2), 12-13 Mo.; Rob.
Robards & Jackson (2), 26-27 Tex.
Robb's Patent Cases (2), 1-2 Robb. Pat. Cas.
Roberts (3), 29-31 La. An.; Rob.
Robertson (7), (N. Y.), 1–7 Robt.; 24-30 N. Y. Super. Ct.; Rob.; Rob. Sr. Ct.
Robinson (1), 38 Cal.; Rob.
Robinson (12), (La.), 1-12 R.; Rob.; Rob. La.
Robinson (4), 1-4 La. An.; Rob.
Robinson (2), (Va.). 1-2 Rob.; Rob. Va.
Rodman (5), 78-82 Ky.
Rogers's City Hall Reporter (6), (N. Y.), 1–6 City Hall Rec.; City H. Rec.;
C. H. Rec.
Root (2), (Conn.), 1-2 Root; Root Conn.
Rowell (8), 45-52 Vt.
Ruffin & Hawks (1), (N. C.), 1 Hawk; Ruff.; Ruff. & H. (See Hawks.)
Runnells (21), 38-56 Iowa.
Sandford (1), 59 Ala.; Sandf.
Sandford (5), (N. Y.), 1-5 Sandf.; 3-7 N. Y. Super. Ct.; S. S. C.; Sand.;
San.
Sandford's Chancery (4), (N. Y.), 1-4 Sandf. Ch.; Sand. Chy.
Sawyer (14), (U. S. C. C. & Dist. Ct.), 1-14 Saw.; Sawy.
Saxton (1), 1 N. J. Eq., or Sax.; Saxt.
Scammon (4), 2–5 Ill.; Sc.; Scam. (See Forman.)
Scranton Law Times (6), (Pa.), 1–6 Scranton L. T.
Selden (6), 5-10 N. Y.; Seld.
Selden's Notes (1), (N. Y.), Seld. Notes.
Select Cases (1), (N. Y.), Yates; Sel. Cas. N. Y.; Yates Sel. Cas.
Sergent & Rawle (17), (Pa.), 1-17 S. & R.; Serg. & Raw.; Serg. & R.
APPENDIX A.
2371
Shand (13), 11-33 S. C.; Sh.; Shand. N. S.
Shaw, G. B. (2), 10-11 Vt.; Sh.; Shaw; Shaw, G. B.
-
Shaw, W. G. (6), 30–35 Vt.; Sh.; Shaw; Shaw, W. G.
Sheldon's Buffalo Super. Ct. (1), Buff. Super. Ct.; Sh.; Sheld.; 43 N. Y.
Super.
Shepherd (47), 19-21, 24-41, 50-51, 60, 63-67, 71-74, 76-79, 82-83, 85–91
Ala.; Sh.; Shep.
Shepherd's Sel. Cases (1), (Ala.), Shep. Sel. Cas.; Ala. Sel. Cas.
Shepherd & Tillman (1), 68 Ala.
Shepley (16), 13–18, 21–30 Me.; Sh.; Shep.
Shipp (2), 66-67 N. C.; Sh.
Shirley (7), 49–55 N. H.; Sh.
Sickles (88), 46–133 N. Y.; Sick.
Silvernail (2), (N. Y. Ct. App.), 1-2 Silver. Ct. App.
Silvernail (2), (N. Y. Sup. Ct.), 1-2 Silver. Sup. Ct.
Skillman's Police (1), (N. Y.), Skil. Pol. Rep.
Skinker (15), 65–79 Mo.
Slade (1), 15 Vt.
Smedes & Marshall (14), 1-14 S. & M.; 9-22 Miss.; Sm. & M.; Smeed
& M.
Smedes & Marshall's Chancery (1), (Miss.), S. & M. Ch.; S. & M. Chy.;
Sm. & M. Ch.; Smed. & M. Ch.
Smith (9), 54-62 Cal.
Smith (2), 2-3 Dak. Ter.
Smith (21), 21–41 Ill. App.
Smith (1), (Ind.), Smith Ind.
Smith (1), (N. H.), Smith N. H.
Smith (2), (Tenn.), 7, 12 Heis.; 53, 59 Tenn.
Smith (11), 1-11 Wis., Smith Wis.
Smith's Cond. Reports (8), (Ala.), 1-8 Sm. Cond. Ala.
Smith, Ed. B. (4), 61-64 Me.; Smith Me.
Smith (E. D.), (4), (N. Y. C. P.), 1-4 E. D. Smith; Smith E. D.; Smith
C. P.
Smith, E. P. (13), 15-27 N. Y.; Smith Ct. App.; Smith N. Y.
Smith, P. F. (32), 51-81 or 81* Pa.; 1-32 P. F. Smith; P. F. S.; Smith Pa.
Sneed (1), (Ky.), Sneed; Ky. Dec.; Sneed Ky.
Sneed (5), 33-37 Tenn.; 1-5 Sneed; Sneed Tenn.
Snow (1), 3 Utah.
Southard (2), 4-5 N. J. L., or 1-2 South.
South Carolina (33), 1–33 S. C.; S. C. R.; S. Car.; So. Car.; South Car.
(See Harper.)
South Carolina Constitutional. (See Treadway, Mill, Harper.)
South Dakota. (See Dakota Territory.)
South-eastern Reporter (15), 1–15 S. E.; S. E. Rep.
Southern Reporter (11), 1-11 So.; So. Rep.
South-western Reporter (19), 1-19 S. W.; S. W. Rep.
2372
ECONOMIC LEGISLATION.
1
Spaulding (10), 71–80 Me.
Spear (2), (S. C.), 1-2 Spear; Sp.; Speer.
Spear's Equity (1), (S. C.), Spear Eq.; Sp. Eq.; Sp. Ch.; Speer Eq.
Spencer (11), 10–20 Minn.
Spencer (1), 20 N. J. L., or Spencer; Spen.
Spooner (4), 12-15 Wis.
Sprague (2), (U. S. Dist. Ct.), 1-2 Sprague; Spr.
Stanton (3), 11-13 0.
Stewart (3), (Ala.), 1–3 Stew.; Stewart.
Stewart (8), 29-45 N. J. Eq., or 1-18 Stew; Stew. Eq.
Stewart & Porter (5), (Ala.), 1-5 Stew. & P.
Stiles (16), 22-37 Iowa.
Stockett (27), 27-74 Md.
Stockton (3), 9-11 N. J. Eq., or 1-3 Stock.; Stockt. Eq.
Story (3), (U. S. C. C.), 1–3 Story; St.; Sto.; Sto. C. C.
Stratton (3), 12-14 0.
Stringfellow (3), 9-11 Mo.
Strobhart (5), (S. C), 1–5 Strobh.; Strob.
Strobhart's Equity (4), (S. C.), 1-4 Strobh. Eq.; Strob. Eq.; Strob. Ch.
Struve (1), 3 Wash. Ter.
Sumner (3), (U. S. C. C.), 1-3 Sumn.; Sum.
Susquehanna County Reports (Pa.), Susq. Co. Rep.
Susquehanna Legal Chronicle (Pa.), Susq. Leg. Chron.
Swan (2), 31-32 Tenn.; 1-2 Swan; Sw.
Sweeney (2), 1-2 Sweeny; 31-32, N. Y. Super. Ct.; Sw.; Sween.
Taney (1), (U. S. C. C.), Taney; Campbell; Camp.; Tan.; Taney Dec.
Tanner (7), 8-14 Ind.
Tappan (1), (O. C. P.), Tappan; Tap.; Tapp.
Taylor (1), (N. C.), Tayl.; Tay.; Tay. J. L.; Term N. C.
T. B. Monroe (7), (Ky.), 1–7 T. B. Mon.; Mon. T. B.; Mon.; T. B. M.
Tennessee (90), 1–90 Tenn. (Also by name of reporter.)
Tennessee Chancery Cases (3), 1-3 Cooper Ch.; Coop.; Coop. Ch.; Coop.
Tenn. Ch.; Tenn. Ch.
Term Reports (3) (N. Y.), 1-3 Cai.; Cai. T. R.; Cain.; N. Y. Term; T. R.
(N. Y.).
Term Reports, N. C. (See Taylor N. C.)
Terrell (20), 52-71 Tex.; Terr.
Terrell & Walker (14), 38-51 Texas; Terr. & Walk.
Texas (82), 1-82 Texas; Tex.
Texas Appeals (30), 1-30 Tex. App.; Texas App.; Tex. Ct. App.
Texas Court of Appeals, Civil Cases, (4), 1-4 Tex. Ct. App. Civ. Cas.; C.
A. Civil Cases.
Texas Unreported Cases (1), (Tex.), Unrep. Cas.; Tex. Unrep. Ca.
Thatcher's Criminal Cases (1), (Mass.), Thach. Cr. Cas.; Th. Cr. Cas.;
Woodm.; Woodm. Cr. Cas.
APPENDIX A.
2373
i
Thayer (2), 18-19 Ore.
Thomas (1), 1 Wyo. Ter.
Thomas & Franklin (1), 1 Md. Ch.; Thom. & Fr.
Thompson (2), 39-40 Cal.; Thomp. Cal.
Thompson & Cook (6), (N. Y.), 1-6 Th. & C.; T. & C.; Thomp. & C.; 8-13
N. Y. Sup.; 1-6 N. Y. Šup.
Thompson's Tennessee Cases (1), Thomp. Cas.; Thomp. Tenn. Cas.
Tiffany (12), 28–39 N. Y.
Tillman (3), 69–70, 75 Ala.
Tobey (2), 9-10 R. I.
Transcript Appeals (7), (N. Y.), 1-7 Trans. App.
Treadway Constitutional Reports (2), (S. C.), 1-2 Treadw.; Tread. Const.;
Const. Rep.; So. Ca. Const.; Const. S. C.
Tripp (2), 5-6 Dak. Ter.
Tucker (1), (N. Y. Surog.), Tuck.
T. U. P. Charlton (1), (Ga.), Charl. T. U. P.; T. U. P. Ch.; T. U. P..
Charlt.; Ch. T. U. P.
Turner (B. D.), (14), 35-48 Ark.
Tuttle (21), 23-32, 41-51 Cal.
Tuttle & Carpenter (1), 52 Cal.
Tyler (2), (Vt.), 1-2 Tyler; Ty.; Tyl.
Tyng (16), 2-17 Mass.
United States (145), 91-145 U. S. (1-90 by reporter.)
United States Court of Claims (25), 1-25 U. S. Ct. Cl.
United States Supreme Court Reporter (9), 1–9 U. S. Sup. Repr.
Utah (6), 1-6 Utah; U.
Unreported Cases. (See Texas.)
Van Ness Prize Cases (1), (U. S. Dist. Ct.), Van Ness.
Vaux, Recorder's Decisions (1), (Pa.), Vaux.
Veazey (9), 36-44 Vt.
Vermont (63), 1-63 Vt.; V.; V. R.; Ver.
Virgin (9), 52–60 Me.
Virginia (13), 75–87 Va.; Va. R.; Virg.; Virgin.; (1 Va. See Gilmer.).
Virginia Cases (2), 1-2 Va. Ca.; Va. Cas.
Vroom (24), 30-53 N. J. L., or 1-24 Vroom.; Vr.
Walker (1), (Miss.), Walk.; 1 Miss.; Walk. Miss.
Walker (1), 25 Tex.
Walker, A. S., Sr. (9), 72-80 Tex.
Walker's Cases (2), 1-2 Walker's S. C. Cas.
Walker's Chancery, (1), (Mich.), Walk. Ch.; Walk. Mich.
Wallace (23), (U. S.), 1-23 Wall.; 68-90 U. S.; Wal.; Wall. Rep; Wall.
S. C.
Wallace, Sr. (1), (U. S. C. C.), Wall. Sen.; Wal.; Wall.
2374
ECONOMIC LEGISLATION.
:
Wallace, Jr. (3), (U. S. C. C.), 1–3 Wall, Jr.
Warden (2), 2, 4 O. S.; Ward.
Warden & Smith (1), 3 O, S,
Ware (3), (U, S. Dist. Ct.), 1-3 Ware (2 Ware; Day.; Davies).
Washburn (8), 16-23 17, Wash.
Washington (4), (U, S. C. C.), 1-4 Wash, C. C.; W. C. C.; Wash.; Wash.
C. Ct.
Washington (2), (Va.), 1–2 Wash.; Wash, Va.
Washington (1), 1 Wash.
Washington Territory (4), 1-4 Wash, Ter.; W. Ty. R.; Wash. Tor. N. S.
Watts (10), (Pa.), 1-10 Watts, W.; Wa.
Watts (10), 16-25 Va.
Watts & Sergeant (9), (Pa.), 1-9 Watts & Ser.; W. & S.; Watts & Sorg.;
Watts & S.
Webb (15), 6-20 Kan.
Wobb & Duval (3), 1-8 Tex.
Weekly Law Bulletin (28), (Ohio), 1-28 WF. L. B.; Ohio L. J.
Weekly Notes of Cases (28), (Pa.), 1-28 I'. N. C., W. N. Cas.; Wook. No.
Cas.
Wendell (26), (N. Y.), 1-26 Wend.; W.; W. R.
Western Reporter (14), 1-14 West. Rep.
Weston (4), 12-14 17; West.
West Virginia (35), 1–35 W. Va.; West Va.
W. G. Shaw (6), 30-35 17; Sh.; Shaw; Shaw, W. G.
Wharton (6), (Pa.), 1-6 Wharton: Wh.; Whar.; Whart.
Wheaton (12), (U, 8.), 1-12 Wheat; 14-26 U. S.; W.; Wh.
Wheeler's Criminal (3), (N. Y.), 1-3 Wh. Cr. Cas.; Crim. Rec.; Wh.;
Whool.; Wheel, Cr. C., Wheel, Cr. Ree,
Wheolock (6), 82-37 Ter.; Wheel,
White (6), 10-15 1'. J'a.
White & Wilson's (1), 1 Tex. App, Civil Cases; Ct. App. Civil Cases.
Whitman's Patent Cases (2), 1-2 Whit. Pat. Cas,; Whitm. Pat. Cas.
Whittelsey (10), 32-41 Mo.
Wilcox (1), 10 (),
Wilcox Lackawana Co. Reports (Pa.), Wil, Lack, Co, Kep,
Williams (1), 1 Aleras.; Will. Mass.; Wms. Mass.
Williams (3), 27-29 1; Will. Vt.; Wms. Vt.
Wilson (3), 1-3 Ore.
Wilson, S. A. (1), 29 Tea. App,
Wilson, S. A. (8), 2-4 Tex. App, Civil Cases; Ct. of App., Civil Cases Tox.
Wilson Super. Ct. (1), (Ind.), Wils.; Ind. Super. Ct.
Wilson & White (1), 30 Tew. App.
Winston (2), (N. C.), 1-2 Winst. L.; Win.; Winst.
Winston's Equity (1), (N, C.), Winst. Eq.; Win, Eq,
Wisconsin (80), 1-80 1178.; W.; W. R.
Withrow (13), 9-21 Iowa,
APPENDIX A.
2375
Woodbury & Minot (3), (U. S, C, O,), 1-3 Wood, & M.; W, & M.; Woodb.
& M.
Woodman (1), (Mass.), Thach, Cr, Cas,; Th, Cr. Cas.; Woodm.; Woodm.
Cr. Cas,
Woods (-4), (U, 8, Ò, C,), 1–4 Woods; Woods C, C,
Woodward's Decisions (2). (Pa.), 1-2 Woodward's Dee,; Woodw. Dec.;
Endlich.
Woolworth (1), (U, 8, C. C.), Wool,; Mill. Dec.; Woolw.
Woolworth (2), 1–2 Neb,; Woolw.
Wright (1), (0., Nisi Prius), Wright; Wr.; Wright N, P,
་
Wright (14), 37-50 Pa.; 1-14 Wright; Wr.
Wyoming (2), 1-2 Wyo, Ter; W.; Wy.; Wyo,; Wy. Torr.
I
Wythe's Chancery (1), (Va.), Wythe; Wy.
Yates's Select Casos (1), (N. Y.), Yates; Sel, Cas. N. Y.; Yates Sol, Cas,
Yentos (4), (Pa.), 1-4 Yeates; Y. You,
Yorgor (10), 9-18 Tenn.; 1-10 Yerg,
Young (26), 21–46 Min.
York Legal Record (2), (Pa.), 1-2 York Leg, Ree,
Zabriskie (4), 21–24 N. J. L., or 1-4 Zab,
Zane (2), 5-6 Utah.
APPENDIX B.
SPECIMEN ORDINANCES OF VARIOUS CITIES RELA-
TIVE TO THE GRANTING AND REGULATION OF
FRANCHISES, AND CONTRACTING WITH FRAN-
CHISE COMPANIES.
Cities.
Albany, N. Y………….
Ordinances as to.
Underground telephone conduits....
Page.
2377
Baltimore, Md……
·
Boston, Mass...
Chicago, Ill...
Cincinnati, O…....
Indianapolis, Ind...
New Orleans, La..
Philadelphia, Pa.
Pittsburg, Pa.……….
•
Gas..
Contracts for public electric lighting...... 2379
Underground telephone conduits.
2381
Opening streets, etc...
2384
Illuminating and fuel gas.
2387
•
•
Cable or electric railways..
2392
Natural gas..
2394
2401
.Elevated street railway.
2406
·
·
.Street railways...
2409
Richmond, Va..
St. Louis, Mo...
.Electric wires..
.Street railways..
2412
2415
San Francisco, Cal....... Gas and water
Electric light and power..
Regulating street railways.
2417
2420
2423
• •
It has been deemed advantageous to insert in this place specimen or-
dinances of some of the more important cities, showing the methods
of dealing with the various industries considered in the foregoing pages,
and to a certain extent furnishing models upon which to form ordinances
which may be desired relative to these companies. It has not seemed
practicable to give any large number of such ordinances of any city, or
of any considerable number of cities; nor are ordinance provisions to
any considerable extent given in the foregoing pages, owing to the de-
cidedly local character which they must of necessity bear. The ordi-
nances given are, in each case, examples of the working out of the
policy of the state as set forth in the foregoing pages in a concrete form,
and, it is believed, are in all cases in force and effect at the present
time.
(2376)
APPENDIX B.
2377
ALBANY, N. Y.
AN ORDINANCE granting to the Hudson River Telephone Company
permission to construct underground conduits in the streets of the
city of Albany, and providing rules and restrictions for the regula-
tion thereof.
[Passed March 2, 1891.]
The City of Albany, in Common Council convened, ordains as follows :
SECTION 1. The corporation known as Hudson River Telephone Com-
pany, organized under the laws of the State of New York, is hereby
granted permission for the term of three years from the date of the
passage of this ordinance, to construct underneath the surface of the
several streets, avenues, alleys, public places and squares of the city of
Albany, conduits, ducts, mains or pipes, with the necessary man-holes
and other appliances, in which to carry its line of wires, cables and ap-
purtenances thereto, for its use in the said city, and in making connec-
tion with its several lines and systems in the various cities and villages
of this and other states, under the following terms, conditions, restric-
tions and regulations:
SEC. 2. Said corporation shall comply with the laws of the State of
New York, and all the laws and ordinances of the city of Albany, now
enacted or hereafter enacted by said city, concerning the use of said
streets, avenues, alleys, public places and squares, and shall do no per-
manent injury to any street, sidewalk, alley, avenue or public place, or
in any manner interfere with any water, sewer or gas pipe, telegraph or
electric wires, cables or pipes, which are now or may hereafter and pre-
vious to the execution of the work hereby authorized, be laid by the
city of Albany, or any authorized person or corporation. No such con-
duit, duct, main or pipe, after the same has been constructed, shall be
tapped or opened for the purpose of lateral extensions of the mains,
pipes, or the wires and cables contained therein, except for the purpose
of extending such conduits, mains, pipes, or the wires or cables con-
tained therein, through intersecting streets, avenues or alleys, and no
street, avenue, or public place shall be allowed to remain open or in-
cumbered for a longer period than shall be necessary to execute the
work for which the same has been opened; and the street commissioner
shall determine the question of such necessity.
SEC. 3. The conduits, mains or pipes which shall contain electric
wires, cables or other conductors of electricity used by said company,
shall be laid under the roadway of the streets, avenues, alleys, and pub-
lic squares and places above referred to; provided, however, that no
such conduit, main or pipe shall be laid under the roadway of any street
or avenue the surface of which is now paved with asphalt, or under the
roadway of Eagle street or of any street or avenue west thereof, the
surface of which is now or may hereafter, and before the laying of said
VOL. II-69
2378
ECONOMIC LEGISLATION.
conduits, be paved with dimension granite block, except Washington
avenue, east of Swan street, Swan street and Hudson avenue, and also
except street intersections paved with asphalt or dimension granite
block, which may be crossed by said conduits, ducts, mains or pipes.
SEC. 4. Immediately after the work of said company in laying its con-
duits, ducts, mains or pipes has been done, it shall forthwith restore
the street, avenue, alley or sidewalk or ground to as good condition as
before the said work was begun, at its own expense; and at least one
foot of clean, sharp black sand shall be placed under all pavement,
flagging or curbstone which shall be disturbed or relaid by said com-
pany.
SEC. 5. The said company shall keep and maintain the parts of such
streets, avenues, alleys, pavements, sidewalks or grounds so disturbed
in good repair and condition, to the satisfaction of the street commis-
sioner, for the period of one year from the time when they shall have
been disturbed and replaced; and that not sooner than at the end of
two months from the time of such disturbance and replacements, and
not later than one year thereafter, the said company shall, by direction
of the street commissioner, proceed to take up any part of said pave-
ment, flagging or curbstone so disturbed, and relay or replace the same
so that it shall have a uniform surface or grade with the adjacent and
surrounding pavement, flagging and curb.
SEC. 6. If the said company shall refuse or neglect to restore and re-
place the said street, alley, pavement, flagging or curb, after having dis-
turbed and removed the same, as is provided in the last preceding sec-
tion, or shall refuse or neglect to comply with an order of the street
commissioner to take up and relay such pavement, flagging or curb, as
in the last preceding section provided, the said work may be done by
the city of Albany, and the said company shall be liable for the cost
thereof, and upon receiving notice from the mayor of the amount of
such expense, the said company shall forthwith pay such amount to the
chamberlain.
SEC. 7. All work done by said company in laying said conduits, ducts,
mains, wires, pipes, cables or other conductors, and in the restoration
of the street pavements and sidewalks, shall be done under the direc-
tion of the street commissioner, and the location of the said conduits,
ducts, mains or pipes in the several streets, avenues, alleys, public
squares and places shall be determined by the city engineer. But no
conduit, duct, main or pipe shall be laid in North Pearl street or South
Pearl street in such location as to interfere in any manner with the pro-
posed new twenty-four inch water main to be laid in said streets.
SEC. 8. In the construction of said conduits, provisions shall be made
by leaving such space therein as may be necessary for the introduction
and laying of the wires and cables of the city of Albany and appurte-
nances thereto, required for conducting electricity to be used in the
transmission of telephonic or telegraphic messages or communications
APPENDIX B.
2379
in connection with the police and fire service of the city of Albany.
And the said city of Albany shall have the right and authority during the
existence of such conduits to introduce and lay in said conduit its wires,
cables and other appurtenances, required as aforesaid for the service
of its police and fire departments, without incurring any expense or
charge for the use or rental thereof, and shall also have the right at all
times, whenever necessary for such purpose, and under the direction
and supervision of the proper officers of said city, to be designated by
either of said departments, to have access to said conduits, ducts, mains,
pipes, or wires and cables, for the purpose of extending or repairing
the same.
SEC. 9. Before commencing work the said company shall signify its
acceptance of this grant or permission, upon the terms, conditions and
restrictions herein provided, by filing a written acceptance thereof,
signed and acknowledged by the president thereof, with the clerk of the
common council within thirty days after the passage hereof, and shall
also file with the chamberlain of said city a bond in the penal sum of
$10,000, to be approved by the corporation counsel, conditioned for the
faithful observance and performance by said company of these condi-
tions and restrictions, and to save and to keep harmless the city of Al-
bany, of and from all losses, damages or injury, by, from, or on account
of the acts or omissions of said company, and of and from any and all
suits, claims and demands against the city of Albany, arising out of the
acts or omissions of said company.
Approved as to form, as amended, March 2, 1891:
JOHN A. DELEHANTY, Assistant Corporation Counsel.
Passed by the following vote (two-thirds of all the members elected
voting in favor thereof:
Affirmative-The President, Ald. Ansbro, Brennan, Cummings, Fitz-
gerald, Fleming, Gillooly, Greagan, Gregory, Jones, Krank, Martin,
Mulderry, O'Connor, Pratt, Russ-16.
AN ORDINANCE authorizing and directing the letting of a contract or
contracts for the lighting of the city of Albany by means of elec-
tricity.
[Passed
.]
The City of Albany, in Common Council convened, ordains as follows:
SECTION 1. It is hereby ordered and directed that the board of contract
and apportionment of the city of Albany shall advertise and receive
sealed proposals, in the manner and form as required by the charter of
the city of Albany, for erecting in the several streets, avenues, and pub-
lic squares of the city of Albany in such places and positions as shall
hereafter be determined by the street commissioner under general
ordinances of the common council, not exceeding fifty electric lamps,
poles, and the necessary apparatus and appliances for lighting said
{
2380
ECONOMIC LEGISLATION.
}
1-
lamps, in addition to those now in use in said city; which electric
lamps, lights, apparatus, and appliances shall be of the kind commonly
known as the "Brush Electric Light" system or patent now in use in
said city of Albany.
SEC. 2. It is hereby further ordered and directed that said board of con-
tract and apportionment shall also advertise and receive proposals, in
the manner and form as required by the charter of the city of Albany,
for furnishing, providing, and supplying the necessary and requisite
electric-light current, to light said lamps from the 15th day of May, 1890,
to and until the 21st day of June, 1891.
SEC. 3. And it is hereby further ordered and directed that said board
of contract and apportionment shall also advertise and receive proposals
for erecting in the manner and form herein before provided, to be
located wherever the same shall be necessary, as directed by the street
commissioner, under such general ordinances, such number of electric
lamps as shall, in addition to those already erected, aggregate not less
than 531, and not more than 600, together with the necessary poles and
necessary apparatus and appliances for lighting the same; all of which
lamps, apparatus, and appliances shall be of the said "Brush Electric
Light" system or patent now in use in said city; and said board shall
also advertise and shall receive proposals in the manner and form here-
inbefore provided for furnishing, providing, and supplying the necessary
electric-light current to light said lamps last mentioned for a period of
five years, commencing June 21, 1891. All of said proposals shall con-
tain bids for maintaining said lamps when erected, in accordance with
specifications to be prepared by the city engineer, which bids shall in-
clude repairs to the lamps and poles, and also altering and changing the
position of the same when directed so to do by the proper officers of
said city.
SEC. 4. And it is further ordered and directed that upon the receipt of
said proposals said board of contract and apportionment shall enter into
a contract or contracts, in the manner and form provided by law, for
the erection and maintenance of said lamps, poles, and necessary appa-
ratus and appliances of the "Brush Electric Light" system or patent, as
aforesaid, and for the furnishing, providing, and supplying the neces-
sary and requisite electric-light current to light each and every of said
lamps during the several periods hereinbefore respectively referred to,
and for changing the position of the same whenever it becomes neces-
sary so to do. Said lights shall be full arc and of the power termed
2,000 candle-power. Said lamps shall be lighted every night in the
year during the periods aforesaid, from darkness to and until daylight,
in accordance with the schedule which shall be prepared and furnished
by the street commissioner, and which schedule shall relate to the time
when each of said lamps shall be lighted and when they shall be extin-
guished; said schedule shall be modified from time to time by said
street commissioner, and shall be filed in his office. A copy of said
APPENDIX B.
2381
schedule, whenever the same shall be altered, shall be served by
said street commissioner upon the party furnishing and maintaining
said lamps at least two days before any change of time is to be required
in said schedule. Said contract shall provide that the number of lamps
upon each circuit to be lighted during said periods shall be regulated
by the capacity of the dynamos furnishing the electric current, such
capacity to be, from time to time, fixed and determined by the certifi-
cate of the street commissioner, referring specifically to each dynamo,
which said certificate shall be, as the same is, from time to time modi-
fied, altered, or changed, filed in the chamberlain's office of said city.
A diagram or chart, defining each circuit and the location of the lamps
and the dynamos in use thereon, and the capacity of the same, furnish-
ing the electric currents therefor, shall be suitably framed and filed in
the office of the street commissioner, and shall be altered and corrected
whenever any change takes place in the position of the lights or in the
dynamos furnishing and supplying said current.
SEC. 5. It is further ordered and directed that no contract shall be en-
tered into by said board of contract and apportionment wherein the
price for lighting and furnishing the electric current to each lamp so
lighted, as aforesaid, shall exceed the sum of forty (40) cents per light
for each lamp so lighted during either of said periods herein before re-
ferred to.
SEC. 6. And when said contracts, or either of them, shall have been
entered into, the party with whom said contract shall have been made
is hereby granted permission to erect and maintain, during the continu-
ance of said contract, poles, lamps, and wires or cables, and the other
necessary appliances and apparatus for the purpose of conducting cur-
rents of electricity for the transmission and production of light, heat,
and power upon and along any of the streets, avenues, or public squares
of said city of Albany. The permission hereby given is granted, and
the contract hereinbefore referred to shall be let and made in pursuance
to the charter and ordinances of the city of Albany, and shall be sub-
ject thereto, and particularly to chapter 43 of the laws and ordinances
of said city.
BALTIMORE, MD.
ORDINANCE MAYOR AND CITY COUNCIL, No. 41, OF 1889.
AN ORDINANCE to provide for laying the wires of the Chesapeake
and Potomac Telephone Company of Baltimore City or the Chesa-
peake and Potomac Telephone Company or of both of said com-
panies in underground conduits in the city of Baltimore.
Whereas, It has been made known to the mayor and city council of
Baltimore, that the Chesapeake and Potomac Telephone Company of
Baltimore City and the Chesapeake and Potomac Telephone Company
have entered upon the occupation of a new building at the corner of
2382
ECONOMIC LEGISLATION.
St. Paul and Bank Lane in the city of Baltimore, intended to be used
in part as a telephone exchange; and,
Whereas, Such telephone exchange will in said location necessarily
require, if the overhead system of wires is wholly continued, a large
and increasing number of such overhead wires along the length of the
street and other public ways leading to said building; and,
Whereas, Such concentration of overhead wires at a point so central
as the location of said buildings is not desirable, and it would be to the
public advantage that such wires should be laid as far as practicable in
cables and underground, therefore,
SEC. 1. Be it enacted and ordained by the Mayor and City Council of Balti-
more, That the said The Chesapeake and Potomac Telephone Company
of Baltimore City and the Chesapeake and Potomac Telephone Company,
acting separately or in conjunction, be and they are hereby respectively
authorized to lay their or their respective telephone wires intended to
be used in connection with said telephone exchange to be established
in the building belonging to the Chesapeake and Potomac Telephone
Company at the corner of St. Paul street and Bank Lane in the city
of Baltimore in cables, laid in suitable conduits under the surface of
the streets, alleys, or highways in said city, now traversed or to be so
traversed by their said respective wires with the necessary man-holes for
affording access to such cables. Such conduits and man-holes shall be
constructed in such manner as not to injure any vault, sewer, water
pipe, or gas pipe, and such conduits and man-holes shall be constructed
by either or both of said companies as parts of one system at their or
their respective cost and expenses, and said companies so acting sepa-
rately or jointly in constructing said system of underground wires shall
have power to make the necessary house connections in the localities
where the same may be required, in such manner as may be best
adapted to the location by means of any wire or wires from such cable
or cables; provided, however, that the said companies, if acting to-
gether, shall have and possess the powers and privileges only which
might have been exercised by one of said companies if acting alone un-
der this ordinance.
SEc. 2. And be it further enacted and ordained, That nothing contained in
this ordinance shall be construed to grant unto either or both of said tele-
phone companies the exclusive right to lay underground wire cables.
within the limits of the city of Baltimore, and that the rights granted by
this ordinance shall cease and determine, unless three miles of the under-
ground conduits provided for by this ordinance are constructed within
two years from the date of its approval, and after said two years and
as rapidly as said conduits may be constructed and the said cables laid
therein all poles belonging to or under the control of either of said com-
panies standing upon any street or thoroughfare in this city along
which any such conduit is constructed and cable laid shall be removed,
and shall not be replaced, except in so far as such existing pole or poles
APPENDIX B.
2383
}
now standing or hereafter to be maintained or erected by such company
or companies are necessary to be maintained or erected by them or it
for the purpose of making distribution of and forming connections with
any wire or wires forming part of any such cable so laid in a conduit
with the building or buildings, or place or places intended to be con-
nected with such wire or wires from such cable.
SEC. 3. And be it further enacted and ordained, That the company or
companies in this ordinance herein before referred to shall, in consid-
eration of the rights and privileges granted to them by this ordinance,
before constructing any portion of the conduit or conduits herein before
authorized, enter into an agreement in a form to be approved by the
mayor of the city of Baltimore, and with sufficient security certified by
the comptroller and approved by the mayor, to pay annually to the
mayor and city council of Baltimore thirty cents for each lineal yard
of the first four miles in aggregate lineal length of conduit or conduits
constructed under the provisions of this ordinance, and twenty cents
per lineal yard for each succeeding mile or fraction of a mile of the ag-
gregate lineal length of such conduit or conduits exceeding such aggre-
gate lineal length of four miles; provided, however, that the annual
payment so to be made in any year, accounting from the date of the
approval of this ordinance, shall not be less than the sum of $3,000,
and shall also before constructing any portion of such conduit or con-
duits file with the city commissioner a plan showing the location and
character of the portion or portions of the conduit or conduits next pro-
posed to be constructed, and every such conduit or part thereof shall
be constructed under the supervision of said city commissioner, and all
paving which may be temporarily removed by the companies or com-
pany herein before mentioned in this ordinance in the course of the
construction of any conduit or conduits authorized by this ordinance,
shall be restored or replaced under the direction and superintendence
of the city commissioner by the companies or company constructing
said conduit or conduits, and at their or its expense, in a manner satis-
factory to said commissioner.
بر
SEC. 4. And be it further enacted and ordained, That in every underground
conduit constructed under the provision of this ordinance, space shall
be provided, if required, free of cost or rent for the laying therein by
the fire commissioners of the city of Baltimore of a cable for the ex-
clusive and official use only of the police and fire alarm telegraph and
police and patrol wires.
SEC. 5. And be it further enacted and ordained, That the company or com-
panies heretofore referred to in this ordinance which shall propose to
exercise any privilege under this ordinance shall, before exercising the
same, enter into a bond in the sum of $10,000 with good and sufficient
sureties to be approved by the mayor and comptroller conditioned that
the company or companies hereinbefore in this ordinance mentioned,
2384
ECONOMIC LEGISLATION.
exercising the privileges granted by this ordinance, will faithfully per-
form the obligations imposed upon it or them respectively thereby.
Approved, May 9, 1889.
FERDINAND C. LATROBE, Mayor.
BOSTON, MASS.
SPECIMEN PROVISIONS FROM THE ORDINANCES OF THE CITY OF BOSTON AND THE
REGULATIONS OF THE BOARD OF ALDERMEN OF SAID CITY, AFFECTING
FRANCHISE COMPANIES.
((
Permits to Franchise Companies to Open the Streets.
Every officer or board in charge of a department issuing a license
or permit, shall insert therein a condition that the person accepting the
same shall conform to the statutes and ordinances and the specifications
in the license or permit; that the license or permit may be revoked at
any time by the authority issuing it; that the violation of any of its
specifications shall work an immediate revocation of the license or per-
mit, and that such person shall indemnify and save harmless the city
from any damage it may sustain, or be required to pay, by reason of
the doing of the work licensed or permitted, or by reason of any act or
neglect of himself or of any of his employees relating to such work, or
by reason of any violation of any specification; provided that nothing
herein contained shall be construed to prevent the insertion of any
other specifications deemed advisable by the authority issuing such li-
cense or permit." (Rev. Ords. 1892, ch. 3, sec. 21.)
"Said superintendent (of streets) may issue permits to persons having
authority in the premises to open, occupy, obstruct, and use portions
of the streets, and every such permit shall specify the time, place, size,
and use of such opening, occupation, or obstruction, and the time
within which the street must be put in good condition, and shall be on
a condition the terms of which shall be those stated in chapter three, sec-
tion twenty-one, of this ordinance, and, in addition, that the person ap-
plying for the permit shall place and maintain from the beginning of
twilight, through the whole of every night, over or near the place so
occupied, opened, obstructed, or used, and over or near any dirt, gravel,
or other material taken therefrom, or to be used by him, a light or
lights sufficient to protect travelers from injury; shall place and main-
tain a safe and convenient way for the use of foot-travelers, and a
safe and convenient passage for public travel around or over such
place; shall, if he does not, within the time prescribed by said super-
intendent, put the street into good condition, satisfactory to said super-
intendent, pay whatever sum the said superintendent shall expend for
putting it into such condition, and that he shall deliver up the permit to
an officer of the police force of said city on or before the expiration of
the time fixed in the permit for completing work, such permit to be re-
turned by said officer to the street department. Said superintendent
may, in addition to said specifications, specify in the permit, or after
APPENDIX B.
2385
the issuing thereof, in writing, the kind of rail or fence to inclose the
place, and the kind of way over or around such place, and the manner of
constructing the same. Should any portion of the street which has
been excavated require repaving or resurfacing within a period of six
months from the time it has been disturbed, the superintendent of
streets shall notify the person applying for the permit under authority
of which the disturbance was made, to make such repairs as in the
opinion of said superintendent are necessary, and in case of the failure
of the said persons to make such repairs within one week from the date
of the said notification, then the superintendent of streets shall have
the right to make such necessary repairs, and the expense of the same
shall be paid by the said persons, and all amounts received by the city
collector for work done or materials furnished under the direction of the
superintendent of streets, as above authorized, shall be placed to the
credit, and be used as a part, of the appropriation of the street depart-
ment." (Rev. Ords. 1892, ch. 36, sec. 8.)
"Said superintendent shall, when authorized thereto by an order of
the board of aldermen, issue permits to open and occupy portions of the
streets, for the purposes of laying, maintaining, and using wires, railway
tracks, or rails therein, or wires, pipes, or conduits under the surface
thereof, on a condition the terms of which shall be those stated in section
eight of this chapter, and in addition that the person applying for the per-
mit shall furnish in his conduits for wires accommodations for all wires.
belonging to or to be used by the city, free of charge, whenever re-
quested to do so by the mayor; shall remove the conduits and wires
whenever directed, and not until directed so to do by the city council;
shall not disturb or interfere with any wires, pipes, or sewers lawfully
laid in such street or connected therewith." (Rev. Ords. 1892, ch. 36,
sec. 14.)
"Said superintendent shall, when authorized thereto by an order of
the board of aldermen, issue permits to open and occupy portions of the
streets, for the purpose of placing and maintaining poles therein, for
the support of wires, on a condition the terms of which shall be those
herein before stated in section eight of this chapter, and in addition
that the person applying for the permit shall keep said poles well
painted and in good condition, to the satisfaction of the superintendent
of streets; shall place the wires on said poles not less than twenty-five
feet from the ground; shall keep the name of the person owning the
poles distinctly painted on the cross-bars used and occupied by him on
the pole, and also on the pole, at a point not less than six feet nor more
than eight feet from the ground; shall allow the departments of the
city the exclusive use of the upper cross-bar and top of each pole, free
of all charge, for the purpose of placing wires thereon; shall not suffer
or permit any other person to place or keep wires on said poles or upon
the fixtures thereto affixed, without permission being first obtained in
writing from the board of aldermen; shall not remove any pole erected
2386
ECONOMIC LEGISLATION.
under this order until, and shall remove any pole when, directed by the
board of aldermen so to do; and that on the violation of any term of
this condition the said superintendent shall remove the poles at the ex-
pense of the person owning them." (Rev. Ords. 1892, ch. 36, sec. 15, as
amended by Ord. of April 6, 1892.)
Regulations as to Street Railway Companies.
“No person having the control of the speed of a street railway car shall
allow such car to go in any part of the city north or east of Charles
street, Pleasant street, Broadway, Dorchester avenue, and Swett street
between Dorchester avenue and the harbor, and including those streets,
at a rate of speed faster than seven miles an hour; nor in any part of
the city south or west of the above streets, and north or east of Swett
street and Chester Park, and including said last named street, nor on
Beacon street between Chester Park and the Boston and Albany Rail-
road, at a rate of speed faster than ten miles an hour; nor in any part
of the city south or west of said last named limits, at a rate of speed
faster than twelve miles an hour; nor in turning a corner in any part
of the city, at a rate of speed faster than four miles an hour." (Rev.
Regulations of 1892 of the Board of Aldermen, ch. 6, sec. 21.)
"No person having the control of the speed of a street railway car
in any street shall, except in case of accident or to prevent injury to per-
sons or property, allow such car, or if the car is drawn by an animal,
shall allow such animal to go within ten feet of a car or other vehicle
in front." (Id., sec. 22.)
"No person having the control of the speed of a street railway car
shall allow it in any street to go against or afoul of any person, vehicle,
or thing whatsoever; nor shall any such person fail to stop his car at
any place in a street when directed by a police officer so to do." (Id.,
sec. 23.)
"No person having the control of the speed of a street railway car
passing in a street shall fail to keep a vigilant watch for all teams, car-
riages, and persons, especially children, nor shall such person fail to
strike a bell several times in quick succession on approaching any team,
carriage, or person, and no person shall, after such striking of a bell, de-
lay or hinder the passage of the car." (Id., sec. 24.)
No person having the control of the speed of a street railway car
passing in a street, shall, on the appearance of danger to any team, car-
riage, or person from, or on the appearance of any obstruction to his
car or any animal, if any there be drawing the same, fail to stop the car
in the shortest time and space possible." (Id., sec. 25.)
"No person having the control of the speed of a street railway car
shall stop any such car on a cross-walk, or in front of an intersecting
street, except to avoid collisions or danger to persons, or as directed by
a police officer." (Id., sec. 26.)
"No street railway company shall, except by permission of the super-
APPENDIX B.
2387
intendent of streets, sprinkle any gravel or sand, or any salt, or other
article of a decomposing nature, on its tracks or rails in a street, or wash
such tracks or rails with brine or pickle." (Id., sec. 27.)
CHICAGO, ILL.
AN ORDINANCE granting to the Chicago Economic Fuel Gas Com-
pany the right to construct and operate works for the manufacture
of gas, etc.
[Adopted December 22, 1890; as amended, July 13, 1891.]
Be it ordained by the City Council of the City of Chicago:
·
SECTION 1. Subject to the terms and conditions of said (this) ordi-
nance, there is hereby granted to the Chicago Economic Fuel Gas
Company, its successors and assigns, the right to construct and operate
works for the manufacture of illuminating and fuel gas within the city
of Chicago; also, with the right of way along, upon, and under all the
avenues, streets, alleys, and public places in said city, for the purpose
of placing, operating, repairing, and maintaining a line or lines of gas
mains and pipes, and all necessary feeders and service pipes in connec-
tion therewith, for the distribution of illuminating gas and natural and
manufactured fuel gas. Said gases shall at all times be of the best
quality and highest efficiency for the purposes; provided, however, that
the successors and assigns referred to in this section, or elsewhere in
this ordinance, shall not be construed to include any other gas com-
pany, trust, or corporation, as provided in section 12 of this ordinance.
(As amended July 13, 1891.)
SEC. 2. Such company or corporation shall not lay its main pipes in
any such avenue, street, alley, or public place of said city, unless it shall
at the time lay down all feeders or service pipes necessary to make con-
nection without any subsequent disturbance of the pavement or surface
of such avenue, street, or public place with each and all building lots
fronting or abutting thereon, and all service pipes or feeders laid by said
company shall be coated with Dr. Angus Smith's composition, or some
other equally good material for preserving said service pipes or feeders
from decay; provided, that the main or distributing pipes shall be laid
on such portion of the public highways as the commissioner of public
works may direct, and at all intersecting streets which are improved,
the main or distributing pipes shall be laid at right angles thereto, and
extend at least to the building line, and all feeders or service pipes shall
be laid to the curb line of the street. Said company or corporation
shall not charge any person desiring to make connection with any ser-
vice pipe laid or to be laid by such company or corporation more than
twenty-five cents a lineal foot for such service pipe when laid. Said
company shall, when so ordered by a majority vote of all the aldermen
elected, extend their mains and supply pipes on any street, avenue, or
other public highway contiguous to the pipes of said company at the
2388
ECONOMIC LEGISLATION.
time in use or operation; provided, such extension shall cover territory
one-half of which is improved by buildings.
SEC. 3. That said company or corporation shall do no permanent in-
jury to any street, sidewalk, alley, avenue, or public place, or shade
tree, or in any manner unnecessarily disturb or interfere with any
water pipe, sewer, gas pipe, conduit or other underground work now or
hereafter laid by said city, or any authorized company or corporation,
and when such company shall open ground in any street it shall forth-
with restore the street, pavement, sidewalk or ground or water pipe,
sewer, gas pipe, conduit or other underground work, to a condition
equally as good as before, at the expense of said company, and if said
company shall fail or refuse so to do, the same may be done by said
city, and the said company shall be liable for and pay the cost thereof.
Said company shall not make any excavation in any street, avenue,
alley or public place without first procuring a permit for that purpose
from the commissioner of public works of said city. When any exca-
vation shall be made by said company in any street, alley, or public
place paved with wooden blocks, the foundation boards or planks shall
be removed without being cut, unless said cutting shall be especially
permitted by the commissioner of public works of such city. The said
company shall not use the public fire hydrants of said city, or any water
therefrom, without paying for same under a license and permit from
the commissioner of public works of said city. The said company shall,
upon notice from the commissioner of public works of said city, remove
or change any gas-main pipe, service pipe or feeder which may be in
the way or interfere with the construction or erection of any viaducts,
public building, or other public structure, and whenever said city shall
construct or form into a general subway any street, avenue, alley, or
other public highway, on or through which any pipe or pipes author-
ized by this ordinance may be located, said company, upon due notice
from proper city authorities, shall occupy said subway and place, and
maintain its pipes and appurtenances therein at its own cost and ex-
pense.
SEC. 4. Such company or corporation shall not open or incumber more
of any street, avenue, alley, or public place at any one time than may
be necessary to enable it to proceed with advantage in the laying of
such main pipes, feeder, or service pipes, nor shall said company permit
any such street, avenue, alley, or public place to remain open or incum-
bered for a longer period than shall be necessary to execute the work
for which the same shall have been opened, or without putting up the
necessary barriers and lights so as to effectually prevent the happening
of any accident in consequence of such opening or incumbering of such
street, alley, avenue, or public grounds, nor shall any two next parallel
streets be excavated at the same time.
SEC. 5. Such company or corporation shall be liable to and shall com-
pensate the city of Chicago, and pay any private individual, owner or
APPENDIX B.
2389
owners, or parties interested in any property adjacent to any street,
avenue, alley, or public place opened or injured by it, for all damages
which may result from leaks of pipes, or by reason of such company
having neglectfully opened, incumbered, protected, or guarded, any
such street, avenue, alley, or public place in said city; provided, said
company shall, in the exercise of the rights and privileges hereby
granted, be subject to all laws and ordinances relating to nuisances.
SEC. 6. Such company or corporation shall be subject to all general
ordinances of the city of Chicago in regard to gas companies, and the
city of Chicago shall have the right, at any time, to provide for the ap-
pointment of one or more inspectors of gas, with all the power and
authority incident to such position, and which the said city may deem
necessary to protect the city of Chicago in its corporate rights, and indi-
vidual consumers of gas. All meters used by said company for measur-
ing gas shall be subject to inspection and approval by such person or
persons, officer or officers, as may be appointed by said city for that
purpose, and said city shall pay all reasonable costs and charges of such
inspection, as the same may be fixed by the city council of said city,
and said company shall pay the reasonable cost of all necessary city in-
spectors of the work of construction.
SEC. 7. The rights and privileges hereby granted are upon the express
condition, that the price to be charged for the several kinds of gas shall
not be in excess of the following rates: For illuminating gas the charge
shall not exceed one dollar and ten cents ($1.10) per one thousand
(1,000) cubic feet; for natural gas the charge shall not exceed sixty
cents (.60) per one thousand (1,000) cubic feet; and for manufactured
fuel gas the charge shall not exceed fifty cents (.50) per one thousand
(1,000) cubic feet, with a rebate of ten (.10) cents per one thousand
(1,000) cubic feet on said above prices for illuminating, natural and fuel
gas, in case of payment before the 12th day of the month next succeed-
ing that in which said gas is furnished; and to attempt to collect a
greater rate than that herein specified shall work a forfeiture of the
rights and privileges hereby granted. Said company shall commence
work within six months from the passage thereof, or this ordinance
shall be null and void. (As amended July 13, 1891.)
SEC. 8. The laying of the pipes herein authorized shall be under the
supervision and direction of the commissioner of public works; and
where said company shall apply to the commissioner of public works
for permission to lay its pipes on any given street in order to reach any
specified point on such street, and there shall be an alley parallel with
said street and within three hundred feet of the same, the commissioner
of public works shall order such pipe or pipes to be laid in such alley
instead of such street, and the use of such alley shall be subject to all
the conditions provided herein for streets.
SEC. 9. Said company shall pay annually to the city of Chicago for
and in consideration of the rights and privileges hereby granted, an
2390
ECONOMIC LEGISLATION.
amount equal to three (3) per cent of the gross revenue or receipts of
said company from the sale of illuminating gas, and five (5) per cent on
the gross revenue or receipts of the said company from the sale of the
natural gas or manufactured fuel gas. Such payments shall be made in
the manner following: At the expiration of one year from the time
when said company shall commence to distribute either illuminating
gas or fuel gas to consumers in the city of Chicago, the president or
other chief officer of the company shall file with the city comptroller a
statement under oath showing the amount of the gross annual revenue
or receipts of said company for the preceding year, and shall at the
same time pay to said comptroller the said amount of three per cent on
the annual gross revenue or receipts from the sale of illuminating gas,
and five per cent on the annual gross revenue or receipts from the sale
of natural or fuel gas. Said respective payments to be made as herein
prescribed, annually, during the term of this ordinance.
And in addition to said payments, said company shall, by the said
city of Chicago, furnish to said city illuminating gas at the rate of not
to exceed seventeen dollars and fifty cents ($17.50) per lamp per annum
during the term of this ordinance. (As amended July 13, 1891.)
SEC. 10. This ordinance is granted upon the express condition that
said company shall, within three years from the date of the accept-
ance of this ordinance, have laid and in operation and ready for sup-
plying consumers at least twelve (12) miles of its main pipes within
the limits of the city of Chicago, and unless it shall so have constructed
and laid the number of miles of distribution pipes herein referred to,
then and under these conditions this ordinance shall be and become
void and of no effect; provided, however, that the time during which
any legal proceeding shall be pending, whereby the said company, its
successors and assigns, shall be prevented from or delayed in complying
with the requirements of this section, shall not be taken or deemed any
part of the time specified; provided, further, however, that the city of
Chicago may intervene in any suit and move for its dismissal in the
name of said company in case such suit may be deemed by the city as
collusive, or for the purposes of delay, or extension of the time herein
specified. (As amended July 13, 1891.)
SEC. 11. Said company shall file with the city clerk a good and suffi-
cient bond, to be approved by the mayor, in the penal sum of one hun-
dred thousand ($100,000) dollars, conditional that such company, its.
successors or assigns, shall comply with all the terms and conditions of
this ordinance, and shall indemnify and save harmless the city of Chi-
cago against and from any and all damages, judgments, decrees, and
costs of whatsoever kind or nature, by reason of the passage of this or-
dinance and the exercise of any rights and privileges hereby or herein
granted.
SEC. 12. This ordinance shall take effect and be in force from and
after its passage and the filing and approval of the bond herein re-
APPENDIX B.
2391
quired, and the acceptance thereof by said company; provided that if
said approved bond and acceptance be not filed within thirty days
of the passage hereof, this ordinance shall be void and of no effect; and
provided, still further, that if said company shall at any time enter into
any combination, directly or indirectly, with any gas company or com-
panies, concerning the rates or prices to be charged for gas, or if said
company shall, directly or indirectly, sell, lease or transfer its plant,
property rights and privileges as herein authorized to any other gas
company, trust or corporation now or hereafter engaged in the manu-
facture and sale of gas within the city of Chicago, or if said company
having commenced to manufacture gas, or furnish natural gas, shall
cease for a period of more than ten (10) consecutive days, unless by
reason of unavoidable accident, or injunction, to furnish gas through
their pipes, or if said company shall fail or refuse to extend its distribu-
tion pipes, as required by this ordinance, the rights and privileges
hereby granted shall cease and be of no more force and effect.
SEC. 13. The rights and privileges granted by this ordinance shall be
granted for the term of twenty-five (25) years from and after its accept-
ance, and all rights hereunder shall cease after the expiration of such
term. The permission and authority hereby granted are upon the ex-
press terms and conditions that at the end of twenty (20) years after
the passage of this ordinance the city of Chicago shall have the right to
purchase the entire plant of said company; and all of its property and
effects of every kind and description within said city of Chicago, at an
appraised value, which shall be ascertained and determined by three
competent appraisers, who shall have free access to all the books, papers,
and other data bearing upon the subject. Said appraised value shall
not include the value of any rights, privileges and franchises granted by
the city. One of the said appraisers shall be appointed by the mayor
of the city of Chicago, one by said company, and one by the two se-
lected; and if they can not agree upon the third appraiser, then any one
of the chancellors of the circuit court of Cook county may appoint him.
The said appraisers shall make a report of the value of said property
within six months after their appointment, to the mayor and city coun-
cil, and said mayor and city council shall have the option at any time
within (6) months after receipt of said report, to purchase said plant
and property, together with all its appurtenances and equipments, at
the appraised value.
2392
ECONOMIC LEGISLATION.
CINCINNATI, O.
AN ORDINANCE to provide for the construction and operation of a
cable line or electric system on Gilbert avenue.
[Passed April 8, 1884.]
SECTION 1. Be it ordained, etc., That whereas it has been made apparent
that the use of horses for the movement of street cars on Gilbert avenue,
which is a part of route No. 10, of street railroads, is very unsatisfactory,
and, to some extent, unsafe, and the movement of the cars necessarily
slow; and whereas, much inconvenience has been experienced by the
people of that portion of the city which is reached by this line; and
whereas the owners of said line are willing to construct a cable or elec-
tric system on said avenue, whereby cars may be rapidly moved by
steam or electricity; therefore, the owners of said route are hereby
granted the privilege of laying the necessary cables and establishing the
necessary fixtures and appliances for the use of the same in and upon
said Gilbert avenue, from the southern terminus of Gilbert avenue to
its intersection with McMillan street, and operating the same in connec-
tion with the lines now owned by the Mt. Adams and Eden Park In-
clined Railway.
SEC. 2. Said owners of route No. 10 are hereby authorized to lay a
double track upon Court street, from Broadway to Gilbert avenue, and
thence on Gilbert avenue to Effluent Pipe street, and use the same as
part of said line, and to abandon all of the said route which lies in
Broadway north of Court street, and in Hunt street and Effluent
Pipe street to the junction of the last named street with Gilbert
avenue.
SEC. 3. This privilege is granted in consideration of the improved fa-
cilities hereby contemplated, and the large expenditure necessary to se-
cure the same, and shall be in force for the period of twenty-five years
from and after the date of this ordinance; and until the end of said pe-
riod of twenty-five years its said owners are authorized to charge for
transportation of persons over said route and cable road a rate of fare
not exceeding the following: Through fare for the first ten years be-
tween Fountain square and the northern terminus of Woodburn
avenue, Walnut Hills, shall be eight cents cash, and tickets in package
of sixteen for one dollar, eight tickets for fifty cents, and four for twenty-
five cents; for the last fifteen years through cash fare shall be seven
cents, and tickets in packages of twenty for one dollar, ten for fifty
cents, and five for twenty-five cents. Fare either way to Eden Park en-
trance shall be five cents cash, or a four cent ticket; during the whole
term, said four cent tickets to be sold in packages of six for twenty-four
cents. Children under twelve years of age shall be carried through for a
cash fare of five cents, or a four cent ticket; children in arms free.
APPENDIX B.
2393
SEC. 4. The present tracks on Gilbert avenue may be removed to the
side of said avenue so that the center of said avenue may be used for
general travel, and in no event shall there be more than two tracks on
said avenue, and the entire work of reconstructing said tracks and the
construction of said cable or electric system shall be under the super-
vision of the chief engineer of the board of public works, and the plans
and specifications therefor shall be subject to the approval of the board
of public works.
SEC. 5. The construction of the cable provided herein shall be com-
pleted and in operation on or before July 1, 1885, or the grant shall
be void.
SEC. 6. Passengers shall be transferred in person without extra charge
at the corner of McMillan and Gilbert avenue by an employe of the
company, who shall be stationed at that point daily from 6 A. M. to 12
P. M. (on all cars operated by the Mt. Adams and Eden Park Inclined
Railway), going to or from the city; provided, the passenger or passen-
gers so to be transferred shall take the next following car going to their
destination.
SEC. 7. Cars shall leave either terminus at Fourth and Walnut and
Woodburn avenue, at least every five minutes from the hours of 6 a. M.
to 9 A. M., and from 5 P. M. to 8 P. M., and at least every ten minutes dur-
ing the other hours of the day until 12 o'clock midnight, and between
the hours of 12 midnight and 2 A. M., at intervals of not more than
thirty minutes apart, and all said cars running in both directions shall
be run through to their destination without change.
SEC. 8. A bond in the penal sum of twenty-five thousand ($25,000) to
the satisfaction of the board of public works for the faithful perform-
ance of this contract shall be given; and the construction and opera-
tion of said cable as herein provided, and the performance of all other
obligations herein contained are conditions precedent to any rights un-
der this ordinance.
SEC. 9. The right is hereby granted to the owners of said route to ex-
tend said cable or electric system over the entire length of the route at
any time during this grant, the same to be constructed as provided in
section four (4) of this ordinance, conditioned that the consent of the
majority of the property owners in feet front abutting on the streets
along the line where such cable or electric system is extended, shall
have been previously obtained and certified by the city engineer.
VOL. II-70
2394
ECONOMIC LEGISLATION.
INDIANAPOLIS, IND.
CITY OF INDIANAPOLIS, IND. General orDINANCE NO. 14, 1887.
AN ORDINANCE authorizing corporations, firms, companies, or indi-
viduals to lay and maintain pipes in the streets, alleys, avenues,
lanes, and public grounds in the city of Indianapolis, for the pur-
pose of supplying said city and its inhabitants with natural gas for
heating and illuminating purposes.
[Passed June 27, 1887.]
SECTION 1. Be it ordained by the Common Council and Board of Aldermen of
the City of Indianapolis, That any corporation organized under the laws.
of the State of Indiana, or any firm, company, or individual, having its,
his, or their principal offices in the city of Indianapolis, Indiana, may
lay, extend, and maintain mains, branches, pipes, and conduits through
the streets, avenues, lanes, alleys, and public grounds of said city, and
may take up for the purpose of altering, changing, or repairing the
same, from time to time, as the necessities of the case may require, for
the purpose of supplying said city and its inhabitants with natural gas,
under and subject to the restrictions and upon the conditions herein-
after set out.
SEC. 2. Before any corporation, firm, individual, or company desiring
to pipe the city of Indianapolis, for the supply of natural gas, shall do
any work toward laying any mains or pipes in any street, avenue, lane,
alley, or public ground thereof, such corporation, individual, firm, or
company, as the case may be, shall execute a bond to the city of Indi-
anapolis, Indiana, in the penal sum of $50,000, to the acceptance and
approval of the mayor, in which one or more of the sureties shall re-
side in Marion county, Indiana, conditional as follows:
1. That the said corporation, firm, individual, or company will not in
any manner molest, damage, or interfere with any of the gas or water
pipes or public or private sewers now laid or constructed, or which may
hereafter be laid or constructed, in or along any of the streets, alleys,
lanes, avenues, or public grounds of said city.
2. That the said corporation, firm, individual, or company will restore
any and all streets, alleys, lanes, avenues, or public grounds in which it
or they may lay mains or pipes, or which it or they shall disturb or in-
terfere with in laying pipes, or trenching or excavating for the purpose
of laying mains or pipes, or in using any of the apparatus or machinery
in connection therewith, to as good condition as they were before the
laying and use of said mains or pipes, apparatus, and machinery and
before said excavating and trenching were begun, and that it will main-
tain the same in such condition for one year after such mains or pipes
are laid, or such trenches or excavations dug or made. And in all cases
where said city shall have taken a bond or agreement from any con-
APPENDIX B.
2395
tractor to keep and maintain the pavements in any street in good repair
for a given time, the said corporation, individual, firm, or company shall
keep that portion of any such street from which it may remove the
pavement for the purpose of laying its mains, pipes, and conduits, in
good condition and repair, for the same period of time stipulated in such
bond or agreement between the city and the contractor.
3. That the said corporation, individual, firm, or company will, with-
out delay, clear all such streets and places of the dirt and rubbish caused
by, or resulting from, the laying of said mains or pipes, or making such
trenches or excavations.
4. That the said corporation, individual, firm, or company will re-
imburse the said city for all sums it may expend in restoring any street
or other public place, or any part thereof, to as good condition as the
same was before the same was opened for the purpose of laying the
mains or pipes therein, and for all sums expended in clearing any of
such streets or places from the dirt or rubbish caused by, or resulting
from, the laying of said mains or pipes where the said corporation, indi-
vidual, firm, or company failed to restore the streets or other places, or
remove such dirt or rubbish as provided by this ordinance.
5. That it will indemnify and save harmless the city from and against
any and all claims, demands, actions, suits, judgments, or liabilities of
every kind that the said city may be subjected to, or incur in conse-
quence of, or growing out of the opening of said streets or other places,
or the laying of said mains or pipes therein or of permitting or having
such gas within the city, or in such mains or pipes, or in said streets or
other places, or the doing of the work incident to this grant, or the
manner of doing the same, or in consequence of injuries or damage to
person or property by such gas, or by reason of any explosion of such
gas, or in consequence of or growing out of the failure of said company
to restore the said streets and other places to as good condition as they
were before being opened by it, or in consequence of or growing out of
any negligence of the agents or servants of said corporation, individual,
firm, or company. It being the intention of the city and any and all
corporations, companies, firms, and individuals accepting the provisions
of this ordinance that said corporations, companies, firms, and individ-
uals shall be and become primarily liable as between them and said city,
in all such cases.
6. That the said corporation, company, firm, or individual, accepting
the provisions of this ordinance, shall begin work thereunder within
sixty days after accepting the provisions hereof, and shall, within one
year, lay not less than twenty-five miles of mains within the corporate
limits of said city.
SEC. 3. The mayor may require the renewal of the bond provided for
in the last section whenever, in his judgment, it has become insuffi-
cient by reason of the death or insolvency of any of the sureties on
said bond.
2396
ECONOMIC LEGISLATION.
SEC. 4. All mains or pipes laid under the provisions of this ordinance
shall be laid in the alleys wherever the same is practicable; and no
route shall ever be selected, or mains or pipes laid in said city, by any
corporation, individual, firm, or company under the provisions of this
ordinance, until a general plan showing the street, alley, avenue, lane,
or public ground to be opened, and the proposed location of the mains
or pipes in such street, alley, avenue, lane, or public ground, and
the highest pressure intended to be carried on said line, with the pre-
caution for safety, shall have been furnished to the city civil engineer
of the city of Indianapolis and the common council and board of alder-
men, and receive their approval, which general plan shall be retained
by said engineer in his office as a public record.
SEC. 5. Whenever the city of Indianapolis shall determine to con-
struct any sewer in, along, or across any street, alley, avenue, lane, or
public ground where any main or pipe of such corporation, individual,
firm or company shall be laid, said corporation, individual. firm or com-
pany, as the case may be, shall, at its, his, or their own expense, lower,
elevate, change or remove the mains or pipes, so that said sewer may be
laid at the point and place determined upon by said city. Notice given
by the city civil engineer in writing shall be sufficient.
SEC. 6. All pavements, sidewalks, cross-walks, curb-stones, gutters,
streets, alleys, or public grounds in any way displaced, disturbed, or in-
jured by any corporation, individual, firm or company accepting the
provisions of this ordinance, in laying, altering, repairing, or maintain-
ing its, his, or their mains, pipes, street-boxes, valves, or other appli-
ances, shall immediately be restored, replaced, repaired and put in as
good condition as the same were before being disturbed or replaced as
aforesaid.
SEC. 7. All work in laying or repairing mains or pipes shall be prose-
cuted in such a manner as not to interfere with the public use or travel
upon the streets, avenues, lanes, and alleys of said city where it can be
avoided. And when such use is unavoidably obstructed by any corpo-
ration, individual, firm or company accepting the provisions of this
ordinance, said corporation, individual, firm or company, as the case
may be, shall, with all reasonable dispatch, repair and replace such
streets, avenues, lanes, alleys, and public grounds, so that the public
use will not be obstructed beyond a reasonable time. The work shall
be pushed as rapidly as possible to completion, and all of the streets,
avenues, lanes, alleys, and public grounds shall be promptly restored to
as good condition as they were in before the work was commenced, and
shall be kept in such condition by said corporation, individual, firm or
company, as the case may be, for the period of one year.
No street,
alley, avenue, lane, or public ground shall be opened for the purpose of
laying mains or pipes under the provisions of this ordinance, between
December 1 and March 1, unless the city civil engineer, in specific cases,
shall authorize the same.
APPENDIX B.
2397
SEC. 8. All pipes, mains, and apparatus of every kind and description
used by any corporation, individual, firm or company, accepting the
provisions of this ordinance, shall be of the most approved design and
quality. All pipes shall be standard weight, and shall be so laid as not
to interfere with the use of the streets, alleys, avenues, lanes, or public
ground after the same are in place. The mains and service pipes shall
also be so laid in the public streets, alleys, avenues, lanes, and public
grounds of said city as to prevent the escape of gas, and in such manner
as that the use of the gas will be safe. Said service pipes shall be laid
to the property line without expense to the persons desiring to use
the gas.
SEC. 9. If the city civil engineer shall discover at any time that any
corporation, individual, firm, or company is prosecuting its, his, or their
work in a careless, dilatory, incompetent, or unskillful manner, he shall
notify the corporation, individual, firm, or company prosecuting the
work in writing, and if such carelessness, incompetency, dilatoriness,
and unskillfulness is not immediately remedied, he shall report the
same to the common council and board of aldermen, who shall have
power to pass and enforce such ordinances or resolutions as shall
remedy the defect.
SEC. 10. In order to provide against gas that may escape from high or
low pressure mains and pipes, from passing into cellars, sewers, and
buildings, it shall be, and is hereby made, the duty of all such corpora-
tions, companies, firms, and individuals laying mains or pipes for carry-
ing gas, as aforesaid, when deemed necessary by the city civil engineer
and said common council and board of aldermen, to provide, furnish,
and supply a system of escape pipes, to be approved by the city civil
engineer and said common council and board of aldermen, sufficient to
carry off any and all gas which may leak or escape through defective joints,
service pipes, connections, or defects in the mains. Gauges showing
the amount of pressure on all natural gas lines shall be erected at the
expense of such corporations, companies, firms, or individuals, and shall
be open at all times to public inspection, and located at such points as
may be directed by the city civil engineer, when concurred in by the
common council and board of aldermen. And it shall be and is hereby
made the duty of said engineer to notify such corporation, company,
firm or individual to reduce or cut off the pressure upon such line or
lines as the public safety from time to time may require; and it shall
be, and is hereby made, the duty of the city attorney to institute such
legal proceedings as may be necessary to compel a compliance with the
provisions of this ordinance and with all other ordinances now in force
or hereafter passed, and all acts of the general assembly affecting such
natural gas companies.
SEC. 11. In consideration of the use of the streets, alleys, avenues,
and lanes and public grounds of this city, and for the granting of this
franchise, all corporations, companies, firms, and individuals availing
2398
ECONOMIC LEGISLATION.
themselves of the rights under this ordinance, shall, as a condition to
the exercise of the franchise herein granted, furnish natural gas to con-
sumer for and at schedule of prices following, to wit:
(The prices prescribed by this schedule are given below, but not in
the language of the ordinance. The figures in the first column refer to
the diameter of the fire-pots of stoves or furnaces.)
DOMESTIC USE (FOR COOKING:)
Stove or Range.
No. 6 and under.
No. 7, 8.
No. 9 and over.
Gas and gasoline..
Oct. to May.
$0 75 per month.
May to Oct.
$0 50 per month.
1 25
it
11
1 00
เ
"C
1 50
"
1 25
เ
75
"
75
"
Per Annum.
$600
12.00
15 00
6 00
RESIDENCES AND OFFICES:
Stoves, etc.
8 inch or less...
8-14 inches.
14-18 inches...
18 inches and over.
Grates and open front heating
stoves...
Furnaces.
22 inches or less..
22-24 inches..
24-26 inches..
26-28 inches.
28-30 inches..
30-34 inches..
34-36 inches..
36-40 inches.
40 inches and over..
Oct. to May.
May to Oct.
.$0 75
44
$0 50
"(
44
Per Annum.
$ 5 25
1 25
75
"
"
7. 00
1 50
1 25
(4
11 00
•
2.00
"
1 50
(C
13 00
•
1 50
"
1.00
"
10 00
Per Month.
Per Annum.
$3.00
$20 00
3 40
23 80
3 50
24 50
3 75
26 25
4 00
28 00
4 50
31 50
5 50
38 50
6 50
45 50
8 00
55 00
HEATING HALLS, STORES, BUSINESS HOUSES, AND HOTELS:
Stoves, etc.
16 inches or less
16-20 inches..
20 inches and over….
Grates and open stoves.
Furnaces.
26 inches or less...
26-30 inches.
30-36 inches.
36-40 inches.
40 inches and over..
FOR RESTAURANTS:
Cooking stoves and ranges...
FOR HOTELS:
Cooking stoves and ranges...
Per Month.
Per Annum.
$3 00
$20 00
4.00
26 00
6 00
40 00
2.00
14.00
Per Month.
Per Annum.
$4 60
$30 00
5 30
35 00
7 30
45 00
8 65
55 00
10 00
65 00
$3.00
$30 00
$5 00
$50 00
The measurements of diameters herein before referred to shall be con-
4
APPENDIX B.
2399
strued to mean the average or mean diameter of the fire pots, as stoves
are constructed at the present time.
When any corporation, company, firm, or individual, supplying the
city of Indianapolis or its inhabitants with natural gas, has once re-
duced the price of gas below the schedule of prices herein before set
out, such corporation, company, firm, or individual, shall be prohibited
from increasing such reduced schedule of prices for a period of three
years, and then only by and with the consent of the common council
and board of aldermen.
Not to exceed one-half of the schedule rates shall be charged for
grates and stoves used for heating, in cases where boilers or furnaces
are used for heating.
Any consumer mentioned in the foregoing schedule shall have the
right to require gas to be furnished by meter measurement and not by
said schedule rates; but in that event, such corporation, company, firm,
or individual, shall have the right to charge and receive therefor any
sum not exceeding ten cents per 1,000 cubic feet. Such meters shall be
promptly furnished upon the written application of any consumer,
without cost to such consumer, by such corporation, company, firm, or
individual.
The consumer may use such gas for both heating and illuminating
purposes.
Any corporation, company, firm, or individual, furnishing gas under
the provisions of this ordinance, shall have the right to discontinue
the further supply of gas to any consumer in case of ten days' default
after the first day of each succeeding month in the payment of charges
for said gas. But when payment of such charges shall have been made
gas shall again be furnished to such consumer on his request.
For all manufacturing purposes, and for all other consumers, and for
all other purposes not designated in the foregoing schedule, for which
natural gas can or may be utilized, such natural gas shall be supplied
and furnished at the option of the consumer: 1st, either at fifty per
cent of the cost of Indiana steam coal at two dollars per ton; or, 2d, by
special agreement; and, in that event, at the same rate to all, whether
large or small consumers, and in no case shall preference be given in
price to one consumer over another by the corporation, company, firm,
or individual furnishing natural gas; or, 3d, by meter measurement not
exceeding seven cents per thousand cubic feet.
Such meters shall be promptly furnished by the corporation, company,
firm, or individual furnishing such gas, and which meters shall be with-
out cost to the consumer, and furnished upon the written application of
such consumer. The consumer may use said gas for both heating and
illuminating purposes, as hereinbefore provided.
The common council and board of aldermen hereby expressly reserve
the right to revise and fix the rates and prices herein designated, at any
time after the expiration of ten years from the date of the passage of
A
2400
ECONOMIC LEGISLATION.
this ordinance. The rates hereinbefore provided for domestic purposes
shall be based upon a pressure of four ounces per square inch at the
point of consumption.
SEC. 12. The city of Indianapolis hereby expressly reserves the right
at any time after the expiration of five years after the date of the
passage of this ordinance, to require any corporation, company, firm, or
individual, furnishing gas under the provisions of this ordinrnce, to pay
into the city treasury annually, a license or tax not exceeding the sum
of three cents per foot of mains laid by such corporation, company, firm,
or individual within the city limits, exclusive of service connections.
Sɛc. 13. Any corporation, company, firm, or individual accepting the
provisions of this ordinance, shall be compelled to furnish gas to all ap-
plicants for any purpose along its, his, or their lines or mains, as pro-
vided for in section 11 hereof, whenever applied for. And any such
corporation, company, firm, or individual shall commence to extend its,
his, or their mains according to the most approved plan, along any
street, alley, avenue, lane, or public ground contiguous to where its, his,
or their mains are already laid, within sixty days after being so ordered
by resolution of the common council and board of aldermen; provided,
the same shall be petitioned for by owners or occupants of real estate
along the line proposed to be extended, and that 10 per centum of such
petitioners shall agree to become consumers of gas, and that in the
opinion of the common council and board of aldermen such proposed
extension is reasonable, and ought to be made, and shall continue such
work and push the same to completion as rapidly as possible; and fail-
ing to comply with any such order, shall be fined, as hereinafter pro-
vided; and each day's failure to comply with any such order shall con-
stitute a separate offense.
SEC. 14. No corporation, company, firm, or individual shall exercise
any of the rights of laying pipes in the city of Indianapolis until such
corporation, company, firm, or individual, as the case may be, shall have
a line of mains laid from some gas-producing region to the city limits
of sufficient dimensions to comply with the intent and purpose of this
ordinance.
SEC. 15. Before any corporation or company shall avail itself of the
provisions of this ordinance, it shall file with the city clerk its written
acceptance of all provisions, restrictions, requirements, and regulations
of this ordinance, which acceptance shall be signed by the president
and secretary of such corporation or company, together with a cer-
tified copy of a resolution duly passed by the board of directors of
such corporation or company, authorizing the execution and filing
thereof, accepting all the conditions, provisions, and stipulations of
this ordinance.
If a firm or individual desires to furnish gas under the provisions of
this ordinance, such firm or individual shall likewise file their or his
written acceptance in the same words, substantially, and upon the
APPENDIX B.
2401
same terms provided for corporations or companies, as provided in this
section.
SEC. 16. Any corporation, company, firm, or individual willfully violat-
ing any provision of this ordinance, directing any thing to be done, or
enjoining the doing of any thing, shall, on conviction, be fined in any
sum not exceeding $100, on complaint of any citizen, filed before
the mayor.
SEC. 17. Nothing in this ordinance shall be so construed as to prevent
the common council and board of aldermen from giving special permis-
sion under this ordinance to any party or parties engaged in the manu-
facturing business, and opening a natural gas well within or without the
city limits, the privilege of laying private pipe lines from the same
to and along the streets and alleys of this city to his or their
manufactories.
SEC. 18. The city of Indianapolis shall have the right, by giving at
least six months' notice, to purchase the entire plant or plants of any
corporation, company, firm, or individual accepting the provisions of
this ordinance, at any time after the expiration of ten years from the
date of its passage. The amount to be paid for such plant or plants,
shall be ascertained by the appointment of three disinterested persons;
one to be appointed by said city, one by said corporation, company,
firm, or individual, and in case of disagreement, the two shall select a
third. The amount thus fixed, shall be paid by said city within six
months after the amount to be paid for such plant or plants shall have
been determined as herein provided.
SEC. 19. This ordinance shall take effect and be in force from and after
its passage and publication once each week for two consecutive weeks,
in the Indianapolis (Daily) Sentinel.
NEW ORLEANS, LA.
MAYORALTY OF New OrleanS, CITY HALL, April 24, 1884.
[No. 682-Council Series.]
AN ORDINANCE granting to B. F. Sherman and L. E. Lemarie and
associates the right to lay pipes, mains and conduits in and along
the streets, parks, sidewalks, gardens, alley-ways, bridges, avenues
and other places within the limits of the city of New Orleans, and
the right to enter upon and break the surface of said streets, parks,
gardens, alley-ways, bridges, avenues and other places, and to ex-
cavate the same for that purpose.
ARTICLE 1. Be it ordained by the Council of the City of New Orleans, etc.,
That Benj. F. Sherman and L. E. Lemarie and their associates, their
successors, transferees and assigns, shall be and are hereby authorized,
for the period of fifty years, to lay at their own expense any and all
necessary mains, pipes and conduits in and along the streets, alley ways,
2402
ECONOMIC LEGISLATION.
i
sidewalks, bridges, avenues, parks, gardens, and other places within the
limits of the city of New Orleans, for the purpose of supplying all
buildings, erections, etc., when needed, with gas, and are to that end
authorized to enter upon any and all said places, and to break, at their
own expense, the surface, and make the necessary excavation thereon,
when the same may be required for the aforesaid purpose, in such man-
ner as to produce the least possible inconvenience to the city, its inhab-
itants or the traveling public, on the following terms and conditions, to
wit:
Provided that the said grantees, their successors and assigns, shall
within ninety days after the promulgation of this ordinance, deposit
with the fiscal agent of the city of New Orleans the sum of $100,000 in
city bonds, as a guarantee of good faith, upon the following conditions:
that said grantees, successors or assigns, shall within a period of not
more than eighteen months after the promulgation of this ordinance, pro-
vided no litigation ensues, unless prevented by causes beyond the con-
trol of the grantees, acquire and complete the works, buildings, and
laying of pipes, etc., and every thing appurtenant to the execution of
this ordinance to the amount of $150,000, and if this condition is not
strictly fulfilled, the said $100,000 shall be ipso facto forfeited to the city
as liquidated damages, and said fiscal agent shall deliver the same to the
mayor of said city, without legal proceedings or formalities.
Provided that for the privileges recited in this ordinance, the said
Sherman and Lemarie and their associates agree to pay for $50,000
worth of public improvements, such as drainage, paving, leveeing, or as
the council may hereafter determine, and to give bonds to the mayor
for the faithful performance of this provision, payments to be made
$25,000 in 90 days, and $25,000 in 120 days.
ART. 2. That the aforesaid Benj. F. Sherman and L. E. Lemarie, their
successors, transferees and assigns, shall repair, at their own expense,
and under the superintendence of the commissioner of public works
and city surveyor for the city of New Orleans, any and all places en-
tered upon and broken by them for the purpose herein mentioned, and
shall reinstate said places in good condition, and continue to repair said
streets or places until the streets are properly replaced by good pave-
ments, to the satisfaction of the city surveyor and commissioner of pub-
lic works; and that the commissioner of public works shall appoint one
inspector to be paid by said company, with the approval of the council,
whose duty it shall be to see that the streets are placed in good condi-
tion.
ART. 3. That if said Benj. F. Sherman and L. E. Lemarie, their suc-
cessors, transferees and assigns, shall fail to repair said streets, parks,
gardens, bridges, alley ways, avenues, and other places so entered upon
and broken by them within thirty days, and after a written notice to
that effect from the commissioner of public works as to the particular
places to be repaired, they shall be liable to a penalty of twenty-five
APPENDIX B.
2403
dollars per day for each and every day elapsing between such notifica-
tion above given and the completion of each set of repairs required by
each notification, and each twenty-five dollars per day for each separate
repair to be made is hereby accepted by said parties as a penalty in the
nature of liquidated damages, to be recovered by the city of New Or-
leans before any court of competent jurisdiction. In case work is not
commenced after five days' notice, the commissioner of public works
and city surveyor shall perform the work at the expense of said com-
pany.
ART. 4. That said Benj. F. Sherman and L. E. Lemarie, their success-
ors, transferees, and assigns, shall not charge and hereby bind them.
selves not to charge the city or any of the inhabitants thereof, for il-
luminating gas manufactured and sold by them at a price greater than
($1.70) one dollar and seventy cents per thousand cubic feet, with
twenty cents per 1,000 cubic feet off to private consumers, if paid
within ten days after monthly bill rendered, to insure prompt payment.
That the quality of the gas to be manufactured and sold by them shall
not be less than twenty candle power of good commercial character, and
as free from deleterious compounds as the nature or the manufacture
will permit, and at no time less than twenty candle power, and that said
parties shall never, except as hereinafter permitted, make any sale or
transfer to or combination with any other gas company or individual,
nor shall they make any arrangement or combination whereby the
privileges in this ordinance contained are rendered inoperative in whole
or in part or by virtue of which they shall agree not to lay mains in
certain portions of the city, or by virtue of which any agreement is made
with reference to fixing the price of gas to be sold to consumers.
ART. 5. That the gas to be delivered by said grantees to consumers,
shall be as free from carbonic oxide as consistent with the manufacturing
of illuminating water gas, and no gas shall be so delivered which con-
tains more than ten per cent of such carbonic oxide. That proper tests
shall be made by the city surveyor to test such gas for carbonic oxide,
who shall report weekly the results of his tests to the council. That
for each and every violation of this provision the said grantees, their
successors, and assigns, agree to pay the city a liquidated penalty of
$25 for each per cent of carbonic oxide over and above the maximum
of ten per cent in volume herein fixed.
ART. 6. That in case said Benj. F. Sherman and L. E. Lemarie, their
successors, transferees, and assigns, shall sell or dispose of the rights and
privileges granted by this ordinance, except to a corporation organized
for the purpose herein expressed, and of which said Benj. F. Sherman
and L. E. Lemarie, their successors, transferees, and assigns, shall be in-
corporators, or if they fail to comply with the provisions of this ordi-
nance within eighteen months after any litigation that may occur be-
yond their control, including the termination of appeals, if any, and
2404
ECONOMIC LEGISLATION.
within eighteen months in case of no litigation, then the ordinance will
be ipso facto null and void, and the franchise annulled and revoked.
ART. 7. That said Benj. F. Sherman and L. E. Lemarie, their success-
ors, transferees, and assigns, shall, at their own expense, make all con-
nections between the mains, shall furnish all meters, and shall conduct
the gas through the streets whenever mains shall be laid to the meters
in use in the house of the consumers of it, and the mayor shall ap-
point, with the approval of the council, one inspector of meters, salary
of said inspector not to exceed $100 per month, to be paid by said gas
company.
ART. 8. That said Benj. F. Sherman and L. E. Lemarie, their success-
ors, transferees, and assigns, shall supply, if required, the gas to the
street lamps, public buildings, and offices of the city corporation on the
line of such mains at the rate of not more than $1 per 1,000 cubic
feet.
Be it further ordained, That in order to enforce the provisions of this
ordinance relative to the candle power of the gas to be supplied, it shall
be the duty of the city surveyor to make a test of the gas furnished at
least once a week and to report in writing to the council the result of
such test.
The burner to be used for testing the gas shall, until otherwise pro-
vided, be the same as that now provided under the acts of congress to be
used by the gas inspector of the District of Columbia; the council shall
have the right to change such testing burner at its discretion.
All testing burners and apparatus shall be furnished and kept in re-
pair at the expense of the grantees, and all tests made as aforesaid shall
be made at least 1,000 yards from the works. Whenever any tests
show that the gas is below the standard of candle power herein fixed,
then such tests shall be continued from day to day, and the grantees,
their successors, or assigns, hereby agree and bind themselves to pay to
the city a penalty of $25 for each candle deficiency, each and every day
that such deficiency is shown by said tests to exist.
ART. 9. That all rights and claims conferred upon said Benj. F. Sher-
man and L. E. Lemarie, their successors, transferees, and assigns, shall
be subject to all police ordinances (not violating the contract and vested
rights and provisions of this ordinance) that may hereafter be passed
by the council of the city of New Orleans with regard to the same.
ART. 10. That said Benj. F. Sherman and L. E. Lemarie, their success-
ors,
transferees, and assigns, shall begin within three months from the
time of the filing with the mayor of the city of New Orleans their writ-
ten acceptance of the provisions of this ordinance, to provide their
buildings, put in their machinery, and lay their mains, pipes, conduits,
in good faith, it being provided, however, that should said Benj. F. Sher-
man and L. E. Lemarie, their successors, transferees, and assigns, be
prevented, by reason of litigation beyond their control, from complying
with the conditions herein imposed, the time for the beginning of
APPENDIX B.
2405
providing buildings, etc., as above provided, shall be extended to
three months after the termination of said litigation, including appeals,
if any.
ART. 11. That the rights and privileges herein conferred shall not in
any manner render the city of New Orleans liable to any other gas
company to whom franchises may have been granted by the legislative
enactments, and that the said grantees accept the privileges herein
given, with the understanding that the city of New Orleans is not to be
made a party to any legal action which may be brought by any indi-
vidual or corporation against said grantees.
Nothing in this ordinance, or in the grants to lay mains, pipes, con-
ducts, or other rights, or in the notarial act made in pursuance of this
ordinance, shall be construed as binding the city of New Orleans, or
making said city liable, directly or indirectly, or in warranty for any
claim of citizens or corporations, on account of said ordinance, grant, or
notarial grant, or any claim for infringements of rights, or damages to
persons or property caused by the grantee, or in any way resulting from
the acts of said grantees, nor for any claim for damages, losses, or in-
juries sustained by said grantees, in case they should be deprived of
their rights, or be interfered with in the exercise thereof by any person
or corporation whatsoever, save it be by the lawfully constituted author-
ities of the city, nor shall the city be liable for any works done, or ma-
terials used in paving or repairing banquettes or streets, or any public
thoroughfares, in pursuance of this grant, or under the direction of said
contract with the said grantees.
ART. 12. That said Benj. F. Sherman and L. E. Lemarie, their suc-
cessors, transferees, and assigns, bind themselves to furnish, free of
charge, charitable institutions, to be designated by the city council, the
same quantity of gas for illuminating purposes now supplied to the asy-
lums of the "Little Sisters of the Poor," "St. Vincent's Infant Asylum,"
'Charity Hospital," by the New Orleans Gas-Light Company.
ART. 13. That at the expiration of said privilege, if the city shall so
elect, the grounds, buildings, machinery, and all other fixtures apper-
taining to the same, shall revert to the city of New Orleans, at a valua-
tion to be ascertained by two disinterested persons, one to be appointed
by the grantee, as herein stated, or their legal successors, and the other
by the city, and, in the event of disagreement as to the said valuation
between said persons thus appointed, a third person or umpire shall be
appointed by the civil district court, parish of New Orleans, on joint
application of said parties, the decision thereby had to be final.
ART. 14. That said Benj. F. Sherman and L. E. Lemarie, their success-
ors, transferees, and assigns, will, at the request of the commissioner of
public works, on the concurrence of the city council, lay pipes and
mains, and furnish gas in such portions of the city now lighted by gas,
or may hereafter be lighted by gas.
ART. 15. That said Benj. F. Sherman and L. E. Lemarie, their success-
2406
ECONOMIC LEGISLATION.
ors, transferees, and assigns, shall deposit with the mayor of the city a
good and solvent bond in the sum of $20,000, at the time of accepting
this ordinance, for the faithful performance of the obligations herein
provided.
And it is further provided and shall be stipulated in said bond and
agreed to by the principals and securities thereon, in addition to the
other conditions and obligations therein expressed, that said grantees
shall not assign the privilege herein granted, except by consent of the
municipal government; excepting to such company as may be organized
by said grantees under this ordinance, nor shall they enter directly or
indirectly into any combination with any other gas company, and in
either event the amount of said bond shall be due and forfeited as
liquidated damages to the city of New Orleans against both principals
and securities on said bond.
This bond is independent of the special guarantee contained in the
first section of this ordinance, and shall not be considered as modifying
or impairing same in any manner.
Adopted by the council of the city of New Orleans, 15th April, 1884.
M. MCNAMARA, Clerk of Council.
Approved, 24th April, 1884.
W. J. BEHAN, Mayor.
PHILADELPHIA, PA.
AN ORDINANCE to authorize and regulate the construction of an ele-
vated railroad by the Quaker City Elevated Railroad Company, and
to authorize a contract between said company and the City of Phila-
delphia in relation thereto.
[Passed February 9, 1892.]
SECTION 1. The Select and Common Councils of the City of Philadelphia do
ordain, That upon the terms, and subject to the restrictions hereinafter
set forth, the said Quaker City Elevated Railroad Company be, and it is
hereby authorized to build and operate an elevated railroad upon the
following route:
A double track road from Front and Market streets, in the city of
Philadelphia, to the intersection of Ninth and Market streets; thence
over Ninth street to the junction of Ninth and Vine streets and Ridge
avenue; thence over Ridge avenue to Lehigh avenue. Also a branch
from the intersection of Ninth and Market streets, over Market street
to Juniper street; Juniper street to South Penn Square; South Penn
Square to Broad street; Broad street to Market street; Market street to
the County Line; Lancaster avenue from its junction with Market
street to the intersection of Lancaster avenue and Forty-fourth street;
Forty-fourth street from Lancaster avenue to Fairmount Park from the
junction of Woodland avenue and Market street over Woodland avenue
to the County Line.
APPENDIX B.
2407
That the road shall be so built, or means be provided under the struct-
ure by said company, its entire length, so as to catch all dripping and
falling substances. And the said company may also construct, at all
necessary and convenient places, such sidings, switches, turnouts, sup-
ports, connections, landing places, platforms, stations, and all necessary
appliances thereto, buildings, telegraphs and signals, and all other
requisite and convenient appliances upon said route, and upon or above
the grade hereby authorized of said railroad as shall be required for the
convenience and rapid and safe operation of their road; and authority
is here given for the construction of the same elevated over the streets
traversed or crossed by the route of said railroad. That the said tele-
graph lines shall be attached to the structure itself. The city shall have
the privilege of attaching its wires to the structure without cost or com-
pensation, and other telegraph companies with consent of the company;
the stations on the entire line shall not be located at a greater distance
apart than half a mile, and no siding, turnout, or any part of the road
which is over a public highway shall be used for the storage of cars.
No bituminous coal shall be used as fuel in locomotives used as a
motive power.
SEC. 2. The railroad herein authorized shall be elevated upon iron
piers, so that there shall be a clear headway of not less than fourteen
feet at all places, and wherever it runs across or over the tracks of any
steam road there shall be a clearance of not less than twenty feet. The
railroad shall be built upon the best methods of deadening sound.
The railroad shall be constructed on the line of the curb on Lancaster
avenue, Woodland avenue, and Ridge avenue, and as near as practica-
ble to the center of the street on Market, Broad, South Penn Square,
Juniper, and Forty-fourth streets. All public sewers, gas and water
pipes, street and sidewalk pavements, and all other municipal property,
shall be carefully preserved and restored, when disturbed, to a condi-
tion satisfactory to the director of the department of public works; and
private vaults under the footway, and all other private property, shall
be interfered with and damaged as little as possible; the said railroad
company shall conform their elevation to any revision which the city
shall, by ordinance, direct on the line of their road, so as to give a
clearance of fourteen feet after said revision is made, and shall also ele-
vate their tracks at steam-road crossings, so as to give a clearance of
twenty feet.
SEC. 3. The said railroad company shall at all times hereafter run cars
over the entire route, stopping at all stations on said route, at intervals
of not more than ten minutes during the day, excepting from six o'clock
A. M. to nine o'clock A. M., and from four and a half o'clock P. M. to
seven o'clock P. M., when they shall run said cars at intervals of not
more than five minutes, and except between the hours of one o'clock
A. M. and five o'clock a. M., when they shall run said cars at intervals of
not more than one hour.
2408
ECONOMIC LEGISLATION.
The rate of fare over the lines of said road, within the limits of the
city of Philadelphia, shall not exceed five cents for a continuous ride
during the hours from six o'clock A. M. to nine o'clock A. M., and from
five and a half o'clock P. M. to seven and a half o'clock P. M., and all
other hours not to exceed ten cents.
SEC. 4. Work shall be begun within six months and completed over
the entire route herein specified within three years of the passage of
this ordinance; and in case work is not begun in good faith within said
six months, and pushed with reasonable dispatch, this ordinance shall
be null and void.
SEC. 5. Plans of the railroad and the location of piers, abutments, and
columns in the street, and all places for bridges, viaducts, stations, sup-
ports, approaches thereof, for the construction of the said railroad
within and crossing the public streets of the city, shall be submitted to
the director of the department of public works and be approved by
him, and the said company shall file a bond, in form to be approved by
the city solicitor, in the sum of one hundred thousand ($100,000) dollars
with good and sufficient securities, approved by the mayor, conditioned
for the faithful performance and observance of all the requirements,
provisions, and restrictions of this ordinance: Provided, however, that
this bond shall not be construed to secure the payment of a percentage
of the gross receipts of the road to the city of Philadelphia, as herein-
after provided, but that a separate and additional bond, in the sum of
one hundred thousand ($100,000) dollars, in form to be approved by the
city solicitor, and with securities approved by the mayor, shall be filed
so soon as the road, or any part thereof, is in condition to be operated;
and that this last named bond shall be conditioned for the payment of
any percentage of the receipts herein provided to be paid to the city.
SEC. 6. No cars for the carriage of freight shall be moved over the
road herein and hereby authorized within the limits of the city of
Philadelphia, under a penalty of one hundred ($100) dollars for each
and every car and for every trip run for the carriage of freight, to be
collected as like penalties are now by law collected.
SEC. 7. The said company shall, on or before the tenth day of Janu-
ary, April, July and October, of each year, file with the controller of
the county of Philadelphia a statement, duly sworn to by the president
and secretary of said company, giving the number of passengers car-
ried, together with the rate of fare charged for each passenger, and the
amount of gross receipts of said company during the three months next
preceding, and shall at the same time pay into the city treasury a sum
equal to one per centum of the gross receipts for the three months em-
braced in said statements: Provided, that this section shall not take
effect until two years after the time the road shall begin running its
The said controller, or other authorized representative or repre-
sentatives of the city of Philadelphia, shall have the right at all times
cars.
1
APPENDIX B.
2409
to examine the books, papers, and accounts of said company relating to
the number of passengers carried and the rate of fare charged, and to
the said gross receipts, in order to verify the accuracy thereof.
SEC. 8. The said railroad company shall make just compensation for
property taken, injured, or destroyed by the construction of the road or
buildings, which compensation shall be paid or secured in a manner
satisfactory to the court of common pleas before such taking, injury or
destruction.
SEC. 9. Before this ordinance shall take effect, the said company shall
enter into a contract and covenant with the city, in form satisfactory to
the city solicitor, to perform all and singular the terms and require-
ments of this ordinance. And that no sale or lease of the franchises by
this ordinance conferred shall be made without the consent of the city
of Philadelphia for that purpose first had and obtained. And the said
railroad company shall pay into the city treasury the sum of fifty ($50)
dollars to pay for the printing of this ordinance.
PITTSBURG, PA.
A GENERAL ORDINANCE relating to the entry upon, over, or under,
or the use or occupation of any street, lane, or alley, or any part
thereof, for any purpose by passenger or street railway companies,
or by companies operating passenger or street railways, and provid-
ing reasonable regulations pertaining thereto for the public con-
venience and safety.
SECTION 1. Be it ordained and enacted by the City of Pittsburg, in Select and
Common Councils assembled, and it is hereby ordained and enacted by the au-
thority of the same, That all passenger or street railway companies, and
all companies operating passenger railways or street railways, which
shall hereafter obtain by an ordinance duly passed and approved, the
consent of the city to enter upon, over, or under, use or occupy any of
the streets, lanes, alleys, or highways, or parts thereof within this city,
for any purpose, shall, upon passage and approval of such ordinance,
but not otherwise, have and be declared to possess the right under this
general ordinance to enter upon, over, or under, and to occupy and use
the same under and subject to the following regulations:
1. Every such company, before constructing a passenger or street rail-
way, or any extension, branch, or alteration thereof, shall file with the
department of public works a plan showing the location of its proposed
tracks, sidings, turnouts, and switches, the pattern of its rails, and the
kind and character of foundation or road-bed proposed to be laid. In case
such company proposes to use a conduit or subway through which mo-
tive power shall be supplied for the traction of cars, such plans shall
show the size, location, and manner of construction of such proposed
VOL. II-71
2410
ECONOMIC LEGISLATION.
conduit or subway, the width and position of the slot or opening therein,
and in case such company proposes to use any overhead means or sys-
tem whereby motive power shall be supplied for the traction of cars,
such plan shall show the size, character, and location with respect to
the roadway or curb line of the posts, poles, or other supports proposed
to be placed in any street, lane, alley, or highway, or part thereof, and
to be used to maintain or support such overhead means or system, and
the said plans shall be subject to the approval of the chief of the de-
partment of public works, or of the committee on public works.
2. Every such company in constructing a railway or any part thereof
shall lay its lines of track of the standard width or gauge between rails,
and in such manner that the top of its rails shall be level with the sur-
face of the roadway of the street upon which it is laid.
3. Every such company shall lay and construct a pavement upon the
space within its tracks, and one foot outside thereof, under the super-
vision of the chief of the department of public works as to the time and
manner of laying the same, and shall keep clean and maintain such
pavement in good order, condition and repair, so long as its tracks shall
be used.
4. All companies operating passenger or street railways. when cross-
ing each other's routes, shall, with respect to each other, observe and
comply with the law of the road, except in cases where the grade of
either or both at the point of intersection shall be on an ascending or
descending grade, and in that event the following rule shall prevail:
The company whose car is on a descending grade shall have the right
of way over a car on either a lesser descending grade, a level or an
ascending grade.
5. Every car shall have a loud-sounding gong, which shall be rung by
the person operating the car, when approaching all street crossings, or
when passing other cars.
6. Where the tracks of one passenger or street railway company cross
the tracks of another such company, and in operating cars thereon it
becomes necessary that one car should wait in order that a collision may
be avoided, the company not having the right of way shall bring its car
to a full stop until after the passage of the other company's car.
7. When the tracks of any street or passenger railway cross at grade
the tracks of a railroad operated by steam, before the cars of any such
railway company shall be allowed to cross the tracks of any such rail-
road, it shall be brought to a full stop, and it shall be the duty of the
conductor, or person in charge of said car, to go forward and ascertain
that such car can be passed over such crossing in safety before such car
shall be allowed to proceed.
8. Each of such companies shall yield the right of way to the fire de-
partment when going to fires, and to the police patrol wagon when
answering calls, and if then signaled by any person in charge of any
fire apparatus or police patrol wagon, shall bring its car to a full stop
APPENDIX B.
2411
until after such fire apparatus or police patrol wagon shall have passed
such car.
9. No car operated by any such company shall be passed over any
hose or other apparatus of the fire department when the same is laid
or in use for the purpose of extinguishing fire, unless such car be passed
over the same upon a creeper or other device approved by the chief of
the department of public safety, and which shall fully protect such hose
or apparatus.
10. If at any time the wires or any of the overhead devices or parts
thereof of any of the said companies shall in any manner obstruct, en-
danger or interfere with the fire department or any of its employees in
the proper use of its apparatus when called into service, the said fire
department or any of the employees thereof, shall have the right and
be at liberty to cut down or remove such wires or devices, without the
city or any of its agents or employees being held in any manner liable in
consequence thereof.
11. In all cases where such companies use electricity as a motive
power, the entire system used and all the devices, means and apparatus
used in the supply, application or use of the power in all respects which
shall in any manner affect or endanger the safety of the public, shall be
at all times kept open to the inspection of and under the supervision
of the department of public safety.
12. When and as often as may be required by the department of pub-
lic safety, each of such companies shall furnish to said department a
statement showing the amount of electro-motive force used and the
current strength conveyed or used upon its wires, and said department
shall at all times have the right to inspect and test the same.
SEC. 2. In case any of such companies fail to secure an approval of its
plans of devices in any respect in manner as hereinbefore provided, it
shall thereupon have the right to make application to councils for such
approval, and councils may, by a concurrent resolution, or otherwise,
make or grant such approval.
SEC. 3. None of such companies shall have the right to enter upon,
over or under, use or occupy any of the streets, lanes, alleys or high-
ways, or parts thereof, within this city, until after such company shall
have procured the consent of the councils of this city by an ordinance
other than this one, duly passed and approved, granting such rights
unto such company, and unless such company shall file with the con-
troller of this city within thirty days after the passage or approval of
such ordinance, its certificate of acceptance of all the conditions and
provisions of this ordinance, the said certificate to be executed under
the corporate seal of such company, duly attested by the president and
secretary thereof.
SEC. 4. Each and every person or corporation violating any of the pro-
visions of this ordinance shall pay a fine of not less than ten ($10) dol-
lars nor more than one hundred ($100) dollars for each and every viola-
2412
ECONOMIC LEGISLATION.
tion of this ordinance, to be recovered summarily before the mayor or
any police magistrate of the city of Pittsburg.
SEC. 5. That any ordinance or part of ordinance conflicting with the
provisions of this ordinance be and the same is hereby repealed, so far
as the same affects this ordinance.
Ordained and enacted into a law in councils this 24th day of Febru-
ary, A. D. 1890.
H. P. FORD, President of Select Council.
Attest: GEO. SHEPPARD, Clerk of Select Council.
G. L. HOLLIDAY, President of Common Council.
Attest: GEO. Bоотн, Clerk of Common Council.
MAYOR'S OFFICE, February 25, 1890.
Approved: WM. MCCALLIN, Mayor.
Attest: ROB'T OSTERMAIER, Ass't Mayor's Clerk.
Recorded in Ordinance Book, vol. 7, page 267, 5th day of March, A. D.
1890.
RICHMOND, VA.
AN ORDINANCE as to the joint use of poles erected in the streets
and alleys of the city of Richmond for the support of wires used
in connection with the transmission of electricity.
[Approved July 18, 1891.]
Be it ordained by the Council of the City of Richmond:
SEC. 1. That all poles now erected in the streets or alleys of the city
of Richmond for the support of wires used in connection with the
transmission of electricity, shall hereafter be allowed to remain only
upon the terms and conditions hereinafter set forth.
SEC. 2. The committee on streets may hereafter require any person
or company owning any of such poles to allow any other person or
company to place upon its poles, and in such positions, any telegraph,
telephone, electric light, electric power, electric car wires, or other
wires used in connection with the transmission of electricity, now be-
longing or that may hereafter belong to any person or company, as the
said committee may from time to time deem proper, upon such terms
and conditions as may be agreed upon by said owner and any person
or company desiring to use such poles; and in the event that said
owner and the person or company desiring to use said poles can not
agree upon satisfactory terms and conditions, the same shall be settled
by three disinterested persons, one to be selected by such owner, one
by the person or company desiring to use said poles, and the third by
the two persons so selected; and the terms and conditions which shall
be fixed and determined by said persons, or a majority of them, shall
be the terms and conditions upon which said company or companies,
APPENDIX B.
2413
respectively, shall use and occupy said poles. If the said owner shall,
for thirty days after having been requested in writing to appoint its
representatives, fail to make such appointment, then the city engineer
shall make such appointment, and the person so appointed shall have
the powers he would have had if he had been appointed by the said
company. If the two arbitrators, selected in either of the two manners
above specified, shall fail for thirty days after their appointment to se-
lect the third arbitrator, then the city engineer shall select such third
arbitrator, and when so selected, he shall have the same powers he
would have had if he had been appointed by the said two arbitrators.
Or if after the three arbitrators shall have been appointed in any of the
modes above specified, they shall fail to settle and determine said terms
and conditions within thirty days from the date of the appointment of
said third arbitrator, then the city engineer shall have power to se-
lect a person who shall have power to settle and determine said terms
and conditions. Should either the said owner or any person or com-
pany that may, under this section, enter upon and use the poles of the
said owner fail to keep and perform each and every one of the terms
as to the use of the said poles, the company so failing shall be liable to
a fine of not less than ten nor more than one hundred dollars for such
failure; each failure to be a separate offense. The said committee shall
have power to require the said owner to allow any person or company
desiring to enter upon and use said poles, to so enter and use the same
under such conditions as the city engineer may prescribe as soon as
the said person or company so desiring to enter shall have appointed
its arbitrator; but the person or company so entering shall do so with
the understanding that he or it will abide by and conform to the terms
and conditions determined upon by the arbitrators, as soon as such
decision shall be announced. And the said committee shall have power
also to require from time to time the said owner or any other person
or company using said poles to afford and furnish such protection or
protections to all wires on such poles as the said committee may deem
proper or necessary in order to allow such wires to perform the pur-
poses or functions for which they were intended. All work as to plac-
ing of wires now upon poles of any other company shall be done at
the cost and expense of the party desiring to use such poles. For any fail-
ure to perform any requirement ordered under this section within ten
days after being notified of such requirement by the city engineer, each
party so in default shall be liable to a fine of not less than ten nor
more than one hundred dollars, each day's failure to be a separate
offense.
SEC. 3. Hereafter no pole shall be erected, nor any wire or other ap-
paratus used in connection with the transmission of electricity be
placed in position in any street or alley of said city, until the city en-
gineer shall have first determined upon the size, quality, character, num-
ber, location, condition, appearance, and manner of erection of such
{
2414
ECONOMIC LEGISLATION.
poles, wires, or other apparatus. Whenever at any time the said poles,
wires, or other apparatus shall, in the opinion of the city engineer, need
changing in size or location, replacing, repairing, being made safe and
secure, or being put in proper and suitable condition and appearance,
such one of the persons so using the same-if there be more than one,
as shall be selected by the city engineer-shall immediately proceed to
do such changing as to size and location, replacing, repairing, making
safe and secure, or putting into proper and suitable condition and ap-
pearance, as the said engineer shall designate in writing, and all dam-
age done to any street by the erection of any pole shall from time to
time be rectified and repaired as required by the city engineer. All
expenses arising from any materials furnished or work done under this
section, shall be borne in such proportions by all persons using such
poles, wires, or other apparatus as the city engineer may deem fair, unless
the parties can agree upon satisfactory terms within ten days from the
time such changes or repairs shall have been completed.
SEC. 4. No person or company shall use the poles, wires, or other appa-
ratus above referred to of any other person or company until he or it shall
have filed with the city engineer a written application fully set forth
what poles, wires, or other apparatus he or it shall desire to use, nor
until receiving from said engineer a written permission to so use the
same in accordance with the provisions of this ordinance.
SEC. 5. The city council hereby reserves the right to put at any time
other restrictions and regulations as to the erection and use of said poles,
wires, and other apparatus used in connection with the transmission of
electricity.
SEC. 6. The city engineer may require from time to time the owner
of any wires such grouping and cabling as he may deem necessary and
proper.
SEC. 7. The officials of the Richmond fire department and fire alarm
and police telegraph department are to have the power to cut any wire
of said company whenever deemed necessary for the protection of the
city's interest. And the said departments shall have the right to use
any such poles, whenever or wherever deemed desirable for wires for
said departments, free of charge.
SEC. 8. Nothing in this ordinance is intended to relieve any person or
company of any condition, restriction, or requirement imposed upon
said person or company by the ordinance under which it has been au-
thorized to place in said streets or alleys any poles, wires, or other ap-
paratus for the transmission of electricity.
SEC. 9. Each and every provision of this ordinance shall apply to any
pole, wire, or other apparatus used in connection with the transmission
of electricity hereafter erected in said streets or alleys, whether the
same be erected by way of repairs or for any other purpose.
SEC. 10. Any person or company violating any restriction, provision,
or condition imposed by this ordinance, or failing to perform any re-
f
APPENDIX B.
2415
quirement made by the city engineer under this ordinance, shall be
liable to a fine of not less than ten nor more than one hundred dollars,
to be imposed by the police justice of said city; each day's violation or
failure to be a separate offense.
This ordinance shall be in force from its passage.
ST. LOUIS, MO.
[15,606.]
AN ORDINANCE authorizing the Vandeventer Avenue Railroad Com-
pany to construct, operate, and maintain a double track passenger
railroad on, along, upon, and across certain streets, alleys, and city
blocks in the city of St. Louis.
Be it ordained by the Municipal Assembly of the City of St. Louis, as follows:
SECTION 1. Permission and authority are hereby given and granted
unto the Vandeventer Avenue Railroad Company, its successors and
assigns, for a term of forty years, to lay down, construct, operate, and
maintain a double track passenger railroad, together with all necessary
turnouts, switches, and sidings at the termini of said railroad and at
such other points along the line of said railroad as may be found neces-
sary for the proper operation of said railroad on, over, and along the
streets, alleys, and city blocks on the route described as follows, viz:
Beginning at some convenient point on the north side of the Natural
Bridge road, between Prairie avenue and Fair avenue, running thence
south with a double track across all intervening property, streets, and
alleys to some convenient point on Vandeventer avenue, between its
present northern terminus and Claggett avenue, thence south on Van-
deventer avenue, crossing all intervening streets and alleys, to city block
number 3,637, thence across said block and the alley therein to Easton
avenue, thence south across said Easton avenue to Vandeventer avenue,
thence south along Vandeventer avenue and across all intervening
streets, alleys, and public places to the south side of Manchester road,
thence in a southerly direction over and across all intervening streets
and alleys and along Vandeventer avenue, as established by ordinance
number 14,405, and along or across all intervening city blocks, streets,
and alleys, and under or across the Wabash Railroad, to some con-
venient point at or near the intersection of Chouteau avenue and Old
Manchester road; provided, that until such time as Vandeventer avenue
from Manchester road to Chouteau avenue is duly opened to public
use; said Vandeventer Avenue Railroad Company is hereby granted
the right to use the present tracks of the Missouri Railroad Company,
as now laid on Manchester road from the intersection of Manchester
road and Vandeventer avenue to the intersection of Qld and New Man-
chester roads, upon such terms and conditions as may be agreed upon
by said Vandeventer Avenue Railroad Company and said Missouri Rail-
2416
ECONOMIC LEGISLATION.
road Company; and provided, further, that if said Missouri Railroad
Company does not construct an additional track, so as to make its line
a double track line between the points named, then the said Vande-
venter Avenue Railroad Company shall have and is hereby granted the
right to build said additional track between the points named, and said
tracks shall become absolutely the property of said Missouri Railroad
Company. But under no circumstances no third track of rails is to be
laid on Manchester road between the points named.
SEC. 2. The railroad herein authorized to be constructed shall be op-
erated by electricity, to be carried on overhead wires suspended from
iron poles, not less than twenty feet above the surface of the streets,
said poles to be placed at the curb line of the street along the route de-
scribed; provided, that in lieu of electricity as a motive power, said railroad
may be operated by the cable system. For the purpose of constructing
and operating its railway, said company is hereby authorized to make
all necessary excavations in the public streets. The general plan, char-
acter, and location of the poles, overhead wires, with a view especially
to safety to life and property, shall be submitted to the board of public
improvements for their approval.
SEC. 3. Said railroad and its appurtenances shall be maintained in
good order by said company, and shall be operated between the hours
of five o'clock in the morning and twelve o'clock midnight, at intervals
not greater than seven minutes. The rate of fare for a single continu-
ous passage one way over said railway shall not be more than five cents
for adults and two and one-half cents for children under the age of
twelve years. Tickets for children to be sold two for five cents. Said
company may run its cars at a rate of speed not exceeding fifteen miles
per hour.
SEC. 4. Within sixty days after this ordinance shall have become a
law, said Vandeventer Avenue Railroad Company shall file with the
city register its written acceptance of the provisions thereof, and its
penal bond to the city of St. Louis in the sum of ten thousand dollars,
with two or more sureties, to be approved by the mayor and council,
conditioned that said company shall observe all the terms and condi-
tions of this ordinance, and shall hold the city of St. Louis harmless.
from the payment of all damages and costs, by reason of the construc-
tion of said railroad. And that it will, within twelve months from the
date of the approval of this ordinance, in good faith, begin the work
herein provided to be done, and that it will complete the same from its
northern terminus to Manchester road within one year from the date
said work shall be commenced. And from Manchester road to the pro-
posed southern terminus, when Vandeventer avenue is opened to public
use, to the right of way of the Missouri Pacific Railroad.
SEC. 5. In consideration of the rights and privileges granted by this
ordinance, the said Vandeventer Avenue Railroad Company agrees to
pay into the city treasury the sum of one thousand dollars on the first
APPENDIX B.
2417
day of January of each year, said payments to begin after the expira-
tion of five years from the date of acceptance of this ordinance.
Approved April 4, 1890.
[12,723.]
AN ORDINANCE regulating the placing of wires, tubes or cables con-
veying electricity for the production of light or power along the
streets, alleys and public places of the city of St. Louis.
Be it ordained by the Municipal Assembly of the City of St. Louis, as follows:
SECTION 1. That no wires, tubes or cables conveying electricity for the
production of light or power, shall be placed along or across any of the
streets, alleys or public places in the city of St. Louis, except as herein-
after provided.
SEC. 2. That all such wires, tubes or cables, along or across any of the
streets, alleys or public places of the city of St. Louis, shall be placed
at such distances above or below the surface of the ground, and secured
in such manner as shall be prescribed by the board of public improve-
ments.
SEC. 3. That any person or persons, corporation or association, desir-
ing to place along or across any of the streets, alleys or public places of
the city of St. Louis, such wires, tubes or cables, shall file in the office
of the board of public improvements an application therefor, stating in
detail the streets, alleys or public places which said wires, tubes or
cables are to occupy, and the manner in which said wires, tubes or
cables are to be secured or supported and insulated, together with a
plat showing the route of such wires, tubes or cables.
SEC. 4. The board of public improvements is hereby authorized, upon
the filing of the application and plat, required by the preceding section,
to grant a permit for such occupancy of the streets, alleys and public
places therein named, with such restrictions, regulations and qualifica-
tions as may be prescribed by said board.
SEC. 5. That in case any person or persons, corporation or association,
desiring to place along or across any of the streets, alleys or public
places of the city of St. Louis, such wires, tubes or cables, shall, with
the application and plat hereinbefore provided for, file in the office of
the board of public improvements the written consent of any telegraph
or telephone company doing business in the city of St. Louis, to the
placing of such wires, tubes or cables upon the poles of said telegraph
or telephone company, situated in the streets, alleys or public places
named in such application, the board of public improvements is hereby
authorized to grant a permit for such occupancy of the poles of such
telegraph or telephone company, with such restrictions, regulations and
qualifications as may be prescribed by said board.
SEC. 6. That whenever, in the judgment of the board of public im-
provements, the use of any alley for the placing of poles for the support
2418
ECONOMIC LEGISLATION.
of such wires, tubes or cables is practicable, such poles shall be placed
along said alley instead of along the street next adjoining and parallel
thereto. Where the poles are set in any alley they shall be located as
near the side lines of the alley as practicable, and in such a manner as
not to incommode the public or the adjoining proprietors or residents.
SEC. 7. That the poles used as herein provided shall be of sound tim-
ber, not less than five inches in diameter at the upper end, straight,
shapely and of uniform size, neatly planed or shaved, and thoroughly
painted with two coats of lead and oil paint, of such color as may be
directed by the board of public improvements, and be supplied with
iron steps, commencing twelve feet from the surface of the ground and
reaching to the arms supporting the wires, tubes or cables; said wires,
tubes or cables shall be run at a height not less than twenty-five feet
above the grade of the street. Whenever the poles are erected on a
street they shall be placed, in all cases, when practicable, on the outer
edge of the sidewalk, just inside the curbstone and on the line dividing
the lots one from the other, and in no case be so placed as to obstruct
the drainage of the streets, or interfere with or damage in any way the
curb-stones, trees or other public or private property on the line of the
street or alley or public place where such poles shall be erected.
SEC. 8. That any person or persons, corporation or association, having
made excavations in the streets, alleys, or public places of the city of
St. Louis, for the purposes aforesaid, shall replace the streets, alleys, or
public places in such manner and in accordance with such regulations
as may from time to time be prescribed by ordinance, or by the
board of public improvements, and to the satisfaction of the street
commissioner.
SEC. 9. The right is hereby reserved to the board of public improve-
ments at any time to direct any alterations in the location of said poles,
and also in the height at which the wires, tubes or cables shall run;
but before any such alteration is made, at least five days' notice in writ-
ing shall be given to the person or persons, or the president, or the offi-
cer in charge of the company affected by the proposed alteration, and
reasonable opportunity shall be afforded the representatives of such
company, or any citizen interested, to be heard in regard thereto. But
when any such alteration shall be ordered, the said company shall
within five days thereafter commence such alterations and complete the
same as soon as practicable thereafter; and upon failure so to do it shall
be deemed guilty of a misdemeanor, and punished as hereinafter
provided.
SEC. 10. No person or persons, corporation, or association, shall be en-
titled to any of the privileges conferred by this ordinance, except upon
the following conditions: That said person or persons, corporation or as-
sociation, before availing himself or itself of any of the rights or privi-
leges granted by this ordinance, shall file with the city register his or its
acceptance of all the terms of this ordinance, and agree therein that he
APPENDIX B.
2419
or it will file with the comptroller of the city, on the first days of Janu-
ary and July of each year, a statement of his or its gross receipts from
his or its business arising from supplying electricity for light or power
for the six months next preceding such statement, which shall be sworn
to by such person or persons, or the president or secretary of such cor-
poration or association; and further agree that he or it will, at the time
of filing said statement with the comptroller, pay into the city treasury
two and one-half per cent, on the amount of such gross receipts up to
the year 1890, and five per cent on the amount of such gross receipts
thereafter. And said person or persons, corporation, or association,
shall, at the time of filing said acceptance, also file with city register his
or its penal bond in the sum of $20,000, with two or more good and suffi-
cient securities, to be approved by the mayor and council, conditioned
that he or it will comply with all the conditions of this ordinance, or
any ordinance which may be hereafter passed regulating the placing of
wires, tubes, or cables in the streets and alleys for the purposes named
therein; that he or it will comply with all the regulations made by the
board of public improvements having reference to the subject embraced
in this or any other ordinance for the purposes herein named; that he
or it will make the statements and payments required by the provisions
of this section, and will save the city of St. Louis harmless and indem-
nified from all loss, cost or damage by reason of the exercise of any
of the privileges granted by this ordinance or any other ordinance
which may be hereafter passed relating to the subject-matter of this
ordinance.
SEC. 11. That any person or persons, corporation, or association, which,
or any president, manager, superintendent, or officer in charge of any
corporation or association who shall violate or fail to comply with any
of the provisions of this ordinance, shall be deemed guilty of a misde-
meanor, and upon conviction thereof shall be fined not less than fifty
dollars, nor more than five hundred dollars.
SEC. 12. That all ordinances or parts of ordinances inconsistent with
the terms of this ordinance be and the same are hereby repealed.
SEC. 13. The city reserves the right to alter, amend, or repeal this or-
dinance at any time.
Approved, March 15, 1884.
2420
ECONOMIC LEGISLATION.
SAN FRANCISCO, CAL.
ORDER NO. 1,687, regulating the use of the public streets and thorough-
fares for the purpose of laying down pipes and conduits therein, and
for introducing into and supplying the city and county of San Fran-
cisco and its inhabitants with gas-light or other illuminating light,
or with fresh water for domestic purposes; and providing for dam-
ages and indemnity for damages.
The People of the City and County of San Francisco do ordain as follows:
SECTION 1. Bond to be filed-Bond to be approved by mayor and filed with
clerk of board of supervisors-Diagrams of streets proposed to be used to be filed
with superintendent of streets. Any person or incorporate company desir-
ing to use any public street or thoroughfare for the purpose of supplying
the city or the inhabitants with water or artificial light shall, at least ten
days before any work is commenced, present to the mayor a good and
sufficient joint and several undertaking in the sum of five thousand dol-
lars, with not more than two sureties, to secure the municipality for all
damages it or said streets or thoroughfares may sustain by such use of
said streets or thoroughfares.
Said undertaking, if satisfactory, shall be approved by the mayor in
writing, and filed in the office of the clerk of the board of supervisors.
At the time of the presentation of said undertaking the person or
company presenting it shall file with the superintendent of public
strects, and with the clerk of the board of supervisors, a diagram of the
streets or part of streets proposed to be used for the purpose of supply.
ing fresh water or artificial light, which diagram shall not cover over
one mile of street; but new and separate diagrams and new and sepa-
rate undertakings must be presented, accepted, and filed for each addi-
tional mile, or fraction of a mile of streets to be used.
SEC. 2. Duty of superintendent of streets to supervise laying of pipes. It
shall be the duty of the superintendent of streets to direct and oversee
the laying of pipes and conduits put down in said streets for the supply-
ing of fresh water or artificial light, and all such pipes and conduits
shall be laid only under his direction and supervision.
SEC. 3. No trench to be allowed to remain open more than twenty-four hours
after pipe is laid. No trench dug for pipe or conduit shall remain open
over twenty-four hours after the pipe or conduit is laid, and all pipes
and conduits shall be laid within twenty-four hours after a trench is
open, and trenches shall be considered and deemed open as soon as the
first opening is made in the street or pavement for the purpose afore-
said.
SEC. 4. Trench must be filled in within forty-eight hours. Within forty-
eight hours after a trench is opened it shall be filled, and if not filled
by the party opening it then the superintendent of streets shall cause it
to be filled, and when filled it shall be put in as good condition as it was
APPENDIX B.
2421
before the work of excavation was commenced; and in case of stone or
other pavement the surface shall be left neither elevated above nor de-
pressed below the surface of the street.
SEC. 5. Parties laying pipe to be responsible for good repair of street over the
same for one year.-Service of notices by superintendent of streets-How to be
made. If within one year after such pipes or conduits have been laid
the surface of the street over such pipes or conduits remain improperly
elevated or depressed, then it shall be repaired and put in good order
by the person or company who caused said pipes or conduits to be laid,
within ten days after notice so to do has been served by the said super-
intendent of streets upon the person or company who caused said
street to be excavated. Service may be made under this order in
the manner provided in the code of civil procedure of the State of
California.
Sec. 6. Duty of superintendent of streets defined. It shall be the duty of the
superintendent of streets to oversee and direct all the work described in
this ordinance, and he shall direct the manner in which repairs shall be
made in accordance with the regulations herein provided, or which
may be hereafter adopted, so that the work shall be performed to the
satisfaction of said superintendent and of the board of supervisors, and
it shall be the duty of said superintendent to cause all surplus material
from said work to be removed after the work is finished, or during its
progress, by the parties excavating and using the public streets for the
purposes provided and regulated by this order, and the general orders of
the city and county not in conflict herewith.
SEC. 7. Streets opened and not put in good condition, superintendent of streets
to have the work done at the cost of persons laying pipes. In the event that
the streets are not properly excavated, or filled, or paved, or planked,
or macadamized, or put in proper condition in the manner and at the
time and as provided herein, then it shall be the duty of the superin-
tendent of streets to cause said streets to be properly excavated, filled,
paved, planked, or macadamized, or put in proper condition, and all
surplus or waste materials from said excavations and fillings to be im-
mediately removed; and he shall keep an account of the expense of
any such work and certify the same to the city and county attorney,
who shall immediately commence the proper proceedings to collect
from the persons or company so failing to put said streets in proper
condition and repair, or from the sureties upon said undertaking, all
costs and charges which the city and county has been put to or has
paid, as herein provided. (As amended December 18, 1883, by order
No. 1,751.)
SEC. 8. Form of undertaking. The undertaking to be given under the
provisions of this order shall be substantially in the following form:
2422
ECONOMIC LEGISLATION.
:
isco.}
STATE OF CALIFORNIA,
City and County of San Francisco.
The undersigned resident and householders in the city and county of
San Francisco, each owning real estate, standing in our own name, ex-
ceeding in value ten thousand dollars, as appears from the last assess-
ment roll, exclusive of property exempt from execution, are jointly and
severally bound to the said city and county in the sum of five thousand
dollars, in manner and form as follows:
Whereas [Name of the person or incorporated company in full], about
to lay down in [describing generally the proposed work to be done];
now we, the undersigned, jointly and severally undertake that all said
work, including excavating, laying pipe, filling, paving, planking, curb-
ing, macadamizing, removing debris and waste and other material, shall
be done in a proper and workmanlike manner, and at and within the
time provided in Order No. [giving the number] of the board of super-
visors of the city and county of San Francisco, and as directed by the
superintendent of streets of said city, either orally or in writing; and
we agree that in case said work or any part thereof is not done to the
satisfaction of said superintendent of streets, then the said superintend-
ent may cause said work or any part thereof to be done or repaired,
and the expense thereof we hereby bind ourselves jointly and severally
to pay or repay to said city and county without demand.
Witness our hand this
day of
188-.
Indorsed:
Approved this
day of
188—.
Mayor.
SEC. 9. Penalty. Any person or incorporated company making any
excavation or disturbing the surface of any public street or thorough-
fare of the said city and county for the purpose of supplying fresh
water or artificial light, before the undertaking herein provided for is
given and approved, is guilty of a misdemeanor, and, upon conviction
thereof, shall be punished by a fine of not more than one thousand dol-
lars, or be imprisoned in the county jail for not more than six months,
or by both such fine and imprisonment.
In board of supervisors, San Francisco, September 4, 1882.
After being published five successive days, according to law, taken up
and passed by the following vote:
Ayes-Supervisors Bodfish, McKew, Shirley, Carmany, Molineux,
Torrens, Bradford, Fisher, Merrill, Russ, Parrish, Kennedy.
Approved, San Francisco, September 6, 1882.
JNO. A. RUSSELL, Clerk.
M. C. BLAKE, Mayor and ex-officio President Board of Supervisors.
APPENDIX B.
2423
ORDER NO. 1,694, providing for the carrying of a bell or gong by all
street cars, and for the sounding of the same when approaching or
passing over the street crossings; also prohibiting children from
getting on or off street cars or trucks when in motion.
The People of the City and County of San Francisco do ordain as follows:
SECTION 1. Bells or gongs to be carried on all street cars. Every street car,
grip car, or dummy propelled by means of wire ropes attached to sta-
tionary steam engines, or by a locomotive engine, or by an electric
motor, plying for hire over and upon the streets of the city and county
of San Francisco, shall have attached thereto a bell or gong, of a size
and weight sufficient to insure its being distinctly heard when rung or
sounded at a distance of at least one hundred feet. And the person,
company, or corporation owning such street car, grip car, or dummy,
who shall fail or neglect to furnish each of the said street cars, grip cars,
or dummies with the necessary bell or gong provided for herein, shall
be deemed guilty of a misdemeanor, and, on conviction, shall be pun-
ished by a fine not to exceed one hundred dollars.
SEC. 2. Bell to be rung when approaching a crossing-Penalty for violation
of order. It shall be unlawful for the engineer, driver, conductor, or
person in charge of any street car, train of street cars, grip car, or
dummy propelled by means of wire ropes attached to stationary steam
engines, or by a locomotive engine, or by an electric motor, to permit
said street car, train of cars, grip car, or dummy to approach any street
crossing in this city and county within a distance of twenty-five feet
without ringing a bell or sounding a gong, which bell or gong must be
rung or sounded until said street car, train of street cars, grip car, or
dummy shall have passed over said street crossing.
Any engineer, driver, conductor, or person in charge of such street
car or train of street cars, grip car or dummy, who shall fail or neglect
to ring or sound such bell or gong while said street car, train of cars,
grip car, or dummy is in motion and approaching within a distance of
twenty-five feet of or passing over any street crossing within this city
and county, and until the same shall have passed over said street cross-
ing, shall be deemed guilty of a misdemeanor, and, on conviction, shall
be punished by a fine not exceeding one hundred dollars, or by impris-
onment not more than thirty days, or by both such fine and imprison-
ment.
SEC. 3. Children under sixteen must not get off or on street cars, wagons, or
trucks while in motion-Penalty. It shall be unlawful for any child under
the age of sixteen years, within the city and county of San Francisco,
to get on or attempt to get on, or to get off or attempt to get off any
street car, train of street cars, grip car, or dummy propelled by wire
ropes attached to stationary steam engines, or by a locomotive engine,
electric motor, horse or horses, or any wagon or truck drawn by one or
more horses, while the same or either of them are in motion.
And any
2424
ECONOMIC LEGISLATION.
child under the age of sixteen years, who shall violate any of the pro-
visions of this section, shall be deemed guilty of a misdemeanor, and
shall, on conviction, be punished by a fine not to exceed fifty dollars,
or by imprisonment not to exceed one month, or by both such fine and
imprisonment.
In board of supervisors, San Francisco. October 30, 1882.
After having been published five successive days, according to law,
taken up and passed by the following vote :
Ayes-Supervisors Bodfish, McKew, Shirley, Carmany, Molineux,
Torrens, Bradford, Merrill, Russ, Parrish, Kennedy.
Absent-Supervisor Fisher.
JNO. A. RUSSELL, Clerk.
i
APPENDIX C.
SKETCHES OF EDITING AND CO-EDITING ATTORNEYS.
The attorneys who have engaged in the preparation of this work
need no word of introduction or commendation within the limits of
their acquaintance; but it has seemed desirable, inasmuch as this
work will come to the hands of many to whom they are comparative
strangers, that an introductory sketch or a brief statement of their
qualifications should be presented in this place. The aim in the
preparation of these sketches has been to present, in as brief a form as
practicable, the professional standing and achievements of each of the
atttorneys, allowing the reader to supply all eulogy or commendatory
phrases from the character of the work which they have performed and
which is presented herein. Aside from the mere statement of facts con-
tained in these sketches, we have relied upon the opinions and state-
ments of friends of the various attorneys for the material for their
preparation.
CHARLES E, EVERETT,
EDITING ATTORNEY.
CINCINNATI, OHIO.
Charles E. Everett, the editing attorney in charge of this work, was
born at Randolph, Cattaraugus county, New York. He prepared for
college at Chamberlain Institute of that place, at that time in charge of
James T. Edwards, D.D., now state senator from the thirty-second dis-
trict of that state. He entered Allegheny College at Meadville, Pa., in
the fall of 1877, graduating in 1881. During his junior year, owing to
his inability to be present at college, he took up the study of law in the
office of Henderson & Wentworth, in his native village, pursuing the
law and his college studies simultaneously. After graduating from col-
lege, he was elected to and accepted the position of first assistant in the
public schools of Glendale, Ohio. While holding this position he de-
clined to permit the consideration of his name for election to the chair
of mathematics in one of the prominent western universities. He re-
signed his position in the Glendale schools to take up the practice of his
profession, and entered the senior class of the Cincinnati Law School,
ranking, upon graduation, among the first five in a class of over one
hundred. He immediately entered upon the practice of law in Cin-
cinnati, and afterward formed a partnership with his brother, Willis M.
VOL. II-72
(2425).
2426
ECONOMIC LEGISLATION.
Everett, now of Atlanta, Ga. Since the termination of that partner-
ship he has continued his practice in Cincinnati. In addition to his
regular practice, he for three years assisted the editor of Giauque's Re-
vised Statutes of the State of Ohio in the annotation and preparation
of that work.
ALABAMA.
WILLIAM L. CLAY,
HUNTSVILLE.
William L. Clay, the author of the Alabama section, was born in
Huntsville, Alabama, September 30, 1852. He was admitted to the bar
by the supreme court of the state in July, 1873, and entered upon the
practice of the law at Huntsville. In 1875, he was elected city attorney,
and served one year; in December of that year he was appointed regis-
tering clerk of the state senate. In January, 1876, he was elected assist-
ant secretary of the senate, and was re-elected in the following Novem-
ber. In 1878, he was elected secretary of the senate, and has been
elected without opposition to the same office at each biennial session
since that time. He is actively engaged in the practice of his profession
at Huntsville, Alabama.
ARKANSAS.
GEORGE W. WILLIAMS,
"
LITTLE ROCK.
George W. Williams, the author of the Arkansas section, was born in
Ouachita county, Arkansas, in 1861. He was admitted to the bar in 1881,
and at once began active practice in Hempstead county, Arkansas. He
removed to Little Rock in 1881, where he has remained until the present
time. In 1883-4 he was employed in the law department of the Kansas
City, Springfield and Memphis Railway Company. He resigned his
position in 1885 to accept that of assistant attorney-general under the
Hon. D. W. Jones. This position he held until the spring of 1887,
when, under an act authorizing the reprint of the first twenty-seven vol-
umes of the Arkansas Reports, and empowering the governor to ap-
point a lawyer to annotate the same, showing in what respect the de-
cisions contained therein had been modified, reversed, or extended,
either by subsequent adjudications or statutes, Governor Simon P.
Hughes selected Mr. Williams. He entered at once upon the work,
which took three years for its completion, and has given thorough
satisfaction to the courts and bar. Mr. Williams is now engaged in the
practice of his profession at Little Rock, Arkansas.
APPENDIX C.
2427
HENRY GOODCELL, JR.,
CALIFORNIA.
SAN BERNARDINO.
Henry Goodcell, Jr., the author of the California section, was born in
1848. Since 1857, he has resided at San Bernardino, California. He is
a graduate of the California State Normal School. In 1873, he was
elected county school superintendent. In 1875, he was admitted to the
bar, and has ever since been engaged in active practice. He was ap-
pointed district attorney of San Bernardino county, in 1878, to fill a
vacancy. In the fall of 1890, he was the Democratic nominee for judge
of the superior court of San Bernardino county.
COLORADO.
EARL M. CRANSTON,
DENVER.
Earl M. Cranston, the author of the Colorado section, was born in
Meigs county, Ohio, in 1863. He removed to Colorado in 1878. He
graduated successively from the Denver High School, the University
of Denver, and the Cincinnati Law School. In 1886, he entered the
office of William B. Mills, who enjoyed a large corporation practice in
Denver. He was elected to the Colorado legislature in 1888. In 1889,
he was elected county attorney of Arapahoe county, in which Denver
is situated. At the present time, he is the senior member of the firm
of Cranston & Pitkin.
WILLIAM S. PARDEE,
CONNECTICUT.
NEW HAVEN.
William S. Pardee, the author of the Connecticut section, was edu-
cated at Yale University, receiving the degree of A.B. in 1882, and that
of L.L.B. in 1884. He has since been engaged in the practice of law at
New Haven, Connecticut, being associated with James P. Pigott, Esq.
DELAWARE.
HERBERT II. WARD,
WILMINGTON,
Herbert H. Ward, the author of the Delaware section, was born in
Sheffield, Vermont, October 11, 1856. He prepared for college at Hard-
wick Academy, and at Vermont Methodist Seminary at Montpelier. He
graduated from Wesleyan University, Middletown, Connecticut, in the
class of 1879. He read law with William C. Spruance, Esq., of Wil-
mington, and was admitted to the bar of New Castle county in 1882.
Since his admission, he has been actively engaged in the practice of the
law at Wilmington, Delaware.
2428
ECONOMIC LEGISLATION.
FLORIDA.
WILLIAM A. BLOUNT,
PENSACOLA.
William A. Blount, the author of the Florida section, was born Oc-
tober 25, 1851. He entered the University of Georgia in February,
1870, from which he graduated with high honors in 1872. He gradu-
ated from the law department of the same institution in 1873, and in
the following year entered upon the practice of his profession at Pensa-
cola, Florida. He was a member of the Florida Constitutional Conven-
tion in 1885, and is at the present time chairman of the commission
appointed by the governor of Florida to revise the statutes of that state.
He has been for over five year last past city attorney of Pensacola.
He
has had a large general practice, and is attorney for many corporations,
including the Louisville and Nashville Railroad, Pensacola and Atlantic
Railroad, Pensacola Street Car Company, Pensacola Water Company,
Pensacola Electric Light Company, The First National Bank of Pensa-
cola, Pensacola and Perdido Railroad, etc.
GEORGIA.
WILLIS M. EVERETT,
ATLANTA.
Willis M. Everett, the author of the Georgia section, was born at
Randolph, New York. He prepared for college at Chamberlain Insti-
tute, and then entered Allegheny College, Meadville, Pennsylvania,
where he graduated with the highest honors. While pursuing his col-
lege course, he studied law in the office of Hon. J. J. Henderson, judge
of the court of common pleas of Crawford county, Pennsylvania. He
was chosen professor of mathematics and German in Chamberlain
Institute in 1886, and resigned the position after one year to form a
partnership with his brother, Charles E. Everett, for the practice of
law at Cincinnati, Ohio. Soon after, business called him to Chicago,
Illinois, where he remained until failing health compelled him to
seek a milder climate. He then removed to Atlanta, Georgia, where he
has ever since been engaged in the active practice of his profession.
He is recognized as one of the most energetic, able, and successful
members of the Georgia bar.
IDAHO.
GEORGE H. STEWART,
BOISE CITY.
George H. Stewart, the author of the Idaho section, was born at Con-
nersville, Indiana, in 1858. He remained with his parents on a farm
until he was fifteen years of age, when he entered the Northern Indiana
Normal School at Valparaiso, Indiana, graduating from the scientific
and law departments in 1880. Mr. Stewart entered upon the practice of
his profession at Fowler, Indiana, where he commanded a good client-
APPENDIX C.
2429
*
age until, on account of failing health, a change of climate became nec-
essary. After spending some time in travel, he located at Stockville,
Nebraska, where he remained until the drouth of 1890, when he removed
to Boise City, Idaho. In Nebraska, Mr. Stewart held the office of prose-
cuting attorney, and was recognized as a most vigorous and fearless
prosecutor, and a terror to evil-doers. Mr. Stewart occupies the front
rank with the leading attorneys of Idaho, and is considered one of the
most forcible advocates in the state. He is one of the firm of Gray &
Stewart, his partner being the Hon. John S. Gray, president of the
Idaho senate and lieutenant-governor.
ILLINOIS.
CHARLES H. ALDRICH,
CHICAGO.
Charles H. Aldrich, the author of the Illinois section, was born in
La Grange county, Indiana, August 26, 1850. His early schooling was
received from the common schools and at an academy at Orland, Steu-
ben county, Indiana, to which place his father removed when he was
sixteen years of age. He finished his preparation for the university in
the high school at Ann Arbor, Michigan, from the classical course of
which he was graduated in 1871. The same year he entered Michigan
University, and graduated therefrom in 1875. He practiced law in Fort
Wayne, Indiana, until 1886. In 1884, he was mentioned and strongly
supported for the position of attorney-general of the state on the Re-
publican ticket, but made no particular effort to secure the nomination.
He removed to Chicago in April, 1886, where he has since been engaged
in the active practice of his profession. He was a member of the com-
mittee on political action of the Union League Club of Chicago for two
years, and was appointed by the Attorney-General of the United States,
in December, 1889, to take charge of the litigation against the subsidized
railroads under the "Anderson bill" of 1888. In March, 1892, he was
tendered and accepted the office of Solicitor General of the United
States, which position he still holds, at the same time retaining his con-
nection with the law firm of Aldrich, Payne & Defrees, of Chicago, of
which firm he is the senior member. His career has been a remarkably
brilliant one, strictly within the lines of his profession, to which he is
ardently devoted, and all who know him predict for him yet higher
honors.
INDIANA.
GEORGE T. PORTER,
INDIANAPOLIS.
George T. Porter, the author of the Indiana section, is a graduate of
Princeton College. He studied law in the office of Porter, Harrison &
Fishback, and in 1872 graduated from Harvard Law School. Mr. Porter
was engaged for several years in the practice of his profession with the
}
2430
ECONOMIC LEGISLATION.
senior and junior members of the firm in whose office he had studied.
He has resided in Indianapolis all his life, and has been engaged in the
practice of the law for about fifteen years.
IOWA.
A. H. M°VEY,
DES MOINES.
A. H. McVey, the author of the Iowa section, is a native of Ohio.
He received a classical education, being a graduate of the Ohio Wes-
leyan University at Delaware. He is also a graduate of the Cincinnati
Law School. His early professional life was passed in Toledo, Ohio,
where he resided for eleven years. In 1883, he removed to Des Moines,
Iowa, and is now a member of the firm of Cole, McVey & Cheshire.
His senior partner, Hon. C. C. Cole, was for some years chief justice of
the State of Iowa, and Thos. A. Cheshire, the junior member, is assist-
ant attorney-general of the state. This firm has a practice second to
none in the state. Mr. McVey has devoted his professional energies
largely to the law of corporations. He is a legal author of good repute
and a finished scholar. Among his more important works is a digest of
the Ohio Reports.
KANSAS.
JAMES W. GLEED,
ΤΟΡΕΚΑ.
James Willis Gleed, the author of the Kansas section, was born in
Morrisville, Vermont, March 8, 1859. He graduated from the Kansas State
University in 1879 at the head of his class; he was instructor in Latin
and Greek from 1879 until 1882, and was then placed in charge of the
chair of Greek for one year. He graduated from Columbia Law School
in 1884, and the same fall entered upon the practice of law in Topeka.
He was soon after made professor of the law of real property in the
State University. He was employed by the state in the celebrated
Muegler and Walruff cases, in which the question of the right of the
state to prohibit the manufacture of liquors, without providing com-
pensation to brewers and others, was first presented to the United
States Supreme Court. He has made a large number of addresses upon
educational and other topics, and has made considerable contribution
to the press and magazines of the country, notably articles on Western
Farm Mortgages," which appeared in the Forum, March, 1890, and
later. He is attorney for a large number of corporations in Kansas and
elsewhere.
HARVEY MYERS,
KENTUCKY.
COVINGTON.
Harvey Myers, the author of the Kentucky section, is a native of Cov-
ington, his present residence. He received a common school education,
APPENDIX C.
2431
1
studied law with his present partner, Hon. T. F. Hallam, and was ad-
mitted to the bar in 1881. He has three times represented Covington
in the state legislature, and was speaker of the last house of representa-
tives. His standing throughout the state as a lawyer is good, especially
in corporation law, in which he has had much experience. He is thor-
oughly esteemed and respected in every way.
GILBERT L. HALL,
LOUISIANA.
NEW ORLEANS.
Gilbert L. Hall, the author of the Louisiana section, is a native of
Westown, Orange county, New York. He was educated at Ithaca
Academy, Ithaca, New York, and Seneca Collegiate Institute, Ovid,
New York. He is also a graduate from the St. Louis Normal School, St.
Louis, Missouri, and, in law, from the University of Louisiana, now the
Tulane University of Louisiana. He is a member of the United States
Supreme Court bar, and for years the law partner of United States Sen-
ator Randal Lee Gibson, of Louisiana; he is now engaged in the general
practice of the law at New Orleans, Louisiana.
MAINE.
GEORGE E. BIRD,
PORTLAND.
George E. Bird, the author of the Maine section, was born at Port-
land, Maine, September 1, 1847. He prepared for college at the high
school of that city, and entered Harvard University in 1865, from
which he graduated in 1869. He was admitted to the bar of Cumber-
land county, Maine, in 1872. He was United States district attorney for
the district of Maine from July, 1885, to June, 1890. He is now en-
gaged in the general practice of the law.
MARYLAND.
ARTHUR STEUART,
BALTIMORE.
Arthur Steuart, the author of the Maryland section, was born in Bal-
timore in 1856. He was educated at the Baltimore City College, Johns
Hopkins University, and the University of Maryland; from the last
of which he received the degree of LL.B. in 1880, and that same year
was admitted to the bar. Since that time, he has been engaged in the
active practice of his profession in Baltimore, devoting himself princi-
pally to the subject of corporations and patents. Together with his
partner, Mr. Benjamin Price, he has published "Price & Steuart's
American Trade-Mark Cases," and is also the author of other works.
Mr. Steuart is a member of the firm of Price & Steuart, practicing in
Baltimore and New York; at the latter place, Mr. James L. Steuart, one
of the members of the firm, is resident, office 29 Wall street.
2432
ECONOMIC LEGISLATION.
MASSACHUSETTS.
EVERETT W. BURDETT,
CHARLES A. SNOW,
•
BOSTON.
Everett W. Burdett, joint author, with Charles A. Snow, of the Massa-
chusetts section, was graduated from the law school of Boston University
in 1877. He was admitted to the Suffork bar in 1878, and has since been
actively engaged in business in the city of Boston. He began practice
with Hon. Charles Allen, now senior justice of the Supreme Judicial
Court of Massachusetts, in whose office he had studied. He was, how-
ever, soon after appointed assistant United States attorney for the dis-
trict of Massachusetts, and served with success in that capacity for
nearly three years, trying substantially all of the cases for the govern-
ment during the latter part of his incumbency.. He resigned at the
end of the year 1880, and entered upon the general practice of the law.
Though he has tried a large variety of cases, his present practice re-
lates chiefly to corporation matters. He became counsel for electric
lighting interests almost as soon as the industry was established in Massa-
chusetts, and has been counsel for various lighting companies since that
time. He has been the attorney for the Boston Electric Light Company
ever since it was formed by the consolidation of the several companies
formerly doing business in Boston. He has also been the general attor-
ney of the Massachusetts Electric Lighting Association, composed of
thirty of the leading gas and electric light companies of the state, since
its establishment. In the latter capacity he has dealt successfully with
a large number of questions of economic legislation.
Charles A. Snow, joint author, with Everett W. Burdett, of the Mas-
sachusetts section, was born in Boston, September 23, 1862. He grad-
uated from Harvard College in 1882, and then studied for two years at
the Harvard Law School. Since his admission to the bar, in 1885, he has
been engaged in the practice of law at Boston, being associated with
Everett W. Burdett, Esq.
MICHIGAN.
HENRY A. CHANEY,
DETROIT.
Henry A. Chaney, the author of the Michigan section, was born at
Burlington, Vermont, July 4, 1848. He was educated in the public
schools at Ogdensburg, New York, and in the Detroit High School. He
was graduated from the academic department of the University of
Michigan in 1869, and from the law department in 1871. He was assist-
ant secretary of the Michigan senate in 1872, legislative correspondent.
of the Detroit Tribune in 1873, clerk to the commissioner of railroads
for Michigan in 1873-4, state reporter in 1878-1886 (reporting volumes
37-58 of the Michigan Reports). In 1876, he published a digest of the
Michigan Reports, and, in 1877, a Manual for Notaries. He is professor
APPENDIX C.
2433
of medical jurisprudence in the Michigan College of Medicine and
Surgery, and of the law of contracts and of crimes in the Detroit College
of Law. He is actively engaged in the practice of law in Detroit at the
present time.
MINNESOTA.
CHARLES T. THOMPSON,
MINNEAPOLIS.
Charles Telford Thompson, the author of the Minnesota section, was
born in the village of Glendale-one of the suburbs of Cincinnati-
Hamilton county, Ohio, June 6, 1853. He is a son of Samuel J. Thomp-
son, Esq., one of the oldest and most successful members of the Cincin-
nati bar. He was prepared for college in the public schools of his na-
tive village, and entered Denison University, at Granville, Ohio, in 1869.
Upon his graduation, in 1873, he went to Edinburgh, Scotland, where
he took a post graduate course in logic, metaphysics, and civil law. He
began the study of American law in 1874, in the office of King, Thomp-
son & Longworth, in Cincinnati. He entered the senior class of the
Cincinnati Law School in 1875, and graduated in 1876. After his admis-
sion to the bar, he practiced his profession with his father in Cincinnati
until October, 1878, when he removed to Minneapolis, where he has
ever since been engaged in the active and successful practice of the law.
He is a member of the firm of Keith, Evans, Thompson & Fairchild,
who are attorneys for a large number of prominent business houses,
banks, and other corporations.
S. S. CALHOON,
MISSISSIPPI.
JACKSON.
S. S. Calhoon, the author of the Mississippi section, was born near
Brandenburg, Ky., in 1838, and was reared and educated at Canton, Miss.
He was secretary of the state senate of Mississippi in 1858, district
attorney of the fifth judicial district from 1865 to 1869; judge of the
seventh circuit court judicial district from 1876 to 1882, when he re-
signed and resumed the practice of law at Jackson in partnership with
his present associate, Marcellus Green, Esq. In 1890, Mr. Calhoon was
president of the constitutional convention of Mississippi. The firm of
Calhoon & Green number among their clients the Jackson Gas Com-
pany, the Light, Heat and Water Company, and the First National
Bank of Jackson.
MISSOURI.
HENRY W. BOND,
ST. LOUIS.
Henry W. Bond, the author of the Missouri section, is by birth a
Tennesseean. He acquired his legal education in the office of Hon.
Thomas J. Freeman, one of the supreme court judges of that state.
2434
ECONOMIC LEGISLATION.
After practicing his profession for some years in his native state, he
located, in 1879, in St. Louis. He is now a member of the firm of Gib-
son, Bond & Gibson, and engaged in the general practice of the law.
This firm has been representing the gas and electric light companies
located in St. Louis, and the Louisville and Nashville and other rail-
road companies, and gives its attention exclusively to corporation and
other civil business.
MONTANA.
HENRY N. BLAKE,
HELENA.
Henry Nicholas Blake, the author of the Montana section, was born in
Boston, Massachusetts, June 5, 1838, and graduated at the law school of
Harvard University in 1858. He removed to Montana in 1866, and has
resided there since that year. He has been elected by the people to
the following public trusts: Member of the house of representatives
for four terms; district attorney of the first judicial district for two
terms; chief-justice of the supreme court of the state. He has held
by appointment the following offices: United States attorney in 1869;
associate justice of the supreme court in 1875; chief-justice of the su-
preme court of the territory in 1889; reporter of the supreme court in
1872. Judge Blake is at the present time chief-justice of the supreme
court of the state.
NEBRASKA.
FRANK IRVINE,
ОМАНА.
Frank Irvine, the author of the Nebraska section, graduated from
Cornell University in 1880, and in law, from the National University,
Washington, in 1883. He was assistant United States district attorney
under Col. Geo. B. Corkhill in 1883 and 1884. He came to Omaha in
1884, and has since been engaged in the general practice of the law.
He has acted as attorney for the Pacific and Postal Telegraph Compa-
nies, and the Nebraska Telephone Company. At the present time he
is one of the judges of the fourth judicial district of Nebraska.
NEVADA.
SARDIS SUMMERFIELD,
CARSON CITY.
Sardis Summerfield, the author of the Nevada section, was born in
Jennings county, Indiana, in 1858. He received an academic educa-
tion, and for several years was a teacher in the schools of Indiana and
Nevada. He was admitted to the Indiana bar in 1880, and to the
Nevada and the United States bar in 1889. He has been engaged in
the active practice of law at Carson City, Nevada, since 1889, and at
the present time is district attorney of the district court of the State of
Nevada.
APPENDIX C.
2435
OLIVER E. BRANCH,
NEW HAMPSHIRE.
MANCHESTER.
Oliver E. Branch, the author of the New Hampshire section, was born
in Madison, Ohio, July 19, 1847. He was fitted for college at Madison
Seminary and at Whitestown (New York) Seminary. Before entering
college, he studied law in the office of his father, Hon. W. W. Branch.
He was graduated from Hamilton College in 1873. He was principal of
the Forestville Free Academy and Union School from 1873 to 1875. He
graduated at Columbia College Law School, taking the two years' course
in one year, and was admitted to the bar in New York City in 1876. He
was a member of the firm of Branch & Branch, 102 Broadway, New
York, from 1876 to 1884. During this time the firm was counsel for
the Howe Machine Company, of Bridgeport, Connecticut, and the
Howe Machine Company, Limited, of London, both of which corpora-
tions were involved in important and varied litigation, in which he was
actively engaged in the courts. He removed to New Hampshire in
1884, where he has since practiced. He was a member of the state
legislature in 1887-9, and was re-elected in 1889-90. He was a mem-
ber of the judiciary committee during both sessions, and took an active
part in all important matters on the floor of the house. His argument
upon the railroad bills during the famous railroad fight in 1887, was
conceded on all sides to be the great speech of that remarkable session.
He has been employed in the complicated litigation that has been go-
ing on between railroads of the state for the last few years, and is now
counsel for the Boston and Maine and the Manchester and Lawrence
Railroad Companies. He is the author of the "Hamilton Speaker,"
published in 1879, and of the “National Series of Speakers," published
in 1885.
NEW JERSEY.
ANTHONY Q. KEASBEY,
EDWARD Q. KEASBEY,
NEWARK.
Anthony Q. Keasbey, joint author, with Edward Q. Keasbey, of the
New Jersey section, was born in Salem, New Jersey, March 1, 1824. He
was graduated from Yale College in 1843, and shortly afterward began'
the study of law in Salem, under Francis L. Macculloch, Esq., and later
in Newark, under Cortlandt Parker, Esq. He was admitted to the bar
in October, 1846, and began the practice of the law in Salem, where he
pursued it until 1852, when he removed to Newark, and in 1855 entered
into partnership with his former preceptor, Cortlandt Parker. This
partnership continued for twenty years. He was appointed United
States district attorney for New Jersey by President Lincoln in March,
1861, and held that office continuously, by successive appointments,
until April, 1886, more than twenty-five years, a period of unbroken in-
2436
ECONOMIC LEGISLATION.
cumbency longer than that of any other United States district attorney
in the Union. Of his fidelity as an officer, and his ability as a lawyer,
no clearer or stronger proof than this record could be asked. It is a tes-
timonial, so to speak, of his official, professional, and personal merit,
signed by the president and senate of the United States, and counter-
signed by the bar of his state. Mr. Keasbey resides in Newark, and is
actively engaged in the practice of the law in connection with his sons,
Edward Q. Keasbey and George M. Keasbey, under the name of A. Q.
Keasbey & Sons. They are counsel for the companies operating most of
the street railways of Newark and its vicinity, and have given special
attention to the organization of franchise companies and other corpora-
tions under the laws of New Jersey.
Edward Quinton Keasbey, was born in Salem, New Jersey, July 27,
1849. He was graduated from Princeton College in 1869, and began the
study of law in the office of Parker & Keasbey, in Newark, in June of
that year. He took the degree of LL.B. in Harvard Law School in
June, 1871, and after studying in Cambridge another year, he was ad-
mitted to the bar of New Jersey at the June term, 1872, and began the
practice of law in Newark. In 1873 he was appointed by Judge Nixon
a United States commissioner, and still holds the office. In 1876, Mr.
Keasbey entered into partnership with his father and his brother
George, and is still engaged in the practice of law in the firm of A. Q.
Keasbey & Sons in Newark. He was a member of the legislature of
New Jersey in 1884 and 1885. He has been the senior editor of the
New Jersey Law Journal for thirteen years, and is the author of a book
on "The Law of Electric Wires in Streets and Highways," lately pub-
lished by Callaghan & Co., of Chicago. He lives in Morristown, New
Jersey.
NEW YORK.
JAMES W. EATON,
ALBANY
James W. Eaton, Jr., the author of the New York section, was born
at Albany, New York, in 1857. He was educated at the Albany Boys'
Academy and at Yale College, from which he was graduated in 1879.
After graduation, he was professor at the Albany Boys' Academy until
1882, when he was admitted to the bar and began active practice. In
1883, he formed a copartnership with George W. Kirchwey, Esq. (now
dean of the Albany Law School), which relation still continues. The
firm of Eaton & Kirchwey are largely engaged in the practice of corpo-
ration law, and represent professionally a number of local corporations.
Mr. Eaton is the author of a legal treatise upon the domestic relations
(Eaton's Reeves' Domestic Relations), and is at present professor of the
law of property, wills, and corporations in the Albany Law School-
the law department of Union University.
APPENDIX C.
2437
JOHN W. HINSDALE,
•
NORTH CAROLINA.
RALEIGH.
John W. Hinsdale, the author of the North Carolina section, was
born in 1843. He is a native of Buffalo, New York, but his early life
was passed in Fayetteville, North Carolina, where he lived until 1874.
He served four years in the Confederate army, where he attained the
rank of colonel. He was educated in private schools and the Univer-
sity of North Carolina. After the war he entered Columbia College
Law School, and was admitted to the New York bar in 1866. The same
year he was admitted to the bar of North Carolina, and began practice
at Fayetteville. In 1875 he removed to Raleigh, where he has pursued
the practice of his profession with much success. His practice is de-
voted principally to railroad, insurance, corporation, and commercial
law. He has a large practice in the United States Supreme Court and
in the other federal courts, and is the attorney for the Raleigh and Gas-
ton and Raleigh and Augusta Air Line railroads, and the Raleigh
Street Railway Company, while he is also retained as regular counsel
for several large and influential insurance companies. His law library
is the largest private law library in the state. In 1878, he annotated
and published a new edition of Winston's North Carolina Reports.
NORTH DAKOTA.
ROBERT M. CAROTHERS,
GRAND FORKS.
Robert M. Carothers, the author of the North Dakota section, was
born in Allegheny county, Pennsylvania, in 1859. He was educated at
the Western University of Pennsylvania, at Pittsburg. From 1877-
1882, he was engaged in teaching in the Iowa College for the Blind. In
1886, he removed to North Dakota. He is a graduate of the law de-
partment of the University of Michigan, and since receiving his degree
has been engaged in the practice of his profession at Grand Forks,
North Dakota. November 4, 1890, he was elected county judge of
Grand Forks county, which position he now occupies.
J. D. BRANNAN,
OHIO.
CINCINNATI.
J. D. Brannan, the author of the Ohio section, was born at Circleville,
Ohio, January 6, 1848. He graduated at Harvard College in 1869. He
attended the University of Munich in 1869-70, and afterward spent four
months at Geneva, during all of which time he made a special study of
the Roman Law. He entered Harvard Law School in 1871, and gradu-
ated in 1872. From September, 1871, until June, 1873, he was connected
with the faculty of the undergraduate department of Harvard, giving
2438
ECONOMIC LEGISLATION.
instruction during part of the time in Roman law. He was admitted to
the bar of Ohio in the fall of 1873, and has since that time practiced
law in Cincinnati. Mr. Brannan has had much experience, and has
given much attention to "franchise companies."
GEORGE H. WILLIAMS,
OREGON.
PORTLAND.
George H. Williams, the author of the Oregon section, was born in
New Lebanon, Columbia county, New York, March 26, 1823, and re-
moved in an early day to Onondaga county, receiving his education at
the Pompey Academy. He studied law with Hon. Daniel Gott, and at
the age of twenty-one was admitted to practice in New York. In the
same year, 1844, he removed to Iowa Territory, practicing law. In 1847,
he was elected judge of the first judicial district of that state, at the first
election after the formation of the state government, serving five years.
In 1852, he was one of the presidential electors at large, and canvassed
the state for Franklin Pierce. In 1853, he was appointed chief justice
of Oregon Territory, and was reappointed by Buchanan in 1857. He
terminated his services in this position by his own resignation, and re-
sumed the practice of the law. He became, however, a member of the
constitutional convention to form the constitution for Oregon, and was
chairman of the judiciary committee. While in this responsible position,
he was active in opposing the introduction of slavery into Oregon, and,
as a constitutional convention required the popular vote upon that ques-
tion, was active in the presentation of the question before the people.
He was active, subsequently, in the formation of the Union party in
1860, and was an earnest supporter of Lincoln's administration and in
suppressing the rebellion. In 1864, he was elected senator in congress,
and was a member of the committee on finance and public lands, and
also of the reconstruction committee. Senator Williams took an active
part in all the legislative proceedings of this exciting time, and was the
author of some of the most important national legislation of the period,
notably the reconstruction bill and the tenure of office act. In 1871, he
was appointed one of the joint high commission to frame a treaty for
the settlement of the Alabama claims and the north-western boundary,
and other questions in dispute with Great Britain; and to his efforts,
ability, and foresight is due very largely the happy and satisfactory so-
lution of those questions. In December, 1871, he was appointed attor-
ney-general of the United States by President Grant, which office he
held for three years; during this time, he had to dispose of many of the
most intricate and important questions connected with the question of
reconstruction, etc. In 1874, his name was presented to the senate for
the place of Chief-Justice of the Supreme Court, left vacant by the
death of the illustrious Chase. Owing to the opposition of the East,
Senator Williams withdrew his name, much to the regret of President
APPENDIX C.
2439
Grant. Since his return to unofficial life, he has made his home at
Portland, where he is ever active in all matters of public interest.
PENNSYLVANIA.
MARLIN E. OLMSTED,
HARRISBURG.
Marlin E. Olmsted, the author of the Pennsylvania section, was born
in Ulysses township, Potter county, Pennsylvania. He comes of a long
line of good ancestry on either side, his mother being a Cushing. His
parents desired that he should go to the bar, and arranged that at an
early age he should read law with his uncle, Judge Arthur G. Olmsted;
but he did not take kindly to the proposition, and, accepting a political
appointment, began his public career as assistant corporation clerk in
the auditor-general's office. At the expiration of one year, though the
youngest employee in the department in service, as well as in years,
having little more than attained his majority, he was promoted to the
rank of corporation clerk, with the entire charge of the assessment and
collection of the state's revenues from corporations. He continued to
serve in this capacity until May, 1875, when, his ideas regarding the
profession having changed, be determined to study law. He entered
the office of Hon. J. W. Simonton, of Harrisburg, now president judge
of that district, and was admitted to the bar November 25, 1878.
While in the auditor-general's office he was recognized by the leading
corporations as an authority on that peculiar and complicated system of
tax laws and levies under which Pennsylvania raises millions of dollars
annually, and as soon as he was released from that office, many of them
secured his services even before he was admitted to the bar. He was
admitted to practice in the supreme court of the state in May, 1881,
and as an attorney and counselor of the supreme court of the United
States in November, 1884, and is a frequent and successful practi-
tioner at both bars, and, also, before the Inter-state Commerce
Commission.
Corporations which had availed themselves of his knowledge of the
tax laws before his admission to the bar, retained him as local counsel
immediately after, and he soon became the resident attorney in Harris-
burg for nearly all the leading corporations in the country, and his
services are frequently required in other states, he being considered an
authority upon all branches of corporation and constitutional law. In
the list of his clients may be found the Western Union Telegraph Com-
pany, Standard Oil Company, Lehigh Valley Railroad Company, Phila-
delphia & Reading R. R. Co., New York Central & Hudson River R. R.
Co., United Gas Improvement Company, Philadelphia Traction Co.,
The Westinghouse Companies, and most of the larger electric, gas, and
passenger railway companies. He is general counsel of the Beech
Creek R. R. Co., and local or consulting counsel for many others too
numerous to mention.
2440
ECONOMIC LEGISLATION.
AMASA M. EATON,
RHODE ISLAND.
PROVIDENCE.
Amasa M. Eaton, the author of the Rhode Island section, was born at
Providence, Rhode Island, May 31, 1841. He graduated from Brown
University in 1861, and from Harvard Law School in 1878, with the de-
grees of A.M. and LL.B. respectively. He was for some years a mem-
ber of the town council of North Providence, and afterward a member
of the city council and board of alderman of Providence. He also
served three years as a member of the house of representatives of
Rhode Island.
T. MOULTRIE MORDECAI,
SOUTH CAROLINA.
CHARLESTON.
T. Moultrie Mordecai, the author of the South Carolina section, was
born at Charleston, South Carolina, in 1855. He was educated at the
Charleston High School and Charleston College, graduating from the
latter institution in 1872. In December, 1873, he was admitted to the
bar of the supreme court by a special act of the legislature of South
Carolina, he being then under the age of twenty-one years. This en-
abling act was the first of the kind passed by the legislature of the
state. Since his admission to the bar, he has been engaged in the prac-
tice of law in both state and federal courts. He is the senior member
of the firm of Mordecai & Gadsden, of Charleston, which represents a
large and influential clientage, among the number being the Postal Tel-
egraph Cable Company, Tide Water Oil Company, Bailey-Lebby Com-
pany, World-Budget Company, U. S. Mutual Accident Association,
Southern Fruit Company, and the State Savings Bank.
SOUTH DAKOTA.
WILLIAM L. MᵒLAUGHLIN,
DEADWOOD.
William L. McLaughlin, the author of the South Dakota section, was
born in Washington Territory, August 21, 1862. He attended the pub-
lic schools in Cheyenne, Wyoming, and afterward Georgetown College,
District of Columbia. From the latter he graduated in 1882, and in 1884
graduated in law. In 1884 he was admitted to the bar of Deadwood,
Dakota. In 1886 he was elected district attorney of Lawrence county.
He is the junior member of the firm of McLaughlin & McLaughlin,
the senior member being his father, Daniel McLaughlin.
TENNESSEE.
ROBERT L. MORRIS,
NASHVILLE.
Robert L. Morris, the author of the Tennessee section, was born at
APPENDIX C.
2441
Nashville, April 9, 1847. He was educated in the city schools and the
academic school of E. L. Crocker, which in its day, was famous and
drew a large patronage from the southern states. Having studied law
with East & Spurlock, of Nashville, and attended the law school of
Cumberland University, at Lebanon, Tennessee, he was admitted to the
Nashville bar, January 28, 1870, and has ever since been actively en-
gaged in the practice of the law. Mr. Morris is a leading member of
the bar of his state, and enjoys a wide reputation as an accurate and
able lawyer. He has given much attention to chancery and corporation
practice, and is well posted in these branches of the law.
TEXAS.
WILLIAM M. WALTON,
•
AUSTIN.
William M. Walton, the author of the Texas section, was born in
Madison county, Mississippi, January 17, 1832. His parents died when
he was under ten years of age, and he was thrown upon his own re-
sources. He labored mornings, evenings, and Saturdays to pay current
expenses, and taught the younger pupils in school to compensate his
own teachers. In 1847 he was deputy circuit court clerk in Carroll
county, Mississippi. In 1850 he went to the University of Virginia. In
1852 the legislature of Mississippi removed his disability of minorage,
and he was granted license to practice law. In 1853 he removed to
Austin, Texas. In 1866 he was elected attorney-general of the state,
but was removed, in 1867, by the military authority as an obstruction to
reconstruction. He has had and still enjoys a large practice. He is the
senior member of the firm of Walton, Hill & Walton.
WYNDHAM R. MEREDITH,
VIRGINIA.
RICHMOND.
Wyndham R. Meredith, the author of the Virginia section, was edu-
cated at the University of Virginia, winning the orator's medal for the
session of 1878-9. He obtained the degree of LL.B. from Richmond
College in 1880, and at once entered upon the practice of his profession
in Richmond. For several years he was special counsel for the State of
Virginia in the immense amount of litigation in regard to the debt
of the state. For the last three years, he has been the counsel for the
electric light and power companies and the street railway lines of Rich-
mond, as well as the representative of other corporations.
WASHINGTON.
F. M. ELLSWORTH,
COLFAX.
F. M. Ellsworth, the author of the Washington section, was born in
Pennsylvania in 1844. He was educated at Washington College, Iowa.
VOL. II-73
2442
ECONOMIC LEGISLATION.
He studied law with Hon. John F. Lacey, Oskaloosa, Iowa, and was ad-
mitted to practice in the district courts of Nebraska in 1869, and to the
supreme court of that state in 1870. He was elected to represent the
tenth district in the state legislature in 1871. He moved to Washington
Territory in 1876 on account of poor health, and formed a copartnership
with Hon. C. H. Hanford, present United States district judge. He
moved to Whitman county in 1877, and entered into a copartnership
with Hon. P. C. Sullivan, and has been engaged in the practice since.
He was appointed prosecuting attorney for Whitman county in 1881,
and served two years. He is a prominent corporation lawyer, and
stands high in the profession as a man of experience and sound legal
judgment.
JOHN A. HUTCHINSON,
WEST VIRGINIA.
PARKERSBURG.
John A. Hutchinson, the author of the West Virginia section, was
born in Parkersburg, Wood county, Virginia (now West Virginia), in
1840. He studied law in the office of the late James M. Stephenson,
and was admitted to the bar in 1861, and in the same year was elected
prosecuting attorney for Pleasants county, and served for nine years.
In 1863, he was elected to the same office in Wood county, serving until
1870. From 1866 to 1869, he was also prosecuting attorney for Wirt and
Ritchie counties, thus serving four counties at the same time. He was
a member of the house of delegates from Wood and Pleasants counties
in 1875-6, and was one of the board of managers on the impeachment
of the auditor and state treasurer. In 1876 and 1884, he was the nomi-
nee on the Republican state ticket for attorney-general. In 1880, he
was the Republican nominee for congress in the old first district, which
included Wheeling and the Panhandle, and in 1886, was the nominee
for the same office in the fourth congressional district, including therein
Parkersburg, Point Pleasant, and Huntington. He is recognized as one
of the ablest lawyers in the state, and has an extensive practice, having.
been engaged in all the leading cases in his portion of the state. He
has been counsel in many of the most important trials in West Virginia,
notably the Van Baker case, in Hancock county; the Cain and Greer
cases, in Jackson county; the Kinney case, in Doddridge county; the
Robinson case, in Kanawha county; the Williams case, in Marshall
county, and numerous others in Wood and other counties. He was one
of the counsel for the Republicans in the litigation growing out of the
gubernatorial contest in 1889 between Goff and Fleming, and his name
was prominently urged to the president for appointment as circuit judge
for the fourth judicial circuit. He has given his attention more particu-
larly to real estate litigation and corporation cases, and has for a number
of years been chief counsel of the B. & O. R. R. Co., for West Virginia,
having more than twenty counties in his jurisdiction; he is also attor-
ney for the L. F. & S. H. R. R. Co.; the Little Kanawha Navigation
APPENDIX C.
2443
Company, and other corporations, manufacturing and otherwise. He is
the author of "Land Titles in Virginia and West Virginia," and "A
Treatise on the Laws of West Virginia, both works of recognized merit,
as well as of several literary works.
WISCONSIN.
HENRY M. LEWIS,
MADISON.
Henry M. Lewis, the author of the Wisconsin section, was born in
Cornwall, Addison county, Vermont, September 7, 1830. In 1846, he
removed with his parents to Dane county, Wisconsin. He received a
common school and academic education. He studied law, and was ad-
mitted to the bar in 1853, and has since practiced his profession. He
was admitted to the Supreme Court of the United States in 1875. He
was elected district attorney of Dane county in 1860, serving two years.
In March, 1867, he was appointed by the President of the United States
collector of internal revenue for the second collection district of Wiscon-
sin, and served in that capacity until June 1, 1873. In 1878, he was ap-
pointed by the President of the United States, United States district at-
torney for the western district of Wisconsin, and was re-appointed in
1882, serving until 1886. He has been a member of the board of directors
of the Madison Free Library and Reading Room since 1873, and for a
considerable part of the time president of the board, and a member of
the board of education for the city of Madison for the last ten years. He
has given particular attention to corporation law, especially as relating
to railroads and insurance, and relating to the rights and liabilities of
municipal corporations. He is the senior member of the firm of Lewis,
Pfund & Briggs.
WYOMING.
CHARLES N. POTTER,
CHEYENNE.
Charles N. Potter, the author of the Wyoming section, was born in
New York state in 1852. His parents removed to Grand Rapids, Michi-
gan, where he was educated in the public schools, graduating from the
high school in 1870. He studied law in the office of Hon. J. W. Ran-
som, and entered the law department of Michigan University in 1871.
Graduating, he was admitted to the bar in 1873, and until 1876 was en-
gaged in the practice of the law at Grand Rapids. He then removed to
Cheyenne, Wyoming, and formed a partnership with Hon. E. P. John-
son, a leading lawyer of the territory, and upon the death of Mr. John-
son in 1879, Mr. Potter succeeded to the business of the firm. From
1878 to 1881, he was city attorney of Cheyenne; from 1881 to 1883,
county and prosecuting attorney; was again appointed city attorney in
1888, his term expiring in February, 1891. In October, 1890, the gov-
ernor of the state tendered him the appointment of justice of the su-
preme court, to fill a vacancy, which he declined. He has held various
2444
ECONOMIC LEGISLATION.
other positions of public trust. In his capacity as city attorney of
Cheyenne, which city owns and controls a system of water-works, he
has had a considerable acquaintance with the legislation relating to such
matters. Mr. Potter is at the present time attorney-general of the state.
He is also the attorney of the Cheyenne City Gas Company, the Brush-
Swan Electric Light Company, the Burlington and Missouri River Rail-
road, etc. He is the senior member of the firm of Potter & Burke.
TERRITORIES; DISTRICT OF COLUMBIA.
WILLIAM B. WEBB,
WASHINGTON.
William B. Webb, the author of the United States, District of Co-
lumbia and territorial sections, was born in Washington City in Sep-
tember, 1825. He graduated from Columbia College in 1844; studied
law and was admitted to the bar of the District of Columbia in 1847.
Upon the adoption of the Metropolitan police system for the District of
Columbia by congress, Mr. Webb was elected its first superintendent,
and organized and controlled its operations during the troubles and vi-
cissitudes of the war until in 1863, when he resigned and resumed the
practice of his profession. He became counsel for the Washington Gas
Light Company, Adams Express Company, and First National Bank of
Washington, and was one of the early presidents of the District of Co-
lumbia Bar Association. In 1885, he was appointed one of the commis-
sioners of the district, and served during his whole term as president of
the board. He was re-appointed by President Cleveland, but the senate
refused to act upon his renomination. Mr. Webb is the author of a di-
gest of the laws of the corporation of the City of Washington, which is
accepted as a standard authority.
APPENDIX D.
TOPICAL INDEX OF STATE SECTIONS.
Owing to the similarity of the discussion of the state sections, and
the quite frequent references in them from one subhead to another, it
has been considered desirable to insert an index following the order of
the subdivisions and subheads of the general plan, thus enabling any
one desiring so to do, to refer to any given subhead of any state section.
This topical index does not take the place of the general index, but is
an addition to that index and the table of contents. If it proves itself
a help to the ready reference and consultation of the various state sec-
tions, it will fulfill the purpose of its preparation.
SUBDIVISION I-HISTORICAL. Ala. 259; Ark. 305; Cal. 319; Col.
351; Conn. 371; Del. 399; Fla. 425; Ga. 437; Ida. 461; Ill. 483; Ind. 565;
Iowa, 627; Kan. 657; Ky. 693; La. 743; Me. 771; Md. S15; Mass. 857;
Mich. 1097; Minn. 1157; Miss. 1201; Mo. 1213; Mont. 1269; Neb. 1289;
Nev. 1319; N. H. 1337; N. J. 1369; N. Y. 1421; N. C. 1569; N. Dak.
1585; O. 1597; Ore. 1669; Pa. 1701; R. I. 1819; S. C. 1849 S. Dak.
1869; Tenn. 1905; Tex. 1945; Vt. 1966; Va. 1993; Wash. 2025; W. Va.
2043; Wis. 2083; Wyo. 2129; D. C. 2223; Ariz. 2260; N. M. 2267; Okl.
2283; Utah, 2301.
SUBDIVISION II-FRANCHISE COMPANIES. Ala. 267; Ark. 307; Cal.
319, Col. 353; Conn. 375; Del. 406; Fla. 429; Ga. 439; Ida. 462; Ill. 484;
Ind. 572; Iowa, 629; Kan. 660; Ky. 696; La. 748; Me. 773; Md. 818;
Mass. 895; Mich. 1101; Minn. 1162; Miss. 1203; Mo. 1214; Mont. 1274;
Neb. 1291; Nev. 1322; N. H. 1337; N. J. 1375; N. Y. 1423; N. C. 1571;
N. Dak. 1585; O. 1600; Ore. 1675; Pa. 1708; R. I. 1822; S. C. 1854; S.
Dak. 1871; Tenn. 1909; Tex. 1947; Vt. 1971; Va. 1998; Wash. 2026; W.
Va. 2045; Wis. 2086; Wyo. 2133; U. S. 2153; D. C. 2232; Ariz. 2261; N.
M. 2268; Okl. 2284; Utah, 2302.
INCORPORATION (CHARTERS) HOW OBTAINED. Ala. 267; Ark. 307; Cal.
319; Col. 353; Conn. 376; Del. 406; Fla. 429; Ga. 439; Ida. 462; Ill. 484;
Ind. 572; Iowa, 629; Kan. 660; Ky. 696; La. 748; Me. 773; Md. 818;
Mass. 895; Mich. 1101; Minn. 1162; Miss. 1203; Mo. 1214; Mont. 1274;
Neb. 1291; Nev. 1322; N. H. 1337; N. J. 1375; N. Y. 1423; N. C. 1571;
N. Dak. 1585; O. 1600; Ore. 1675; Pa. 1708; R. I. 1822; S. C. 1854; S.
Dak. 1871; Tenn. 1909; Tex. 1947; Vt. 1971; Va, 1998; Wash. 2026; W.
(2445)
!
2446
ECONOMIC LEGISLATION.
Va. 2045; Wis. 2086; Wyo. 2133; U. S. 2153; D. C. 2232; Ariz. 2261;
N. M. 2268; Okl. 2284; Utah, 2302.
ARTICLES (ACT) OF INCORPORATION. Ala. 269; Ark. 307; Col. 353;
Conn. 376; Del. 406; Fla. 429; Ga. 440; Ida. 463; Ill. 485; Ind. 573;
Iowa, 629; Kan. 660; Ky. 699; La. 749; Me. 774; Md. 819; Mass. 897;
Mich. 1102; Minn. 1163; Miss. 1203; Mo. 1216; Mont. 1274; Neb. 1291;
Nev. 1322; N. H. 1338; N. J. 1375; N. Y. 1424; N. C. 1572; N. Dak.
1585; O. 1600; Ore. 1675; Pa. 1710; S. C. 1854; S. Dak. 1871; Tenn.
1910; Tex. 1947; Vt. 1971; Va. 1999; Wash. 2027; W. Va. 2045; Wis.
2087; Wyo. 2133; D. C. 2233; Ariz. 2261; N. M. 2268; Okl. 2285; Utah,
2302.
Must show what. Ala. 269; Ark. 307; Cal. 322; Col. 354; Fla. 429; Ga.
463; Ill. 486; Ind. 575; Iowa, 629; Kan. 661; Ky. 700; La. 749; Me.
774; Md. 820; Mass. 1102; Minn. 1164; Miss. 1204; Mo. 1216; Mont.
1275; Neb. 1292; Nev. 1323; N. H. 1338; N. Y. 1426; N. C. 1572; N.
Dak. 1585; O. 1600; Ore. 1675; Pa. 1710; S. C. 1854; S. Dak. 1872; Tenn.
1911; Tex. 1947; Vt. 1972; Va. 1999; Wash. 2027; W. Va. 2045; Wis.
2087; Wyo. 2133; D. C. 2233; Ariz. 2262; N. M. 2268; Okl. 2285; Utah,
2303.
Publication of. Conn. 376; Fla. 429; Iowa, 630; Ky. 700; La. 749;
Mass. 900; Mich. 1103; Minn. 1164; Miss. 1204; Neb. 1292; N. C.
1572; Pa. 1714; Tenn. 1912; Vt. 1972; Ariz. 2262.
Filing. Ala. 270; Ark. 307; Cal. 323; Col. 354; Del. 408; Fla. 429;
Ida. 463; Ill. 486; Iowa, 630; Kan. 661; Ky. 700; La. 749; Me. 776;
Md. 821; Mass. 900; Mich. 1103; Minn. 1165; Miss. 1204; Mo. 1217;
Mont. 1275; Neb. 1293; Nev. 1323; N. H. 1338; N. J. 1378; N. Y. 1430 ;
N. Dak. 1586; O. 1601; Ore. 1676; Pa. 1714; S. C. 1854; S. Dak. 1872;
Tenn. 1912; Tex. 1947; Va. 2000; Wash. 2027; W. Va. 2047; Wis.
2088; Wyo. 2133; D. C. 2233; Ariz. 2262; N. M. 2269; Okl. 2286; Utah,
2304.
ORGANIZATION; PRELIMINARY REQUIREMENTS.
Ala. 271; Cal. 323; Ill.
487; Ind. 577; Me. 776; Md. 821; Mass. 903; Mich. 1104; Minn. 1165;
Miss. 1204; Mont. 1273; N. J. 1379; N. C. 1572; O. 1601; Ore. 1676; R.
I. 1823; S. C. 1855; Tenn. 1912; Tex. 1948; Vt. 1973; Va. 2000; W. Va.
2048; Wis. 2088; Ariz. 2262; N. M. 2270; Okl. 2286; Utah, 2304.
NOTICES. Mich. 1105; Minn. 1166; O. 1601.
COMMENCING BUSINESS. Conn. 377; Ga. 442; Ida. 464; Ill. 487; Iowa,
631; Kan. 661; Ky. 701; Me. 777; Mass. 906; Minn. 1166; Neb. 1294
N. H. 1339; N. J. 1379; N. Y. 1432; Pa. 1716; S. Dak. 1872; Tenn.
1913; Tex. 1948; Wash. 2028; Wis. 2089; Ariz. 2262; N. M. 2270; Okl.
2286.
FEES. Ala. 272; Ark. 308; Cal. 323; Col. 355; Conn. 377; Del. 408;
Fla. 429; Ga. 442; Ida. 465; Ill. 488; Ind. 577; Iowa, 631; Kan. 662;
APPENDIX D.
2447
Ky. 701; La. 750; Me. 778; Md. 821; Mass. 907; Mich. 1105; Minn.
1166; Miss. 1204; Mo. 1218; Mont. 1275; Neb. 1294; Nev. 1324; N. H.
1338; N. J. 1379; N. Y. 1433; N. C. 1573; O. 1602; Pa. 1716; R. I. 1824;
S. C. 1855; S. Dak. 1872; Tenn. 1913; Tex. 1948; Vt. 1973; Va. 2001;
W. Va. 2050; Wis. 2089; N. M. 2270.
AMENDMENTS, REPEALS, ETC. Ala. 273; Ark. 308; Cal. 324; Col. 355;
Conn. 377; Del. 408; Fla. 430; Ga. 442; Ida. 465; Ill. 488; Ind. 578;
Iowa, 631; Kan. 662; Ky. 701; La. 750; Me. 779; Md. 821; Mass. 908;
Mich. 1106; Minn. 1167; Miss. 1204; Mont. 1275; Neb. 1294; Nev. 1324;
N. H. 1339; N. J. 1380; N. Y. 1433; N. C. 1573; N. Dak. 1586; O. 1603;
Ore. 1676; Pa. 1717; R. I. 1824; S. C. 1856; S. Dak. 1872; Tenn. 1913;
Tex. 1948; Vt. 1974; Va. 2002; Wash. 2028; W. Va. 2050; Wis. 2089;
Wyo. 2133; U. S. 2154; D. C. 2234; N. M. 2270; Okl. 2286; Utah, 2304.
By the corporation. Ala. 274; Cal. 324; Del. 410; Ill. 490; Ind. 578;
Kan. 662; Ky. 705; Me. 782; Md. 822; Mass. 911; Mich. 1106; Minn.
1167; Mont. 1276; N. H. 1340; N. J. 1380; N. C. 1574; O. 1604; Ore.
1676; Pa. 1719; S. Dak. 1873; Tenn. 1914; W. Va. 2051; Wis. 2090;
Wyo. 2134; Okl. 2287.
By the courts. O. 1605.
DURATION OF CHARTER. Ala. 274; Cal. 325; Col. 356; Del. 410; Fla.
430; Ga. 443; Ida. 465; Ill. 491; Ind. 579; Iowa, 632; Kan. 663; Ky.
705; Me. 783; Md. 823; Mass. 912; Mich. 1107; Minn. 1168; Miss. 1205;
Mo. 1219; Mont. 1276; Neb. 1295; Nev. 1324; N. H. 1340; N. J. 1382; N.
Y. 1435; N. C. 1574; N. Dak. 1587; Pa. 1722; R. I. 1825: S. Dak. 1874;
Tenn. 1915; Tex. 1949; Wash. 2028; W. Va. 2052; Wyo. 2134; U. S.
2161; Ariz. 2263; N. M. 2270; Okl. 2287; Utah, 2304.
OBJECTS. Ala. 275; Ark. 308; Cal. 325; Col. 356; Del. 410; Ga. 444;
Ida. 466; Ill. 491; Ind. 579; Iowa, 632; Kan. 663; La. 750; Me. 783;
Md. 823; Mass. 912; Mich. 1108; Minn. 1168; Neb. 1295; Nev. 1324;
N. H. 1340; N. J. 1382; N. Y. 1436; O. 1605; Pa. 1722; R. I. 1825; S.
Dak. 1874; Tex. 1949; Vt. 1975; W. Va. 2052; Wis. 2092; Wyo. 2134;
N. M. 2271; Okl. 2287.
POWERS. Ala. 275; Cal. 326; Conn. 378; Del. 410; Ga. 444; Ida. 466;
Ill. 491; Ind. 579; Iowa, 632; Kan. 663; Ky. 705; La. 751; Me. 783;
Md. 823; Mass. 912; Mich. 1108; Minn. 1169; Miss. 1205; Mo. 1220;
Mont. 1276; Nev. 1324; N. H. 1340; N. J. 1382; N. Y. 1436; N. C. 1575;
O. 1605; Ore. 1677; Pa. 1723; R. I. 1825; S. C. 1856; S. Dak. 1874;
Tenn. 1915; Tex. 1949; Vt. 1975; Va. 2002; Wash. 2028; W. Va. 2053;
Wis. 2092; U. S. 2161; D. C. 2234; Ariz. 2263; N. M. 2271; Okl. 2287;
Utah, 2305.
BY-LAWS. Ala. 277; Ida. 467; Ill. 495; Ind. 580; Kan. 664; Me. 783;
Md. 824; Mass. 916; Mich. 1109; Minn. 1169; Mo. 1221; Mont. 1277, N.
H. 1341; N. Y. 1441; N. C. 1575; O. 1607; R. I. 1825; S. Dak. 1875;
2448
ECONOMIC LEGISLATION.
Tenn. 1916; Tex. 1950; Vt. 1975; W. Va. 2054; Wis. 2094; Wyo. 2134;
N. M. 2272; Utah, 2305.
OFFICERS; MEETINGS; VOTING; QUORUM, ETC. Ala. 277; Ark. 308; Cal.
326; Col. 357; Conn. 378; Del. 410; Fla. 430; Ga. 444; Ida. 468; Ill. 495;
Ind. 581; Iowa, 634; Kan. 664; Me. 783; Md. 825; Mass. 916; Mich.
1109; Minn. 1169; Miss. 1206; Mo. 1221; Mont. 1277; Neb. 1295; Nev.
1324; N. H. 1341; N. J. 1383; N. Y. 1441; N. C. 1575; N. Dak. 1587; 0.
1608; Ore. 1677; Pa. 1724; R. I. 1826; S. C. 1856; S. Dak. 1876; Tenn.
1916; Tex. 1951; Vt. 1976; Va. 2002; Wash. 2029; W. Va. 2054; Wis.
2094; Wyo. 2134; U. S. 2168; D. C. 2235; Ariz. 2263; N. M. 2273; Okl.
2289; Utah, 2305.
Books. Ala. 279; Ark. 309; Conn. 380; Del. 412; Ida. 471; Ill. 498; Ind.
584; Iowa, 634; Kan. 666; La. 752; Me. 787; Md. 825; Mass. 920; Mich.
1112; Minn. 1171; Mo. 1225; Mont. 1278; N. H. 1342; N. Y. 1446; N.
Dak. 1587; O. 1610; R. I. 1827; S. C. 1857; S. Dak. 1880; Tenn. 1916;
Tex. 1952; Vt. 1977; Va. 2004; Wash. 2030; W. Va. 2057; Wis. 2097;
D. C. 2236; Ariz. 2264; Okl. 2290; Utah, 2306.
.
CAPITAL STOCK. Ala. 279; Ark. 309; Cal. 328; Col. 357; Conn. 380;
Del. 413; Fla. 431; Ga. 445; Ida. 471; Ill. 498; Ind. 584; Iowa, 635;
Kan. 666; Ky. 709; La. 752; Me. 787; Md. 825; Mass. 921; Mich. 1113;
Minn. 1171; Miss. 1207; Mo. 1226; Mont. 1278; Neb. 1296; Nev. 1326;
N. H. 1342; N. J. 1384; N. Y. 1446; N. C. 1576; N. Dak. 1588; O. 1610;
Ore. 1679; Pa. 1730; R. I. 1827; S. C. 1857; S. Dak. 1881; Tenn. 1916;
Tex. 1952; Vt. 1977; Va. 2004; Wash. 2031; W. Va. 2058; Wis. 2097;
Wyo. 2135; D. C. 2236; Ariz. 2264; N. M, 2274; Okl. 2290; Utah, 2306.
Assessments. N. Dak. 1588; S. Dak. 1882.
Bequests. R. I. 1829.
Shares and share-holders.
Mass. 922.
Paying of capital. Mass. 923.
Increase and decrease of. Ala. 280; Ark. 310; Cal. 329; Col. 359; Conn.
381; Fla. 431; Ga. 445; Ida. 473; Ill. 501; Ind. 588; Iowa, 636; Kan.
667; Ky. 710; La. 753; Me. 789; Md. 827; Mass. 926; Mich. 1114;
Minn. 1173; Miss. 1208; Mo. 1226; Mont. 1279; Neb. 1296; Nev. 1327;
N. H. 1343; N. J. 1385; N. Y. 1448; N. C. 1576; N. Dak. 1590; O. 1611;
Ore. 1680; R. I. 1829; S. C. 1858; S. Dak. 1884; Tenn. 1917; Tex. 1953;
Vt. 1979; Wash. 2032; W. Va. 2059; Wis. 2099; Wyo. 2136; D. C. 2237;
N. M. 2275; Okl. 2291; Utah, 2307.
Transfer of. Ala. 281; Ark. 311; Col. 359; Conn. 382; Ida. 474; Ill.
502; Ind. 588; Iowa, 637; Kan. 668; Ky. 710; La. 754; Me. 790; Md.
828; Mass. 932; Mich. 1114; Minn. 1174; Miss. 1208; Mo. 1228; Mont.
1279; Nev. 1327; N. H. 1344; N. J. 1387; N. Y. 1451; N. C. 1576; N.
Dak. 1591; O. 1612; Ore. 1680; Pa. 1737; R. I. 1829; S. C. 1858; S. Dak.
1884; Tenn. 1917; Tex. 1953; Vt. 1980; Va. 2005; Wash. 2033; W. Va.
APPENDIX D.
2449
.
2061; Wis. 2099; Wyo. 2138; D. C. 2238; Ariz. 2265; N. M. 2275; Okl.
2291; Utah, 2307.
Company's lien on. Ala. 281; Ark. 311; Conn. 382; Ida. 474; Iowa, 636;
Ky. 711; Me. 790; Mass. 934; Mich. 1114; Minn. 1174; N. Y. 1453; N.
C. 1577; Pa. 1738; S. C. 1859; Tenn. 1918; Vt. 1980; Va. 2005; W. Va.
2061.
Preferred stock. Ala. 282; Ind. 589; Ky. 711; Me. 791; Md. 828;
Mass. 936; Mich. 1115; Minn. 1174; Mo. 1228; N. H. 1344; N. Y. 1453;
O. 1612; Pa. 1738; Tenn. 1918; W. Va. 2062.
Stock in other companies. Ga. 446; Ill. 502; Ind. 589; Mass. 926; Mich.
1115; Mont. 1279; N. Y. 1453; O. 1612; Pa. 1738; Va. 2006; W. Va. 2062;
Wis. 2099; Wyo. 2138.
Bonds, debts, etc. Ala. 282; Ark. 311; Cal. 329; Col. 359; Conn. 382;
Del. 414; Fla. 431; Ga. 446; Ida. 474; Ill. 503; Ind. 589; Iowa, 637;
Kan. 668; Ky. 711; La. 754; Me. 791; Md. 829; Mass. 938; Mich. 1115;
Minn. 1175; Miss. 1208; Mo. 1229; Mont. 1279; Neb. 1297; Nev. 1327;
N. H. 1344; N. J. 1387; N. Y. 1454; N. C. 1577; N. Dak. 1591; O. 1612;
Ore. 1680; Pa. 1739; R. I. 1830; S. C. 1859; S. Dak. 1885; Tenn. 1918;
Vt. 1980; Va. 2006; Wash. 2033; W. Va. 2062; Wis. 2100; Wyo. 2138;
U. S. 2170; D. C. 2238; Ariz. 2265; N. M. 2275; Okl. 2292; Utah, 2307.
DIVIDENDS. Ala. 283; Ark. 312; Cal. 330; Col. 360; Conn. 383; Del.
414; Ga. 446; Ida. 475; Ill. 505; Ind. 591; Iowa, 638; Kan. 668; La.
755; Me. 792; Md. 829; Mass. 944; Mich. 1116; Minn. 1175; Miss. 1208;
Mo. 1230; Mont. 1280; N. J. 1388; N. Y. 1461; N. C. 1578; N. Dak. 1592;
O. 1613; Ore. 1680; Pa. 1745; R. I. 1831; S. C. 1859; S. Dak. 1885; Tenn.
1918; Tex. 1954; Vt. 1980; Va. 2006; Wash. 2034; W. Va. 2064; Wis.
2101; Wyo. 2138; N. M. 2276; Okl. 2293.
LIABILITY OF STOCKHOLDERS. Ala. 283; Ark. 312; Cal. 330; Col. 360;
Conn. 383; Del. 414; Fla. 431; Ga. 446; Ida. 475; Ill. 505; Ind. 591; Iowa,
639; Kan. 668; Ky. 713; La. 755; Me. 794; Md. 829; Mass. 945; Mich.
1116; Minn. 1176; Miss. 1208; Mo. 1230; Mont. 1280; Neb. 1297; Nev. 1328;
N. H. 1346; N. J. 1388; N. Y. 1461; N. C. 1578; N. Dak. 1592; 0.1614;
Ore. 1680; Pa. 1745; R. I. 1831; S. C. 1860; S. Dak. 1886; Tenn. 1918;
Tex. 1954; Vt. 1980; Va. 2007; Wash. 2034; W. Va. 2064; Wis. 2101;
Wyo. 2138; D. C. 2239; Ariz. 2265; N. M. 2276; Okl. 2293; Utah,
2307.
LIABILITY OF OFFICERS AND DIRECTORS. Ala. 284; Ark. 312; Cal. 332;
Col. 360; Conn. 383; Del. 414; Ga. 447; Ida. 475; Ill. 508; Ind. 592; Iowa,
640; Kan. 670; Ky. 714; La. 756; Me. 797; Md. 830; Mass. 957; Mich.
1119; Minn. 1180; Miss. 1209; Mo. 1230; Mont. 1280; Neb. 1298; Nev.
1329; N. H. 1347; N. J. 1388; N. Y. 1466; N. C. 1578; N. Dak. 1592;
Q. 1616; Ore. 1680; Pa. 1747; R. I. 1833; S. C. 1861; S. Dak. 1887; Tenn.
1919; Tex. 1955; Vt. 1981; Wash. 2034; W. Va. 2065; Wis. 2103; Wyo.
2139; D. C. 2240; Ariz. 2265; N. M. 2276; Okl. 2294; Utah, 2307.
2450
ECONOMIC LEGISLATION.
REPORTS. Ark. 312; Cal. 333; Col. 361; Conn. 384; Del. 415; Ga. 447 ;
Ida. 475; Ill. 509; Ind. 593; Iowa, 641; Kan. 671; La. 756; Me. 797;
Md. 831; Mass. 960; Mich. 1119; Minn. 1181; Miss. 1209; Mo. 1231;
Mont. 1281; Neb. 1298; Nev. 1329; N. H. 1348; N. J. 1388; N. Y. 1469;
N. C. 1578; N. Dak. 1592; O. 1616; Ore. 1681; Pa. 1747: R. I. 1835; S.
C. 1861; S. Dak. 1888; Tenn. 1920; Tex. 1956; Vt. 1981; Va. 2007; Wash.
2035; W. Va. 2065; Wis. 2105; Wyo. 2139; D. C. 2240; N. M. 2276; Okl.
2294.
TAXATION. Ala. 284; Ark. 313; Cal. 334; Col. 361; Conn. 385; Del.
415; Fla. 432; Ga. 447; Ida. 475; Ill. 510; Ind. 593; Iowa, 641; Kan.671;
Ky. 715; La. 756; Me. 798; Md. 831; Mass. 965; Mich. 1120; Minn.
1182; Miss. 1209; Mo. 1233; Mont. 1281; Neb. 1298; Nev. 1329; N. H.
1349; N. J. 1389; N. Y. 1472; N. C. 1578; N. Dak. 1593; O. 1617; Ore.
1681; Pa. 1750; R. I. 1836; S. C. 1861; S. Dak. 1889; Tenn. 1920; Tex.
1956; Vt. 1981; Va. 2007; Wash. 2035; W. Va. 2066; Wis. 2106; U. S.
2174; D. C. 2241; N. M. 2277.
Of stock in hands of holders. Ark. 314; Cal. 334; Col. 362; Conn. 386;
Ga. 448; Iowa, 642; Kan. 672; Ky. 719; La. 758; Md. 836; Mass. 974;
Miss. 1209: Mo. 1234; Neb. 1300; N. H. 1350; N. Y. 1483; N. C. 1579;
O. 1617; Ore. 1682; Pa. 1771; R. I. 1837; S. Dak. 1892; Tenn. 1922; Tex.
1957; Vt. 1982; Wash. 2036; Wis. 2107.
Exemption from. Ala. 286; Conn. 386; Fla. 432; Ga. 449; Ill. 519; Iowa,
642; Ky. 719; La. 758; Me. 800; Md. 837; Mass. 974; Miss. 1209; Mo.
1235; Neb. 1300; N. Y. 1483; N. C. 1579; Pa. 1772; S. Dak. 1892; Tenn.
1923; Tex. 1957; Vt. 1983; U. S. 2177; D. C. 2241.
Licenses. Cal. 335; Kan. 673;
CONSOLIDATION OF COMPANIES.
La. 758; O. 1618; Pa. 1771.
Ala. 286; Conn. 386; Ga. 449; Ida. 475;
Ill. 519; Ind. 595; Iowa, 642; Kan. 673; Ky. 720; La. 758; Me. 800; Md.
838; Mass. 975; Mich. 1121; Minn. 1184; Mo. 1235; Mont. 1282; Neb. 1301;
N. H. 1350; N. J. 1390; N. Y. 1483; O. 1618; Pa. 1776; S. Dak. 1892;
Tenn. 1923; Tex. 1957; Vt. 1983; W. Va. 2068; Wyo. 2140; U. S. 2180;
D. C. 2242; Ariz. 2265; N. M. 2277; Okl. 2295; Utah, 2307.
Trusts, etc. Ill. 522; Mo. 1236; Tenn. 1924.
ALIENATION OF PROPERTY AND RIGHTS. Mass. 975; Wis. 2107.
Ark. 314; Cal. 335; Col. 362;
Ind. 596; Iowa, 643; Kan. 674;
Mass. 978; Mich. 1122; Minn.
DISSOLUTION; FORFEITURE. Ala. 286;
Conn. 386; Del. 416; Ida. 476; Ill. 525;
Ky. 721; La. 759; Me. 802; Md. 838;
1184; Mo. 1240; Mont. 1282; Neb. 1302; Nev. 1330; N. H. 1350; N. J.
1391; N. Y. 1485; N. C. 1580; N. Dak. 1594; O. 1621; Ore. 1682; Pa.
1779; R. I. 1839; S. C. 1865; S. Dak. 1892; Tenn. 1924; Tex. 1957; Vt.
1983; Va. 2009; Wash. 2036; W. Va. 2068; Wis. 2107; U. S. 2181; Ariz.
2265; N. M. 2277; Ökl. 2296; Utah, 2308.
FOREIGN CORPORATIONS.
Ala. 288; Ida. 476; Ill. 526; Ind. 596; Iowa,
643; Kan. 675; Ky. 722; La. 760; Me. 803; Md. 839; Mass. 982; Minn.
APPENDIX D.
2451
1187; Mo. 1240; N. H. 1351; N. J. 1393; N. Y. 1486; O. 1624; Ore.
1683; Pa. 1780; R. I. 1839; S. Dak. 1896; Tenn. 1925; Wash. 2037; W.
Va. 2072; Wis. 2108; U. S. 2182; D. C. 2242; N. M. 2278; Okl. 2297;
Utah, 2308.
SUBDIVISION III-FRANCHISES. Ala. 290; Ark. 315; Cal. 335;
Col. 363; Conn. 387; Del. 416; Fla. 432; Ga. 449; Ida. 477; Ill.
527; Ind. 598; Iowa, 644; Kan. 675; Ky. 723; La. 761; Me. 804; Md.
839; Mass. 987; Mich. 1122; Minn. 1188; Miss. 1209; Mo. 1243; Mont.
1283; Neb. 1302; Nev. 1330; N. H. 1351; N. J. 1394; N. Y. 1486; N. C.
1580; N. Dak. 1595; O. 1624; Ore. 1684; Pa. 1782; R. I. 1840; S. C.
1865; S. Dak. 1897; Tenn. 1925; Tex. 1959; Vt. 1984; Va. 2010; Wash.
2039; W. Va. 2074; Wis. 2108; Wyo. 2140; U. S. 2198; D. C. 2243; Ariz.
2265; N. M. 2278; Okl. 2297; Utah, 2308.
HOW OBTAINED. Ala. 290; Ark. 315; Cal. 335; Col. 363; Conn. 387;
Del. 416; Fla. 432; Ga. 449; Ida. 477; Ill. 527; Ind. 598; Iowa, 644;
Kan. 675; Ky. 723; La. 761; Me. 804; Md. 839; Mass. 987; Mich. 1122;
Minn. 1188; Miss. 1209; Mo. 1243; Mont. 1283; Neb. 1302; Nev. 1330;
N. H. 1351; N. J. 1394; N. Y. 1486; N. C. 1580; N. Dak. 1595; 0.1625;
Ore. 1684; Pa. 1782; R. I. 1840; S. C. 1865; S. Dak. 1897; Tenn.
1925; Tex. 1959; Vt. 1984; Va. 2010; Wash. 2039; W. Va. 2074; Wis.
2108; Wyo. 2140; D. C. 2243; Ariz. 2265; N. M. 2278; Okl. 2297;
Utah, 2308.
POWERS OF MUNICIPALITIES AS TO. Ala. 292; Ark. 315; Col. 364; Conn.
388; Ga. 451; Ill. 529; Ind. 600; Iowa, 645; Kan. 676; Ky. 725; La.
761; Md. 841; Mass. 995; Mich. 1127; Minn. 1189; Mo. 1245; Mont.
1284; Neb. 1303; N. H. 1354; N. J. 1400; O. 1629; Ore. 1687; Pa. 1787;
S. Dak. 1898; Tenn. 1926; Tex. 1959; Vt. 1985; Wash. 2039; W. Va.
2075; Wis. 2109; N. M. 2279; Okl. 2298; Utah, 2309.
Classification of municipalities. Cal. 337; Kan. 676; Ky. 725; Neb.
1303; O. 1629; Pa. 17SS.
LIMITATIONS. Ark. 315; Cal. 338; Col. 365; Conn. 388; Del. 417; Ill.
530; Ky. 726; La. 762; Me. 805; Md. 842; Mass. 998; Mo. 1246; Mont.
1284; Neb. 1307; Nev. 1331; N. J. 1401; N. Y. 1509; O. 1633; Pa. 1788;
R. I. 1840; S. Dak. 1899; Tenn. 1927; Wyo. 2143; N. M. 2279.
CONTROL OF STREETS. Ala. 293; Ark. 315; Del. 418; Ga. 451; Ida.
479; Ill. 530; Ind. 603: Iowa, 645; Kan. 679; Me. 806; Md. 842; Mass.
1004; Mich. 1129; Minn. 1191; Mont. 1285; N. Y. 1510; 0. 1635; Ore.
1688; Pa. 1788; S. C. 1866; S. Dak. 1899; Tenn. 1927; Tex. 1960; Va.
2011; W. Va. 2075; Wyo. 2143; U. S. 2203; D. C. 2245; N. M. 2279.
SPECIAL DAMAGES; PROPERTY OWNERS' RIGHTS. Ala. 292; Conn. 389;
Del. 418; Ga. 451; Ill. 531; Ind. 603; Iowa, 646; Kan. 679; Ky. 727;
Me. 806; Md. 842; Mass. 1011; Mich. 1129; Minn. 1191; Miss. 1210;
Mo. 1247; N. H. 1355; N. J. 1401; N. Y. 1515; O. 1635; Ore. 1688; Pa.
2452
ECONOMIC LEGISLATION.
1789; R. I. 1841; S. Dak. 1899; Tenn. 1928; Tex. 1960; W. Va. 2076;
U. S. 2206; D. C. 2246; Okl. 2298; Utah, 2309.
CONDEMNATION OF PROPERTY. Ala. 315; Conn. 389; Del. 418; Fla. 433;
Ga. 452; Ida. 479; Ill. 532; Ind. 604; Iowa, 646; Kan. 679; Ky. 728;
La. 762; Me. 806; Md. 843; Mass. 1016; Mich. 1130; Minn. 1192; Miss.
1210; Mo. 1247; Mont. 1285; Nev. 1332; N. H. 1355; N. J. 1403; N. Y.
1519; N. C. 1581; N. Dak. 1595; O. 1636; Ore. 1691; Pa. 1789; S. C.
1866; S. Dak. 1899; Tenn. 1928; Tex. 1960; Vt. 1986; W. Va. 2077;
Wyo. 2144; U. S. 2209; D. C. 2248; Ariz. 2266; N. M. 2280; Okl. 2298;
Utah, 2309.
DURATION OF FRANCHISE; RENEWAL OF. Ala. 295; Ark. 316; Cal. 339;
Col. 365; Del. 419; Ga. 452; Ida. 479; Ind. 607; Iowa, 646; Kan. 680;
Ky. 732; La. 763; Me. 807; Md. 843; Mass. 1023; Mich. 1131; Minn.
1193; Mo. 1252; Neb. 1307; N. H. 1355; N. J. 1404; N. Y. 1523; O. 1643;
R. I. 1841; S. Dak. 1902; Tenn. 1928; Wis. 2110; Wyo. 2144; N. M.
2280; Utah, 2310.
REFUSAL TO GRANT A FRANCHISE. Ark. 316; Col. 365; Del. 419; Fla.
433; Ga. 452; Ind. 607; Iowa, 646; Kan. 680; La. 763; Me. 808; Md.
843; Mass. 1023; Minn. 1193; Neb. 1307; Nev. 1332; N. H. 1356; N. Y.
1523; R. I. 1841; S. Dak. 1902; Tenn. 1929; Vt. 1988; Wis. 2110.
CONFLICTING GRANTS. Ala. 295; Cal. 339; Col. 366; Conn. 389; Ill. 534;
Ind. 607; Iowa, 647; Ky. 731; La. 763; Me. 808; Mass. 1024: Minn.
1193; Mo. 1252; Neb. 1307; N. H. 1356; N. J. 1404; N. Y. 1524; O. 1644;
Ore. 1693, Pa. 1793; R. I. 1842; Tenn. 1930; Tex. 1960; W. Va. 2077;
U. S. 2210.
PERPETUAL AND EXCLUSIVE FRANCHISES.
Ala. 295; Ark. 316; Cal. 339;
Col. 366; Conn. 389; Del. 419; Fla. 433; Ga. 452; Ida. 480; Ill. 534; Ind.
608; Iowa, 647; Kan. 680; Ky. 732; La. 763; Md. 843; Mass. 1026;
Mich. 1132; Minn. 1194; Miss. 1211; Mo. 1252; Mont. 1285; Neb. 1308;
Nev. 1332; N. H. 1356; N. J. 1405; N. Y. 1527; N. C. 1581; Ore. 1693;
Pa. 1793; R. I. 1842; S. Dak. 1902; Tenn. 1929; Tex. 1961; W. Va. 2078;
Wis. 2110; Wyo. 2145; U. S. 2210; N. M. 2280; Okl. 2299.
CHARGES FOR FRANCHISES. Ala. 297; Ark. 317; Cal. 340; Col. 366;
Conn. 391; Del. 420; Fla. 433; Ga. 453; Ill. 537; Ind. 609; Iowa, 649;
Kan. 681; Ky. 734; La. 764; Me. 808; Md. 845; Mass. 1027; Mich. 1134;
Minn. 1194; Miss. 1211; Mo. 1254; Neb. 1309; Nev. 1333; N. H. 1357;
N. J. 1406; N. Y. 1528; N. C. 1582; O. 1647; Pa. 1796; R. I. 1843;
Tenn. 1930; Tex. 1961; Vt. 1989; Va. 2020; Wis. 2112; Ariz. 2266 ;
Utah, 2310.
METHODS OF CONSTRUCTION. Ala. 297; Ark. 317; Cal. 340; Col. 366;
Conn. 391; Del. 420; Fla. 433; Ga. 454; Ida. 480; Ill. 540; Ind. 609; Iowa,
649; Kan. 681; Ky. 734; La. 764; Me. 808; Md. 847; Mass. 1027; Mich.
1135; Minn. 1194; Miss. 1211; Mo. 1254; Mont. 1285; Neb. 1310; N. H.
APPENDIX D.
2453
1357; N. J. 1407; N. Y. 1530; N. C. 1582; O. 1648; Ore. 1693; Pa. 1797;
R. I. 1844; S. C. 1866; Tenn. 1930; Tex. 1961; Vt. 1989; Va. 2020; Wash.
2041; W. Va. 2078; Wis. 2113; Wyo. 2145; U. S. 2218; D. C. 2248; N. M.
2280; Okl. 2299; Utah, 2310.
REGULATIONS AS TO SERVICE. Ala. 298; Ark. 317; Cal. 341; Col. 367;
Conn. 393; Del. 420; Fla. 433; Ga. 455; Ida. 480; Ill. 546; Ind. 611;
Iowa, 651; Kan. 682; Ky. 735; La. 765; Me. 809; Md. 847; Mass. 1036;
Mich. 1136; Minn. 1195; Miss. 1211; Mo. 1258; Mont. 1285; Neb. 1312;
Nev. 1333; N. H. 1359; N. J. 1410; N. Y. 1536; N. C. 1582; O. 1650; Ore.
1694; Pa. 1800; S. C. 1866; Tenn. 1931; Tex. 1961; Vt. 1989; Va. 2021;
Wash. 2041; W. Va. 2078; Wis. 2114; Wyo. 2145; U. S. 2219; D. C. 2252;
Ariz. 2266; N. M. 2281; Okl. 2300; Utah, 2314.
DISCRIMINATION IN SERVICE; REFUSAL TO RENDER SERVICE. Ark. 317;
Cal. 346; Col. 367; Conn. 393; Del. 421; Fla. 434; Ga. 456; Ida. 481;
Ill. 551; Ind. 616; Iowa, 651; Ky. 735; Me. 810; Md. 849; Mass. 1048;
Mich. 1138; Minn. 1196; Miss. 1211; Mo. 1262; Neb. 1313; N. H. 1360;
N. J. 1412; N. Y. 1555; N. C. 1583; N. Dak. 1595; O. 1655; Ore. 1695,
Pa. 1802; S. C. 1867; S. Dak. 1902; Tenn. 1933; Tex. 1963, Wis. 2114;
Wyo. 2146; N. M. 2281; Okl. 2300.
SAFETY OF LIFE AND PROPERTY. Ark. 317; Cal. 346; Col. 367; Conn. 395;
Fla. 434; Ga. 456; Ill. 552; Ind. 617; Iowa, 652; Kan. 684; Ky. 735; La.
767; Me. 811; Md. 853; Mass. 1051; Mich. 1139; Minn. 1196; Mo. 1262;
Mont. 1285, Nev. 1333; N. H. 1362; N. Y. 1556; N. C. 1583; 0.1656; R.
I. 1846, Tenn. 1934; Tex. 1963; Va. 2021; D. C. 2255; Okl. 2300; Utah,
2314.
STATE AND MUNICIPAL AID. Ala. 299; Ark. 317; Cal. 347; Col. 367; Conn.
393; Ga. 457; Ida. 481; Ill. 554; Ind. 618; Iowa, 653; Ky. 737; La. 768;
Me. 812; Md. 853; Mass. 1061; Mich. 1139; Miss. 1211; Mo. 1263; Mont.
1286; Neb. 1314; Nev. 1334; N. H. 1362; N. J. 1413; N. Y. 1558; N. C.
1583; O. 1657; Ore. 1695; Pa. 1805; R. I. 1847; S. C. 1867; S. Dak. 1903;
Tenn. 1934; Tex. 1963; Vt. 1989; Va. 2022; W. Va. 2079; Wis. 2115;
Wyo. 2146; U. S. 2221; Okl. 2301.
PUBLIC SERVICE. Ala. 300; Ark. 317; Cal. 347; Col. 367; Conn. 396; Del.
422; Fla. 434; Ida. 481; Ill. 555; Ind. 619; lowa, 653; Kan. 684; Ky.
739; Me. 812; Md. 853; Mass. 1061; Mich. 1139; Minn. 1196; Miss.
1212; Mo. 1264; Mont. 1286; Neb. 1314; N. H. 1363; N. J. 1414; N. Y.
1559;
N. C. 1584; O. 1659; Pa. 1806; R. I. 1847; S. C. 1868; Tenn. 1934;
Tex. 1963; Vt. 1990; Va. 2022; Wis. 2116; Wyo. 2146; D. C. 2256; Ariz.
2267; N. M. 2281; Okl. 2301; Utah, 2314.
ALTERATION, AMENDMENT, ETC., OF FRANCHISES. Ala. 301; Cal. 348; Col.
368; Conn. 397; Del. 442; Fla. 434; Ga. 457; Ill. 556; Ind. 621: Iowa, 653;
Kan. 685; Ky. 739; La. 769; Me. 812; Md. 854; Mass. 1065; Mich. 1141;
Minn. 1197; Mont. 1287; Neb. 1315; Nev. 1335; N. H. 1364; N. J. 1415;
2454
ECONOMIC LEGISLATION.
N. Y. 1561; O. 1660; Pa. 1810; R. I. 1847; S. Dak. 1903; Tenn. 1935;
Tex. 1963; Va. 2023; Wis. 2122; Wyo. 2147 D C. 2256; Okl. 2301.
ASSIGNMENT OF FRANCHISES. Ala. 302; Conn. 397; Ill. 557; Iowa, 654;
Kan. 686; Ky. 739; Mass. 1066; Mich. 1142; Minn. 1197; Mo. 1264;.
Tenn. 1935.
CONSOLIDATION OF FRANCHISES.
Ill. 558; Iowa, 654; Kan. 686; Ky.
740; Me. 812; Mass. 1066; Mich. 1142; N. H. 1365; N. Y. 1563; O. 1661;
S. Dak. 1903; Tenn. 1936.
FORFEITURE OF FRANCHISES. Cal. 348; Ill. 558; Iowa, 654 ; Ky. 740;
Md. 851; Mass. 1066; Mich. 1142; Minn. 1198; Mo. 1264; Mont. 1287;
Nev. 1335; N. Y. 1563; O. 1661; Ore. 1695; Pa. 1810; S. Dak. 1903; Tex.
1964; Wis. 2122.
SUBDIVISION IV.-MUNICIPAL OWNERSHIP. Ala. 302; Ark. 318; Cal..
348; Col. 369; Conn. 398; Del. 422; Fla. 434; Ga. 457; Ida. 482; Ill. 558;
Ind. 622; Iowa, 655; Kan. 686; Ky. 740; La. 769; Me. 812; Md. 854;
Mass. 1067; Mich. 1143; Minn. 1198; Miss. 1212; Mo. 1265; Mont. 1287;
Neb. 1315; Nev. 1336; N. H. 1365; N. J. 1415; N. Y. 1564; N. C. 1584;
O. 1663; Ore. 1695; Pa. 1810; R. I. 1847; S. C. 1868; S. Dak. 1903; Tenn.
1936; Tex. 1964; Vt. 1990; Va. 2023; Wash. 2042; W. Va. 2079; Wis.
2123; Wyo. 2147; D. C. 2256; N. M. 2282; Utah, 2315.
HISTORICAL. Ala. 302; Ark. 318; Cal. 348; Col. 369; Conn. 398; Del.
422; Fla. 434; Ga. 457; Ida. 482; Ill. 558; Ind. 622; Iowa, 655; Kan.
686; Ky. 740; La. 769; Me. 812; Md. 854; Mass. 1067; Mich. 1143;
Minn. 1198; Miss. 1212; Mo. 1265; Mont. 1287; Neb. 1315; Nev. 1336;
N. H. 1365; N. J. 1415; N. Y. 1564; N. C. 1584; O. 1663; Ore. 1695; Pa.
1810; R. I. 1847; S. Dak. 1903; Tenn. 1936; Tex. 1964; Vt. 1990; Va..
2023; Wash. 2042; W. Va. 2079; Wis. 2123; Wyo. 2147; D. C. 2256;
N. M. 2282; Utah, 2315.
POWER OF MUNICIPALITIES TO ERECT OR PURCHASE SUCH INDUSTRIES. Ala.
303; Cal. 349; Ga. 458; Ind. 623; Iowa, 655; Kan. 687; Md. 855; Mass.
1071; Mich. 1145; Minn. 1198; Neb. 1316; N. H. 1366; N. J. 1417; N.
Y. 1565; Ore. 1696; Pa. 1811; S. Dak. 1903; Tenn. 1939; Wyo. 2149.
POWER TO APPROPRIATE PROPERTY FOR. Ill. 562; Kan. 691; Mass.
1094; Ore. 1698; Tenn. 1941; W. Va. 2082.
EXAMPLES OF THE EXERCISE OF OWNERSHIP.
1420; Tenn. 1942.
Ga. 459; Kan. 691; N. J..
ECONOMIC RESULTS. Mass. 1095; Minn. 1200; Neb. 1318; N. H. 1368;
N. Y. 1568; Tenn. 1942; Vt. 1992; W. Va. 2080; Wyo. 2152.
APPENDIX E.
AN ACT RELATING TO THE FORMATION OF CORPO-
RATIONS.
The following act (approved November 22, 1892) relating to corpora-
tions has been furnished through the kindness of Hiram A. Huse of
Montpelier, Vt. It was received at too late a date to incorporate into the
state section, and consequently is added as an appendix at this point:
It is hereby enacted by the General Assembly of the State of Vermont:
Section 1. Five or more persons of lawful age may, by articles of asso-
ciation, form a corporation for the carrying on of any object, purpose or
business not repugnant to public policy or the laws of this state, except-
ing telegraph, telephone and express companies, corporations for bank-
ing, insurance, the construction and operation of railroads or aiding in
the construction thereof, and the business of savings banks, trust com-
panies or corporations intended to derive profit from the loan of money
or to deal in real estate, provided, however, if, in the opinion of the sec-
retary of state, the business of a proposed corporation may be repugnant
to public policy or the laws of this state, he shall, before making the
record hereinafter provided, refer the same to a judge of the supreme
court, who shall have full power to determine, with or without hearing,
whether said proposed corporation may or may not be organized under
the provisions of this act.
Sec. 2. The articles of association shall set forth the name of the
corporation, the object or objects for which it is established, the place in
which its business is to be carried on, and the amount of its capital
stock, if any, and shall be signed by the persons who associate together
to form it, with the designation of the post-office address of each.
Any corporate name may be assumed which is not in use by any
other corporation or company, and a corporation organiz! under the
provisions of this act may adopt a corporate seal.
Sec. 3. Such articles of association, signed by the corporators, shall
be transmitted to the secretary of state, who shall thereupon, if the arti-
cles are made and executed in compliance with this act, record the same
in a book kept for that purpose and return to the corporators a certified
copy thereof, which copy shall be recorded in the office of the town clerk in
the town in which the principal business office of said corporation shall be
located, in a book kept by him for that purpose. And when said original
articles and said certified copy are so recorded, and the franchise or
license tax required by law, if any, has been paid to the state treasurer,
(2455)
2456
ECONOMIC LEGISLATION.
the signers thereof shall be a corporation, and such corporation, its offi-
cers and stockholders, shall have all the rights and powers, and be sub-
ject to all the duties and liabilities of corporations, their officers and
stockholders, except so far as the same are limited or enlarged by law.
Sec. 4. The articles of association provided in the preceding sections
shall be in substance as follows:
We, the subscribers, hereby associate ourselves together as a corpora-
tion, under the laws of the State of Vermont, to be known by the name
of for the purpose of
at in the county of
divided into
State of
2
in the
shares of
with a capital stock of
dollars each (if it be a stock company), or upon the following con-
ditions, if not a stock company: (here insert conditions under which the sub-
scribers agree to associate together for the purposes named). Dated at
this day of
A. D.
in
the county of
Town clerks shall keep a separate book for recording such articles of
association and shall receive ten cents a folio for recording the same.
Sec. 5. Any three of the five signers of the articles of association by
which a corporation is formed may call the first meeting of the mem-
bers or stockholders by giving each, in hand, or leaving at the abode of
each, or sending through the mails, postpaid, to the post-office address
of each, a notice of the time and place of meeting, at least seven days
before the day of meeting. Such meeting may be held without pre-
vious notice, if all the members or stockholders voluntarily assemble
together for the purpose; or it may be so held at a time and place to
which they have all agreed in writing.
Sec. 6. At the first meeting and adjournments thereof, the members
or stockholders shall effect an organization by the choice, by ballot, of a
temporary clerk, by the adoption of by-laws, and by the election of of-
ficers in accordance with the by-laws and laws of the state. The tem-
porary clerk shall hold office and perform the duties of clerk of the cor-
poration until a permanent clerk is regularly chosen and qualified.
Sec. 7. Such corporation may adopt by-laws not repugnant to the
laws of this state to provide for the election, removal, and retiring of
members; to fix the times and places of holding meetings, and the
manner of calling and conducting them; to regulate the number of offi-
cers, the manner of choosing them, their tenure of office, and their
powers and duties, and to promote the objects of the corporation; and
they may alter and amend such by-laws. And in the event of a failure
to hold an annual meeting, for any cause, the owners of one-twentieth
part of the stock or property thereof, or if the same is not divided into
shares or stock, one-twentieth part in number of the members thereof,
may apply in writing to a justice of the peace to call a meeting, stating
the occasion and purpose thereof. The justice shall thereupon issue
his warrant to one of the applicants, requiring him to warn a meeting
at a suitable time and place, for the purpose stated in the application
and warrant; and all business transacted at the meeting in pursuance
of the warrant shall be valid.
APPENDIX E.
2457
Sec. 8. Every corporation shall have a clerk, who shall be chosen an-
nually by the stockholders or in such other manner as the charter or
by-laws may prescribe, and shall be and continue an inhabitant of this
state and keep his office therein; he shall hold office for one year and
until his successor is chosen and qualified. In case of vacancy in the
office, it shall be filled as provided in the by-laws, or if there be no pro-
vision on the subject in the by-laws, it shall be filled by the directors or
officers charged with the management of the affairs of the corporation,
until the next election.
Sec. 9. The clerk shall record all votes and proceedings of the stock-
holders or members of the corporation, and of the directors or other
officers charged with the management of its affairs; shall keep a record
of all instruments and papers required to be recorded in his office; and
shall perform all other duties incumbent on him by law, or usage, or by
the by-laws.
Sec. 10. All records, accounts, and papers of the corporation shall be open
to the inspection of every member and stockholder of the corporation.
Sec. 11. The clerk, treasurer, assistant treasurer, or other officer or
agent of any corporation having the keeping of any such record, ac-
count, or paper, when required by any member or stockholder, on pay-
ment or tender of the fees allowed by law, shall furnish a certified copy
of any record, account, or paper which the party is entitled to inspect.
Sec. 12. If any clerk, treasurer, assistant treasurer, or other officer, or
any agent of the corporation, after demand of such copy and payment
or tender of the fees therefor, shall neglect or refuse for seven days to
furnish it, he shall forfeit for every offense a sum not exceeding one
thousand dollars to any member or stockholder who shall have de-
manded such copy.
Sec. 13. The term "clerk," as used in this act, shall mean the record-
ing officer of a corporation, by whatsoever title he may be designated;
and the term "treasurer," as used in this act, shall mean the officer hav-
ing the care and custody of the funds of a corporation, by whatsoever
name he is designated.
Sec. 14. The business of such corporation shall be managed by not
less than three directors, who shall be stockholders, and two of whom
shall reside in the state; they shall be chosen annually by the stock-
holders at such time and place as provided in the by-laws of the corpo-
ration, and shall hold their offices one year and until others are chosen;
said directors shall elect one of their number president of the corpora-
tion and may fill a vacancy in their board occurring during the year.
Provided, that if said corporation is not a stock company, the same be
managed by not less than three trustees, to be chosen in such manner
and to hold office for such time as may be prescribed in the by-laws.
Sec. 15. A majority of the directors or trustees, convened according to
the by-laws, shall be a quorum, and a majority of the stock represented
at a meeting, or of the members of a corporation having no capital
stock present at a meeting, may transact the business of such meeting.
74
2458
ECONOMIC LEGISLATION.
Each share of stock shall entitle the holder to one vote, which may be
cast under a written proxy duly filed with the clerk.
Sec. 16. Such corporation may admit associates and members, and for
just cause remove them; may elect all necessary officers, define their
duties, and fix their compensation; may sue and be sued, appear, pros-
ecute, and defend in the corporate name to final judgment and execu-
tion; appoint agents and attorneys for that purpose; and shall have
perpetual succession, unless incorporated or formed for a limited term,
or dissolve as provided by law.
Sec. 17. Such corporation may make contracts; may hold by pur-
chase, gift, grant, devise, or bequest, real and personal property neces-
sary for the purposes of the corporation, or taken in payment of or as
security for debts due it, and may manage, mortgage, convey, and dis-
pose of the same.
Sec. 18. They may take mortgages or pledges, or make attachments of
any property to secure the payment of debts due to them, and may
perfect the title thereto by proper legal proceedings; but they shall sell
or dispose of any property so obtained, which they are not authorized
to hold, within five years after the title is perfected.
Sec. 19. Before a corporation commences business, the president or
clerk shall make a certificate, verified by oath, stating the amount of
capital actually paid in, which shall be filed in the office of the secretary
of state, and a certified copy thereof filed with the town clerk of the
town in which the business office of said corporation shall be located;
and if the corporation contracts debts before the provisions of this sec-
tion and of section three of this act are complied with, the president
and directors shall be personally liable for such debts.
Sec. 20. If the directors declare and pay a dividend to the stockhold-
ers, from the property and assets of the corporation, when the same is
insolvent, or when by the payment of such dividend it becomes insol-
vent, knowing its condition, the directors assenting thereto shall be
jointly and severally liable, in an action founded on this statute, for
debts due from such corporation at the time such dividends are made.
Sec. 21. One-fourth of the capital stock shall be paid in before the
corporation contracts debts, and no part of it shall be withdrawn or di-
verted from the proper business of the corporation; provided, however,
that such capital stock may be issued in payment for any property de-
mand necessary for the business of the corporation, and the stock so is-
sued shall be full paid stock and not liable to further call; and no debts
shall be contracted by the corporation exceeding in amount two-thirds
of the capital stock actually paid in; and a director assenting to the cre-
ation of such indebtedness shall be personally liable for the excess.
Sec. 22. The stockholders of a corporation shall be individually liable to
its creditors to an amount equal to the amount unpaid on the stock held
by them, respectively, for contracts and debts made by such company.
Sec. 23. If the capital stock of a corporation is withdrawn and re-
funded to the stockholders before the full payment of its debts, each
APPENDIX E.
2459
stockholder shall be personally liable for the payment of such debts, to
the amount so refunded to him, to be recovered in an action founded
on this statute; and if a stockholder is compelled by such action to pay
such debt; or any part thereof, he may, by, bill in equity, compel the
other stockholders, to whom any part of said capital stock has been re-
funded, to contribute their proportional share of the sum so paid by him.
Sec. 24. The corporation shall have a lien upon the capital stock held
by the stockholders and upon their property invested in the corporation
for the debts due from them to it.
Sec. 25. The amount of capital stock shall be determined in the arti-
cles of association, and shall not be less than five hundred nor more
than one million dollars, and the same shall be divided into shares not
exceeding one hundred dollars each.
Sec. 26. The corporation may increase its capital stock and the num-
ber of shares thereof at a meeting of the stockholders warned for that
purpose; but the whole amount, when so increased, shall not exceed
the amount authorized by the preceding section.
Sec. 27. When a corporation desires to increase its capital stock, a cer-
tificate of such increase, signed and sworn to by the president and
clerk, shall be filed with the secretary of state, and recorded by him,
and a certified copy thereof returned and recorded in the town clerk's
office, as prescribed in the case of the original articles of association.”
Sec. 28. A corporation organized under the provisions of this act may,
by a vote of stockholders owning at least two-thirds of the capital stock,
at a meeting duly warned for that purpose, reduce its capital to any sum
not below the amount required by this act to authorize the formation of
a corporation; but no reduction shall be made so that the amount of the
debts and liabilities of such corporation shall exceed two-thirds of its
reduced capital; and such reduction shall not affect any then existing
liability of the corporation, or of its stockholders or members. .
Sec. 29. When a corporation so reduces its capital stock, a certificate
of such reduction, signed by the president and directors, shall be filed
with the secretary of state, and recorded by him, and a certified copy
thereof returned and recorded in the town clerk's office, in the same
manner as provided in case of an increase of capital stock.
Sec. 30. A corporation may divide its corporate property into shares,
regulate the term and manner of holding the same, may raise money by
assessment on the shares or rights of the members thereof, in propor-
tion to their several interests, according to its articles of association or
by-laws; and the payment of such assessments may be enforced by the
sale or forfeiture of the estate of a member of such corporation after
having given due notice thereof, and the same may be redeemed within
one year thereafter, upon payment of such assessment with interest and
costs; but no other estate of the members shall be taken or forfeited for
the payment of such assessments.
Sec. 31. The corporation shall cause a book to be kept by its clerk in
the town where its principal business office is located, containing a
2460
ECONOMIC LEGISLATION.
record of the articles of association; the names of the holders of stock;
their places of residence; the number of shares held by each; the
amount actually paid in on each share; the time when they respectively
became owners of such shares; and a record of the transfers of shares;
which book shall, during the usual business hours of each day, be open
for the inspection of 'stockholders.
Sec. 32. The name of a corporation may be changed upon a two-
thirds vote of the stockholders who shall also represent two-thirds of
the stock, if it be a stock company; otherwise, by a two-thirds vote of
all the members present at a meeting duly warned for that purpose,
and by filing with the secretary of state a certificate executed by the
clerk of said corporation, setting forth the change made and the sub-
stance of said vote, and by causing the same to be recorded in the office of
the secretary of state, and in the town clerk's office, where the original
articles and certified copy thereof are required to be filed, under the
provisions of this act; but said change shall not affect any liability then
existing.
Sec. 33. A corporation organized under the provisions of this act, or
stockholders owning one-fourth of the capital stock thereof, or if there
be no stockholders, one-fourth of the members of the corporation, may
apply by petition to the court of chancery in the county in which the
corporation has its principal business office, for a decree of dissolution,
or for such other relief as may be just; and the court, after due notice
to all parties interested and a hearing, may decree that the corporation
be dissolved, subject to such limitations and conditions as justice may
require.
Sec. 34. The clerk of said court shall cause an attested copy of such
decree of the court to be filed in the office of the secretary of state
forthwith after it is made, and when such copy has been so filed, the ex-
istence of the corporation shall terminate, in accordance with the terms
of such decree.
Sec. 35. A corporation organized for literary, educational, or scientific
purposes, shall have no power to confer degrees.
Sec. 36. Corporations organized under the provisions of this act shall
be subject to future legislation; and the supreme court, upon petition,
shall have power to dissolve the same whenever it shall appear that its
business transactions are repugnant to public policy, or the laws of this
state, upon such notice and hearing and upon such terms and conditions
as said court shall deem just.
Sec. 37. Societies or private corporations formed or organized under
the provisions of a previous law, for the purposes contemplated in this
act, may have and exercise the powers conferred by such law.
Sec. 38. Chapter 153, sections 3664 to 3675, inclusive of chapter 164 of
Revised Laws, No. 87, of the acts of 1886, and No. 127 of the acts of
1888, and all law inconsistent herewith, is hereby repealed.

UNIVERSITY OF MICHIGAN
Flad.
3 9015 06837 2898

A LEET
FOOTE
CHAS EVERETT.