§ 44. THE ACTS DISCUSSED IN THE SLAUGHTER HOUSE CASES WERE NOT ONLY VIOLATIVE OF NATIONAL LAW, BUT A USURPATION OF MUNICIPAL POLICE POWER. The public health cannot be conserved by the fiat of a State charter; nor by grant of exclusive power to a private corporation;' the relation of the State to the health of a city is remote. Not only is the matter of local police one for the local authorities, but the State cannot even exercise the final control over the determination of any matter by the ordinance of the city.2 And even in the case under discussion, while admitting that the only justification for the attempt of the State to confer a monopoly upon a citizen or corporation was that it was an exercise of the regulating power, it is not asserted that such regulation could be applied to the citizens of other States engaged in interstate commerce. In ex parte Virginia, the court showed that in the Slaughter House Cases it was defining the extent of the police power and not the

In Pensacola Tel. Co. v. Western Union Tel. Co., 96 U. S. 1, it was held that an exclusive charter given by a State to one telegraph company cannot prevent a foreign telegraph company from entering the State. Telegraph companies are engaged in interstate commerce. Insurance companies are not. Paul v. Virginia, 8 Wall. 168; Ducat v. Chicago, 10 Wall. 410; Liverpool Ins. Co. V. Mass., 10 Wall. 566; Doyle v. Continental Ins. Co., 94 U. S. 535; Phila. Fire Ass'n v. New York, 119 U. S. 110; Hooper v. Cal., 155 U. S. 648; New York Life Ins. Co. v. Cravens, 178 U. S. 389; Bank of Augusta v. Earle, 13 Pet. 519. Nor can a corporation employed by the national government be excluded. Stockton & R. R. Co., 32 Fed, 9, 14; Horn Silver Mining Co. v. New York, 143 U. S. 305; Postal Tel. Cable Co. v. Adams, 155 U. S. 658; Atl. & Pac. Tel. Co. v. Phil., 190 U. S. 160.

Yick Wo v. Hopkins, 118 U. S. 356. See an admission of the limitation of police power in People v. Beattie, N. Y. Law Journal, July 26, 1904.

3 100 U. S. 339.

question of its possession. It was not considered whether a corporation really held its monopoly naturally by virtue of a special franchise from the municipality concerned. The property used was that of the city; the health jeopardized was that of the city or that of all using the river or the abutting shore.' In the latter case, the matter was one for the national law; in the former, for a municipal ordinance.' The State may grant exclusive use of a definite portion of its own property, but it may not create in an individual a property right which is based solely upon the prohibition to all others of the exercise within a certain territory of a legitimate business. The act of the State was a wholly unwarrantable restraint of trade. It is impossible to say that the city was compelled to use its property in such a way as to preserve the exclusive rights of the private corporation. This follows necessarily from the opinion in the case of Charles River Bridge v. The Warren Bridge,3 above quoted.

In the case of the Metropolitan Street Railway Company v. Commissioners, it was held that the grant of a general franchise to a corporation to live and to do business gives no right to occupy the public highways without special authority. Thus the creation of a corporation is distinct from the regulative

For a discussion of the division of shore between city, state, and nation, see Shively v. Bowlby, 152 U. S. 1.

2 New York City v. Pine, 185 U. S. 93; Kansas v. Colorado, 185 U. S. 125; Missouri v. Illinois, 180 U. S. 241; U. S. v. Rio Grande Co., 174 U. S. 690. These cases concerned disputes over sources of water supply for cities. They show clearly the direct connection between national control of property, individuals, and commerce, and the police, health, and government of cities.

3 11 Pet. 420.

4 174 N. Y. 417, 199 U. S. 1.

function and the grant of special franchises.1 In Miller v. The State, it was said by the Supreme Court of the United States that "Power to legislate founded upon such a reservation [as grew up after the Dartmouth College Case] in the charter of a private corporation is certainly not without limit, and it may well be admitted that it cannot be exercised to take away or deprive rights acquired by virtue of such a charter, and which, by the legitimate use of the powers granted, has become vested in the corporation."

1 See as to disability of State legislatures to regulate interstate commerce under the police power, Central Georgia R. R. Co. v. Murphy, advance sheets, U. S. S. Ct., decided Jan. 9, 1905. But no fee exacted for the privilege of becoming a corporation under the law of the State can be contrary to the Constitution of the United States, Ashley v. Ryan, 153 U. S. 436. Those desiring the so-called privilege must accept the conditions. "The corporate franchises, the property, the business, the income of corporations created by a State may undoubtedly be taxed by the State; but in imposing such taxes, interstate or foreign commerce, or any other matter exclusively within the jurisdiction of the Federal government must not be hampered." P. & S. M. SS. Co. v. Pa. 122 U. S. 326. In Maine v. Grand Trunk Ry. 142 U. S. 217, by a five to four decision, an annual excise tax was upheld for the privilege of exercising railroad franchises in the State, ascertainable by dividing the gross receipts by the number of miles of road operated, and multiplying the resulting average by the number of miles operated within the State. "A resort to receipts was simply to ascertain the value of the business done," said Field, J., for the court. "The case of Steamship Co. v. Pennsylvania, 122 U. S. 326, in no way conflicts with this decision. That was the case of a tax in terms upon the gross receipts of a steamship company incorporated under the laws of the State, derived from the transportation of persons and property between different States and to and from foreign countries." The case of State Tax on Gross Receipts, 15 Wall. 284 (1873), holding such a tax valid, was shaken in Fargo v. Mich. 121 U. S. 230, and disapproved in P. S. S. Co. v. Pa., 122 U. S. 326; Ratterman v. W. U. Tel. Co., 127 U. S. 411; Ind. v. P. P. Car Co., 11 Biss. 561; 16 Fed. 193; N. & W. R. R. v. Pa., 136 U. S. 114; Crutcher v. Kentucky, 141 U. S. 147.

215 Wall, 478.

In People v. O'Brien,' it was held: "That a franchise to construct and operate a railroad was property, and transferable as such. That while the Legislature under the reservation under the Constitution in the State of New York might repeal and dissolve the corporation, it could not deprive the creditors and stockholders of the corporation of their interest in this franchise, and that, therefore, the franchise would pass to a receiver of the corporation." "States cannot, by granting franchises to corporations engaged in the business of transportation, which is in itself interstate commerce, acquire the right to regulate that commerce, either by taxation or in any other way.'

$45. THE GRANT OF BARE CORPORATE CAPACITY BY A STATE CREATES ABSOLUTELY NOTHING. In every State and organized Territory there are general laws under which a corporation may be formed by complying with the conditions prescribed. In most States the incorporators sign articles and file them

1 III New York, 1.

2 Fargo v. Mich., 121 U. S. 230.

See on Creation of Corporations, Franklin Bridge Co. v. Wood, 14 Ga. 80; State v. Dawson, 16 Ind. 40; Shaw v. Quincy Mining Co., 145 U. S. 444; on De Facto and Irregularly Organized Corporations, Finnegan v. Norenberg, 52 Minn. 239; Foster v. Moulton, 35 Minn. 458; Railway Co. v. Cary, 26 N. Y. 75; Heaston v. Railway Co., 16 Ind. 275; on the Nature of a Corporation a "A collection of many individuals united into one body, under a special denomination, having perpetual succession under an artificial form, and vested by the policy of the law with the capacity of acting in several respects as an individual, particularly of taking and granting property, of contracting obligations and suing and being sued, of enjoying privileges and immunities in common and enjoying a variety of political rights, according to its purpose," 1 Kyd. 13. Likewise Taylor, Corp., sec. 51; Morawetz, sec. 227; People v. Standard Oil Co., 49 Ohio St. 137; People v. North R. S. Rep. Co., 121 N. Y. 582, 621.

with a State officer; in a few States they are filed with a court,' or with a local official.?

"It is not strictly correct to say that a private corporation is created' by the legislature. The object of the charter is merely to confer upon the grantees the right or franchise of forming a corporation, and of acting in a corporate capacity, or, in other words, to legalize the subsequent acts of the incorporators."

Since the determination of the powers of a corporation is inherent in the very nature of the corporation, its powers cannot be altered by any other State. While the law of another State may permit or forbid the exercise of corporate powers, it cannot increase or diminish the powers themselves, or in any way affect their existence. Thus, when a railroad was chartered by the State of Indiana without power to lease another railroad, an act of the Illinois legislature authorizing it to lease a railroad in the latter State could not confer upon it the power to do so, and a lease attempted to be made in accordance with the Illinois statute would be void. And a railroad chartered by Kentucky with power merely to operate a railroad could not accept a warehouseman's lease in Louisiana, whatever the law of the latter State. So a telegraph company chartered to maintain telegraph lines only in certain named counties of a State may not enter another State and appropriate property, though

Alabama, Georgia, Maryland, Virginia.

District of Columbia.

Morawetz, 2d. Ed. sec. 24, Ellis v. Marshall, 2 Mass. 269, 277; Dartmouth College Case, 4 Wheat. 518, 683, 684; Beatty v. Knowles, 4 Pet. 152, 167; Providence Bank v. Billings, Pet. 514.

4

St. Louis, V. & T. H. R. R. v. Terre Haute & I. R. R., 145 U. S.

State v. So. Pac. Co., 52 La. Ann. 1822.