reserved power is the reservation of an authority to change or rescind a particular contract and is in no sense the creation of a new and distinct power,' nor can it be utilized as the means or vehicle for accomplishing such a result.2

§ 53. IMPAIRMENT OF CONTRACT AND REGULATION OF INTERSTATE COMMERCE BY THE STATES BY CONTROL OF CORPORATIONS.-There is the same right in the State now under the police power as there would have been had the Dartmouth College Case not been decided. In Wales v. Stetson, decided in 1806, Chief-Justice Parsons had said that "the rights legally vested in Minn. 418; Morgan v. Louisiana, 93 U. S. 217; Bondholders v. R. R. Commissioners, Case No. 1625, 3 Fed. Cas. 846; Jersey City GasLight Co. v. United Gas Improvement Co., 46 Fed. 265; California v. Central Pacific R. R. Co., 127 U. S. 40; State v. Minnesota Thresher Mfg. Co., 40 Minn. 225; Tuckahoe Canal Co. v. Tuchahoe etc. R. R. Co., 11 Leigh (Va.) 78; Denver & Swansea R. R. Co. v. Denver City R. R. Co., 2 Colo. 682; State v. Gas-Light Co., 18 Ohio St. 262; Sellers v. Union Lumbering Co., 39 Wisc. 527; Truckee & Tahoe Turnpike Road Co. v. Campbell, 44 Cal. 89; Davis v. New York 14 N.Y. 523; Milhau v. Sharp, 27 N.Y. 619; State v. Stebbins, I Stew. (Ala.) 312; Bank of Augusta v. Earle, 13 Peters, 595; Walsh v. New York Floating Dry Dock Co., 77 N. Y.

452; Detroit v. Detroit, etc. Plank-Road Co., 43 Mich. 140; People v. O'Brien, III N. Y. 1; Simpson County Court v. Arnold, 7 Bush (Ky.) 353; Snell v. Chicago, 133 Ill. 143; Rochester Turnpike Co. v. Joel, 41 A. D. (N. Y.) 43; Opinion of the Justices, 97 Me. 590; In re New York Cable Ry. Co., 40 Hun., 1; Ohio v. Neff, 52 Ohio St. 375; Woodward v. Central Vt. Ry. Co., 180 Mass. 599; Commissioners v. Navigation Co., 79 Ky. 73; Stearns v. Minnesota, 179 U. S. 223; Jersey City Gas-Light Co. v. Dwight, 29 N. J. Eq. 242.

1 Ireland v. Palestine, etc. Turnpike Co., 19 Ohio St. 369. "Opinion of the Justices, 66 N. H. 629; State Tax on Foreign Held Bonds, 15 Wall. 300; Mr. Justice Bradley, dissenting, in Sinking Fund Cases, 99 U. S. 700.

3 2 Mass. 143 (1806); see also Commonwealth v. Bonsall, 3 Wharton (Pa.), 559, 1838; Houston v. Jefferson College, 63 Pa. St. 428 (1869).

this, or in any corporation, cannot be controlled or destroyed by any subsequent statute, unless a power for that purpose be reserved by the legislature in the act of incorporation." This language is not judicial; the right to impair a right is a contradiction in terms. The reservation has been sustained upon the ground that the reservation was not a condition repugnant to the grant but only a limitation thereof.1 Where the power to revoke or amend charters is provided for in a State constitution, no legislature, in any subsequent statute, can grant a charter free from such reserved power, whereas if the power be contained merely in a general statute, the legislature may in any subsequent statute or in any later special act of incorporation grant a charter which shall be irrevocable and thus pro tanto repeal the preexisting statutory reservation of power. It is not always certain whether an act of incorporation shows an intention on the part of the legislature to make the reserved-power clause of a former act inapplicable to that particular corporation or group of corporations. It is axiomatic that when a right is vested, it is irrevocable. That which is given by the State is a franchise if there is no force in the reservation of the right to alter; that which is not given by the State is not a franchise; the right to regulate does not predicate the right to create, else there would be no distinction between a domestic

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1 McLaren v. Pennington, 1 Paige's Ch. Rep. (N. Y.) 102 (1828), Walworth, Chancellor.

' New Jersey v. Yard, 95 U. S. 104; Scotland County v. Missouri, Iowa & Nebraska Railway Co., 65 Mo. 123; Louisville Gas Co. v. Citizens' Gas Co., 115 U. S. 683.

Citizens' Savings Bank v. Owensboro, 173 U. S. 636.

Fletcher v. Peck, 6 Cranch, 87; Terrett v. Taylor, 9 Cranch, 43; Dartmouth College v. Woodward, 4 Wheat. 518.

and a "foreign" corporation; that which is recognized as the right of a "foreign" corporation within a State cannot be considered as a franchise when possessed by a domestic corporation. Therefore the right to carry on any particular business, whether belonging to a natural or an artificial person, is not necessarily or even usually a franchise. The right to carry on such business by a corporation organized under a special charter or general law is not a franchise, but a power, provided such business might be conducted by any citizen who chose to engage in it. The right to exist as a body corporate, carrying with it the right to sue and be sued, and to transact business in a common name and with a limited liability on the part of the stockholders, is said to be a franchise,' but it cannot be said to be granted by the so-called State of charter, for it is recognized by the law de facto or as a fact both in the domestic State and in other States, and some of the parts of the franchise are burdens imposed by the law. The franchise of being a corporation is derived from the assumption of the legal consequences of a legal fact dependent on the will of a certain number of individuals. It is believed and it may fairly be said that it has been held that it is the "acting on the law" which creates the charter and makes what is termed the corporate franchise irrevocable. Thus it has been held that the contract spoken of in the Dartmouth College Case does not arise until the charter has been accepted by the corporation, and that until such acceptance the legislature may alter, amend, or revoke the char

1 Jersey City Gas-Light Co. v. United Gas Improvement Co., 46 Fed. 265; California v. Central Pac. R. R. Co., 127 U. S. 40; State v. Minnesota Thresher Co., 40 Minn. 225; Tuckahoe Canal Co. v. Tuckahoe & James River R. R. Co., 11 Leigh (Va.), 78.

ter.' The theory is adopted that incorporators give consideration for the first or corporate franchise, but that for want of such consideration subsequent privileges and exemptions may be recalled or restricted.' But franchises are property; the proper expression of the truth is to say that they may be abandoned and under certain facts be held so to be and that their exercise is subject to the general political power called the police power. A franchise does not descend to the level of a revocable license by being subject to the police power of the State or by abandonment by the corporation. The State could not by the strongest expression alienate its power of eminent domain,' or the duty of exercising the police power. In the case of a real franchise, granted by the State and acted upon, it would be as ridiculous to say that the State can confiscate the property thereby created as to say that an individual or corporation could purchase immunity from the general laws and political power necessary for the protection of society." The New

1 State v. Dawson, 16 Ind. 40; Bank v. Richardson, I Me. 79; Regents v. Williams, 9 Gill & J. (Md.) 365; Pearsall v. Railroad Co., 161 U. S. 646.

2 Christ Church v. Philadelphia, 24 How. 300; Philadelphia and Gray's Ferry Co.'s Appeal, 102 Pa. St. 123; Tucker v. Ferguson, 22 Wall. 527; Railroad Co. v. Supervisors, 93 U. S. 595.

See Calder v. Kirby, 71 Mass. 597; Stone v. Mississippi, 101 U. S. 814.

West Point Bridge Co. v. Dix, 6 How. 507; Hyde Park v. Oakwoods Cemetery Assoc., 119 Ill. 141; Charles River Bridge v. Warren Bridge, 11 Pet. 420.

5 Beer Co. v. Massachusetts, 97 U. S. 25; Fertilizing Co. v. Hyde Park, 97 U. S. 659; Butchers' Union Slaughter House Co. v. Crescent City Live Stock Landing Co., 111 U. S. 746 (Slaughter House Case).

An exemption from taxation, given for a consideration, is irrevocable, but it is not a real exemption. Taxes are held to

York courts have distinguished between special franchises or franchises of property and the form in which the franchises are exercised. The form may be held to have been abandoned; but the Court of Appeals said, in the case of a franchise to maintain tracks and run cars on Broadway, that abandonment, by inisuser or otherwise, of the so-called franchise of incorporation, did not permit the State, w thout previous compensation, to deprive the stockholders and creditors of such franchise. Of course the State always has the choice of expropriation, but the court said that there are no reported cases in which the judgment of the court has ever taken the franchises or property of a corporation, through the exercise of the reserved power of amendment and repeal, or transferred it to other persons and corporations, without provision made for compensation. The reserved power adds nothing to the police power. So in the case of the right to lay gas-pipes in the streets of a city; the right to make and maintain a railway and to take tolls or fares thereon; the right to lay tracks in the streets of a city; the right to collect tolls upon logs put into a river; the right to collect tolls on bridges, roads, have been paid. New Jersey v. Wilson, 7 Cranch, 164; Pacific R. R. v. Maguire, 20 Wall. 36; Northwestern University v. People, 99 U. S. 309.

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1 Metropolitan Street R. R. Co. v. Commissioners, 174 N. Y. 714. 2 People v. O'Brien, 111 N. Y. 1; Rochester and Charlotte Turnpike Co. v. Joel, 41 A. D. 43.

People v. O'Brien, 111 N. Y. 1; see Denver & Swansea R. R. Co. v. Denver City R. R. Co., 2 Colo. 682.

Jersey City Gas Co. v. Dwight, 29 N. J. Eq. 242; State v. Cincinnati Gas-Light and Coke Co., 18 Ohio State, 262.

Blake v. Winona, etc. R. R. Co., 19 Minn. 418; Morgan v.

Louisiana, 93 U. S. 217.

• Milhau v. Sharp, 27 N. Y. 619.

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Sellers v. Union Lumbering Co., 39 Wisc. 527.