Oregon Railway & Navigation Co. v. Oregonian Railway Co.

CASES ADJUDGED

IN THE THE COURTOF UNITEDSTATES, SUPREME AT OCTOBER 1888. TERM, OREGON RAILWAY AND COMPANY NAVIGATION

v. OREGONIAN RAILWAY COMPANY, LIMITED. THE ERROR THE- CIRCUIT COURT OF THE UNITED STATES TO FOR DISTRICT OF OREGON. Argued 5, 1889.

No. 26. 1888. Decided April May 1, March corporation only In the a United States can have an existence under the created, express State which it and can law no exercise granted the,charter is not to it under which \ exists, legislative some other act. powers, property, grant private a When a makes statute franchises to a individual, private to a grant .or construction points always against grantee, doubtful should and in favor general applies government; and this rule of construction still greater organizing force to articles association a under general laws. railroad, appurtenances to lease a The and franchises is to be not presumed grant and, from the charter; usual in a railroad do, by legislative authorized company unless action so to one cannot company lease, them to transfer another nor can operate them under such a receive lease. general Oregon The constitution laws do not authorize a railroad State, organized under the laws to take a of a lease railroad and franchises. general foreign corporation laws confer right no' State, only make lease of a railroad within the but to con- there, acquire operate struct or one cxxx —1 von.

Statement of Case. provision general aWhen state constitution contains laws, special .may general be created -be formed laws, private corporation can be created until thereafter has been enacted. law corporation organized through a is When articles of association entered into laws, general place the memorandum of under association stands in the powers legislative a charter in so far that its cannot exceed those therein; powers but enumerated and therein claimed enumerated by authority. not are warranted statute void for want Thomas Co., 71, explained. 101U. S. Railroad proviso assigns” The use successors or a a. words attached to specific grants corporation making necessarily a statute to does' not ' imply property that the can transfer all its and its fran- chises to to be exercised the latter. another provision corporations general organizing A in a act for for the streams, navigating portage railroads to construct where necessary, corporation organized a it shall under not lease such a. railroad, imply does not that without such a 'restraint the a could make such lease. provision organization A in a act that a cor- poration organized under authorize its own dissolution and thereafter, disposition corpora- of its does not authorize such a tion, existence, dissolving continuing dispose not of all its corporate powers by franchises lease. lessee; operation payment The a years railroad and rent for three a ninety-six years, under lease of it for which was executed in violation corporate lessee, both of the lessor does so- by part performance, far execute the contract of estop lease toas up setting illegality lessee in an action at law to recover after accruing rent. The as stated case, tbe court was as fol- opinion, : lows

This is a writ of error to the Circuit Court of the United States for the District of Oregon.

The Oregonian Kailway Limited, recovered a. Company, judgment against Oregon Com- Kailway Navigation for'the sum of pany aon contract $68,131, for the lease of a railroad owned had plaintiff suit,-which been leased to and used the defendant. This sum was for the- semi-annual rent, payment advance, half year 15, beginning May 188.4.

The Oregonian was Kailway Limited, Company, organized in Scotland, under what called .are “The Acts,” Companies’ R’Y CO. CO. RAILWAY OREGONIAN 3 OREGON of the Case. Statement and in memorandum 1877, 1867 Parliament of of- office and it is declared that its of association place principal the Ore- action, The defendant in the is at Dundee. business was organized gon Navigation Company, Railway filed the. 13, 1879, articles of June according incorporation, on that and its office statutes principal subject, at Portland, declared in articles be. those Oregon. and still amendments to

After petition, many original amended, came to case answers, hearing more numerous and a motion ón a demurrer answer before court the demurrer was denied, it out. This motion was strike but. all as the were sustained, present supposed pleadings arise, ren- could the case the issues judgment writ of error is which this dered for the. review plaintiff, Fed. Fed. Rep. Rep. prosecuted. out the acts of amended sets petition plaintiff or under which

Parliament organized as is to an of so much thereof understanding necessary in and full it's Mem- record, questions presented gives its Arti- of and also what called Association,” orandum This after memorandum, cles of Association.” stating as above and that name registered given, will in be situated Scotland, give office proceeds objects established, for which follows: “First. building, constructing, reconstructing, equipping, or or disposing operating, leasing selling, transferring, owning, dr and or of, operat- otherwise purchasing acquiring, holding in or" otherwise or all any or using, dealing ing, working, railroads, of. or railroad or in State Ore- railways, railway of States of and the in the United Territory gon "Washington, in or in either of said America, them, or between such points or in from or elsewhere North America as may State Territory to time be or determined said time resolved upon and all of and minerals and the carrying passengers, goods of and on, traffic and other freight doing performing acts, with rail- all deeds and other connected other operations said or either in the State railroads of Territory, ways in or North America. elsewhere them, of

Statement the Case. “ Second. The building, constructing, equipping, owning or the or leasing, selling, operating, transferring, holding, or and the otherwise, acquiring, purchase working of one or more lines or of of or lines using portions or thereof from of Portland railway, parts (first) city in Astoria; or- the of the State 'of United States city Oregon, from or. said either both of or from America, cities, or some or'Columbia, or other rivers, place Willamette point th# State of or of the said Oregon, any part said through portion or State south the Cascade Oregon lying .west range ¿orne State, said at or mountains, near, or point said thence, Cascade from mountains; or range (second) or of the western or southwestern any portion part of said State of to and across and to the east side Oregon, of. said Cascade in said mountains, moun- range pass through tains or near that fork or branch of the Willamette .at Piver, in said State of or known as middle fork branch Oregon, of said or some other river, said mountains, through pass one within hundred miles north or south said middle fork or branch of said river, where be found to actual .on the easiest and most route across the survey Cas- practicable cade thence mountains; range (third) through portion of said State of east of said Cascade Oregon lying range mountains and on the Territories of or through Washington the States of Idaho, California, Nevada United or States all or more of' America, one or said any through States Territories to a connection orwithbut with, making connection with, either railways railway of said States of or Territories California, Nevada, and with or without one or more Idaho, Washington branch lines or west from said north, south, east, (a) running main line on the east side of said of mountains, Cascade range or from said main line on the west side of said (I)') running Cascade in said or State of range, Oregon, forming junction, one of more with said main at one or more line, junctions,, to a terminus in said of of the State points, portion (cid:127) of with west said'Cascade of or to a mountains,' range junction said main or to terminus or termini at one or more line, seaT .a R’Y CO. RAILWAY CO. OREGONIAN- OREGON Statement' of Case. all as from time Ocean, Pacific may the shores

ports actual as also be determined fey surveys; purchase, time or to and enter into construct, own, build,’ equip operate, agree- lines, run or to lease line or branch of ments over (1) any n or railroads, or railroad branches, railway railways, with, to, or or meet or become become connect attached may main branch or main line or its of its said any or such other main or branches hereinbefore designated; (2) or or lines, line or extensions any railway railways, branch made in connection this railroads, or with railroad company’s and or distinct branches, main or line, any separate form in such manner of or and on such all therefrom, way to time deem advisable said terms as time company and and of all other interests, for its and doing performing connected said with or designated railway railways, operations or or branches or connection with railroads, thereof, of -a similar or different nature, other railways doing which this shall at time deem any said-company performing and for its interests out of its business. advisable the carrying or other- Third. The building, constructing; purchasing, or wise holding, operating, acquiring, equipping, owning or the leasing operating, leasing, equipping operat- or otherwise of, or the transferring, disposing selling, ing, or railroad, other or of any railway working using or or of steamboat, wharves, any jetties, steamship, stage, road, locks, clay road, hack, canals, bridge, plank turnpike, or means for lines, line, lines, or truck, express or or either or both, passengers, transportation freight ‘in or in or or whole constructed now operated part, which ih or in constructed or hereafter part, operated whole States' of California, Nevada, either of said Oregon, Idaho, that'whether said Territories Washington (cid:127) and distinct and as line or from, with connection separate of said railroad or rail- railways, means railway independent built, constructed, owned, to be roads, so purchased, equipped, pr company.” aforesaid operated that the has also avers complied petition authorizes statute of foreign TERM, 1888.- 6 Statement of the Case. countries to do business that State upon complying - certain On this averment issue raised. requirements. (cid:127) (cid:127) It also that' the an alleges, 1, 1881, on--August plaintiff, indenture .of demised to defendant lease, a certain railway or railroad owned State plaintiff, with its stations, connected*there- depots, (cid:127)a term with, .for date of hinety-six years 'the and that the lease; the terms of said defendant, by indenture, covenanted to the' therefor agreed pay plaintiff yearly rental thousand half- twenty-eight pounds sterling, equal on the 15th óf the 11th Novem- yearly payments, May ber in each in advance. It then year, proceeds- allege “that the execution of upon said indenture of lease the said defendant entered into of said demised possession property, 'and has in the of the same to the continued enjoyment present but that on the fifteenth time, May, defendant,' that neither it nor the was authorized pretending plaintiff to enter into said indenture of empowered by lease, law tendered offered restore of said demised possession in its then condition,” property, plaintiff and, disavowing n lease, refused further obligation pay rent, wherefore the of $68,131. the sum prays plaintiff judgment substance

The, numerous answers and amended an is, swers that the defendant denies has-any plaintiff avers that it had no existence; corporate make contract or lease as stated the petition, contract,' although signed president defendant with the of that seal attached, and the order of board of signature secretary, also; directors, without and-is legal authority, binding In defendant. of the defence and fact, the essence of the whole whether these had is, controversy companies under their .as to make organization contract of lease which is the foundation this action. following principal The and relied some statutes cited inon argument, opinion or referred of the court: 37¿e 7,1862,25 (1) Companies’ August British Act e. & 2'6 Viet. under r R’Y CO. OREGONIAN CO. RAILWAY OREGON Statement of Case. it has the rent due avers defendant fully paid from which 15, 1881, the term the lease for ending May Railway Company organized. following Oregonian Limited The the

which the in error: the act extracts from brief of defendant “ persons pur- Any or more associated for lawful VI. seven Sec. association, may, subscribing a pose by names to memorandum of and their respect requisitions regis- complying of this act in of the with otherwise tration, liability.” incorporated company, limited an with or without form “ principle company having a is the of the formed on Sec. YIII. Where shares, unpaid liability limited to the amount on their here- of its members shares, company by a limited the to as memorandum inafter referred following' things (that say) : (1) shall the is to The contain association proposed company, the “limited” of the with addition the word name part Kingdom, (2) in such name: The of the United the last word as Scotland, Ireland, England, registered in the officeof the which whether pro- proposed objects company the (3) The for which is be situate: liability company posed (I) is A declaration that the to. be established: capital com- (5) is limited: The amount of members with which proposes registered a pany into shares of certain fixed be divided Subject following regulations: (1) That amount: subscriber each of the memoran- (2) take less than one share: That subscriber shall opposite number of shares shall to his name the association write dum takes. he “ company principle having Sec. IX. Where on the formed a respect- liability of its members limited to amount as the members such company ively in to contribute to the of the the event of undertake assets up, company being limited referred to as a the same wound hereinafter following contain the guarantee, the memorandum of association shall n proposed company, things say), : (that (1) is to The name of the (2) in name: The “limited” as the last such word word addition Ireland, Scotland, England, Kingdom, in part of the United whether proposed company (3) registered tobe situate: office of-the which proposed objects' company (I) A for which the is to be established: the assets of the that each member undertakes to contribute to declaration up, company during being the time that he in event the same wound afterwards, member, payment year or within one of the debts and is a company time at he ceases to contracted before the liabilities member, costs, up expenses winding charges a and and be of. company, adjustment rights contributories and for the required, themselves, exceeding amongst a such amount as be specified amount.” stamp the same Seo. XI. The memorandum of association shall bear presence deed, signed by if it and shall be each subscriber were least, .of, by, and attestation be attested one at the witness Scotland, England and Ireland: It sufficient attestation well as of the Case'.

Statement force of time disavowed the contract, obligatory to return deliver to the offered all up plaintiff' prop- lease. held under the erty shall, company registered, and the thereof bind members to the when if each member had and affixed his seal same extent as his name subscribed thereto, contained, there in the memorandum on the of him- were executors, administrators, self, heirs, to observe all the his covenant memorandum, subject provisions of this act.” conditions of such may, memorandum of in the case aof association XIV./. The Sec. shares, shall, company company in the case of a limited limited unlimited, accompanied, registered, by guarantee when articles association, signed, the subscribers to the memorandum of association prescribing regulations as the subscribers'to the expedient: memorandum of deem The articles shall be ex- association adopt pressed separate .They may paragraphs, arithmetically: numbered provisions table A in the first all or contained marked shall, They hereto: in case of a limited schedule whether shares, unlimited, capital guarantee that has a divided into state the capital company proposes registered; amount the to be and of with which unlimited, company, by guarantee or in the case of a limited whether shares, capital into has not a divided state the number of members with company proposes registered, enabling for the be the of payable company registration: registrar the on In a to determine fees unlimited, shares, capital having guarantee or and a into limited divided least, opposite to shall take one share at the and shall write each subscriber the number of he name in the memorandum association shares his of. takes.” ¿VI. shall, printed, they of be bear The articles association shall Sec. deed, stamp signed by they a be if contained in and shall the same as were of, presence by, and at the each subscriber in the be attested witness one. least, a in and such shall be sufficient attestation attestation Scotland they company England registered, shall bind the and When well Ireland: each had and the thereof to the same extent as if member sub- members thereto, in and there such articles scribed his name and affixed his seal were himself, his^heirs, part executors and ad- contained a on the of covenant articles, ministrators, regulations in to- all the contained such conform..to subject provisions act; moneys payable, by any mem- to the of this and all pursuance regulations company, of the ber to the in of the conditions and company, regulations, deemed to be a of be shall England such.conditions member, company, in and debt due from such to the Ireland specialty inbe the nature of a debt. of and the articlés of asso- “Sec. XVII. The association .memorandum ciation, companies any, registrar joinf if to the of shall be delivered .stock mentioned, register the same: There shall

hereinafter shall retain who shares, capital paid by company having a into registrar be divided R’Y CO. OREGON v. OREGON.IAN RAILWAY CO. Statement of the Case. both on the of

It also appears part pleadings, entered into an defendant, agreement, plaintiff respect in B of mentioned table marked in the several matters hereto, specified, several therein first schedule fees or such fees smaller m'ay direct; by company from time time as the Board of Trade respect capital having into of the several divided shares matters table, hereto, marked C in the first méntioñed schedule several specified, may such fees as the therein smaller Board of Trade fees paid registrar pursuance timé direct: All fees to the said time to paid receipt Exchequer, Majesty’s into the of Her act shall and be Kingdom of the fund of to the account consolidated carried United and Ireland. Britain Great Upon registration XVIII. memorandum association Sec. n of the articles of association cases where articles of association parties registered,- required this act or desire of to be certify company incorporated, that the registrar shall under hand his company company a limited that the in the 'case of is limited: association, together of the memorandum of such subscribers with persons as from time to time become members of the thereupon corporate by body be a the name contained in the memorandum association, capable exercising forthwith of all the functions of an perpetual incorporated company, having and a common .succession lands, seal, liability to hold but with of thé company-in to the to contribute assets the event of the members being up as is hereinafter mentioned: A certificate of in- wound same registrar given by shall be conclusive requisitions respect registration this act that all the evidence complied been with.” relating provisions and laws (2) The in the constitution corporations, following organization whieh the are the most material: JET, Section (a) Constitution Article laws, “Corporations may but shall formed not be laws, except municipal special purposes. passed All laws created ' altered, amended, may repealed, pursuant be or but not to this -so section impair any Corporate rights.” destroy or vested toas 14, 1862, Oregon Corporation Act amended October as October (b) The 24, 1866. and October “ persons incorporate' three or shall desire to 1. Whenever more Sec. themselves, business, any enterprise, purpose engaging in the lawful for they may provided occupation, act. pursuit, or so in the manner do “ persons 2. shall make and articles written Sec. Such subscribe any incorporation triplicate, acknowledge and the before officer same 1888.

Statement.of the Case. defendant which thé was to by continue use the time road the order to serious loss being, prevent arising acknowledgment deed; take the of a authorized and file one of such State, Secretary in the officeof the articles another with thé clerk of the enterprise, business, county pursuit, occupation proposed the where or carried, on, principal place proposed to be or the office'or of business is located, “ possession corporation. and retain the third in of the incorporation, copy 3. The articles of Sec. or a certified of the one Secretary Clerk, County of State or filed with is evidence of the corporation. of such existence incorporation specify: 4. The articles of “Sec. shall 1. The name by known, assumed and shall be and the dura- corporation limited; enterprise, business, if pursuit, tion of the 2. The or corporation occupation proposes place in which engage; 3. The proposes corporation principal place where to have its officeor of busi- ness; 'capital amount of corporation; 4.'The stock of the 5. The capital stock; corporation-is amount of each share of such 6. If the formed navigating any water, for the stream or Other making or or railroad, road, constructing road, plank road, clay macadamized canal road, canal, bridge, navigation, the termini such or the site of such bridge. Upon making filing 5. incorporation Sec. and of the articles provided, persons' subscribing herein corporators, tjie and same carry specified objects articles, authorized to into effect the provided act; successors, in this manner and their associates and articles, assigns, the name' assumed thereafter be deemed power: body corporate sued; 1. To sue and be 2. To contract and with; seal, corporate 3. to, be contracted To have and use same pleasure; purchase, possess dispose alter at 4. To of such real and property may personal necessary carry into convenient effect object incorporation; appoint 5. To such subordinate officers corporation agents may require,, prescribe as the business of the 6._To compensation; by-laws, their duties and make not inconsistent with law, any existing any portion for the sale of delinquent of its stock for thereon, .unpaid may assessments due which sale w'lthout’judgment be made Provided, execution;. That thirty' no such sale shall be made without days’ place, sale, newspaper notice of time and in some in circulation in ' neighborhood stock, of such for the transfer of its management property, of its regulation afid for the affairs.” . directors, . . powers Erom the first of meeting “Sec..9. them, .in vested are exercised their officers or except agents, specially provided chapter.” as otherwise in this (cid:127) (cid:127) . . may Sec. vested in the directors be exercised them, by'a majority quorum less number at nil of. constitute regular meetings by-laws 'or stated authorized in all OREGON RAILWAY CO. v: CO. OREGONIAN R’Y of the Case.

Statement of relations of two railroads, from but disruption . such to be that use was not’ construed being incorporators shall when either the directors or filed with the cases Secretary county a designating of clerk written statement State such quorum. .” . number sufficient form less “ corporation provisions Any. organized under the of this Sec. 19.. act purpose, any meeting may, of at the stockholders which for such called majority by a of the stock of such increase or vote of thereof, capital stock or the amount of the shares or authorize' diminish its corporation settling of such business and dissolution its however, provided, capital stock; dividing disposing of its act, corporation except capital any- stock formed under this purpose making constructing corporations for 'of a rail- formed dollars, corpo- road; any million of exceed the sum two shall never corporate provision of act shall violate this this forfeit ration shall rights. purpose corporation any Any navigating formed for the Sec. water, incorporation, any may, by construct or virtue such other stream road, road, railroad, plank clay bridge; road or or macadamized or canal purpose pas- necessary transporting freight or convenient for the portages navigation, any sengers on the line of such across occasioned rapids navigation of any obstructions to the such stream or other- or other corporation water, had manner and like effect if such been in like purpose; corporation specially for such formed under this formed special incorpora- incorporated by any or hereafter act of heretofore act or otherwise, tion, Assembly passed by Legislative or for of this State State, any forming navigating" of this or purpose of stream or other water part, any boundary in in such cor- whole or nor stockholder thereof stock, directly indirectly any'interest poration, take or or hold shall ever (or act, corpbration any may this be formed under which- in the stock ; constructing any purpose building in this mentioned nor or road act any purchase, way corporation any lease or control such ever shall corporation; provided corporate rights last-named of such or the road fur- incorporated ther, hereafter or which heretofore ferry purpose establishing keeping a and' act for the this formed under boundary any forming or of this State across stream water thereof, pur- part, for the not be deemed whole act, meaning of this pose navigating or water such stream within taking holding thereof be restrained shall the stockholders nor purpose for the of construct- formed under act stock any building road.” ing or twenty quoted) 18, 1878, (above so passed October to amend section (c) An act as to read asfollows: Any corporation navigating stream formed incorporation, railway, may, construct virtue of such other water TERM, 1888. the Case. of; Statement the law would either what nor lease, beyond party as binding been made. There is also -if this had imply arrangement canal, road, road, bridge necessary road, plank clay or or or macadamized purpose transporting freight passengers or across or for of convenient the by rapids navigation, or portage of such on the line occasioned stream, water, navigation or other in like- to the of such other obstructions manner, effect, corporation had been formed for and like as if such with purpose.” foreign incorporations (d) do business and exercise “An act to to authorize Oregon, corporatepowers passed October 1878. within the their State of ' “ incorporation incorporated purpose any foreign for the Sec. 1. 4hat operating, purpose constructing, constructing of or the of or or and for. road, any railway, acquiring operating of and macadamized with the road, plank road, purpose conducting clay bridge, for of canal or or the shall, water, substance, pipes by ground, gas or other means of laid compliance regulation foreign for the of cor on with the of laws this State therein, powers porations rights, transacting the same and business n privileges domain, of rights in the of the eminent collection of exercise tolls, by given prerogative other as are the laws of this "State franchises and Staté, purpose corporations constructing organized for of this within road, road, road, plank clay any railway, bridge, canal or or macadamized conducting pipes means of laid of water under the sur ground. face of the nn “ give Nothing in this act contained be so construed as Sec. corporations, any any foreign rights, or or further acquired by corporations powers,, may privileges than .exercised incorporated State; only give foreign of as to under the laws this so corporations privileges, compliance rights, same and with State, may acquired of this exercised in- laws corporated under of this- the laws State.” October, 1880, grant Oregonian Railway (e) Act entitled an act to of22& Limited, right way grounds Company, and over the state station lands, city public grounds at the and terminal facilities Portland.” ' sjc $ ‡ ¥ “ Whereas, Limited, Company, Railway engaged in Oregonian is now . Oregon, system railways in the from the construction of a State State, Portland, port city shipping head of used this most systems Yalley, of railroads the Willamette and to a connection having of the United States those States and Territories connection with railway Mountains, building Rocky situate east of and people advantage lasting great said will be of benefit and therefore, Now, . State: . . RAILWAY CO. OREGON OREGONIAN R’Y CO.

Statement of the Cáse. in the an averment petition was not in the property when the offer to samé condition return it was made as it was enacted, &c., heretoy That there granted Be it and is [toe] Ore- Limited, Railway Company, gonian at engaged this time operation railway of a the construction in the Oregon, and State of and to operators assigns, railway and the owners toeing now constructed it, railway, construction, and for the use of said opera- use and thereof, easements, rights, privileges, tion following, and say: is to premises Portland, city 1. Those certain situate in the in the Sec. commonly public levee, State known as the . . to toe held, enjoyed occupation track, track, stations, for used side water warehouses, depot buildings, wharves buildings such other of such form and requi- erections manner of construction as toefound site, necessary receiving, shipping convenient in the storing wares, produce, goods, generally merchandise'and freight, of all kinds of a,nd generally ordinary depot pur- for use manner usual and poses, and as management inch toe under the exclusive and control of railway; of said the owners (cid:127) “ Provided, always, Oregonian Limited, Railway Company, That the said sell, assigns, convey premises shall assign or its have no or hereby thereof, rights granted, any part parcel any person, per- sons, only parcel of, firm or save with and as and and as railway appurtenant company, to the now built and owned slid and now process toy . . .” of construction it. paper opinion 29, entitled, (f) page The its Court on referred “ Oregon recognizing assignability Public Statutes railroads.” “ Oct.,' 1880, Oregonian Railway Company’s In addition Act of 22 following: are the there “ Bailway Statutes, Oregon Navigation Oregon 1. The Co.’sAct— 25 Oct. —1880 “ ‘ duly incorporated 13,1879, July Recites O. N. Co.'was R.\& " of,’ purpose, among things, other etc. 1. for That there be and Sec. Co., heretoy granted R. assigns, there is to the said N. its O. successorsand .& right way through any belonging and all lands to the State of Ore- gon, assigns, etc. 2. Sec. Whenever said its successors or shall file, etc'. ‘‘ 1880, p. Oregon 2. Statutes 55 —Astoria and Winnemucca Railroad for Co.’sAct. “ hereby Co., granted Sec. 1. That there toe to the A. & W. R. R. assigns, right way, . and its etc. . . A. That company the same Sec. right, assigns. hereby and it and its authorized con- £o, bridges, struct etc. TERM, 1888.

(cid:127)14 in.Error. (cid:127)Argument Defendant for and as in the answer, this is denied received; it- was when it can fact make no to that ho wa's taken regard proof to this court. case presented figure in, G. James Garter plaintiff J. N. Mr. Mr. Doljpli error. a brief for. error. also filed

Mr. Bartlett plaintiff Sidney Mr. F. (with .Edmonds George Mr. General Attorney for defend- on the Robertson brief) was' Mr. Edmond Whom - in error. ant I, defend- was within lease corporate is covered the contract ant. It is admitted question “ — 1878, Statutes, 'Bridge Oregon Co.’sAct. Portland 3. “ Co., corpora- Bridge for the Portland 1. That it shall lawful Sec. conformity incorporated duly and in law tion. ’ qr hereby assigns assigns, be and are author- said construct, build, etc. ized empowered —1882, Railway Oregon October. Co.’sAct —17 Short-Line 4. Statutes of Co., hereby granted O. L. the said S. R. there be and 1. That Sec. way, assigns-, right of etc.- its successorsor .and Portland, R. Lake R.-Co.’sAct— Dalles and Salt “5. Statutes 16— 'of 15 Oct. 2; rights way. proceeds Grants Grants of land sales. Sec. Sec. company,'hereby granted, privileges rights of this . Sec. il. The . assignable the assent of the not be without shall Legislature. Railway and-Telegraphic 14— Central “6. Statutes Pacific n Line—24 Oct. hereby Oregon granted Central Pa- That there be and to the 1.' Sec. assigns way Company through belonging lands and its cific Oregon, etc. State'of ‘ case, viz., posterior litigation following in An act act is to the this The system.’ completion narrow-gauge Eeb., provide (24 1885.)' 'It for proceeds: -Railway 22 Oregonian Co.’s Act of Oct. récites Limited, did, Whereas, Railway Coinpany, day Oregonian on the 1st said railway lines of then Willamette August, lease constructed period Company Railway'and Navigation Valley Oregon for to the- years, ninety-six etc” CO. v. OREGONIAN R’Y CO. RAILWAY OREGON Argument for in Defendant Error'. of the act of so express language incorporation;

the defendant’s contention is that its own articles practically are and void. The same incorporation illegal considerations that the lease was ultra vires as apply objection to. Both under plaintiff. companies incorporated general articles laws, the same character, essentially purporting (cid:127) to contain each case the which are here powers challenged. The law of authorizes for lawful business, This enterprise, pursuit occupation. corporation is created under that iaw the lawful business leasing a railroad in that State. The whole case of operating defendant rests on a laid rule down misapprehension this court Railroad Co. v. 101 U. S. Thomas, 71. There created under a act of company special legislature, to construct and but not to gave operate, lease; and the court held that a lease of the was ultra vires. company “The Mr. Justice “or- powers corporations,” says Miller, under statutes are and such ganized legislative such, only, those statutes confer. The charter of a is the of its 'and measure the enumeration of-these powers, the exclusion of all others.” Had the implies defendant’s been as to articles silent this casé have been leasing, might cited as an but lease, validity against the articles as it is an are, for the lease; -authority n indeed, is other cáse -in .so, the United every States and Eng- land in which the contract of a has been declared' ultra vires. decision Railroad v.Co. Thomas is based avowedly case of the. Co. Ashbury Railway Riche, R. Carriage L. H. and Mr. L. Justice 653; Miller the' .used adopts language

in that That case followed line' of cases long English case.. in which acts were companies organized special held to make contracts their incompetent within not.falling pur as defined such acts. But that case poses has value great inasmuch as, present controversy, predeces unlike like, but sors, case, it; concerns the of a incorporated, article's by special act, incorporar tion under a act. The decision case assumes .that TERM, 1888.

16 Argument for Error. Defendant is the of a of association that the memorandum equivalent Lord was so held Selborne It charter. legislative and com- their declarations repeated Lord Cairns, See also v. Pennsylvania on in Railroad Co. irfented Thomas. 118 Railroad, U. S. 290. Louis, Alton &c. St. Railroad relied show that dis on, ones These decisions, only charter. The defendant is contained in the is power puted then, In the the charter. driven to attack proposition vague is lies its that a lease of a contrary public policy law of inasmuch case, general any whole- railroad. a "beleased, including thing, may , intent without con- That a of a railroad lease power the lease is ferred public company making against on the that it involves an be admitted ground policy, But to be abandonment what has of franchise duty. established here not that a lease without is¿ that a lease an unlawful State is itself bad, purpose, if a lawful busi- it is (cid:127)business, because, purpose, enterprise; ness or then the State has conferred power enterprise, both companies.

At could be created common law corporations king not and with contrary any powers- general purpose, that of lease. See Sutton’s law, leading taking including 30 b. Under Case, Hospital Rep has those laws, powers analogous corpora- In tion at common created .the law, king. analogous Act, under it has been held the Companies’ system England that the not although specified power leasing implied, v. Lee memorandum of association. Featherston Moor Porcelain, R. 1 L. Co., Eq. In the hostile to there is no .lawsÁf Oregon public policy The constitution leasing. prohibits incorporation except Britain, laws. The like law law, of Great general for all one code kinds of defines It provides corporations. dis- corporations including power of” their of' is. This pose property. disposition again mentioned for the dissolution section provides observes, As in the court below corporations. Judge Deady OREGON RAILWAY CO. v. OREGONIAN R’Y CO.

Argument for Defendant in Error. “dispose” implies corresponding power to take. we it is submit, Again, although for our case that these necessary provisions may.reasonably construed as that the to meaning acquire assign, by lease or otherwise, is incident to all whether corporations, an assumed as the articles of leasing object incorpora tion or not. See Miners’ Ditch Co.v. Zellerbach,37 California, S. 99 543; C. Am. Dec. 300.

In its form 20 of the original laws Oregon § thé of railroads to a prohibited certain class of leasing corpo- rations, it to all others. thereby, by imphcation, permitted In its amended form this was prohibition withdrawn, became to all. leasing thereby open the act of 1880 certain

Finally and interests granting rights and its is incon Oregonian Railway Company assigns, sistent with a hostile Not to is the policy only leasing. grant made to the and its but the company assigns, company’s right the whole is and it is enacted assign property recognized, that certain of the the act shall be rights granted by assignable .with the whole only This grantee. statute is cited here as of the only proof part negatives of a hostile Its theory public policy leasing. importance in is noticed elsewhere. See on these respects points, Cascade Co. v. 3 Fink v. 164; Baity, Canyon Oregon, 301; Co., Oregon, Oregon Railway Co., Road 5 v. Branson 10

The defendant is not entitled to challenge of its own articles of or to legality incorporation, repudiate unlawful a which it formed was out. See carry 15 Ewing Robeson, 26; Indiana, Cheshire Glass Dooley v. 15 Co., 494; v. Horicon 22 Gray, Darge Co., Wisconsin, 417; Racine &c. Co.v. Farmers’ Loan Co., Railroad and Trust 49 Illinois, S. 331; C. Am. Dec. 595.

II. The defendant is from our estopped denying corporate existence powers.

The defendant’s answer admits the contract as pleaded, 'i.e., it was the defendant’s 'admission signed by president sealed with the secretary, seal, corporate VOL. CXXX —2 TERM, 1888.

Argument in Error. for Defendant au board of is admission of directors, authorized The rent contract as provided pleaded. allegation for three itself an admission years paid of the existence between defendant and, lease plaintiff landlord The contract as of the relations tenant.. is a contract between the Com- Oregonian Railway pléaded The lease and the defendant. is a Limited pany pleaded Limited. lease Kailway Company Oregonian facts rule this state of is laid down applicable Field on (Wood’s edition) following Corporations action is terms: When the brought rule is it,, a contract executed defendant need offer exist that the prove plaintiff corporate it in and the defendant ence, estopped denying on the and when absence of fraud corporation; the existence of a from corporation party denying estopped it if he as denies its existence such, at the time he recognized show how it ceased See also hé must exist.”- subsequently Indiana, 14 Jones v. Cincinnati 601; v. Hubbard Chappel, 14 Cotton Indiana, 89; Dutchess Foundry, Type Manufactur Davis, Am. Dec. 459; v. 14 Johns. S. C. 7 Cow 238; Co. ing v. Shield, 100 S. Commissioners 62 Co., 55; ell v. U. Springs 15 Evansville, Indiana, v. Missouri, 247; Evansville Railroad Ind Railroad, Fort 16 Wayne Heaston Cincinnati and 395; v. Am. Dec. 430 Brownlee Ohio and In ; ; ia C.79 v. na, 275 S. 94 Indiana, 68; Bolles, 18 v. Railroad,

diana Douglas County N. Y. Swart Pickett, 482; Methodist Church v. 19 104; U. S. v. 24 Railroad, 389; v. Michigan, Kennedy wout Michigan 41 v. Barb. 59; Donnell, 572; 28 Barb. Phœnix Bank Cotton, 46 Am. 122; 8 B. Mon. S. Dec. Tennessee, v. Bank C. Jones 36 v. Turner, Arkansas, 577; Mutual Ins. Co. Helena v. 540; 24 Teutonia, 251; 8 Franz v. Bissell, 203; Wilcox, Maryland, Ins. 2 S. 43 Co., 124; v. Kalamazoo C. Cahill Doug. (Mich.) Am. Dec. 457. (cid:127) the defendant court below that It was suggested of- No is limited organization. defects estoppel alleged cases, inferred or any such limitation is implied - to show that, while a the true rule is party estopped OREGON RAILWAY CO. 'v. OREGONIAN R’Y CO. 19

Opinión Court. no if could have existence, jet legal corporation otherwise, court admission (as. knows, judicially there is a under which it then exist, law might pleadings,) the fact of with the contracting party estops its corporate capacity.- denying It that the law under claims to which happens plaintiff Defendant exist is before the court. admits fully expressly Act, the British The court itself Companies’ pleaded. 1862, law, under which knows it law- (p. Oregon 95,) in' in railroad business and the further fully engage, act expressly recognizes (p. plaintiff 56,) in such business, lawfully engaged grants it certain and its therein. The rights assigns privileges British of its creation, law whereby created company may lawful law purpose; Oregon under.which may n 'exist- act in law, its lawful Oregon; recognizing facilities, ence under its name, for its corporate granting business; the contract name with corporate corporate' all defendant; these conditions show a de corpora- facto tion, under a law which corporate rights using permits and raise an existence, with it estoppel persons dealing against which is absolute. full this

Against recognition by legislature plea ques existence or can be of tioning plaintiff’s corporate avail. Such held recognition court long ago as to conclusive Character, and to corporate -give even if not before. question, possessed Societyfor Propagation Pawlet, Pet. See Gospel also 4 Jameson v. People, Illinois, S. 257; C. Dec. 304; Am. Kanawha Co. v. Coal Kanawha and Ohio Coal 7 Blatch Co., ford, 391. delivered the court. opinion

Mr. Miller Justice two on this questions presented demurrer, the only ones to be are: considered, necessary Whether

First. Com- plaintiff, Oregonian Bailway pany, Limited, laws of organized Britain, Great Opinion of the Conn.. to it as the statute in reference with such aid Oregon gives done, in that had the lease its rail- State, business ; n and, road to the defendant Whether Railway Second. Navigation in under' action, defendant organized Company, had the law- laws of the State legal capacity lease on its ful to make said part. the foundation the lease which is of this itself,

Although in in nor record, is not found action, pleadings, it made in to- amended statements by petition, peti- regard to its nature or charac- and answers leave tion question here the two ter so far as affects suggested. questions as the established doctrine of It considered may are to the court corporations, they regard them the acts of such conferred such and only under which are or- of the several States they the legislatures whatever it in this have A country, ganized. exercised the at a time when the crown been England (cid:127)an existence under the bodies, can have only creating crep.ted. which it law of State or sovereignty express do not relate to cor- And these where they municipal powers, conferred the benefit solely exercising porations in some sense body politic parts public, until within recent have in this years the State, country acts of the been conferred legislative body always by special But the claim to éxist. rapid growth they under.which to take a all or come have nearly which corporations, all of the business country, especially operations and individ- capital enterprises requiring large aggregations the needs of a as their success ual as well meeting energy, commercial relations, number of most important vast of law mak- attention and consideration the serious demanded rendered have been services And while valuable ers. which have stimulated this class organizations, public it came at last to acts, numeróu's their special formation by their were attended many oper- they perceived evils(in manner in as much hasty ation' as well good, sometimes with created legislatures, were RAILWAY CO. v. OREGONIAN R’Y CO. OREGON

Opinion of the Court. under due often without consideration privileges, exclusive bad led motives,' influence frequently improper results. the desire to- this or it was consideration, mainly

Whether uniform which the arid more rule .rights fix some powers by or those for should come profit, corporations, pecuniary private it con- state existence, certain into many years ago came, were to have which formed-or remodelled stitutions like that which is now to be found them a provision 11, article 2: State constitution § formed under laws, may be Corporations general- created for laws, not be by special except municipal purposes. altered, to this section laws All passed pursuant but not so as or amended, repealed, impair destroy any vested rights.” corporate conferred and

Outside privileges granted under exist, statutes which to those they organizations by in all the States of the which like Union, law' as of their common the foundation jurisprudence, and it is doc- common the established law; governed by iri court, of this with some of the States and, trine exceptions, Britain, common law as well as of G-reat which prevails, it can exercise which that such derived, char- which is not granted under which some other act exists, ter legisla- which that charter. ture granted has been before court more than

This proposition once: considered Thomas recent It years. very fully 101 U. S. which resembled the case Co., 71, Railroad before in several features. us important Millville Glassboro Kailroad Company, incorporated into the laws of New entered an Jersey, agreement and others for the lease of its railroad to them

Thomas at It was that the agreed company might twenty years. the lease and retake of the railroad; terminate time possession n loss case incurred should lessees damage and the amount be arbitration, adjusted equitably paid This contract was made and the les- company. TERM, 1888.

Opinion of the Court. sees took control of the used it until when- were served with notice the lessor terminating a. lease. A suit was to recover mentioned brought damages in the which came the Circuit contract,- Court -of the .United- States for the Eastern District of to this Pennsylvania court, where was and received very elaborately argued, earnest consideration of the court, may perceived from of the case. The which was report concurred in opinion, all the who in the sat contains a full case, judges review of decisions courts on the English subject discussed, also of. of this court. decisions previous

The turned question altogether' upon rail- road under its charter and the laws of company, New Jersey, to make the- lease which its road was turned over for to the absolute control twenty years of other The parties. to do this was asserted under the right following language the charter of the company: That shall be lawful for the said at time any . the continuance of its during to make charter, contracts and- with engagements any individuals, kind of transporting conveying any goods, produce, merchandise, ór and to enforce freight, passengers, fulfil- ment of such contracts.” But the court said it was sound impossible rule of

construction to find in this language permission -sell,lease, or transfer to others the- entire railroad and the rights franchises of the corporation.

The cases of The Asbury & Iron Railway Carriage Co. v. L. R. H. Riche, 7 L. 653, decided the House of Lords in 1875, and The East Co. The Anglian Railways Eastern v. Counties 11 Railway Co., C. B. were also 775, reviewed, with several-others of a similar character from the reports this-court, courts highest which, of-England, said:

“The broad doctrine was established that a contract not within the conferred scope on the powers corporation cannot made valid the assent of one of the share- every nor holders, can it e becd partial performance foundation of a of action.” right v. R’Y 23 CO. CO. RAILWAY OREGONIAN

OREGON Opinion of the Court. to the case of also made same

Reference opinion How. Line Railroad v. 17 Winans, Co. The York & Maryland to con- which has held that 30, undertaken cannot, a railroad by. alienating operate struct control and avoid respon- use and supervision; The court that it assumed charter.. accepting sibility from the cannot absolve itself per- said: without the consent of its legisla- formance obligations 1 Sim. (N. this effect were cited Beman v. ture.” To Rufford, v. Birkenhead & Lancaster Co., and Winch Railway S.) L. & S. C. 13 1035; Jurist, Eng. Eq. v. Railroad Union Green & Minnesota Afterwards, Bay the case of Thomas U. S. Co., Steamboat Railroad was referred to with Co., supra, approbation. Railroad Co.v. in the case of St. later,

Still Pennsylvania where the- 309, 118 U. S. whole Co., 290, Railroad Louis &c. a full the conclusion reconsidered after argument, was question : in the stated language following as the result of stated, think it cases “We may just the^e authorized its that unless and on sound specially principle, aided some other a railroad action, charter, legislative other turn over to contract, lease or cannot, by any company of its road and' all time, for a another company, long period the exercise 'of its the use of franchises, appurtenances, without, nor can other similar railroad any powers, make a contract to receive and road,' operate suck of the' first and that such franchises is not railroad a contract ordinary powers .of among not to from the usual of and is be presumed grant in a railroad charter.” powers of that this is the law of the State

It be considered may it or modified its consti- has been altered . Oregon, except tution and statutes. Out met an of

We are here with embarrassment arising nor the defendant in the that neither the circumstance plaintiff exercise its case powers special present professes of That on charter conferred Oregon. legislature laid down in its con- in. principle accordance State, wifh

Opinion of the Court. we to which stitution, referred, already passed general laws for the of formation See Laws of private corporations. c. 8. Under title 1 reads as (Deady’s Comp.) § follows:

“ Whenever three or more desire to persons incorporate in themselves lawful enter- purpose engaging business) do pursuit, so prise, occupation, may in this manner act.” provided is then

Provision made for the mannér which these per-, shall constitute sons themselves articles corporation, by'filing before a association, officer, proper acknowledged officeof the State and that of "the clerk of Secretary where business is to be carried on.' What these county articles shall contain is with some But specified particularity; title 2.«of this same chapter more"important regard the matter at issue, because relate^, among things, which for the construction rail- organized roads. The mode their formation same as those under title but the declaration of coming powers be exercised become corporations may cofisideration important present case. the act October Session 21, 1878, legislature By it is

Laws, 95, incor- provided any foreign corporation porated constructing, constructing for^the Or purpose.of, power of, operating, acquir- and- . . any railway) shall, ing operating compliance laws of this State for the cor- with-the regulation foreign have the- business-therein, same transacting porations rights, ” as a domestic formed for privilegés such and more. -purpose, When we therefore, have what were conferred powers fcjund, the laws. of on the in defendant this

by Oregon w¿ shall case also determined that the powers plain- were no tiff to the same greater regard subject matter, concerned, so far as. statute's rare as except may shown that’oilier some statute. powers given by express also It at that conceded, outset-of may argument, under the Act of by memorandum'made Companies’ R’Y CO. CO. OREGONIAN RAILWAY 'OREGON ¡Opinión Court. made under the articles of association and the

the plaintiff, declarations both defendant, by laws Oregon contain each of them to and of of these buy companies powers railroads;- to be therefore," The lease only question, or sell is authorized declaration of whether this considered'is the laws Oregon.. by under the articles of association, that the

It is argued under the association, memorandum of Companies’ law, apt of an are themselves the Britain, of Great equivalent Acts whatever is found that the legislature, and incorporation of the com description power, grant is tantamount memorandum, in such articles or set forth pany, of the court in act. A the opinion to a phrase legislative is cited as this Co., Railroad Thomas v. supra, supporting association, memorandum of namely, proposition, , charter.” of a stands Lord Cairns place legislative said Lord court, Cairns meant, But what was both s or described such that claimed, wa anything granted, and business of -the cor in relation to instrument powers o construc be held t be a of them could not poration could not exceed those in other words tion; powers that It in such a therein. was necessarily implied enumerated or memorandum not that such' articles remark anything the statutes in forma warranted by question, authorizing was'void for want of bodies, authority. tion of corporate exercise Of course corporate powers, be in accord from the laws of must with the derived that of that State and its statutes constitution subject. that The constitutional above provision, corporations' quoted, created be formed under shall not be laws, special could be laws, implies no. private corporation general until had been enacted, thereafter law created law of the "the fundamental became thereupon under it. It is idle formed to all State regard assume to itself could therefore, say, any corporation in its articles declaration the mere of action by them. that it memorandum possessed the two statutes already much care

We have examined with 26 1888.

Opinion of the Court. referred to enacted in accordance concerning incorporation, with, that and do not constitutional find provision, any express to lease its an for a road for indefi- authority lease; or for it to take such a nor we nite able to period, statutes, find' those or either of them, language in relation be conferred powers upon corpora- down, from the laid departure justifies principles tions in Thomas v. Railroad Co.

It is to be remembered that where statute- making grant franchises, to a indi powers, property, private or á 'the vidual, becomes con private subject struction as the extent of the the universal regards rule grant, in- is that doubtful the construction shall be points against and in favor of the or the grantee government general public.' As was said in case Charles River v. Warren Bridge 11 Pet. this court the Bridge, principle recognized grants by public nothing passes by implication.” See also Railroad Co.v. 23 Dubuque Litchfield, Pacific How. Co.v. S. 66; Illinois, U. Turnpike if the

Therefore articles of association of these two corpora- instead of tions, mere being adoption by corporators themselves of declaration of their own purposes had been an act of the confer- powers, legislature Oregon on the would be they ring corporations, subject to the rule above stated and to construction rigid regard more, How much should then, this rule powers granted. and with how much more reason should a court, applied, called to determine the these articles powers granted by of association, construe them with the rigidly, stronger leaning in doubtful cases favor public against private corporation.

We have to when such consider, articles become the subject are in a construction, sense their forma- exparte ; tion and execution —what shall into them well as put — what shall be left out do not take under the place supervision official whatever. are the They production citizens, private interest who gotten up parties to become and stimulated their zeal propose corporators, R’Y CO. v. OREGONIAN CO. RAILWAY OREGON Opinion of the Court. than concerned rather advantage parties personal

the good. general acknowl- the articles,

These when corporators, signed of the notary public, before peace any justice edged of the and the clerk the of State in the office of filed Secretary so are, They become complete operative. county, proper a substitute for in accordance law, framed with legisla- far as State, of the will'of in the people tion, place put acts of the Neither legislature. formerly expressed n officer file who nor those who takes such acknowledgment, The of criticism or articles, rejection. to to and of the second' fact, the first is to certify duty in their documents, filed as mark them respective public simply offices. the sole action assume which articles,

These necessarily of which have enormous many powers, corporators sometimes character, of a heretofore considered been public interests very very largely public affecting mind*as to the not themselves commend judicial seriously,,do liberal very class of instruments justifying requiring . whether conform is construction. question Where statute organiza- authority given by regard corporate construction tions, is to be determined always upon just the other a due for all with therein, regard granted powers and the rule stated above. of the State that laws subject, upon that there much confidence It is urged apparent laws of in the is anything general provisions which in relation to the formation of private corporations, 1 found in titles c. 8, Deady’s Comp,, to include terms authorizes a which by express association, articles of in its within enumerated powers is the that of such a as the one which subject lease making founded this action. these laws are based Arguments upon within the .is, railroads that implication building business, of title a lawful pur- enterprise, meaning § ”. suit or and the further inference occupation; is one which lessee, either as a lessor or railroad, leasing business of incident and lawful proper pursuit

Opinion of the Court. a railroad. The same constructing operating argument drawn from the fact title .2 the au- general recognizes n thority construction rail- corporations organized roads, macadamized roads, roads, roads, canals or plank clay lands for their uses bridges, appropriate necessary - exercise of eminent in the manner domain, out. pointed of the statute of New language Jersey, (quoted

Thomas Railroad Co., which it was supra,) urged that the railroad had to make the lease in authority as liberal in its controversy, quite descrip tion of the was authorized exercise as to be found in the statutes. In anything fact, which was to that given contracts for the regard making transportation passen .of and the of a railroad gers freight, business general doing with other it corporations private persons, approaches nearer the to make leases than which is to be anything in found the laws of this court held that Oregon; yet although it awas direct from the itself, not authority legislature to the restrictive criticisms above the subject lease suggested, in made that case ultra without vúres, of the company. (cid:127) Another to be observed, important peculiarly consideration acts formed applicable to corpora- tors themselves, what business about are to declaring and the which exercise pursue, to in powers they purpose oh, is, that while the to be done be law- carrying thing ful in there are and must be limitations general way, .upon the means it is to be done or which carried out, which the cannot remove or articles vio- incorporation A late. be authorized to estab- articles might lish a in a large manufactory particular locality, might held to be a valid with to sufficient incorporation prose- powers cute the described; business men- articles, such although would not tioning particular place, empower in the exercise of the thus to on a busi- conferred, carry ness to health in or comfort those injurious living vicinity. CO. v. OREGONIAN R’Y CO. ÉAILWAY

OREGON Opinion of the Court. in in -which described

Instances multiplied might' powers who terms as objects parties belonging general but the valid; would.be thus become incorporated would not authorized in out be' purpose, carrying general exercise, for so mode necessary doing in'any powers law of the would which the State justify any private The manner which unincorporated body. person and their exercised, shall be to the these subjection laws of the State and restraint general genóral not in sense public policy,- by' principles enlarged articles of association authority', inserting depart therefrom. act,

In the absence of incorporation anything-in general are referred to several statutes of the State we hot to railroad which, while specifically granting companies or to take other railroads to lease their right owners, under lease from their are supposed by implication in all We are fur- companies. recognize of that State in nished a list of statutes which wqrd hr the is used corporations, generally “assigns” rega,rd supcessors or phrase assigns,” sought that a proposition corporation may imply assign reference, A is made to the act of all its property. special which the October 22, legislature granted Limited, Railway Company, right way Oregonian the state facilities lands, over terminal station grounds at the of Portland.” city public grounds to this statute is and, taken quite lengthy, preamble clause, the shows with connection enacting very plainly thyt' at to to that aimed was the sq give principal object could do certain so, far as the rights, privileges legislature and levee, in streets and that' grounds, upon public easements for River, near the banks of the its on and Willamette city, of its railroad! Aftér and wharves and operation depots is the said added, are “That thése fully proviso specified, or its Limited, Company,- assigns, Railway Oregonian or to sell, have no rights convey, or,assign premises power thereof, or to any person, hereby granted, any part parcel so

Opinion of the Court. save with firm and as persons, only built now parcel appurtenant railway to owned in said and now of construction company process it.”

It is and with some of- strenuously argued, plausi- degree that the “ of this and the use of the bility, language proviso, ” ” words successors which statutes, assigns referred that the law of railroad to, imply compa- nies make, and must be to may supposed capable making, But whatever have been the intent assignments. may minds of the words, these legislators using pre- the form which we would to find a cisely expect grant' sell, lease, transfer the title, ownership, or use of railroad lines, thereto, property belonging the franchises on, one necessary carry-them to another.

One of most with which a important powers corpora- tion can be-invested the to sell its out whole right property franchises under which it is or the together operated, to lease for a term of In authority long years. railroad case of a these next to privileges, to build would be the most railroad, operate which could it, idea would important given impress look, itself would we legislature. Naturally, to do these some of law. things express provision We would that if .the saw confer suppose legislature fit it would do so in terms could which not be misun- rights derstood. infer, To either intended to contrary, confer them or existed, recognize they already use word loose and indefinite simple assigns,” very is a term, stretch the court making impli- cations which we do not feel to be justified. who enacted these statutes had an have legislators may

idea there were could certain things to which we have assign; they may'have expressions used referred in a loose instead a technical very sense; that cases arise where supposed might prop- some or fore- erty law, going by operation bankruptcy CO. CO. R’Y RAILWAY OREGONIAN OREGON Opinion of thft Conrt. the the hands of its owners into from

closure, posses- original of the latter would the sion justify description persons, “ In these successors or terms the words using assigns.” that have authority might given they máy future, thought to all or some statutes, either to generally the to sell or transfer corporate property organization, special it. their But whatever been pur- or some vest one, forced would think we argument pose, lease their sell or in railroad general power companies contracts to take or make franchises, buy .property same from other of the corporations, leases terms made of these indefinite “successors which is use assigns.” came Thomas v. Railroad Company,

This up question railroad com a lease which, stated, already supra, to be was.held void. its road franchises corporate pany was in full an act was "Whilethe lease operation, passed by unlawful New Jersey declaring legislature of that railroad lessees, chaj^e directors, agents for and a half cents mile three carrying more than per was that this use of word “lessees” It insisted passengers.. that road, the then lessees existing operatéd applied leáse state ratification legislature it. the court held In said: discussing subject which'they knew at inferred that the It legislature fairly may be, was were time the statute passed plaintiffs running do so as lessees road, corporation.' claiming act decide It was not important not. contract or No done under lawful this was whether as no lease, made as to the terms was inquiry probably was information on needed. subject did run the determined that whoever The legislature the franchises conferred the company, road and exercise done, claim of this was should and under whatever right Hence, rates of fare established the act. bound by to decide whom was the without undertaking included was used which road, control of language the railroad. directors, lessees agents

Opinion Court. .“ the a The lessees more ratification mention implies ’ ‘ word of the than the directors would lease imply contract.of a is contract. It such an the incidental by disapproval use' of word in an effort to make sure that ‘lessees,’ the all who be bound the law, collected fares should that a con- by the charter, tract forbidden unauthorized by by public to be valid and ratified the State.” is made 85. policy, by p. This with force to the which language applies great attempt is made in this deduce the case to use of the word as- in the act of October 1880, sign” the recognition of the to sell or power its entire company assign The property rights. object legislature making to that statute that was make sure proviso grant of terminal facilities given Oregonian Company they with the called, wharves, access depots, river for the use of the road, should never separated by sale, or otherwise from the itself, road assignment, into whosesoever hands the road went also should go rights, powers conveyed With- privileges by grant. out these words it is prohibitory possible company might- have had to sell or or wharves power assign depot granted, while without the to do either to the regard rights or franchises of which were they Hence, already possessed. used term which in a they they supposed way might cover transfer of the the railroad any ownership by company made to statute, whether grants by operation, law or otherwise. If should be sold out under property or deed of or other trust, instrument mortgage any had the company might make possibly under, who be called purchasers might “assigns” pro- there should also itwith ceedings, made go grant statute.

The, used'in the statute in this case is language question than that in other cited cases to us counsel, stronger we are of do not, nor opinion them, do they any establish the collectively, laws proposition, a railroad sell could or lease entire prop- franchises and to another or erty, take a R’Y CO. RAILWAY CO. OREGONIAN OREGON.

Opinion of the Court. or franchises from other or lease of .similar grant or company. person here con- made to sustain

The proposition attempt to lease, another infer- for in regard tended which we think untenable. equally ential reasoning process c. title 1: found provision following formed for the of navh purpose Sec. Any corporation or of sueh other water virtue stream may, by gating road, macadamized railroad, construct any incorporation, or canal road, road, necessary or clay bridge, plank transporting pas-- freight convenient line of such across navigation, any portages sengers obstructions to the other any rapids naviga- occasioned by like manner and water, such stream tion of had been formed if such like effect'as corporation specially but no formed under this act for corporation such purpose; of act or hereafter by any heretofore incorporated special or this of State assembly legislative passed incorporation, for the of or stream otherwise, purpose navigating or any in this or thereof State, of forming boundary other water in nor in such stockholder or any corporation, whole part, stock, or hold or interest or -take indi- any ever directly shall of in the stock which formed' any corporation may rectly of or this act, any purpose building constructing under mentioned; this nor such act any road control lease, or such road or the way any ever purchase, of such last-named corporation.” rights corporate railroa,d that this It is prohibition against leasing argued fact that such a would power recognition not been forbidden but as statute; if had existed section to the whole relates competition language or exist arise betweén may organized or when waters, streams navigating to construct a across find convenient road such portages' line of carry on navigation may- required theif another, one water- to over navigable goods such that it has effect see do establishing we principle, general cxxx —3

vox...

Opinion of the Court. From the fact that the revision of this law simple all reference leases was it is omitted, argued another one road b.y wherever power leasing situated, without reference to its with roads owned competition to a amounts restoration of the navigation companies, power to lease or leases accept, all of all ‘its State, of its road, of all its franchises, for an indefinite of time.

property, length As to this we can that the say section, only original relating ato class of solely, peculiar' objects, construction namely, of roads across portages by corporations waters navigating of the State, and its last clause the forbidding purchase, or control of lease, such road portage corporate rights them, was to that limited class acquired by necessarily roads, and the or modification of so much of the repeal section as related to could lease have no effect declare that all railroads .the State of had the lease, to make contracts of either as lessors or lessees.

One other laws provision Oregon, immediately the section is also relied discussed, preceding just the- of a all of sell right prop- establishing and therefore its smaller erty, subsidiary power it. It is under c. title as1, found follows: leasing “ Sec. Any corporation organized provisions of this at act the stockholders which is may, any meeting called for such vote stock purpose, majority the. increase diminish stock capital its. the amount of the shares or authorize the thereof, dissolution such the of and of its business and dis- corporation settling itsof and its stock: Provided, posing dividing property capital That the stock of héwever, any formed capital corporation under this formed for act, the of except and a railroad, shall never- exceed constructing the making of dollars, sum two million of any corporation and shall violate of this act shall forfeit provision its corporate rights.”

It is that because a has argued corporation authority put an end its a of existence vote the of tq its stock- majority R’Y CO. CO: OREGONIAN RAILWAY OREGON Opinion of the Court. its affairs, event it in which

holders, may proceed up settle stock, therefore, and divide its its capital property, dispose ter- no in full with such purpose a operation, its busi- in the course its existence, ordinary may, minating - arid, if it be real and a its all of ness, personal, property, sell its and of its road, franchises, company dispose on business a carry necessary properly powers' if it can do this, therefore, insisted that may, It is carrier. all franchises, such a transferring lease make property those privileges. powers, rights that such not need to show

But it does provision, argument a act for dissolution of voluntary corporation by made of its 'its disposition prop incorporators, providing has to that effect been resolution adopted, when erty its on sale distribution of dividends whether profits of its effects or for stock, shares any disposition of- be in tó and cannot law,- is not applicable compatible existence, confer tended to upon corporations continuing contract which, these like very companies, contemplate-in a of more than entered into continuance ninety-six years, franchises, their dispose corporate powers an for indefinite to lease them much less period to others. before continued to exist;

In the case us both corporations both entered into contracts ninety- covering period them if the one of valid, six contract lease years; and use of the to the control obtained 'the thereby right on became other, franchises therefor, bound for of rent profit payment supposed e can see term. "W entire capital period reason conferred corporation going why act, out of its own existence, dissolved by including can be to wind of its affairs property, right up dispose which contem- held"to on a confer come. an of a hundred existence years plates -that-if- does there to be force Nor objection appear take a lease an cannot acquire laws, of a railroad cannot acquire existing

Opinion of the Court. it at all, the constitution legislature being prohibited by charters of and therefore, incorporation, granting special it it said, has no ato grant special privileges we particular proposition corporation prepared —a concede to its fullest extent. But without assuming, deciding, that it is true cannot to a grant legislature right railroad make take lease of the particular it another would be within its clearly to confer laws on all railroad power general corporations the State the to make and to take leases, which powers within are claimed to exist under plaintiff the’general law of itas now stands. Oregon reasons for that the

The had holding Oregonian Company no to make lease of its railroad are even power stronger than those for that the holding Railway Oregon Naviga- tion had no to take the lease. Company power n In the first even if a domestic railroad place, established under' the could con- general laws Oregon entitled assume articles the strued power taking leases other railroads' as incident to and in connection own road, would by means follow operating such a could assume the its whole power leasing railroad for a term of to another years thereby abandon and transfer substantially its whole corporate rights and franchises. is a Oregonian Company foreign corporation, laws of do not

general Oregon give foreign corporation to lease, but construct or only to acquire and operate railroad within the State.' The statute relied only giv- to lease those ing is the (except already considered) law of 1878, Laws 9'5,which Oregon, p. does not include or touch The first sec- clearly power.- while tion, includes, classes among foreign therein particularly enumerated, incorporation foreign incorporated purpose constructing,- constructing or for the' of or with the -operating, purpose cor- acquiring omits operating, any railway,” significantly established porations their selling leasing OREGON RAILWAY R’Y CO. OREGONIAN CO. -v.

Opinion oí Court. themselves; roads, instead of them this section operating and enu- to those' classes therein of foreign corporations gives' merated “the same and privileges only rights, exercise of of eminent collection of tolls domain, rights the other franchises as laws prerogative given by to this State, this State within for corporations organized or one the other for' purpose constructing railway,” leases is of which already specified, purposes making And that noth- not one. the second section, merely providing to in the act as to contained shall so construed give ing than anv further foreign corporations rights to exercised domestic only by corporations, acquired same as them the domestic may acquire give both of exercise, classes, is limited to evidently foreign domestic the first section. corporations, specified for created statute, short, Under foreign corporations cor- and no all, at foreign leasing get road. sell lease its any power gets poration counsel defendant by Another relied argument cases laid in certain in error is within the down that, principles far executed one here is an oh contract so subject, re- and to its error is validity deny plaintiff estopped con- stated, As fuse continue its already performance. one its road, tract Was which the demised privileges plaintiff , 1st from the for a franchises, ninety-six years, period it, who took defendant, possession August, until 15th it, day and used and under the lease, occupied did It then three of less than years. May, period plaintiff, what was equivalent returning refused be further the contract. bound by ' for To a contract runs ninety-six years, which say and actual of' both to it continual opera- which requires parties contract an executed tions and becomes it, performance term, for than three less performance years car- has ever been than it doctrine farther much carrying of cases is This class ried, and a misnomer. decidedly in a suit equity the doctrine performance governed a suit for nor is this specific perform- specific performance, Field, Opinion: Dissenting J. anee. This is an action at law to recover under a money contract void, which is. where for three nearly years acted under but in it, which of them (cid:127)parties one refuses longer to be bound and the provisions; now set' argument up is that because the has for all defendant actual use it paid made of the road while in the actual engaged performance of the contract between the dates it is just given, bound thereby for more than ninety-three contract years longer was made without lawful authority by board president of directors. We consider this no fur proposition'as needing ther consideration, reference to the discussion except same in Thomas v. subject Railroad Company Pennsylvania RailroadCo v. St. Louis &c. Railroad Co., cited. already the Gircvdt Oourt judgment is Oregon reversed, a/nd the case is remanded to that with a court, direction to overrule the a/nd demurrer, to talce such proceed- further as shall he

ings la/w, a/nd not according §T'Cwrisistent (cid:127) with this opinion. Field dissenting.

Mr. Justice I am not able with the to. agree court in the majority decision of case. this It seems to me clear a that cor- railway has the poration Oregon her laws to léase right its. road to another of like A cor- character. foreign as is the poration, below, the act of plaintiff October 21st, 181.8, on the same with placed a domestic footing corpo- ration, with the laws upon complying passéd regulation of such business in the State. transacting That act declares that, such compliance, foreign corpora- tion-shall have “the same as a rights,.powers privileges”- domestic corporation. Besides, act of' October 22, -1880, entitled An act to the- grant Oregonian Bailway Limited, Company, right 'and station over the way state lands,: grounds and-terminal facilities at the -upon public grounds city* Portland,” as an recognizes plaintiff existing corporation, lawfully 'in(cid:127)-the construction and .engaged operation railway of á.

BADGES v. CUSIMANO.

Syllabus. the head Portland to of the Willamette “from Oregon,, to it “and to its valuable and grants assigns” Talley,” easements property,” accompanied privileges, “rights, have ho to sell,' a convey, proviso granted, any part or-assign premises rights parcel' ‘“ save with, thereof, any person corporation, only (cid:127) of and to, a' now appurtenant railway part parcel and now in and owned said con- built process and it observed, it.” As' the- court below seems struction by this had to me very implies plaintiff justly, thus and also the road, granted rights .premises "assign not otherwise. therewith, connection of the State is what sustained I Cannot perceive public policy which has her ato foreign denying per therein, to lease its constructed mission railway It would rather if seem, road to a domestic corporation. any. control, considerations public policy policy such from to her transfer of the road own' favor a foreigners would made can the transfer is the State exercise When citizens. "and its use, the road, management, charges for. ov"er she could exercised. same previously, articles association which for And there nothing r transfe the directors plaintiff bids making it. if the laws of permit t was not member the cour Mr. Chief Justice Fuller in this and took decision. cajse argued,

when BADGER v. CUSIMANO. THE UNITED FOR THE THE COURT OF STATES TO CIRCUIT

ERROR. LOUISIANA. OF DISTRICT EASTERN Argued Decided March 31, 1889. January No. 179. plaintiff, finding on the in favor issues there

When recovery pleadings an action ille- bythe duties fact.raised

Case Details

Case Name: Oregon Railway & Navigation Co. v. Oregonian Railway Co.

Court Name: Supreme Court of the United States

Date Published: Mar 5, 1889

Citation: 130 U.S. 1

Docket Number: 26

Court Abbreviation: SCOTUS