discharge under the laws of the State where the contract was made, but not to be performed, could not be pleaded in bar in

Statutes affecting Municipal Corporations.-See ante in this note, under the head "Municipal Corporations." An act providing that the amount of all judgments against a municipality should be included in the tax levy of the next year, and that no execution should issue until the money to pay such judgments should be so raised, was held void as to past contracts. Hadfield v. Mayor &c. of N. Y. 6 Robt. 501; see also Smith v. Mayor &c. 7 Robt. 190; McCauley v. Brooks, 16 Cal. 11; but see Dodd v. Miller, 14 Ind. 433; Swann v. Buck, 40 Miss. 268. A statute prohibiting a city from levying taxes to pay judgments against it, was held void, in South v. Madison, 15 Wisc. 30. Requiring a certain amount of the revenue of the year to be set apart is not objectionable, unless it appears that payment of warrants drawn must be delayed thereby. Humbolt Co. v. Churchill Co. Comm'rs, 6 Nev. 30.

A law compelling funding of claims at a lower rate of interest is unconstitutional. Brewer v. Otoe Co. 1 Neb. 373. But changes may be made in funding laws, provided the rights of creditors are not injuriously affected. Thornton v. Hooper, 14 Cal. 9; Babcock v. Middleton, 20 Cal. 643.

The fact that one of the contracting parties is a municipality does not give the Legislature power to take away the rights or remedies of the other party. Thus, a statute creating a commission for examining into the legality of all outstanding claims against a county, and funding such as are found legal, and providing that no claim not presented to and allowed by such commissioners shall be a legal and valid claim against the county, is void so far as this last provision is concerned. Rose v. Estudillo, 39 Cal. 270. And an act providing that no judgment shall be had against the city of New York, unless on proof that the amount is in the treasury unexpended to the credit of the appropriation for the specific object or purpose for which the contract was made, is void as to past services and prior contracts. Smith v. Mayor &c. 7 Robt. 190.

The Supreme Court of the United States has held, in a long series of cases, that where municipal corporations have created indebtedness—e. g., issued bonds under color of legislative authority, which were valid according to the judicial decisions of the State at the time—any subsequent legislation affecting the contracts or the remedy upon them, and any subsequent judicial decisions of the State courts putting a different construction upon the State Constitution or statutes, by which the contracts would be rendered illegal, impair the obligation of the contracts, and are void; and the United States courts will enforce such bonds against the municipalities by action, or by mandamus, or by receiver, notwithstanding State statutes which forbid the municipality to pay the debts or to levy taxes for the purpose of paying, and notwithstanding the municipal authorities refuse to levy such taxes. Gelpke v. Dubuque, 1 Wal. 175; Havemeyer v. Iowa Co. 3 Ib. 294; Thompson v. Lee Co. Ib. 327; Mitchell v. Burlington, 4 Ib. 270; Butz v. Muscatine, 8 1b. 575; Van Hoffman v. Quincy, 4 Ib. 535; Chicago v. Sheldon, 9 Ib. 50; City v. Lamson, Ib. 477. In one case, when the municipal authorities not only refused to levy the tax, but all resigned, and the municipality was without officers, the U. S. Circuit Court held that it could appoint an officer of the court in the nature of a receiver to perform the duties of the municipal authorities, and levy and collect the tax. Welch v. Ste. Genevieve, 1 Dillon, C. C. 130.

Laws incidentally affecting Contracts.-As a general proposition statutes cannot

the Circuit Court of the United States against a creditor, a citizen of another State at the time of the origin of the con. tract and of the discharge; that the same is true when the

be objected to because they incidentally and remotely affect contract rights, they being passed diverso intuitu, and being necessary for the general public welfare. See ante in these notes, upon "Obligation of Contracts," under head of "Police Power," “Taxation," and "Eminent Domain," in their effects upon contracts. The following points and cases are added: A statute authorizing a city to take land for public improvements applies to a case where the city itself had sold the land with warranty. Brimmer v. Boston, 102 Mass. 19. A charter having contained leave to set up a lottery, a subsequent statute making lotteries illegal passed diverso intuitu was held valid as against such charter. Miss. Soc. of Arts v. Musgrove, 44 Miss. 820. An act annexing part of a county to a city does not impair obligation of contracts of the county creditors. Wade v. Richmond, 18 Gratt. 583. An act prohibiting action on contracts made outside of the State in fraud of its laws is valid. Davis v. Bronson, 6 Clarke (Ia.) 410. As to the effect upon a chartered bank of a statute restricting the negotiation of notes, see McIntyre v. Ingraham, 35 Miss. 25.

Courts, however, are inclined to restrain the Legislature in its exercise of general powers, even in matters of public concern, so far as such exercise may encroach upon private rights of contract. Thus, where under a mortgage of a railroad to trustees to secure bonds, the trustees were in possession, and the mortgage contained adequate provision for the appointment, when necessary, of successors in the trust, an act providing for an annual election of trustees by the bondholders was held invalid. Fletcher v. Rutland &c. R. R. 39 Vt. 633. The same was held of an act authorizing land dedicated by the owner for a public square to be used for a different purpose, Warren v. Lyons City, 22 Iowa, 351. As to power of the Legislature to authorize the sale of lands devised in charity, although alienation is prohibited by the terms of the devise, and to change the object of the charity, see Att'y Gen. v. The Clergy Soc. 10 Rich. Eq. 604; Burton's Appeal, 57 Penn. St. 213. A statute authorizing debts to a mother bank to be paid to its branches, and vice versa, was held unconstitutional, in Bank of Old Dominion v. McVeigh, 20 Gratt. 457. Also a statute exempting the property of a particular corporation from sequestration unless mismanagement, &c., were shown. Penrose v. Erie Canal Co. 56 Penn. St. 46.

That consolidation of two colleges does not impair the obligation of scholarships sold in one of them, see Huston v. College, 63 Penn. St. 428. As to consolidation of railroads, see McCray v. Junction R. R. 9 Ind. 358.

The fact that a question of public policy is involved does not make it constitutional to take away rights secured by contract. Thus, provisions, whether contained in statutes or in Constitutions, making void past contracts for slaves entered into before slavery was abolished, or prohibiting courts from entertaining suits thereon, are invalid. Pillow v. Brown, 26 Ark. 240; McElvain v. Mudd, 44 Ala. 48; Calhoun v. Calhoun, 2 Rich. N. S. 283; White v. Hart, 13 Wal. 646. And contracts in which the consideration was Confederate money cannot be declared void on that account. Thorington v. Smith, 8 Wal. 1. But the contrary was held in Hale v. Huston, 44 Ala. 134. An amnesty act is unconstitutional if it takes away contract rights. State V. Gatzweiler, 49 Mo. 17; Clark v. Ticknor, 49 Mo. 144; see Drehman v. Stifle, 8 Wal. 595. And an act allowing set-off of losses during the war. Gunn v. Hendry, 43 Geo. 557; Solomon v. Lowry, 44 Geo. 290. And an act allowing defendant to

action is brought in the courts of a State other than that of the origin of the contract; that a creditor of one State, who volun

return property purchased in full satisfaction of the contract. Abercrombie v. Baxter, 44 Geo. 36.

Who can Complain.—That only parties whose rights are invaded can complain, see New Orleans Nav. Co. v. New Orleans, 12 La. Ann. 364, and Mobile &c. R. R. v. State, 29 Ala. 573, where it was held that creditors could not complain of the forfeiture of a charter consented to by the corporation. It seems individual stockholders may complain of infringement of the contract contained in the charter of a corporation. Gifford v. New Jersey R. R. 2 Stockt. 171. But where a municipality subscribes to the stock of a corporation under legislative sanction, the individual corporators have no right to complain of a statute authorizing a withdrawal of the subscription. People v. Coon, 25 Cal. 635. Where the charter of a turnpike corporation provided that certain towns should not be compelled to support any part of the road, is was held that the towns had no constitutional right to the continuance of the exemption. Brighton v. Wilkinson, 2 Allen, 27.

Extent of the Legislative Power where the Right to amend, alter, or repeal Charters, &c., is reserved either in the Charter or in some general Statute.—It would seem that the right of alteration or repeal cannot be reserved in such terms as to leave the rights of corporators, or those with whom they contract, wholly at the mercy of the legislative will. See Goener v. Schroeder, 8 Minn. 387.

It is difficult under the authorities to determine how far, under the reservation usually made, the legislative power extends. It certainly is far broader than the police power, the taxing power, or the power of eminent domain. There are cases which hold that the power of repeal and amendment enables the Legislature to dispose of the property of all corporations to the same extent as it may dispose of the property of municipal corporations, and to invalidate contracts so far as the corporations are concerned. Other cases, however, limit the legislative power to measures of change far less radical than these. The reservation of the right to amend merely does not enable the Legislature to repeal, or to defeat or substantially impair, the original object of the incorporation. Comm'rs v. Holyoke &c. Co. 104 Mass. 446, 451. See Mayor v. Norwich &c. R. R. 109 Mass. 103; Parker v. Metropolitan R. R. Ib. 506. The following cases are illustrations of what the Legislature has done under the reserved right, and it will be seen that some of them go much further than others. A railroad may be compelled to erect a station at a particular place. Commonwealth v. Eastern R. R. 103 Mass. 254; and to alter, grade, and build connecting tracks, Fitchburg R. R. v. Grand Junction R. R. 4 Allen, 198; and to widen a bridge, English v. New Haven R. R. 32 Conn. 240; and to construct the embankments necessary to carry a highway across it at its own expense, Albany &c. R. R. v. Brownell, 24 N. Y. 345. Where a statute has exempted a railroad corporation from a duty imposed by law-e. g., ringing a bell-such duty may be reimposed. Galena &c. R. R. v. Appleby, 28 Ill. 283.

But where a corporation has been granted the privilege of increasing its capital stock, in consideration that it shall be liable for all damages to fish-rights caused by its dams, and it has paid large sums on account of such damages, it cannot be required to make new fish ways. Commonwealth v. Essex Co. 13 Gray, 239. We think this case cannot be reconciled with many other decisions, and especially with two recent ones made by the United States Supreme Court, and cited below, and see

tarily makes himself a party to insolvent proceedings in another State, is bound by the result.

Comm'rs v. Holyoke &c. Co. 104 Mass. 446. The number of directors in a railroad to which a city is entitled by virtue of its municipal sub cription may be increased. People v. Hills, 46 Barb. 340. This case was reversed by the Court of Appeals upon another point. A subsequent case involving the same question was carried to the U. S. Supreme Court, and the ruling in People v. Hills, 46 Barb. 340, was there affirmed. It was urged, on the argument, that the number of directors was not a provision either of the city or of the railroad charter, but depended in fact upon a contract between the city and the company, and that, while the Legislature might alter the charter of both corporations, it could not on the plea of such alteration change the contract made between them. The Supreme Court, however, upheld a statute making the change. Miller v. State, 15 Wall. 478. Bradley and Field, JJ., dissented, and their brief opinion we quote: "I dissent from the opinion of the court in this case, on the ground that the agreement with respect to the number of directors which the city of Rochester should elect was not a part of the charter of the company, but an agreement outside of and collateral to it. Whilst the Legislature may reserve the right to revoke or change its own grant of chartered rights, it cannot reserve a right to invalidate contracts between third parties; as that would enable it to reserve the right to impair the validity of all contracts, and thus evade the inhibition of the Constitution of the United States." Ibid. 499. By a general statute of South Carolina the right to alter, amend, or repeal charters subsequently granted is reserved, unless the charter, in express terms, is excepted therefrom. A railroad was chartered under this statute. Subsequently an act was passed exempting this railroad from all taxation, but this act did not in any manner state that it was excepted from the operation of the prior general law referred to. Finally, in 1868, a new State Constitution, and legislation under it, reimposed taxes upon the railroad. The Supreme Court of the United States held this last legislative act to be constitutional and valid. Tomlinson v. Jessup, 15 Wall. 454. In Holyoke Co. v. Lyman, 15 Wall. 500, the case of Comm'rs v. Holyoke Co. 104 Mass. 446, is affirmed, . and, as it seems, that of Commonwealth v. Essex Co. 13 Gray, 239, is overruled.

Again, the same court held that two colleges might be consolidated, one being removed from its former location, even though this one had issued scholarships which were contracts between the holders thereof and the college. It was urged in this case, also, that the statute had the effect to impair the obligation of these contracts between the college and individuals, but the court held the change was within the legislative power. The decision, however, proceeded partly upon the ground that the terms of the scholarships were not directly invaded, and therefore that the objection urged did not exist in fact. Pennsylvania College Cases, 13 Wal. 190. It has been held that the limits of an exclusive ferry privilege may be narrowed. Perrin v. Oliver, 1 Minn. 202. And, in New York, that the land of a railroad may be taken for a public highway without compensation. Boston &c. R. R. v. Greenbush, 5 Lans. 461. These cases, therefore, directly hold that under the ordinary reservation, the Legislature may take away property belonging to the corporation, and alter contracts made by it, so far at least as its own rights thereunder are concerned.

A statute transferring the management of a turnpike road to the county court, on account of the neglect and misconduct of the directors, was held valid in Simpson

The Supreme Court has not decided that a contract which is in terms to be performed within the State where the discharge is granted, may not be barred by such discharge, as against a citizen of another State seeking to enforce the contract in the State where the contract was to be performed and where the discharge was obtained. Nor has it decided the question where the contract was made with a citizen of the State where the discharge is granted, and of which both creditor and debtor were citizens at the time of the proceedings in insolv ency, though the contract itself was entered into in another State.*

I take this clear and succinct statement from a recent case in Massachusetts where the whole subject has been considered. Marsh v. Putnam, 3 Gray, 563, per Thomas, J. The other cases in Massachusetts are-Bray

nard v. Marshall, 8 Pick. 194; Betts v. Bagley, 12 Pick. 572; Agew v. Platt, 15 Pick. 417; Savoye v. Marsh, 10 Met. 594; Fiske v. Foster, 10 Met. 597; Woodbridge v. Allen, 12 Met. 470; Ilsley v. Meriam, Cush. 242;

County Ct. v. Arnold, 7 Bush (Ky.) 353. Also a statute authorizing the sale of the franchises of a corporation, for purpose of paying its debts, by the chancellor, on application of a creditor. L. &. O. Turnpike v. Ballard, 2 Metc. (Ky.) 165. And a statute for the winding up of insolvent corporations. Robinson v. Gardiner, 18 Gratt. 509.

The method of enforcing the liability of corporators may be changed. Hyatt v. McMahon, 25 Barb. 457. And personal liability may be imposed as to all future transactions. In re Oliver Lee & Co.'s B'k, 21 N. Y. 9; Sherman v. Smith, 1 Black, 587. The capital stock may be reduced with the assent of a majority of the stockholders. Joslyn v. Pacific Mail Co. 12 Abb. Pr. R. (N. S.) 329. And the business of a corporation may be extended-e. g., a railroad may be authorized to extend its line. Durfee v. Old Colony R. R. 5 Allen, 230. See, on the subject of altering the charters of banks organized under a general banking law containing the usual reservation, In re Oliver Lee & Co.'s Bank, ubi sup. ; Sherman v. Smith, 1 Black, 587; see also Iron City B'k v. Pittsburg, 37 Penn. St. 340.

Taxes may be increased by general law beyond the limits fixed in the charter. Commonwealth v. Fayette &c. R. R. 55 Penn. St. 452. And where by the charter of a religious society, the trustees had the right to impose assessments or contributions only with the consent of a majority of the pewholders, the Legislature may dispense with such consent. Bailey v. Power Street Church, 6 R. I. 491.

Though the right is reserved to the Legislature, it may be exercised by the people by a change in the Constitution. In re Oliver Lee & Co.'s Bank, ubi sup. And where, at the time of granting the charter. a two-thirds vote of the Legislature was required under the Constitution, under a new Constitution not containing such restriction, the alteration may be made by a majority vote. In re Reciprocity Bank, 22 N. Y. 9.

Where the Constitution reserves the right to alter or repeal charters, provided no injustice be done to the corporators, it seems that the court is to judge of the justice of the amending statute. Iron City Bank v. Pittsburg, 37 Penn. St. 340. But in this case a tax law general in its operation on all banks was held not to be unjust.