8 State v. Southern R. R. Co. 24 Tex. 80; People v. Stanford (1888), 77 Cal. 360.

9 In re Application of Attorney-General (1989), 3 N. Y. Suppl. 461, construing the phrase "upon leave granted" in N. Y. Code Civ. Proc. § 1798. 10 Nevitt v. Bank of Port Gibson, 14 Miss. 513.

11 State v. Phoenix Bank, 33 N. Y. 9 27; Chappel v. Chappel, 12 N. Y. 215: 6! Am Dec. 496; People v. Ulster Com. P. 18 Wend. 6-8; Young v. Drake. Hun C1; Denton v. Denton, 41 How. Pr. 221; People v. New York, 19 How. Pr. 283; Bridenbacker v. Mason, 16 How. Pr. 203; Cleveland Peter. 19 Abb. Pr. 407; People v. Hectograph Co. 10 Abb. N. Cas. 358; Lowber v. New York. 5 Abb. Pr. 48'; S. C. 25 Earb. 203; Stilwell v. Ca penter, 2 Abb. N. Cas. 238; Martin v. Martin, 3 Barn. & Adol. 934. Cf. BronLacrosse etc. R'y Co. 2 Wall. 233; Mussina v. Goldthwaite, 34 Tex. 125; 7 Am. Rep. 281.

§ 592. Forfeiture not to be collaterally pleaded. An act constituting a ground of forfeiture of the charter of a corporation cannot be plead collaterally in a suit between the corporation and an individual;' for the State may waive its right to enforce the penalty, and it cannot be known in any collateral proceeding, but that it may elect so to do. Accordingly, until forfeiture has been judicially declared, the corporation is not deprived of any of its powers, franchises, or rights of contract; neither is it relieved of any of its obligations; not even though the charter may provide for an ipso farto forfeiture."

1 Atlanta v. Gate City etc. Co. 71 Ga. 106; Ashville Division v. Aston, 92 N. C. 578; Mississippi etc. R. R. Co. v. Cross, 20 Ark. 443; Hammett v. Little Rock etc. R. R. Co. 20 Ark. 204; Taggart v. Western Maryland R. R. Co. 24 Md. 563; 89 Am. Dec. 760; Hamilton v. Annapolis etc. R. R. Co. 1 Md. Ch. 107; Barren Creek ctc. Co. v. Beck, 99 Ind. 247; Briggs v. Cape Cod etc. Canal Co. 137 Mass. 72.

2 Frost v. Frostburgh etc. Co. 24 How. 278

3 Barclay v. Talman, 4 Edw. Ch. 123, 129; Penobscot Boom Co. v. Lamson, 16 Me. 224; 33 Am. Dec. 656.

4 Buffalo etc. R. R. Co. v. Cary, 26 N. Y. 75; Mechanics etc. Assoc. v. Stevens, 5 Duer, 676; Hughes v. Bank of Somerset, 5 Litt. 45; Connecticut etc. R. R. Cov. Bailey, 24 Vt. 465; 58 Am. Dec. 181; Waterford etc. R'y Co. v. Dalbiac, 6 Ex. 443.

5 Commonwealth v. Worcester etc. Co. 3 Pick. 227.

6 Atchafalaya Bank v. Dawson, 13 La. 497. But see Brooklyn etc. Transit Co. v. Brooklyn, 78 N. Y. 524. See, also, In re Brooklyn etc. R. Co. 72 N. Y. 245.

§ 593. Waiver-The State may waive its right to enforce a forfeiture-Subsequent recognition of corporate existence. The State may waive its right to enforce the forfeiture of the franchises and privileges of a corporation.' And it is deemed to have done so when, having notice of the fact which constitutes the ground of forfeiture it subsequently enacts a statute which recognizes the existence of the corporation. For example, the right to declare a charter forfeited, on account of the corporation having been engaged in the transaction of a different business than was authorized by the general law under which it was originally organized, has been held to be waived by the State, by the subsequent enactment of a statute enlarging the corporate powers.3

1 Atchafalaya Bank v. Dawson, 13 La. 497: State v. New Orleans etc. Co. 2 Rob. (La.) 529; Chesapeake etc. Canal Co. v. Ohio R. R. Co. 4 Gill & J. 1, 127; Frederick etc. Seminary v. State, 9 Gill, 379; Commonwealth v. Union etc. Ins. Co. 5 Mass. 230; 4 Am. Dec. 50.

2 People v. Manhattan Co. 9 Wend. 351; People v. Fishkill etc. Co. 27 Barb. 445; State v. Bank of Charlestown, 2 McMull. 439; 39 Am. Dec. 135; State v. Mississippi etc. R. R. Co. 20 Ark. 495; Lumpkin v. Jones, 1 Kelly, 27; Commonwealth v. Union etc. Ins. Co. 5 Mass. 230; 4 Am. Dec. 50; McConahy v. Turnpike Co. 1 Pa. 426; Kishacoquillas etc. Co. v. McConahy, 16 Serg. & R. 140.

3 People v. Ottawa etc. Co. 115 Ill. 281.

§ 594. Of the jurisdiction of courts of law and equity—The legislature prohibited from judicial acts. When the constitution of a State prohibits the legislature from exercising judicial functions, it cannot pass an act forfeiting a charter without the consent of the corporation.' But when in a statute reserving to the State the right to repeal all charters subsequently granted, there is a proviso that a certain class of charters shall be forfeited only for cause, a legislative inquiry to ascertain whether

there be grounds for forfeiture, is not a judicial act. Proceedings to forfeit the charter of a corporation must be brought in a court of law. A court of equity has no jurisdiction, unless it be conferred by statute; although equity may hold directors liable for a breach of trust.5 Under the New York statutes, the so-called "supreme court" has jurisdiction to dissolve a corporation at the suit of the attorney-general." Leave to file an information for the purpose of having the charter of a corporation forfeited, is not in the discretion of the court, but must be granted as of course.7

1 University of Maryland v. Williams, 6 Gill & J. 365; 31 Am. Dec. 72; Bruffet v. Great Western R. R. Co. 25 Ill. 353.

2 Wood's Railway Law, 1716, citing Crease v. Babcock, 23 Pick. 334; 34 Am. Dec. 61.

3 State v. Merchant Ins. etc. Co. 8 Humph. 235; President etc. v. Trenton Bridge Co. 13 N. J. Eq. 46; Attorney-General v. Stevens, 1 N. J. Eq. 369; 22 Am. Dec. 526.

4 Hardon v. Newton, 14 Blatchf. 376, 378; Belmont v. Erie R'y Co. 52 Barb. 637; Howe v. Deuel, 43 Barb. 504; Bayless v. Orne, 1 Freem. Ch. (Miss.) 161; Folger v. Columbian Ins. Co. 99 Mass. 267; 96 Am. Dec. 747; Strong v. McCagg, 55 Wis. 624, 627; French Bank Case, 53 Cal. 435.

5 Dodge v. Woolsey, 13 How. 331; Fountain Ferry etc. Co. v. Jewall, 8 Mon. B. 140, 142; Hodges v. New England Screw Co. 1 R. I. 312; 53 Am. Dec. 624; Baker v. Backus, 32 Ill. 79. But cf. People v. College of California 38 Cal. 166.

6 Denike v. New York etc. Co. 80 N. Y. 599; Wilmersdoerffer v. Lake Mahopac etc. Co. 18 Hun, 387; 2 N. Y. Rev. Stat. 463, § 38; N. Y. Laws of 1870, ch. 151, § 2. Cf. Attorney-General v. Bank of Chenango, 1 Hopk. Ch. 596.

7 Cole v. Dyer, 29 Ga. 434; State v. Southern Pacific R. R. Co. 24 Tex. 80; Fall River etc. Works v. Old Colony etc. R. R. Co. 3 Allen, 221.

§ 595. Dissolution by repeal of charter.—The learned reader should bear in mind the distinction between the repeal and the forfeiture of charter. The practical importance of the distinction lies in the fact that the former is a legislative act of the State, the latter a judicial act of the State; the former cannot be accomplished without impairing

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the obligation of the contract between the sovereign and the corporation, unless the right has been reserved in the constitution of the State, or in some previously, enacted general law, or in the charter itself; the latter may be accomplished without a reservation of that right; the former lies in the discretion, it might be almost said the caprice, of the legislature; the latter is a penalty to be inflicted only for cause.

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1 Greenwood v. Union Freight R. R. Co. 105 U. S. 13; Lothrop v. Stedman, 13 Blatchf. 134; Myrick v. Brawley, 33 Minn. 377; and cases cited infra, § 594.

2 Vide supra, § 592, and cases cited infra, note 6.

3 Miller v. State, 15 Wall. 478; New Orleans etc. Co. v. Louisiana ctc. Co. 115 U. S. 750; Greenwood v. Union Freight R. R. Co. 105 U. S. 13; Sinking Fund Cases, 99 U. 8. 700, 737; Dartmouth College v. Woodward, 4 Wheat. 518; Miller v. State, 15 Wall. 478; Fletcher v. Peck, 6 Cranch, &7; Port of Mobile v. Louisville etc. R. R. Co. 84 Ala. 115; State v. Northern Central R'y Co. 44 Md. 131, 164; Wales v. Stetson. 2 Mass. 143: 3 Am. Dec. 39; Stevens v. Rutland etc. R. R. Co. 29 Vt. 545; Lothrop_v._Stedman, 42 Conn. 583; Zabriskie v. Hackensack etc. R. R. Co. 13 N. J. Eq. 178; 90 Am. Dec. 617.

4 Vide supra, § 585.

5 Greenwood v. Union Freight R. R. Co. 105 U. S. 13; Myrick v. Brawley, 33 Minn. 377; and cases cited in the following section.

6 Vide supra, § 584-589; Miller v. State, 15 Wall. 478; Campbell v. Mississippi Union Bank, 7 Miss. 625, 653; State v. Northern Central R'y Co. 44 Md. 131, 164.

§ 596. The same subject, continued.—The constitution of New York reserves to the legislature the right to alter from time to time or repeal any general of special act relating to the formation of corporations; and the General Railroad Act of 1850 in that State reserves to the legislature the right at any time to annul or dissolve any company incorporated under the act; with the proviso, however, that the dissolution shall not take away or impair any remedy against the corporation, its stockholders, or officers, for any liability previously incurred."

When the State has reserved the right of repeal, the legislature may exercise it without assigning any reason therefor; and the validity of its action does not depend upon the necessity for it, nor upon the soundness of any reasons which may be alleged as promoting it. Where a charter provides

that, upon a failure to comply with any of its conditions, it shall be subject to alteration or repeal by the legislature, it is not essential that there be a judicial determination of the fact of failure before the legislature can act.* The reserved power of repeal may be exercised by the State summarily and at will, and its action being a legislative and not a judicial act, cannot be reviewed by the courts, unless the exercise of the power be so wanton and causeless as to violate the principles of natural justice. Unless the right to repeal has been reserved, the legislature cannot, by a subsequent act, render defaults of the corporation an absolute ground of forfeiture, which were only a qualified ground of forfeiture under its charter. A corporation formed under a general incorporating statute is not affected by the repeal thereof." But a special charter, it seems, may be repealed by a general law. A forfeiture or dissolution can be declared only by the courts of the State from which the corporation derived its charter." Accordingly, a court of equity will not try, in a collateral way, the question of a violation of its charter by a foreign corporation.10 Where the charter of a railway authorizes it to build its tracks through any street or highway, a grant by a city ordinance to the company of the right to use a particular street for that purpose, and to load and unload its freight cars thereon, is a

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