and it cannot even grant an easement within its location to individuals or the public. But it can, it has been held, in connection with the owner of the fee, dedicate for a public highway land which it has taken under the right of eminent domain.2 Power to hold Property and maintain a Railroad in a Foreign State. A corporation may, when authorized by the law which created it, hold property in a foreign State when admitted to do so by its law or policy, and may be invested by such State with the power to construct and maintain a railroad, and take private property therefor.4 Power to establish By-laws. The company has an implied power to establish by-laws, but whether the power is conferred expressly or by implication, it is limited to such as are lawful and reasonable. It cannot by a by-law control the jurisdiction of courts, or without special statute authority declare a forfeiture of shares of capital stock for non-payment of calls. It may regulate the mode of transferring shares, but it cannot unreasonably restrict the power of transfer.8 The power to alter and repeal by-laws is limited to the making of such new by-laws as are reasonable, and cannot be used to divest rights acquired under the by-law which is amended or repealed. U. S. 71; York & M. L. R. Co. v. Winans, 17 How. 30; Pearce v. Madison & I. R. Co., 21 How. 441; Pullan ". Cincinnati & C. A. L. R. Co., 4 Biss. 35; Commonwealth v. Smith, 10 Allen, 448; Richardson v. Sibley, 11 Allen, 65; Middlesex R. Co. v. Boston & C. R. Co., 115 Mass. 347; Vermont & C. R. Co. v. Vt. Cent. R. Co., 34 Vt. 1, 47; Black v. Del. & R. Canal Co., 7 C. E. Green, 130, 399, 9 C. E. Green, 455; Stewart's Appeal, 56 Pa. St. 413; Pittsburg & C. R. Co. v. Allegheny County, 63 Pa. St. 126; Wood v. Bedford & B. R. Co., 8 Phil. 94; State v. Consolidation Coal Co., 46 Md. 1; Hays v. Ottawa, O., & F. R. V. R. Co., 61 Ill. 422; Atlantic & P. Tel. Co. v. Union Pacific R. Co. (U. S. C. C., D. Neb.), 1 Fed. Rep. 745; Mulliner v. Midland R. Co., L. R. 11 Ch. Div. 611. But see Shepley v. Atlantic & St. L. R. Co., 55 Me. 395; Kennebec & P. R. Co. v. Portland & K. R. Co., 59 Me. 9; Hall v. Sullivan R. Co., 21 Law Reporter, 138; Miller v. Rut If the by-law is separable land & W. R. Co., 36 Vt. 452; Bardstown & L. R. Co. v. Metcalfe, 4 Met. (Ky.) 199; State v. North Carolina R. Co., 72 N. C. 634. A general authority conferred by the charter to purchase lands was held to authorize the purchase of a railroad. Branch v. Atlantic & G. R. Co., 3 Woods, 481. 1 Sapp v. Northern Cent. R. Co., 51 Md. 115; ante, Chap. IX. p. 260. 2 Green v. Canaan, 29 Conn. 157. 4 Ante, Chap. VII. pp. 144, 145. 5 Chandler v. Northern Cross R. Co., 18 Ill. 190; Kennebec & P. R. Co. v. Kendall, 31 Me. 470; Kent v. Quicksilver Mining Co., 78 N. Y. 159, 178, 182; Williams v. Great Western R. Co., 13 Exch. 10; Angell & A. on Corp. ch. x. 6 Amesbury v. Bowditch Mut. Fire Ins. Co., 6 Gray, 596. 7 Ante, Chap. III. pp. 85, 86. Kent . Quicksilver Mining Co., 78 in its character, it may be void in part, and otherwise valid.1 The power to make by-laws is, in the absence of a contrary usage or statute provision, with the body of members, and not with the directors.2 Power to issue Shares of Stock. The power to issue shares of capital stock is limited to the number fixed by law. The power to issue preferred stock, according to the weight of authority, exists only under statutes; but stockholders may by acquiescence waive the right to object to an unauthorized issue. The power to pay interest on the stock exists only when conferred by statute. The power to enforce the payment of subscriptions has been already treated." Power to take Tolls. The power to take tolls must be expressly given, and when so given is, in case of doubt or ambiguity, to be construed favorably to the public. Tolls are to be distinguished from rates of transportation, being a tribute for a privilege, as a right of passage, and not, like freight or fares, a payment for a service.8 Power to discriminate in Charges for Transportation. A railroad company, being under a public obligation as a common carrier, and being in a certain sense a public agent in consequence of holding by delegation the power of eminent domain, is required to treat the public with equality and fairness. It cannot discriminate in the transportation of persons and merchandise by giving special privileges to one which it denies to another, or by 1 Amesbury v. Bowditch Mut. Fire Ins. Co., 6 Gray, 596. 2 Morton Gravel Road Co. v. Wysong, 51 Ind., 4. Ante, Chap. V. pp. 127, 128. p. 124. 4 Ante, Chap. V. 5 Ante, Chap. V. p. 126. Ante, Chap. III. pp. 81–86. 7 Stourbridge Canal Co. v. Wheeley, 2 B. & Ad. 792; Barrett v. Stockton & D. R. Co., 2 Man. & G. 134, 3 Man. & G. 956; Portsmouth Bridge Co. v. Nance, 6 Man. & G. 229; Perrine v. Chesapeake & D. Canal Co., 9 How. 172; Camden & A. R. Co. v. Briggs, 2 Zab. 623; Bridge Co. v. Hoboken Co., 2 Beasley, 81, 503, 1 Wall. 116; Penn. R. Co. v. National R. Co., 8 C. E. Green, 441; Blake v. Winona & St. P. R. Co., 19 Minn. 418; Munn v. Illinois, 94 U. S. 113, 126. 8 Boyle v. Phil. & R. R. Co., 54 Pa. St. 310; Cumberland Valley R. Co.'s Appeal, 62 Pa. St. 218; Camblos v. Phil. & R. R. Co., 4 Brewster, 563. See Johnson v. Hudson River R. Co., 2 Sweeney, 298, where the power to demand fare of a passenger is said not to be one which can be implied; but quære. 9 Sandford v. Catawissa. W., & E. R. Co., 24 Pa. St. 378; Audenried v. Phil. & R. R. Co., 68 Pa. St. 370; New England Express Co. v. Maine Cent. R. Co., 57 Me. 188; McDuffee v. Portland & R. R. Co., 52 N. H. 430; Chicago & N. W. R. Co. v. People, 56 Ill. 365. charging for the same service higher rates to some than to others.1 This rule is not to be inexorably applied so as, provided the rate is reasonable for all, to exclude contracts for transportation at a less rate in special cases, where under the circumstances the discrimination appears reasonable.2 It does not exclude arrangements for through traffic which provide for transportation at a less rate than is charged upon local freight.3 The company's right to make and, using reasonable force, to execute regulations in the transportation of passengers and the use of its stations belongs to a specific treatment of its duties and liabilities as a common carrier, rather than to the consideration of its general powers. Power to make Contracts. Corporations have an implied power to make such contracts as are usual and necessary for carrying into effect the purposes for which they were created. A railroad corporation is usually authorized to make contracts by an express provision of statute; but in the absence of such a provision the power is implied as necessary and incidental to the express power to locate, construct, maintain, and work a railroad. The power, whether express or implied, must, in view of the purposes and methods of such an enterprise, be allowed a liberal scope. The company, by custom and necessity, conducts operations which are extensive and miscellaneous. It holds wide relations with local and general business. It is often designed not merely to convey passengers and goods upon its own road, but to be a part of an extended line of transportation. Its capacity to make contracts cannot, therefore, be measured by the narrow and rigid rules which were applied at an early day to business or commercial corporations, still less by those which govern municipal and 1 Messenger v. Penn. R. Co., 7 Vroom, 407; Cumberland Valley R. Co.'s Appeal, 62 Pa. St. 218, 230; Camblos v. Phil. & R. R. Co., 4 Brewster, 563, 622; Vincent v. Chicago & A. R. Co., 49 Ill. 33. For the construction of the English statutes which prohibit unequal charges, see Great Western R. Co. v. Sutton, L. R. 4 H. L. 226, where the earlier cases are reviewed. 2 Fitchburg R. Co. v. Gage, 12 Gray, 393; Sargent v. Boston & L. R. Co., 115 Mass. 416, 422; McDuffee v. Portland & 3 Shipper v. Penn. R. Co., 47 Pa. St. 338; Stewart v. Erie & W. Trans. Co., 17 Minn. 372. 4 Angell & A. on Corp. § 271. 5 South Wales R. Co. v. Redmond, 10 C. B. N. s. 675, 685; Baltimore v. Balt. & O. R. Co., 21 Md. 50, 91. eleemosynary corporations.1 The courts, while in theory adhering to the ancient formula which defines the power of a corporation to make contracts, or bind itself by them, in fact deprive it of its legal force by a liberal application of the doctrine of estoppel.2 The Extent and Limit of the Power to make Contracts, how determined. The power of a corporation, in respect to contracts and business dealings, extends not merely to those which are absolutely essential or indispensable to the performance of the specified acts authorized by its charter, but as well to those which, not being prohibited by statute or public policy, are designed and may be useful to promote the main enterprise.3 The choice of means which are reasonably promotive of the main purpose is 1 A corporation authorized to boom lumber, it was held, could not recover for driving lumber. Bangor Boom Co. v. Whitney, 29 Me. 123. A corporation authorized to maintain a turnpike and keep a hotel was held not authorized to be a carrier on the turnpike, and, therefore, not liable for the price of wagons purchased for the purpose of carrying passengers on it. Downing v. Mt. Washington Road Co., 40 N. H. 230; Wis wall v. Greenville & R. Plank Road Co., 3 Jones Eq. (N. C.) 183. In McCullough v. Moss, 5 Denio, 567, a corporation for smelting ore was held not bound by a promissory note, unless it was made affirmatively to appear that it was given in the course of its business. In Penn., D., & M. Steam Nav. Co. v. Dandridge, 8 Gill & J. 248, 819, a company incorporated to transport passengers and merchandise between Baltimore and Philadelphia was held not bound by a contract to break the ice and tow from the port of Baltimore a vessel destined for Virginia; and the doctrine was stated, that a corporation can make no contract which is not necessary, either directly or incidentally, to enable it to answer the purpose of its charter, and that it is not estopped from denying its capacity. See Boyce v. Trustees, &c., M. E. Church, 46 Md. 359, 373. Of a similar tenor with the above cases are: Strauss v. Eagle Ins. Co., 5 Ohio St. 59; Abbott v. Balt. & R. Steam Packet Co., 1 Md. Ch. 542; Madison, W., & M. Plank Road Co. v. Watertown & P. Plank Road Co., 7 Wis. 59, 5 Wis. 173; Dietrich v. Madison Relief Assoc., 45 Wis. 79; Orleans, F., & H. Steamship Co. v. Ocean Dry Dock Co., 28 La. An. 173; Toll Bridge Co. v. Osborn, 35 Conn. 7; Hood v. New York & N. H. R. Co., 22 Conn. 502 (considered in Converse v. Norwich & N. Y. Trans. Co., 33 Conn. 166, 179); Pearce v. Madison & I. R. Co., 21 How. 441; Franklin Co. e. Lewiston Savings Bank, 68 Me. 43. See Angell & A. on Corp. § 256. In Norwich v. Norfolk R. Co., 4 El. & Bl. 397, 433, Coleridge, J., said: "When one considers the immense extension and increase of corporate bodies in modern times, the vast variety of purposes for which they are created, the complication of circumstances under which they are to act, the liability to error in the formation of prospective plans as to detail, and the ever-arising improvements in the means and appliances of mechanics and science, it would seem that public convenience and policy, as well as good sense and justice, require that, within the limits of a substantial adherence to purpose, the empowering clauses of incorporating instruments should be construed largely and liberally, so as not to defeat the purpose by a too narrow restriction of the with the corporation; and,, where different methods stand this test, judicial tribunals will not revise its discretion by holding that the one chosen was not indispensable and that another might have been more wisely taken.1 Some rules for determining the power of railroad corporations to make contracts, which have been stated in judicial opinions, deserve notice in this connection. The contracts of a corporation are presumed to be within its power, and the burden of showing its incapacity by the terms of the charter is on the party who denies their validity. The want of power may be expressly declared by statute, or implied from the nature and objects of the corporate body. The inquiry in some English cases is said to be, not whether the contract was authorized, but whether it was forbidden.2 Contracts, it is said, should be clearly outside of the objects of the charter, in order to be held invalid between the corporation and innocent third parties as in excess of corporate powers.3 Another test is as follows: If the contract is judicially perceived from its terms to be necessarily unconnected with the purpose of the incorporation, namely, the making, maintaining, and working the railway, both parties must have known it to be 1 Baltimore v. Balt. & O. R. Co., 21 Md. 50, 92; Curtis v. Leavitt, 15 N. Y. 9, 65; Madison, W., & P. Plank Road Co. v. Watertown & P. Plank Road Co., 5 Wis. 173; Norwich v. Norfolk R. Co., 4 El. & Bl. 397, 432, 433, Coleridge, J. 2 Miss. & M. R. Co. v. Howard, 7 Wall. 392, 412; Ohio & M. R. Co. v. McCarthy, 96 U. S. 258, 267; Morris & E. R. Co. v. Sussex R. Co., 5 C. E. Green, 542, 4 C. E. Green, 13, 574; Chautauque County Bank v. Risley, 19 N. Y. 369; Downing v. Mt. Washington Road Co., 40 N. H. 230, 234; Strauss . Eagle Ins. Co., 5 Ohio St. 59, 62; Alabama Gold Life Ins. Co. v. Central A & M. Assoc., 54 Ala. 73; South Wales R. Co. v. Redmond, 10 C. B. N. s. 675, 682, Erle, J.; Shrewsbury & B. R. Co. v. North Western R. Co., 6 H. L. Cas. 113, 124, 135, 137, 2 MacN. & G. 324, 17 Q. B. 652; South Yorkshire R. & River Dun Co. v. Great Northern R. Co., 9 Exch. 55, 88, Parke, B.; Eastern Counties R. Co. v. Hawkes, 5 H. L. Cas. 331, 381; Bateman v. Ashton-underLyne, 3 Hurl. & N. 323. See Kitchen v. Cape Girardeau & S. L. R. Co., 59 Mo. 514. In Scottish North Eastern R. Co. v. Stew art, 3 Macq. 382, 415, Lord Wensleydale (Parke, B.) said: "There can be no doubt that a corporation is fully capable of binding itself by any contract, . . . except when the statutes by which it is created or regulated, expressly or by necessary implication, prohibit such contract between the parties. Prima facie, all its contracts are valid, and it lies on those who impeach any contract to make out that it is avoided. This is the doctrine of ultra vires, and is, no doubt, sound law, though the application of it to the points of each particular case has not always been satisfactory to my mind." In Taylor v. Chichester & M. R. Co., L. R. 2 Exch. 356, 384, Blackburn, J., said: "I think, therefore, we are entitled to consider the question to be, not whether the present defendants had, by virtue of their acts of incorporation, authority to make the contract, but whether they are by those statutes forbidden to make it." His language on p. 362 is to the same effect. 3 Eastern Counties R. Co. v. Hawkes, 5 H. L. Cas. 331, 381, 382; Cary v. Cleveland & T. R. Co., 29 Barb. 35, 52. |