Black v. Delaware & Raritan Canal Co.

The Chancellor.

When the rule to show cause in this case was granted, an unusual length of time was allowed, and 1 then mentioned to the counsel of the complainants, that I would expect them to bo ready, to-day, to proceed with the cause. The time has been sufficient to prepare, on the side of the complainants, unless the answer of the defendants put the matter in an entirely now and different light. The answer of the defendants, as read, is long, not much longer than the bill; but the great part of that answer is made up of admission of the facts charged in the bill — admitted shortly, it is true, not spun out to a great length; but each separate fact, each separate act, each separate organization, the acceptance and approval of each act of the legislature is, distinctly admitted by itself. I noticed carefully the reading of the answer, and there appeared to me to be few or no new facts. One, two, or perhaps three of the facts charged by the complainants in the bill, are denied. One, that appeared to me, upon the original reading of the bill, to be important, and does now, was, whether there was a connection between the roads in question and the Pennsylvania Eailroad. A large part of the answer is taken, in denying — not a mere simple denial, (which would have been of no avail in such a case,) but denying, (by setting forth the facts,) — the allegation in the bill, that there was no connection, between the Pennsylvania Eailroad, the proposed lessee, and the united roads. Another part of the answer denies the fact stated of the *168 expected income of the roads, under their present management and organization. The bill states that they might make fifteen per cent, under good management, as at present organized. Another long part of the answer is denying that fact.

Counsel' 'have not pointed out to me any matter in the answer, that is new, any matter that changes the case, as they may be supposed to have come prepared for arguing it. Counsel, in preparing for arguing a cause like this, do not come expecting that the defendant will admit everything that is charged against him. These matters are matters responsive to the bill. Counsel ought to have come prepared, upon their being denied, to contest the case, upon a denial being put in.

In these injunction cases, the remarks of the opening counsel are very sensible, and addressed to the discretion of the court, which ought to be exercised in favor of a full hearing of all parts of the case; and, though I do not see what the surprise is, though I do not see what, in this answer, is to change the case, from its position as originally presented for the allowance of the rule to show cause, I am willing to accede to so reasonable a request as counsel have made, for an adjournment over until next Wednesday, that they may read this answer and consider it; because, although I have failed to see in it, by the reading, and counsel seem to have failed to see in it, anything that is new or unexpected, or that should change the position of the case, (or at least have not pointed it out to me, therefore, I presume have not seen it,) it may be that, on a careful perusal of this answer, counsel may see something different in it. And one week longer cannot seriously incommode the defendants. The rule, as it now exists, if I merely adjourn the case, will prevent the execution or consummation of the lease. It may be important to- the corporations, defendants, if they are to-execute the lease, that it be done soon. - If it is so beneficial;' as they set out in théir answer, to the stockholders, the sooner it is done, probably the better, and I am unwilling to *169 delay them in what they consider — whether I consider it so or not — a matter important to have finished; but I think the week’s delay asked by counsel, is not unreasonable. If the time, therefore, will suit the counsel on the other side, or, at least, is not incompatible with tlioir engagements, I will adjourn the cause till next Wednesday.

Mr. V. B. Bradford, (of Philadelphia,) for complainants.

I. The companies named as lessors in the proposed lease, severally or collectively, prior to March 17th, 1870, did not possess any franchise or power to make or execute any lease of their canal and railroads, with their appurtenances, and of all their property and interest, real, personal, and mixed, for the purpose and object contemplated in said lease.

II. That said companies do not now possess, nor have they at any time since March 16th, 1870, possessed, severally or collectively, any franchise, privilege, or power to make and execute said lease, or any similar lease.

It is alleged, by the defendants, or some of them, that, on the 17th of March, 1870, the legislature of Mew Jersey, by an act approved on that day, conferred on said companies a franchise, privilege, or power to make and execute the said lease.

The complainants deny this allegation; because,

1. The title, preamble, and enacting clauses of said act demonstrate that its proposed application to said lease is an entire perversion of it.

It is a safe and reasonable canon of judicial interpretation and construction of a statute, that, if its language and spirit are fully satisfied by a different construction, or on a different hopothesis, than the one contended for, such latter con *170 struction is excluded and inadmissible, for, “ expres&io unius est exdusio alterius."

*169 Owing to the illness of the Chancellor, the case was postponed till the 12th of September, when the argument was had upon the rule to show cause, on the bill, answers, and affidavits annexed thereto.

*170 2. Said act does not authorize or sanction a lease, of the franchises, or of any of the franchises of the United Companies, or either of them, in any way or manner, expressly or by legal implication, to “ the Pennsylvania Bailroad Company.”

That company is not named in said statute; nor, is a lease to “ the Pennsylvania Bailroad Company,” indirectly authorized or sanctioned by the language of said enactment. The works of that company are not, “ in connection or continuity ” with the works of “the United Companies of New Jersey.” They do not form “ continuous and connected lines with the works of the United Companies of New Jersey.” The works of three distinct and independent corporations— to wit, of “ the Trenton Delaware Bridge Company,” (partly a New Jersey corporation and partly a Pennsylvania corporation), of “the Philadelphia and Trenton Bailroad Company,” and of “ the Connecting Bailway Company,” (both Pennsylvania corporations) lie between the works of “the United Companies of New Jersey,” and those of “ the Pennsylvania Bailroad Company,” and separate them, bjr an interval of at least thirty-one miles. How, then, can “ the continuity or connection ” required by the statute, be said to exist between the works of “ the United Companies of New Jersey,” and those of “the Pennsylvania Bailroad Company,” respectively?

Again: the statute refers to railroad companies in the state of New Jersey, “ or otherwise.” The word “ otherwise ’’ is not an adverb of place or situation. It here has not the meaning of the words, “otherwhere,” or “elsewhere,” which are synonymous words. Lexicographers agree, that no such meaning attaches to the word “'otherwise,” which signifies “in a.different manner,” “by other causes,” “in other respects.” It is used, with such signification, in a subsequent part of the same act. Substitute such correlative renderings, or such significations, of “otherwise,” and *171 they are wholly inapplicable, without meaning, and, in legal parlance, are insensible, here. If so, that word is not to be regarded, as it appears, in this part of the statute. This portion of the statute must be read without it. If the legislature had intended to authorize a lease, between “ the United Companies of New Jersey” and a foreign corporation, they should have either expressly named such corporation, or, have used the word “elsewhere,” or, the word “otherwhere,” in the connection, in which the insensible word, “ otherwise,” appears. It is not in the rightful power of any court, to supply language not used by the legislature, except where, of logical necessity, such language is implied from the context. To erase the word “ otherwise,” and substitute the word “elsewhere,” or, the word “otherwhere,” would be to make law, and not to expound it. To convert the word “otherwise” into the word “otherwhere,” or, the word “ elsewhere,” would simply be, to furnish a now idea, and not a more verbal correction. No one can contend; that a judicial tribunal can do this and thus legislate. To speak of “ companies in New Jersey, or in a different manner,” or, “ by other causes,” or, “ in other respects,” is not the same as to say, “in Now Jersey, or in another stale,” “ elsewhere,” or, “otherwhere;” but, such an expression, in such connections, is without meaning, insensible, and to bo wholly disregarded in reading and expounding said act.

3. The said act of March 17th, 1870, does not authorize a grant or transfer, by lease or otherwise, of all the property and estate, real, personal, and mixed, and, of all the franchises appurtenant thereto, of the United Oanal and Eailroad Companies of Now Jersey, such as is proposed by the said lease, to any other company, domestic or foreign.

4. The said act of March 17th, 1870, has never been accepted, by either of the several corporations sometimes called “the United Canal and Eailway Companies,” named in the said act as the recipients of the proffered grant of additional or supplemental corporate franchises and powers.

The said act purports, “to enable” the said companies, *172 and to grant to, confer, and bestow on them, severally and collectively, the additional and supplemental franchises and powers set forth in said act, which they did not, in whole or in part, previously possess. The said act is, therefore, in legal contemplation, a proffered supplement to the several acts of incorporation of the aforementioned respective companies ; is, pro tanto, a new act of incorporation, i. e., it proffers new and further terms of contract to the said corporation. Said act must, therefore, be clearly, distinctly, and formally accepted, before it can form any part or portion of the several charters of the aforementioned respective companies, or bind, as a new, further, and additional contract, either the state, the said several corporations, or their several and respective stockholders. An acceptance of the proposed lease in the manner mentioned in said act, is in no just sense an acceptance of said act by the stockholders of either of the corporations who are named in said act, or in said lease. To validate said act, an acceptance, by all the stockholders, in a duly convened corporate meeting of each of the companies whose respective charters are affected by said act, is absolutely indispensable. In reference to a proper acceptance of said act, the mode adopted by the board of directors of the United Companies of New Jersey? to obtain the assent of the stockholders of the several companies, impliedly to said act, by the appointment of a committee “ to obtain the consent of the stockholders to said lease,” and to effect an execution of said lease, is illegal, inequitable, inappropriate, and unconstitutional. The aforementioned action of the said united board is manifestly a breach of trust by trustees, by means of a combination to effect a surrender and extinguishment of their trust, in disregard of the good faith and fidelity which they owe to the people of New Jersey, and to the stockholders and bondholders of the United Companies of New Jersey.

5. The said act of March 17th, 1870, does not authorize said lease, because it is an unconstitutional and void act. It is invalid and unconstitutional; because,

*173 First. It authorizes, (where a single stockholder is unwilling to accept it, in the case of such stockholder,) a divestiture of vested rights, “ an impairment of the obligations of contracts,” and such a change or alteration of private property as is tantamount to “ a taking of such private property ” “ for a private use, and not for a public uso.”

Second. The only provision mado, in said act, for compensating the dissatisfied stockholders for the taking of their stock, is, that “ its value shall be assessed, as of the time immediately before the taking, hut that the assessment thereof shall not bo mado and compensation paid until after the taking.”

The Constitution of New Jersey expressly requires, that compensation shall bo first mado. See Const. N. J., Art. IV, § 7, Clause 9.

Third. In requiring the dissatisfied stockholders to give up their shares of stock, and equitable corporate franchises and rights belonging to them, as cestui que trusts or beneficiaries of said corporations, (to wit, among others, the right, “ of electing directors to manage the business of said railroads and canal, and the right to participate in a division of the net earnings or profits of said business, in the ratio of the stock hold by each of them, as evidenced by certificates for said shares of stock,”) in order to enable said corporations to carry into execution, any agreement, contract, lease, or other arrangement which they may deem it expedient to make, with any of tho other companies mentioned in the first section of said act; the act delegates, or attempts to delegate, to said United Companies, the right to decide (in tlioir own case) what constitutes “a public use,” sufficient to “justify tho taking of private property,” which right can only he exercised by tho legislature itself.

Fourth. The said canal and feeder, and the said railroads of the said United Companies, with their necessary and proper appendages and appurtenances, respectively, are “public highways,” within the state of New Jersey, and it is not competent for tho legislature of New Jersey, directly *174 or indirectly, to assign or transfer, or to authorize an assignment or transfer of the highways, or the control of the highways of New Jersey, to a foreign corporation.

III. The lessee named in the proposed lease, “ the Pennsylvania Railroad Company,” possesses no power or franchise to become lessee in the said lease.

It is a legal presumption, until the contrary is shown, that “the'Pennsylvania Railroad Company” possess no power or franchise to become the lessee of all the canal, railroads, franchises, and other property, real, personal, and mixed, of the lessors, (corporations of the state of New Jersey,) as mentioned in the said lease, for the reason that the said “ Pennsylvania Railroad Company ” is a foreign corporation, having its exclusive residence and field of corporate action on the soil of Pennsylvania, and possessed of a corporate life and existence derived, solely, from the commonwealth of Pennsylvania, which, as respoects the present question of corporate franchises and property, is as foreign to the sovereignty of New Jersey, as that of any distinct and independent government in Christendom. The Pennsvlvania . Railroad Company is, legally speaking, an artificial person, inhabitant and citizen of the commonwealth of Pennsylvania.

The counsel here examined successively, and at length, the different statutes of the state of Pennsylvania, to show that they conferred no power or authority on the Pennsylvania Railroad Company to take the lease.

IY. The said lease, or any such lease, is a violation of the laws and Constitution of New Jersey.

Y. The said lease, or any similar lease, will, if executed and carried into effect, be contrary to equity and good conscience, and tend to the manifest wrong and injury of the complainants.

The unconscionable and inequitable features of said lease, are—

*175 1. The rent or dividend of ten per cent, per annum, stipulated for, is a wholly inadequate return or compensation for a transfer of the valuable and highly remunerative works and franchises of the lessors to the lessee. The average of net profits for thirty-eight years, from 1832 to 1870 inclusive, the whole period of the existence of the companies, was twelve and twenty hundredths per cent, per annum. There can he no reasonable moral doubt, that henceforth the companies will be able to earn not profits equivalent, at the least, to fifteen per cent, per annum.

2. The covenant and guarantee of the Pennsylvania Eailroad Company to pay a rent equivalent to a dividend of ten per cent, per annum, on the capital stock of the lessors, for nine hundred and ninety-nine years, is not safe or reliable, to the extent of a substitution of said guarantee for the valuable real, personal, and mixed estate of the lessors, transferred to said Pennsylvania Eailroad Company by the proposed lease. The said lease violates the good faith of the corporators of the lessors to their mortgage bondholders whose moneys have paid for nearly half the cost of filie works of said companies. Those bondholders contracted directly with their obligors, the United Companies, who are stripped by this lease of the means of fulfilling, in a direct and immediate manner, their respective obligations. If the lessee shall, by mismanagement, either wilful or accidental, be unable to protect the obligations of said companies, they and their creditors may be remitted to expensive proceedings in equity, in a foreign jurisdiction, against the lessee, as their immediate remedy. The United Companies and the guaranteed return or quasi rent, will also be liable for any tort committed on their works, or in connection with them, by the lessee, in a common law action. They cannot relievo themselves by such lease from their corporate obligations and liabilities to the public.

3. The proposed lease is one-sided, and affords very little security to the stockholders of the companies, lessors. It is mainly made in the interest of the Pennsylvania Eailroad *176 Company. It is fair in seeming and false in meaning. “ It-keeps the word of promise to the ear, and breaks it to the-hope.” To verify these assertions, reference is made to the-lease itself, and especially to the complete severance of the-works and franchises of “ the Philadelphia and Trenton Railroad Company,” from the fortunes and interests of its affiliated companies, the United Companies of New Jersey,, affected by it. The Philadelphia and Trenton Railroad Company, with its connecting railway, is an essential part-of the main trunk line between Philadelphia and New York.. So highly has a close association with it been regarded by the New Jersey companies, that they, in the names of trustees, purchased and now own a considerable majority of its-stock. Nevertheless, the aforementioned influential stock interest in the Philadelphia and Trenton Railroad, is assigned and transferred, by the proposed lease, to the Pennsylvania Railroad' Company, so that the latter company can,, next January, elect every director and officer of “ the Philadelphia and Trenton Railroad Company,” and then, with the consequent consent of said company, can, at no distant day, merge it into their own corporation, as may suit themselves. In that way, if not in some other way, the lease-enables the lessee to sever and annul the security afforded by the business; works, and franchises of “ the Philadelphia- and Trenton Railroad Company," now and heretofore closely-connected with those of the United Companies of New Jersey, to the stockholders of all the companies.

4. The proposed lease provides that the lessors “ shall furnish, when required, to the lessee, marketable certificates-of new stock of the United Companies of New Jersey, to the-amount of $2,250,000, and also $3,000,000 of the consolidated first mortgage six per cent, coupon bonds, free of tax, of the said United Companies, to be used by the lessee in making certain stipulated improvements at Harsimus cove, and elsewhere.” What is this but watering the stock and increasing the debt of the United Companies of New Jersey ? It is-paying for improvements for the almost exclusive use and. *177 •advantage of tlie lessee, without corresponding security to the lessors; because, in case of the bankruptcy of the lessee, but little use can be had or benefit derived to the United •Companies in the transaction of their own proper and legal business, from the contemplated large outlay, by the lessee, •at “Harsimus cove,” even admitting that by a “re-entry,” the said United Companies can ever regain possession of the properties leased by them “ as of their former estate therein.” It ought to have been stipulated in said lease that such •expenditure and improvement, with a view of increasing the ■security of the lessors, (because the usufruct of the lessee is to bo for nine hundred and ninety-nine years,) should he made by the lessee at its own proper charge and cost.

5. The proposed lease assigns and transfers to the lessee the absoluto possession, control, and disposal of the vast .amount of saleable real and personal property of the lessors, which the lessee will have in its power to use and apply, according to its numerous and varied necessities, and at its •own option.

6. The alleged remedy of “a re-entry,” provided in and •by the lease “ for covenants broken,” affords no security. It is an illusory and ineffectual remedy. It is, indeed, no remedy whatever. There can he no “re-entry” on public franchisos and properly appurtenant thereto. Tho canal .and railroads of the lessors are “public highways,” “rights •of way ” common to every citizen, on which every citizen has a right of going, and on which there can be no private ■entry, nor any “re-ontry” for covenants broken. The lessors cannot maintain ejectment for their railroads and canal, or for the necessary appurtenances or appendages thereto which are exempt from taxation, such as stations and depots. They can only have such remedies as are appropriate to their vindication of “ a right ” to a franchise or to an incorporeal hereditament, such as a “ right of way.” What remedy can the stockholders of said companies have, other than a hill in equity, against the lessee, in case of a failure to pay the rent stipulated or non-performance of any other *178 covenant contained in the proposed lease? There is no such “privity of contract” between individual stockholders and the lessee as to entitle them to a common law remedy, such as an action of covenant, debt, or indebitatus assumpsit Their supposed right of “re-entry,” and of re-vesting of their former position, in relation to their canal, railroads' and business as common carriers, is fallacious, impracticable, and valueless.

7. The proposed lease for the long term of nine hundred and ninety-nine years, by legal presumption, is taken out of and from an interest of greater duration, capable of sustaining a quasi reversion, and must, therefore, rest on the certain continuance of that larger interest beyond the term of such lease. If such-quasi reversionary interest is dependent on circumstances, if a continuance of its supporting franchise is uncertain, or if it may be defeated by a condition, such lease, together with its annual return, in a quasi rent, to wit, the guaranteed dividends, will fall with such cessation, discontinuance, or defeasance, and the lessee, moreover, will have good cause of action for a disturbance, and a claim for pecuniary damages against said lessors. Now it is well known that the state of New Jersey has attached a condition to its grant of franchise to the United Companies, respectively, viz. that the state may take the works of said companies in 1889, on a just valuation. If the state should so do, either at the suggestion of the lessee, its successors or assigns, or of its own motion, in 1889, it may be inquired, who will have the right to receive, from the state, the pecuniary consideration for such assumption ? Clearly, so far as its leaseholders of nine hundred and ninety-nine years (which may be, practically, regarded as almost equivalent to the whole interest) is involved, the lessee will be entitled to a very large compensation for a deprivation of the usufruct, for a very long period, of a most valuable and remunerative, property. What will be the appraised value, as respects the- ' stockholders, of a quasi reversionary interest, after the expiration of nine hundred and ninety-nine years ? and what- *179 would be the proportion payable to them of the amount to be paid by the state ? What then will become of the quasi security afforded by the usufruct of the leased property, for the payment of the annual dividend of ten per cent., by the said lessee to the said stockholders ? and what then will bo the right of the stockholders to claim, from the lessee, such dividends, by way of quasi rent or return ?

YI. The complainants, by reason of such manifest wrong and injury, are without adequate remedy, • other than the protection by the preventive writ of injunction prayed for in the bill, and are, under and by virtue of the Constitution of the United States, the Constitution of the state of blew Jersey, and the laws of Yew Jersey, entitled to the protection afforded by said writ of injunction.

Mr. Bradford discussed these propositions in a long and elaborate argument, and cited many authorities in their support.

Mr. J. P. Stockton, for defendants.

The bill is bad on account of the omission of necessary parties.

The rule is, that the rights of all persons whoso interests are immediately connected with the decision, and affected by it, shall be. provided for, as far as they reasonably may be.

The Philadelphia and Trenton Railroad Company, and the Pennsylvania Railroad Company, are both necessary parties. Their interests are immediately connected with the decision.

The general rule is, that all persons legally or beneficially interested in the subject-matter of a suit should bo made parties; or, if the expression bo deemed more exact and satisfactory, that all persons interested in the object of the bill are necessary and proper parties. All the exceptions to the rule are founded upon public convenience and policy, and courts of equity never permit any exception, unless they *180 can dispose of the merits of the case before them without prejudice to the rights and interests of other persons who are not parties. If complete justice cannot be done without others being made parties, whose rights or interests will be prejudiced by a decree, then the court will altogether stay its proceedings, even though these other parties cannot be brought before the court; for in such cases the court will not, by its endeavor to do justice between the parties before it, risk the doing of positive injustice to other parties not before it whose claims are or may be equally meritorious. Story’s Eq. Pl., § 77, and cases cited; Hallet v. Hallet, 2 Paige 15 .

The object of the bill is shown in the prayer to restrain the parties, that is, the New Jersey companies and their directors, from executing a lease, of which the Philadelphia . and Trenton Railroad Company is one of the lessors, and of which the Pennsylvania Railroad Company is the lessee; a lease the three lessors and parties to which are declared by the acts set out in the bill to be identical in interest with the Philadelphia and Trenton Railroad Company.

The object of the bill is further " to restrain the consolidation of the capital stocks of the United Companies, and the Pennsylvania Railroad Company; ” and this, although the bill sets out the act of the legislature authorizing it, and expressly consolidating it with the Philadelphia and Trenton Railroad Company by name. So the act is declared invalid for want of acceptance, and unconstitutional, and the court is asked to declare this without an effort being made to get the party the most interested before the court.

The bill sets out the making of the lease, showing the Philadelphia and Trenton Railroad Company to be one of the four lessors. It recites the resolution of the boards of all four companies adopting the lease.

The principle at the foundation of the question of who are necessary parties, is a principle admitted in all courts, upon questions affecting the suitor’s person and liberty, as well as his property, namely, that the rights of no man shall be *181 decided without giving him an opportunity to be heard. Story’s Eq. Pl., § 72.

Is it alleged that the parties are out of the jurisdiction of the court, and cannot be reached by process ? It is a weU known rule, in such a case, that the bill should not only allege that the person is out of the jurisdiction, but it should go on to pray process against him, so that he may be made .amenable to the process of the court, should he come within the jurisdiction. One reason for this is, that the absent person may have an opportunity of appearing to the suit and taking such a course in it as he may deem to be for his advantage. Munoz v. De Tastet, in note to Brookes v. Burt, 1 Beav. 109.

When the party is out of the jtirisdiction, it should be positively averred in the bill, and not left to more inference. Penfold v. Nunn, 5 Sim. 405. There is no such averment in this bill. The general rule is, that to a bill against a partnership, all the partners must be made parties. But if one of the partners be resident in a foreign country, so that he cannot bo brought before the court, and the fastis so charged in the bill, the court will ordinarily proceed to make a decree against the partners who are within the jurisdiction; with this qualification, however, that it can be done without manifest injustice to the absent partner. Story’s Eq. Pl., § 78, and cases cited. But the excuse for a non-joinder of parties, that they are out of the jurisdiction, ought not to prevail where important rights of the absent partners are involved. Vose v. Philbrook, 3 Story 347 .

The United Companies of New Jersey, and the Philadelphia and Trenton Railroad Company, under the agreements between them, have been held to be partners. They have a community of interest. In the cases arising out of the accident at Burlington, the facts were sot out in affidavits showing the relations of the companies to be a partnership, and a case removed to the United States courts on that assumption.

But since the coming in of the answer, this matter is *182 established beyond doubt. The answer sets out the fact that on the 22d day of April, 1836, an agreement was made between the Delaware and Raritan Canal Company, and the Camden and Amboy Railroad and Transportation Company, of the one part, and the Philadelphia and Trenton Railroad Company, of the other part, by which agreement the said partners did agree, each with the other, that from and after the 1st day of June then next ensuing, during and until the expiration of their said charters, respectively, the clear profits arising from the stock of said companies should he divided among all the stockholders of the said several companies, share and share alike.

By the contract itself, it further appears that it is provided therein that the stock of the said companies, respectively, shall be paid up in full, and that the accounts of the said companies shall he kept separate, and the dividends of the clear profits thereof shall be made and declared separately in the same manner as if this agreement had not been made.

The company is an independent organization, treated as such in the contract, and so spoken of in the act of 1870, but the community of interest existing will, if-the lease should prevent the making of fifteen per cent, dividends, be the same loss to the corporators of the Philadelphia and Trenton Railroad Company, as to those of the three defendant companies. If the securing of ten per cent, for nine hundred and ninety-nine years is a valuable addition to the stock of the defendant companies, it is of precisely the same value to the stock of the Philadelphia and Trenton Railroad Company.

The Philadelphia and Trenton Railroad Company, and “The Joint the Delaware and Raritan Canal, and the Camden and Amboy Railroad and Transportation Companies,” as the act of 1870 recites, have an identity of interest.

The lease must be executed by them as a separate company. They might be obliged to perform it specifically, if the courts of Pennsylvania were appealed to ? If so, would *183 it bo pretended that such a decree would be made in Pennsylvania without making parties of these defendant corporations ?

It has been recently held by a distinguished equity judge, Vice-Chancellor Wood, that when a bill was filed by a stockholder, on behalf of himself and all other stockholders, against the chairman, directors, and secretary of a railway company, to restrain them from acting on an agreement dated some years before, and entered into between the company and six other railway companies, for the general regulation and assimilation of the traffic tolls on the several railways, as being ultra vires, and to the damage of the company and its members, that the six other companies ought to have been made parties to the bill. Hare v. Northwestern Railway Company, 3 Law Times, N. S., 289.

See also Godifroi § Shortt on Railways 79; Salomons v. Laing, 12 Beav. 377; Bryson v. The Warwick Canal Company, 4 De G., M. & G. 711.

The Philadelphia and Trenton Railroad and the Pennsylvania Railroad Companies, have a recognized existence in the state of New Jersey. They may sue and be sued, and yet that is a power derived only from their charter. 25 Vermont 433.

Corporations may legally contract in other states than those which charter them. Bank of Augusta v. Earle, 13 Peters 591 ; Story on Confl. of Laws 37; United States v. Amedy, 11 Wheat. 412 ; Beaston v. The Farmers Bank of Delaware, 12 Peters 136 ; Angell & Ames on Corp., §§ 272, 273; Daniell's Ch. Pr. 134; Nix. Dig. 173.

They may hold lands in another state. Dry Dock v. Hicks, 5 McLean 111 .

But the Philadelphia and Trenton Railroad is within the jurisdiction, and could bo served with process. Since the passage of the act of 1870, it is naturalized in New Jersey, and process can be served upon her, as upon all other citizens. It is not pretended otherwise by the bill.

The connecting roads chartered by different states, are *184 not to one another and the other states as foreigners by the English law. It has even been suggested in the cases, that they are citizens by the Constitution of the United States.

But has the Pennsylvania Railroad Company, to which I have only incidentally alluded, any interest in the object of this suit ? Do the facts in the bill show that, even if the bill was in proper form, and averred directly that that company was- out of the jurisdiction, it is a case where the court will go on in the absence of a party in interest ? Are not important rights of the Pennsylvania Railroad Company involved ? Does not the court run great risk of doing injustice, by going on without an effort having been made to get them into court — without putting the case in such a position that they can come in and show their interest ? Is it not a case where the court will stop, rather than run the risk of doing injustice?

The object of the bill is to prevent the execution of a contract already made and directed to be executed by the United Companies in connection with the Philadelphia and Trenton Railroad Company, as lessors of property they aver to be worth $50,000,000. The Pennsylvania Railroad Company are charged to be incapable of receiving it, the act declared not to authorize it, and yet they are not made parties, and cannot come in, and show the fact that they have full and ample, authority from the state of Pennsylvania, under which they have made similar leases which the courts have approved. In other words, if this court will deny the party most interested the right of appearing and showing the power they have, then a decree may be had, preventing those who contracted with them from executing a contract already made by virtue of an act of the legislature of this state. In such a case, a preliminary injunction has never before been granted.

So far from the Pennsylvania Railroad Company not being a necessary party, it would seem as if they are purposely not made defendants, to prevent their coming in and showing their power.

*185 In the case of Gratz v. The Pennsylvania R. Co., and Phila. & Erie R. Co., 41 Penn. St. 447, where both contracting companies, in a similar case, wore made parties, it appeared that the Pennsylvania Railroad Company being about to purchase the rolling-stock and bonds of the Sun-bury and Erie Railroad Company, and to lease it for the term of nine hundred and ninety-nine years, a bill in equity was filed by a stockholder for a preliminary injunction against the proposed purchase and lease : Held, “ that the intended contracts were valid because within the corporate powers of the two companies under the acts of Assembly of April 13th, 1860, and April 23d, 1861. This is what they are not permitted to show. This is why one of the contracting parties is not made a party to the bill, the object of which is to prevent the execution of an indenture of lease, which, by virtue of an act of the state which has been in force for more than a year, has been adopted and ordered executed by the parties defendant.

Suppose the Pennsylvania Railroad Company, having a perfect right to sue here, should apply to the United States court, or to this court, for a specific performance, and insist, after a vote of two-thirds, that the company be compelled to execute the lease, would the court refuse to consider that that should be done which wras agreed to be done by both parties, and ordered to be done ? Yet, for the first time in the history of equity, this court would find itself in a position where they refused to hear the authority and power claimed, and its source, because they proceeded to adjudicate, with the main party in interest no party to the suit. They act without hearing the parties interested.

If these are foreign corporations, which I insist they are not in the sense used in the English books, even by the strict rules that apply to partnerships — omitting the fact that these corporations have duties to the public at large outside of their relations to their stockholders — I insist that the excuse for non-joinder cannot prevail where not only important rights of absent partners are involved, but the *186 only party interested on one side in the contract executed between lessors and a lessee, and the fulfillment of which it is sought to restrain, is not a party to the bill. Story’s Eq. Pl., § 78.

If the Pennsylvania Railroad Company, and the Philadelphia and Trenton Railroad Company are not interested in the object of the bill, then neither are these complainants nor the defendants. If they are, the court must stop until proper parties are joined, and the injunction must be dissolved. Story’s Eq. Pl., § 77, and cases.

Can it be gravely insisted in a court of equity that after the lease was adopted and ordered to be executed by the officers on the occurrence of a certain event, that after the performance of the condition which made the order absolute, the companies lessors and individual directors can be restrained from fulfilling the contract, when it is clear that the act was within the legitimate exercise of the powers which had been granted, on the ground that the company lessees have not the power to accept the lease, without making a party of that company the doubt of whose power is the ground of the relief sought ?

Can it be possible for a court to listen to an argument and examine the statutes of Pennsylvania to ascertain whether the Pennsylvania Railroad Company are empowered to lease other railroads, when they are not made parties to the bill, and have not the power to show their authority, and when and where obtained ?

In the case of Mott v. The Pennsylvania Railroad Company, the powers of the Pennsylvania Railroad Company, under the act of-April 13 th, 1860, and April 23d, 1861, were construed by the court at the instance of a dissentient stockholder. The decision was in favor of the power of the company. Now suppose, without making parties of them in this case, the prayer of the bill was granted because the court here took a narrower view of the powers conferred by that act, are you not doing great injustice to the absent ? Ought they not to be permitted to show how their courts *187 liad interpreted their acts? Yon cannot rely upon the defendant companies doing it. They may regret the act tliey have done. They may be willing to have the contract declared void for want of power to make such a contract on the part of the Pennsylvania Railroad Company. It will not do to leave the Pennsylvania Railroad Company’s interest to the mercy of those with whom they are treating for peace.

This is not only a preliminary question, but it is a fundamental question, which should control the whole argument and the extent of the examination which the court will permit in this case.

By not making the Pennsylvania Railroad Company parties, complainants are estopped from denying their power. If it appears that defendants are acting within the scope of their authority, if the acts complained of are no violation of their organic law, the dissentient stockholder has no place in court, no right to examine into the wisdom of the exercise of the discretion vested in the directors and controlled by a majority in interest of the corporators. There is no charge of fraud in the bill; nothing to justify this court in undertaking to review the wisdom of the management of a corporation, whether they should make three or four per cent, dividend. Yor have the court any power whatever to ask whether a foreign corporation with wdiich they have contracted is ultra vires in making that contract, or whether it is not. They and their powers, by the act of complainants, are placed outside of your jurisdiction.

The Pennsylvania Railroad Company are not here, and if defendants have the power and have exorcised it, the case lh at anjend. I insist that if the court does permit this case to proceed, the examination is necessarily limited entirely to the question of whether the corporations defendant have exceeded their powers in ordering the contract to be executed. Before reaching this question, however, the court will stop if it finds the slightest cause for believing that complainants acquiesced. If it appears that they had knowledge of what was contemplated, and waited until the corporation had *188 acted before seeking the aid of this court, the corporation cannot be enjoined at the prayer of complainants.

The individual cannot be enjoined, because all that remains to be done is to affix the seal, which is done by the president, in whose custody the law considers it; but the order of the board, by virtue of which it validates and executes the lease, is already made. There is no prayer to enjoin the president from affixing the seal when two-thirds of the stockholders have approved of the contract. It is his duty to do it, even though an injunction rested on the individuals composing the boards of directors of the three defendant companies. An injunction against the corporation may prevent any agent from doing any further act in the matter, but this simply proves that the prayer is too late as against the corporation, as they have exhausted their power and finished their work, leaving nothing but the simple act of obedience of an officer to the order of the board to be enjoined.

Had the lessors power to make the lease set out in the bill?

I claim that they had ample power under the act of 1870. That they had ample power, and it was their duty to do it, without any special enactment, if in their discretion it would enable them better to perform their duties to the public and render more valuable the interest of the stockholders.

To enable it to answer the purpose of its creation, every corporation aggregate has incidentally, at common law, a right to take, hold, and transmit property, and may dispose of any interest in the same, having the same power in this respect as an individual. Thus it may lease, grant in fee or tail, or for a term of lives, mortgage, and, though insolvent, assign in trust for .the payment of debts. A. & A. on Corp., ch. V, §§ 145, 191; Featherstonhaugh v. Lee Moor Porcelain Co., Law Rep., 1 Eq. 318; Parish v. Wheeler, 22 N. Y. 494 ; Pennock v. Coe, 23 How. 117 .

There can be no doubt, the general principle of the majority to control the minority, in all the operations of the *189 company, within the legitimate range of its organic law, is implied in the very fact of its creation, whether expressly conferred or not. It is incident to every business corporation to obtain such extension and enlargement of its corporate powers as the course of trade and enterprise and altered circumstances shall render necessary or desirable, not altogether inconsistent with its original creation. 1 Redf. on Railw., pages 72, 73, § 20, Clauses 3 and 8; Louis., Cin. & Charleston R. v. Letson, 2 How. 497 ; Ware v. The Grand Junction Water Works, 1 Russ. & My. 470.

Hence, it is held that a court of equity will not, at the instance of a shareholder, restrain a joint stock incorporated company, whose acts of incorporation prescribe its constitution and objects, from applying in its corporate capacity to Parliament, and from using its corporate seal and resources to obtain the sanction of the legislature to the remodeling of its constitution, or to a material extension and alteration of its objects and powers. 1 Redf. 74, § 9 .

There was a time when the tendency of the courts was otherwise, and some few cases were decided which held the principle that tlio directors, and the majority of the company, may be restrained from employing money subscribed for one purpose for another, however advantageous; but the distinction in those cases, which exist between partnerships and joint-stock companies, unincorporated and unconnected with public duties, and those which had duties to the public constantly increasing, was entirely lost sight of. The duty imposed by the act of incorporation, under actual circumstances, and the demands of increased traffic, drives the corporation to demand increased powers, enlarged capital, new connections and agents, not contemplated in the original act. Stevens v. The South Devon. Railw. Co., 13 Beav. 48; 1 Redf. on Railw. 75.

In the case of Mott v. The Penn. R. Co., 30 Penn. St. 23, the brief of Cuyler, St. George Campbell and Stanton, states that no case can be found either in England or in this country, of a preliminary injunction being granted for re *190 straining a corporation from performing an act expressly authorized by legislative authority. This view was sustained by the court. It was held that a dissenting stockholder of the Pennsylvania Railroad Company cannot have a preliminary injunction tp prevent the company from becoming the purchasers under the authority of the act; his rights could' only be determined on final hearing.

Could these companies, at the instance of the owner of one share of stock, continue to run a horse railroad from Camden to Amboy, against the will of the legislature, and the majority of the stockholders ?

While the wants of the community advanced, while new arteries of trade opened, in every direction around, New Jersey, against the will of the legislature, against the demands of access to the national capital, could she stand at gaze, like Joshua’s moon on Ajalon ? This can’t be law, because law is common sense.

The charters of two of these companies, the Camden and Amboy Railroad and Transportation Company, and the Delaware and Raritan Canal Company, with all the subsequent acts to that time, underwent a searching examination in the Delaware Bay Railroad case.

As the grant secured to the companies the exclusive right between the cities, a question arose as to the meaning of the word “ between; ” whether it embraced local business which did not go through. Chancellor Green, in a very able opinion, examined the subject, and that opinion declares what the undertaking was and is. That opinion was confirmed by a unanimous vote of the Court of Appeals. The only two judges who dissented, if I am right in my recollection, did so on points of practice as to how far our relief should go, the Court of Appeals going further than the Chancellor.

In this opinion, the Chancellor said: “ The contract is founded upon a valuable consideration, paid by the companies. It was made as an inducement to private enterprise and *191 private capital, to construct an important highway required for public travel and the convenience of commerce, and which it was incumbent upon the state in its sovereign capacity to provide, either directly by its own means or through the agency of others.”

Mow, is it reasonable, can it be law, that as the public demands increased, as it became necessary to expend vast amounts of money to do the business which the public wants demanded, that while men talked of moving the national capital, because proper and continuous means of access across Mew Jersey were said to have been denied; while Congress maintained the right to break down all state rights, and ignore tlieir boundaries, to force roads across the states for continuous communication, on account of its paramount necessity ; that while it is a fact that cannot be denied that the existence of the nation was preserved, and its political unity secured, by bands of continuous iron rails, reaching from the Pacific to the Atlantic; that the law all the time was, and is now, that one stockholder could have defied the whole Mational Government, the state legislature, the public wants, the safety of the people, the supreme law? One share of stock could do all this, notwithstanding the fact that the charter authorized the Camden and Amboy Eailroad Company “ to exercise all the rights, powers, and privileges pertaining to corporate bodies, and necessary to perfect an expeditious and complete line of communication from Philadelphia to New York, and to carry the object of this act into effect.”

The case of Kean v. Johnston, was decided entirely on the construction of the act taken by the Master, he holding that the act itself, in terms, required every stockholder to assent. It is also a case of amalgamation, and so cited by Mr. Eedfield on his work on Eailways. Or rather, it was a case of entire dissolution, and embarkation in a new business, and so treated by the Master. I think I ought further to add that the case was settled by the parties, after an appeal to the Court of Appeals, and has no further weight as *192 authority than the opinion, at that time, with the lights that then shone round him, of an able and eminent jurist.

But the application of legal principles which do not change, to the ever new and changing circumstances that follow railways, is of much difficulty, and cases are decided differently in the different states and England; and courts never hesitate to correct a mistake in the dicta of the court or the application of the law, as soon as subsequent cases or new events show the error. In the early days of railway cases in this state, it was held by our Supreme Court, that if a cow trespassed upon the track the company should pay its value. The law now holds the owner very properly responsible for his negligence, in endangering the lives of passengers, and causing great loss of property.

In Zabriskie v. The Hackensack and New York Railroad Company, 3 C. E. Green 178, corporators and private partners, are treated as precisely in the same position. On page 184, the Chancellor says the doctrine of Natusch v. Irving was adopted in New York by Chancellor Kent, in the case of Livingstone v. Lynch, 4 Johnson’s Ch. 573, and in this state by the decision of Parker, Master, in Kean v. Johnston, 1 Stockton 401, losing sight of the distinction made in Mott v. The Pennsylvania Railroad Company, altogether. This case, however, was put on the ground that it was a new and different enterprise, and not within the power of the legislature to so alter the charter under the power to alter or repeal at pleasure. “ The question here is, can this company, either with or without the consent of a majority in interest of its stockholders, compel the complainant to embark capital subscribed for the first enterprise in this new one, entirely different ?” The Chancellor moreover adds, on page 193 : “ The company is authorized to construct another road; it is not compelled to do it. If it build it, or if it does not, its old charter remains, with all its franchises and privileges intact, and no new burdens, except so far as it' assumes them. This is in no sense of the word an alteration of the charter. It would be as absurd *193 as to say, that an owner had altered his house who had built a larger one on an adjoining lot.”

Now, the act of 1870 is in no sense an alteration of the charter. It is a grant of a privilege the legislature have a right to grant. It is no new burden on the company; it only confers a privilege, which they may exercise or not, as they choose. If the exercise of that privilege violates the law of corporations, that is, the contract between the stockholders, it cannot be done without the consent of all the shareholders.

The necessary changes in the management of business, to keep the business from being diverted from Now Jersey, was the duty of the corporation to the stockholders, and to the state, and they had a right, and it was their duty, to apply to the legislature for increased powers, and this has been constantly done, until the capital has increased from one million to thirty-five millions. In addition, by and with the consent of the corporation, alterations have been made in the charter of a fundamental character, rendered necessary by the increased demands of the public.

These companies have made contracts and running arrangements for years, with agents in and outside of the state, which were necessary to make connections and satisfy the just demands of the public wants. They have their arrangements now with the Philadelphia and Wilmington Railroad Company, the Baltimore and Ohio, and Pennsylvania Railroad Company. In one sense this may be called ultra vires. It was only contemplated at the time that the city of Camden and the wharf at Amboy should be united ; and selling through tickets to New Orleans and California was never dreamed of. These things not being illegal — not being prohibited — are to be considered a part of the original grant; they are the result of the exercise of the discretion of the directors, who represent the majority of stock, and as long as that is honest and does not violate the law, a court of equity will not interfere with it.

It is not ultra vires, because it is an exercise of a power, *194 made necessary by a change of circumstances, to carry out the very object of the original charter. What would be ultra vires in this case, would be to fail in their duty to the public, to the state, and the stockholders, by letting the march of improvement pass them by, or annihilate them. And this subject is confided to the discretion of the directors, and not to the court. Hodges on Railways, 57, 58, 59.

The rule is, that the court will not interfere in matters which are properly the subject of internal regulation. See Kerr on Injunctions, 565; Foss v. Harbottle, 2 Hare 461; Gregory v. Patchett, 33 Beav. 595; Charlton v. Newcastle, 5 Jurist, N.S 109; Godifroi & Shortt on Railways, 72, 73, 74.

The suggestion that a stockholder has a right to hold the whole body, in spite of the direct power given by the legislature, to employing the funds to no purpose but that contemplated by the original corporators at the time of the first charter, as applied in some of the cases, is not applicable to public companies, or private companies with public duties. The attempt to apply it has already reduced the proposition to an absurdity.

Is the right derivative, or is it only the injured stockholder who has it ? Then, are we to examine the date that each shareholder bought his stock, to ascertain what contract he had a right to insist upon ? As one of the material alterations of the management of these companies has been the repeated issue of new stock, it is true, that if that class of power, when authorized by law, with the consent of the majority, is to be considered ultra vires, any stockholder could have kept the capital at the original sum of one million of dollars, and the corporation could have defied any improvement whatever in transit across this state. The whole matter controlled by one obstinate man with one share of stock. In fact, the constant re-iteration in the bill that all the alterations became law by acquiescence, is a necessity, as they state themselves out of court by admitting that any of *195 the acts of the legislature were valid. And yet, whoever heard of the allegation of the performance of anything more than the condition precedent? In other words, the bill takes the position, and the draftsman found it necessary that every change from the original charter was made by “acquiescence.” The connection with the New Jersey Railroad Company; building the Trenton branch; the marriage act; the building the Belvidere and Flemington roads; the consolidation with the New Jersey road; in some cases an alteration of the charter so fundamental that the assent of the corporation had to be filed; these are all ultra vires. And again, interfering with the relations of stockholders, to such an extent that the assent of a majority, or two-thirds, as the case may be, was required, as in the act to validate and confirm the consolidation with the New Jersey Railroad Company when a joint-stock was made. And at other times, conferring privileges which do not alter the relation, but which simply permit the company to exercise their discretion, with enlarged power to meet the public demands. All these are law only by acquiescence, and the legislature have been for more than forty years passing acts which were invalid — which did not become law by virtue of their own power, but by the laches of those interested.

None of the complainants are shown to be original stockholders in the Camden and Amboy Railroad, or Delaware and Raritan Canal.

None of the complainants were stockholders in the original undertaking of “ perfecting an expeditious and complete line of communication from Philadelphia to New York.” What are they doing here, asking to hold the majority to a contract to which they were no party — an undertaking in which they never embarked ? If the right is derivative, at least the persons who were the original shareholders should have been named, and if they were not the party complainant, the assignment should have been set out so that it would appear on the face of the bill that complainants received their stock in accordance with law and the rules of the com *196 pany. Their title to sue as shareholders and hold the majority to a particular undertaking is not set forth at all. And by the affidavits it absolutely is made to appear affirmatively, that the title they have, good or bad, is of a different character and occurred at different dates, while nearly all the stock owned by them may be, and probably is, new stock, created since the most important changes in the organic law of the companies. Yet it appears that John Black was a subscriber to the capital stock of the New Jersey Railroad Company. See 1 Daniell’s Ch. Pr. 195; 1 M. & K. 61; Sayer v. Wagstaff, 2 Y. & Coll., Chan. 230; Ryan v. Anderson, 3 Madd. 174.

They have no standing in court as dissentients to the charge of an original undertaking. The bill is demurrable on this ground, and, in addition, it would seem as if they made the bill multifarious, as though there was amis-joinder as well as a non-joinder. They claim different and inconsistent equities. They claim no common interest, but claim to hold the majority to different and inconsistent contracts. Van Sandau v. Moore, 1 Russell 441; Kean v. Johnston, 1 Stockt. 414.

The English courts have in some instances, indeed, restrained railway companies from carrying contracts of leasing into effect without the authority of the legislature.

But such contracts being legal, and not inconsistent with the policy of the acts of Parliament, are to have a reasonable construction; and where, by the creating of new companies and other facilities, the business is very largely increased, the parties are still to abide by the fair construction of the original contract, as applicable to the altered circumstances. East Lancashire R. v. The L. and Y. R., 25 E. L. & Eg. 465; Kerr on Inj., (Eng. ed., 1867) 560, title “ Leases and Working Arrangements.”

In Kean v. Johnston the Master says, (page 410,): “In Ware v. The Grand Junction Water Company, 1 Russell & Mylne 461, Lord Brougham, on the application of a single shareholder, restrained .the corporation from embark *197 ing their funds and credit in getting water by aqueduct from another river instead of the Thames, as originally contemplated. In Cardiff v. the Manchester and Bolton Canal, a corporation, on the application of a stockholder, was restrained from applying to Parliament for a change in their charter to enable them to convert a portion of their canal into a railway.” How, contrast this with the summary of the law in England to-day, as laid down by Mr. Redfield, — Redfield on Railways, page 592, ch. 22, § 1, cl 6 : “ There is no doubt of the right of a railway in England to apply to the legislature for enlarged powers, even for the power to become amalgamated with other companies, so as to make one consolidated company. And contracts between the different companies for this purpose, have been there recognized and enforced in courts of equity.” Citing Mozly v. Alston, 1 Phillips 790 , where Lord Cottenham said: “ There is scarce a railway in the kingdom that does not come to Parliament for extension of powers.”

“And there seems,” says Mr. Redfield, continuing, “to be no question made in the English courts of the power of Parliament to extend the line of a railway or to consolidate existing companies, and the shareholders are bound by the >acceptance of such legislative provisions by a majority of the company, as by contracts to procure such powers by act of Parliament.” Great West. R. v. The Birm. and Oxford Junc. R., 5 Railway Cas. 184, 241; Stevens v. The South Devon R., 2 E. Law & Eq. 138; Great West. R. v. Rushout, 10 E. Law & Eq. 72; Lauman v. The Penn. R. R. Co., 30 Penn. 42 ; Godifroi & Shortt on Railways, 82 and cases, and 72; Hodges on Railways (4th ed.) 71.

The Chancellor, in Zabriskie v. The Hackensack Railroad Company, 3 C. E. Green 189, says: “In New York a different rule has been established, and it is held, that the power to alter will authorize the company, by consent of the legislature, to extend its enterprise without the consent of stockholders.” He cites a large number of New York cases to that effect, and adds, that the Supreme Court of Massa *198 chusetts, in Durfee v. The Old Colony Railroad, 5 Allen 230 , had followed the New York rule. He also cites Banet v. Alton and Sanga. R. Co., 13 Ill. 504 ; The Pacific R. Co. v. Renshaw, 18 Missouri 210; The Pacific R. Co. v. Hughes, 22 Missouri 291; to the effect that a majority of the stockholders, by the authority of the legislature, may make a change, provided it is not a great nor a radical one.

The Chancellor insists that the principle of these cases is wrong; that if the majority of the stockholders and the legislature can change the object of the enterprise in small things, there is no principle of law by which they can be restrained in any a little larger. This may be entirely true; but the distinction we make is recognized in all the cases and authorities between a change of object, and a change of power and means to continue the same object which became necessary by increased demands. It is not necessary for us to hold that a banking company can abandon its business and make a railroad company of itself.

I recollect a case of deviation, in 9 Harris, where it was said that the deviation of a quarter of a mile for a forbidden or unauthorized purpose was illegal, but a deviation of ten miles from a proper necessity was justifiable. Now, in the case now before us, it is admitted that the object is the same; the means only are altered to suit altered circumstances.

Now, suppose the Chancellor is right, the new cases and new light since the decision, have drawn the line clearly. An entire alteration, creating $50,000,000 of stock where there was only $3,000,000, is legal by authority of the legislature and a majority of the stockholders, provided it be needed by the increased public necessity to do the same character of business; the changes of channels and circumstances made by the rapid growth of the country and the exercise of a wise foresight as to the rivalry in their business being duly considered. Mr. Redfield, on page 199, treating of the fundamental alteration of charter, says: “ And an alteration in the charter which consists only in the increase *199 of tho corporate powers, as of a different organization of the corporate body, leaving it with lawful power to execute what may be regarded as substantially the original object of its creation, will not exonerate subscribers to the original stock of the company.” Pacific Railway v. Hughes, 22 Mo. 291 ; Peoria & Oquawka R. v. Elting, 17 Ill. R. 429.

It appears, then, that an alteration which leaves with the corporation lawful power to execute substantially the original object of its creation, is legal. 2 Stockt. 174.

Let us then pause before examining the cases further, and understand precisely what was the original object of the undertaking in this case. There is not much difference of opinion in the cases as to the law, but the difficulty arises on its application. What are incidental powers, is a new question in each case. What was the object of the creation is a question, also, for each case.

Eortunately for us in this case, we do not have to ask the court to decide the objects of our creation from the words of our act of incorporation and subsequent alterations. Clear as that object is in all of the legislation of the state, yet I claim that we are past the point when that question can be made in blew Jersey. The Court of Appeals, by a unanimous vote, confirmed the construction given by Chancellor Green to the acts defining the objects of the creation of this defendant corporation. 1 C. E. Green 362; 3 Ibid. 546.

The exclusive privileges have, indeed, expired by the limitation of time; but that cannot affect the application of the opinions of the Chancellor and the Court of Appeals as to what was our undertaking. They protected it, and when tho franchise was attacked, they defined its extent, in order to protect it to that extent only. We now know the object of the creation of this corporation, and no man can gainsay it.

Everhart v. The Westchester & Philadelphia R. Co., 28 Penn. 339 ; Sparrow v. Evansville & Crawfordsville R. Co., 7 Porter (Ind.) 369; Sprague v. Illinois River Railroad, 19 Ill. 174 ; Joy v. Jackson, 11 Mich. 175 .

*200 In Bissell v. Mich. So. R., 22 N. Y. 258 , the English cases were reviewed, coming down to the case in the House of Lords, of Eastern Counties R. Co. v. Hawkes, 5 H. L. Cas. 331, then the last authority on the question. Since then this question has'been the subject of an adjudication in the House of Lords.

The views of Judge Comstock, in Bissell v. The Michigan Southern Railroad Company, have been established in England. The head note of this decision in the House of Lords, reads as follows : “ That the contract was not ultra vires of the directors in the sense of being prohibited by the legislature, and was therefore a legal contract, binding on the company.” 39 Law Jour. Ex. 217.

In the case of Taylor v. Chichester and Midhurst Railway, the company agreed to pay the plaintiff £4000 for land, which they proposed to take for an extension of their road; and for personal compensation. They adopted another line for their road, and did not require his land. He sued on the agreement, and the defence was ultra vires. In the Court of Exchequer, in 1866, 4 Hurlst. & Colt. 409, the contract was held to be binding on the defendant, and j udgment was given for the plaintiff. On appeal to the Exchequer Chamber, in 1867, 2 L. R. Ex. 356, this decision was reversed by the majority of the judges, on the ground that the covenant required a misappropriation of defendant’s-funds, and was ultra vires in the sense that the legislature intended that such a contract should not be made, and that the company was therefore not bound by it. Willis and Blackburn, the dissenting judges, held that the contract was not expressly, or by necessary implication, prohibited, and that the company was, therefore, bound. They followed the case of Eastern Counties Railway v. Hawkes, relied on by the Chief Justice in Bissell v. Michigan Southern Railroad Company, and held, further, that “ a company incorporated by statute is entitled to make all contracts connected with the purpose of its incorporation not expressly, or by necessary'implication, prohibited. All such contracts are *201 prima facie- valid, and it lies upon a company seeking to repudiate a contract, to show that it is prohibited; not upon the opposite party to show that it is authorized.”

The opinions of these judges, pp. 375, 393, present a full review of the cases, and are now upheld as the law.

The reversal of the judgment of the Exchequer Chamber by the House of Lords, in 1870, is found in 39 Law Jour. Ex. 217; L. R. 4, Ho. L. Cas. 628.

Lord Westbury, who followed the Lord Chancellor, said, on page 226 : “ It would stop all railway companies in all their transactions; for there' is not a company, I suppose, that has not, in the course of time, added some new undertaking to the old one.”

A contract is ultra vires only when from the express provision, or necessary inference, the act of incorporation prohibits it. South Yorkshire Co. v. Great Northern R. Co., 9 Exch. 55, 84; Mayor of Norwich v. Norfolk Railw. Company, 4 Ell. & Bl. 397; 30 E. Law & Eq. 120; 24 Law Journal, N. S., Q. B. 105.

See the opinion of Lord Wensleydale, in the Scottish Northeastern Railway against Stewart. 3 McQueen 382, 215; Godifroi & Shortt on Railw. 81, 72; Gregory v. Patchett, 33 Beav. 595; Charlton v. Newcastle & Carlisle Railw. Co., 5 Jurist, N. S., 1096; Ex parte The Peru Iron Co., 7 Cowen 540; Kerr on Inj. 569.

The law as laid down in England before the recent cases, covers the defendant’s course entirely. In 1867 they carefully distinguish between the cases where the contract fell properly within the object of the company. Kerr on Inj. 564 and cases; A. & A. on Corp. 162.

Where a lease was made by express authority conferred by statute: Held, that the directors of both roads were bound, as wore the majority of the stockholders in both, to conduct and administer the roads according to its terms, and their liability to the stockholders of each road the same as though they had been united by act of the legislature upou *202 the same terms and conditions as those contained in the lease. 43 N. H. 515.

In cases where it has been held that a railroad company cannot, by leasing its corporate property and franchises, relieve itself from liability to the public for injuries sustained and damages resulting from breach of contract or duty by the lessee, an immense mass of authority sustains the leases incidentally, and manifests the absurdity of the position taken in the bill, “ that the lease would be a virtual dissolution or extinguishment of the said United Companies.” Ohio & Mississipi R. Co. v. Dunbar, 20 Ill. 623 ; Langly v. Boston & Maine R. Co., 10 Gray 103 ; McCluer v. Manchester & Lawrence R. Co., 13 Gray 124 ; Ingersoll v. Stockbridge & Pittsfield R. Co., 8 Allen 438 ; Wyman v. The Penobscot & Kennebec R. Co., 46 Me. 162 ; Stearns v. The Atlantic & St. Lawrence R. Co., Ibid. 95; Whitney v. The Same, 44 Ibid. 362; 1 Redf. on Rail. 590, § 142, clause 3, and cases in the note.

In the York R. Co. v. Winans, 17 How. 30 , it was held by the Supreme Court of the United States, that a railroad company organized under a charter from Pennsylvania, is responsible for the infraction of a patent right respecting cars, although the entire capital stock of the company was held by a connecting company in Maryland, which latter company also, worked the road by the instrumentality of its agents and motive power and cars. That the obligation to the community which the Pennsylvania railroad was placed' under by its charter, cannot be evaded by any transfer of its rights and powers to another company. Justice Campbell, in delivering the opinion of the court, said: “ Important franchises were conferred upon the corporation to enable it to provide the facilities to communication and intercourse required for the public convenience. Corporate management and control over these were prescribed, and complete responsibility for their insufficiency provided, as a remuneration to the community for the grant. The corporation cannot absolve itself from the performance of its obli *203 gations without the consent of the legislature.” Citing Beman v. Rufford, 1 Sim., N. S., 550; Winch v. The B. & L. R. Co., 13 L. & E. 506.

The lessee of a railroad is an agent of the corporation under the general railroad act of Vermont, making such corporations amd their agents liable for damages occasioned by want of fences and cattle guards. Clement v. Canfield, 28 Vt. 302 .

As the act of 1870 has been in force more than a year, and the bill sets out that the contract was adopted by the corporation, it seems as if the discontented stockholders have acquiesced, that is, taken no step until the contract was completed, and, under the English ruling, the United Companies could be compelled to execute the lease.

If so, the right to interfere by way of injunction on the part of the stockholders, now for the first time coming into court, is lost by acquiescence. 1 Redfield on Railways, p. 74, § 20, clauses 11 and 12; Graham v. Birkenhead, &c., Railway Co., 6 E. L. & Eg. 132; Beman v. Rufford, Ibid. 106.

Lord Oranworth said : “ This court will not allow any of the shareholders to say that they are not interested in preventing the law of their company from being violated.” Ffooks v. London & S. W. R., 19 E. L. & Eq. 7.

See Chapman v. The Mad River R., 6 Ohio St. 119 ; Godifroi & Shortt on Railways, p. 87. See 2 Redf. on Rail., p. 356 ,clause 3, as to how slight a matter in such cases is considered acquiescence. Kerr on Injunc. 202.

Mere objection, or protest, or threat to take legal proceedings, is not sufficient to exclude the consequence of laches or acquiescence. Birmingham Canal Co. v. Lloyd, 18 Vesey 15. Kerr on Inj. 203, and cases cited.

If one neglects to apply as soon as he is acquainted with the matter, he cannot have an injunction. Hodges on Railways (4th ed.), page 62, and cases cited; Attorney-Gen. v. Briggs, 1 Jur., N. S., 1084.

As the injury to a company in being stayed is great in *204 proportion to the magnitude of their operations, the court will, in general, hold even slight acquiescence as a bar to relief. Kerr on Inj. 202; Greenhalgh v. Manch. & Birm. R. Co., 3 M. & Cr. 784; 3 Railw. Cas. 120.

But this matter of acquiescence rests upon another principle of which nothing has yet been said. It is beyond dispute, that the acquiescence of an agent is binding on the principal, within the scope of his authority. The company being authorized by the act of 1870, as well as by their common law power, to exercise their discretion in reference to the employment of agents and the management of the road, they leased the road as the agents of the stockholders.

Their acquiescence was the acquiescence of every stockholder, subject to the condition of obtaining the requisite two-thirds in interest. Each stockholder can vote as he pleases; but when the condition is fulfilled, which is alleged in the answer, the stockholders are taken to have acquiesced through their agents, whom they appointed for such purposes at their last annual election. Kerr on Inj. 202.

Prom the foregoing examination of the authorities, it seems to be clear :

1. That the majority can control the minority in a corporation, in all the operations of the company within the range of its organic law.

2. That the modern doctrine is, that the legislature may extend the lines of a railway, and consolidate companies, and the shareholders are bound by the acceptance of a majority. That it is incident to every corporation to obtain such extension and enlargement of its corporate powers as the course of trade and enterprise, and altered circumstances, shall render necessary or • desirable, not altogether inconsistent with its original creation.

3. That the leasing of one road by another to carry on the business for which it is chartered, authorized by the legislature, and approved by the majority of stockholders, is *205 valid, and that contracts to that effect will be enforced in equity; the lessees being simply the agents of the lessors.

4. That the want of express power in the charter does not make it illegal to make a contract connected with the purpose of the corporation not expressly, or by necessary implication, prohibited, and that such contracts will be enforced in equity.

o. That in cases where a single stockholder might object, if he waits until the corporation have concluded their contract with a third party, knowing of the negotiation and the passage of an act to authorize it, his right to object is lost by acquiescence, and the act is valid. If the act is within the scope of the authority of the agent, the silent principal acquiesces.

6. That the policy of the state and the uniform custom toward these companies and others, acquiesced in for nearly forty years by the stockholders, from the marriage act to the consolidation with the How Jersey Railroad Company, is an acquiescence which deprives a single stockholder from objecting to a smaller alteration, which is a matter confided to the discretion of the directors, and authorized by legislative authority.

Let us now examine briefly, taking the case as stated in the bill, what is the contract adopted and ordered to be executed, and what is the authority for it ?

If it be not a fundamental change in the organic law changing the object of the association, although not specially authorized by an act of the legislature, it is valid, and an injunction should not issue under any ruling of any court heretofore made in this state or elsewhere.

But the authority for this contract is an act of the legislature set out in the bill passed in 1870. It is entitled “ An act to enable the United Railway and Canal Companies to consolidate their stock, and to consolidate or connect with other companies.” It recites in the preamble: “Whereas, *206 the Delaware and Raritan Canal Company, the Camden and Amboy Railroad and Transportation Company, and the New Jersey Railroad and Transportation Company, sometimes called the United Companies, and the United Railway and Canal Companies, are identified in interest, and have also an identity of interest with the Philadelphia and Trenton Rail-, road Company and other companies; therefore.”

Now, this preamble acknowledges the valid completion of the consolidation with the New Jersey Railroad by the lease and subsequent act to validate the agreement. It further, in continuation thereof, acknowledges that thereby there is an identity of interest with the Philadelphia and Trenton Railroad Company. It confirms the ratification of these consolidations when two thirds in interest approve it.

It then declares it lawful, by the same vote, to consolidate with the Philadelphia and Trenton Railroad Company, which is alleged, in the bill, to be a corporation outside of the state, (and is not a party to the bill,) “ and with any other railroad company in the state, or otherwise, with whom they may be identified in - interest, or whose works shall form, with their own, continuous or connected lines, or to make such other arrangements for connection or consolidation of business with any such company or companies by agreement, contract, lease, or otherwise.”

That the word. “ otherwise ” after the words “ in this state or ” referred to the antecedent “ state,” and meant in this state or not in this state, cannot be disputed, either from the grammatical construction of the sentence, that being its nearest antecedent, or from the context. That a foreign corporation was intended to be consolidated or leased, and one with whom they are connected and have continuous lines, is plain, because that is the case with the Philadelphia and Trenton Railroad, who are mentioned by name.

The apparent denial of the fact in the bill, that the Pennsylvania Railroad Company does not form a continuous and connecting line, arises from the persons who verified the bill swearing to the conclusions of law that the draftsman of the *207 bill inserted. Separating tlie Philadelphia and Trenton Railroad, which was consolidated by this act, and over which connecting lines had been run for twenty years, from the link, because it is called a foreign corporation and not made a party to the bill, it may bo true. As a fact it is not true. The answer sets forth fully all the contracts and various arrangements by which they are shown to be continuous and connecting lines, in every sense, both as to the roads and tho business regulations. But this act proceeds to require “ that if any stockholder or stockholders shall be dissatisfied, the said company shall pay to such stockholder the full value of his or her stock immediately prior to such consolidation or lease,” and provides the means of ascertaining its value.

It is objected in the bill that tho Constitution of the state requires that compensation shall be “first made ” before the taking, and that although the assessment is made before the taking, compensation is paid afterwards.

This is not in fact true. In tho first place the property is not taken at all but remains still under the control and management of the trustees, who' manage their business agents. It was recently decided in blew York that a railroad company who had a lease on real property which had not expired could proceed and condemn the property by the power of eminent domain. The tenures are totally different; one by purchase, and the other by condemnation.

But this point is too finely drawn. The compensation is previously made, and may actually be paid by tho party. Under the act there is simply a privilege to the party when property is taken (if it be taken), to have this time to assess its value. 55 Penn. 350 ; Angel & Ames on Corp., § 192, and cases; 3 Zab. 9; 13 How. 518 and 83; 6 How. 529 .

If it were real estate, the time when it was “ taken ” would be a definite point, but as it is an incorporeal hereditament it is not taken at any particular moment; it is incapable of being “ touched or handled,” and, therefore, cannot literally be “ taken ” in the way of sensation or feeling.

*208 It is really only “ taken ” when the .compensation is paid. If they enter before, it is only to explore. They neither " take,” “ have,” nor “ hold,” until they compensate. The court would, be bound to give the act a constitutional construction, if possible, and if they thought it necessary to sustain it would hold that " immediately prior to the execution of the lease, compensation should be made.”

The act was intended to confer the power of leasing or consolidating with the Philadelphia and Trenton Railroad Company, the Pennsylvania Railroad Company, or any other company, foreign or domestic, which fulfilled the requirements of connection, identity of interest, etc.

It has done so effectually.

Mr. Gilchrist, Attorney-General, for the state.

I appear before the court in this case, in my official capacity alone. I am retained for neither party. The cause is really a private one between private parties. The state is a holder of shares of the stock of the United Companies, and, according to a familiar practice, is allowed to be heard, though not a party, in a case of this kind. It is the interest of the state — even assuming that by the terms of the act of 1870, it has consented to this lease — that it should not be made, if the act does not make the jorovisions necessary to pass a good title to the works and franchises. Such an abortive lease would not accomplish any good purpose, that the legislature could possibly have had, in giving its consent to the making of a lease.

It seems to me that the act .of 1870 does not make the necessary provisions to justify a lease, against the consent of a minority of the stockholders, and that neither a lease to the corporation of another state, nor to a corporation of this state, can be made under this act, against the consent of these complainants.

The answer admits the complainants are shareholders in the stock of the United Companies, and dissent to the lease.

The answer also admits the existence of all the charters *209 and supplements, which define the nature and extent of the franchises granted to the United Companies.

It does not deny the allegation of the bill, which is proved by the affidavits' annexed to it, that the complainants have never assented to the act of 1870, but have always resisted and repudiated it. These admissions and these proofs are sufficient, it seems to me, to show that the making of this lease, or any lease of these works, under the act of 1870, is impossible.

I do not maintain that the legislature cannot by law, authorize the making of a lease of corporate franchises without the consent of all those who are holders of a share of the stock at the time of the passage of the law; for the legislature can call into service for any public use the power of eminent domain, and take — first making compensation— the share of any shareholder who refuses to give or sell his share for the public use. The stock being taken out of the hands of the dissenters, there are no persons capable of dissenting. All property is subject to the right of eminent domain. Any owner of property, whether it be land or a share in the stock of a corporation, must yield it up for the public use, but he is not required to yield it up without just and full compensation. So sacred too, is property considered, that he is not bound to yield it up, even for public use, if it is to go into the hands of an individual or private corporation, until such just compensation is ascertained in due form, and the money paid or tendered to him, so that he shall have in his hands, before he sees his property pass into the hands of an individual or a private corporation, a just compensation for it.

The Constitution requires that there shall be no uncertainty, or contingency, or delay about his compensation, when the public use requires that his property shall become the property of an individual or private corporation; and to prevent uncertainty, contingency, or delay, it requires that before he gives up his property he shall have its value in his hands.

*210 If the act of 1870, beside providing that the franchises and property might, for the public use, be leased against his consent, also provided, that before the lease, he should have the value of his share of this property, or which is the same thing, the value of his stock, ascertained, and that value placed in his own hands, or tendered to him, the franchises and property of the corporation might then be leased as the act directs.

This is the ordinary way in which all property is taken and delivered over to individuals for the public use. This is the way in which leases of railroads, and of all corporate property and franchises, must be made.

So that, in maintaining that this proposed lease cannot be made under the act of 1870 without the consent of every shareholder, I am not contending that corporate franchises and property cannot be leased if one shareholder dissents, and that there is no way of removing this obstacle; but that the legislature, by the act of 1870, authorizes a lease of the corporate franchises and property to a private corporation, not merely against the consent of the shareholders, but without making the usual and requisite provision necessary to overcome that obstacle. In the same manner I would maintain that a railroad corporation could not build its road without the consent of every landowner whose land it crossed, if the law authorizing the road to be built made no othér provision for overcoming the obstacle of a dissent by a landowner, than the act of 1870 does to overcome the dissent of a stockholder.

An authority given by legislative act to a railroad company to enter upon lands necessary to build a railroad from Newark to Trenton, and take the lands of all owners, if two thirds of them consented, without provision was made for compensation for the taking of'the land of unwilling owners, would plainly violate that part of the Constitution which requires that such a naked authority shall not be given* Under such a law it might therefore be properly said that *211 the railroad could not be built without the consent of every owner of the land on the route between the termini.

If, by legislative act, authority were given like that just mentioned in every particular, except a provision that the dissenting owners’ land might be taken on compensation, but that the company taking it should not be compelled to pay the compensation until three months after the road was built; this authority would not be a valid authority, because it would be an authority to take property without the 'previous payment of the compensation. In such a case, too, it might be said, with propriety, that the railroad could not be built without the consent of every owner of land on the route between the termini; for if one owner dissented, the law gives no valid authority to take his land.

These, it seems to me, are plain cases in which this court would hold that the authority given, was an authority given to a private corporation to take private property for public use, without just compensation first made to the owner; and being given directly contrary to a constitutional prohibition, was a void authority, and the execution of it proper to be enjoined on the application of any owner.

The words by which this authority is ordinarily given are “ that it shall be lawful for the said company to enter upon, take, have, hold, and occupy and enjoy” the property required. These words are not contained in this act. The act declares “ that it shall and may be lawful for the United Companies, b}7 and with the consent of two-thirds in interest of the stockholders, to consolidate, &c., or to make such arrangements for connection or consolidation of business with any such company, &c., by lease, &c., as to the directors of the said United Companies may seem expedient.”

But this is qualified by two provisos. One is as follows :

“ Provided further, that no such consolidation, agreement, contract, lease, or other arrangement shall have the effect, or be construed to release or discharge the said United Companies, or any or either of them, or any company or companies with which any such consolidation, agreement, *212 contract, or lease may be made, from any taxes, liabilities, obligations, or duties, which they or either of them may be subject or liable to, either to this state, or to any person or persons.”

The other proviso makes it plain that the legislature intended that the dissenting stockholders should be compensated for the change which the act authorized. “ Provided further, that if any stockholder, or stockholders, being such at the time of making any such consolidation, agreement, contract, lease, or other arrangement, shall be dissatisfied with the same, the said companies shall pay to such dissatisfied stockholder, the full value of his, her, or their stock, immediately prior to such consolidation, agreement, lease, or other arrangement, to be assessed by three disinterested commissioners, appointed for that purpose by the Supreme Court, or Court of Chancery, of this state, on the application of either party, made upon twenty days’ notice; but the said companies shall not be compelled to pay for stock of any such dissatisfied stockholder, or stockholders, unless he or they shall give written notice of such dissatisfaction, to the president, secretary, or treasurer of the company whose stock shall be held by him, or them, within three months after such consolidation, agreement, contract, lease, or other arrangement, shall have been made and consented to by the requisite number of stockholders.”

The making of a “ lease ” of all the works, franchises, and property, even of the cash, of the United Companies for nine hundred and ninety-nine years, is the thing about to be done under this act.

As the objects of the corporation are distinctly stated in the charter, that becomes the test, whether any act proposed to be accomplished by the corporation is for the promotion of those objects. If tried by this, any object proposed is not one of the objects of the corporation, to accomplish it will be violating the contract.

Whether an authority to malee a lease of the franchises, and all the property of a corporation, against the dissent of *213 one or more stockholders, would be an authority to impair the contract between the corporation and any one who is a dissenting stockholder at the time of the making of it, will appear, if we consider the effect a lease will have when it is carried into effect.

Though after the lease shall be carried into effect, the stockholder will hold a certificate of stock, which, on its face, declares him entitled to a certain number of shares of the capital stock of his corporation — that which was the capital stock of his corporation, will, against his consent, on the day after the lease takes effect, be an entirely different thing. It was the corporeal works and property then held by the corporation in possession, with most extraordinary powers and privileges, enabling the corporation to use and operate the works, exercise the franchises of taking tolls and fares, and divide the profits thereby made; it will be a rent. 'On the day after the lease shall take effect, the capital ¡stock of the corporation will consist of no corporeal works ■or property whatever in possession.' The rent, though capable of seizin, is not of corporeal possession. The original ■capital stock will be passed to the lessee; a new capital ¡stock will be created, and though more or less valuable, it will be an entirely different one; the old certificate of stock will not be called in; he will hold it; it will be unaltered in its language; it will entitle him to the same number of ■shares in the capital stock of his corporation; but his corporation will be shorn of all means of making any profit for its stockholder; and every power and privilege to use and operate the works and exercise the franchises, and consequently the capacity to make and divide any profits therefrom, will be entirely gone for nine hundred and ninety-nine years.

The structure of the corporation for the next nine hundred and ninety-nine years will be completely altered. Before, it was an artificial being, with ample and important franchises and faculties, by the exercise of which, and the operation of its great works, it had profited its stockholders *214 for a generation. After, it will be an artificial being, without either franchise or faculty, for nine hundred and ninety-nine years, except, perhaps, (and it is only perhaps) the franchise and faculty to take and receive the rent and divide it among those who have now become stockholders in a valueless reversion, and in a rent issuing out of what will become the property of the lessee.

The franchises and faculties it before had, and the works, and other property o'f ‘the corporation, it will have, by contract, rendered itself incapable of holding or exercising or enjoying during nine hundred -and ninety-nine years. All these operations the taking effect of the lease must have on the corporation. The corporation will be denuded for nine hundred and ninety-nine years of every characteristic it had; of every marked individuality it had; its identity will be gone. Nothing but its history can show what it has been; what it was before the lease took effect. On examining it, and every feature it has, after the lease shall take effect, nothing can be recalled but its origin; that was legislative. If its origin was not legislative, it could not continue to exist, thus shorn of its features, franchises, and faculties. It will be almost literally a lifeless hulk; practically, it'will be a mere ruin. It will exist — but the lease having taken effect — without a faculty it had when it showed life and usefulness. Its powers and franchises will have passed from — will have been taken from it for nine hundred and ninety-nine years for the public use. This is the operation the taking effect of the lease will have upon the artificial being itself.

But these are not all of the results the taking effect of the lease will accomplish. While the certificate of a share or shares in the capital stock of the company of the same name will remain — it will be a certificate of a share in the capital stock, of a corporation of air entirely different character — in the capital stock of a corporation without a franchise for nine hundred and ninety-nine years (except that of being); without, for nine hundred and ninety-nine yefirs, a single *215 faculty of making money; confessedly without, for nine hundred and ninety-nine years, a single faculty that can contribute to the public use — for the taking effect of the lease, will have divested it of all of them, to enable another company to put them to a greater public use; without, for nine hundred and ninety-nine years, a single shred of the capital stock which the certificate of stock guaranteed the stockholder certain shares of. The certificate of stock will be a certificate of a share or shares in a corporation totally different in every substantial and valuable characteristic— and shares of an entirely different thing — of an entirely different capital stock. All the capital stock will then be a rent.

This rent will not issue out of the capital stock of the corporation. The rent will be the capital stock of the corporation. The former capital stock out of which the rent will issue, will be the capital stock and property, not of the stockholders’ corporation, but of another corporation.

The stockholder’s certificate will no longer give him any voice in the appointment of managers of the old capital stock out of which the rent will then issue; though the wisdom of this management must constitute the chief security for the rent, which the taking effect of a lease will force upon him.

Under these now circumstances, produced by the lease having taken effect, will not the stockholder, although he will retain the old certificate, have a share in a new thing ? Will he not have lost his share in the old thing, and this too, against his consent ?

Will not all of these extraordinary changes, which will be produced if the lease takes effect, the very changes which the courts of this state have repeatedly held do, if produced without the assent of a stockholder, impair the contract between him and his corporation ? Kean v. Johnston, 1 Stockt. 401; Zabriskie v. Hack. R. Co., 3 C. E. Green, 179. And yet a lease which will produce these effects, is authorized by this act to be made without his assent. If the title *216 of the dissenting stockholder to his stock, is not divested before these changes are produced, is not there a contract between him and the corporation, which is impaired by these changes ?

A change can be lawfully made in this contract with his consent. A change can be lawfully made in the structure of the corporation, or any other change which a lease will produce, if the person who is a stockholder assents to them; or if, before they are made, the stock held by any dissenter is taken under the right of eminent domain; for his stock being taken, no contract with a dissenting person is in existence. This act is plainly based on. the idea of the necessity of taking the stock of dissenters under the right of eminent domain. That the act recognized the necessity for the taking of the stock of the dissenter is plain. It directs the company to pay him for it, if he dissents and gives notice of his dissent at a certain time named. The act certainly did not contemplate that he should be paid for his stock, and keep it, too. It contemplated that after the payment he should no longer keep it, that it should be taken by, or pass • to somebody else, or be extinguished — which is only another word for saying it shall belong to the corporation.

It may be said that the act did contemplate that the stock should be taken, but not till after the lease was made. If this be so, then at is plain that the stockholder, until his stock is taken, is a stockholder, with every right and privilege of a stockholder — a stockholder holding a contract with the corporation, by which it is bound not to alienate its franchises, but to exercise them, to use the works and not dispose of them, and to make profits out of the exercise and use of them. Being a stockholder with such inviolable contracts, this court will restrain the making of this lease, which alienates the franchises, and disposes of the works, and puts it out of' the power of the corporation to exercise them, and by which it contracts not to exercise or use them, or make a profit for its stockholders.

In this aspect of the case — that the act contemplates that *217 the stock shall be taken, but not till after the lease is made —the title of a stockholder to his stock, before and at the time of the lease, is perfect, and his right to restrain a threatened breach of the contract between him and the corporation, by the making of the lease of the franchises and property for nine hundred and ninety-nine years, seems to me indisputable. It may be said that the provision which declares that the companies shall not be compelled to pay for the stock, unless the dissenting stockholder, within three months after the lease, shall give notice of his dissent, was a mere indulgence to the stockholder which gives him three months to make up his mind whether he will keep his stock or take its value at the date of the lease. It may be that this was so intended; but the stockholder has, without this proffer, a more sacred right — a right that, until he makes up his mind to assent, and does actually assent, his contract shall not be impaired by stripping his corporation of all its franchises, and transferring all its capital, stock, and the title and the possession of all its works to a stranger, by means of a lease for nine hundred and ninety-nine years. At any time before the lease is made, he has the right to come into this court, and ask that his corporation shall not violate that contract, but be enjoined to keep it. The act may have been intended to give him a right after the lease was made, instead of the right he would have in this court before the lease was made to restrain the making of it; but the gift of this right after the lease, even if it were expressly said it should be instead of the right to come into this court before the lease and restrain it, would not take awray the right to come here beforehand. The right to come here before the lease and restrain it, cannot be taken from the stockholder, for it depends on the provision of the national Constitution that no state shall pass any law impairing the obligation of a contrae^ and on the provisions of our own Constitution that the legislature shall not pass any law impairing the obligation of contracts, or depriving a party of a remedy for enforcing a contract which existed when the contract was *218 made. It matters not how much the stockholder was to be indulged, .bjr this clause; he already had a higher and stronger right secured to him by irrefragable sanctions. That right still subsists; that right this court is bound to enforce, notwithstanding any law whatever that the legislature may -make, giving substitute rights, or attempting to cripple the power of this court, to give the old relief to which the party was entitled before the passage of any such law.

It may be said that there was no necessity for taking the stock at all, and that the provision for the payment of its value to the stockholder, was a mere gratuity. If there was no necessity for taking the dissenter’s stock, as a step toward the lease, the payment would be a mere gratuity. Whether there is a necessity to take the stock of the stockholder, to enable a lawful lease to be made, depends upon the question, whether, while the stock remains in the hands of the stockholder, there is not a contract between him and the corporation, that the franchises shall be exercised and not disposed of, that the works shall be used to make profit for the stockholder, and not passed over to others.

That there is such a contract between the corporation and the stockholder1 at the moment he becomes such, I think, all the cases hold; and that it subsists, until he consents to its abrogation, or ceases to be a stockholder, I think is apparent. If the contract continues, and a lease is made, against the consent of the parties to it, to say that it is a lawful lease, is to say that the law authorizes the other party to do that ^hich the other party has contracted not to do, and which the Constitution says no law can authorize him to do. The execution of such a pretended law will be restrained, and the corpoi'ation held to its contract by this court, by injunction. Hence, if a lawful lease is to be made, the stock must be taken and paid for, or the contract will subsist.

It may be said that there can be no taking of the stock within the constitutional provision against taking property, *219 because it is not property. But the charters of the United Companies expressly declare the shares of stock to be personal property. The Canal act, § 17; The Camden & Amboy act, § 16; The New Jersey R. R. act, § 2.

It aprpears to me that the act of 1870 did intend to give the right to take the stock of the dissenting stockholder. The creation of a special tribunal to ascertain and determine the value of the stock of any dissenter, and the direction that that value should be paid, can be accounted for on no other basis. It is a very important part of the act; it follows immediately after the authority to lease; it is introduced by way of proviso after that authority and in qualification of it; it is a condition upon which the authority to make a lawful lease is given.

The office of a proviso is to repeal the purview. Townsend v. Brown, 4 Zab. 86. This proviso repeals the authority to lease, so far forth as any dissenting stockholder is concerned, and as long as one exists, no lease can be made. Ho is to be dealt with otherwise. His stock is to be paid for — and if paid for, of course it is to be taken; he is not to be paid for his stock and keep it too; but his stock is to pass from him.

I have endeavored to establish that so long as the stock continues the property of a dissenting stockholder, so long as there is a person standing in the way who holds such a contract of the corporation, that against his consent, no lawful lease can be made. Because the contract will continue so long as the dissenter holds his stock, and cannot be overcome except by his consent, the taking of the dissenter’s stock before the lease is attempted, is necessary.

This act does provide for the taking of the dissenter’s stock as one of the means necessary to make the lease, but it does not provide for its being taken at the time when it can assist the lease. The constitutional provisions against impairing contracts connot be complied with if a lease is made before the stock is taken. If the act of 1870 does not provide for the dissenter’s stock being taken before the lease *220 is made, it authorizes as lawful that which all the authorities agree will impair a contract, a contract which, from its. nature, subsists so long as the title of the dissenter to his. stock subsists.

Does the act authorize the stock to be taken before the lease ? The only parts of the act from which it can be ascertained whether the stock was to be taken before the lease, are the first and second provisos.

The provision for the payment of the dissenting stockholders contemplates that the stockholder who is to be paid shall be one who continues a stockholder down to and at the-very time of making the lease, and even afterwards, for it is. not every dissenting stockholder that is to be paid — it is “ such dissenting stockholder,” that is, the stockholder before mentioned in the clause, “ if any stockholder, being-such at the time of making any such lease shall be dissatisfied.”

The stockholders who are to be paid, then, are only such as continue stockholders at the time of the making of the lease.

The act, therefore, cannot contemplate taking the stock of a dissenter before the lease, for it pays no stockholder who-is not such at the time of the lease. But the act goes further and indicates most distinctly, that the stockholder whose-stock is to be taken must continue such till after the lease; it pays no other. He must not only be a stockholder at the-time of the lease, but afterwards; for unless after the lease he gives notice of his dissatisfaction, he is to have nothing.. The act says expressly, “ but the said companies shall not be compelled to pay for stock of any such dissatisfied stockholder or stockholders, unless he or they shall give written notice of such dissatisfaction to the president, &c., within three months after such lease shall have been made.”

This provision, postponing the obligation to pay a dissenting stockholder till some time after the lease, plainly shows, that the act contemplated that the dissenter’s stock should continue vested in him till after the lease, for there is no- *221 obligation to pay till notice, and no notice can be given, which will be of ;my validity to raise the obligation to pay, till after the lease. If he is dissatisfied before the lease, it gives him no compensation. He may be dissatisfied before and give notice before, but he must be dissatisfied at the very time of the lease, and give notice afterwards.

He must retain the character of stockholder until the time comes when he can give the notice. On giving this notice at the particular time mentioned in the act, and at no other time, does the obligation to pay arise; for the clause is in the negative. It does not say that the company shall pay when notice of dissatisfaction is given, but that the company shall not be compelled to pay, unless within throe months after the lease the notice is given. “Within'' three mouths after an event is some time after. It is not before. This the courts of New York have held. Our Court of Chancery and Court of Appeals, in the case of Krovts and the Continental Hotel Company, held that where a statute which Required a chattel mortgage to be filed “ within ” a certain time before a day, filing it before the time “ within ” which it was required to be filed, was no compliance with the act. So here the obligation to pay arises only some time after the lease; at no time before it; and then it does not arise to any one but to him who continues to bo at that time — after the lease — a stockholder. This, it seems to me, makes it clear that the act gives no indication of an intention that the dissenting stockholder's stock shall be taken before the lease.

The words “ shall pay to such dissatisfied stockholder or stockholders the full value of his, her, or their stock, immediately prior to such ‘ lease ’ ” describe what valuation shall be placed upon the stock, i. e., the value immediately before the lease. They do not fix the time of the payment of that value, and therefore afford no indication that the stock was to be taken before the lease, but merely that that value before the lease was to be paid, and to be paid as the subsequent clause says, after the lease — after notice given *222 after the lease. When we are considering whether the act requires the stock to be taken before the lease, or not, it is proper to give all due weight to the clause in the second proviso — that the lease shall not have the effect, or be construed, to release or discharge any contract. If the clause authorizing the stock to be taken is capable of the construction that the stock is to be taken after the lease, and if that construction gives to the lease the effect of releasing or discharging the contract with the stockholders, it might be asked, why should not that clause, as to the taking, receive a different construction — a construction that it permits and enjoins the taking before the lease ?

But the language authorizing the taking, cannot bear that construction. Every word in it looks to a taking after the lease, and to a payment after the lease, to a continuation of the relation of stockholder after the lease, and it is. impossible to construe it as indicating an intention to take before —the words are too strong and specific. The stock cannot be valued, the commissioners cannot be appointed, till after, unless the stockholder continues a stockholder at the date of the lease, and is then dissatisfied; and, indeed, it would seem not until the written notice of dissatisfaction is given, which must come after the lease, to entitle the stockholder to valuation or payment.

But if this construction were possible, the United Companies intend, they say, to execute this lease as soon as practicable, after two-thirds of the stockholders assent. So that, even with this construction, the lease cannot lawfully be made till the stock is taken, and as it is now threatened to be made without taking the stock first, it must be restrained.

It seems to me, from these considerations; that it is plain that the clause authorizing the taking of the stock will not bear the interpretation of an authority to take before the lease, and, on the contrary, does not permit the taking till afterwards, thus requiring the dissatisfied stockholder to remain a stockholder till after the lease; the contract of the *223 corporation with the stockholder consequently continuing per force in existence.

To say that a lease authorized while a stockholder continues such and his contract is in force, and he dissents to the lease, is a lawful lease, is to say that a lease is lawful which not only impairs, but overrides, prostrates, and destroys the contract against the will of one of the contracting parties. In such case, neither the lease, nor any pretended law which sanctions it, is valid or lawful; both are contrary to the Constitution.

It seems to me the clause giving the right to take the stock after the lease only, was conferred intelligently and knowingly; but the clause conferring it is so framed that it is useless for the only purpose for which, if framed properly, it could have been used. It is so framed that it cannot be used at the very time when only it could be of any use to promote the object of the act, which was to transfer the title to these franchises and property to another corporation. It is so framed as to make the power to take the stock exercisable only after the contract (which exists with the stockholder so long as he is a stockholder) shall have been entirely disregarded, and his right to redress for the injury complete. It makes the power to take the stock exercisable after the injury of impairing his contract has already been inflicted upon him.

The effect of so framing the clause, giving the right of eminent domain, as to be exercisable only after the lease is given, is to make the authority to lease an authority to disregard the contract; and, as such, an illegal authority. An authority to disregard a contract cannot bo given by a law of the legislature; and, therefore, so much of the law as gives such an authority is void, and the authority is void. It may be said that there is no distinction, in substance, between impairing the obligation of a contract and compensating for that illegal injury, and taking the property created by the contract and paying for it; but the law and the Constitution say there is.

*224 “ The eminent domain, the highest and most exact idea of property, remains in the government, and it has a right to resume the possession of the property whenever the public interest requires it.” West River Bridge v. Dix, 6 How. 535 .

“ This taking by the state has never been held to impair the obligation of the contract by which the property is held.” Ibid. 536.

“However nice the distinction may seem to be — when examined it will be found substantial. The Constitution does not prohibit a state from impairing the obligation of a contract unless compensation be made, but the inhibition is absolute.” Ibid. 538.

“ The power of eminent domain is implied in the contract.” Ibid. 542.

It can, therefore, be executed on that which is held by the contract, and without impairing its obligation. To take stock, or a franchise, under the right of eminent domain— both of which are held under, and existing by force of, a contract — is not to impair the obligation of the contract, not to violate it; but to regard it, recognize it, to assume its validity, to concede that it created and vested the projDerty. The new taker holds the property under the contract as a link in the chain of his title to it; and the contract is necessarily left unimpaired, so that it may be a muniment of the title of him in whom the exercise of the right of eminent, domain vested the property created by the contract.

The clause in this act, giving the right to take the stock,, stays the exercise of the right of eminent domain until after another constitutional right is invaded. How perfect soever this clause may be in every respect, the lease made under the first clause will inflict an injury, if made as it must be before the stock can be taken.

It seems to me that this clause was so framed of purpose, and it was endeavored to be cured by giving to the stockholder, after his contract was impaired, the value his stock had at the time of its being impaired. In other words,, it *225 gives as a compensation for the injury of impairing a contract the compensation which would be due-if his property had been taken at that time under the right of eminent domain, instead of his eontraei being impaired at that time. Now, as the Supreme Court of the United States say in the case just cited, “the Constitution does not prohibit a state from impairing the obligation of a contract unless compensation be made, but the inhibition is absolute;” and therefore it in no wise cures the act of 1870, which authorizes the lease to bo made while the stockholder’s contract exists, that it gives to the stockholder as a compensation for that unlawful act the same compensation that he would have been entitled to if his stock had been taken by a lawful act, done under the right of eminent domain. But, in truth, it does not give him the same compensation that he would have been entitled to in the latter case. For he would, in the latter case, have had his compensation for a rightful act first, and his property would have been taken afterwards ; whereas, here a wrongful act is done first, which is considered so violative of all public policy, that it is never permitted, oven where the most ample compensation is given, and afterwards a compensation is given which would be due for an entirely different and lawful act.

The reason for framing the clause as it was framed, was that the taking of the property beforehand, under the right of eminent domain, would be inconvenient in carrying out the lease in view. The exercise of that power beforehand would require compensation first, or before the lease, and would require entirely too solid a confidence in the success of the new enterprise on the part of a promoter of it, to make it entertainable by capitalists. But safeguards for property are inconvenient. They are obstacles. They are established because they make it inconvenient to appropriate property.

The dissenting stockholder, on examining an act which is worded as this is, might well be impressed with his helpless condition. He sees in this law that the state permits his *226 whole interest to be swept away first, and that he is sent to look after a limited compensation — limited to a value at a certain time — either from his own company, after it is stripped of its assets, or from a strange company, of whose responsibility he knows nothing and which he more than suspects— a company which may or may not be reached by the process of that state only, whose process he could invoke to bring it to justice.

Such laws ought not to be permitted to pass, and this court sits here with the high function of saying that if passed they shall not be executed.

On the other hand, if this law provided that before his stock was taken he should have the value of it put into his hands, as he, in common with the owner of every other kind of property, is entitled to have it, he would see that all the hazards of the new enterprise were upon those who promoted it; and would have the benefit of the timidity of capital to invest in doubtful enterprises, on the side of his desire to keep his own.

'Whatever the compensation is to be; how much it resembles the compensation due for taking his stock — however .ample it may be, how fully soever it may be, a compensation for the injury of impairing the contract, the fact remains — the injury to be done under the act of 1870 is the impairing of a contract. The promoters of the act chose to accomplish the lease by impairing the stockholder’s contract, first, and then authorize his stock to be paid for afterwards at its value at -the time of his contract being impaired. This was their way of accomplishing it. This is not the way of the law, of the Constitution, and it is a way in which this • court will not permit a lease to be accomplished. I am sure that if the promoters of the act had perceived that this was the real operation and effect of postponing the exercise of the right of eminent domain under the first proviso until after the lease was made, they would have been the last of all men to ask for a law which permitted the prostration of any contract between the companies and their stockholders; for the *227 very existence of corporations and the preservation of all their extraordinary and necessary rights and powers depend upon the existence of a healthy public sentiment which will secure the inviolability of contracts.

The same considerations which show that the United Companies cannot make a lease of their works and franchises, show that no other corporation can take the lease of them; for to take a lease of these franchises will affect the structure of the lessee corporation in the same manner that granting them affects the lessor corporation.

The law of Pennsylvania is the same as our own law on this subject.

Besides, there is no pretence of power on the part of the lessee to condemn its dissenting stockholders’ stock and so procure a unanimous body of stockholders and prevent the violation of any contract that might exist if there were a dissenter. More than this : besides the assent of the stockholders, or a condemnation of their stock, the assent of the state in which these franchises are to be exercised by the lessee corporation, is necessary to bo given to it in special. It is clear that a general authority to lease a franchise to any corporation, would not give the capacity to any corporation to take the franchise and exercise it. A bank could not take such a lease under such a general power, nor an insurance company, nor a manufacturing corporation — under any supposed implication that an authority to one corporation to lease its franchise to any other, is an authority to that other to take them and exercise them.

The best precedents of enabling statutes of this kind, and there are many, add a distinct clause authorising a particular corporation, or class of corporations, to take, and so, on principle, it should be.

The other questions which are raised by the pleadings in this private case, I do not feel called upon to discuss. I think none of them so important or so clear against the lease as those I have considered.

Mr. I. W. Soudder, for defendants.

1. The legislature of the state of New Jersey had the power to pass the act approved March 17th, 1870, entitled, “An act to enable the United Railway and Canal Companies to consolidate their stock, and to consolidate or connect with other companies.” A lease executed under the authority of this act, was not in violation of that clause of the Constitution of the United States which deelares, “ that no state shall pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts.”

We must look into the charters of the companies — lessors • — for the contracts. The charters are the contracts between the state as one party, and the corporations as the other party. These charters are not executory contracts — they are contracts executed — they are grants. There is no contract in any of these charters which prohibits these companies from executing a lease.

The cases which give construction to this clause of the Constitution of the United States, all show that to impair the obligation of the contract, the legislature must make some change in the grant made by the state and contained in the charter; and inasmuch as the charters in question do not prohibit the corporations from making a lease, a law of the state, conferring a power to the corporations to make a lease, would not impair the obligations of the contract. An act, giving power to make a lease, would be an enabling act, authorizing the lessees to execute a part of the powers originally granted.

The following cases were cited and commented on : Dartmouth College v. Woodward, 4 Wheat. 519 ; Providence Bank v. Billings, 4 Peters 558 ; Gordon v. Appeal Tax Court, 3 How. 133 ; Planters’ Bank v. Sharp, 6 How. 330 ; Satterlee v. Matthewson, 2 Peters 380 ; Holbrook v. Furney, 4 Mass. 566 .

Under the lease the obligations of the lessors to the state remain the same. The lessee is to operate the works demised under the charters of the lessors. No property can be *229 sold, unless by consent of the lessors. The proceeds of the property of the lessors when sold, must be applied to the enlargement of the works of the lessors, or to pay debts. The corporations of the lessors remain, and the stockholders remain. In case of failure to pay the rent, the lessors resume all their property and franchises.

There was no express contract in the charter of the corporations — lessors—that they should not convey and transfer their property. On the contrary, such power was given. Charles River Bridge v. Warren Bridge, 11 Peters 420 , Justice McLean, p. 521. “After a careful examination of the questions adjudged by this court, they seem not to have decided in any case that the contract is impaired within the meaning of the Constitution, where the action of the state has not been on the contract.”

See Smith on Stat. and Const. Law, p. 409, § 266.

2. The case of a lease by a railroad company does not fall within that class of cases denominated ultra vires, and in which one stockholder can ask for an injunction to restrain the execution of a lease, to which two-thirds of the stockholders assent.

The cases in which a few stockholders can enjoin a corporation, even though the majority should assent, are those in which the corporation uses its capital and money in a business, and for a purpose different from that authorized by the legislature.

The leading cases stated and reviewed: Coleman v. Eastern Counties’ Railway Co., 10 Beav. 12; Hodgson v. the Earl of Powis, 12 Beav. 397; Cal. & Dumbart. Junction Railway Co. v. Magistrates of Hellensburgh, 2 Macqueen 391; Scottish Northeastern Railway Co. v. Stewart, 3 Macqueen 383; Bissell v. Mich. South. & North. Indiana R. Co., 22 N. Y. 258; Kean v. Johnston, 1 Stockt. 403; Zabriskie v. The Hack. & N. Y. R., 3 C. E. Green 180; Sussex Railroad v. Morris & Essex R., 4 C. E. Green 13; 5 C. E. Green 543; South York. Railway Co. v. Great West. Railway Co., 8 Exch. 73; Beman v. Rufford, 1 Simons (N. *230 S.) 550; Great North. Railway Co. v. Eastern Counties’ Railway Co., 9 Hare 306; East Anglian Railway Co. v. Eastern Counties’ Railway Co., 11 C. B. 775; Vance v. East Lan. Railway Co., 3 K. & J. 57; Great West. Railway Company v. Rushout, 5 De Gex & Sm. 307; Hawkes v. Eastern Counties’ Railway Co., 1 De G., Mac. & G. 737; 5 H. L. Cas. 348.

The principles of these cases do not apply to this lease. The United Companies are not to spend money received for one purpose, for another purpose. The railroad and canal constructed for certain purposes are not to be used for other purposes.

The doctrine of partnership does not apply. A stranger cannot be introduced into a firm without the concurrence of the firm. Any person can become a stockholder. Parties must join together having goods, labor, or skill. The stockholder purchases his shares, and leaves the management to the executive officers. Partner liable in his individual estate for the debts of his firm; not so a stockholder.

3. The lease is said to be against the policy of the law, founded on the case of Winch v. The Birkenhead, Lancashire and Cheshire Junction Railroad Company. 13 Eng. &. E. Rep. 506; 5 De G. & Sm. 562.

That case is distinguishable from the lease. It was an agreement which provided for the amalgamation of three roads and the lease of a fourth; and, after the three roads had been amalgamated, the fourth road, or leased road could also be amalgamated with the other three. Such an agreement was pronounced against the policy of the act of Parliament, and savoring of illegality.

That case, neither in principle nor its facts, can control the case before the court.

One class of cases shows the doctrine of ultra viris, viz. the expenditure of the capital of a corporation in a project not authorized by the charter.

The case of Winch, it has been contended, shows another class in which money is not expended in a new project, but *231 which arc said to be against public policy, and savor of illegality. This is not true in fact. A court of equity will not enjoin where the contract is merely against the policy of the law, there there is no irreparable injury.

4. The state of New Jersey has authorized this lease by the act approved March 17tli, 1870, entitled “ An act to enable the United Eailway and Canal Companies to consolidate their stock, and to consolidate and connect with other companies,” and this lease, when executed in pursuance of the powers thus given, will be lawful.

The connection is not limited to any class of railroads, whether in or out of the state. The United Companies can lease to “any such companies” as they would have a right to consolidate with. They can consolidate with any company with which they “ are or may be identified in interest.”

They can then consolidate with the Philadelphia and Trenton Eailroad Company, as they have “ an identity of interest with the Philadelphia and Trenton Eailroad Company.”

The act empowers a consolidation or lease with a named company out of the state, “ and any other companies.” It is clear then that the power to consolidate with, or lease to “any other railroad or canal company,” is not by the general scope of the act confined to such companies only as are in the state of New Jersey.

There are three positions set forth by the act which authorize a lease or consolidation. 1. Identity of interest. 2. Continuous lines. 3. Connected lines.

Every one of these three positions have reference to companies out of the state.

The connection of the United Companies in New Jersey with tlieir branches and auxiliary lines, is such as that on the question of intention in the statute they could not bo meant.

Then the identity or connection must be looked for out of this state. The lines of the companies were continuous *232 lines across the state. The bill so charges, as to canal, a “ perfect, expeditious, and complete line of water communication between the cities of Philadelphia and New York.” By Camden and Amboy Railroad, bill charges “ a perfect, expeditious, and complete line of communication between the cities of- Philadelphia and New York.” By New Jersey Railroad, bill, charges, “ another perfect, expeditious, and complete line of communication, by way of Trenton, between the cities of Philadelphia and New York.”

Charter of canal, § 2, power given “ to perfect an expeditious and complete line of communication from Philadelphia to New York,” &c.

Camden and Amboy Railroad v. Briggs, 2 Zab. 633; held in a penal suit, that the line extended. from New York to Philadelphia.

Continuous lines across the state, into Philadelphia, could only have continuous lines by connection in Pennsylvania. Works out of the state only could form continuous or connected lines.

“In this state or otherwise.” The term “otherwise,” thus connected, could only mean out of the state. The power to lease, if given generally, would not have been confined to the state of New Jersey. It was intended to make the case clear, by expressions not doubtful — “ in this state, or otherwise.” The word “ otherwise ” refers to and is predicated of the conditions in which these United Companies exist— otherwise than in New Jersey. The United Companies were all created by the laws of New Jersey; companies “otherwise,” must be such as were not created by the laws of New Jersey.

The concurrent legislation of the states of New Jersey and Pennsylvania give meaning to this act. The “ act to authorize railroad companies to lease or become lessees, and to make contracts with other railroad companies, corporations, and parties,” was passed February 17th, 1870; the New Jersey act, March 17th, 1870.

*233 5. The lines are both continuous and connected.

Their contracts, business connections, &c., show this clearly.

6. The Pennsylvania Railroad Company has full power in law to become the lessee.

The complainants cannot deny this position, as they have not made the Pennsylvania Railroad Company a party.

Two acts make this clear: “An act to authorize railroad companies to lease or become lessees, and to make contracts with other railroad companies, corporations and parties,” approved February 17th, 1870. “An act relating to leases or contracts for the use of canals or other navigation works by railroad companies,” approved May 3d, 1871.

The legislature of Pennsylvania have thus clearly conferred the power.

The law is clearly settled in Pennsylvania: Commonwealth v. The Atlantic & Great Western R. Co., 53 Penn. (3 P. F. Smith’s) 9; The Philadelphia & Erie R. Co. v. The Cattawissa R. Co., Ibid., p. 56.

7. The complainants can only complain of injury to their private rights. They have no foothold in this court for pretended injury to public interests, or the violation of public property, by this lease. Their private rights can bo paid for, and the defendants tender just compensation, in such mode as equity may require. The act of March 17th, 1870, passed by the New Jersey legislature, prescribes an equitable mode of compensating the complainants by commissioners.

This mode of compensation does not violate the Constitution of New Jersey. There are two clauses of that Constitution.

Art. I, pi. 16. “ Private property shall not be taken for public use, without just compensation; but land maybe taken for public highways, as heretofore, until the legislature shall direct compensation to be made.”

Art. IV, § 7, pi. 9. “ Individuals or private corporations *234 shall not be authorized to take private property, for public use, without just compensation first made to the owners.”

The mode of compensation is not unconstitutional, because no property has been taken. The property of the shareholders has not been taken. The title remains in them. They can vote on the stock. The shares of stock do not amount to a deed for the property. Whatever interest in the property, represented by the stock, remains as before.

The Constitution contemplates that the private property which shall be taken, shall be for public use. Stock cannot be taken for public use. An exclusive right might be condemned, that thereby physical property could be taken for public use. Then the exclusive right would be extinguished. Shares of stock are like choses in action. Angell & Ames on Corp., 9th ed., §§ 560, 563; Williams on Personal Property 186.

The language of the New Jersey Constitution, “ compensation first made,” has a well known history. It was to prevent land from being taken first and paid for afterwards. Bonaparte v. The Camden & Amboy R., 1 Baldwin C. C. Rep. 205; Den v. The Morris Canal Co., 4 Zab. 590.

These cases prove that land could, under the old Constitution, be taken and used first and paid for afterwards. The clause in the new Constitution was introdued simply to do away with this legal conclusion. Doughty v. The Somerville & Easton R., 1 Zab. 443.

The title of a stockholder in his stock may pass by a certificate signed in blank — -it passes by delivery merely. The rule of this act, therefore, is just, that the stockholder should dissent to the lease, make known his dissent, and then have his shares condemned, if he seeks compensation in that way. If the calling in the aid of commissioners should be regarded as a mode of condemnation under the Constitution, it would nevertheless be legal.

The complainants contend that the lease is not valid as against them, because of their objection. If necessary *235 to condemn their stock, then the lease is not valid as against them until their stock shall be condemned. The proper time for fixing values would be immediately prior to the making of the lease. Then the ownership of the stock could be ascertained.

The works when leased are subject to public use. Under the Constitution, the legislature can determine the public use and the mode of condemning. The leased roads are subject to the public use, and the legislature have declared that the interest of the stockholders can be condemned. The right to condemn, and the mode of condemnation under this law, are complete.

The bill is not framed on the basis that the complainants want their stock condemned, or that condemnation would bo unlawful. The bill is based on the idea that the lease is wholly unlawful, and that the objection of any stockholder can defeat the same. Equity can provide a mode of compensation to the stockholder, if the lease would be inequitable as to him.

The Irrigation Company of France, 39 Law Jour., N. S., Chan.; S. C., on appeal, 6 Law Rep. Ch. 176; Lauman v. The Lebanon Valley R., 30 Penn. Rep. (6 Casey) 46; 2 Parsons’ Mar. Law 555.

8. The lease of the works requiring a continuation of the former use, a majority of the directors and stockholders should control.

Durfee v. The Old Colony & Fall River R. Co., 5 Allen 242 ; Bank of Augusta v. Earl, 13 Peters 519 ; Lauman v. The Lebanon Valley R., 30 Penn. Rep. (6 Casey,) 46; Nix. Dig. 341; Gifford v. The New Jersey R., 2 Stockt. 172; Vance v. The Eastern Lancashire Railway, 3 K. & J. 57.

The analogy of a partnership is delusive. Each partner attends to the business. The partnership manage the business. Not so in corporations. Each partner contributes of capital, or skill, or labor. A new partner cannot be introduced without the consent of the former partners. Stockholders change daily, and that, too, by certificates in blank.

*236 The legislature of New Jersey has declared that the rights of stockholders could be affected without the assent of them all.

By the act (in the case) by which the Delaware and Raritan Oanal Company, and the Camden and Amboy Railroad Company, were united as Joint Companies, the consent of seven-eighths was required.

9. The local railroads, constituted in states, under state charters, have been recognized by the courts, as the means by which commerce is carried on, under the clause of the Constitution of the United States, by which Congress shall have the power to regulate commerce among the several states. The Erie Railway Co. v. The State, 2 Vroom 531 .

The Cumberland Road was constructed with the consent of the states through which it passed.

2 Statutes at Large, 357, § 3; Gibbons v. Ogden, 9 Wheat. 203 ; Passaic Bridges, 3 Wall. 782 .

10. The powers of corporations can be exercised out of the territorial jurisdiction in which they were created; and there is a necessity for the union of railroads in different states, to carry on “commerce among the several states.”

Bank of Augusta v. Earl, 13 Peters 519 ; Lumbard v. Aldrich, 8 New Hamp. 31; State v. Freeholders of Hudson, 3 Zab. 210; 4 Zab. 719, 725; State of Vermont v. Boston, &c., Railroad, 25 Vt. 433 .

11. Assuming that the lease might be avoided, on information filed by the Attorney-General on behalf of the state, the lease, if executed and delivered without the license of the state, would not be void. ’ .

Without the sanction of the state, the stockholders of the-leased roads would be without remedy, by reason of acquiescence.

This lease does not transfer the franchise of being a corporation.

12. Independent of the covenants in the lease by the lessee,, the lease would not in any degree relieve the lessors from *237 any obligations which they owe to the state of New Jersey or to individuals.

1 Redf. on Railw. 590; Nelson v. The Vermont and Canada R., 26 Vt. 717 ; Sawyer v. The Rut. & Bur. R., 27 Vt. 370 ; Clement v. Canfield, 28 Vt. 302 .

The state and individuals are protected by the express covenants in the lease.

13. The contention that the lease is unlawful because it not only demises the roads and canal, but other property, such as stocks, is unfounded.

The shares of stock in other roads held by the lessors under the sanction of the laws of New Jersey, are the means by which the lessors hold their title to property in auxiliary works, as stock of the Associates of the Jersey Company; stock of the Ferry Company at Camden; stock of the Belvidere Delaware Bailroad, &c. They are like the titles to lands which are not now a part of the works. These stocks pass as appurtenant to the demised property. The Philadelphia & Erie R. Co. v. The Penn. R. Co., 53 Penn. R. 56.

14. If the execution of such a lease was not sanctioned by the act of New Jersey of March 17th, 1870, and if it is against the policy of the law by reason of the exercise of prerogative franchises in the state of New Jersey, by the Pennsylvania Bailroad Company, without sufficient license, the private rights of stockholders would not be invaded, and the only remedy is by quo warranto.

Vermont v. Boston, Concord & Mont. Railroad, 25 Vt. 433, 441 ; Gifford v. The New Jersey R., 2 Stockt. 177; Bissell v. The Mich. South. R., 22 N. Y. R. 272; Att. Gen. v. Great West. Railway Co., 1 Drewry & Sm. 154; Vermont v. Boston, &c., Railway, 25 Vt. 441 .

15. There can be no injunction until the rights of the complainants are settled at law. A quo warranto would be a remedy at law.

Morris & Essex Railroad v. Pruden, 5 C. E. Green, 537; The Hackensack Improvement Commission v. Midland *238 Railway Co., ante p. 94; Treadwell v. Salisbury Man. Co., 7 Gray 399 .

16. There are two main propositions in this case which have been discussed, and which can be answered affirmatively, and the others enforce and illustrate them.

1. Had the legislature of New Jersey the constitutional power to pass the act of March 17th, 1870? 2. Does that act authorize this lease ?

Under these propositions the lease is good against the state as well as the complainants.

Mr. Browning, for complainants.

The learned counsel who immediately preceded me has stated to your honor, that more than two-thirds in value of all the stockholders have assented to the execution of the lease in question. He mentions this, of course, as a fact, to have some influence upon the court. He does not state, however, nor pretend that when the bill was filed, or when the answer of the corporate defendants was put in, such was the condition of things. But simply stated, as I understood him, that the fact is so now.

This statement is in no sense responsive to the bill; and, therefore, in this case, as it now stands, is entitled to no consideration; however true in fact. But I go further' — fearing that silence may be regarded as acquiescence in the truth of the statement — and put in a rejoinder. For, although the learned gentleman may, and no doubt does, so understand it, as a simple fact; yet when the proper time shall arrive, we will maintain that, as yet, there has been no legal consent of any of the stockholders. That the assents referred to have been procured by personal application to the individual stockholders; and not upon duly convened meetings of the stockholders, after full and fair representation to, and consideration by them. And that assent to such a paper, cannot be legally and properly obtained, by sending emissaries around the country to the several stockholders, men and women, and obtaining their *239 signatures to a prepared written assent, at best but imperfectly understood, upon such representations as the emissary may choose to make.

The relation of trustee and cestui que trust, exists between the directors of these companies and the stockholders; and before trustees can acquire an assent of their cestuis que trust, to a contract which is to deprive them of both their ‘property and trustees, by transferring it to another sot of trustees, for a different use, they should be convened, and the contract fairly and fully explained, and all the information touching it imparted to them, which the trustees themselves possessed, to avoid all misrepresentation and unfairness. The simple application of this rule, if it would not dispose of the whole list of assents to which the gentleman refers, would clearly exonerate the complainants, and all others of the stockholders, who have not understandingly and with a full knowledge of all material facts, actually signed the assent. Shortz v. Unangst, 3 Watts & Serg. 52.

The counsel here, by way of preliminary to a discussion of the questions involved, directed the attention of the court to the character and value of the property proposed to be leased; the title of the companies to this property; and the interest and estate of the state therein. Tie then proceeded —

I.

The only statutory authority conferred upon the United Companies to execute the lease in question, so far as New Jersey is concerned, is the act of March 17th, 1870.

It is entitled “An act to enable the United Railway and .Canal Companies to consolidate their stock, and to consolidate or connect with other companies.”

The enacting clause is as follows : “ Bo it enacted by the Senate and General Assembly of the state of New Jersey, That it shall and may be lawful for the said United Com *240 panies, by and -with the consent of two-thirds in interest of the stockholders of each, expressed in writing, and duly authenticated by affidavits, and filed in the office of the Secretary of State, to consolidate their respective capital stocks, or to consolidate with any other railroad or canal company or companies in this state or otherwise, with which they are or may be identified in interest, or whose works shall form, with their own, continuous or connected lines, or to make such other arrangements for connection or consolidation -of business with any such company or companies, by agreement, contract, lease, or otherwise, as to the directors of said United Companies may seem expedient.”

The second proviso in this section is : “ Provided further, That no such consolidation, agreement, contract, lease, .or other arrangement, shall have the effect or be construed to release or discharge the said United Companies, or any or either of them, or any company or companies with which any such consolidation, agreement, contract, or lease may be made, from any taxes, liabilities, obligations, or duties which they or either of them may be subject or liable to, either to this state or to any other person or persons.”

Admitting, for the present, that this act is valid and, binding upon those corporations, respectively, and upon their stockholders, then, as a mere matter of construction, my proposition is,

1. That it does not authorize the making of the lease in, question, by the United Companies, to the Pennsylvania, Railroad Company, a foreign corporation not mentioned in the statute.

It proposes to confer on existing private corporations, new and important powers, not existing at common law, or included in their charters, or prior supplements. In such cases, and in all cases of legislative grants to private corporations, the well established rule of construction I take to be this: That grants to private corporations shall be construed, strictly, against the grantees; and to prevail they must be express and clear beyond a doubt;, a doubt defeats, *241 the power. Like a doubt in criminal cases, it acquits the accused; and it is the duty of the court to direct an acquittal. In other words, what is not granted, in clear and unequivocal language, is withheld.

2 Dwarris on Stat. 750; 2 Redf. on Railw., pp. 445-6, § 233; C. & A. R. Co. v. Briggs, 2 Zab. 623, 641, 647; Townsend v. Brown, 4 Zab. 80, 87; Leggett v. N. J. Man'f. Co., Saxt. 541, 550; Bridge Co. v. Land and Imp. Co., 2 Beas. 81, 94; S. C., Ibid. 556; Joint Co.’s v. R. & Del. Bay R. Co., 1 C. E. Green 321, 372; Morris Canal Co. v. Central R. Co., Ibid. 419, 436; Mor. § Essex R. Co., v. Sussex R. Co., 5 C. E. Green, 542, 562; Nix. Dig. 168, § 3; Packer v. S. & Erie R. Co., 7 Harris 218; Bank of Penn. v. Comm., Ibid. 152; Penn. R. Co. v. Canal Com’s, 9 Harris 10, 22; Comm. v. Franklin Canal Co., Ibid. 125, 138; Comm. v. Erie R. Co., 3 Casey 351.

I confine my authorities, except the elementary books first mentioned, to this state, and the state of Pennsylvania. So far as I know, the same rule, in substance, prevails everywhere. And 1 limit my reading to the New. Jersey and Pennsylvania cases, assuming that the rulings in them will govern the court in this case.

In the case of Leggett v. The New Jersey Manufacturing Company, Chancellor Vroom, in 1832, said: “I concur in the opinion of the Supreme Court of the United States, as pronounced by Justice McLean, in the case of Beatty v. The Lessee of Knowles, 4 Pet. 168 , that a corporation is strictly limited to the exercise of the powers specifically conferred .on it; and that the exercise of corporate franchises, being restrictive of individual rights, connot be extended beyond the letter and spirit of the act of incorporation.” Saxt. 550. And Chancellor Halsted, in the case of the Camden and Amboy Railroad Company v. Briggs, decided by our Court of Errors, in 1850, says it is a “familiar principle, that a corporation, being a creature of law, has just such rights and powers as the law creating it gives it, and no other.” 2 Zab. 641. And Justice Randolph, in the same case, said: “ In *242 questions arising on canal and railroad charters, as to the right to take freight or toll, or the quantity thereof, courts have uniformly construed the charter in favor of the public, and most against the company.” Ibid. 647. And Chief Justice Green, delivering the opinion of our Supreme Court, in the case of Townsend v. Brown, in 1853, says : “ It is a rule of construction, no less wise than clear, that in all cases of public grants, the interpretation shall be most favorable to the public, and most strongly against the grantee. The rule is founded in wisdom. All experience teaches that public rights are yielded to private interests with sufficient alacrity. .If the legislature really design to grant to individuals the right of several fishery, below low-water mark, it is easy to do so, in plain and express terms. It is far better that the right should be unequivocally settled by legislative interference, than that public rights should be frittered away by the aid of judicial construction.” 4 Zab. 87.

• In a later case, decided by the same distinguished jurist, in 1860, as Chancellor, against the claim of a bridge company, to the exclusive right of a bridge over the Hackensack river, within certain prescribed limits, designated in its charter, he said: “ Public grants are to be strictly construed. Contrary to the rule adopted in the case of private contracts, they are to be taken most strongly against the grantee; and in favor of the public. If there be a doubt as to the extent of the grant, the doubt is resolved in favor of the public. This is especially true of all grants which, like the present, narrow the powers, or abridge the functions of government. This grant is in derogation of public right. It restrains the sovereign power. It narrows the exercise of the great duty which the sovereign owes the people, of furnishing convenient highways.” On this rule, where the exclusive right of a bridge had been clearly and expressly granted, by our legislature in 1790, he'held that a railroad bridge, across the Hackensack, over which thousands of persons and hundreds of tons of merchandise were daily *243 carried, was not a bridge within the meaning of the grant. And our Court of Errors, on appeal, affirmed the decree, on that rule. Bridge Co. v. Hob. Land & Imp. Co., 2 Beas. 94 and 503.

In the still later case of the Joint Companies v. the Raritan and Delaware Bay Railroad Company, decided by the same very learned Chancellor, in 1863, he said: “It is a well settled rule of construction, that public grants are to be construed strictly; and in all cases of grants of franchises by the public to a private corporation, the established rule of construction is, that any ambiguity in the terms of the contract, must operate against the corporation, and in favor of the public. The corporation take nothing that is not clearly given by the act.” 1 C. E. Green 372.

At a later period, in the same year, Master Wilson, sitting for the Chancellor, in the case of the Morris Canal and Banking Company v. the Central Railroad Company of New Jersey, stated the same rule, equally strong and clear. “ It is a well settled rule of construction,” says the Master, “ in regard to a public grant, that the grantee can take nothing not clearly given him by the grant. In case of doubt, the grant is construed in favor of the state, and most strongly against the grantee.” Lbid. 436.

Nothing can more fully establish the rule as I claim it, than these cases — that public grants, to private corporations, must bo express and clear. A doubt defeats the claim. Whatever is not clearly and expressly granted, is withhold.

This rule is no less clearly and firmly established, and acted upon, in the state of Pennsylvania. On this point, the courts in that state “give no uncertain sound.” If possible, they lay down the rule more strongly, and adhere to it more rigidly, than we have done.

In the case reported in 7 Harris 218, of Packer v. The Sunbury & Erie R. Co., the Chief Justice of that state, delivering the opinion of the Supreme Court, says : “ All acts of incorporation, and acts extending the privilege of incorporated bodies, are to be taken most strongly against the *244 companies. Whatever is not expressly and unequivocally granted in such acts, is taken to have been withheld.” Again, on page 152, in the same book, in the case of the Pennsylvania Bank v. the Commonwealth, the Chief Justice illuminates the rule, and exposes the great dangers which require an unflinching adherence to it. “If,” says he, “ acts of incorporation are to be so construed as to make them imply grants of privileges, immunities and exemptions, which are not expressly given, every company of adventurers may carry what they wish, without letting the legislature know their designs. ' Charters would be framed in doubtful, or ambiguous language, on purpose to deceive those who grant them; and laws, which seem perfectly harmless on their face, and which plain men would suppose to mean no more than what they say, might be converted into engines of infinite mischief. The legislature, without knowing or intending it, might be thus induced to disarm the state of its most necessary powers and transfer them to corporations. The continued existence of a government, under such circumstances, would not be of much value. There is no safety to the public interests, except in the rule which declares that the privileges not expressly granted in a charter are withheld.”

In the subsequent case of The Pennsylvania Railroad Company v. The Canal Commissioners, the same learned judge repeats the rule, as follows: “Corporate powers can never be created by implication' nor extended by construction. No privilege is granted unless it be expressed in plain and unequivocal words, testifying the intention of the legislature, in a manner too plain to be misunderstood. When the state means to clothe a corporate body with a portion of her sovereignty, and to disarm herself to that extent of the powers which belong to her, it is so easy to say so, that we will never believe it to be meant when it is not so said. Words of equivocal import are so easily inserted by mistake or fraud, that every consideration of justice and policy requires that they should be treated as nugatory when they do find their *245 way into the enactments of the legislature. In the construction of a charter, to be in doubt is to be resolved; and every resolution which springs from doubt is against the corporation. This is the rule sustained by all the courts in this country and in England. Ho other has ever received the sanction of any authority to which we owe much deference. This court has asserted it times without number.” 9 Harris 22. And still again : in the same book, in the case of The Commonwealth v. The Franklin and Erie Canal Company, the same learned judge reiterates the rule, with emphasis. Ibid. 128.

In the case of The Commonwealth v. The Erie and Northeast Railroad Company, the same judge sums up the rule. “ This case,” says he, “requires us to give a construction to the charter of a private corporation. The frequency of such cases excites some surprise, when wo reflect that an act of incorporation is, and always must be, interpreted by a rule so simple that no man, whether lawyer or layman, can misunderstand or misapply it. That which a company is authorized to do by its act of incorporation, it may do; beyond that, all its acts are illegal, and the power must be given in plain words or by necessary implication. All powers not given in this direct and unmistakable manner, are withheld. * * * If you assert that a corporation had certain privileges, show us the words of the legislature conferring them. Failing in this, you must give up your claim. A doubtful charter does not exist; because, whatever is doubtful is decisively against the corporation.” 3 Casey 351.

The undeniable rule, then, of construing legislative grants to private corporations — admitted and acted upon everywhere, an

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