the Pacific Railway Companies and the general statutes providing for the formation of national banks all contain a reservation by Congress of the power to amend them. The question has never been directly raised before the United States Supreme Court. The grant of a franchise to be a corporation is, by our case law, a contract between the grantor and the grantee. It is settled law that Congress may in general make contracts which are binding upon the Federal government, and which will be enforced when Congress has provided courts with jurisdiction to enforce them. The question under discussion seems reduced to this: Is the grant of a franchise to be a corporation, or is the grant of any other franchise, subject to the general rule controlling contracts of the government? The consideration that Congress, in the exercise of its functions as a national legislature, may enact laws which impair the obligation of contracts between citizens, as it has perhaps done in the case of the Legal Tender Acts, seems irrelevant. § 679. Effect of Reservation of Right to Amend.- The question remains, how far a corporate franchise conferred by one Congress, with the reservation of the right to amend, is binding upon a future Congress. Under the constitution, the power to amend the charter of a corporation cannot be used to take away from it property already acquired under its charter, or to deprive it of the fruits, actually reduced to possession, of contracts lawfully made; but, subject to such restrictions, Congress may establish by amendment, whatever it might have prescribed in the original charter.2 Under this rule, it was held that Congress might require a national corporation to establish a sinking fund, to secure the payment of claims against it, not yet due.3 1 United States v. Union Pacific R. Co. (1875), 91 U. S. 72; U. S. v. U. P. R. Co., 98 U. S. 559; also obiter remarks of court in Sinking Fund Cases (1878), 99 U. S. 700. * Sinking Fund Cases (1878), 99 U. S. 700. Congress has, in a number of cases, declared by statute the forfeiture, by a national railway corporation, of lands previously granted to it by Congress, and often without assigning any reason for the forfeiture,-e.g. Act § 680. Not Dissolved by State Action.- A national corporation cannot be dissolved, or its property confiscated, or its operations seriously crippled, by State action. We have already seen that a national corporation is exempt in general from State control, in the exercise of all rights held by it under the Federal constitution and statutes.1 2 § 681. Corporations of the Territories. What has already been said of the power of Congress to create corporations to act within the States, is true of the power of Congress to create corporations to act within the territories; but it is comparatively unimportant with reference to the latter. By the Federal constitution Congress has general legislative control over the Territories, limited only by the restrictions contained in that instrument, while in respect of the States it exercises merely enumerated powers. Congress has empowered the territorial legislatures to authorize, by general statutes, the formation of corporations within their territorial jurisdictions, and has forbidden such legislatures to grant private charters or special privileges. No such restriction rests upon Congress itself. It has authorized a railway corporation, created by one territory, to extend its line through other territories.5 Territorial corporations become State corporations upon the admission into the Union of the territory creating them. A corporation created by Congress directly, in pursuance of its powers of local legislation over a territory, or mediately through a territorial legislature, is prima facie a corporation of the territory, as a corporation created by a State of the Union is a corporation of the State. A corpora tion of a territory, unless it holds other franchises than are necessarily implied from its corporate character, has no right to act within the limits of a State without its consent; but if such corporation is permitted by its charter to act generally beyond the territory, it may act by comity within any State, so long as the consent of such State continues. A corporation of a territory cannot sue or be sued in the Federal courts as a national corporation.2 § 682. Corporations of the District of Columbia.- Congress is given by the constitution general and exclusive legislative power over the District of Columbia. Under the authority thus conferred, Congress may create corporations within the District. It has frequently done so. In one volume of the Statutes at Large,5 are to be found an act to incorporate a building company, an act to incorporate a railway company, an act to amend the charter of another railway company, and acts to incorporate an inebriate asylum, a cemetery company and an insurance company. The franchises which Congress, acting as a local legislature for the District, may confer on a corporation, beyond the franchise to exercise the powers which a natural person exercises without special authorization, are probably co-extensive with those it may confer on a natural person. Congress probably cannot create a corporation within the District of Columbia and confer upon it power to act within the States without their assent, unless such corporation is, according to Marshall's rule, an appropriate means to carry into execution the enumerated powers of Congress, acting as a national legislature.' But Congress may permit a corporation of the District to act within the States, just as any State may permit a domestic corporation 1 See authorities cited as to powers of corporations of the District of Columbia, post, § 682. Adams Express Co. v. Denver &c. R. Co., 16 Fed. Rep. 712. U. S. Const., art. I., sec. 8, cl. 17. ✦ Such power recognized. Huntington v. Savings Bank, 96 U. S. 388; Hadley v. Freedman's Savings &c. Co. (1874), 2 Tenn. Ch. 122; Williams v. Creswell (1876), 51 Miss. 817; Daly v. Nat. Life Ins. Co. (1878), 64 Ind. 1. 5 19 U. S. Stat. 6 Statutes at Large, vol. 18, p. 513, contain "An act to incorporate, the Inland and Seaboard Coasting Company of the D.strict of Columbia." Congress can only confer on the District of Columbia municipal powers. Stontenburgh v. Hennick, 129 U. S. 141. to act beyond the State limits. A corporation acts beyond the territory of the sovereign creating it, only by comity. The States generally permit corporations of the District to act within their limits as foreign corporations.1 Congress, in the exercise of its powers of local legislation over the District, in 1868 incorporated an insurance company, with permission to it to act within the States with their assent. In 1867 it passed a general incorporation law, authorizing the formation of "national trades unions" within the District, with authority to establish branches within the States.3 The statute does not expressly provide that a branch union shall only be established within a State, with the express or implied consent of such State; but such is probably the meaning of the statute. § 683. State Corporations Holding Federal Franchises. To avoid misapprehension, it is proper to say that Congress has not chartered any corporation, with power simply to operate telegraph lines within the States. It has conferred, by general statute, upon such State telegraph companies as choose to accept the terms offered, the franchise to construct and operate their lines on all post routes, which include all railways, public roads and streets in the country. These State corporations, although they are made agents of the national government and have important powers confided to them to be exercised in all parts of the union, are not within the scope of this chapter. A State corporation holding a patent right is not a national corporation.5 1 Hadley v. Freedman's Trust Co., 2 Tenn. Ch. 122; Daly v. Nat. Life Ins. Co., 64 Ind. 1; Williams v. Creswell, 51 Miss. 817. 2 15 U. S. Stat. 184. 3 Stats. 49th Congress, 1st Sess., ch. 567, p. 86. 4 Consult: Act of July 24, 1866, substantially re-enacted as Rev. Stat., §§ 5263-5268; as to penalties: Act of June 10, 1872, 17 Stat. 366; same: Rev. Stat., § 5269; as to what are post routes: Act of June 8, 1872, 17 Stat. 283 at p. 308, § 201; Rev. Stat., § 3964; Act of March 1, 1884, 23 Stat. 3; Pen sacola Tel. Co. v. Western Union Tel. Co., 96 U. S. 1; Telegraph Co. v. Texas, 105 U. S. 460. Act to protect telegraph lines owned or occupied by the United States: June 23, 1874, 18 St. 250; Western Union Tel. Co. v. Pendleton, 122 U. S. 347; Western Union Tel. Co. v. Massachusetts, 125 U. S. 530; Ratterman v. Western Union Tel. Co., 127 U. S. 411; Leloup. v. Port of Mobile, 127 U. S. 640; Western Union Tel. Co. v. Alabama, 132 U. S. 472. 5 United States v. Amer. Bell Telephone Co. (1886), 29 Fed. Rep. 17. § 686. Scope of this Chapter. In this chapter it is intended to discuss the question of the residence of corporations, and the place of holding corporate meetings and of doing corporate acts, except so far as the question relates to jurisdiction, to taxation, and to the status of foreign corporations. These subjects are reserved for separate treatment. 687. Corporations Anciently Named as of Some Place. It is said by Sir James Grant, in his work on corporations, that by the ancient law of England, every corporation must be created as of some place. This expression was used in the construction of ancient charters granted by the king, and meant nothing more than that, unless the charter named a certain place for the residence of the corporation, it was void. But the ancient learning on this subject had reference to the name and identity of the corporation, and not to any power or disability to act in one place, and not in another. Thus, it is said in Bacon's Abridgment, "A corporation must be named of such a 1 Grant Corp. 14, 53, 54; Case of Sutton's Hospital, 10 Coke Rep 29b. |