place or supplement rules of the common law, they would in all cases be nugatory. The mere suggestion of the case of the ordinances of municipal corporations will give point to this. By the principles of the common law, every man may lawfully engage in trade without restriction or without paying a tax for the privilege. By municipal ordinances, license taxes are imposed upon merchants doing business within the limits of the particular municipality, to which citizens outside the municipality are not subject by the ordinary law of the State. Such ordinances are therefore in a sense contrary to the law of the State, and yet they are not for this reason invalid, although they are enforced by the sanction of fine and imprisonment. So, the by-laws of municipal corporations frequently define and punish offenses of a petty character, of which the general statute law of the State and the common law take no notice; but they are not for this reason to be regarded as void, because contrary to the general law. It is therefore a sound conclusion that if a by-law of a corporation is not unreasonable, or contrary to the general policy of the law, the mere fact that it introduces a new rule which is not the rule of the common law does not render it invalid.1

§ 1015. Must not be Contrary to the Articles of Incorporation. As already pointed out 2, the articles of incorporation, where the corporation is organized under a general law, occupy, when conformable to the governing statute, the place of a charter for the corporation, and in some States the word "charter" is used with reference to such articles. They are the constitution of the company, as distinguished from its by-laws, which in their relation to the former are in the nature of subordinate regulations. It follows that a by-law, by which a corporation undertakes to deprive a dissenting stockholder of a right secured to him by the articles of association, is void. Thus, it has been held that a building association cannot retire and cancel shares of stock against the will of the holder thereof.3

§ 1016. Must not be Contrary to Common Right. The proposition that a corporate by-law must not be contrary to the

1 Goddard v. Merchant's Exchange,

9 Mo. App. 290; s. c. affirmed, 78 Mo. 609.

2 Ante, $216.

3 Bergman v. St. Paul Mut. Building Assoc. 29 Minn. 275.

common law, is, as has been suggested,1 to be understood as meaning that it must not contravene those principles of common right which are imbedded in the common law. When, therefore, a by-law is contrary to common right, it will be declared void by the judicial courts, unless express legislative authority can be found for its enactment. This is very nearly the legal equivalent of the proposition, discussed hereafter, that by-laws are void when unreasonable; 2 since anything is unreasonable in a legal sense when it is contrary to a common right.

§ 1017. Illustrations of Municipal Ordinances Contrary to Common Right. — The author is indebted to a learned note of Mr. Freeman in the American Decisions,3 for a collection of cases in which municipal by-laws have been held void, on the ground of being contrary to common right. This has been held of a by-law prohibiting all persons, except the inhabitants of a town, from taking fish from a navigable river within the town limits; conferring a right to obstruct the highway, or the approaches to a bridge, so as to interfere with public travel; 5 under a power to regulate wharves, defining the line of high water mark and declaring the erection of buildings below that line a nuisance; 6 authorizing the sale without notice to the owner, of property left on the levee beyond a certain time; 7 imposing a tax on wagons of outside residents engaged in hauling into and out of the city; assum

1 Ante, § 1014. Post, § 1023.

3 38 Am. Dec. 636.

4 Hayden v. Noyes, 5 Conn. 391; Willard v. Killingworth, 8 Conn. 247. 5 Stack v. East St. Louis, 85 Ill. 377; Pettis v. Johnson, 56 Ind. 139.

Evansville v. Martin, 41 Ind. 145. Lanfear v. Mayor, 4 La. 97; s. c. 23 Am. Dec. 477.

8 St. Charles v. Nolle, 51 Mo. 122. In numerous other cases municipal by-laws have been set aside which impose restrictions upon the free vending within the city limits of the producers of farm produce. In this respect the American municipal regulations are entirely different from those which obtain on the continent of Europe. In France it is permitted to municipalities to establish a local

8

tax called an octroi, which is levied upon articles of farm produce, wines and other things consumed within the city by its inhabitants, and brought in by producers from the outside. Travelers who have carried their luncheon with them in a basket have had amusing experiences in Italian cities, with the collectors of this local tax, over the question of paying duty on their dinner. The American principle does not, it has been held, extend so far as to render a municipal ordinance void which exacts a license of a person whose business is that of manufacturing and whose manufacturing establishment is outside the city, but whose goods are delivered inside in his own wagons. Memphis v. Battaile, 8 Heisk. (Tenn.) 524; Edonton v. Capehart, 71 N. C. 156.

2

ing to regulate or prohibit burying grounds outside the corporate limits,1 though within the corporate limits this is a proper subject of municipal regulation. The proposition of the preceding section is also well illustrated by judicial holdings to the effect that a municipal ordinance authorizing the arrest of persons without warrant is void because in contravention of those principles of common right secured by the general law of the land.3

§ 1018. Must Operate Equally. Another principle, which is perhaps a mere paraphrase of the principle that by-laws must be reasonable and of the principle that they must not be contrary to common right, is that they must operate equally upon all persons of the class which they are intended to govern. On this ground, a municipal ordinance which is flagrantly unequal and partial will be set aside as void. It has been so held of an ordinance exacting a license for selling goods, and fixing one rate of license to be paid for selling goods within the corporate limits. or in transitu to the city, and another and much larger rate for selling goods not within the city or in transitu to it.' The same has been held of a municipal ordinance imposing a license fee, and discriminating between merchants and manufacturers residing outside the city limits, and other persons of the same class residing within the city limits. Not only was this void because it operated unequally and partially, but it was held to be beyond the authority of the city council.5 Another court

1 Begein v. Anderson, 28 Ind. 79. 2 City Council v. Baptist Church, 4 Strobh. L. (S. C.) 306; Coates v. Mayor, 7 Cow. (N. Y.) 585; Com. v. Fahey, 5 Cush. (Mass.) 408; Bogert v. Indianapolis, 13 Ind. 134; New Orleans v. St. Louis Church, 11 La. An. 244; Brick Presbyterian Church v. Mayor, 5 Cow. (N. Y.) 538; Com. v. Goodrich, 13 Allen (Mass.), 546; Musgrove v. Catholic Church, 10 La. An. 431. But such restraints must be reasonable; and an ordinance forbidding burials within the corporate limits but not in a populous section has been held void. Austin v. Murray, 16 Pick. (Mass.) 121. So, an ordinance prohibiting the erection of a

private hospital within the city limits is cot invalid. Milne v. Davidson, 5 Mart. (N. 8.) (La.) 409; s. c. 16 Am. Dec. 189. So, an ordinance has been upheld, forbidding the purchase of the carcasses of dead animals for the purpose of boiling, steaming and rendering them, and prohibiting them from being boiled, steamed and rendered within certain limits. State v. Fisher, 52 Mo. 174, 177.

8 Petersfield v. Vickers, 3 Coldw. (Tenn.) 205; Judson v. Reardon, 16 Minn. 431; Pinkerton v. Verberg, 30 Cent. L. J. 352.

4 Ex parte Frank, 52 Cal. 606.

5 Nashville v. Althorp, 5 Coldw. (Tenn.) 554. Accordingly, it has been

has said: "All corporation by-laws must stand on their own validity, and not on any dispensation granted to members. They cannot be subjected to any conditions which do not apply to all alike, and cannot be compelled to receive, as matter of grace, anything which is a matter of right; neither, on the one hand, should there be personal exemptions of a general nature from any valid regulations that bind the mass of corporators." So, it has been held that, under the power of a corporation to make by-laws, a resolution directed against the stock of a certain shareholder is unlawful.2

1

And,

§ 1019. Must not Disturb Vested Rights. - As statut es which impair the obligation of contracts and disturb vested rights are unconstitutional and hence void,3 so, for stronger reasons, the by-laws of a corporation will be held void, where they operate to disturb the vested rights of the members. although the power is reserved to a corporation, by its charter, to alter, amend, or repeal its by-laws, it cannot repeal a by-law so as to impair rights which have become vested thereunder.5 A striking illustration of this is found in the principle that where neither the charter nor the governing statute imposes on the members a personal liability to pay the debts of the corporation, such a liability cannot be created by any by-law or vote of the corporation so as to be binding on dissenting members. So, where a city has granted to a street railway company a franchise to operate a railway with a double track, it cannot, after the company has expended money under the grant, restrict it to a single track, by an amendment to the ordinance conferring the franchise."

said that "by-laws must be certain, must be directed to all within the sphere of their operation, and must operate equally." Goddard v. Merchants Exchange, 9 Mo. App. 290, 295; opinion by Hayden, J., quoted with approval in Budd v. Multnomah St. R. Co., 15 Ore. 413; s. c. 3 Am. St. Rep. 169, 174.

1 People v. Young Men &c. Society, 41 Mich. 67.

2 Budd v. Multnomah Street Ry. Co., 15 Ore. 413.

Post, Ch. 117, Art. I.

People v. Fire Department, 31 Mich. 458; People v. Crockett, 9 Cal. 112; Gray v. Portland Bank, 3 Mass. 363.

Kent v. Quicksilver Mining Co., 78 N. Y. 159, affirming s. c. 12 Hun (N. Y.), 53.

6 Trustees v. Flint, 13 Metc. (Mass.) 539; Kennebec &c. R. Co. v. Kendall, 31 Me. 470; Reid v. Eatonton Manufacturing Co., 40 Ga. 98.

7 Burlington v. Burlington Street Railway Co., 49 Iowa, 144.

§ 1020. Must not be Unreasonable, Oppressive or Extortionate. — It may be stated, as a general rule, that, in the absence of any statutory restraint, and considering the question solely as a question between the corporation and its members, a by-law of a corporation, in order to be valid, must not be unreasonable, oppressive or extortionate.1

§ 1021. Must be Reasonable. - Corporations have none of the elements of sovereignty; they cannot go beyond the powers granted to them; they must exercise those powers in a reasonable manner; and whether they have, in a given instance, exercised them reasonably or unreasonably, is a question which it is competent for the judicial courts to decide. It is therefore a principle of the common law, running back so far that its origin cannot be found, that the by-laws of a corporation will be set aside by the judicial courts when deemed unreasonable. The principle applies equally to private and public corporations. No doubt it had its origin when nearly all corporations were municipal in character, and in the earliest cases it was asserted and applied in respect of municipal by-laws, called in modern times ordinances. In other words, the judge, enlightened by

1 Hagerman v. Ohio &c. Asso., 25 Ohio St. 186; Forest City &c. Asso. v. Gallagher, 25 Oh. St. 208; Citizens' &c. Asso. v. Webster, 25 Barb. (N. Y.) 263; Shannon v. Howard Building Asso., 36 Md. 383; State v. Overton, 24 N. J. L. 435; s. c. 61 Am. Dec. 671; People v. Throop, 12 Wend. (N. Y.) 183, 186; Buffalo v. Webster, 10 Wend. (N. Y.) 99.

2 Com v. Worcester, 3 Pick. (Mass.) 461, 473; St. Louis v. Weber, 44 Mo. 547.

3 Com. Dig., tit. Franch., F. 10; Bac. Abr., tit. By-law; 2 Kyd Corp. 95; Sutton's Hospital Case, 10 Coke Rep. 1, 31a; London v. Vanacker, 1 Ld. Raym. 498; Rex v. Spencer, 3 Burr. 1828; Norris v. Staps, Hob. 211; Feltmakers v. Davis, 1 Bos. & P. 98, 100; Palmetto Lodge v. Hubbell, 2 Strobh. L. (S. C.) 457; 49 Am Dec. 604; Rex

v. Richardson, 1 Burr. 539; Com. v. St. Patrick's Society, 2 Binn. (Pa.) 441; 4 Am. Dec. 453; Com. v. Cain, 5 Serg. & R. (Pa.) 512; St. Luke's Church v. Mathews, 4 Desau. (S. C.) 578, 585; s. c. 6 Am. Dec. 619; Gray v. Medical Soc., 24 Barb. (N. Y.) 570, 574; citing 2 Kent Com. 296. "A by-law must be reasonable, and for the common benefit; it must not be in restraint of trade, nor ought it to impose a burden without an apparent benefit." Commissioners v. Gas Co., 12 Pa. St. 318; Budd v. Multnomah Street R. Co., 15 Ore. 413; s. c. 3 Am. St. Rep. 169, 174. See on this subject: Buffalo v. Webster, 10 Wend. (N. Y.) 99; Hudson v. Thorne, 7 Paige (N. Y.), 261; Stokes v. City of New York, 14 Wend. (N. Y.) 87.

4 The following cases assert and illustrate the principle that municipal