three classes is in terms, and was in fact, a purely arbitrary selection by the legislature. "The law has not even the merit of uniformity," says Mr. Cary, in his brief.

"It imposes burdens upon one class of corporations not placed upon another of the same class. It grants to one privileges denied to another of the same class. It enacts that the Wisconsin Central Railroad Co. may so use and enjoy its property as to derive an income, while this right is denied the Chicago, Milwaukee, and St. Paul Railway Co. It is class legislation in all its nakedness and deformity, without even a shadow or color of equity.1"

This point has not yet received the attention which we think it merits, although it has of late been becoming more prominent.

Shortly after the passage of these laws, the question of their validity was submitted to some of the most eminent counsel in the United States. The Attorney-General of Wisconsin, Messrs. Benjamin R. Curtis, William M. Evarts, and E. Rockwood Hoar, have given elaborate opinions upon this question. These opinions are so carefully prepared, and the judgment of such great lawyers tends so strongly to form the law, that they deserve to be somewhat fully stated here, especially as in modern days such opinions do not find the place in the reports which they sometimes attained fifty years ago.

"I can have no doubt," says Judge Hoar, "that the franchises of a corporation, like any other corporate or individual property, may be taken for public use, under the right of eminent domain, upon payment of just compensation. There can be no doubt either, that the charter of a corporation may, under such a reservation " [as Article XI. § 1, of the constitution of Wisconsin] "be repealed. But repeal of a charter leaves the corporate property to be divided among its owners. Where the franchises are divisible, any one of them may be taken away. This clearly is included in the power to alter. Whatever is embraced under the police power, or the power to regulate the exercise or enjoyment of the franchise for the protection of public interests, will also be comprehended in the power to alter. . . . 'Power to legislate, founded on such a reservation,' says Mr. Justice Clifford, 'is certainly not without limit; but it may safely be affirmed that it reserves to the legislature the authority to make any alteration or amendment in a charter granted subject to it, that will not defeat or substantially impair the object of the grant, or any rights which have vested under it, which the legislature may deem necessary to secure either the object of the grant, or any other public right not expressly granted away by the charter.'" 2

554.

1 Durkee v. City of Janesville, 28 Wis. 464; Wally's Heirs v. Kennedy, 2 Yerger, 2 Holyoke Company v. Lyman, 15 Wall. 522.

After stating that the Potter act does not repeal, and does not purpose to repeal, the charter, Judge Hoar continues:

"That would have been within the legislative power; and if it had been done, the company could have disposed of its property to satisfy its creditors and return their investment to its stockholders. It does not repeal a part of the franchise, as if it had forbidden the carrying of freight, leaving the road a road for passenger travel only. In that case, the corporation could have disposed of its freight cars, and its obligations would have been coextensive with its powers. On the contrary, all the duties and obligations of the corporation are preserved and enforced. The statute takes from the corporation the power to require from its customers a compensation for the services rendered. This it does without any judicial ascertainment of what would be a reasonable compensation for such service, or any proof, or decision, that the prices fixed would pay even the expenses of operating the road. By the terms of the charter, the fares and freights to be collected were made the consideration of the undertaking of the company to do the duty imposed upon it, and, on the part of the corporators, was the object of acquiring corporate powers and assuming corporate obligations. The new statute imposes penalties on the company and its officers and agents, for a refusal to continue to perform all its duties upon the new terms which it prescribes. This seems to me to be neither repeal nor alteration, within the meaning of the constitutional provision, but simply confiscation of property. It takes from the company, at the mere pleasure of the legislature, the compensation which it was agreed it should receive for expense incurred and services rendered; still it requires the expense and service to continue, the reasonable compensation to be earned, and distributes this property, or right of property, among the citizens of the state whose persons and property are carried in the cars.

"I cannot think that, if, as the Supreme Court has said, there is a limit to such an exercise of legislative power, any limit can be fixed which this legislation does not transcend. If this statute is constitutional, I can see no reason why a law compelling the railroad company to carry passengers gratuitously, or to pay them for riding in the cars, would not be."

Judge Curtis, resting on the fact that the railroad had previously a right to regulate its charges for the business it might transact through its directors; and that the Potter rates will leave nothing from its receipts, above its expenditures, to be divided among the stockholders or pay interest on its bonds; and "that many millions of dollars of bonds, duly issued by the corporation under authority of law, the proceeds and avails of which were actually received by the corporation, and expended in building and equip

ping the road, are now outstanding in the hands of bonâ fide holders in the United States and foreign countries," - gave his opinion that the Potter law impairs the obligation of the contracts of the bondholders, and is therefore invalid under the Constitution of the United States; it being declared by the highest authority, that such reserved power over corporate charters as that in the Wisconsin constitution is not an unlimited power.1

He gives his opinion, first:

That "it is not within the field of legislation, under any American constitution, to fix and prescribe for the future what prices shall be demanded either for commodities or for personal service, or for a union of both. I do not believe it is within the power of any legislature in the United States to compel owners of property, or persons natural or political, to part with their property, or render their personal services at their own expense and risk, to the public for prices fixed by the legislature. No department of government has power to make bargains for the people; 2 nor even for a municipal corporation, when the purpose is private.3

"If the legislature in this instance can be deemed to have possessed that authority, it must be because this particular case is an exception to the general rule. I suppose the ground on which such an exception would be attempted, is, that railroads have often and correctly been said to be public highways. They are so in some sense. They are usually authorized by the state to be constructed, and the power of eminent domain is entrusted to the corporation to enable it to locate and construct the road; but, when constructed, it is out of the means of a private corporation, which is the owner of the road in the same sense that a private corporation is the owner of a bank. Property acquired by the corporation belongs to it exclusively, and its ownership is as absolute as that of any private individual of property belonging to him.

“Moreover, this fact, that a railroad is in some sense a public highway, stops far short of what is necessary in order to lay the foundation for such legislation as is found in this act; because this legislation undertakes to prescribe the prices which shall be paid, not for tolls for passing over the road, but for the service rendered by the corporation as common carriers in transporting, at its own expense and risk, persons and property from point to point on the road, as well as for receiving and delivering the persons and the property. Now, here again there is an element of publicity in the char

1 Commonwealth v. Essex Company, 13 Gray, 253; Miller v. Railroad Co., 21 Barb. 517; Miller v. State, 15 Wall. 498.

2 Taylor v. People, 4 Hill, 140.

8 The People ex rel., &c. v. Batchellor, 53 N. Y. 140.

acter of the corporation and its business. Being common carriers of persons and property, the law requires them to transact business for all applicants, at reasonable times, and at reasonable rates of compensation. But a railway corporation, when carrying on the business of common carriers, at its own expense and risk, and for its own profit, cannot be distinguished from any other common carriers. Its duties, its liabilities, and its rights are the same, whether they transact business over a road which they own, or which they hire, or which nature has made for them in the shape of a navigable river, or which the public has built at its expense, and thrown open for common use; and unless it can be successfully maintained that the legislature may, by what is in truth a legislative decree, establish, for the future, prices for personal service and expenditures and risks incurred in rendering those services, I am unable to see how this law can be brought within the field of legislation."

Second. He gives his opinion that it violates Article I. § 13, of the declaration of rights in the Wisconsin constitution.

"It is settled law, both in Wisconsin and elsewhere, that this article requires the law which takes the property, to provide for making the compensation. It is settled also, by the highest authority, that, to amount to a taking, it is not necessary that the owner of the property should be deprived of its possession. If he is allowed to remain in possession, but forced under heavy penalties so to use his property as effectually to destroy or greatly impair its value, he comes within this article of the Bill of Rights.1 Upon the facts which have already been stated, it is apparent that this railway corporation has, under this law, but one of two alternatives: the first being to continue to carry on its business for the prescribed rates of compensation, certainly without any profit, and probably at a considerable loss; or to abandon the use of its property, and close up its road. I cannot entertain any reasonable doubt, that such a law, accompanied and to be enforced by severe penalties, which render one or the other of these alternatives absolutely necessary, is an infraction of the article in the Bill of Rights.

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'A law which, under heavy penalties, prohibits a person, whether natural or political, from using his property so as to derive any advantage whatever from it, and leaves him subject only to loss from its use, does as effectually take his property as if it had, under the like penalties, prohibited its owner from interfering with it.

66

Thirdly. But there is another objection to this law, which, to my mind, is of itself decisive. Under the power to alter, amend, or repeal a charter, a legislature may change, or, in some instances, perhaps, destroy contracts into which the state has entered by the granting of charters. But this must

ļ

1 Pumpelly v. Green Bay Company, 13 Wall. 66.

be limited to the modification or destruction of the contracts of the state. It has never been extended, and, consistently with the Constitution of the United States, it cannot be extended to contracts made by the corporations under authority of law, with bona fide creditors, who have lent their money to construct and equip the railroad, and taken security by mortgage thereon. Any law of a state which takes away property.relied on by creditors when they loaned their money, or the security on which they gave credit, or which seriously impairs the remedy which such creditors have had, impairs the obligation of their contracts. This has been repeatedly decided by the Supreme Court of the United States, in a series of cases. This railroad mortgaged all its property under an authority conferred upon it by law so to do, to secure the payment of its bonds; and a law of the state, enforced by sufficient penalties, which compels the railroad corporation so to employ the property, thus mortgaged to the bondholders, that it becomes useless, not merely to the corporation itself but also to the bondholders, deprives them of security which lawfully belongs to them, and impairs the obligation of their contracts. When they took these mortgages, they had a right to presume, and unquestionably did presume, that the property mortgaged would be employed by the railway corporation for reasonable rates of compensation in transacting their business.

"This just and reasonable expectation cannot, in my opinion, be disappointed, and the rights acquired by the mortgagees be disregarded, through an act of the legislature in effect commanding the road to transact its business on such terms that the bondholders cannot possibly receive any part either of the interest or principal of their bonds.

"And I wish to say, in this connection, though it has relations to some other positions in this opinion, that this power to prescribe prices of commodities and service for the future does not exist at all, or it is unlimited. And if the fact above stated, that business transacted by the railway corporation, at the rates prescribed by this act, would certainly no more than pay the expenses of transacting the business, should be controverted or denied, such denial would not be sufficient to support this law; ecause, as already stated, if the rates prescribed would leave some profit to the railroad, it is in the power of the legislature still further to reduce those rates, and compel the railway corporation to conduct its business at a loss; and, indeed, this very law, by its 13th section, undertakes to authorize the railroad commissioners, who are to be appointed under it, to use their discretion to reduce the rates mentioned in the act, and makes that act of discretion final and conclusive."

1 Brownson v. Kinzie, 1 How. 311; McCracken v. Hayward, 2 How. 608; Curran v. Arkansas, 15 How. 305; Hawthorne v. Calef, 2 Wall. 10; Tomlinson v. Jesup, 15 Wall. 454.