ing to represent them; that the firms were turned into corporations pursuant to the requirements of the deed; that the shares of capital stock of all the corporations (including the four that have since come in) were, with a single exception, transferred to the trust board; that the trust board has issued and distributed the trust certificates, and that a dividend of two and one-half per cent. has actually been declared and paid upon such certificates. Where did the trust board obtain the money with which to make that dividend? Necessarily from each corporation, under the provision that the profits arising from the business of each corporation shall be paid over by it to the board hereby created. Such certainly is the fair implication from the fact of the receipt by the trust board of the necessary funds from the various corporations in connection with a deed purporting to be signed by their officers and containing this provision. Thus the corporations acted upon the deed and performed one of the most vital duties imposed upon them thereby. Further, it appears that all the capital stock of all the corporations was actually transferred to the trust board, not, as we have already seen, in severalty nor as tenants in common, but as joint tenants. That at once necessarily disqualified every director in every corporation, unless indeed a single share was reserved or transferred to each of such directors under the authority of the

clause of the trust deed to which we have referred. If that was done, and as these directors have contiuued to perform their ordinary functions, we must assume that it was done, then the deed again became an executed contract, and the directors held their offices or continued to perform their duties by the force of its provisions. Still further, we find a strong implication that mortgages were placed upon the property of some of the corporations, by corporate act, pursuant to the provisions of the deed. . . It really seems unnecessary to dwell further upon this subject. The accumulation of evidence points irresistibly to the complete practical identity of shareholders and corporations, and it is quite impossible to sever the acts of the persons solely interested in these corporations from that of the corporations themselves."

1 State v. Minnesota Thrasher Manuf. Co., (1859) 40 Minn. 213; State v. Merchants' Ins. &c. Co., 8 Humph. 235; Harris v. Mississippi Valley &c. R. Co., 51 Miss. 602; Commonwealth v. Franklin Ins. Co., 115 Mass. 278; Eastern Archipelago Co. v. Queen, 2 E. & B. (75 E. C. L. R.) 869; People v. Bristol & Rensselaerville R. Co., 23 Wend. 222; Chesapeake & Ohio Canal Co. v. Baltimore & Ohio R. Co., (1832) 4 G. & J. 1, 107, where non-user of the franchise of eminent domain to condemn lands for the construction of canals, during a period of some forty

years, was held not to be under the circumstances a proper ground of forfeiting the franchise, the court saying, "Nor is it every non-user, that will furnish a sufficient ground for a judgment of forfeiture;" Board of Commissioners Fred. Female Seminary v. State, 9 Gill, 379; State v. Commercial Bank, 28 Pa. St. 383. See "Forfeiture of Corporate Franchises," (1866) 5 Am. L. Reg. N. S. 577, 581, 585. Thus the mere fact that the trustees of a mutual benefit association illegally voted themselves back pay and issued unauthorized certificates of membership, was not held sufficient ground for ousting the association of its franchise. State v. People's Mut. Benefit Assoc., (1885) 42 Ohio St. 579, Follett, J., dissenting. So where a corporation is charged with taking up with its own stock the stock and indebtedness of an insolvent company at fictitious values, and with the unlawful purchase and retirement of part of its own stock, as the unauthorized acts affect merely stockholders and creditors who have an adequate legal remedy the State will not interfere. State v. Minnesota Thrasher Manuf. Co., (1889) 40 Minn. 213. In another case a petition for the dissolution of a corporation stated that one-half of

the shares of the corporate stock was owned by the petitioners; that the parties differed concerning the management of the corporate affairs; and that the petitioners were convinced that if the methods and plans advocated by other parties in relation to the management of the corporation were carried out, the result would be its financial ruin. What the methods and plans were the petition did not state; neither was it shown that, on account of disagreement, or for any other reason, a dissolution of the corporation would be beneficial to the interests of the corporation. It was held that the petition was insufficient. In re Pyrolusite Manganese Co., 29 Hun, 429; 2 Waterman on Corporations, 899.

1 E. g., as in Hartford v. Boston, H. & E. R. Co., 40 Conn. 524; Washington & B. Turnpike Co. v. State, 3 Wall. 210.

2 Brandon Iron Co. v. Gleason, 24 Vt. 288; People v. Northern R. Co., 53 Barb. 98. Upon the question of user of franchise under a charter of incorporation, it was held error to charge that the acceptance of a deed, and subsequently of a deed of confirmation, from the grantor's devisee, was not enough to prove user; and that the question should have

2

been left to the jury. Augusta Manuf. Co. v. Vertrees, (1882) 4 Lea, 75.

1 People v. North River Sugar Refining Co., (1890) 121 N. Y. 582; s. c. 8 Ry. & Corp. L. J. 22, per Finch, J., who continued, "The Code of Civil Procedure authorizes an action for that purpose when the corporation has 'violated any provision of law whereby it has forfeited its charter or become liable to be dissolved by the abuse of its powers.' In Thompson v. The People, 23 Wend. 583, the ground of forfeiture was tersely described as some 'misdemeanor in the trust injurious to the public,' and as recently as the case of Leslie v. Lorillard, 110 N. Y. 531, we said, ⚫ in the granting of charters the legislature is presumed to have had in view the public interest; and public policy is concerned in the restriction of corporations within chartered limits; and a departure therefrom is only deemed excusable when it cannot result in prejudice to the public.""

22 Waterman on Corporations, 903; Harris v. Mississippi Valley &c. R. Co., 51 Miss. 602; State v. Com

mercial Bank, 28 Pa. St. 383; Commonwealth v. Allegheny Bridge Co., 20 Pa. St. 185; People v. Jackson &c. P. R. Co., 9 Mich. 285. The right to improve and extend the navigation of a river is a franchise, the manner of doing it being the mode of exercising the franchise. If there are various alternative modes authorized by the charter, subject each of them to be changed at the will of the corporation, no experimental trial of one of the modes will work a forfeiture of the right to resort to the others. So long as the charter remains in force the very employment of some one of the authorized modes of improvement is a practical exercise of the franchise. Chesapeake & Ohio Canal Co. v. Baltimore &c. R. Co., (1832) 4 Gill & Johns. 1, 106, 107; 2 Waterman on Corporations, 899.

3 Commercial Bank v. State, 6 Sm. & M. 599.

4 Commonwealth v. Pittsburgh &c. R. Co., 58 Pa. St. 26.

5 Note to Ottaquechee Woolen Co. v. Newton, (Vt. 1885) by H. C. Black, 21 Cent. L. J. 432, 435.

the acceptance of United States bonds by the State treasurer, in lieu of a deposit of $200,000 required by the charter of the canal company to be made with him before beginning to construct, was held to be a waiver of any ground of complaint on the score of the deposit not being in money; Rice v. National Bank, 126 Mass. 300; Folger v. Columbian Ins. Co., 99 Mass. 267, 274; Commonwealth v. Union Ins. Co., 5 Mass. 230; Boston Glass Manuf. Co. v. Langdon, 24 Pick. 49; Heard v. Talbot, 7 Gray, 113; Beach on Railways, 591. In People v. Ottawa Hydraulic Co., (1886) 115 Ill. 281, it was held that the legislature, by recognizing the existence of a corporation which had been doing a different business than that authorized by the general law under which it was originally incorporated, and by enlarging its powers, may waive the State's right to seek a forfeiture. The acceptance by the legislature of accounts which corporations are required by statute to submit, or acts authorizing railway or turnpike companies to effect a change of route, are examples of such subsequent recognition as will be deemed a waiver of a ground of forfeiture. State v. Fourth N. H. Turnpike Co., 15 N. H. 162; People v. Fishkill P. R. Co., 27 Barb. 460; Central Crosstown R. Co. v. Twenty-Third St. R. Co., 54 How. Pr. 168; In re N. Y. Elevated R. Co., 70 N. Y. 327; In re Mechanics' Soc., 31 La. Ann. 627; White's Creek Turnpike Co. v. Davidson, 3 Tenn. Ch. 396; La Grange &c. R. Co. v. Rainey, 7 Coldwell, (Tenn.)

420. The declaration of the legislature that, if the holders of a franchise to collect tolls for the navigation of an artificial channel shall permit the channel to become so obstructed as to impede navigation, "the collection of tolls by them shall be suspended until all obstructions shall be removed or said channel deepened to the depth heretofore specified," amounts to a waiver of the right to have a forfeiture of the franchise declared for such cause. Particularly where the obstruction is only temporary, and not serious, and where a municipal corporation is the real owner of the privilege, and the persons holding the franchise, and who were responsible for the obstruction, have no other means of payment of their claim for opening the channel. State v. Morris, 73 Tex. 435.

In People v. Oakland County Bank, 1 Dougl. (Mich.) 282, where the charter of the defendant provided that unless a certain sum therein named was paid in within two years, the act of incorporation should be void, it was held that it would be unreasonable and unjust, seven years after granting the charter, to oust the corporation from its franchises for this reason, even if there was evidence of the non-payment of the sum pursuant to the requirement. In an Indiana case an incorporated turnpike company in good faith attempted to consolidate with another one. Twelve years afterwards the consolidation was declared void. The company then resumed possession of its property,