Argument for Plaintiff in Error.

To the admission of all this evidence the defendant objected, "on the ground that it was beyond the power of either corporation to make the contract; and also because it was null and void by reason of its being in restraint of trade and against public policy as preventing competition." The court sustained the objection, and excluded the evidence; and the plaintiff excepted.

The plaintiff then offered to prove, in addition to the above evidence, that in pursuance of the indenture of February 17, 1870, the plaintiff's cars, contracts and patent rights were delivered to the defendant, and continued in its possession under the indenture, and the defendant insisted on retaining them, until July 1, 1886, and the defendant then for the first time tendered them to the plaintiff and declared the indenture void, in accordance with its provisions. The defendant objected to this evidence; the court sustained the objection, and excluded the evidence; and the plaintiff excepted.

The defendant thereupon moved for a nonsuit, and the court granted the motion, and ordered a nonsuit, and refused a motion of the plaintiff to take it off; and the plaintiff again excepted. A judgment of nonsuit was entered accordingly; and the plaintiff tendered a bill of exceptions, which was allowed by the court, and sued out this writ of error.

Mr. John G. Johnson for plaintiff in error.

I. This contract was not ultra vires.

This case differs from Thomas v. Railroad Company, 101 U. S. 71; Pennsylvania Railroad Co. v. St. Louis, Alton &c. Railroad Co., 118 U. S. 290, 307; and Oregon Railway Co. v. Oregonian Railway Co., 130 U. S. 1, in that no privilege was conferred upon the Central Transportation Company, which required the performance of some duty as an equivalent. It never became a trustee for the public to discharge a duty because of a privilege conferred. It was vested with a franchise to be a corporation, to use a seal, and to act without its members becoming individually liable, saving to a certain extent, for its debts. It was permitted to do nothing which could not be done by an individual. Its sole power

Argument for Plaintiff in Error.

was to manufacture cars under specified patents. It was in precisely the same position as that of a limited liability company, which is only permitted to do what may be done by individuals; which is not a corporation; but which, under the laws of Pennsylvania, may use a common seal, and may act without its members being liable for its debts.

It does not require an act of Assembly to permit a railroad corporation to sell such of its real and personal property as is not necessary for the exercise of its franchises. None of the property acquired by a manufacturing company is necessary to the exercise of its power to manufacture; because it may locate other property at any point which may please it, and may there carry on its business. A railroad corporation, however, is only authorized to locate a road between certain termini. After it has located the same, its power further to locate is at an end. Its right of way, therefore, becomes absolutely necessary to the continuance of its railroad. There is, therefore, a very obvious reason for requiring that such property, so necessary to the exercise of the quasi public franchise, shall not be disposed of. There is no such reason in the case of a manufacturing corporation, which may build, or buy, as many mills as it may see fit.

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The Central Transportation Company, though called a transportation company," was, as we have said, a manufacturing corporation, with no right to transport, saving as the same resulted from its right to use the cars which it might manufacture. In selling or leasing such cars it exercised a right of ownership incidental to its right to manufacture, as much as was that to transport, and it violated no duty to the public such as it would have owed to it if it had acquired property under the right of eminent domain, or had been vested with a power to do some act for the public benefit, by legislative grant, which it was not competent for individuals to perform.

At the time of the lease the whole capital of the company had been invested in its cars, its patents and its contracts. Even if it was under an obligation to the State to manufacture, it had performed it by investing in such operation its

Argument for Plaintiff in Error.

whole authorized capital. It was at liberty, after it had done this to sell the property, and it was under no obligation to reinvest the proceeds in further manufacturing.

Of

Even if it had sold all its cars and patents, and had refused to manufacture other cars, and even if such refusal would have been cause for a forfeiture, it was only competent for the Commonwealth, by writ of quo warranto, to work such forfeiture. It is not open to any person other than the Commonwealth, to complain that a private corporation deserves a writ of ouster because of its non-exercise of its franchises. course, the case is different with a quasi public corporation; for there the public have a right to demand that the property which it has acquired under the right of eminent domain, shall be used for the benefit of those whose rights alone justified its grant. This right the court will make efficacious whenever a person in interest asks it so to do.

The distinction between quasi public, and ordinary trading corporations, is one that is much more than hinted at in Thomas v. Railroad Company, supra, and is very clearly stated in the text-books, and in many of the cases. Taylor on Private Corporations, §§ 131, 132; Morawetz on Corporations, SS 1025, 1129; Ardesco Oil Co. v. North American Mining Co., 66 Penn. St. 375, 381.

Further, the lease was not ultra vires in view of the act of February, 1870. This act antedates the lease by but a few days, and we may fairly infer that it was passed to set at rest any doubt which might possibly be raised as to the validity of what must then have been under contemplation. The lease, made within a few days after the passage of this act, has continued to be acted upon, without question as to its validity, for sixteen years. By virtue of this lease the Pullman Company has possessed itself of all the property and business of the plaintiff. If the decision of the court below is sustained, it will retain everything that is valuable, and which it could never have acquired but for this lease, and will be obliged to return nothing but worthless cars.

It was thought by the court below that the legislature could not have intended to permit this lease to be made, because it

Argument for Plaintiff in Error.

extended the charter of the company for ninety-nine years, and permitted the capital to be increased. It was necessary to extend the charter, which would expire in some twelve years, in order that the corporation might make a lease of longer duration than would otherwise have been possible. The extension of the charter was even more necessary than was the giving of the power to lease and transfer. We can hardly suppose that the authority to increase the capital was conferred because the legislature intended to put upon the company the duty of manufacturing more cars. In point of fact, the capital stock was increased to permit the issue of a stock dividend. Though there is no evidence of this before this court, it can conceive of many reasons why the capital was permitted to be increased without supposing that such permission was meant as a denial of the expressly-conferred right to lease and transfer.

By the act of February, 1870, the company is "empowered to enter into contracts with corporations of this or any other State for the leasing, or hiring and transfer to them, or any of them, of their railway cars and other personal property."

Under another act of the same legislature, passed eight days later, to wit, on the seventeenth day of February, 1870, Purdon's Dig. 1441, all the leases of railroads in Pennsylvania have been made. The language of its grant was "to lease or become lessees of any railroad." This is no broader than the power conferred upon the Central Transportation Company. For the construction of similar acts see Pennsylvania Railroad Company v. St. Louis, Alton &c. Railroad Co., 118 U. S. 290, 318; Willamette M'f'g Co. v. Bank of British Columbia, 119 U. S. 191.

It was not necessary to secure the passage of the act of February, 1870, to enable the plaintiff to hire its cars to railroad corporations. The right to use, or to hire to others to use, was incidental to that to manufacture. It had been hiring its cars to railroad corporations, as is evidenced by the contracts which it assigned to the Pullman Company, ever since it had been incorporated.

Argument for Plaintiff in Error.

The act of 1870 conferred power to lease or hire and transfer all the cars and personal property of the plaintiff. Is it possible to confer in clearer language a more unlimited power to lease? To lease not a part, but the whole, of the assets of the company. Can we doubt that this act authorized the corporation to change its position from that of owner and possessor of its entire property into that of a lessor entitled to receive from its lessee a rental?

We can hardly believe that the decision of this court in Railroad Co. v. Thomas would have been rendered if an act of the legislature of New Jersey could have been found, approximating in liberality to the acts empowering the Central Transportation Company.

II. It did not create a monopoly, which made it void.

The Legislature of Pennsylvania authorized a lease of all the plaintiff's property to a single corporation, and, if, therefore, such a lease did create a monopoly, it was one which was legal. We do not, however, mean to confine our discussion under this head to saying this, although, as we think, it is conclusive.

It can hardly be said that a corporation having a power to manufacture cars creates a monopoly by selling or leasing such cars to another corporation, especially in a State like Pennsylvania, where it is open to any set of five persons in the Commonwealth, to file articles of association, and to become clothed with the power to manufacture as many cars as they may see fit.

In Morrison v. Barclay Coal Company, 68 Penn. St. 173, corporations which controlled, practically, all the output of coal in a large region, entered into a contract to put up prices. This did create a monopoly. It was impossible, however, for the Central Transportation Company to monopolize the manufacture of cars.

An assignment by the Central Transportation Company of the property which it possessed in 1870, created a monopoly to no greater extent than results from any assignment of a like character by a corporation or an individual. A monopoly results from a contract between persons or corporations prac

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