track from Council Bluffs to South Omaha, this track crossing the Mis souri river on the Pacific's bridge; the building by the Rock Island of a road from South Omaha to Lincoln; and the giving by the Pacific of the use of its track from Lincoln to Beatrice. The Rock Island proceeded to construct a road from South Omaha to Lincoln, and about the 1st of January of this year sought to use the Pacific's tracks between Council Bluffs and South Omaha, and Lincoln and Beatrice, which use was denied by the Pacific. Thereupon this bill was filed in the district court of Douglas county, Neb., to compel specific performance of the contract. A preliminary injunction was granted by the district court, though no posses sion was ever in fact taken or use made of these lines by the Rock Isl. and. Immediately thereafter the Pacific removed the case to this court. In due course of time, the pleadings were completed, the proofs taken, and the case is now before us for final determination.

Four questions have been presented, and argued with distinguished ability. They are-First, was the instrument, as thus signed and attested, so authorized and executed as to become and be a contract of the corporations? Second, if it was so authorized and executed, was it ultra vires? Third, if not ultra vires, is it a contract of which a court of equity may compel specific performance? And, fourth, if it may, ought specific performance to be decreed?

With regard to the first question, that the contract was signed by the proper executive officers, and that the formalities of execution were sufficient, is not disputed; and, if it was one of those minor contracts which fall within the scope of the ordinary powers of chief executive officers, no question could arise as to its being a contract of the corporations. But it is not such a contract. It is one of vast moment, running for 999 years, and affecting largely the financial interests, business, and policy of the corporations. It so changes the sweep of the future that no mere executive officer, of his own volition and by virtue of the ordinary powers of his office, could commit the corporation thereto. But authority beyond that of the executive officers is not wanting. After the contract had been drafted, and on the 22d day of April, 1890, it was submitted to the executive committee of the Union Pacific Railway Company,—and of that company's relation to the contract I first speak,-and unanimously approved by all the members of that committee then present. The committee consists of seven, and six of the seven were present. Thereafter, and on the 30th day of the same month, the regular annual meeting of the stockholders was held, at which over two-thirds of the capital stock · of the company was represented, to-wit, 437,376 shares; and at such meeting this resolution was unanimously adopted:

"Resolved, that the agreement between the Union Pacific Railway Company, the Omaha & Republican Valley Railway Company, the Salina & Southwestern Railway Company, the Chicago, Rock Island & Pacific Railway Company, and the Chicago, Kansas & Nebraska Railway Company, dated May 1, 1890, (a copy of which is herewith submitted,) granting to the two lastnamed companies trackage rights over this company's lines from Council Bluffs to Omaha, including the Omaha bridge, and the lines of this company's Omaha & Republican Valley branch, from Lincoln to Beatrice, Neb., and prov.47 F.no.1-2

viding, further, for the use by this company of the Chicago, Kansas & Ne braska Railway Company's lines between McPherson and South Hutchinson, Kan., and the line from South Omaha to Lincoln, Neb., on the terms therein provided for, be, and is hereby, approved, and the action of the executive committee in authorizing the execution thereof is hereby ratified, approved, and confirmed."

-And at the same meeting this resolution was adopted:

"Voted unanimously that the stockholders hereby approve and confirm and ratify all the actions of their board of directors and the executive committee during the past year."

While the contract was never forinally presented to the board of directors, and by such board authorized or approved, yet, immediately after the annual election of directors, in 1889, the board met, and, after appointing the executive committee, it "voted that, while the board of directors is not in session, the full power thereof, under the charter and by-laws of the company, be, and hereby is, conferred upon the executive committee;" and this resolution was but a repetition of those passed by the boards of directors in the 10 preceding years. This delegation of power was by virtue of article 4 of the by-laws of the company, which reads:

"The board of directors shall have the whole charge and management of the property and effects of the company, and they may delegate power to the executive committee to do any and all acts which the board is authorized to do, except such acts as by law, or these by-laws, must be done by the board itself."

In the original charter of the Union Pacific Railway Company, (12 St. 489, § 1,) the power to make by-laws was granted by this sentence:

"Said company, at any regular meeting of the stockholders called for that purpose, shall have power to make by-laws, rules, and regulations as they shall deem needful and proper, touching the disposition of the stock, property, estate, and effects of the company, not inconsistent herewith, the transfer of shares, the term of office, duties, and conduct of their officers and servants, and all matters whatsoever which may appertain to the concern of said company."

It is clear from these quotations from the records of the company that, so far as the executive committee and the stockholders could by their approval bind the corporation to this contract, they did so. As against this, it is contended that, as the board of directors did not formally act upon, either to authorize or approve the contract, the corporation never became bound, because power in respect to such matters is lodged solely in the board of directors; and, secondly, that if this be not true, and the stockholders are vested with power in respect thereto, the vote of the stockholders at the annual meeting was not sufficient, because in the call for such meeting no mention was made of this proposed contract; and the minority of the stockholders, who were not present, were thus given no opportunity to consider it, and never joined in the approval. Neither

of these propositions can be sustained. By the original Union Pacific act, there was created "a body corporate and politic, in deed and in law;" which corporation was "authorized and empowered to lay out, locate, construct, furnish, maintain, and enjoy a continuous railroad and telegraph," etc.; and was also "vested with all the powers, privileges, and immunities necessary to carry into effect the purposes of this act, as herein set forth." By this act, therefore, was created a corporation, with all the powers incident to corporate existence. One of those incidents is that the ownership of the corporate property is vested in the stockholders, and with them rests also the absolute and ultimate power. In the Dartmouth College Case, 4 Wheat. 518, Judge STORY, speaking of an aggregate corporation, says, (page 667:) "Among other things, it possesses the capacity of perpetual succession, and of acting by the collected vote or will of its component members." It is true that the act provides that there shall be certain directors appointed by the government. This provision was inserted doubtless because of the fact that the government, as second mortgagee and a bountiful donor to the company, was largely interested. It is also true that subsequent legislation (13 St. 361, § 13) provides that at least one government director shall be a member of each standing committee. But there is nothing in the original act, or any subsequent legislation, giving to them either veto or controlling power; and from some of the reports which have been made in times past, by these government directors to the government, as well as from some of the developments in this case, it would seem as though they were too often regarded as merely convenient and useful ornaments. While doubtless congress could have vested either in the board of directors as such, or in these government directors, absolute and exclusive control in matters like this, yet it did not. Not only did it, as appears from the provisions heretofore quoted, give to the stockholders control over "all matters whatsoever which may appertain to the concern of said company," but also its express grant of powers to the directors is by the same section limited to the election and appointment of officers and agents, the location and construction of the road, and the matter of subscriptions. All other powers which the directors have are those which spring from the nature of their officers, or from special grants from the stockholders. In this, as in any other stock corporation, with the stockholders rests not only the ownership of the property, but the ultimate and absolute power and control. Much is said in the books about the ordinary and extraordinary powers of a corporation,-the one vested in the directors, the other in the stockholders or members. In 1 Beach, Priv. Corp. § 73, the rule as to the latter is thus stated:

"To the members is reserved also the right of applying to the legislature for amendments of their charter, and the power to accept or reject proposed amendments thereof, to alter the articles of association, to authorize an inerease or reduction of the capital stock, to sell or lease the corporate property, or modify the terms of an existing lease, to consolidate or merge the company with other corporations; and, in general, all extraordinary or unusual powers not conferred upon the directors, expressly or by necessary implication, are reserved to the members."

The

If this statement of law be correct, then this contract is one beyond the power of directors to make, and could be authorized only by the stockholders; for the making of such a contract is not among the matters expressly or by necessary implication granted by the charter to the directors. But I rest little on this distinction; for any act, although within the powers of a board of directors, when done by an executive officer, with the direction or approval of the stockholders, is binding on the corporation, although the directors have never directed or approved of it, unless by the terms of the charter exclusive power therefor is vested in the directors. Neither is there force in the other objection,-that the notice of this annual meeting did not specify these contracts. charter, in the same section heretofore quoted from, provides for annual meetings of the stockholders, for the transaction of business, "to be holden at such time and place, and upon such notice, as may be prescribed in the by-laws." Notice of time and place was given as prescribed by the by-laws, and the meeting was duly held. There is no by-law requiring special mention of the subjects to be considered at such meeting. Every stockholder, therefore, takes notice of the fact that all business which may be transacted by the stockholders is open for consideration and action at such meeting; and their powers at such a meeting are as vast and complete as the competencies of the corporation. Indeed, at the time the notice was given of this annual meeting, this contract was not prepared, and could not have been specified therein; and the fact that other matters were specified in the notice in no manner limited the powers of the stockholders at such meeting. State v. Bonnell, 35 Ohio St. 10; Warner v. Mower, 11 Vt. 385; 1 Beach, Priv. Corp. § 279; Sampson v. Steam-Mill Corp., 36 Me. 78; 1 Mor. Priv. Corp. § 482; Cook, Stocks, $595.

Summing up this question: The instrument was signed and attested by the proper officers. It was approved by the executive committee, which executive committee was granted ad interim by the board of di rectors all the powers of that board. Authority to make such a delegation of power was given to the board by the by-laws. Power to make such by-laws was bestowed by the act of incorporation upon the stockholders. At the regular meeting the contract was approved by all the stockholders present, being two-thirds of the entire number. Under these circumstances, if the contract was one which the corporation could make, it was fully authorized and duly executed, and binding.

So I pass to the second question: Is the contract one which the corporation could make, or is it ultra vires? The doctrine of ultra vires has been thoroughly sifted within the last 30 years,-its extent and limitations clearly defined. Thomas v. Railroad Co., 101 U. S. 71; Branch v. Jesup, 106 U. S. 468, 1 Sup. Ct. Rep. 495; Pennsylvania R. Co. v. St. Louis, A. & T. H. R. Co., 118 U. S. 290, 6 Sup. Ct. Rep. 1094; Oregon Ry. & Nav. Co. v. Oregonian Ry. Co., 130 U. S. 1, 9 Sup. Ct. Rep. 409; Central Transp. Co. v. Pullman's Palace Car Co., 139 U. S. 24, 11 Sup. Ct. Rep. 478. Two propositions are settled. One is that a contract by which a corporation disables itself from performing the func

tions and duties undertaken and imposed by its charter is, unless the state which created it consents, ultra vires. A charter not only grants rights, it also imposes duties. An acceptance of those rights is an assumption of those duties. As it is a contract which binds the state not to interfere with those rights, so, likewise, it is one which binds the corporation not to abandon the discharge of those duties. It is not like a deed or patent, which vests in the grantee or patentee, not only title, but full power of alienation; but it is more,—it is a contract whose obligations neither party, state or corporation, can, without the consent of the other, abandon. The other is that the powers of a corporation are such, and such only, as its charter confers; and an act beyond the measure of those powers, as either expressly stated or fairly implied, is ultra vires. A corporation has no natural or inherent rights or capacities. Created by the state, it has such powers as the state has seen fit to give it,-"only this, and nothing more." And so, when it assumes to do that which it has not been empowered by the state to do, its assumption of power is vain; the act is a nullity; the contract is ultra vires. These two propositions embrace the whole doctrine of ultra vires. They are its alpha and omega. To determine the applicability of these propositions to the contract, we must notice its features a little more in detail. It is too long to quote in full, but the first section of the first article is its kernel. It is as follows:

"The Pacific Company hereby lets the Rock Island Company into the full, equal, and joint possession and use of its main and passing tracks, now located and established, or which may be hereafter located and established, between the terminus of such tracks in the city of Council Bluffs, in the state ɔf Iowa, and a line drawn at a right angle across said tracks within one and one-half (1) miles southerly from the present passenger station of South Omaha, in the state of Nebraska, including the bridge on which said tracks extend across the Missouri river, between said cities of Council Bluffs and Omaha; connections with Union Depot tracks in Omaha, the side or spur track leading from the main tracks to the lower grade of the Pacific Company's sidings and spur tracks in Omaha, and such extensions thereof as may be hereafter made; side tracks in Omaha on which to receive from and deliver to the Rock Island Company freight that may be handled through the warehouses, or switched by the Pacific Company; the connections with the Union Stock-Yards tracks in South Omaha, and conveniently located grounds in South Omaha, on which the Rock Island Company may construct, maintain, and exclusively use a track or tracks, aggregating three thousand (3,000) feet in length, for the storage of cars and other purposes,-for the term of nine hundred and ninety-nine (999) years, commencing on the first day of May in the current year; for which possession and use the Rock Island Company covenants, promises, and agrees to pay to the order of the said Pacific Company, monthly, during the continuance of said term, the sum of three thousand seven hundred and fifty (3,750) dollars, with the proportion of the costs and expenses actually incurred during the month for which such payment is made, in maintaining, repairing, and supplying with water that portion of such main tracks jointly used and situated east of the east end of said bridge, and in the city of Council Bluffs, and in paying taxes and assessments legally laid and levied thereon, which proportion shall be to the aggregate of the amount so paid as the proportion of the number of wheels per mile operated during the same month by the Rock Island Company over said tracks, or any part