the professed traffic contract is, in fact, a lease, it is ultra vires, but where the contract is in the proper sense a traffic contract, then, as we believe, it may be effective.

§ 516 (453). Contracts granting right to use-Effect and construction of. It is held that an agreement between two railroad companies, conferring on each the right to run its cars over the tracks of the other, each retaining absolute control over its road for all other purposes, confers no interest which can be assigned or leased.69 It is obvious that such a contract cannot be regarded as a lease since there is nothing more than an agreement permitting one company to use the tracks of another, but it is difficult to determine just what the specific nature of the contract is and what are the rights of the parties. It is a contract for joint use, and the company owning the road does not fully part with possession or control, so that the rights and obligations of the parties are not the same as those of a lessor and lessee in an authorized lease. Some of the courts hold that an agreement by one railroad company that another, "and its assigns," may use one of its tracks on certain conditions, is a mere license and not a lease.70 We incline to the opinion that where there is a valid

tion was stated but not decided. The court, however, referred to the cases of Burke v. Concord &c. R. Co., 61 N. H. 160, and Boston &c. R. Co. v. Boston &c. R. Co., 65 N. H. 393, 23 Atl. 529. In the first of the cases cited the court held that the joint manager of two roads both operated by one company under a contract had no right to use the joint funds in improving the road of the operating company and that the other company might recover it in a proper action. In support of this ruling the court cited Slater Woolen Co. v. Lamb, 143 Mass. 420, 9 N. E. 823; Central &c. Co. v. Pullman's &c. Co., 139 U. S. 24, 11 Sup. Ct. 478, 35 L. ed. 55; Central Trust Co. v. Ohio &c. R. Co., 23 Fed. 306; Nims v. Mount Hermon &c., 160

Mass. 177, 35 N. E. 776, 22 L. R. A. 364, 39 Am. St. 467; L'Herbette v. Pittsfield &c. Bank, 162 Mass. 137, 38 N. E. 368, 44 Am. St. 354; Manchester &c. R. Co. v. Concord &c. R. Co., 66 N. H. 100, 20 Atl. 383, 9 L. R. A. 689, 49 Am. St. 582. See also Central Trust Co. v. Colorado &c. R. Co., 89 Fed. 560.

69 Brooklyn Crosstown R. Co. v. Brooklyn City R. Co., 51 Hun 600, 3 N. Y. S. 901.

70 Coney Island &c. R. Co. V. Brooklyn Cable Co., 53 Hun 169, 6 N. Y. S. 108. In a reported case the president of the plaintiff railroad company testified that the vice-president of the defendant railroad company promised that plaintiff should have, free of charge, full terminal

consideration for such an agreement it is not a mere revocable. license but is an enforceable contract. If there is a sufficient consideration for the agreement, we can see no reason why it should not be regarded as a contract in all that the term implies. If, however, there is no consideration the agreement may well be treated as a mere license. If there is nothing more than a license then there is reason for holding that the licensee cannot enjoy the privileges conferred by such agreement and at the same time confer the right to do so on other companies, since this would be to impose greater burdens on the licensor than the agreement contemplated.72 We do not believe that there can be an assignment, even if there be a contract, where the original company also retains the right to make use of the right or privilege granted it, for the grant implies that the right to exercise the privilege is only conferred upon the company to which it is granted. The

facilities at the junction of the two roads. A director of plaintiff testified that it was assumed, rather than expressly agreed, that plaintiff should have such terminal facilities. Several officers of plaintiff testified that they had heard of no claim that said agreement had been made until about twenty years after the organization of plaintiff, when it was deprived of such terminal facilities. It appeared that the plaintiff company had been operated by defendant for five years, and that on being reorganized, it consented that a charge should be made for the use of the terminal facilities; that at a subsequent reorganization a higher charge was paid for eighteen months; and that two years later the charge was increased, and one payment made under protest. No action was ever taken by the directors of either company upon the subject. It was held, in an action for damages for severing the connection

between the two companies, and depriving the plaintiff of such facilities, that the evidence justified a finding that the agreement was temporary and permissive only. Port Jervis &c. R. Co. v. New York &c. R. Co., 132 N. Y. 439, 30 N. E. 855. Where one railroad company has permission by parol to extend its track upon the right of way of another company for the purpose of making a connection, such permission is a mere license, and, although valuable improvements have been made, may be revoked at the will of the licensing company. Richmond &c. R. Co. v. Durham &c. R. Co., 104 N. Car. 658, 10 S. E. 659, 40 Am. & Eng. R. Cas. 488.

71 Louisville &c. R. Co. v. Kentucky &c. R. Co., 95 Ky. 550, 26 S. W. 532.

72 Coney Island &c. R. Co. V.' Brooklyn Cable Co., 53 Hun 169, 6 N. Y. S. 108.

parties may, of course, provide for an assignment by the stipulations of their contract.73

§ 517 (454). Part performance-Effect of.-Under the rule approved by the Supreme Court of the United States, the partial performance of a contract of lease, executed without legislative authority, confers no rights under the lease. Thus, where a void lease is made by a railroad company for a term of ninety-six years, at a certain yearly rental, the use of the road by the lessee and payment of the rental for three years does not make the contract so far an executed one as to estop the lessee to deny its validity.74 This doctrine results from the principle elsewhere considered that where the contract is, in a proper sense, ultra vires, no right can be founded on the contract itself. If the contract be absolutely void and not merely voidable, it cannot be made effective by the acts of the contracting parties.75

§ 518 (455). Duration of a lease.-Where there is no authority to sell, there is, as it seems to us, no right to execute a lease the practical effect of which is equivalent to a sale.76 This principle would prohibit a railroad company from leasing its road for such a length of time as would clearly deprive it of possession and use

73 As to assignments of leases, see, generally, Terre Haute &c. R. Co. v. Peoria &c. R. Co., 61 Ill. App. 405, 167 Ill. 296, 47 N. E. 573; Indianapolis Mfg. &c. Union v. Cleveland &c. R. Co., 45 Ind. 281; St. Joseph &c. R. Co. v. St. Louis &c. R. Co., 135 Mo. 173, 36 S. W. 602, 33 L. R. A. 607; Boston &c. R. Co. v. Boston &c. R. Co., 65 N. H. 393, 23 Atl. 529; Frank v. New York &c. R. Co., 122 N. Y. 197, 25 N. E. 332.

74 Oregon R. & Nav. Co. v. Oregonian R. Co., 130 U. S. 1, 9 Sup. Ct. 409, 32 L. ed. 837; Oregon R. &c. Co. v. Oregonian R. Co., 145 U. S. 52, 12 Sup. Ct. 814, 36 L. ed. 620. See also East St. Louis &c. R. Co. v. Jarvis,

92 Fed. 735; Ogdensburgh &c. R. Co. v. Vermont &c. R. Co., 63 N. Y. 176. But see where authority was afterwards conferred and the lease recognized. Terre Haute &c. R. Co. v. Cox, 102 Fed. 825.

75 Ante, §§ 427, 438 and §§ 411-414. 76 St. Louis &c. R. Co. v. Terre Haute &c. R. Co., 145 U. S. 393, 12 Sup. Ct. 953, 36 L. ed. 738, and cases cited. But it has been held that a lease may be made for 999 years where there is authority to lease. Dickinson v. Consolidated Trac. Co., 119 Fed. 871; Wormser v. Metropolitan St. R. Co., 98 App. Div. 29, 90 N. Y. S. 714.

for a palpably unreasonable period. We do not believe that a transfer can be made which is in substance a sale, although in form a lease. Of course, where there is authority to sell, a sale may be made. It has been held in New York that a lease of its road by a railroad company for a longer term than the period of its corporate existence is not void, since the laws of that state provide for an extersion of the charter. There is, as it seems to us, reason for the conclusion that a railroad corporation cannot make a lease extending beyond its corporate life. One would think that in authorizing a lease the legislature had in mind the statute fixing the duration of corporate existence, and that it did not mean that any corporate act should be effective after corporate death. But there is also some reason for the other view, and as already shown, the courts seem inclined to adopt the view that such a lease is not void.78

§ 519 (456). Effect of lease on taxation.-Where the statute authorizes the execution of a lease and also provides that the leased road shall become the property of the lessee company, the road is assessable as the property of the lessee and not as the property of the lessor.79 It may well be doubted whether this

77 Gere v. New York &c. R. Co., 19 Abb. N. Cas. (N. Y.) 193. The fact that a lease by a railroad company was for 999 years, while the charter of the lessee would expire in about forty years, did not render it void, especially as the charter contained a provision that it might be renewed from time to time, and as the lease was expressly made binding upon the assigns and successors of the parties. Union Pac. R. Co. v. Chicago &c. R. Co., 51 Fed. 309, 10 U. S. App. 98, 163 U. S. 564, 599, 16 Sup. Ct. 1173, 41 L. ed. 265.

78 See also as to such leases and leases for a long term distinguished from a sale or consolidation. Union Pac. R. Co. v. Chicago &c. R. Co., 163 U. S. 564, 569, 16 Sup. Ct. 1173,

41 L. ed. 265; Sioux City &c Co. v. Trust Co., 82 Fed. 124; Chicago &c. R. Co. v. People, 153 Ill. 409, 38 N. E. 1075, 29 L. R. A. 69; Morrison v. St. Paul &c. R. Co., 63 Minn. 75, 65 N. W. 141, 30 L. R. A. 546; State v. Montana R. Co., 21 Mont. 221, 53 Pac. 623, 45 L. R. A. 271, and see generally Ackerman v. Cincinnati &c. R. Co., 143 Mich. 58, 106 N. W. 558; Lancaster County v. Lincoln Auditorium Assn., 87 Nebr. 87, 127 N. W. 226.

79 Huck v. Chicago &c. R. Co., 86 Ill. 352; Hagan v. Hardie, 8 Heisk. (Tenn.) 812. See generally Philadelphia &c. R. Co. v. Appeal Tax Court, 50 Md. 397; Appeal Tax Court v. Western &c. R. Co., 50 Md. 274. Such a contract is practically a con

result would follow where the lessor remains the owner and only transfers the road for a limited time. If the lessor remains the owner the principle which ordinarily prevails would require that taxes be assessed against it and not against its lessee. We suppose that where there is simply an authority to lease and no provision vesting the lessee with the ownership the property must be treated for the purpose of taxation as that of the lessor. Authority to execute a lease implies that the lessor retains the ownership of the demised property, but grants to the lessee use, possession and control for a designated term. A person, natural or artificial, who executes a lease, does not sell or convey the property, but simply transfers use, possession and control for the term designated in the lease. It is competent for the legislature in conferring authority to lease to prescribe the terms and conditions upon which the authority shall be exercised, and hence it may provide that the lessee company shall be treated as the owner or that it shall pay all taxes. In every authorized lease there are two estates, that of the lessor and that of the lessee, and where both are of value both may be assessed, but each estate must be assessed against its owner unless the statute otherwise provides. It is probably true that if under the form of a lease a sale is made, the company acquiring the property is liable to taxation as owner,81 but to have this effect the contract, although in form a lease, must be, in legal contemplation, a sale. Where the statute provides for a tax upon the earnings of the road the lessee company is, ordinarily, the party against which the assessment should be made.82 The earnings are part of the estate of

tract of sale, or rather, in its practical effect is equivalent to a sale in cases where the term is one of great length; while nominally a lease it is practically a sale in its effects and consequences. Where the contract is for a short term it is a lease rather than a sale, but if for a great number of years it would be substantially a sale of the property. Pennsylvania R. Co. v. St. Louis &c. R. Co., 118 U. S. 290, 6 Sup. Ct. 1094, 30 L. ed. 83.

80 See to the effect that the lessor must pay the franchise tax. Central of Georgia R. Co. v. Wright, 206 Fed. 107; Chesapeake &c. R. Co. v. Louisville &c. R. Co., 154 Ky. 637, 157 S. W. 1107.

81 Commonwealth v. Nashville &c. R. Co., 93 Ky. 430, 20 S. W. 383, 54 Am. & Eng. R. Cas. 254.

82 Vermont &c. R. Co. v. Vermont &c. R. Co., 63 Vt. 1, 21 Atl. 262, 731, 46 Am. & Eng. R. Cas. 646