Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/141

 PART I.] CONSTRUCTION OF CORPORATE POWERS. [§ 153. it may enjoin another company, possessing no adequate and constitutional authority, from building a road between the same points. 1 Likewise, where a street railway company has the right that no other parallel railway shall be built within three blocks, it may enjoin an invasion of its rights without further proof of damage than that its right is invaded. 2 0^o?*r-< YY^lf^ § 153. The second reason why a person, although affected by / % no estoppel, may not collaterally question the validity of cor- - porate franchises lies in the great hardship to which corpora- ^*=- tions would be subject if they could be forced in any proceeding, in order to enforce their rights, to prove the absolute legal reg- ularity of their organization. And thus it is, that only in a direct proceeding brought in proper form to test the validity of its franchises, or in a proceeding where the corporation is itself seeking to exercise a special franchise, which the other party denies to exist, or which the corporation is entitled to exercise only by virtue of its regular and complete organization, can the corporation be compelled to prove anything more than a de facto organization. Mackall v. Chesapeake, etc., Canal Co. 3 is an instructive case in point. There the property of the canal company, by its charter exempted from taxation, had been sold under a tax sale, and the purchaser, to sustain the valid ity of the sale, pleaded that the company had forfeited its privileges. But the court held, that the question of the company's forfeiture of its right to hold, free from taxation, property no longer in use for canal purposes, could be judicially determined only in a direct pro- ceeding by the public authorities, and could not be made an is- sue for the first time in the trial of a question of private right between the company and a purchaser under a tax sale. 4 T. Co. v. Vermont Central R. R. Co., 21 Vt. 590; Thorpe v. Rutland & B. R. R. Co., 27 Vt. 140, 152. See §453. 1 Raritan & D. B. R. R. Co. o. Del- aware, etc., Canal Co., 18 N. J. Eq. 546; Boston & L. R. R. Co. v. Salem, etc., R. R. Co., 2 Gray (Mass.), 1; Pontchartrain R. R. Co. v. New Or- leans, etc., R. R. Co., 11 La. Ann. 253. 2 St. Louis R. R. Co. v. Northwest- ern St. L. R'y Co., 69 Mo. 65. Such exclusive franchises are, of course, to be construed strictly against the grantee; see Louisville & P. R. R. Co. v. Louisville City R'y Co., 2 Duv. (Ky. ) 175, and §453; and may be taken by eminent domain. See §470. 3 94 U. S. 308. 4 See, also, Toledo & Ann Arbor R. R. Co. v. Johnson, 49 Mich. 148; Osborne v. People, 103 111. 224; New 121