Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/290

 § 307. J THE LAW OF PRIVATE CORPORATIONS. [CHAP. VII. public duties to discharge, like other corporations, have un- doubtedly all powers and capacities necessary or incidental to the accomplishment of the objects of their incorporation and the successful carrying out of their business. § 30G. That such corporations can do no act which does or may disable them from serving the public as it was Other acts intended they should serve it, and that, therefore, they cannot without special authority transfer or mortgage their franchises, or the property which is necessary to enable them to use their franchises, seems settled. But in regard to many contracts and arrangements made by railroad companies, the rights of the public are to be considered ; and, while the vague statement may be made, that if any such contract in- fringes the rights of the public it will be void as against public policy, every one knows that public rights and public policy are not easily ascertainable; and just what view a court will take of any given contract, counsel may find difficult to prog- nosticate. § 307. The various traffic and business arrangements of rail- roads may now be considered ; but, beforehand, a Traffic arrange- general rule may be submitted that seems fairly de- ducible from the decisions and sound as far as it goes. A business or traffic arrangement or contract entered into by a railroad or other corporation charged with the performance of public duties, which is fairly necessary, incidental, or ancillary to the carrying out of its purposes of incorporation, will be valid (assuming the contract to be entered into in the proper manner), provided the contract is not injurious to the public (1) by necessarily or potentially rendering the corporation incapable of performing its public duties or enabling it to shirk its public obligations, or (2) by creating a monopoly in the contracting parties, through the stifling of competition or in other ways, not at that time legal, but which the passing of an expected statute would render legal; and both parties must have understood that, if the sanction of the legislature should be withheld, the contract would not go into effect. The contract does not import that plaintiffs bound themselves to con- 270 struct the road at all events and with- out legislative authority." New Haven and Northampton Co. v. Hay- den, 107 Mass. 522. See, also, Super- visors v. Wisconsin Central R. R., 121 Mass. 460; and compare Burbank v. Jefferson City Gas Light Co., 35 La. Ann. 444. See § 162 a.