We are all agreed that the obligors in the collateral bond were improperly made parties defendant, and that the bill, as to them, must be dismissed with costs against the complainants.
It is admitted that, but for the statute — Comp. L. §3567 — they could not be joined in a foreclosure bill upon this mortgage. We do not think the statute can be fairly construed as extending to an undertaking like the present, which is not for the payment of the debt or any part of it, but entirely collateral — that the company should (among other collateral matters) provide a sinking fund equal to eight per cent, per year of the sum loaned, to be invested *163by the trustees in bonds of tbe company or in certain specified stocks. The obligation of the makers of this bond would be discharged the moment the bonds or stocks were paid over into the sinking fund; yet the debt might remain entirely unpaid. Should the stock be lost or stolen, or become depreciated, this would not affect them. Their undertaking was purely collateral, and to be enforced by suit at law.
It is objected that the bill cannot be maintained against the company, for the following reasons:
I. That the company had not the right, under the general powers contained in its charter, and without a special provision of statute to that effect, to mortgage its road and franchises; its powers being conferred for a public purpose, which might be defeated by sale under a mortgage; and that the mortgage cannot, therefore, be maintained without the aid of the special act of 1851.
II. That it cannot be sustained under the act of 1851: because, 1st. The act conflicts with section 23 of article IV. of the Constitution, which prohibits the Legislature from authorising “by private or special law, the sale or conveyance of any real estate belonging to any person.” 2nd. Because the act was never duly accepted by the corn» pany. 3rd. If the act be constitutional, and its acceptance sufficient, it will not sustain the mortgage in this case; because the act only authorized a mortgage “ of the road or other property of said company;” which, it is insisted, must mean the entire road authorized by the charter to be 'Constructed, while that covered by the mortgage is only a part of the road so authorized; and if the act authorizes a mortgage of the franchise of the company at all, then it must be for the whole franchise, because it is in its nature indivisible. We will consider these objections in their order.
I. Can this mortgage be sustained and enforced to any, and if so, to what, extent, without the aid of the special act of 1851 ?
*164On the argument "of this cause, this question, so far as it relates to the franchises of the coloration, was treated as if all the rights and powers conferred by the charter constituted but one entire franchise, which in its nature must be indivisible, no part of which could be assigned or mortgaged without the whole. I do not think this the true view of the subject. But all the several rights and powers conferred by the charter, may, I think, be treated as so many different franchises, some of which are essentialj to the existence of the corporation, while others are not. Those which are essentially ^ corporate franchises, without which the corporation could not exist, and which are, in their nature, incapable of being vested in, or enjoyed by, a natural person- — -such as the right or franchise of being a corporation, of having corporate succession, &c.— cannot be made the subject of sale or transfer, without a positive provision of statute, giving the^ authority and pointing out some mode in which such transfer may be effected: as this would be allowing the corporation “to transfer its corporate existence into another body”— to create a new corporation, which is an act of the sovereign power only to be performed by the Legislature-The franchise, also, of taking private property for the use of a road, though not perhajjs necessarily a corporate right, yet being an exercise of the right of eminent domain, and to be exercised only by the officers, and in the manner specified in the charter, may also require positive legislative authority for its transfer. — See Pierce on Railr. 516, 517 & 518. — See also Opinion of Judge Curtis, in Hall v. Sullivan R. R. Co., given at length in a note to the same work, p. 520, et. seq., and in Redf. on Railw. p. 578, et seq. “But” (says J. Curtis in the case' last cited) “the franchises to build, own and manage a railroad, and to take tolls thereon, are not necessarily corporate rights: they are capable of existing and being enjoyed by natural persons, and there is nothing in their nature *165inconsistent with their being assignable. — See Redf. on Railw. pp. 573 to 589, where this whole subject is discussed.
As a general rule, corporations may, I think, be said to have an incidental power to dispose of their property, real and personal, either by sale absolute, or by mortgage or other mode of security, for any debt which they may rightfully contract, to the same extent as natural persons, except so far as that power may be restrained by their charter, by considerations connected with the purposes of their creation, or limited by express provision or just implication of some statute, or by the general policy of the State to be deduced from its legislation. — A. & A. on Corp. §§187, 191; Pierce on Railr. 513, 514, and cases cited; 2 Kent, 281; Barry v. Merch. Exch. Co., 1 Sandf. Ch. 280.
Certain franchises — such (among others) as that of keeping a fair, a market, or a ferry, and taking tolls — have generally been recognized as property, and when vested in individuals, at least, proper subjects of transfer and mortgage. — Com. Dig. Title “ Grant, C.; ” Powell on Mort. 17 (b); Coote on Mort. 101; Hilliard on Mort. Ch. 1, §4; Pierce on Railr. 518, note 2, and cases cited. The franchise of maintaining a plank road and taking tolls is not necessarily a corporate franchise, more than that of a ferry. And it is difficult to discover any substantial reason why one should be held a proper subject of sale and mortgage and not the other. If public confidence is reposed in a plank road corporation, and there is an implied obligation on its part to afford the proposed • public accommodation, these considerations .would seem to apply with equal force to the legislative grantee of a ferry franchise: and if a transfer by mortgage of the franchise of taking tolls is to be prohibited in the one case, lest it might disable the original grantees from performing their duties to the public, it is difficult to see why the same consi*166derations do not equally apply to the other; and if a purchaser or assignee may perform those duties in the one case, why not in the other. — Bowman v. Wathen, 2 McLean, 376; and see Felton v. Deall, 22 Vt. 170; Trustees of Maysville v. Boon; 2 J. J. Marsh, 224; Phillips v. Bloomington, 1 Green (Iowa) 498 ; McCawley v. Given, 1 Dana, 261; Biggs v. Ferrell, 12 Ired. 1. The reasons against allowing such a transfer in the case of a railroad corporation would be stronger than in the case of a plank road, as more special guards are required for the protection of the public interest.
In Enders v. Board of Public Works, 1 Graft. 364, a dock company, whose charter declared the dock to be a public highway, was held to have the power to mortgage its dock, though the power was contested as conflicting with its duties to the public: and see Central Bridge Corp. v. Bailey, 8 Cush. 319. In Allen v. Montgomery Railr. Co. 11 Ala. 437, it was held that, upon general principles, a railroad company had the power to mortgage its property in such a manner as to transfer the beneficial use of its franchise for the benefit of creditors, and that a special power for that purpose in the charter did not abridge the general power; and see Mobile & Cedar Point Railway v. Talman, 15 Ala. 472.
“ The proposition” (says Mr. Pierce, in his able work on Railroads, p. 516), “that a corporation cannot perform acts as to its property which will disable it from performing its public duty, if admitted at all,, must be confined to a very limited operation; so limited as to make the proposition itself doubtful;” and he gives some pertinent reasons for this view; yet there are, doubtless, . many species of corporations as to which such considerations should be allowed to limit, if not to prohibit, the power of such transfer. But there are many cases where the public object for which the charter was granted would be promoted rather han orejudiced by a mortgage. The corporators or *167stockholders may not have the pecuniary ability to achieve the enterprise, while the necessary funds might be readily raised on the security of a mortgage; and the enterprise completed: and, for similar reasons, it cannot, in ordinary cases, necessarily follow that the public would be injured by a sale of the property on foreclosure — such as the road and toll houses of a plank road company, and the right to receive tolls — as the stockholders may be insolvent, or unable to perform their obligations to the public, while the purchaser is both able and willing to do it. And the purchaser on foreclosure sale must doubtless take the property and franchises, subject to the performance of substantially the same public duties, which would attach to the ownership or control of the property in the hands of the corporation. Whether any, or what, qualifications ought to be attached to this proposition in any particular case, it is not necessary here to decide. But unless it can be made clearly apparent to the court, that the necessary, or' at least the natural and probable result, of giving a mortgage or of a sale under it would be such as must defeat the public object, or injuriously affect the public interest, the mortgage cannot be pronounced illegal: and if not strictly an illegal contract, then it is difficult to perceive any satisfactory ground upon which the corporation can be allowed to set up the public interest in defeasance of its own solemn deed, after having obtained the money on the faith of it. It is a question between the mortgagee or purchaser, on the one hand, and the public on the other, with which the corporation have no concern. The state may choose to waive, or insist upon its rights. Central Bridge Corporation v. Bailey, 8 Cush. 323.
I am aware of no provision of the statute or of the charter, which either expressly or by just implication, can be fairly construed as prohibiting a plank road company from mortgaging their road and fixtures, with the franchise of taking tolls; nor was any such provision cited *168or relied upon in the - argument. There are some special duties imposed upon the company, to he performed by its officers (especially in the 9th and 18th sections of the general act of 1848), which might raise some difficult questions if the road, and the right of receiving the tolls, should come into the hands of a purchaser on foreclosure sale; but they are the same questions (and no others) which would arise in case of a sale on execution, And this brings us to the question of. the public policy of the State, in reference to the sale of a franchise vested in a corporation.
If the State had adopted a policy calculated to prohibit, or had failed to provide for, a sale on execution, of the franchise of taking tolls against plank roads and similar corporations, this would be a strong argument against the power to dispose of the same by mortgage: but if'the State has waived, for the benefit of creditors, the injury •which might result to the public by a transfer under execution, then in the absence of any prohibition against mortgaging, I am at a loss to discover upon what ground it can .be held that a mortgage of the same property should not be held valid and to authorize a sale to the same extent. The power of the corporation to contract a debt cannot be doubted, and the power of this corporation to contract the debt for which the mortgage is given was not denied upon the argument, nor do I think it can be successfully controverted: see Gordon v. Preston, 1 Watts, 385; Union Bank v. Jacobs, 6 Humph. 515; Barry v. Merchants' Exch. Co. 1 Sandf. Ch. 280. If not paid, the law, at the instance of the creditors, would compel a sale on execution. Why may not the parties provide by contract, on the like failure to pay, for a sale to the same extent under a mortgage, as the law would have compelled, had no mortgage been given? The reasons are the same in both cases, and the effect upon the corporation and the public the same. But if the sale on *169execution is, by the statute, a qualified or restricted sale, these restrictions and qualifications might ¡ perhaps apply equally to a sale under the mortgage. The Legislature has, by general statute, provided for the sale on execution of the franchise of any corporation authorized to receive tolls: R. S. of 1846, Ch. 55; Comp. L. Ch. 73, §§9 to 19: and though the language of the ninth section would seem to-authorize a sale of all the franchises of the corporation, yet it is manifest from the twelfth and thirteenth sections, that nothing is sold or conveyed but the right to the possession of the road and its fixtures, and the right or franchise of receiving the tolls, and these not absolutely, but during the least period of time for which any bidder 'shall agree to take the same and pay the debt. And it is expressly provided by the fifteenth section, that the corporation “shall in all other respects retain the same powers, and be bound to perform the same duties, and liable to the same penalties and forfeitures as before such sale. It is clear from this, that no franchise, which is-essentially and exclusively a corporate franchise, is authorized to be sold. That this statute, though previously passed applies to these plank road corporations, see James v. Pontiac and Groveland Plank Road Co., 8 Mich. 91.
The fact that the whole road authorized by the charter was not covered by the mortgage is, I think, no objection to its validity, and if -the view I have taken of the ease thus far be correct, the mortgage of a part is even less objectionable as regards both the public and the company, than a mortgage of the whole.
But again, there is nothing in the case tending to show that any portion of the balance of the road, from Eaton Bapids towards Lansing, has ever been constructed. We cannot presume without proof that it has been: as no legal duty rested upon the company to construct it. People v. The Jackson and Mich. Plank Road Co., 9 Mich. 285. My conclusion, therefore, is that the mortgage in this *170case was valid under the incidental or implied powers granted by the charter : though the sale on the mortgage, so far as it depends upon those incidental or implied powers, might perhaps be required to conform substantially to the mode of sale provided for on executions. Whether it would be otherwise, or whether the result at which I have arrived would be, in any respects, altered by the special act of 1851, is a question to be considered under that act, if valid.
II. We do not think this act comes in conflict with the twenty-third section of the fourth article of the Constitution against authorizing “by -private or special law, the sale or conveyance of any real estate belonging to any person”; but that so far as the act has any effect, it'must be treated as ap amendment of the charter. The eighth section of the fifteenth article of the Constitution, authorizes the Legislature to amend any'act of incorporation theretofore granted (of which this was one), by a vote of two-thirds of all the members elected to each house. The act in question was declared to take immediate effect (§ S). By the twentieth section of the fourth article of the Constitution it could not be ordered to take immediate effect without a vote of two-thirds of the members elected to each house,1 which is the same majority as that required to amend an act of incorporation. W e must, therefore, presume that the act was passed by the requisite majority. Whether it would be competent to prove the contrary we need not decide, as no such proof is offered.
But it is objected that this act was never accepted-by the company. Its acceptance by the board of directors is admitted, and that a certificate of accejffance, signed by the president and secretary, and under the corporate seal, was filed in the office of the secretary of state, as provided in the third section of the act. Admitting that it is competent for the company to set up in defense to the mortgage, the want of assent by any stockholder to the *171amendment, to the same extent that a stockholder not assenting might avail himself of the same matter, when called upon to pay a subscription, or in a bill in equity to restrain the corporation from applying the corporate funds in a manner only authorized by the amendment — a proposition which may admit of some doubt — it certainly cannot be pretended that it could be made available to the company to -any greater extent. But granting the rule to be the same in both cases, the objection in this case can not be sustained. If the amendment were such as purported to effect a fundamental change, in the object, nature of the enterprise, or character of the business authorized by the charter, then I am inclined to think it would not be in the power of the Legislature to bind, by the amendment, any individual stockholder without his assent. But this amendment relates only to the mode of transacting the business, and effecting- the enterprise which it was the object of the . charter to authorize: it is merely auxiliary to the original object, and was intended only to facilitate its attainment. In such cases it seems to be now well, and I think - justly, settled, that the stockholder has no right to complain; and that his assent will be presumed. Every man by becoming a stockholder, must be conclusively presumed to assent to the rule that a majority is to govern, touching the mode of carrying on the business or enterprise authorized by the charter, unless the Legislature has prescribed some other rule. He must therefore be held to agree that, to this extent, the majority may ask for, and accept, amendments to their charter.
In the present case it appears by the evidence in the record, that, at a meeting of the stockholders specially called for the purpose of taking into consideration the question of making this loan and securing the same by mortgage, the holders of a majority of the stock voted for a resolution to make the loan and to secure the same by a mortgage 'of the road, and that there was not a vote *172against it; and that the holders of three-fourths of' the stock voted at the same meeting for a resolution, authorizing the sale of the bonds at not less than ninety cents on their par value. These resolutions, and the call of the meeting, refer to the act of 1851, and if that act was at all necessary to authorize the loan or the mortgage, these votes are sufficient to show clearly its acceptance by the act of the majority of the stockholders.
The act of 1851 must therefore be held to be valid and to authorize the mortgage, whether it was previously authorized under the incidental powers of the corporation or not, unless the mortgage is to be held void because it does not cover the whole road authorized by the charter. But what is the extent of the operation of this act? Does it authorize the company to mortgage any other of its franchises than those I have endeavored to show might have been mortgaged under the incidental or implied powers contained in the charter. I think it does not. It authorizes the company to “mortgage the road or other property’’ of the company “to secure their bonds.” It is silent on the subject of franchises; but as the road could be of no value without the power or franchise of receiving tolls, and its object was to enable the company to raise money on the security of the mortgage, the franchise of receiving tolls must be understood as included with the road and fixtures. And in thus expressly authorizing a mortgage for this specific purpose, it is fair to presume the Legislature intended a mortgage with the usual power of sale, and which on default should authorize an absolute sale of the property mortgaged, as the usual and most effectual means of rendering the security available.
But I think it very clear that no power is given by the act to mortgage any franchise essentially corporate in its character, and which could not be enjoyed by a natural person — such as the right of being a corporation. In other words, there is nothing in the language of the act,. *173or in the nature of the provision, which would authorize the corporation to transfer its corporate existence to the mortgagee, or the person who might become the purchaser under the mortgage. Such a power could hardly be implied in any case, and to authorize such a construction the language ought to be very plain and express: and it would at least be natural to expect, if such were the intention, some legislative provision for the mode of carrying it into effect. Is the old stock to be extinguished, or held in trust for the purchaser? May the purchaser on the mortgage foreclosure issue new stock, and if he may, can he be compelled to do so? If the purchase be made by •a single individual, how are the directors and officers to be chosen ? Or is he to be a corporation sole, without any of the officers required by the charter? These, and many other questions, would naturally require some legislative provision.
I am, therefore, satisfied no other franchises are authorized to be mortgaged than those I have endeavored to show would have been authorized under the incidental powers of the corporation; and the same considerations will •apply, so far as relates to the question of mortgaging the whole or a part of the road.
So much of the decree of the Court below as relates •to the obligors in the collateral bond must be reversed, and the bill as to them dismissed, with costs against complainants of both courts. And the decree of foreclosure and sale, entered in the Court below, must be so modified as to confine the sale to so much of the road between Jackson and Eaton Rapids as may have been already constructed, together with the toll-houses, gates, and other fixtures and erections appurtenant thereto,- with the franchises and rights of keeping up and maintaining the said road, fixtures, erections and appurtenances, and of taking ■tolls thereon, and the cause must be remitted to the Court *174below for further proceedings. Neither party to recover-costs- on the appeal.
Martin Ch. J. concurred in this opinion. Manning J.:I think the mortgage good under the act, and on that ground concur in the opinion of my brother Christiancy. Whether it would be valid without the act I have some doubt, and do not wish to express an opinion on that, point, as it is not necessary to a decision of the cause.