Hoar, J.
The question whether the mortgage made to the defendants by the Troy and Greenfield Railroad Company is of any validity against the Commonwealth requires the court to give a construction to the provisions of St. 1854, c. 286. To ascertain what the legislature intended to authorize or prohibit by [455]*455that statute, it will be expedient first to consider what were the powers of railroad companies in relation to the issue of bonds and the making of mortgages at common law, or before the statute was enacted.
There seems to be no reason why a railroad corporation should not be considered as having power to make a bond for any purpose for which it may lawfully contract a debt, without any special authority to that effect, unless restrained by some restriction, express or implied, in its charter, or in some other legislative act. A bond is merely an obligation under seal. A corporation having the capacity to sue and be sued, the right to make contracts, under which it may incur debts, and the right to make and use a common seal, a contract under seal is not only within the scope of its powers, but was originally the usual and peculiarly appropriate form of corporate agreement. The general power to dispose of and alienate its property is also incidental to every corporation not restricted in this respect by express legislation, or by “the purposes for which it is created, and the nature of the duties and liabilities imposed by its charter.” Treadwell v. Salisbury Manuf. Co. 7 Gray, 404.
But in the case of a railroad company, created for the express and sole purpose of constructing, owning and managing a railroad ; authorized to take land for this public purpose under the right of eminent domain; whose powers are to be exercised by officers expressly designated by statute; having public duties, the discharge of which is the leading object of its creation; required to make returns to the legislature; there are certainly great, and, in our opinion, insuperable objections to the doctrine that its franchise can be alienated, and its powers and privileges conferred by its own act upon another person or body, without authority other than that derived from the fact of its own incorporation. The franchise to be a corporation clearly cannot be fi'ansferred by any corporate body, of its own will. Such a franchise is not, in its own nature, transmissible. The power to mortgage can only be coextensive with the power to alienate absolutely, because every mortgage may become an absolute conveyance by foreclosure. And although the franchise to exist [456]*456as a corporation is distinguishable from the franchises to be enjoyed and used by the corporation after its creation, yet the transfer of the latter differs essentially from the mere alienation of ordinary corporate property. The right of a railroad company to continue in being depends upon the performance of its public duties. Having once established its road, if that and its franchise of managing, using and taking tolls or fares upon the same are alienated, its whole power to perform its most important functions is at an end. A manufacturing company may sell its mill, and buy another; but a railroad company cannot make a new railroad at its pleasure.
The whole reasoning of the court in the case of Whittenton Mills v. Upton, 10 Gray, 582, in which it was held that a manufacturing corporation has no power to make a contract of co-partnership, applies with much greater force to the transfer of its franchise by a railroad company.
No case has been cited in which the exercise of such a power has ever been judicially sanctioned in this commonwealth, where there was not express legislative authority for it; and the cases in which the legislature has expressly conferred the power, or confirmed its exercise, furnish at once a strong implication that it would not otherwise exist, and afford a solution of the allusion to railroad mortgages which occurs in the statutes.
Coming, then, to the consideration of the statute of 1854, we find it entitled “An act to authorize railroad companies to issue bonds.” The first section recites the purposes for which a railroad corporation may issue bonds, namely, “ for the purpose of funding its floating debt, or for money which it may borrow for any purpose sanctioned by law.” This is, on its face, merely permissive. But it presents this alternative of construction. Either the corporation did not, in the view of the legislature, have the right to issue bonds without the permission, in which case all the conditions and limitations attached to the privilege must be held to qualify and define the extent of the permission given; or if the full right existed when the statute was passed, then it seems impossible to give any other sensible meaning to its provisions, except to construe it as prescribing the conditions [457]*457and limitations under which the power might thereafter be exercised. The question is, did the legislature intend that these companies should be allowed to issue bonds only in the mode and for the purposes authorized by the statute ? If that intention is made apparent, it makes no difference whether the language is affirmative or negative. The same section, then, contains two provisions : first, that the issue of bonds shall be authorized by a majority of the stockholders, at a meeting called for the purpose ; and secondly, that the amount of bonds issued shall not exceed the amount of capital actually paid in. The second section provides that such bonds may be issued in sums of not less than one hundred dollars each, payable at periods not exceeding twenty years from the date thereof, and at a rate of interest not exceeding six per centum per annum, payable annually or semi-annually. The language is still affirmative and permissive, but strictly limiting the nature and extent of the act allowed. The third section enacts that no railroad corporation, having issued any bonds under the provisions of the act, shal'i subsequently make or execute any mortgage upon its road, equipment and franchise, or any of its property, without including in and securing by said mortgage all such bonds previously issued, and all other preexisting debts and liabilities of said corporation. This section certainly implies that a railroad corporation may mortgage its road and franchise under some circumstances, but gives no direct authority to make such a mortgage; and it plainly prohibits any mortgage which does not conform to the rule imposed. The fourth and fifth sections provide securities for the correct issue of the bonds, and for making them binding on the corporation, though sold at less than par.
The court are all of opinion that the statute was intended to prescribe the terms and conditions on which railroad corporations should thenceforth be allowed to issue bonds, and that any ponds which have been issued since its passage and do not conorm to those conditions are made in violation of law, and are therefore void. We cannot suppose that the legislature could intend to pass an act to make legal certain bonds which the corporations had full power to issue without such authority, and [458]*458which would leave all other bonds of equal validity. It must be remembered that these corporations are bodies created for public purposes ; that their charters'are made subject to repea. or alteration at the pleasure of the legislature; and that the Commonwealth has reserved full power to regulate and control their action by general or special laws.
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Hoar, J.
The question whether the mortgage made to the defendants by the Troy and Greenfield Railroad Company is of any validity against the Commonwealth requires the court to give a construction to the provisions of St. 1854, c. 286. To ascertain what the legislature intended to authorize or prohibit by [455]*455that statute, it will be expedient first to consider what were the powers of railroad companies in relation to the issue of bonds and the making of mortgages at common law, or before the statute was enacted.
There seems to be no reason why a railroad corporation should not be considered as having power to make a bond for any purpose for which it may lawfully contract a debt, without any special authority to that effect, unless restrained by some restriction, express or implied, in its charter, or in some other legislative act. A bond is merely an obligation under seal. A corporation having the capacity to sue and be sued, the right to make contracts, under which it may incur debts, and the right to make and use a common seal, a contract under seal is not only within the scope of its powers, but was originally the usual and peculiarly appropriate form of corporate agreement. The general power to dispose of and alienate its property is also incidental to every corporation not restricted in this respect by express legislation, or by “the purposes for which it is created, and the nature of the duties and liabilities imposed by its charter.” Treadwell v. Salisbury Manuf. Co. 7 Gray, 404.
But in the case of a railroad company, created for the express and sole purpose of constructing, owning and managing a railroad ; authorized to take land for this public purpose under the right of eminent domain; whose powers are to be exercised by officers expressly designated by statute; having public duties, the discharge of which is the leading object of its creation; required to make returns to the legislature; there are certainly great, and, in our opinion, insuperable objections to the doctrine that its franchise can be alienated, and its powers and privileges conferred by its own act upon another person or body, without authority other than that derived from the fact of its own incorporation. The franchise to be a corporation clearly cannot be fi'ansferred by any corporate body, of its own will. Such a franchise is not, in its own nature, transmissible. The power to mortgage can only be coextensive with the power to alienate absolutely, because every mortgage may become an absolute conveyance by foreclosure. And although the franchise to exist [456]*456as a corporation is distinguishable from the franchises to be enjoyed and used by the corporation after its creation, yet the transfer of the latter differs essentially from the mere alienation of ordinary corporate property. The right of a railroad company to continue in being depends upon the performance of its public duties. Having once established its road, if that and its franchise of managing, using and taking tolls or fares upon the same are alienated, its whole power to perform its most important functions is at an end. A manufacturing company may sell its mill, and buy another; but a railroad company cannot make a new railroad at its pleasure.
The whole reasoning of the court in the case of Whittenton Mills v. Upton, 10 Gray, 582, in which it was held that a manufacturing corporation has no power to make a contract of co-partnership, applies with much greater force to the transfer of its franchise by a railroad company.
No case has been cited in which the exercise of such a power has ever been judicially sanctioned in this commonwealth, where there was not express legislative authority for it; and the cases in which the legislature has expressly conferred the power, or confirmed its exercise, furnish at once a strong implication that it would not otherwise exist, and afford a solution of the allusion to railroad mortgages which occurs in the statutes.
Coming, then, to the consideration of the statute of 1854, we find it entitled “An act to authorize railroad companies to issue bonds.” The first section recites the purposes for which a railroad corporation may issue bonds, namely, “ for the purpose of funding its floating debt, or for money which it may borrow for any purpose sanctioned by law.” This is, on its face, merely permissive. But it presents this alternative of construction. Either the corporation did not, in the view of the legislature, have the right to issue bonds without the permission, in which case all the conditions and limitations attached to the privilege must be held to qualify and define the extent of the permission given; or if the full right existed when the statute was passed, then it seems impossible to give any other sensible meaning to its provisions, except to construe it as prescribing the conditions [457]*457and limitations under which the power might thereafter be exercised. The question is, did the legislature intend that these companies should be allowed to issue bonds only in the mode and for the purposes authorized by the statute ? If that intention is made apparent, it makes no difference whether the language is affirmative or negative. The same section, then, contains two provisions : first, that the issue of bonds shall be authorized by a majority of the stockholders, at a meeting called for the purpose ; and secondly, that the amount of bonds issued shall not exceed the amount of capital actually paid in. The second section provides that such bonds may be issued in sums of not less than one hundred dollars each, payable at periods not exceeding twenty years from the date thereof, and at a rate of interest not exceeding six per centum per annum, payable annually or semi-annually. The language is still affirmative and permissive, but strictly limiting the nature and extent of the act allowed. The third section enacts that no railroad corporation, having issued any bonds under the provisions of the act, shal'i subsequently make or execute any mortgage upon its road, equipment and franchise, or any of its property, without including in and securing by said mortgage all such bonds previously issued, and all other preexisting debts and liabilities of said corporation. This section certainly implies that a railroad corporation may mortgage its road and franchise under some circumstances, but gives no direct authority to make such a mortgage; and it plainly prohibits any mortgage which does not conform to the rule imposed. The fourth and fifth sections provide securities for the correct issue of the bonds, and for making them binding on the corporation, though sold at less than par.
The court are all of opinion that the statute was intended to prescribe the terms and conditions on which railroad corporations should thenceforth be allowed to issue bonds, and that any ponds which have been issued since its passage and do not conorm to those conditions are made in violation of law, and are therefore void. We cannot suppose that the legislature could intend to pass an act to make legal certain bonds which the corporations had full power to issue without such authority, and [458]*458which would leave all other bonds of equal validity. It must be remembered that these corporations are bodies created for public purposes ; that their charters'are made subject to repea. or alteration at the pleasure of the legislature; and that the Commonwealth has reserved full power to regulate and control their action by general or special laws. The language of the statute is in substance this : “ Such are the bonds which railroad corporations may henceforth issue.” To declare that they may be issued on certain fixed conditions is, in effect, to enact that they shall not be issued in any other manner.
That bonds issued in violation of a statute are void, was held in a recent case in the queen’s bench in England — Chambers v. Manchester & Milford Railway, 26 Law Reporter, 583. The prohibition' in the statute on which that case depended was more direct, but the principle applicable to it is the same, and rests upon strong and just foundations in reason.
The bonds issued by the Troy and Greenfield Railroad Company for securing which the mortgage held by the defendants, as trustees, was made, are payable at a period exceeding twenty years from their date, and were issued to an amount very largely in excess of the amount of capital stock actually paid in. The legislature did not mean that such bonds should be made. Their illegality is apparent upon their face, and open equally to the knowledge of the party who issued and the party who received them.
The bonds being invalid, the mortgage to secure them is invalid likewise. It becomes unnecessary, therefore, to consider the questions which have been so largely and ably discussed in the argument, to what extent the power to make a mortgage of a railroad has been recognized, or exists by implication under our statutes, and especially whether such a power is conferred, to any extent, i>y the statute of 1854. But it may be well to observe that the object of that statute seems to have been exclusively the regulation of the issue of bonds by railroad corporations; and that mortgages are only mentioned incidentally with reference to the future security of the bonds, and not with any view of defining or extending the general power of making [459]*459mortgages. And further, we understand the bonds which are the subject of the statute to be only bonds for the payment of money, constituting a funded debt of the company; and do not consider the opinion which we have expressed to have any application to bonds for other purposes, and of a different character, such as bonds to dissolve an attachment, for the conveyance of land, or the like. Nor do we mean to decide that some of the provisions of the statute may not be merely directory.
We find no evidence that the Commonwealth has ever known and sanctioned the irregular and illegal issue of the bonds in question, either directly or by implication. Nor do we think that they fall within the class of cases in which it has been held that a violation of corporate powers cannot be taken advantage of collaterally. The second mortgage to the Commonwealth gives it a direct interest in the property, and, not being made expressly subject to any prior incumbrance, gives the right to maintain and prove that the supposed conveyance to the defendants was illegal and void.
The result to which the point decided leads is this: that, the defendants having no title which they can maintain against either of the mortgages to the Commonwealth, the plaintiffs have a plain, complete and adequate remedy at law for any interference with the mortgaged property, and the bill must be dismissed
The following case from Middlesex County, involving similar questions, was argued in February 1865 in Boston : —
East Boston Freight Railroad Company vs. Gardiner G. Hubbard & another.
Tort, in the nature of trespass quare clausum.
It was agreed, in the superior court, that in November 1855 the Grand Junotitn Railroad and Depot Company, having before then at five several times isued bonds amounting in all to $1,140,000, which all remained due, and portions tf which were secured by mortgages upon different parts of their railroad, issued other bonds to the amount of $100,000, which were secured by a mortgage to two trustees, upon another part of their railroad. The company at the same time owed a floating debt of about $100,000, which was not included in the mortgage; and the amount of capital stock paid in was $792,291.66. In 1856 [460]*460the company became insolvent, and in April 1862 George W. Gordon recovered judgment against them for $25,667, and the sheriff levied his execution upon their franchise, and sold the same, with all the rights and privileges, so far as related to the receiving of tolls, for the term of ninety-nine years, by auction, for the amount of damages and costs in the execution, to the plaintiffs, who by their charter were authorized to lease or purchase the same.
One of the original trustees in the mortgage of November 1855 afterwards died, and the other resigned; and the defendants were appointed in their place, and entered upon the premises described in the mortgage for the purpose of foreclosure.
Upon these facts judgment was rendered for the plaintiffs, and the defendants appealed to this court.
S. Bartlett $• G. G. Hubbard, (H. W. Muzzey with them,) for the defendants.
J. G. Abbott §• B. Dean, for the plaintiffs.
Hoar, J. The title of the plaintiffs is good, unless the defendants can show a paramount title; and the question is on the validity of the mortgage under which the defendants claim. It was made to secure $100,000 of bonds issued by the Grand Junction Railroad and Depot Company in November 1855 ; the cor. poration owing at. that time $1,140,000 of bonds previously issued, and its whole capital then actually paid in by the stockholders amounting to $792,291.66. The bonds were therefore issued in direct violation of St. 1854, c. 286, § 1, and the mortgage is affected by the like illegality. Commonwealth v. Smith, ante, 448. A further objection to the mortgage is, that it seems to have been made in disregard of § 3 of the same statute; there having been outstanding liabilities of the corporation at that time to the amount of $100,000, which were not secured by it.
If these objections were not sufficient, it might be very difficult to find what legal effect a mortgage of the franchise of a railroad company over a portion of ts road could have, or how it could be supported for any purpose
Judgment for the plaintiffs upon the facts agreed.