Imágenes de páginas

ner in which it has been before executed."-Crabb's English Syno


The controversy rduces itself, therefore, to the meaning of a single word. Whatever is within the scope of the authority conferred or retained by that word, that the legislature may freely do whenever the public necessity or convenience requires, and of which necessity or convenience the legislature alone are to judge. Whatever is beyond the scope of such authority, of course, the legislature cannot do, and all such legislative action taking place under pretense of being an exercise of the reserved power must fall, if found by the courts to be repugnant to the constitution of the State or of the United States.

Another limitation suggested by the language of the court above quoted, and likewise by the remarks found in 15 Wallace, 459 and 519, is to the effect that the reserved power cannot be used to destroy or impair rights which have become vested under the charter. At page 459 the court says: "Rights acquired by third parties, and which have become vested under the charter, in the legitimate exercise of its powers, stand upon a different footing; but of such rights it is unnecessary to speak here. The State only asserts, in the present case, the power under the reservation to modify its own contract with the corporators; it does not contend for the power to revoke the contracts of the corporation with other parties, or impair vested rights of property thereby acquired."

It could never be contended that such acts as these are within the reserved power, or that the legislature could directly interfere in a contract lawfully entered into between a subscriber to the stock and the corporation so as to deprive the subscriber of the benefits of such contract, or that it could in like manner take away vested rights of property, whether belonging to the corporation or third persons, or that it could revoke the contracts of the corporation with other parties, or impair any vested rights thereby acquired. The legislature cannot take the property of a corporation and transfer it to a third party, nor absolve the corporation from any debt or obligation which it owes or has entered into with a third party. These would not be acts of legislation under the reserved power, because they would not operate upon or affect any of the "rights, privileges, or immunities of the corporation derived by its charter directly from the State." They would operate upon and affect, not franchises bestowed by the State, but vested rights acquired and coming from an entirely different source, namely, the contracts entered into by the parties, and which they had legal capacity to make. These are not so much instances of limitation upon the power derivable from the meaning of the word by which it is reserved, as in cases falling wholly without the scope of the power.

But it seems obvious that the court did not intend and ought not to be understood by these remarks as indicating that the legislature may not, by way of alteration or repeal, operate upon the franchises of the corporation, as it finds public and private convenience and utility to require, although the effect of such action may be in

cidentally to diminish the ability of the corporation to pay its debts, or to depreciate the value of its stocks or bonds. All such incidental effects consequent upon the exercise of the reserved power may be fairly said to have been in the contemplation of all stockholders and creditors at the time they acquired their interests. The decision in the case (Tomlinson vs. Jessup) in which this language of the court occurs, is itself a refutation of the proposition that the incidental effect thus produced by the exercise of the reserved power can constitute any legal ground of complaint on the part of any one, or be assigned as a reason for holding such exercise of the reserved power invalid. It will be remembered that that was an action by a shareholder to restrain the collection of the tax imposed upon the reserved power, and to have such imposition declared unconstitutional and void, on the ground that it would destroy the value and render worthless the shares of stock held and owned by the plaintiff. But the court said: "It may be equally true, as stated by counsel, that the exemption from taxation added greatly to the value of the stock of the company, and induced the plaintiff to purchase the shares held by him. But these considerations cannot be allowed any weight in determining the validity of the subsequent taxation. The power reserved to the State by the law of 1841 authorized any change in the contract as it originally existed, or as subsequently modified, or its entire revocation. The original corporators, or subsequent stockholders, took their interests with knowledge of the existence of this power, and of the possibility of its exercise at any time, in the discretion of the legislature." So it is submitted here that the indirect results, if such should be, springing from the exercise of the reserved power, in affecting the price or value of the stocks or bonds of the corporation, or the ability of the corporatian to pay its debts, cannot have any weight in determining the validity of the action of the legislature. This point is briefly but ably considered by the court of Wisconsin, 35 Wis., 578, 579.

It is manifest, if any such limitation attaches to the reserved power to alter or repeal, it must result in defeating such power altogether as to every corporation having stockholders or creditors, and thus the State or the legislature, in a vast majority of cases, would end just where they began, having gained nothing whatever by the reservation. Logically considered, as the court of Wisconsin say, this is only a denial in another form of the power to alter or repeal. It is clear that whatever limitation of the kind attaches to the power to alter, the same must also attach to the power to repeal, and as there can be no absolute repeal of the charter of a corporation having stockholders and creditors, which may not, or which may almost be said will not, injuriously affect the pecuniary interests of its stockholders and creditors, it follows that the power is gone or can only be exercised in a few minor and comparatively unimportant cases. Few corporations are created without authority to issue stock, and the number is very small indeed of those not having the capacity to contract debts, both which things are invariably done. By issuing stock or contracting debts,

and continuing either of those relations, the corporation, through the agency of its stockholders and creditors, nullifies the reserved power or secures perpetual immunity and exemption from its exercise. It seems impossible that such a proposition should be sustained, or that argument should be needed to refute it. It defeats itself by disproving the very words of the reservation, which are things incapable of disproof. It is a vain effort to put a limitation upon the words or the power reserved by them where no such limitation exists a limitation also utterly inconsistent with the meaning of the words and with the existence and nature of the power. Courts do not set aside and amend the contracts of parties in this way. The compacts and stipulations solemnly entered into with States and governments, securing valuable public rights and privileges, cannot thus be invaded and destroyed. It may be regarded as not very questionable, indeed, as quite certain, that over the same words found in a contract between private individuals no such controversy would ever have arisen. Acquiescing in the rule that courts interpret contracts, where interpretation is necessary, not make or unmake them, and that they give effect to them without looking to the consequences lawfully ensuing from the free acts and stipulations of the parties, or which have knowingly and voluntarily been incurred by others who have become interested, the same words in such a contract would have been permitted to have their effect according to their plain import and meaning, and as they must have been understood by the parties. The magnitude of the interests here involved, or the fact that the people of a great State, or of many States are interested, cannot vary the question, for it is not by considerations like these that courts are governed in the construction of contracts. Effect here must be given to the words in their entirety, without forced or unnatural restrictions or conditions which will operate to defeat the plain purposes of the parties in employing them. Within the scope of the power reserved, the authority of the legislature is unlimited. It is, as this court has declared an authority to be exercised" in the discretion of the legislature."

The inquiry, therefore, is as to the extent of the power, or what acts are to be considered as within it. This inquiry has also been answered by this court. "All rights, privileges, and immunities derived by its charter directly from the State," are subject to legislative control, modification or repeal under the reserved power. Whatever is given by statute may be taken away by statute. State vs. Hoeflinger, 31 Wis., 262, 263, and authorities there cited. Vested rights of property cannot be taken away by statute, because the statute does not give them, but only the capacity to acquire them. The capacity to acquire such rights in the future may be restricted, modified, or taken away, because that capacity of the corporation is given to it by its charter. Perrine rs. Canal Co., 9 How., 184. Contracts lawfully entered into by or with the corporation cannot be interfered with or revoked for a similar reason. The legislature cannot say the corporation shall not be bound by its contract, nor impose upon it a contract obligation against its will.

In this case the only question is whether the right to charge and receive fares and tolls for the transportation of passengers and goods by a railroad company is a right granted by the State under the charter, for it is only upon this right the legislature has sought to operate by the act in controversy. We answer that beyond doubt it is such a right. The right of opening and establishing highways of all kinds for the use and accommodation of the public, including railroads, plankroads, turnpikes, canals, bridges, and the like, is a public right. It is a right inhering in the State as a necessary and inseparable attribute of its sovereignty. "Of the necessity and convenience of all roads and other public works and improvements, of their fitness, and the best mode of providing them, the established government of the State, acting by the legislature for the time being, must necessarily judge and determine." 2 Gray, 33. It is plainly within the prevince of the legislature to determine and regulate the use of all common and public rights and easements." 13 Gray, 247. And the same is true of the right to manage and control all roads, and other such means of public travel and intercommunication. The right to charge and receive tolls for the use of roads, bridges or ferries, designed for the convenience and accommodation of the public, and used by the public, is essentially a public right, and when granted, as it can only be by the State to a natural person or corporation, it is in the strictest sense of the term a grant of a franchise. No man has a right to build a bridge over a river, or to set up a ferry, or construct and operate a railroad, for the use of the public, without the authority of the State. All these are franchises belonging to the sovereign, and not to be exercised by individuals or corporations without the grant or license of the sovereign. We are not aware that these principles were ever before seriously disputed.

They are principles which were frequently conceded by the very able counsel on both sides in the argument of Charles River Bridge vs. Warren Bridge, 11 Peters, 420.

They are directly affirmed by this court in Perrine vs. Chesapeake and Delaware Canal Co., 9 How., 172, where it was held that a corporation, except as authority is granted by the State, cannot lawfully demand or receive toll for the transportation of passengers.

And again this court recognizes and affirms the right as a public, not a private one, in Olcott vs. The Supervisors, 16 Wallace, 695, where it is said; "Whether the use of a railroad is a public or private one, depends in no measure upon who constructed or who owns it. It has never been considered a matter of any importance that the road was built by the agency of a private corporation. No matter who is the agent, the function performed is that of the State. Though the ownership is private, the use is public. So turnpikes, bridges, ferries, and canals, though made by individuals, under public grants, or by companies, are regarded ts publici juris. The right to exact tolls or charge freights is granted for a service to the public."

“A ferry is publici juris: it is a franchise that no one can erect

without the king's license." Blesset vs. Hart, Willes' Reports, 512. See also 7 Pike, 496.

"The right to run a railroad, taking tolls or fares, is a franchise which no person or corporation can legally exercise without a special grant from the legislature." Whiting vs. The Sheboygan R. R. Co., 25 Wis., 206.

"The privilege of making a road and taking tolls thereon is a franchise, as much as the establishment of a ferry or a public wharf and taking toll for the use of the same." Bleekman vs. Saratoga & Schenectady Reilroad Co., 3 Paige, 75.

"When individuals, under a charter from the Government, construct works for the public accommodation, and open the works to the use of the public, this is, in law, a dedication of the works to the public use, and no toll can be demanded unless it be authorized by the charter. The reason of this is that a toll, in such a case, is a common charge which it is the prerogative of the government alone to impose and regulate. This principle seems to be well settled. Thus turnpikes have been held to be public highways, and the erection of a gate upon them without the authority of the legislature has been adjudged a public nuisance. And money exacted as a toll at such gate has been held to be illegally taken, and the person who received it compelled by action to refund it.

"So it has been held that if individuals build a bridge by virtue of an act of the legislature they cannot legally demand toll without authority from the legislature. It is also well settled that a ferry is publici juris. It is a franchise which no one can erect without authority from the government. If a ferry be erected without authority, or if a franchise be abused, an information in the nature of a quo warranto lies." Olcott v. Banfill, 4 N. H. 545.

But the right to build and run a railroad, and take tolls or fares, is a franchise of the prerogative character, which no person can legally exercise without some special grant of the legislature." State v. Boston, Conrod & Montreal Railroad Co., 25 Vt., 442.

"It is true the plaintiffs had a right to take tolls from all who traveled or carried freight on it, according to certain rates fixed by the charter, but that was a mere franchise; a privilege derived entirely from the charter, and it was gone when the charter was repealed. The State may grant to a corporation, or to an individual, the franchise of taking tolls on any highway, opened or to be opened, whether it be a railroad or river, canal or bridge, turnpike or common road. When the franchise ceases by its own limitation, by forfeiture or by repeal, the highway is thrown back on the hands of the State, and it becomes her duty, as the soverign guardian of the public rights and interests, to take care of it.' Erie & Northeast Railroad Company v. Casy, 26 Pa. St., 307.


The subject of controversy is a mere naked, incorporeal right, claimed by the plaintiffs, to have and enjoy a right to maintain a railroad, and to take the tolls and profits thereof, a right created and granted to them by the government of the State; and they allege, whether correctly or not is hereafter to be considered, that the defendants have disturbed them in the enjoyment of this incorpo

« AnteriorContinuar »