text:
Chicago Burlington and Quincy Railroad Company v. Iowa

APPEAL from the Circuit Court of the United States for the District of Iowa.

This bill was filed by the Chicago, Burlington, and Quincy Railroad Company, a corporation created by the laws of Illinois, for an injunction restraining the Attorney-General of the State of Iowa from prosecuting suits against it or its officers, under the provisions of an act passed by the legislature of Iowa, entitled 'An Act to establish reasonable maximum rates of charges for the transportation of freight and passengers on the different railroads of this State,' approved March 23, 1874.

The complainant is the lessee of the Burlington and Missouri River Railroad in the State of Iowa; the two roads being connected by a bridge which crosses the Mississippi River at Burlington, thus making a continuous and uninterrupted line of railroad from Chicago, Ill., to Plattsmouth, on the Missouri River, Iowa.

In constructing its road, the Burlington and Missouri River Railroad Company executed sundry mortgages upon its property, &c., which are still outstanding.

On Dec. 31, 1872, that company leased its road and branches, with all their fixtures, appurtenances, and equipments of every kind, and all their franchises and privileges, to the complainant in perpetuity, and delivered possession thereof.

By the lease, the complainant covenanted to take immediate possession of the demised premises, and to keep the railroad and branches equipped, and maintain and operate them in such manner as to furnish reasonable accommodations to the public, and to pay all taxes and assessments that might be lawfully levied, charged, or assessed on the roads anf property, or any part thereof; to assume all leases, contracts, bonds, and other obligations of whatever kind; to pay and discharge all debts and liabilities of every nature, both principal and interest; to make to the stockholders of the Burlington and Missouri River Railroad, and branches, the same amount of dividends per share that it should make to its own stockholders, and to grant and secure to them the same benefits and emoluments, of every description, that its own stockholders might receive, have, or become entitled to.

The indebtedness, over and above the expenses of keeping the roads in repair and operation, which the complainant became liable to pay for the leased roads, amounted to $7,353,950; and the stock of said roads, upon which it obligated itself to pay dividends, amounts to the further sum of $6,532,552.76; and for the means of payment it relies upon the earnings of the roads.

The complainant claims, that, under the provisions of the laws of Iowa, which existed and were is force when the Burlington and Missouri River Railroad Company was organized, and when the money with which its road and branches were built and equipped, was borrowed, and the mortgages to secure the payment thereof were executed, the company had the right to fix, defermine, and establish the tariff of rates, for the transportation of freight and passengers over its road and branches, and that it has always heretofore exercised that right, without question of its power and authority to do so; that this right, power, and privilege were, by the lease aforesaid, assigned, set over, and transferred to the complainant, and that it has, ever since the lease, exercised the power, without question of its right to do so; that, in the exercise of such power, it has fixed and adjusted the tariff of charges for the transportation of persons and property over the road and branches, with a view to furnishing to the country the greatest facilities of transportation, and at the lowest rates, compatible with the duty of the complainant to keep the roads in good condition and repair, and provided with the necessary depots, freight-houses, machine-shops, engines, cars, &c., to meet the demands of business, and to provide the means of defraying the expenses of operating the roads, paying the interest upon the indebtedness, and earning reasonable dividends for the stockholders; and that the earning of the roads, under the operation of the tariff so established, have been barely adequate, under careful and economical management, to such purposes; and that these ends cannot be attained if the complainant shall be deprived of its just and lawful right to fix its tariff of charges, and be compelled to conform to the act in question.

It is further charged, that the persons who loaned the money with which the road and branches were built and equipped, and to secure the repayment of which the bonds and mortgages were executed, did so in reliance upon the earnings of the roads to refund and repay the money so loaned, and in the full confidence and belief that the right of the company to fix and control the tariff of charges for transportation would never be denied or interfered with.

The complainant insists that the act referred to impairs the obligation of the contract between the State and the Burlington and Missouri River Railroad Company, that between that company and its stock and bond holders, and that between the Burlington and Missouri River Railroad Company and the complainant; and that it is also a violation of that provision of the Constitution of the United States which gives to Congress the power to regulate commerce among the several States.

It also charges that by the said act, and the pretended classification of railroads under it, it is required to transport passengers and property for less compensation than other railroad companies in the State are allowed to charge and receive for transporting persons and property, for equal distances, although the labor, cost, and expense of transportation over the road of complainant are full as much per mile as the labor, cost, and expense of like transportation over the roads which are allowed greater compensation therefor, and that said act is therefore in conflict with and a violation of the sixth section of art. 1 of the Constitution of Iowa, which provides that 'all laws of a general nature shall have a uniform operation, and that the general assembly shall not grant to any citizen, or class of citizens, privileges or immunities which, upon the same terms, shall not equally belong to all citizens.'

The answer, so far as material to the present purpose, admits most of the allegations of the bill, but denies that the Burlington and Missouri River Railroad Company, either by the charter or the laws of Iowa, had the exclusive right and power to fix its rates of fare, and denies that any attempt is to be made to enforce the law, so far as regards inter-state commerce.

On hearing, the court rendered a decree denying the injunction, and dismissing the bill; from which decree complainant appealed.

The errors complained of are,--

1. The refusal of the court to grant the injunction.

2. The decree dismissing the bill.

Mr. O. H. Browning and Mr. F. T. Frelinghuysen for the appellant.

1. The charter of the Burlington and Missouri River Railroad Company is a contract between the company and Iowa, entitled to the protection of the Constitution of the United States, and its obligation cannot be impaired by any act passed by the general assembly of that State. Miller v. State, 15 Wall. 478; Pacific Railroad Co. v. Maguire, 20 id. 36; Railroad Company v. Maryland, 21 id. 456.

2. Under its charter, and the Constitution and laws of Iowa, which existed at the time of its organization, that company had the right to fix the rates of compensation for the transportation of persons and property over its road; and this right, a material and valuable part of its contract, the State can neither take away nor impair. Revision of the Laws of Iowa, 1860, p. 969; chap. 43 of the Iowa Code, 1851, sects. 673-678, 680; Pierce on Am. Railroad Law, 461; Miller v. State, supra; Dartmouth College v. Woodward, 4 Wheat. 518; Railroad Company v. Maryland, supra; Boyle v. ''Phila. & Reading Railroad Co., 54 Penn. 312; Penn. Railroad Co. v. Sly'', 65 Penn. 207; Cooley on Const. Lim. 279, and cases there referred to; The People v. Marshall, 6 Ill. 684; Case of the State Freight Tax, 15 Wall. 232; Ang. & Am. on Corp., sect. 111; The People v. The Manhattan Co., 9 Wend. 393; Ang. on Carriers, sect. 124; The Citizens' Bank v. Nantucket Steamboat Co., 2 Story, C. C. 35; Brown v. State of Maryland, 12 Wheat. 419; License Cases, 5 How. 574; Iowa Code, 1851, sects. 729, 734, 736, 738, 750; O. & M. Railroad Co. v. McClelland, 25 Ill. 141.

3. The right which the company had under its charter, and the laws which existed when it was organized, to receive compensation for services, and fix the rates of such compensation, by making its own contracts therefor, has never been forfeited or surrendered, but is still an existing right. 11 Stat. 9; Revision of Laws of Iowa, 1860, pp. 215, 216, 999, 1000; 2 Pars. on Contr. 494, 499; Parkhurst v. Smith, Willes, 332; Session Acts of Iowa, 1862, 197; id. 1870, 106, 179; Iowa Code, 1873, 239; Session Laws of Iowa, 1868, 13, 66, 68, 167; The People v. Marshall, supra; Session Acts of Iowa, 1864, 44, sects. 1, 2; Iowa Code, 1851, c. 43; B. & M. R. Railroad Co. v. White, 5 Iowa, 411; Maryor, &c. v. Second Ave. Railroad Co., 32 N. Y. 261; Mayor, &c. v. Third Ave. Railroad Co., 33 id. 42.

4. The act of the Iowa legislature, entitled 'An Act to establish reasonable maximum rates of charges for the transportation of freights and passengers on the different railroads of this State,' approved March 23, 1874, impairs the obligation of the charter contract; of the contract between the company and its stockholders, and bondholders and mortgagees; and the contract between the complainant company and the Burlington and Missouri River Railroad Company; and is therefore unconstitutional, null, and void. Session Acts of Iowa, 1874, p. 61; Stewart v. Laird, 1 Cranch, 299; Martin v. Hunter's Lessee, 1 Wheat. 351; Cohens v. Virginia, 6 id. 264; Bank of United States v. Halstead, 10 id. 63; Ogden v. Saunders, 12 id. 290; Surgett v. Lapice, 8 How. 68; Gibbons v. Ogden, 9 Wheat. 1; City of New York v. Miln, 11 Pet. 157, 158; Ohio Life and Trust Co. v. Debolt, 16 How. 432; Havemeyer v. Iowa County, 3 Wall. 294; Thomson v. Lee County, id. 327; Larned v. Burlington, 4 id. 275; The City v. Lamson, 9 id. 477; Olcott v. The Supervisors, 16 id. 678; Supervisors v. United States, 18 id. 71.

5. The act of the Iowa legislature, now in question, is in conflict with the Fourteenth Amendment to the Constitution of the United States, which provides that 'no State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law, nor deny to any person within its jurisdiction the equal protection of the law.' Bartemeyer v. Iowa, 18 Wall. 129; Railroad Company v. Maryland, 21 id. 456; License Cases, supra; Brown v. State of Maryland, 12 Wheat. 419; Railroad Commissioners v. P. & O. C. Railroad Co., 63 Mo. 276; 1 Black. Com. 138; 2 Kent, Com. 320; Wynebamer v. The People, 13 N. Y. 398, 433; Pumpelly v. Green Bay Co., 13 Wall. 166.

6. The act is in conflict with the provision of the Constitution of the United States which gives to Congress the power to regulate commerce among the several States. Congress has exercised that power by the statute of June 15, 1866. 14 Stat. 66. Under it, the authority of the appellant to transport from State to State, and receive compensation therefor, includes ex necessatati rei the right and power to fix such rates of transportation.

7. The act, so far as it prescribes the rates of compensation for the transportation of persons and property, is not a police regulation, and cannot be maintained under the police power of the State. License Cases, supra; 4 Black. Com. 162; 2 Bouv. Law Dic. 348; Railroad Company v. Fuller, 17 Wall. 560; State v. Noyes, 47 Me. 189; Cooley's Const. Lim. 574 et seq.; Benson v. The Mayor, &c., 10 Barb. 345; P. W. & B. Railroad Co. v. Bower, Am. Law Reg., March, 1874, p. 174; T. W. & W. Railway Co. v. Jacksonville, 67 Ill. 40.

8. The act is in conflict with and a violation of sect. 6, art. 1, of the Constitution of Iowa, which provides that 'all laws of a general nature shall have a uniform operation; the general assembly shall not grant to any citizen, or class of citizens, privileges or immunities, which, upon the same terms, shall not equally belong to all citizens.'

Mr. M. E. Cutts, Attorney-General of Iowa, contra.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.


text: Talk:Chicago Burlington and Quincy Railroad Company v. Iowa

license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


text:
Chicago Burlington and Quincy Railroad Company v. Iowa/Opinion of the Court

Railroad companies are carriers for hire. They are incorporated as such, and given extraordinary powers, in order that they may the better serve the public in that capacity. They are, therefore, engaged in a public employment affecting the public interest, and, under the decision in Munn v. Illinois, supra, p. 113, subject to legislative control as to their rates of fare and freight, unless protected by their charters.

The Burlington and Missouri River Railroad Company, the benefit of whose charter the Chicago, Burlington, and Quincy Railroad Company now claims, was organized under the general corporation law of Iowa, with power to contract, in reference to its business, the same as private individuals, and to establish by-laws and make all rules and regulations deemed expedient in relation to its affairs, but being subject, nevertheless, at all times to such rules and regulations as the general assembly of Iowa might from time to time enact and provide. This is, in substance, its charter, and to that extent it is protected as by a contract; for it is now too late to contend that the charter of a corporation is not a contract within the meaning of that clause in the Constitution of the United States which prohibits a State from passing any law impairing the obligation of a contract. Whatever is granted is secured subject only to the limitations and reservations in the charter or in the laws or constitutions which govern it.

This company, in the transactions of its business, has the same rights, and is subject to the same control, as private individuals under the same circumstances. It must carry when called upon to do so, and can charge only a reasonable sum for the carriage. In the absence of any legislative regulation upon the subject, the courts must decide for it, as they do for private persons, when controversies arise, what is reasonable. But when the legislature steps in and prescribes a maximum of charge, it operates upon this corporation the same as it does upon individuals engaged in a similar business. It was within the power of the company to call upon the legislature to fix permanently this limit, and make it a part of the charter; and, if it was refused, to abstain from building the road and establishing the contemplated business. If that had been done, the charter might have presented a contract against future legislative interference. But it was not; and the company invested its capital, relying upon the good faith of the people and the wisdom and impartiality of legislators for protection against wrong under the form of legislative regulation.

It is a matter of no importance that the power of regulation now under consideration was not exercised for more than twenty years after this company was organized. A power of government which actually exists is not lost by non-user. A good government never puts forth its extraordinary powers, except under circumstances which require it. That government is the best which, while performing all its duties, interferes the least with the lawful pursuits of its people.

In 1691, during the third year of the reign of William and Mary, Parliament provided for the regulation of the rates of charges by common carriers. This statute remained in force, with some amendment, until 1827, when it was repealed, and it has never been re-enacted. No one supposes that the power to restore its provisions has been lost. A change of circumstances seemed to render such a regulation no longer necessary, and it was abandoned for the time. The power was not surrendered. That remains for future exercise, when required. So here, the power of regulation existed from the beginning, but it was not exercised until in the judgment of the body politic the condition of things was such as to render it necessary for the common good.

Neither does it affect the case that before the power was exercised the company had pledged its income as security for the payment of debts incurred, and had leased its road to a tenant that relied upon the earnings for the means of paying the agreed rent. The company could not grant or pledge more than it had to give. After the pledge and after the lease the property remained within the jurisdiction of the State, and continued subject to the same governmental powers that existed before.

The objection that the statute complained of is void because it amounts to a regulation of commerce among the States, has been sufficiently considered in the case of Munn v. Illinois. This road, like the warehouse in that case, is situated within the limits of a single State. Its business is carried on there, and its regulation is a matter of domestic concern. It is employed in State as well as in inter-state commerce, and, until Congress acts, the State must be permitted to adopt such rules and regulations as may be necessary for the promotion of the general welfare of the people within its own jurisdiction, even though in so doing those without may be indirectly affected.

It remains only to consider whether the statute is in conflict with sect. 4, art. 1, of the Constitution of Iowa, which provides that 'all laws of a general nature shall have a uniform operation,' and that 'the general assembly shall not grant to any citizen, or class of citizens, privileges or immunities which, upon the same terms, shall not equally belong to all citizens.'

The statute divides the railroads of the State into classes, according to business, and establishes a maximum of rates for each of the classes. It operates uniformly on each class, and this is all the Constitution requires. The Supreme Court of the State, in the case of McAunich v. M. & M. Railroad Co., 20 Iowa, 343, in speaking of legislation as to classes, said, 'These laws are general and uniform, not because they operate upon every person in the State, for they do not, but because every person who is brought within the relation and circumstances provided for is affected by the law. They are general and uniform in their operation upon all persons in the like situation, and the fact of their being general and uniform is not affected by the number of persons within the scope of their operation.' This act does not grant to any railroad company privileges or immunities which, upon the same terms, do not equally belong to every other railroad company. Whenever a company comes into any class, it has all the 'privileges and immunities' that have been granted by the statute to any other company in that class.

It is very clear that a uniform rate of charges for all railroad companies in the State might operate unjustly upon some. It was proper, therefore, to provide in some way for an adaptation of the rates to the circumstances of the different roads; and the general assembly, in the exercise of its legislative discretion, has been fit to do this by a system of classification. Whether this was the best that could have been done is not for us to decide. Our province is only to determine whether it could be done at all, and under any circumstances. If it could, the legislature must decide for itself, subject to no control from us, whether the common good requires that it should be done.

Decree affirmed.

MR. JUSTICE FIELD and MR. JUSTICE STRONG dissented.


text: Talk:Chicago Burlington and Quincy Railroad Company v. Iowa/Opinion of the Court


text: Peik v. Chicago and North-Western Railway Company Lawrence


text: Talk:Peik v. Chicago and North-Western Railway Company Lawrence


text:
Peik v. Chicago and North-Western Railway Company Lawrence/Opinion of the Court

APPEALS from the Circuit Court of the United States for the Western District of Wisconsin.

The appellants in the first case, non-residents of the State of Wisconsin, and owners of first-mortgage bonds of the Chicago and North-western Railway Company, filed their bill to restrain the company from obeying, and Paul, Osborn, and Hoyt, railroad commissioners, and Sloan, Attorney-General of Wisconsin, from enforcing, c. 273, Laws of 1874, of that State, which limits the rate of charges for transporting passengers and freights on all the railroads in the State.

The bill sets out the various acts incorporating the company and the companies with which it is consolidated, and it alleges that the company was authorized to give its bonds and mortgages to secure the payment of borrowed money; that the complainants are owners of bonds issued or guaranteed by the company, and secured by mortgages upon various portions of its railroad, executed pursuant to law; that the tariff of rates charged by the company before the passage of that chapter did not produce sufficient income to pay interest on its debt, the legal rate of interest allowed by the laws of the State to its stockholders, and expenses; that the enforcement of said chapter will cause the destruction of the securities held by the complainants; that the classes of freight established by sect. 3 of said chapter are different from the classes of freight established by the laws of Illinois, Iowa, and Minnesota, for the transportation of freight upon the railroads of the company in those States, and that it is practically impossible to carry on the business of transporting freight from Wisconsin to either of those States; that the enforcement of said chapter will impair the obligation of the contract entered into between the company and the complainants; that said chapter is in violation of the thirteenth article of the bill of rights of the Constitution of Wisconsin, which declares that the property of no person shall be taken for public use without just compensation therefor; that the general assembly of Wisconsin had no constitutional power to pass said chapter; that the eighteenth section is a regulation of inter-state commerce; and that the company has never accepted said chapter, but will be obliged to conform to the reduced rates of fare and freight therein specified, or cease operations in Wisconsin, unless said chapter shall be held to be unconstitutional.

The bill in the second case was filed by stockholders of the company, and is substantially the same as that in the first case.

Chapter 273 classifies railroads in the State, fixes the limit of fare for the transportation of any person, classifies freights and the maximum rates therefor, and prescribes certain penalties and forfeitures for receiving any greater rate or compensation for carrying freight or passengers than the act provides. It appoints railroad commissioners, and prescribes their duties and powers. The eighteenth section is in the following words:--

'Nothing contained in this act shall be taken as in any manner abridging or controlling the rates for freight charged by any railroad company in this State for carrying freight which comes from beyond the boundaries of the State, and to be carried across or through the State; but said railroad companies shall possess the same power and right to charge such rates for carrying such freight as they possessed before the passage of this act.'

The defendants in each case demurred to the bill of complaint therein filed. The demurrers were sustained, and the defendants brought the cases here.

Mr. W. M. Evarts, Mr. C. B. Lawrence, Mr. B. C. Cook, Mr. John W. Cary, and Mr. E. W. Stoughton, for the appellants.

The act entitled 'An Act relating to railroads, express and telegraph companies, in the State of Wisconsin,' approved March 11, 1874, regarded independently of the clause of the State Constitution, reserving the right to alter or repeal corporate charters, is a clear violation of that provision of the Federal Constitution which forbids a State to pass any law impairing the obligation of contracts. Wilmington Railroad Co. v. Reid, 13 Wall. 266; Pacific Railroad Co. v. McGuire, 20 id. 42; Humphrey v. Pigues, 16 id. 247; Attorney-General v. The Railroad Companies, 35 Wis. 425.

That clause must be construed in connection with another provision in the same instrument, forbidding the taking of private property for public use, except on due compensation, and in subordination to the Fourteenth Amendment to the Constitution of the United States, which ordains that 'no State shall deprive any person of life, liberty, or property, without due process of law.' No compensation has been tendered, and the act violates that amendment. Wynehamer v. The People, 13 N. Y. 392; Pumpelly v. Green Bay Co., 13 Wall. 466; Green v. Biddle, 8 Wheat. 355.

So long as the company operates the road, it has the right to demand a reasonable compensation for its services. That right is not a special franchise or privilege, but exists by universal law, and cannot be abridged or impaired. Case of the State Freight Tax, 15 Wall. 233; Miller v. State, 15 id. 478; Holyoke Co. v. Lyman, id. 500; Von Hoffman v. Quincy, 4 id. 535; Curran v. State of Arkansas, 15 How. 304; Beardstown v. Louisville Railroad Co., 4 Met. (Ky.) 308; Sage v. Dillard, 15 B. Mon. (Ky.) 353; Commonwealth v. Express Company, 13 Gray, 253.

NOTE.-These cases were elaborately and at great length argued by the respective counsel. It will be impracticable for the reporter to furnish more than a very condensed synopsis of the argument. No attempt will be made to give the particular points which each of the counsel maintained. The argument on each side is given as a whole.

The question of what is a reasonable compensation is for judicial determination, and cannot be decided by the legislature. Commonwealth v. Proprietors of Bridge, 2 Gray, 337; Attorney-General v. The Railroad Companies, supra; P. W. & B. Railroad Co. v. Bower, Law Reg., March, 1874; Chicago & Alton Railroad Co. v. The People, 67 Ill. 11; State v. Noyes, 47 Me. 203; Stamford v. Pawlet, 1 Cromp. & J. 57. The State, being a party to the contract, cannot prescribe the compensation by a subsequent enactment which shall bind the other party. Were it otherwise, the will of each succeeding legislature, and not the charter, would determine the powers and rights of the company.

Conceding that the charter which gave the franchise be subject to repeal, the State cannot take from the company its roadbed and its rolling-stock, or the income derived from their use, without making just compensation. The Supreme Court of Wisconsin, in Attorney-General v. The Railroad Companies, supra, in granting an injunction to restrain the company from operating its road except upon the terms prescribed, declares that 'the material property and rights of corporations should be inviolate.' This act, so far from leaving them inviolate, takes the income, and thus as effectually deprives the company of the beneficial use of its property, and the means of performing its engagements with its creditors, as if the road was confiscated. There is no substantial difference between a law which diminishes the income of a company thirty per cent, by reducing its tariff of rates, and one which requires it to pay that per cent to the treasurer of State, and obliges him to distribute it pro rata among those who paid fares or freight to the company.

In all the adjudged cases on the subject the rulings have been uniform, that there are some necessary limits to the exercise of the power which the State assumes to amend or repeal charters, and among them is, that the character of the companies shall not be changed, nor the purposes of their creation defeated, nor vested rights of property impaired. Sage v. Dillard, 15 B. Mon. (Ky.) 353.

'It seems to us,' says the Supreme Court of Massachusetts, in Commonwealth v. Essex Co., 13 Gray, 253, 'that this power must have some limit, although it is difficult to define it. Perhaps the rule is this, that where, under a power in the charter, rights have been acquired and become vested, no amendment or alteration of the charter can take away the property or rights which have become vested under a legitimate exercise of the powers granted.'

Tried by this principle, thus explicitly announced, and which is substantially sustained by this court in Holyoke Company v. Lyman and Miller v. State, supra, the act cannot be justified. The vital element in the ownership and management of railway property, the right to classify the various kinds of freight, and to determine and receive the proper compensation, is taken from the corporation and vested in the State.

Independently of the foregoing considerations, applicable to all railway companies in the State, the Chicago and Northwestern Railway Company occupies a peculiar position, which for two reasons places it beyond the reach of the act:--

1. The sale in 1859 of the Chicago, St. Paul, and Fond du Lac road, which is a part of the Chicago & North-western road, under a deed of trust, and by authority of the legislature, vested the title to the first road in certain purchasers, with a right to operate it. The subsequent grant of corporate franchises conferred on them no additional right in or to the road, and the alteration or repeal of the charter cannot impair any right which they, by their purchase, acquired and held as natural persons.

2. The legislature of Wisconsin entered into a contract with an Illinois corporation, by which the latter acquired rights in that road which the act impairs, in violation of the tenth section of the first article of the Federal Constitution. Coe v. ''The Columbus, P. & Ind. Railroad Co., 10 Ohio, 386; Atkinson v. M. & C. Railroad Co.'', 15 id. 36; Curran v. State of Arkansas, 15 How. 534; Railway Company v. Wheaton, 13 Wall. 284; Morris Canal & Bank Co. v. Townsend, 24 Barb. 658.

The act violates in principle the congressional land grant of June 3, 1856, to which was annexed the condition that the roads of the companies receiving its benefits should 'remain public highways for the use of the government of the United States, free from tolls or other charges upon the transportation of property or troops of the United States,' and that the mails should be transported at such prices as Congress might direct. If Wisconsin can pass such an act, it can fix a rate of compensation which will prevent the operation of the road, and disable the company from performing its duties to the general government. McCulloch v. State of Maryland, 4 Wheat. 316; Osborn v. Bank of United States, 9 id. 740.

The act violates the contract entered into between the corporation and its bondholders, which the State had suthorized, and thus violates that provision of the Federal Constitution which forbids a State to pass a law impairing the obligation of contracts. Durfee v. Old Colony, 5 Allen, 247; Curran v. State of Arkansas, 15 How. 304; Woodruff v. Trapnall, 10 id. 190; Baring v. Dabney, 19 Wall. 8; Von Hoffman v. City of Quincy, 4 id. 458; Hawthorn v. Calef, 2 id. 10; Tomlinson v. Jessup, 15 id. 457.

The act is a regulation of inter-state commerce, and for that reason unconstitutional. Case of the State Freight Tax, supra.

Mr. I. C. Sloan and Mr. L. S. Dixon, contra.

The power reserved to the general assembly by the Constitution to alter or repeal charters, and the effect of its exercise, are the controlling questions in this controversy, and they are not new, either in the courts of Wisconsin, in those of the several States, or in this court.

As early as June, 1854, before the contracts relied upon by the complainants were entered into, or any road now owned and operated by the defendant company was built, or any indebtedness incurred by it or any of its predecessors, the Supreme Court of Wisconsin held that, by the operation of such reserved power, an act of the legislature was valid, although it restricted the amount which, under a charter previously granted, a plank-road company might have charged and received for tolls. The Madison, Watertown & Milwaukee Plank-road Co. v. Reynolds, 3 Wis. 287.

The same principle has also been announced in Pratt v. Brown, id. 603; Nazro v. Merchants' Insurance Co., 14 id. 295; Kenosha, Rockford, & Rock Island Railroad Co. v. March, 17 id. 16; Whiting v. The Sheboygan & Fond du Lac Railroad Co., 25 id. 197; State v. Milwaukee Gas Light Co., 29 id. 461; The West Wisconsin Railroad Co. v. The Board of Supervisors of Trempealeau County, 35 id. 257; The Attorney-General v. The Railroad Companies, id. 425.

In the last case the court remarks:--

'The power to repeal can bear but one construction. The power to alter depends on the meaning of the word 'alter.' To alter is to make different, without destroying identity (Crabb); to vary, without entire change (Webster and Imp. Dict.). A corporate charter of one kind cannot be altered to a charter of an entirely different kind. But a corporate charter may be altered so as to make it different in detail, so long as the general identity of the corporation remains; so that it is varied without entire change. This is the obvious meaning to lawyer or layman. Arguments ab inconvenienti cannot weigh against the manifest meaning of the word used: they may go to impeach the wisdom of the power, but not to impair its import.'

In this court a similar construction has been given to the same words, and the scope and effect of the reserved power held to be the same, whether it be contained in a special act creating a corporation, or in a general law applicable to all future acts of incorporation, unless specially excepted, or, as in this instance, in the Constitution, under which no unalterable or irrepealable charter can be granted. Sherman v. Smith, 1 Black, 587; Pennsylvania College Cases, 13 Wall. 190; Tomlinson v. Jessup, 15 id. 454; Miller v. State, id. 478; Holyoke Company v. Lyman, id. 500; Olcott v. The Supervisors, 16 id. 678.

Charters are to be construed most favorably to the State, and nothing passes by implication. The Dubuque & Pacific Railroad Co. v. Litchfield, 23 How. 66; The Binghamton Bridge, 3 Wall. 51; Home of the Friendless v. Rouse, id. 430.

The controversy is therefore reduced to the meaning of 'alter.' The remark in Tomlinson v. Jessup, supra, that 'rights acquired by third parties stand upon a different footing,' was obviously not intended to intimate that the legislature, in the exercise of the power conferred by the Constitution, may not, by altering the charter of a company without its consent, operate upon its franchises, whenever the public interests would be thereby subserved, although the effect may be incidentally to diminish its resources for the payment of its debts, or depreciate the value of its stock or its bonds. Such an effect constitutes no valid ground of complaint: if it did, the exercise of the power would be always defeated. Few corporations are free from debt and all of them have stockholders.

Whatever is given by statute may be taken away by statute. State v. Hoeflinger, 31 Wis. 262; Perrine v. Chesapeake & Delaware Canal Co., 9 How. 184.

The right to charge tolls for the use of roads, bridges, or ferries is a franchise. It was so conceded by counsel on both sides in Charles River Bridge v. Warren Bridge, 11 Pet. 420, and directly affirmed by this court in Perrine v. Chesapeake & Delaware Canal Co., supra, and in Olcott v. The Supervisors, supra.

Like rulings have been had in Blisset v. Hart, Willes, 512; Whiting v. The Sheboygan & Fond du Lac Railroad Co., supra; Beekman v. Saratoga & Schenectady Railroad Co., 3 Paige, 75; Olcott v. Banfill, 4 N. H. 545; State v. Boston, Concord, & Montreal Railroad Co., 25 Vt. 442; Erie & North-east Railroad Co. v. Casey, 26 Penn. St. 287; Boston & Lowell Railroad Corporation v. Salem & Lowell Railroad Co., 2 Gray (Mass.), 27; Raritan & Delaware Bay Railway Co. v. Delaware & Raritan Canal Co., 18 N. J. Eq. 570; Delaware, Lackawanna, & Western Railway Co. v. Erie Railway Co., 21 id. 298; McGregor v. Erie Railway Co., 35 N. J. L. 97; Blake v. Railroad Company, 19 Minn. 418.

The exercise of the reserved power in question is sustained by the following cases:--

In New York: McLaren v. Pennington, 1 Paige, 102; ''The Schenectady, &c. Plank-road Co. v. Thatcher, 10 N. Y. 102; Buffalo & N. Y. City Railroad Co. v. Dudley'', 14 id. 336; In the Matter of Oliver Lee & Co.'s Bank, 21 id. 9; In the Matter of the Reciprocity Bank, 22 id. 9; The Albany Northern Railroad Co. v. Brownell, 24 id. 345; The Northern Railroad Co. v. Miller, 10 Barb. 260; White v. Syracuse & Utica Railroad Co., 14 id. 559; Hyatt v. McMahon, 25 id. 457; In the Matter of the Reciprocity Bank, 17 How. Pr. 323.

In Massachusetts: Crease v. Babcock, 23 Pick. 334; Roxbury v. ''The Boston & Prov. Railroad Corporation'', 6 Cush. 424; Boston & Lowell Railroad Corporation v. Salem & Lowell Railroad Co., 2 Gray, 1; ''Mass. General Hospital v. St. Mut. Life Ass. Co.'', 4 id. 227; Commonwealth v. Essex Company, 13 id. 239; Fitchburg Railroad Co. v. ''Grand Junct. Railroad Co., 4 Allen, 198; Commonwealth v. Eastern Railroad Co.'', 103 Mass. 254; Commissioners of Fisheries v. Holyoke Company, 104 id. 446; ''Mayor, &c. of Worcester v. Norwich & Worcester Railroad Co.'', 109 id. 103; Parker v. Metropolitan Railroad Co., id. 506.

In Maine: Proprietors, &c. v. Haskell, 7 Greenl. 474; Read v. Frankfort Bank, 23 Me. 318; Meadow Dam Company v. Gray, 30 id. 547; Oldtown & Lincoln Railroad Co. v. Veazie, 39 id. 571.

In New Jersey: Story v. ''The Jersey City, &c. Plank-road Co.'', 16 N. J. Eq. 13; State v. Miller, 30 N. J. L. 368; State ex rel., &c. v. Miller, 31 id. 521; State ex rel., &c. v. The Mayor, &c., id. 575.

In Indiana: Wilson v. Tesson, 12 Ind. 285.

In Rhode Island: Bailey v. Trustees, &c., 6 R. I. 491; Gardner v. Hope Insurance Co., 9 id. 194.

In Minnesota: Perrin v. Oliver, 1 Minn. 202; Blake v. Railroad Company, 19 id. 418.

In Iowa: Miner's Bank v. United States, 1 Green, 563.

In Kentucky: Sage v. Dillard, 15 B. Mon. 347; Louisville v. President, &c., id. 642.

In Pennsylvania: Erie & North-east Railroad Co. v. Casey, 26 Penn. St. 287.

The creation of corporations is a prerogative of sovereignty, to be exercised or not, as the legislature shall see fit; and at such times, in such manner, and subject to such conditions and reservations as it shall determine, regard being had only to the restrictions which the Constitution imposes upon the lawmaking power. The latter, therefore, by statute, or the people, by fundamental law, may reserve the absolute control over these artificial persons; and there is no authority lodged elsewhere to interfere with or prevent the exercise of this sovereign right. The government which creates may reserve the power to destroy them, or to prescribe the condition upon which their future or continued existence shall depend.

This principle has been fully and clearly recognized by this court. Railroad Company v. Maryland, 21 Wall. 471; McCullach v. Maryland, 4 Wheat. 427; Providence Bank v. Billings, 4 Pet. 513; Bank of Commerce v. New York City, 2 Black, 620; Veazie Bank v. Fenno, 8 Wall. 533; Charles River Bridge v. Warren Bridge, supra; Turnpike Company v. State, 3 Wall. 210.

The bondholders and mortgagees of the company have no greater rights or immunity from legislative control than has the company itself, and the existence of their claims in no way impairs or defeats the power to alter or repeal the corporate franchises.

None of the cases cited by the complainants sustain the doctrine contended for by them. On the other hand, the rule of law is well settled in this court. Mumma v. The Potomac Company, 8 Pet. 281; Pennsylvania College Cases, supra; Curran v. The State of Arkansas, 15 How. 311; Read v. Frankfort Bank, 23 Me. 318.

The stockholders and creditors invested their money subject to the reserved power, of which by presumption of law they had notice. The East Anglican Railways Co. v. The Eastern Counties Railway Co., 11 C. B. 775.

The act limiting the tolls and charges of the railroad company is not an encroachment upon the power of Congress to regulate commerce among the several States. No discrimination is made between citizens of the State and citizens of other States. Case of the State Freight Tax, 15 Wall. 277; Railroad Company v. Richmond, 19 id. 584; Railroad Company v. Maryland, 21 id. 456.

Nor does it contravene the article of the State Constitution which provides that the property of no person shall be taken for public use without just compensation therefor. Gilman v. City of Sheboygan, 2 Black, 513.

The position cannot be maintained that the legislature lost or forfeited the use of the reserved power by authorizing a corporation to consolidate with one of the same or a different name, incorporated in another State, with an irrepealable charter. A power granted by the Constitution cannot in this way be released or destroyed. By the consolidation, the corporations acquired an identity of interest, but did not necessarily cease to be distinct entities. Farnum v. Blackstone, 1 Sumn. 47; Central Railroad & Banking Co. v. Georgia, 92 U.S. 665.

A corporation can have no existence beyond the limits of the State or sovereignty which brings it into life and endows it with its faculties and powers. The O. & M. Railroad Co. v. Wheeler, 1 Black, 286; McGregor, qui tam, v. Erie Railway Co., 35 N. J. L. 115. The Illinois Company had no authority to consolidate with a corporation created by and operating in Wisconsin, except such as was conferred by an express legislative enactment, the acceptance of which subjected it to all the conditions, obligations, and liabilities which the Constitution and laws of Wisconsin imposed. The consolidated company sustained in Wisconsin the same relation to that State as did the original corporation.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

These suits present the single question of the power of the legislature of Wisconsin to provide by law for a maximum of charge to be made by the Chicago and North-western Railway Company for fare and freight upon the transportation of persons and property carried within the State, or taken up outside the State and brought within it, or taken up inside and carried without. That company was by its charter authorized 'to demand and receive such sum or sums of money for the transportation of persons and property, and for storage of property, as it shall deem reasonable.' Charter of the Wisconsin & Superior Railroad Co., sect. 6. Other forms of expression are used in charters granted by Wisconsin to other companies, which by consolidation have become merged in the present corporation; but they are all the same in effect. None go beyond this.

The Constitution of the State in force when each of the several acts of incorporation was passed, provides that all acts for the creation of corporations within the State 'may be altered or repealed by the legislature at any time after their passage.' Art. 11, sect. 1.

It was conceded upon the argument that this reserved power of the Constitution gave the legislature 'the same power over the business and property of corporations that it has over individuals,' or, as it is expressed by one of the counsel, 'nothing more could have been intended than to leave the stockholders in corporations in such a position that the legislature could place them on the same footing with natural persons before the law, and disable them from permanently evading the burdens on all others engaged in similar vocations, by appealing to the letter of their charter. Their object was not to open the door to oppression, but to secure simple equality between citizens of the State, whether working singly or in corporate associations.' And, in another place, the same learned counsel says: 'The privilege, then, of charging whatever rates it may deem proper is a franchise, which may be taken away under the reserved power, but the right to charge a reasonable compensation would remain as a right under the general law governing natural persons, and not as a special franchise or privilege.'

Without stopping to inquire whether this is the extent of the operation of this important constitutional reservation, it is sufficient to say that it does, without any doubt, have that effect. In Munn v. Illinois, supra, p. 113, and Chicago, Burlington, & Quincy Railroad Co. v. Iowa, supra, p. 155, we decided that the State may limit the amount of charges by railroad companies for fares and freights, unless restrained by some contract in the charter, even though their income may have been pledged as security for the payment of obligations incurred upon the faity of the charter. So far this case is disposed of by those decisions.

It remains only to consider a few questions raised here which were not involved in the cases that have already been decided.

1. As to the consolidation of the Wisconsin corporations with those of Illinois. For the purpose of promoting this consolidation, the legislature of Wisconsin passed an enabling act, and, in so doing, provided that if such consolidation was perfected, 'the consolidated company shall be and remain subject to the laws of the State of Wisconsin and the State of Illinois, respectively, and shall have in all respects the same privileges as though this consolidation had not taken place; provided, that the laws of Illinois shall have no force and effect in the State of Wisconsin.' Wisconsin Consolidation Act, March 10, 1855, sect. 8. The second section of the same act also provided that the consolidated company should 'have all the rights, privileges, and franchises conferred on the said companies [those in Illinois as well as those in Wisconsin] by the laws of the States of Illinois and Wisconsin, respectively, the same, and not otherwise, as though the said consolidation had not taken place.' In this way, Wisconsin in effect said to the Illinois companies, 'You may consolidate your interest with those of the named companies in this State, and form one corporation in the two States; but, in so doing, you must, in Wisconsin, be subject to our laws. In Wisconsin, all corporations are liable to have their charters altered or repealed at the will of the legislature. If you are willing to take this risk, we will care for you, within our jurisdiction, precisely as we do for our own corporations.'

Upon these terms the consolidation was finally perfected, and the consolidated company now exists under the two jurisdictions, but subject to the same legislative control as to its business in Wisconsin as private persons. The Illinois companies might have stayed out. But they chose to come in, and must now abide the consequences. Thus Wisconsin is permitted to legislate for the consolidated company in that State precisely the same as it would for its own original companies, if no consolidation had taken place. This is the contract by which the Illinois stockholders must abide. Having availed themselves of what they supposed to be the advantages of the consolidation, they cannot repudiate their corresponding obligations.

There is nothing, therefore, in this objection.

2. The obligations of the consolidated company, under the land grant to the Wisconsin and Superior Railroad Company, to keep that part of its road which formerly belonged to that company open as a public highway for the use of the government of the United States, free from toll or other charges upon the transportation of property or troops of the United States, and to transport the mails at such prices as Congress may by law direct. The United States do not complain. It will be time enough for us to consider this objection when they do.

3. As to the effect of the statute as a regulation of interstate commerce. The law is confined to State commerce, or such inter-state commerce as directly affects the people of Wisconsin. Until Congress acts in reference to the relations of this company to inter-state commerce, it is certainly within the power of Wisconsin to regulate its fares, &c., so far as they are of domestic concern. With the people of Wisconsin this company has domestic relations. Incidentally, these may reach beyond the State. But certainly, until Congress undertakes to legislate for those who are without the State, Wisconsin may provide for those within, even though it may indirectly affect those without.

4. As to the repeal of this act by that of March 12, 1874. The Supreme Court of Wisconsin has decided that there is no such repeal as is claimed. The Atty.-Gen. v. Railroad Companies, 35 Wis. 427. This is binding on us.

5. As to the claim that the courts must decide what is reasonable, and not the legislature. This is not new to this case. It has been fully considered in Munn v. Illinois. Where property has been clothed with a public interest, the legislature may fix a limit to that which shall in law be reasonable for its use. This limit binds the courts as well as the people. If it has been improperly fixed, the legislature, not the courts, must be appealed to for the change.

6. The sale of the Chicago, St. Paul, and Fond du Lac Railroad Company. The charter of the company whose road was sold does not confer any right which has been impaired by this legislation. That company, like other railroad companies in Wisconsin, was subject to regulation as to its fares, &c. It is, therefore, unnecessary to consider what might under other circumstances have been the effect of such a sale.

This disposes of the case. No other questions need be considered. If the question ever arises whether the company can be compelled to continue its business at the prices fixed, it will be time enough for us to pass upon it when it reaches here in due course of proceeding. It is not here now.

Decrees affirmed.

MR. JUSTICE FIELD and MR. JUSTICE STRONG dissented.


text: Talk:Peik v. Chicago and North-Western Railway Company Lawrence/Opinion of the Court


text:
Chicago Milwaukee and St Paul Railroad Company v. Ackley

ERROR to the Circuit Court of the County of Milwaukee, State of Wisconsin.

Mr. John W. Cary for the plaintiff in error.

Mr. I. C. Sloan, contra.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.


text: Talk:Chicago Milwaukee and St Paul Railroad Company v. Ackley


text:
Chicago Milwaukee and St Paul Railroad Company v. Ackley/Opinion of the Court

The only question presented by this record is whether a railroad company in Wisconsin can recover for the transportation of property more than the maximum fixed by the act of March 11, 1874, by showing that the amount charged was no more than a reasonable compensation for the services rendered.

What we have already said in Peik v. Chicago & North-western Railway Company, and Lawrence v. Same, supra, p. 164, is applicable to this case. As between the company and a freighter, there is a statutory limitation of the charge for transportation actually performed. If the company should refuse to carry at the prices fixed, and an attempt should be made to forfeit its charter on that account, other questions might arise, which it will be time enough to consider when they are presented. But for goods actually carried, the limit of the recovery is that prescribed by the statute.

Judgment affirmed.

MR. JUSTICE FIELD and MR. JUSTICE STRONG dissented.


text: Talk:Chicago Milwaukee and St Paul Railroad Company v. Ackley/Opinion of the Court


text:
Page:Haiti- Her History and Her Detractors.djvu/387

Rh with the other Islands of the West Indies,' a review of a book entitled 'Where Black rules White,' in the Nation of last week, and an unpublished article on my desk entitled 'The Other Side of Haiti.' In all these articles I agree with your correspondent that Haiti is not so black as it has been painted.

"." This absolute denial passed quite unnoticed, the Washington Post in all probability never having any knowledge of the contradiction of the sensational story attributed to Professor Hill, no mention being made of his letter to The Sun; therefore up to the present time the readers of this newspaper, one of the most important of those edited in the capital of the United States, must be under the impression that they know the truth about cannibalism in Haiti.

Like the author of the Washington Post interview, Spenser St. John, in quoting others, may have taken


text:
Winona and St Peter Railroad Company v. Blake

ERROR to the Supreme Court of the State of Minnesota.

Mr. B. C. Cook and Mr. C. B. Lawrence for the plaintiff in error.

Mr. W. P. Clough, contra.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.


text: Talk:Winona and St Peter Railroad Company v. Blake


text:
Winona and St Peter Railroad Company v. Blake/Opinion of the Court

By its charter, the Winona and St. Peter Railroad Company was incorporated as a common carrier, with all the rights and subject to all the obligations that name implies. It was, therefore, bound to carry, when called upon for that purpose, and charge only a reasonable compensation for the carriage. These are incidents of the occupation in which it was authorized to engage. There is nothing in the charter limiting the power of the State to regulate the rates of charge. The provision in the act of Feb. 28, 1866, that the 'company shall be bound to carry freight and passengers upon reasonable terms,' and that in the Constitution of Minnesota (art. 10, sect. 4), that 'all corporations being common carriers,. . . shall be bound to carry the mineral, agricultural, and other productions or manufactures on equal and reasonable terms,' add nothing to and take nothing from the grant as contained in the original charter.

This case, therefore, falls directly within our rulings in Munn v. Illinois; Chicago, Burlington, & Quincy Railroad Company v. Iowa; Peik v. Chicago & North-western Railway Company; and Chicago, Milwaukee, & St. Paul Railroad Company v. Ackley, supra.

For the reasons stated in the opinions in those cases, the judgment of the Supreme Court of Minnesota is

Affirmed.

MR. JUSTICE FIELD and MR. JUSTICE STRONG dissented.

NOTE.-In Southern Minnesota Railroad Company v. Coleman, error to the Circuit Court of the United States for the District of Minnesota, which was argued by Mr. H. J. Horn and Mr. G. E. Cole for the plaintiff in error, and by Mr. E. C. Palmer for the defendant in error, MR. CHIEF JUSTICE WAITE, in delivering the opinion of the court, remarked: This case, in all its essential facts, is precisely like that of Winona & St. Peter Railroad Company v. Blake, supra. The judgment of the Circuit Court is, therefore, affirmed upon the authority of that case, and for the reasons stated in the opinions which have just been read.

MR. JUSTICE FIELD and MR. JUSTICE STRONG dissented.


text: Talk:Winona and St Peter Railroad Company v. Blake/Opinion of the Court


text:
Stone v. Wisconsin

ERROR to the Circuit Court of the County of Dane, State of Wisconsin.

Mr. John W. Cary for the plaintiff in error.

Mr. I. C. Sloan, contra.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

title: Stone v. Wisconsin


text: Talk:Stone v. Wisconsin

title: Talk:Stone v. Wisconsin


text:
Stone v. Wisconsin/Opinion of the Court

The only question presented in this case, not decided in Chicago, Milwaukee, & St. Paul Railroad Co. v. Ackley, supra, p. 179, is as to the effect upon the rights of these parties of the charter of the Milwaukee and Waukesha Railroad Company, passed by the territorial legislature of Wisconsin, March 11, 1847. This provides (sect. 15) that 'on the completion of said railroad, or any portion of the track, not less than ten miles, it shall and may be lawful for the company to demand and receive such sum or sums of money for passage and freight of persons and property as they shall from time to time think reasonable.' It is claimed that this gives the company the charter or contract right to fix its own rates of fare and freight, subject only to a judicial determination as to whether they are reasonable. Without admitting that such would be the effect of this provision, we shall dispose of the case upon another ground.

The first section of the act appoints commissioners to receive subscriptions to the capital stock. The second section provides:--

'That the capital stock of said company shall be $100,000, in shares of $100 each; and as soon as one thousand shares of stock shall be subscribed, and five dollars on each share actually paid in, and a statement shall be deposited with the treasurer of the County of Milwaukee, authenticated by the oath of the secretary and two or more of said commissioners, that such subscriptions and payments have been in good faith made, the subscribers of such stock, with such other persons as shall associate with them for that purpose, their successors and assigns, shall be, and they are hereby, declared and created a body corporate and politic, by the name and style of 'Milwaukee and Waukesha Railroad Company,' with perpetual succession, and by that name shall have all the privileges, franchises, and immunities incident to a corporation.'

The commissioners named in the first section met and organized, Nov. 23, 1847. Books of subscription were opened, and one of the commissioners was authorized to procure an amendment of the charter. Upon application made under this authority, an amendment, not at all important to the present inquiry, was passed by the territorial legislature, March 11, 1848. The requisite amount of stock was subscribed on or before April 5, 1849. It does not appear that any was subscribed before; but on that day the necessary certificate under sect. 2 was filed with the treasurer of Milwaukee County.

Wisconsin was admitted into the Union as a State, May 29, 1848, 9 Stat. 233, under a constitution ratified by the people, March 2, 1848, which provided, art. 11, sect. 1, that all laws for the creation of corporations 'may be altered or repealed by the legislature at any time after their passage.'

Upon this state of facts the Supreme Court of Wisconsin decided, in the case of The Attorney-General v.Railroad Companies, 35 Wis. 599, 'that the charter was accepted and the corporation organized many months after the adoption of the Constitution and the admission of the State into the Union by Congress.' Previous to that time it 'remained a naked unaccepted proposition.' p. 601. For this reason, it was held that 'its acceptance after the organization of the State, so far as it is a contract, makes it manifestly a contract with the State.' p. 605. The ground on which the decision was placed is that, as the act of incorporation had not been accepted when the territory ceased to exist, there was no contract between the corporation and the territory; but the State Constitution having continued the act in force, it became thereafter a State statute for the incorporation of the company, and, as such, subject to the reserved power of alteration and repeal. This construction of the statute and Constitution is binding upon us as a question of State statutory and constitutional law.

This being so, we are not called upon to consider any of the other points which appear in the case in opposition to the effect claimed for the territorial act by the plaintiff in error.

Judgment affirmed.

MR. JUSTICE FIELD, with whom concurred MR. JUSTICE STRONG, dissenting.

title: Stone v. Wisconsin/Opinion of the Court


text: Talk:Stone v. Wisconsin/Opinion of the Court


text:
Stone v. Wisconsin/Dissent Field

MR. JUSTICE FIELD, with whom concurred MR. JUSTICE STRONG, dissenting.

I dissent from the judgments of the court in the several railroad cases arising in the States of Illinois, Wisconsin, Iowa, and Minnesota, commonly known as the 'Granger Cases,' and from the reasons on which the judgments are founded. These cases involved a consideration of the charters of the different companies, and of the extent of the power of the legislature over them, as well in the absence of any reservation of a right to alter or repeal them, as when such reservation was embodied in them, or in the constitutions under which they were granted. On the one hand, it was contended that the legislature of each State possessed the power, irrespective of any reservation, to regulate at its discretion the compensation which the companies chartered by it might charge for the carriage of persons and merchandise, without reference to the expenses of the carriage, or the obligations incurred in the construction of the roads. Unlimited power over every railroad corporation in respect to the business it should carry on, and the compensation it should receive, was asserted, except where these were specifically designated and permanently fixed in the charter.

On the other hand, it was contended that the charters of the companies constituted contracts between the States creating them and the corporators, within the provision of the Federal Constitution prohibiting legislation impairing the obligation of contracts; and that they could not, therefore, be changed in any material particular, unless the power to make the change was reserved in the charters, or in some constitutional provision of the States; that the right of the companies to operate their respective roads and charge reasonable compensation for transportation of persons and merchandise was the essential franchise granted, and that what was reasonable compensation in any case, depending, as it must, upon a variety of considerations, upon which the parties had a right to be heard, was a judicial question, and not a matter for legislative determination.

It was also contended that the clause in the Constitution of some of the States, reserving a power to their legislatures to alter acts of incorporation, did not authorize an entire change in the character of a corporation, or its distruction; and that a sound interpretation of the clause would prevent such a regulation of fares as would take from a company the power to meet its just obligations, by which the means were obtained to construct and equip its road.

The questions thus presented are of the gravest importance, and their solution must materially affect the value of property invested in railroads to the amount of many hundreds of millions, and will have a great influence in encouraging or repelling future investments in such property. They were ably and elaborately argued by eminent counsel, and nothing was omitted which could have informed or enlightened the court. The opportunity was presented for the court to define the limits of the power of the State over its corporations after they have expended money and incurred obligations upon the faith of the grants to them, and the rights of the corporations, so that, on the one hand, the property interests of the stockholder would be protected from practical confiscation, and, on the other hand, the people would be protected from arbitrary and extortionate charges. This has not been done; but the doctrine advanced in Munn v. Illinois, supra, p. 113, has been applied to all railroad companies and their business, and they are thus practically placed at the mercy of the legislature of every State.

In that case, the court has declared as its solemn judgment that property 'becomes clothed with a public interest when it is used in such a manner as to be of public consequence and affect the community at large,' and thus loses enough of its private character to make its use subject to regulation, not only in the manner of the use, but as to the compensation which the owner may receive for it. 'When, therefore,' says the court, 'one devotes his property to a use in which the public has an interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good, to the extent of the interest he has thus created. He may withdraw his grant by discontinuing the use, but so long as he maintains the use he must submit to the control.' There is no business or enterprise involving expenditures to any extent which is not of public consequence, and which does not affect the community at large. There is no industry or employment, no trade or manufacture, and no avocation which does not in a greater or less extent affect the community at large, and in which the public has not an interest in the sense used by the court.

There is no doubt of the power of the legislature to prescribe in the charter of any corporation the compensation it may receive for services rendered, or to reserve the power to regulate such compensation subsequently. The power to prescribe the conditions of use and enjoyment necessarily accompanies the power to grant. But the charter of a corporation being a contract, a sufficient consideration for the privileges and franchises conferred being found in the duties and liabilities assumed by the corporators, the subsequent power of the legislature is restrained by its terms. This has been so often judicially declared, that it has been supposed to be no longer open to discussion. The first question, therefore, for consideration in all cases where legislation affects the constitution of a corporation, or its beneficial operation, is, what is the true construction of its charter, and, consequently, what privileges does it confer and what restraint does it impose upon legislative interference? The rights and privileges implied in the contract are equally as inviolable as those expressed. This question is not met by the court in its opinion, the several cases being disposed of by the novel doctrine announced in Munn v. Illinois, that the legislature has a right to regulate the compensation for the use of all property, and for services in connection with it, the use of which affects the 'community at large;' and the further doctrine, equally novel, that although the charter of a company confers the power to make reasonable charges, the whole matter is reserved to be regulated by the State, in its discretion.

If it be admitted that the reserved power to alter all laws creating corporations authorizes the legislature to regulate the rates of charges of a railroad company for the transportation of persons and property, it should not, in common honesty, be so used as to destroy or essentially impair the value of mortgages and other obligations executed under express authority of the State. The reserved power has not generally been supposed to authorize the legislature to revoke the contracts of the corporation with third parties, or to impair any vested rights acquired under them. But no considerations of this kind are of any weight under the decision in that case.

So long as that decision remains, it will be a waste of words to discuss the questions argued by counsel in these cases. That decision, in its wide sweep, practically destroys all the guaranties of the Constitution and of the common law invoked by counsel for the protection of the rights of the railroad companies. Of what avail is the constitutional provision that no State shall deprive any person of his property except by due process of law, if the State can, by fixing the compensation which he may receive for its use, take from him all that is valuable in the property? To what purpose can the constitutional prohibition upon the State against impairing the obligation of contracts be invoked, if the State can, in the face of a charter authorizing a company to charge reasonable rates, prescribe what rates shall be deemed reasonable for services rendered? That decision will justify the legislature in fixing the price of all articles and the compensation for all services. It sanctions intermeddling with all business and pursuits and property in the community, leaving the use and enjoyment of property and the compensation for its use to the discretion of the legislature. Having already expressed my objections to that decision in a dissenting opinion, I need not repeat them here.

title: Stone v. Wisconsin/Dissent Field


text: Talk:Stone v. Wisconsin/Dissent Field

title: Talk:Stone v. Wisconsin/Dissent Field


text:
Dunbar v. Myers

APPEAL from the Circuit Court of the United States for the Southern District of New York.

The facts are fully stated in the opinion of the court.

This case was argued by Mr. Charles F. Blake v. Mr. Samuel J. Glassey for Dunbar, and by Mr. Frederic H. Betts for Myers.

MR. JUSTICE CLIFFORD delivered the opinion of the court.

title: Dunbar v. Myers


text: Talk:Dunbar v. Myers

title: Talk:Dunbar v. Myers