South Western Railroad v. Benton

58 S.E.2d 905, 206 Ga. 770, 1950 Ga. LEXIS 581
CourtSupreme Court of Georgia
DecidedApril 10, 1950
Docket16980
StatusPublished
Cited by10 cases

This text of 58 S.E.2d 905 (South Western Railroad v. Benton) is published on Counsel Stack Legal Research, covering Supreme Court of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
South Western Railroad v. Benton, 58 S.E.2d 905, 206 Ga. 770, 1950 Ga. LEXIS 581 (Ga. 1950).

Opinions

Hawkins, Justice.

(After stating the foregoing facts.) The controlling question in this case is, whether the South West-era Railroad Company (hereinafter called “South Western”) can legally sell and convey its franchise and physical properties to the reorganized Central of Georgia Railway Company (hereinafter called “Central”) upon the vote of a majority of its stockholder’s, or whether such a sale would have to be authorized by the unanimous consent of the stockholders.

Able counsel for all parties at interest have submitted most excellent briefs, showing exhaustive research. Due to the many underlying and fundamental principles of law and constitutional provisions which must be taken into consideration, and the conflicting lines of authority from other jurisdictions touching certain phases of the question, its solution has not been without difficulty.

It is insisted by the plaintiffs in error, the South Western and its officers and directors, that the South Western is authorized to sell its franchise and physical properties by majority vote of its stockholders under the provisions of the act of 1933 (Ga. L. 1933, p. 235), now codified as §§ 94-328 and 94-329 of the Code of 1933, as follows: “Any railroad corporation organized under the laws of this State, which has heretofore leased its property for a long term of years to another corporation, which lease has terminated, and the lessor is not a going concern or equipped to conduct the operations of a railroad company, is hereby authorized to sell or lease its property, rights, and franchises to another railroad corporation upon such terms as may be agreed upon by the board of directors of the selling or lessor corporation and assented to by the holders of a majority of its stock.” Code § 94-328. “The railroad corporation to which a sale or [783]*783lease is made under the terms of the preceding section shall acquire all the property, rights, and franchises of the selling, or lessor, corporation.” § 94-329. And it is insisted by the intervenors, Callaway, as Trustee, and Central, that South Western has such authority under the Code sections above referred to and also under the provisions of the General Railroad Law of 1892, as found in Code §§ 94-311 and 94-318.

It is insisted by the plaintiffs, now defendants in error: that the trial court properly held that these sections of the Code do not constitutionally apply to the South Western, for the reason that the charter of South Western contains no authority to the corporation to sell its franchise and property; that it has only the powers conferred upon it by its charter, and the general laws of force at the time of its enactment, to the effect that a railroad corporation cannot, without special authority or statute, alienate by sale its franchises or property essential to the performance of its duty to the public; that its grant of powers and exemptions is to be strictly construed, and its obligations are to be strictly performed, whether they may be one to the State or to individuals; that the charter constitutes a contract between the State and the corporation and between the stockholders themselves; and that to apply the provisions of these Code sections to the South Western would be violative of article 1, section 10 of the Federal Constitution (Code § 1-134), which provides that: “No State shall . . pass any . . law impairing the obligation of contracts,” and of article 1, section 3, paragraph 2 of the Constitution of the State of Georgia (Code, Ann., § 2-302), which provides that “No . . law impairing the obligation of contracts . . shall be passed.”

It must be borne in mind that the charter of South Western was granted by the General Assembly of Georgia by the act approved December 27, 1845 (Ga. L. 1845, p. 132), prior to the Code of 1863, wherein the State first reserved unto itself the power to change or modify charters granted by it, and prior to the enactment of the General Railroad Law of 1892, now codified under Chapter 94 of the Code, conferring upon railroad companies much broader powers than were granted to the South Western in its charter. The powers conferred by the charter of the South Western were strictly limited, Section 1 providing: [784]*784“That for the purpose of constructing a Rail Road communication between the City of Macon and the navigable waters flowing into the Gulf of Mexico,” certain individuals shall hereafter be a body corporate with authority to “do all lawful acts properly incident to a corporation, or necessary and proper for the transaction of the business for which it is incorporated.” Section 3 of the act provides: “That the company herein incorporated shall confine their efforts and enterprise to the building and completion of a Rail Road communication from the City of Macon to” named points. The several amendments to its charter were contained in the acts of the General Assembly as follows: Stockholders’ meeting, when called, Ga. L. 1847, p. 184; authorizing branches to Albany and Fort Gaines, Ga. L. 1849-50, p. 243; authorizing Union Depot at Macon, Ga. L. 1849-50, p. 249; authorizing the Directors of South Western to lease its railroad to the Central Railroad and Banking Company of Georgia for such time and on such other terms as they deem best, Ga. L. 1851-52, p. 119; authorizing construction of bridges across the Chattahoochee River and the Flint River Extension, Ga. L. 1851-52, p. 121; authorizing consolidation with Muscogee Railroad Company, Ga. L. 1855-56, p. 187; and increase in capital stock, Ga. L. 1859, p. 329, Ga. L. 1860, p. 197; authorizing road from Americus to Albany, Ga. L. 1859, p. 329; branch road to Dawson, Ga. L. 1860, p. 197; number of Directors increased, Ga. L. 1862-63, p. 87; authorizing issue of bonds for certain purposes and execution of mortgages, Ga. L. 1872, p. 331.

By reference to this charter as amended, it will be observed that it contains no specific authority to sell its franchise or property. It is silent upon the subject.

It is insisted by counsel for all of the parties at interest that the court should take into consideration, in determining the question here presented, the laws existing at the time of granting the charter; that they must be taken as if expressly referred to or incorporated in its terms; and that the charter as a contract must be measured by the standard of laws in force at the time it was granted. Cited in support of this proposition are the following authorities which sustain this position of counsel: Home Building & Loan Assn. v. Blaisdell, 290 U. S. 398, 435 [785]*785(54 Sup. Ct. 231, 78 L. ed. 413, 88 A.L.R. 1481); Long Island Water Supply Co. v. Brooklyn, 166 U. S. 685 (17 Sup. Ct. 718, 41 L. ed. 1165); 12 Am. Jur. 14, § 386; W. B. Worthen Co. v. Kavanaugh, 295 U. S. 56 (55 Sup. Ct. 555, 79 L. ed. 1298, 97 A.L.R. 905); Central Transportation Co. v. Pullman Car Co., 139 U. S. 24, 48 (11 Sup. Ct. 478, 35 L. ed. 55); Clarke v. Gold Dust Corporation (3 C. C. A.), 106 Fed. 2d, 598, 309 U. S. 671 (60 Sup. Ct. 614, 84 L. ed. 1017). But here ends any agreement between counsel as to the applicable law.

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Bluebook (online)
58 S.E.2d 905, 206 Ga. 770, 1950 Ga. LEXIS 581, Counsel Stack Legal Research, https://law.counselstack.com/opinion/south-western-railroad-v-benton-ga-1950.