Union Branch Rail Road v. East Tennessee & Georgia R. R.

14 Ga. 327

• Court: Supreme Court of Georgia
• Decided: October 15, 1853
• Docket: No. 48
• Status: Published

Opinion

By the Court.

Starnes, J.,

delivering the opinion.

The question in this case is alone upon the sufficiency of the plea. The other assignments of error were abandoned in the argument before us.

[1.] It is insisted first, that this plea is not good, as it brings forward no new matter; and that advantage might have been taken of what is set forth in it, upon demurrer.

It is true, that the proper office of a plea in Chancery, is to bring forward some fact not distinctly appearing in the bill, which displaces the equity.

Trying this plea, by this rule of Chancery practice, we sustain it; for we find it bringing forward the fact of the grant of franchise to the Iliwassec Rail Road Company, by the Legislature of Georgia, in the year 1847; which fact is alluded to in the bill, only as “Apretended Legislative grant, from the State of Georgia.” Neither the character of that grant, nor its terms are stated in the bill; and the plea, therefore, in clearly and distinctly setting forth these things, brings forward hew matter within the reason of the rule stated.

[2.] Another objection to the plea, is that it contains no denial of the allegation in the bill, to the effect, that the said Rail Road Company suspended its work with the intention of abandoning it, at one period after its charter; that this, consequently, must be taken as true, and that charter be regarded as having been forfeited.

This objection cannot prevail: 1. Because, in the same connection, the bill alleges that a few days before the charter was to become void, by reason of this suspension, the Legislature of Tennessee extended the time for the construction of the road. 2. Because advantage cannot be taken of non-user or mis-user of an Act of Incorporation, in this collatteral way, according to the view which this Court entertains on this subject. (Young vs. Harrison, 6 Ga. Rep. 130.)

Einding the defendants thus rightly in Court with the plea, let us inquire into the question which it raises.

The complainant insists upon its right of way over the premises in question, by virtue of the Act of our General Assembly, passed in the year 1840, granting corporate privileges to the Cross Plains & Red Clay Rail Road; together with the Act of 1849, changing the title of this tympany to its present name, recognizing its original privileges, repealing the 9th and 10th sections of the Act of 1840, whiah gave to the Legislature the right to repeal the charter on ^prms, and allowing three years in which to complete the roaoll (Acts of 1840, Pamp. 87. Of 1849, Pamp. 241.)

The defendants, in their plea, rely on -the Act of 1847, granting to the Hiwassee Rail Road Comparin' the right of way over the premises, together with certain Resolutions of the General Assembly of 1837, offering to secure similar privileges to those enjoyed by the Western & Atlantic Hail Road, in our State, to any road in the State of Tennessee*seeking to connect with the same; provided, that the latter State would grant the privilege of extending that road to the Tennessee river.

[3.] It is the opinion of this Court, that the defendants take no legal aid from the Resolutions of 1837. We are not prepared to hold, that after the Legislature passed these Resolulutions, the State was forever prohibited from granting to its own citizens the exclusive right of way over the territory which lay between the Western & Atlantic Rail Road and the Tennessee line; and that the sole right of constructing and working Rail Roads, in this portion of our State, was thereafter reserved to citizens of Tennessee, seeking to connect with our road. This we must hold, if we give to these Resolutions of 1837, the effect claimed for them.

[4.] Neither do we agree with the complainant, that the Act of 1849, cited, has any influence in the consideration of this subject, or in any manner affects the rights of the defendants; because, we believe that the Act of 1847 repealed the Act of 1840, so far as the grant of ilie exclusive right of way to the complainant was concerned; and a consideration of these two latter Acts must determine the matters in issue between the parties.

[5.] We hold, that the Act of 1847 repeals the Act of 1840, for the following reasons:

1. In Section 10 of the Act of 1840, incorporating the Gross Plains & Rod Olay Rail Road, (now the complainant) the Legislature reserved to itself the right to repeal that Act of Incorporation, on certain terms, viz: that the Stockholders should be paid for their work, investments, and improvements, if it were repealed.

2. That Act of 1847, in granting to the Hiwassee Rail Road Company the right of way over the same premises, was directly repugnant to the Act of 1840; and as a consequence, by well known and settled rules, repealed the Act of 1840, or so much of it, as secured to complainant the exclusive right of way over these premises. Ry virtue of the Act of 1840, the complainant, perhaps, may still construct a road, “ Erom the City of Dalton, and extending thence, and terminating on the line of the State of Tennessee, at a place called Red Clay;” for the Act of 1847 secures to the Hiwassee Rail Road Company the right of way only over the route of said company, f‘ With such rights, privileges, and immunities” as are granted to the Western & Atlantic Rail Road, in the State of Tennessee, by an Act of said State, passed on the 24th day of Januuary, 1838. (Acts of 1847, JPamp. 171.)

This grant of privileges, &c., by the Act of Tennessee, passed on the 24th of January, 1838, is that which, by said State, had been previously “ Granted, made and prescribed for the benefit, government and direction of the Hiwassee Rail Road Company. (Acts of Term. 1838.)

On looking to the charter of this Company, and to the Legislation of Tennessee concerning it, we find no grant to that Company of any exclusive right of way, except for a space of two hundred feet, through which their track shall pass, “ Erom Knoxville, East Tennessee, through the Hiwassee District, to a point on the Southern boundary of Tennessee.” (See. 13 of Act of Incorporation.) And the 27th Section of this Act. expressly provides, that full privilege is reserved to any corpoporation of the State, afterwards to connect with the road, upon condition that no injury shall be done to the works of the Hiwassee Rail Road and that there shall be no interference with the privileges granted them.

It thus appears that the Hiwassee Rail Road Company, now called the East Tennessee & Georgia Rail Road Company, have, by virtue of the Act of 1847, the right of way over a track of two hundred feet (with the other privileges granted by the Tennessee Act) from the terminus of their road, at the Tennessee line, to the point which they have selected on the Western & Atlantic Rail Road, at or near Dalton; and that this Act necessarily repeals the Act of 1840, pro tanto.

To this view of the subject, it has been objected: 1. That there was no provision made by the Act of 1847, for compliance with the terms on which only, the Act of 1840 could be repealed; and there has been no such compliance. 2. That there is no direct provision in tho Act of 1847, for the repeal of the Act of 1840; and that an Act of the Legislature, granting a charter to corporators, and contracting with them as such, cannot be repealed by implication. 3. That the Act of 1847 is unconstitutional. 4. That the Legislature had no authority to make this grant to a foreign corporation.

[6.] Our view of the first objection is, that tlie Act of 1840 did provide that just compensation should be made to the complainant, “ For their work, investments and improvements,” in the event that it should be repealed; but did not provide that this should be done, only in one way, viz: by the appointment of assessors, by the repealing Act, who should, together with an equal number appointed by the -Stockholders, value the property, assess the damage, &c. The Act also provided, that such assessors might be appointed by the Governor of our State, and the Stockholders of the road. The words are as follow: “If any future General Assembly deem it advisable, they may repeal this Act; and if it be repealed, the Stockholders shall be paid for their work, investments atid improvements, at a fair valuation, to be made by an equal number of disinterested persons appointed on the part of the State in said repealing Act, or by the Governor and the said Stockholders.”

It follows, that if the complainant, or the Stockholders of the company, have put “ work, investments and improvements” upon their road, of whose value they have been deprived by the repealing Act of 1847, they have their claim for the same upon the State ; and as Stockholders, may call on the Govern- or, with them to have “a fair valuation” fixed for their work, investments, &c.; and they will have the right to demand payment of the same.

[7.] The next objection raises the inquiry, whether or not there is any difference in the Legislative proceeding, by which an Act of Incorporation (in which the Legislature have reserved the right of repeal,) is repealed, and that by which any other Act is repealed.

It was urged that contracts may be made, and rights may vest under such an Act, and in reliance upon it. This is so; but is just as true of any other Act whatever. And he who contracts or invests under such an Act, surely does it with notice, and with a full sense of the risk he takes.

What difference then, is there on principle, between the repeal of such an Act, and any other securing important rights and privileges to the citizen, and which may be repealed ?— And why any difference in form, on greater solemnities in repealing such an Act ?

We find no such distinction anywhere drawn. The Common Law doctrine is, that “Every affirmative Statute is a repeal by implication, of a precedent affirmative Statute, so far as it is contrary thereto, for leges posteriores priores contrarias abrogant. (JDwarr. on Stat. 673.)

In view of this Common Law principle, we cannot recognise the distinction taken.

[8.] It is also objected, that the Act of 1847, being a compact between two States is void, because contrary to the 10th Section of tire 1st Art. of the Constitution of the U. S., which declares, that “ No State, without the consent of Congress, shall lay any duty of tonnage; keep troops or ships of war, in time of peace ; enter into any agreement or compact with another State, or with a foreign power ; or engage in a war, unless actually invaded,” &c.

This objection is not well taken :

1. Because, in our opinion, this prohibition applies only to such an “agreement or compact” as is in its nature political; or more properly, perhaps, such as may, in any wise, conflict with the powers which the States, by the adoption of the Federal Constitution, have delegated to the General Government. This first appears from the context. We find the prohibition, as to entering into an agreement or compact, associated with others, preceding and following it, in the same sentence, and which undoubtedly contemplate political acts, or exercise of sovereign powers, with which the States, by the adoption of the great Federal Compact, have parted; such acts as laying duties on tonnage; keeping a standing army or navy; making war, &c.; and, in the language of Judge Story, when commenting on other words in this very clause, we may properly argue, that the sense of each of these terms, “ Is best known by its association, (noseitur a sociis) to apply to treaties of a political character.”

In the next place, this appears from the reason and spirit of the prohibition.

The framers of the Constitution clearly intended nothing more by this clause, than to prohibit the several States from exercising their authority in any way which might limit, or infringe upon a full and complete execution by the General Government, of the powers intended to be delegated by the Federal Constitution; because nothing more was to be gained by any further prohibition, no further benefit to the General Government could have been derived from it, and it would have been entirely superfluous and unnecessary.

It was very proper and expedient, that no State should have been allowed to enter into any compact with another State or Foreign Government, which, by involving the exercise, of powers parted with by the States, and belonging to the Federal Government, might operate seriously to embarrass that Government. But it could work no injury to the General Government, for such State to make an agreement with another State, or even a foreign power, which in no wise conflicted with the authority delegated to the General Government, and tended in no manner to embarrass that Government, in the full and complete exercise of its powers. Unless we take this view of the case, we must hold that a State, without the consept of Congress, can make no sort of contract, whatever, with another State. That it cannot sell to another State, any portion of public property, (personal in its character, and not involving a question of territory) though it may so sell to individuals. That (for example) the State of Georgia cannot sell to the State of Tennessee, a surplus engine on its road, or any portion of its manufactured articles in the Penitentiary, without the consent of Congress.

We can see no advantage to be gained by, or benefit in such a provision; and hence, we think it was not intended.

We are supported in this view of the question we are considering, by Judge Story, who, in summing up his observations on this clause of the Constitution, remarks as follows: “ We have thus passed through the positive prohibitions introduced, upon the powers of the States. It will be observed, that they divide themselves into two classes ; those which are political in their character, as an exercise of sovereignty, and those which more especially regard the private rights of individuals. In the latter, the prohibition is absolute and universal. In the former, it is sometimes absolute, and sometimes subjected to the consent of Congress.” (3 Story Com. on Con. Sec. 1400.)

The prohibition which we are considering, is one of those which is “ Subjected to the consent of Congressand according to this eminent jurist, it follows that it is one of those “ Which are political in their character.” If we admit then, that this Act of 1847 is a feature in a compact between two States; yet, is it nothing more than an agreement, that the right of way shall be granted t'o certain citizens, for the purpose of constructing a Rail Road, and is in no wise political in its character, nor conflicting with the authority of the General Government; and therefore, we hold that the consent of Congress was not necessary to its validity.

2. Our next reason for this opinion is, that the rights of the defendants, under the Act of 1847, do not depend upon any compact between Tennessee and Georgia. It may be assumed, that this Act would not have been passed, but for the passage of a similar Act by Tennessee ; and that both had their origin in an agreement between the States, unaccompanied with the consent of Congress ; and yet, it would seem that this Act quoad the rights of the defendants is constitutional and valid. They were no parties to any unconstitutional compact; but as private citizens contracted with the State of Georgia, for this franchise, and upon the faith of this Act, proceeded to put their work, investments and improvements upon the land to which this franchise attached.

[9.] The other objection is, that the State of Georgia could not give authority to the East Tennessee & Georgia Rail Road Company, as a corporation in the State of Tennessee, to extend their road into Georgia.

We know of no reason why the State should not exercise the power hero questioned. If it have the authority to grant the right of way over any portion of its territory, and has not parted with this right, we see not why it should not grant this franchise to persons residing out of the State, as well as to persons within the State, if, in the opinion of the Legislature, the public good is thereby promoted.

It is true, that a corporation can have no legal existence out of the sovereignty by which it is created; yet it does not ensue, that its existence as an artificial person, capable of contracting, may not be recognized elsewhere. In the language of Ch. Jus. Taney, in the case of The Bank of Augusta vs. Earle, 13 Pet. 588, “ Its residence in one State creates no insuperable objection to its contracting in another.”

This point is expressly decided in that case, by the Supreme Court of the U. S.; and effectually disposed of, in language like the following: “ It is sufficient that its [the corporation’s] existence as an artificial person, in the State of its creation, is acknowledged and recognized by the law of the nation where the dealing takes place ; and that it is permitted by the law of that place, to exercise there the powers with which it is endowed. (See also, Angel A. on Qorp. 97, 98.)

Let the judgment be affirmed.