Saint Paul weekly Minnesotian., 1858-11-27

Supreme Court Of MfnnesOfas..
Railroad Company Against Henry H.
Sfbley. .--

Supreme Court of Mtnnesoias..-PacIfie
Railroad Company Against Henry H.
Sibley. -
In the natter OF the application Of the Minnesota and
| Pacific Railroad Company, for peremptory writ OF
nldnddmuS to compel Henry II. Sbley as Governor
of the S'ste to issue and deliver State Bonds to said
Company.
This proceeding has grown out of differ
ence of opinion, between the Governor of the
State, and the railroad companies, as to the
requirements of Section 10 of Article 8 of the
Constitution, as amended by vote of the peo-
pie, on the 10th day of April A. D. 1853
The clause material to the matter in contro-
versy is in these words: "And as farther Sc
curity, an amount of first mortgage bonds, on
the roads, lands and franchises of the respec-
tive companies, corresponding to the State
bonds issued, shall be transferred to the Trea-
surer of the State, at the time of the issue OF
State Bonds"
This language, in the opinion of the Cover
nor, gives to the State an exclusive lien on the
roads, lands and franchises of the respective
companies, to the extent of the bonds which
may be received from them, and in the words
| OF his written requirement, he insists ON " a
deposit of first mortgage bonds, of the com
panies, made to the State, based upon a deed
OF trust to the State, equal in amount to the
State bonds issued to such companies, which
deed of trust shall specify priority of lien to
such bonds as the companies may deliver to
the State in exchange for the bonds" On
the other hand the companies deny that the
State is entitled to any preference as to these
| securities
The Minnesota and Pacific Railroad Com
pany, having rendered and offered to transfer
to the Treasurer of State first mortgage bonds
at the rate of one hundred thousand dollars
for every ten miles Ofits road, then completed
and ready for superstructure, secured by a
deed of trust on its road, lands, and franchis-
es, and demanded of the Governor that he
cause to be issued and delivered to said COM
pany corresponding amount of State bonds,
which he refused to do, makes this application
for peremptOry writ of maltddmus
1t is admitted that the company has strict
ly complied with the provisions of its charter,
and of the constitution, in all, save that the
trust deed, given to secure the first mortgage
bonds, does not express preference, as to
such bonds as may be transferred to the State
| This trust deed conveys the road, lands and
| franchises of the company to certain trustees,
| to secure the payment of bonds issued, or to
be issued, for the construction of the fifty
miles of its road, then contracted to be built,
and such other of its bonds as might thereaf-
| ter be issued, under certain restrictions,
amongst which are the following to-wit -
| whenever, and as often as the construction of
| forty additional miles of said road, or its
| branches, shall be contracted for, additional
bonds may be issued for said construction,
not exceeding the rate of S35, 900 per mile,
and so On as the work progresses, until the
fn1 Tho L., oil 70 10
made payable at the same time; must be
cOuntersigned and registered by the trustees,
and bear a rate of interest not exceeding sew
| en- per cent. per annum.
From this it will be seen that the question
to be determined is not, as has been insisted
whether the company can issue bonds all ibi-
tun, and thus deprecate and destroy the Sc
curity, given the State by the clause under
consideration; for the trust deed expressly linn
its the amount of issue, and it was not claim
ed that the utmost limit allowed exceeds the
actual cost of constructing and euupping the
road Donhtlecc tho nn.-tc could intorfero TO
prevent the depreciation of these securities by
fraudulent issues of bonds. Here, however,
+l,- ,.n" question ic whether the State legally
or equitably, has right of priority over all
others who may eXpend labor OF money in the
construction or equipment of this road. 1t
seems clear that such q claim would not COM
mend itself very strongly to the favor of a
court of chancery, and it should follow, in all
such cases, that the legal right to such undue
preference, must be clearly made to appear,
before it can be admitted.
liz giving construction to this section of the
Constitution, we will be aided by recurring to
the condition of that instrument before it was
amended, and considering the OCCASION the
necessity and the object of the change-wc
snail then be better able to determine the pre-
else meaning of the language employed. Prior
to the amendment the State was prohibited
from loaning its credit in aid of any individual,
association or corporation. The Constitution
was ratified by the people when submitted to
them, with marke unanimity-as much, per-
hcps, out of regard for it as a whole and to
put to rest the veXatiOus questions of regular
itv, which attended its formation, as from any
peculiar favor with which each particular pro-
vision was viewed.
Congress had previous to this madea muni-
ficent grant of lands to the Territory, to aid in
the construction of certain lines of railroads,
and Territorial Legislature had disposed of
these lands to certain railroad eOmpanies.-
These several companies had duly organized,
and most, ifnot all of them, had located then
respective roads. Scarcely had the people
passed upon the Constitution in this form, be-
fore the financial embarrassment into which
the whole country was thrown, made 1t appar-
ent to all tlat unless these roads received some
assistance from the State, they would not be
built, and the land grant for which our people
had labored so long and so arduOusly, would
thus be lost to us.
To secure this Government aid and to pre-
vent so great misfortune as the loss of the
land grant, change in the fundamental law
was deemed necessary, and accordingly the
Legislature, then in session, passed an act, in
accordance with Sec. l of Art. IA of the Con-
stitutiOn, proposing so to amend Sec. lO OF
Art. 9. as to authorize the State to loan its
credit to the several railroad companies having
possession of this grant of lands This propO-
siton was duly submitted to the people for ap-
proyal or rejection, and was adopted by ma
ioritv quite as decided as that given for the
Constitution in its original form; showing that
whatever would have been the result on the
provision as it stood originally, had thereb been
an opportunity to vote on the proposition sep
aratcly, they were at least satisfied that a
change was necessary. Certain it is that they
gave uaequivOcal expression to their desire
that the State should loan its credit in aid of
these lines of railroads. The first line of the
paragraph expresses the object of the change
to be 6 for the purpose Of erpediting the con
struction of the line of railroads" &C., and in
this the State has an interest scarcely inferior
to that of the companies themselves; not an
antagonistic interest, but in perfect harmony
with the interest of the companies.
The section is now in these words: I" The
credit of the State shall never be given or loan
ed in aid of any individual, association or cor
poration, except that for the purpose of expe-
diting the construction of the lines of railroad
in aid of which the Congress of the United
Ct.to, hos Granted lands IN the Territory Of