Semi-weekly standard. [volume] (Raleigh, N.C.) 1853-18??, 1860-10-10
lEror he T.rberensh M.reur,.l

RAILROADS VS. STATE LEGISLATION.
A friend who has evidently given the matter con-
siderable attention has handed us the annexed arti-
Gle discussing the right of our State Legislature to
investigate the affairs of a Railroad.
This same matter was before our Legislature last
session-was soon disposed Of although it attracted
some general attention. We have never gwen the
subject much thought and do not at this time feel
prepared either to endorse condemn the views Of
our, correspondent We give them, however, for
what they are worth:
Has THE LEGISLATURES ANY RIGHT TO INVESTIGATE
THE AFFAIRS OF A RAILROAD Pit may seem to those
who have not examined the question, that the Leg
isature may derive authority to investigate the az
fairs of Railroad Company from either or each of
two sources, viz The common law Of the sovereign
to visit" it is called all civil corporations or
from right attaching to or springing from the
interest the State has in the stock of the corpora
ton but upon reflection it seems to us that from
neither of these sources can the Legislature derive
any authority, either by committee OF its own
body or in any other way to institute and conduct
such investigations, as were made under the sane
ton of its authority, into the condition of the differ
ent Railroad corporations of the State.
It is true that at common law the sovereign has
the right to 'vist" all civil corporations, but is
also true that the sovereign exercise that right
only in one mode, and that-is through the medium
of the courts of justice, when and where only all
misbehaviors of this kind of corporations are en-
quired into and redressed and all their controversies
decided" RI Blackstone 4s1l The Legislature
then, has no authority in exercise OF this right OF
visitation" to appoint committee of its own body
to conduct the investigation. The proper way IS
for the Attorney General to institute proceedings in
the courts of justice. AngeH Dc Ames on Corpora
tiOns S64S-6SS.
Is there any authority in the Legislature, spring
ing from the interest that the State has in the stock
of the corporation, by virtue Of which it can order
an investigation?
Rail Road company is private corporation,
Or. & G. R. R. VS.. Davis Dew. & Bat 451,) the re-
suit of compact between the Stale in its sovereign
capacity and the subscribers for the stock and the
Legislature has right to change, modify or annul
such corporation" Mills VS.. Williams, IL Ired
sos 1t is true that the State is also stakeholder
but that fact does not alter the character of the cor
poration for the State does not by such participa
ton indemnity itself with the corporation 1t is
sound principle of law, that when a government
becomes partner in a trading company, 1t divests
itself so far as concerns the transactions of that
company Of its sovereign character and takes that
of private citizen" Bank of U. S. VS.. Planters
Bank of Georgia, 9 Wheaton U. S. Rep 907, and
for this reason such corporation be sued in the
State courts and for this reason also the maxim,
Rullum tempus occurit regi does not apply. So
where the State owned the whole stock in bank
ing company, it was held I" that the State did not
transfer any portion of its sovereignty to the cor
poTation and did not communicate to it any Of its
same level as other corporate bodies" State Bank
of S. Carolina VS.. Gibbs, 8 McCord S. c. Rep. 377.
So that when State enters into such corporation
it loses its sovereign capacity, and at the door of
the corporation to speak, diyests itself Of its
sovereign attributes and enters simply as a naked
stakeholder; is known in the corporation only as
stakeholder, and has no rights save those given by
the charter to stockholders, and can exercise the
rights therein given only in the mode therein pro-
vided. There is right then, springing from the
States interest in the stock to institute an investi
CATION
Is there any condition annexed to the States sub
scription by virtue of which the Legislature has
the right contended for? We have examined only
the charter and amendment of the n. G. Rail Road,
but we have doubt the other charters are like it.
Two acts and two only, of the Legislature have
been accepted by the stockholders viz: the original
charter and the amendment Of the session of 1885
By examination Of the original charter, it will be
seen that reference is made to the States stock in
sections thirtysix and forty three only The thirty
sixth section provides for the subscription of two
millions of dollars upon compliance with certain
ditions. The forty third section provides for the
appointment of State directors I" in proportion to
the stock subscribed, by the Governor by and with
the advice of his council" In the amendment of
1885, the State stock is alluded to only in the
first second, third and fourth sections The first
and second sections provide that ten thousand ad
Gtona shares shall be subscribed, and that it shall
be preferred stock The third section provides that
"the affairs of the said company shall be managed
and directed by general board to consist of twelve
directors eight on the part of the State and four
the part of individual stockholders, to be elected
and appointed as hereinbefore provided &c" The
fourth section provides, that at all general meet
ngs of the stockholders the State shall be repre-
sented by an agent proxy, appointed by the Gov
ernor, and such agent shall not be entitled in the
general meetings aforesaid to vote in the election of
the directors to be elected on the part of indvid-
uals.'
So that we see there is no condition annexed to
the States subscription by virtue of which the Leg
slature can rightly exercise the power it claims
far from such being the case, it is evident that the
Legislature was intended to have no control over
the States stock because the directors and proxies
are appointed by the Governor, and of course
sponsble to him and not to the Legislature. The
State is amply protected by having eight directors
out of twelve, and by her proxies in the general
meetings, where they have control Of the whole pro-
ceedings and institute an investigation whenever
they see proper; and this is the mode provided in
the charter for the exercise Of the rights therein
granted.
If the Legislature then derives no authority from
the State a sovereign a stakeholder, whence
does its authority arise?
The CENSUS OF 1860, AND TIE APPoRTIoNMENT