Ottumwa weekly courier. (Ottumwa, Wapello County, Iowa) 1872-1899, 1874-05-21

The Hon. Matt Carpenter, of Wis.
consin, writes letter from Washing.
ton to the Journal, published at Madi-
son Wisconsin, which that paper pub
fishes, and in which the Senator takes
grounds against the soundness of
Evarts and Curtis opinions upon the
railroad law in Wisconsin Mr.. Carpen.
ter maintains that the law is constitu-
tional. He claims that the power of
the Legislature lie over the corpora
tons of the State, to alter, amend or
totally repeal their charters that they
are creatures of law and cannot over
ride the source from whence they
sprang. He says the Supreme Court of
the U S. has held that railroads are pub
lie highways and as such are subject to
Legislative control. On another i'm
portant question we cannot do better
than give Mr.. Carpenters own Ian
guage as follows:
But again, Mr.. Curtis says: "But
there is another objection to this law,
which to my mind is of itself deci-
sivc. Under the power to alter,
amend, or repeal charter, Legisla-
turc may change, or in some instances
perhaps destroy contracts into which
the State has entered by the granting
of charters. But this must be limited
to the modification not destruction of
the contracts of the State. 1t has new
er been extenned, and consistently with
the Constitution of the United States
it cannot be extended to contracts
made by the corporation under au.
thority of law with bona fide credi-
tors who have lent their money to
construct and equip the railway under
a security by mortgage thereon. Amy
law of State which takes away pro-
perty relied on by creditors when they
loaned their money or the security on
which they gave credit or which seri.
ously impairs the remedy which such
creditors have had impairs the obliga-
ton of their contracts"
And again, after saying that this
company had executed q mortgage,
and that bonds secured thereby had
been sold. he adds; when they took
these mortgages they had right to
presume, and unquestionably did pre-
sumo, that the property mortgaged
would be employed by the railway
corporation for reasonable rates of
compensation In trsnsacting their bu-
siness. This just and reasonable ex.
pectation cannot in my opinion be dis
appointed, and the rights acquired by
the mortgages disregarded through an
act of the Legislature, in effect COM
manding the road to transact their bu-
siness on such terms that the bondhol-
ders cannot possibly receive any part
either of the interest or principal of
| the bonds.
This Is the most remarkable doctrine
ever maintained by eminent counsel.
1t is in substance that the railway
company by executing mortgage has
clothed its mortgage with powers it
never possessed itself--powers denied
to it by the constitution of the State
which created the cooperation morga
gor. 1t is well settled that any person
dealing with q corporation must take
notice of the law of its creation, and
all constitutional aud statutory provi-
sions which limit and restrict the pow
ers of the corporation, and that no one
can be q bona fide holder of what the
corporation is incapable of granting.
Angel and Ames, on corporations, say
persons out of the State, as well as in
it, are bound to notice the public laws
limiting the powers of corporations
The State authorized the railway com.
pany to mortgage its property and
franchises, whatever they were, and a.
they were, with all the privileges and
all the infirmities belonging to them
When the mortgages accepted their
mortgage and purchased the bonds SO.
cured by it, they knew they were deal
ing with q corporation created by the
laws OF Wisconsin, and they were
bound to take notice that the constitu-
ton of the State authorized the Legis.
lature to absolutely repeal the charter
of the corporation. They were also
bound to take notice that by the gen
eral railway law of the State 1t is ex,
pressly provided that the purchaser Of
q railway at a mortgage foreclosure
sale shall take the place of the mort.
gagor or company, enjoy the same
rights and be subject to the same laibil-
tiles.
If the doctrine commended for by Mr.
Curtis should prevail, it would follow
that this provision of the Constitution
of Wisconsion had been repealed by a
mortgage executed by railway com.
pany, and the mortgage had not only
deprived the company of its property
and franchise covered by the mort.
gage, but had stripped the Legislature
Of a power conferred upon it and itt
successors for ever by the Constitution
of the State. But suppose the Legis.
lature had not only authorized the
company to mortgage its property and
franchises, as it did, but had gone fur.
Their, as it did not, and had expressly
provided that in case the company
should make and execute q mortgage
| upon its property and franchises the
charter of the company should never be
altered or repealed. Will any lawyer
seriously maintain that such q law
would be valid? Can the Constitution
of Wisconsin be repealed by the joint
action of the Legislature and rail
way campany? Can one Legislature
bind its successors not to exercise a
power expressly conferred by the Con
stitution? The doctrine would permit
any railway company to evade legisla-
tive control by q contract for mort
gage in q contract not even made
within the State, but with third per-
sons out Of the State.
But this proposition deserves no
further consideration. 1t simply ex-
cites establishment that any lawyer
should be willing to advance it. The
factis that the corporations of the State
created under this Constitution hold
their franchises subject to the will OF
the Legislature. Men who invest
money in railways and railway secur-
tiles rely and may safely rely upon the
good faith of the Legislature and the
love .of even-handed justice-enter-
tanned by the people. If the provi-
sions of the law are in any respect I'M
just to the companies, which / do not
believe, the next Legislature will mod
ifY them. Rnf IL will nccnr 10 exerx