Savannah morning news. [volume] (Savannah) 1868-1887, 1881-02-11

1 acte OF lSo6-4, D. 404.
That these two companies were consolidated
| by authority Of an act of the General Assem-
/ bly, Of the State Of Georgia, approved April
18th, 1853, entitled AN act to authorize the
/ Albany aud Gulf Railroad Company, and the
| Atlantic and Gulf Railroad Company, and for
act Of consolidation, It was enacted, That the
| several immunities, franchises and privileges
| granted to the said Savannah, Albany and
| Gulf Railroad Company, and the Atlantic and
| charters and the amendments thereof, and the
| liabilities therein imposed, shall continue in
force, except so far as they may De inconsis-
| tent with their act of consolidation"
| The bill claimed that the two companies
aforesaid, which were consolidated, and out Of
| which the Atlantic and Gulf Railroad Compa-
ny was formed. were granted by their charters
| the right to change certain rates OF freight
and passenger fares specified therein, and that
| the right to change the same frelghts and
fares had been conferred upon the Savannah,
| Florida and Western Railroad Company by the
act Of February 20, 1876, aforesaid.
That the Savannah, Florida and Western
| Railroad Company had adopted schedule OF
| freights and passenger fares within the maxi
| mum rates fixed by the charter Of the Atlantic
and Gulf Railroad Company but that the rates
| so adopted were greater than these fixed by
| the schedule of the said Railroad Commission
The bill claimed that if the rates established
ny the Railroad Commissioners were made
| obligatory upon the Savannah, Florida and
| Western Railroad Company il would not only
| be unable to establish a sinking fund to pay
| OF its first mortgage bonds, but would be
| unable to declare dividends OF any amount
| whatever to its stockholders, and the company
would be driven into ruin and bankruptcy.
The bill further alleged that complainant
| had hoped that the said Savannah. Florida and
| Western Railroad Company would adhere to
| the schedule of freights and fares which it
had adopted as aforesaid, but that he had
been injured, and charged that it intedued to
abandon said schedule and adopt the one pro
| mulgated by said Railroad Commission which
| It admitted would not enable 1t to earn a suf-
| hcient income to pay its expenses, the interest
| on its bonded debt, but that on the contrary
| its receipts would not enable 1t to pay the in
| terest on its bonds by at least s. 10000 per an
| mum, and that such deficit would continue
from year to year, and the stockholders of said
| company would receive no dividend whatever,
| but that the value of thu stock of said COM
pany would be gradually destroyed by said
| annual deficit.
The bill averred that said act of October IA.
| 1879, under authority of which said Railroad
| Commissioners assumed to act. was in viola
| ton OF the several provisions Of the constitu-
ton OF Georgia above quoted, and that il ex-
| cluded the defendant railroad company from
| its right of trial by jury guaranteed by the
constitution of the State; that it violated that
clause of the constitution of the State para
| graph nine. section one, article one, which
| ordains that excursion prices shall not be i'm
posed nor cruel nor unusual punishments in
| f1icted; that said act violated that part of the
| fourteenth amendment to the Constitution of
| the United States which declares that mo
| State shall deprive any person OF life, liberty
| W,
deny to any person within its limits the equal
protection ofthe laws, and section ten, article
| one, which forbds State to pass any law i'm
| pairing the obligation of contract
| The bill prayed that the Savannah, Florida
| and Western Railroad Company might be en-
| Joined from doing any act which would be an
acceptance on the said statutes Of October H.
| 1879, IN an amendment to its charter or from
carrying out the provisions of said act or from
| operating its road for such rates or fare and
! freight as should be inadequate to yield reve-
| or SAID railroad, and maintaining its track and
| equipment, and paying interest on its bonded
| debt and reasonable dividends to its stock
| nolders, ana providing reasonable sinking
| fund for the payment Of the principal of its
| bonded debt, and that said Commissioners
| might be enJoiRed from prescribing rates of
| fare and freight over said company's railroad,
| or in any manner enforcing the provisions of
| the said act of October IA, 1872 and that this
| said Attorney General might be restrained
| from instituting any suit of any kind against
said railroad company for the purpose of en-
forcing the provisions OF said act, and for gene
raj relief.
Upon the filing of this bill a restraining or
| der was allowed enIoiniDg the defendants as
| prayed for.
Subsequently on September 6, 1880. the de-
PENDANT railroad company answered the bill,
and on September IS the Railroad Commits
| siOners filed a demurrer thereto.
On December 8, 1880, the comulainant filed
an amendment to his bill, in which he averred
that estimating the stock of the defendant
| company at 81 000, coo. and taking into account
the mortgage lien subject to which it was
| bought and which amounted to So no GOO the
entire cost of the railroad and other property
were only 900 per mile. That the gross re-
ceipts OF the Atlantic and Gulf Railroad Com
pany for the last eight years under schedule
substantially higher than that adopted by the
Savannah, Florida and Western were $685. 1872.
That the average interest charges and ex-
penses of the latter company amount to 1857.
242, leaving surplus of only $l1655 applca-
BILE to dividends and sinking fund, and that
allowing dividend of per cent on the stock
the net receipts would fan short S23,550 per
annum.
That the receipts of the defendant railroad
company, under the schedule promulgated by
the Railroad Commissioners, would fail to pay
the running expenses, the annual interest on
prior liens subject to which the road was sold.
for nearly fifty thousand dollars per annum,
and the said amendment charges that the
schedule promulgated by said Commissioners
| Is not reasonable or Just.
On December 22, % and q, 1880, the case was
heard upon motion for an injunction pen
dente lite In accordance with the prayer of the
bi Upon this motion the afidavits of John
Screven, lately one of the receivers of the At
lantic and Gulf Railroad Company. of w S.
Chisholm, Vice President. H. S. Baines, Gen
eral Manager, and w. P. Hardee, Treasurer of
the Savannah, Florida and Western Railroad
Company, and of G. H. PhinizY, President of
the Georgia Railroad Comp ny, were read for
the complainant and the affidavit of the Rail-
road Commissioners was read in their own be-
half
Mr. Robert Falligant for the complainant.
Messrs. Clifford Anderson Attorney General
of Georgia, Robert Toombs and P. l.. Mynatt
for the Railroad Commissioners
Mr.. w. S. Chisholm, for the Savannah
| Florida and Western Railroad Company
| WOODS, Circuit Justice
The question for solution is whether the case
made by the bill and amendment. and the
afhdavlts In support Of it, entities the COM
plainant to the writ Of injunction as PRAYED
for in the bill
The first inquiry that arises is, what are the
rights OF the Savannah. Florida and Western
Railroad Company under the law of its organi-
cation? On behalf of the complainant. IL
aVerred that the railroad company has the
right, within limit prescribed by the charter
of the Atlantic and Gulf Railroad Companv
to fix its own schedule of freight and passen-
ger fares, and that this right Is not subject to
legislative control
Il is settled that railroad companies are subj
ject to legislative control as to their rates of
fare and freight, unless protected by their
charters.-Munn VS. Illinois, "a United States.
1l3. Chicago Street Railroad Company VS..
Iowa, "a United States 161
When the charter Of a railroad company
allows 1t to charge maximum rates of fares
and freight but the right is reserved to the
Legislature TO repeal or amend the charter it
may change the rates prescribed by the char
ter by establishing maximum limit beyond
which they shall not go.-Peik VS.. Chicago,
etc, railway company, "a United States 1854
By the act of the Legislature of Georgia of
February ~, 1876, entitled an act to enable the
purchasers OF railroads to form corporations
and to exercise corporate powers and priv
leges, under which the Savannah Florida and
western KalIPoad Company was organized, it
was clothed with all the rights privileges and
immunities of the Atlantic and Gulf Railroad
Company. 1t Is necessary therefore to INQUIRE
what were the charter rights of helatter com
| pany. 1t organized by the consolidation
of the Savannah, Albany and Gulf Railroad
Company and the Atlantic and Gulf Railroad
| Company, by authority of act of the Legis-
| lature of Georgia approved April 49, 1863
| When this act was passed sections 1851 and
1852 Of The Code of 1883, which took effect
January !, 1868, were in force The first of
these sections declared: Persons are either
| natural or artificial The latter are the
creatures or law and except so far as
the law forbidS is subject to be changed
modified or destroyed at the will Of their
creator; they are called corporations" The
second declared: I" In all cases Of private
charters hereafter granted the State reserves
| the right to withdraw the franchise unless
such right is expressly registered in the
| charter
From these sections of the Code it ia an
| parent that the rights privileges and fran
| chises of the Atlantic and Gulf Railroad Com
| pany were subject TO alteration, amendment
| or Withdrawal at the will of the Legislature
This point has been expressly decided bv the
| caseof Railroad Company VS.. Georgia.-9S u
| s., $50.
In that case it was held that by the consoli-
| da'ion under the act of April IS, 1863 OF the
| Savannah, Albany and Gulf Railroad Com
| pany, and the Atlantic and Gulf Railroad Com
pany, said companies were dissolved and a
| new corporation to-wit' the Atlantic and
Gulf RAILROAD Company was created, and
that this new company became subject to the
provisions OF the CoGe OF Georgia, above re-
| cited.
And n hos ha-r, ax,oraseI,, 5aoi5o5 -. Al G..