The clarion. [volume] (Jackson, Miss.) 1883-1888, 1884-05-28
JUDGE pEYroH's DECISION.
gATcHEz, JAeKsos 4 coIrNsUs RArLRoAp CO.

1tAln GME4kCus IA Tie ldaAlSf INANl0H u
persons and property over completed
line Of railroad between Natchez and
Jackson. Il was chartered by the State
under an act Of the Legislature of July
21st 1870. The twelfth section of said act
provides 4thas it shall be lawful for
the Company hereby Incorporated, from
time 70 time, to fix, regulate, and revise
the tolls and Charges by them to be re-
ceiyed for the transportation of persons
and property upon the road hereby au-
thorlzed to be built, or upon any part
thereof. Said act of incorporation
does not reserve to the Legislature the
power to alter, modify or repeal the
same.
The Company organized under this
charter, and rel, on its chartered
rights, invested its capital, built the
road, and is now carrying on its business
and performing its obligations unde- the
charter.
At the last session of the Legislature
an act was passed entitled IAN act for
the regulation freight and passenger
rates on railroads in this State and to
create Il Commission to supervise the
same, and Tor other purposes" and an
act supPien Entail thereto. These acts
constitute What is known as the Railroad
Supervision law. This law empowers
the Commission to revise and fix the
tariff of charges for transportation of
every kind over the railroads of this
State. Section six, after investing the
Commission with this power, provides
at shall be the duty of said Commits
m tv-aEahf,I ,nl nnroftal
supervision over every such tariff of
charges from time to time as justice to
the public and each of said railroad
companies may require, aud to increase
or reduce any of said rates, according
as experience and business operations
may show to be Just. Sections one
two, three and seven prohibits extor,
ton and any discrimination, and pro
vide severe pains and penalties tor theil
violation. But section nine relieves the
companies from these penalties if they
will adopt the tariff of charges fixed by
the Commission, thus: provided, In
no instance shall any corporation, rail
road, or person be criminally or civilly
liable for the making of any charge OIL
discrimination whatever, if the same i.
not in violation of the tariff of charges
or rules and regulations prescribed by
the Commission. What does this mean
The obvious purpose is to compel rail
| road companies to surrender their rights
to fix and regulate the tariff of charges
over their respective roads, and put the
same, the most important part OF thei
| business, under the control and manage
ment of the commission. This bein:
so, the law manifestly conflicts will
| complainant charter. so the question
is sqaarely presented whether the charte
is d contract and protected by the Stat
and Federal Constitution.
II is not to be supposed that the com
plalnant would have accepted the char
ter, invested its capital, and assumed it
obligations under the charter WITHoU'
THE RIGHT To FIX ITS TOLLS and MAN
AGE ITS OWN BUSINESS. This is tn
most important part of the franchise
1t Is essential to the very existence ant
life of the corporation. 1t induces cap
ital, and enables the corporation to max
the necessary financial arrangements t
carry on its business.
The bill alleges (and for the purpos
OF this application must be taken to b
true) that in view of compliments RICH
to fix and regulate tolls for the use o
its property and facilities, it was enabled
to sell and dispose of its capital stock
that none of this stock could have beef
sold or disposed of had it been suppose,
that the Legislature could deprive til
Company Of the right to fix its toll
and charges, and vest in others the abso
lutte control of its tariffs.
The Company, and all persons deal
ing with it, had the right to act upol
the faith of the rights and privilege
guaranteed by the charter, and it woulC
be an act of bad faith on the part 0
the State, after investments had beer
made, rights attached, and obligation
incurred, to deprive the Company o
any essential right, as the right to fl
its tolls. Such deprivation might seri
ously disable the Company by prevent
ing it from performing its obligation
and making the necessary negotiation
to carry on its operations. Capital i
cautious and will not go where it vii
be under the control of others than it
owner.
Where capitalists. form a company
and propose to the State to build rail
road within its borders, if the State viii
grant certain franchises, as the right o
way and the right to fix and regulat,
tolls and charges for the transportation
of persons and property, and the Stat,
accepts the proposition and grants tn,
charter with those rights, it is in form
and substance contract The Stat
receives a consideration, valuable anC
permanent, for the rights which i
grants. In the building and operatin,
of railroads the wilderness disappears
and thriving towns and villages spring
up. The value of real estate is augment
ed, population is increased, and thu
facilities of transportation and trave
are greatly enhanced. Besides thesC
advantages, the State receives taxei
from the railroads. Such are some o.
the benefits which the State derive,
under the contract, and the State shoull
not deprive the companies of those
rights on the faith of which these bene
fits accrue to the State. Good faith anC
fair dealing demand this. The people
of the State, approaching the sanctity
of contracts and the public faith, have
in their sovereignty, put a a prohibition
on the legislative power, that "no law
impairing the obligation of contracts
shall ever passed" State Constitution
art. /, sec. 8.
The people of the United States, in
order that the States should at all times
preserve inviolate contracts, and prevent
the mischief that might. result if States
were to pass laws impairing the obliga-
ton of contracts, placed prohibition
upon the States that "no State shall pass
any law impairing the obligation Of con-
tracts" United States Constitution, art.
!, sec. 10. In the construction of this
clause of the Constitution, it has uni
formerly been held by both State and
Federal Courts, since the decision of
the Dartmouth College case, that the
legislative charter of private corpora
ton is contract, and when there is no
reservation to alter, modify or repeal
the same, it is protected by the Consti-
tuition of the United States. No subse-
quent Legislature can impair it. $50
long as legislative bodies are intrusted
with the duty of creating these bodies
polite, and prescribing the limits to
their powers and privileges, it must be
because it is believed that they will ex-
ercise their legislative authority wisely
for the public benefit. Whatever rights
or immunities it may be found necessary
to bestoW upon corporations by the
creative act, they should be looked upon
as inducements held out to the corpora
tions to encourage them to incur the
hazards always incident to the employ |
ment of capital in such enterprises. If |
there should be no restraints upon the |
State to prevent its abrogation or alter
alton, at pleasure, of charters thus
it would materially diminish
he security of corporate property and
discourage such investments. IF
tatute guaranteeing certain advantages
o those who employed their capital in
particular direction with no reserve of
,ower toalter or modify expressed either