St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1896-04-20
IN WHICH THE UNITED STATES
SUPREME COURT OVERRULED
JUDGE SANBORN.
JUDGE KELLY HAS A COPY
(WHICH FOLLOWS IN MANY &C.
SPECTS THE LOGIC OF HIS
RULING ON pEARsALL,s CASE.
The Court Takes Firm Stand
Against the Consolidation as
Monopoly.

Judge Kelly has received from United
States Justice Brown copy of the decision
of the United States supreme court, reversing
the finding of Judge Sanborn and sustaining
Judge Kelly in the Great Northern-Northern
Pacific consolidation case which was taken
up on appeal from the decision in the
United States circuit court denying the ap-
plication of Thomas w. Pearsall for an in
Junction restraining the Great Northern from
consolidating. In this decision wide de-
parture is taken from the the theory laid
down in the Dartmouth college case, in
which it was held that charter once grant
ed could not be altered in any material
spect and which had served a precedent
for generations in all courts of the United
States in the determination of issues like
those raised in the Great Northern case. In
view of the fact that the Associated Press
port at the time the decision was handed
down was not sufficiently full to convey the
real import of the decision, the G o b here
with gives some excerpts from the most i'm
Portant parts.
To state the facts briefly, the Great North
ern claimed the right to consolidate under the
act of the legislature of 1865, giving it the
right ''to connect with or adopt as its own
any other railroad running in the same
general direction with either of its main
lines or any branch roads, and which said
corporation is authorized to construct" and
TO consolidate any portion of its capital stock
or property. Subsequently the legislature
passed an act taking away this privilege, but
in the present case the road contended that
this later act was unconstitutional, for the
reason that it sought to take away a vested
right in violation Of the original charter
passed in 1885, Therefore the question turn
ed on whether the right to consolidate, grant
ed in 1865, could subsequently be taken away.
The opinion says that had the right been
exercised before it was sought to take it
away, it would have become vested, and the
subsequent act, by which it was sought TO
take it away, unconstitutional. Then follows
a long review on the subject of vested rights
and the decisions defining the rights that be-
come vested, and the conclusion is expressed
that as applied to railroad companies it may
Reasonably be contended that the term ex-
tends to all rights of property acquired by
executed contracts, as well as to all such
rights as may be necessary to the full and
complete enjoyment of the original grant, or
of property legally acquired subsequent to
such grant. Continuing it says:
But where the charter authorizes the
company in sweeping terms to do certain
things which are unnecessary to the main
object of the grant, and not directly and i'm
mediately within the contemplation of the
parties thereto, the power conferred,
long as it is uneXecuted is within the con-
troll of the legislature and may be treated
a license, and may be revoked, if a possible
exercise of such power is found to conflict
with the interests of the public. AS applica-
BILE to the case under consideration, we think
it competent for the legislature to de-
clare that the power it had conferred upon
the Minneapolis & ST. Cloud Railway
pany to consolidate its interests with those of
other similar corporations should not be eX-
ercised, so far as applicable to parallel or
competing lines, inasmuch as it is for the
interest of the public that there should be
competition between parallel roads. The leg
islature has the right to assume in this con-
nection that neither road would reduce its
tariff to destructive or Improbable figure,
to a point where either road would be-
come valueless to its stockholders, and that
the object of the act in question is to pre-
vent such a combination between the two as
= would constitute monopoly.
When the act Of 1866 was passed 1t was
doubtless contemplated that the Minneapolis
St. Cloud Railway company would desire
to extend its road Though it is hardly pcs
sible to suppose that extension to the
Pacific coast was thought of at that time),
and to build, purchase or lease branch roads,
which would serve as feeders to its main
line, and open up railway communication
with territory naturally tributary to st. Paul
and other towns on the Mississippi river.
Such antcipations were perfectly legitimate,
and these broad powers are undoubtedly in
tended as an encouragement to the construc-
ton Of railways, to the development of the
vast, unoccupied, but fertile, territory stretch
ing in both directions from the course of the
Mississippi river and also to a connection with
fprti1n haat-ornuyinC ~ onj-
toba, by branch road to the Canadian line.
Had it occurred to the legislature at that
would be used to obtain the control of paral-
lei and competing lines and to stifie legiti-
mate competition, doubtless a proviso would
have been inserted to meet this possibility
That the charter Of 1866 might be available
to accomplish this purpose became apparent
so soon that within nine years after, and
before the construction of the road had been
fairly entered upon, the legislature declared,
in its act of March g. 1874 that no railroad
corporation should consolidate with, lease,
purchase or control any parallel or competing
line; and to indicate still more clearly that
its object was only to prevent the abuse of
these powers by the creation of a monopoly,
1t passed another act, in 1881. repeating this
prohibition, and further declaring that any
railroad corporation, whether organized under
der general law or special charter, might
consolidate with, lease, purchase or in anv
way become the owner Of or control or
hold the stock Of any other railroad corpo-
ration, when the respective roads could be
+ tdWluily CoiLHeCIeu anu operated together, so
as to constitute one continuous main line,
with without branches.
We DO not deem it necessary to express
an opinion in this case whether the legisla-
ture could wholly revoke the power it had
given to this company to extend it's system
by the construction or purchase Of branch
lines or feeders, since the possibility of an
extension of the road, even to the I%,ifc
coast, may have had an influence upon per-
sons contemplating the purchase of its stock
or securities, so that right to do this might
be said to have become vested. But we
think 1t was competent for the legislature
out of due regard for the public welfare
to declare that its charter should not be
used for the purpose Of sitting competition
and building up monopoIes. In short wa
cannot recognize vested right to do man
tfest wrong.
Nor do We undertake to say that the leg
islature may not, in the exercise of a wise