The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1896-11-08
THE LEASE OF THE N. G. R. n.
The Legislature Will be Asked to Have
the Validity of Lease Passed Upon,


the Validity of Lease Passed Upon.
To the Editor: The Legislature Of
/ North Carolina, at it next session, will
| be petitioncd to investigate the ninety
nine years lease OF the N. G. II. II. and
to have the validity Of the same passed
upon by our courts The directors of the
n G. II. L.. clearly acted ultra wires"
and the United States Supreme court
has so held in the case of the Pennsyl-
vania r.. X. against the st. Louis and Al
ton, 11S u. $. The court decided that,
Unless specially authorized by it's char
ter or aided by some other legislative
action, a railroad company cannot, by
lease or other contract, turn over to an
other company for a long period of time
its road and all it's appurtenances, the
use of its franchises and the exercise Of
its powers, nor can any other railroad
company, without similar authority, make
a contract to run or operate such road,
property, and franchises of the first cor
poration. Such a contract is not among
the ordinary powers of a railroad com
pany, and is not to be inferred from the
usual grant Of powers in a railroad char
ter"
This case came to the Supreme court
from Indiana Commissioners vs.. Rail
road Company, 30th Indiana), and the
court goes on to say, ut is cited, in the
brief of counsel for complainant, as sus-
tanning the doctrine, that in Indiana the
right OF railroad companies to lease their
roads to other companies is recognized
by the judiciary Of that State.
We think it proves the opposite. The
lease in that case was held void as being
ultra vires" All the arguments Of the
court are based on the proposition that
the corporation can do no valid act UNI
authorized by statute, and can make no
contract in contravention Of public
policy"
The court further says: "We look in
vain, in the latest decision Of the State,
for any assertion Of the proposition that
by the laws of that State, or by the de-
cisions of its courts, there exists any
law by which one railroad company can
by lease, or by any other contract make
an absolute surrender of its road and its
franchise to another"
Mr.. Justice Miller, delivering the opin-
ion of the court, in Thomas vs.. Railroad
Company, 101 II. S., says: when a cor
poration like a railroad company has
granted to it by charter q franchise, in
tended in large measure to be exercised
for the public good, the due performance
of those functions being the consideration
OF the public grant, any contract which
disables the corporation from performing
those functions which undertakes, with
out the consent of the State, to transfer
to others the rights and powers conferred
by the charter, and to relieve the grantees
OF the burden which it imposes, is a vio-
lation of the contract with the State and
is void as against public policy
In the case OF the Central Transports
ton Company VS.. Pullman Car Company,
139 u. s., the court says in reference to
the cases above named and quoted: 1.-THE
clear result Of these decisions may be
summed up thus: The charter of cor
poration, read in the light Of our general
laws which are applicable, is the measure
Of it's powers, and the enumeration of
| those powers implies the exclusion of all
others not fairly incidental All contracts
made by a corporation beyond the scope
Of those powers are unlawful and void,
and no action can be maintained upon
them in the court, and this upon three
| distinct grounds: The obligation of every
| one contracting with a corporation to
take notice of the legal limits of its pow
| ers; the interest of the stockholders, not
to be subjected to risks which they have
| never undertaken; and above all the in
terest of the public, that the corporation
shall not transcend the powers conferred
| upon it by law. A corporation can not,
without the assent of the Legislature
transfer its franchise to another corpora
ton and abnegate the performance of
the duties to the public, imposed upon
it by it's charter as the consideration for
the grant of its franchise. Neither the
grant Of a franchise to transport passen-
gers, nor a general authority to sell and
dispose of property, empowers the
grantee, while it continues to exist as
corporation, to sell or to lease its entire