The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-07-23

sytn VS.. City OF Hammond decided April
l9 1897 by the Supreme Court of the United
states, IL was ruled that a late decision OF
the supreme Court of the State of Indiana
on the validity Of proceedings under In
diana statutes charging the boundaries of
the city or Hammond was law for the par
ties especially in view of the circumstance
that Mrs. Forsyth herself had taken the
appeal which resulted in that decision and
ii view Of the further circumstance that the
state decision was upon essentially the spe-
cine controversy afterward in another
form, made the subject of litigation in the
case before the Supreme Court of the
United States. But where the controversy
concerns contract and the meaning of
the contract depends upon the construction
or state statute, or provision of q state
constitution. decision on the meaning of
said statute, or constitutional provision,
by the highest court of a State, made after
the contract was entered into and rights
had vested Hereunder, is not conclusive
upon d litigant in a federal court. The liti-
giant IN suen case is entitled to the indie
pendent judgment of the national tribunal
Burgess VS.. Seligman for instance 107
y. > TO- involved the construction of
contract between the defendant, citizen Of
1NtW York ana q missouri corporation. The
former had received certain shares of stock
from the latter. Whether this stock was
owned absolutely, or held as security for
ANOTHER obligation, was the question. The
sense of the contract depended on the con-
structton of a statute of Missouri. After
the making of the contract, but before the
declslon IN the Supreme Court of the United
States, the Supreme Court of Missouri
ruled in another controversy between the
same parties upon the same question that
within the sense of the statute the stock
was owned and not pledged. Having this
decision before 1t, the Supreme Court of
the United States made a contrary ruling
ana this in a case where there was no
FEDERAL question, but only diverse citizen
ship. If the Missouri decision had been
prior to the contract, the federal tribunal
would doubtless have said that the contract
was made on the meaning of the statute a
declared In the state decision and that con-
~ 70 f.gf int r.a11 49,
have been followed. as of course The Mis-
souri, statute be it noticed was in a sense
part OF a contract-that is, the court could
not tel what the contract meant when the
parties made it without constituting the
statute. For full and clear discussion of
the subject and the cases in point see the
opinion of Lurton, circuit Judge. in I,o1lis
vile Trust Company VS.. City of Cincinnati
l6 Fed; Rep. 296 If the controversy in a
and al the more If 1t involve both a con-
tract right, as above explained, and also
federal question-then, of course that
court must decide for itself. treating a state
decision with due consideration, but not as
foreclosng Independent judgment.
A CHARTER A CONTRACT.
Whether the decision in the Navin case
be conclusive upon the litigants here de-
ponds on the nature of the present con-
troversy, in view of the rules above adj
verted to.
In the Dartmouth College case a
Wheaton, $50 it was ruled that the char
ter OF private corporation is a contract
between the corporate body and the State.
and that an act of the Legislature changing
the charter in any respect material to the
rights of the corporation is a violation ne
lnaI PROVISION OF the national Constitution
when lnhiblts State from making a law
lmpalrlng the obligation of a contract The
aCtloh was troVer, and the parties were
citizens of New Hampshire The appeal
went 10 the Supreme Court of the United
states by reason of the federal question
trine is still the law-and it applies to the
charter of railroad company Take for
instance, Banking Company VS.. Smith Q28
Y. 81 l4.) There the State of Georgia had
granted a charter to railroad company
and the contention was that within the
sense OF this charter the company was au-
thorlzed or given the right to charge for
carriage of freight as much as so cents per
huudredweight or 10 cents per cubic foot
Tor each hundred miles. The Legislature
OF Georgia had passed a law creating a
board with authority to fix rates for COM
mon carriers That board had prescribed
rates much less than the so cents or the 10
cents mentioned above. The Supreme Court
of the United States ruled that the railroad
charter was a contract which the subse-
quent act could not alter; that if the
Sharter provision upon fair construction
nad the meaning contended for, then the
subsequent enactment could have no an
phcation as against it; but upon exam
1natlon of the words of the charter they
We're held, when applied to the case be-
fore the court, not to have the meaning
mouth College case applies also to a rail-
road corporation organized under a
general incorporation law. See, for in
U. S., 1861 In such a case the sections of
the general Incorporation law constitute
a contract between the State and any
corporation organized Hereunder If in a
charter it be provided that the corpora
ton may charge rates up to or within
a specified limit or that the directors
sub To Tot,
selves fix the rates in their discretion, such
provision cannot be annulled or changed
by the Legislature unless power in that be-
halI pc reserved as part or the charter
agreement, and subsequent action by the
Legislature must be referred to and be
within the reservation.
In Reagan vs. Farmers Loan and Trust
Company. SUPRA, Mr.. Justice Brewer says:
If the charter had in terms granted to the
corporation power to charge and collect
definite sum per mile for transportation of
persons or property, 1t would not be doubt
ed that that express stipulation formed
part of the obligation of the State which
1t could not repudiate.
STREET CAR COMPANY'S CHARTER.
I'm the case at bar it was provided in
Section of the act of 1861, under which
the defendant company was organized, that
the directors should have the power to fix
the fare on its street railroad by Section u
that the corporation could not build tracks
or operate cars on the street at all, except
under conditions which the city would first
agree to; and by Section H. that this act
may be amended or repealed at the discre-
ton of the Legislature The city agreed
that the fare charged by the company
might be as much as cents. Subject to
this, the right to fix the fare was vested
in the corporation, and this right cannot
be modified otherwise than provided in
the charter contract namely by amend
ment of the act according to the terms of
Section II, when read in the light of those
restrictions in the Indiana Constitution
bearing upon the matter of amendment to
that act. There is no general authority in
the Legislature under which the corporate
power on the matter of fares can be
changed in contravention of charter
contract. Whatever the Legislature may do
must be within the sense of Section IL of