The news & observer., 1897-02-24

sary and useful institutions or mouern
civilization, But if in addition to the
dangerous power of transferring all thelI
nroperty and franchises to any body and
anywhere, it should also be held thai
their corporate powers are such contracts
as nut them beyond the reach of all leg
/ islative check or control in the interest oil
society. then the problem will have been
solved. The government, in my opinion,
will have addicted its sovereignty, here
| tofore supposed to be inalienable, and
society will be left without protection to
( chartered responsibility.
''My conclusion upon the whole case is,
| that the North Carolina Railroad Com
pany had no right to change the gauge
| and it's assignee acquired no right TO
! change it; and further that the lease is
ulra wires and void. For although the
right of transportation over the road Is
the subject of lease, the lease as made
cannot be good in part and bad in part,
because il is impossible 90 separate the
good from the bad and 10 apportion u
rent given in soiida. | therefore think
the Judgment of the court below should
have been affirmed"
We believe that the courts to-day would
make the dissenting opinion the Judgment
Of the court. and therefore we are desir-
Gus of testing the question in the only
form that can give relief by annulling
the lease.
There was no necessity OF making the
new lease six years before the expiration
of the old lease, and il the Southern
Railway was pressing for the directors
to make the contract 80 long a time in ad-
vance. IL was the duty OF the directors
to say: Put your proposition in writing
and we will submit ii with our rSAcommen-
dation TO the next session of the General
Assembly for ratification or rejection. We
are only trustees for the State, and we are
unwilling to stretch our authority by max
ing so long a contract without Legislative
sanction" The Southern Railway knew
when the Legislature OF 1895 was in
session that they would want the lease re-
newed before 1t expired. The directors
lad no equitable right-we want the
courts 10 say whether they had the legal
right-to make the 99-year lease six years
before the time of the old lease expired.
The directors contracted for the lease
without advertising for bids and without
seeking competition. They are the trus-
tees of the States property. They stand
in relation to the State as trustees. II as
trustee of a cestui que trust, either one Of
these directors had rented property with
out opportunity to others to bid, the ces-
tut que trust could recover from the trus-
tee the difference between the amount act
ually received as rental of the property
and the amount that could have been re-
eeived by inviting competition. The ad-
mission that the trustee thought ne was
getting the best trade possible would not
serve him If it could be shown that he
had made the contract without an effort
to secure larger rental. How much
more censurable the trustee would be
If he had been notified by other response
bl parties that they would pay higher
rental if he would postpone the time of
renting until the existing lease expired,
so that the party leasing could obtain
possession Of the property. This is the
case of the directors of the North Caro-
lima Railroad. They leased for 90 years
the North Carolina Railroad 30 the South
ern Railway without advertising for bids,
and in the face of the fact chat the pres
ident of the road was advised that if he
would wait till near the expiration of the
old lease another responsible party would
bid
In law, if these directors were trustees
Of private parties they wonld be accounta-
BILE to the cestui que trust for the differ
enee between the amount they received
by advertising, if the amount could be
aseertained, as it can be done in the case
of the rental of the North Carolina Rail-
road for $2S0,000 per annum when $780,
900 can be secured-in fact when a re-
sponsible party is begging to be allowed
an opportunity to pay that sum, and when
a higher rental can be secured by opening
the lease to competition OF responsible
parties. Why do we say this? The
Southern Railway authorities pay 81, 100
per mile for the rental of the line between
Charlotte and Atlanta, and only frac-
ton over 5000 per mile for the North Car
olina Railroad, when General Henderson,
chief counsel for the Southern Railway,
says the North Carolina road is the most
valuable road ia the South, if not in the
whole country.
The above facts prove
/. That the directors stretched their
power, if they did not exceed it.
2. That there is grave doubt whether
they had the power to make the lease
and that there is much authority to the
effect that the directors had no right to