The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1899-09-17
THE RAILROADS. CLAIM
EXEMPT FROM CORPORATIONS
RATE-MAKING POWER.
THIS CLAIM THE STATE HAS DENIED
Shepherd and Battle. for the State, and Watts
FIR The Ra,lroad. At orneys Are
Given Twenty Days to
File Briefs.

! Ashevile, y. c., Sept. 16.-(Special.)
The fertilizer rate case was argued
for three hours before Judge Simonton
this morning. Speeches We're made
by Judge Shepherd anil Mr.. Battle
for the State and by Judge Watts
for the railroad.
All were learned, and upon the
one point of law at issue, whether the
Carolina Central's charter gives it
exemption from the rate-making power
of the Corporation Commission. The
railroad alleges that it does; the State
contends it does not.
The burden of proof being on the
State, it had the opening and con-
Guiding arguments
Judge Shepherd opened and Mr.. Bat
tie closed. The case came up on mo-
ton for a temporary injunction. re-
straining the Corporation Commission
from reducing freight rates on fertiliZ-
ers over the Carolina Central rail-
road.
For proper understanding of the
case brief review of the legislative
and judicial history of the Carolina
Central railroad is necessary.
The Wilmington and Charlotte Rail-
road Company was Incorporated by the
Legislature February Is, 1855. One
day later the name was changed to
the Wilmington, Charlotte and Ruth
erfordton Railroad Company. In 1873
the road was sold under judgment and
decree for foreclosure of mortgage, ana
became the Carolina Central Rail
road Company. Again in 1880 it was
sold under an order of court and be-
came the Carolina Central Railroad
Company
Each time the road went under new
management the purchasers were declar-
ed to be a lawfully organized corpora
ton succeeding to and possessed of all
rights, privileges and franchises which
were owned and possessed by the former
corporation"
Now, among these rights and privi-
leges conferred on the original cor
poration was this in section II of the
charter: ''TTHat said company shall
have exclusive right of conveyance
or transportation of persons, goods,
merchandise and produce on said rail-
road to be constructed, at such charges
as may be fixed upon by the board
of directors"
These facts, Judge Watts argued,
presented two Federal questions: ],
whether the commission, in SO far as it
undertakes to reduce the freight rates
for fertilizers on the Carolina Central.
does not violate the Constitution of
the United States by obligation of con-
tract between North Carolina and the
railroads: 2. If it does not it violates
the Fourteenth Amendment by depriv-
ing the railroad of its property without
due process of law.
s'The act of incorporation" said Judge
Watts in his argument was accepted
by the railroad company, and its ac-
ceptance. on one side, and grant made
by the State, with conditions imposed
and privileges and immunitles confer
red in the bill. became contract be-
tween the railroad company and the
State which cannot be amended or
annulled without the consent of both
parties"
lit has often been decided by the
courts that charter granted by the
State creates contract which the
State cannot violate. In support of this
position Judge Watts referred to the
Richmond and Danville Railroad Com
4 ~. Vs. y.
Navigation Company, Ill n. g. and
Wilmington and Weldon VS.. Reed, 13
Wall
In the Bass case Justice Avery says:
Unless power is specifically reserved
when the charter is granted, or under
constitution or general laws, the Legis-
lature cannot, as a general rule, modi-
fy the charter so as to take away any
power which would inure to the profit
of or prove a protection to the com
pany from loss"
The State contends, in the argument
of Judge Shepherd and Mr.. Battle:
/, That the Wilmington, Charlotte and
Rutherford Railroad did not have the
right under the charter to fix rates
which the State could not supervise;
2, That if it ever had such right, it ex-
pired with the dissolution OF the Will
mington, Charlotte and Rutherford
Railroad Company in 1872 and did not
pass TO the Carolina Central;
3, That the Carolina Central Com
pany was chartered III 1878 and author
lied to buy the Wilmington, Charlotte
and Rutherford railroad, and is there
fore purchaser and not successor of
that road. having only such rights as
it's own charter gives, and that exclu-
sive rate-making power is not in this
charter;
4, That the charter of the Carolina
Central Company was granted since
1868 and is repealable, and that the
Corporation Commission act gives power
to fix the rates
In this case as in the tax case both
sides are given twenty days in which
to file briefs.
The rate case disposed of the tele-
graph tax case was taken up.
Mr.. Strong, attorney for the West
ern Union, made an attempt to have
the hearing postponed, but the Judge
denied the motion. 1t was then mu-
tually agreed. in view OF the fact that
the law in this case is the same as
that governing the railroad tax case,
that there should be no oral argument,
but both sides will file their briefs
and Sllch further affidayitg ne may