The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1899-11-02
THE STATE SCORES
BEFORE S|MONT TON
His Decision in the Fertilizer
Rate Case
NO VIOLATION CONTRACT
FOR THE CORPORATION COMMITS
SION TO FIX RATES.
E.S. MARTIN APPOINTED SPECIAL MASTER
To Inquire Into the Reasonableness of the Rates
as Fixed by The Commissi n Mining Can
be Satisfactorily Settled by Afidayits
Says Simonton.

The opinion of Judge Simonton, of the
United States Circuit Court. in the for
tilizer rate case was handed Gown IN the
Clerks office here yesterday. The State
wins on the FIRST contention set up IN the
complaint, the contention that The Cor
fertilizers had violated the States con-
tract with the railroad company. As to
the contention that the rates are unrea-
sonably low, Judge Simonton says: No
issue can be decided by affidavit with
any degree of satisfaction" and appoints
Mr.. e. S. Martin. of Wilmington, Spe
cial Master, to inquire into all the facts
bearing on the case.
The title of the case is Virginia b
Matthews VS.. Board of Corporation Com
missioners of North Carolina
In his opinion, Judge Simonton says:
The complainant is the holder of bonds
of the Carolina Central Railroad Com
pany, secured by a mortgage On its prop
erty and franchises. She comes into
court complaining of the Board of Cor
poration Commissioners of the State OF
North Carolina. in that said Board have
so far reduced the rates of freight on fer
tilizers that the income of the railroad
company is seriously impaired and It's
interest earning capacity destroyed.
The bill makes two Federal questions:
i. That by the charter of this railroad
company the exclusive right of fixing
charges on passengers and freight car
ried by said company is vested in its
board OF directors; and that this inter-
ference by this Corporations Commits
sioners is invalid, as the act authorizing
it impairs the contract % the charter.
2sBecause the rate imposed by the Cor
poration Commissioners is SC unrea soma
BILE that it amounts to the taking Of pri-
vate property for public purposes withou.
compensation.
Judge Simonton then cites that in Feb
ruary, 1855, the General Assembly of
North Carolina incorporated the Will
mington, Charlotte and Rutherford Rail
road company, giving it the power to
carry passengers and freight ''at such
charges as may be fixed upon by the
board of directors and that in 1873,
under decree of foreclosure adj prop
erty rights and franchises of said com
pany were sold to Timothy Fl. Porter.
Just before this sale the Legislature
chartered the Carolina Central Railroad
Company, and authorized it to buy "all
the contracts, franchises, rights, privi-
leges and immunities" of the Charlotte
and Rutherford Railroad Company. In
1880 a mortgage on the Carolina Central
was foreclosed TO a new company or
ganized under the general law of the
State and had its organization confirmed
by special act in 1881, giving it all the
rights and powers of the old Carolina
Central Company.
Judge Simonton then cites the con-
stitution of North Carolina, Article VIII,
section /, as follows:
Corporations may be formed under
general laws, but shall not be created by
special act, except for municipal purposes
and in cases where, in the Judgment OF
the Legislature, the object of the corpor-
alton cannot be obtained under general
laws. All general laws and special acts
passed pursuant to this section may be
altered from time to time, or repealed"
Taking up the plaintiffs contention
that the Carolina Central is the successor
of the Charlotte and Rutherford and
entitled to all its rights and privileges.
including the exclusive right to fix
freight and passenger rates, Judge 81
monitor proceeds to enquire whether the
exclusive right given the former corpora
ton to fix rates passed by sale to the new
corporations He cites the opinion in Chi
cago. ETC., Railroad VS.. Nebraska, 10
Y. s., ~, which declares that in con-
tracts with persons or corporations where
the safety and welfare of the public are
concerned, such contracts 'are held to be
within the supervising power and con-
trol of the Legislature" and that clause
of the Federal Constitution which pro-
tects contracts from legislative action
cannot be in every case successfully in
voked. The presumption is that when
such contracts are entered into it is with
the knowledge that parties cannot, by
making agreements on subjects involving
the rights of the public withdraw such
subjects from the police power of the
legislature
An array of decisions is instanced all
to the end that where special privileges
or immullities have been granted one cor
poration they can not pass to another
by purchase, the court declaring: This
is statutory rule of Interpretation
founded on an obvious policy which re-
CARDS such exemptions as in derogatiOn
Of the sovereign authority and of COM
mon right, and therefore not TO be eX-
tended beyond the exact and express
requirements of the grant construed
serictissimi juris."
Under these decisions and the clause
Of the. Constitution quoted and ON the
facts as cited, Judge Simonton rules that
the Carolina Central is new corpora
ton, is subject to the control of the Gen
eral Assembly and that the charter OF
the old Wilmington, Charlotte and Ruth
erford, in so far as it gave the exclusive
right to fix charges to the board of direc-
tors, is as if it We're repealed explicitly
by the act of 1899 creating the Corpora
ton Commission. He adds: ''This action