Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1902-04-03
Vermont's Governor VindicateG
by Massachusetts, Supreme
Court.
LAW UNCONSTITUTIONAL
Central Vermont Railway Company
Cannot be Compelled to Pay Unse-
cured Debts of Another Company
Opinion by Chief Justice
Holmes.

Holmes.
a decision involving the constitutional.
/ ity of the law regarding payment of un-
secured debts of the Central Vermont by
its new owners, passed by the Legislature
in 1900 over Governor Stickneys veto, has
been made by the Supreme Court OF Massa-
chuSetts, the opinion being by Chief JUS
tice Holmes. The case which grew out OF
the burning of the Ogdensburg elevator, -
discussed at length on the editorial page.
The decision which involves the rights OF
unsecured creditors of railroads sold under
foreclosure proceedings is as follows:
/ This is an action upon judgment obtain-
ed by the plaintiff against the Central Ner-
mont Railroad company, different corpo-
ration from the defendant, and upon a
Vermont statute, st. 1900, C. 1i2. requiring
thc defendant to pay certain Judgments Of
which the plaintiffs was one. The defend-
ant was Incorporated for the purpose Of
taking over the property of the Judgment
debtor, the Central Vermont Railroad conf
pany, by means OF foreclosure sale In
payment it was authorized to give its own
stock and bonds. and the charter provided.
expressly and by reference to a preliminary
agreement in pursuance of which the char
ter vas obtained, who were to receive the
stock and bonds and in what amounts. The
the arrangement, VT. st. 1898, C. 159 The
charter, however, provided that it should
DE subject to alterations, amendment or
repeal, as the public good may require"
ana the latter statute JuStifies itself by its
tide as such an amendment, although in
its enacting part it simply adds the re-
quirement of these new payments to those
which are in the original act. The defense
is that the so-called amendment is con-
trary to the constitution Of Vermont and Of
the United States.
We regret very much that the former
question at least should not be answered
by the Supreme Court of Ner-
mont rather than by ourselves. But
as it arises in suit properly
before US, we must deal with it to the
best Of our ability, as our predecessors and
the courts of other States have done in
similar cases. Simonds VS.. Simonds, los,
Mass. 51l; Shoe & Leather National bank
VS., Wood 142, Mass $50, 56S; Stoddard vs..
smith, j Binn. 355, 63; New York Life lns.
Co. vs. 3D. of Commissioners, 1O6, Fed. Rep.
The statute requires the defendant to
pay a sum of money to a stranger, to
whom, so far as appears, the defendant
was under no previous legal, equitable or
moral obligation. A purchaser at mort
gage sale is not bound to pay creditors Of
: the nurtgagor who are less well secured
than himself. 1t does not appear and is
not contended. that, when the charter was
granted, there was even an intention on
' the part of any one that the defendant
should pay judgments like the present. 1t
rather may be said to appear that there
4 was no such intention, so far as any eX-
preston can be found in the documents.
Such an intention cannot be presumed, be-
cause one purpose Of a foreclosure is 10
i withdraw property from the reach OF
: creditors of the mortgagor who have in
ferior liens or none. In short, We cannot
deal with the act as correcting a mistake
and carrying out the understanding on
which the defendant was called into being.
and therefore uphold il upon the SOM what
swampy ground of Danforth V. Groton
Water Co., 17S Mass, 4T2.
The statute is an attempt to require pr-
I Vate property to be applied to a private
use, and therefore encounters those pro-
visions of the Vermont Constitution which
declare the right to possess property. and,
by making express provisions for comp IL
sation. etc, whenever any person prop
erty is taken for the use of the public
implicitly prohibit the taking of it for
uses not public. VT. Const. c. l, arts. l.
X .; Williams V. School District No. g. %
VI 27l; Tyler V. Beacher, A VT as, 81;
Quimby " Hazen. "a VT. 1872 $40; Snow V.
Sandgate, 6G VT. Al; Talbot V. Hudson, Ii
Gray, Ali. i2l. We presume that the
provisions would not be limited by con-
struction to cases where the statute iden-
tined the specific property taken. but
would apply equally where the act required
some property to be appropriated 10 the
specified use. Indeed, as in this case, tho
/ appropriation is TO be in the form OF
! money. the further question is raised
I whether even If the use We're public the
, taking of property in that form is within
, the power of the State. Cary Library v.
Bliss, Isl Mass. S64, S7S. 37s.
| At follows that the statute is void unless
= ii is saved by the reservation of the power
to amend the charter in the original act.
. We are of opinion that il is not saved No
: doubt under a general reservation of such
} power, amendments have been held valid
which directly affected the property of IL
!, corporation by cutting down the tolls
I, which the charter allowed it to charge or
by increasing the share of profits which
the charter required il to pay over 10 an
other institution. Parker VS.. Metropolitan
/ railroad l09 Mass. sos; Mass. Gen. hospital
t vs.. State Mutual Life Assurance company,
: Gray, 81, 234. But cases like these are
in the strictest and most literal sense
t amendments of the charter and do not lead
to the conclusion that the power to take
away property rights Is unlimited. The
contrary proposition of Chief Justice Shaw
, now is accepted by most courts elemen-
tary law. An unqualified power to amend
authorizes a modification of the franchise
conferred, but does not authorize a depart
ure from the general restrictions on logis-
Ilation with regard to property acquired
land owned by the company, by the device
of inserting a confscation clause in the
charter by way of amendment. Com. VS..
Essex Co., 10 Gray, 239, 25S; Sinking Fund
cases. SO U. s. 700, 720. al, I4S, 15S; Detroit
VS. Detroit and Howell Plank Road Co., 43
Mich. l4O, l4I; People VS.. OBrien, Ill n.
Y. !; Dow VS.. Northern railroad, g n. II. l.
See Attorney General VS.. Old Colony rail-
road, 100 Mass. g..
The so-caled amendment would not have
fallen within the power OF the Legislature
had the power 10 amend the charter been
general lut the power reserved is Qnuli-