Case Name: The State of Louisiana v. New Orleans, Jackson and Great Northern Railroad Company
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1868-06
Citations: 20 La. 489
Docket Number: No. 1631
Parties: The State of Louisiana v. New Orleans, Jackson and Great Northern Railroad Company.
Judges: 
Reporter: Louisiana Annual Reports
Volume: 20
Pages: 489–495

Head Matter:
No. 1631.
The State of Louisiana v. New Orleans, Jackson and Great Northern Railroad Company.
At all elections for directors of the New Orleans,’ Jackson and Great Northern Railroad Company* the State of Louisiana and the City of New Orleans have che right to one vote for each share .of stock which they or either of them have in said road. ‘ i
Where the votes of the City of New Orleans and the State of Louisiana have not been counted at an election, held for director* of the New Orleans, Jackson and Great Northern Railroad Company, tne eleotion is null and void. ,
The State, being a stockholder in the New Orleans. Jackson and Great Northern Railroad Cóaj^ariy.j. has the legal right to question before the courts the legality of any election ‘for dirébtOKsf
APPEAL from the Sixth District Court of New Orleans, Buplaniiev, Jj»
B. L. Lynch, Attorney General, and Lacey, 31 tries & 'Bullgh,for plaintiffs and appellants.
Campbell, Spofford & Campbell md.L. ÁSijnmonds, for defendants and appellees. ’
Brief by Ijacey, 31-trles & Butler, for plaintiffs.
* * * Before ceedingto place the Court in possessionof our views upon the real mérjts of this cause, we deem it not amiss to give Your Honors the general outlines of the argument. We contend:
That the act incorporating the company provides that every subscriber to the shares of the capital-stock shall become a stockholder,! and that at all elections by stockholders, and at all their meetings each share shall be entitled to one vo.e; and that in this statute the State and City are not excepted.
That the acts granting the aid of the State to the extent of one-fifth .of the capital-stock of the company, and the aid of the City to the extent of two millions of dollars are cumulative statutes, giving to the State and City a right, additional to that accorded by the act of incorporation; in other words, the right to a representation of three in the board of directors, in addition to the privilege of voting upon the strength of their stock. • >
That under these statutes, the State and City had the right to vote upon the strength of their stock, and the deprivation of this right by. the commissioners ' if election was unlawful.
And lastb , that the commissioners were not justified, in declaring the minority andidates chosen, on account of the ineligibility of the majority candidates.
First. The act incorporating the company, approved April 22d, 1853, provides that every subscriber to the capital-stock shall become a stockholder, and that at all elections by stockholders, and at all their meetings, each stockholder shall be entitled to one vote for each and every share held by him; and in this law, the State and City are not excepted, or placed upon a different footing from that of private stockholders. ...
The act under consideration is universal in its application, extehding to all subscribers to the capital-stock, State, municipal and individual. The law provides that any subscriber, from twenty-five dollars and upwards shall become a stockholder, and thus be entitled to vote. If there be a provision in the charter of the company, which places the State and the City upon a footing different from that of individual stockholders, counsel for relators have not been able to discover it; and we do not hesitate to assert that in and by the act of incorporation, no such distinction exists; and the State and City, as well as individuals, upon subscribing to the capital-stock, became stockholders, and entitled to vote upon the strength of their shares.
On the 28th day of April, 1853, an act was passed authorizing a,subscription on the part of the Slate, to one-fifth of the capital-stock of all railroad and plankroad companies, and giving the State a right to a per manent representation of three in. the board of directors of such companies. On the 15th of March, 1854, the Legislature authorized the City of New Orleans to subscribe to the stock of the New Orleans, Jackson and Great Northern Railroad Company, in a sum not exceeding two millions of dollars; and gave to the City a like representation with the State, of three.members in the board.
These statutes, it is contended by respondents’ counsel, destroyed the right to vote, which the State and City would otherwise have possessed under the charter, and restricted the State, and City, notwithstanding their heavy subscriptions, to a fixed representation of three each in the directory.
This leads us to show:
Second. That the acts granting the aid of the State, to the extent of one-fifth of the capital-stock, and authorizing a subscription on the part of the City to the extent of two millions of dollars are cumulative statutes, giving to the State and City a right of permanent-representation in addition to the right to vote upon the strength of stock, accorded by the act of incorporation.
This interpretation is correct, because:
1. It is equitable.
Our interpretation not only places the State and City upon equal terms with other stockholders, but on account of the'large subscriptions offered by the State and City, and the very groat pecuniary interests which they have at stake, in the affairs of the company, it gives to them a right in addition to that bestowed upon private stockholders.
Is it anything more than equitable to say that the State and City, when subscribing, secured the privileges of other subscribers; and that the additional burthen of a heavy subscription, in which the public was interested, carried with it an additional right or privilege?
. 2. It gives effect to both laws on the same subject-matter. Civil Code, Art. 17.
. 3. It does not, by implication, destroy a right accorded by the charter to the State and City.
If the Legislature had intended that the acts, passed on the 28th day of April, 1853, and on the 15th of March, 1854, should not be cumulative in , their nature, but restrictive, confining the rights of the State and City to the fixed representation provided for in these statutes, the legislative will would have been declared in express terms; and in the absence of such terms, we humbly submit unto Your Honors the right to vote upon the strength of stock, should not, be taken from the State and City by implication. It is time enough to attempt to deprive a party of a vested right when there is a clear and positive declaration on the part of the Legislature that such should be the case; and it is not the part of wisdom to reach that end by inference or implication.
4. This interpretation has been placed upon the law by the Legislature.
In the year 1859, a report of the joint committee, appointed to investigate the affairs of the railroads in which the State is a stockholder, was made to the Legislature; and in this report, it was held that the State and City did not possess less rights as stockholders than a private citizen; that by the acts of incorporation of the New Orleans, Jackson and Great Northern Railroad Company, they acquired the right to vote upon the strength of their stock; and that this right has nowhere been surrendered. The committee repudiated the idea of the acts of 1853 and 1854* having the effect of destroying the right of the State and City to vote upon the strength of their subscriptions.
On the 13th of March, 1860, a similar report was made by the joint committee of the Legislature, in which the interpretation we have placed upon the law was fully and explicitly indorsed. And, upon the recommendation of this report, an interpretative statute was passed by the Legislature, authorizing and requiring the Governor of the State of Louisiana and the Mayor of the City of New Orleans, to vote on the stock of the State and City in all elections for directors of the company/ Yide Act 1860, p. 186.
Counsel for relators do not refer to this statute, for the purpose of proving that a new right was thereby accorded to the State and City, but simply to show the legislative interpretation of pre-existing statutes.
Again. The Legislature of the State of Mississippi, on the 20th December, 1861, passed an act entitled “an act to amend the charter of the New Orleans, Jackson and Great Northern Railroad Company.” By that statute it was provided, that thereafter at all elections for directors in the New Orleans, Jackson and Great Northern Railroad Company, neither the Governor of the State of Mississippi, nor the Governor of the State of Louisiana, nor the Mayor of the City of New Orleans, should be empowered or authorized to vote on the shares of stock, owned by either of said States or by said City in said company.
Sec. 3 declares: “That this act shall not go into effect until passed by the State of Louisiana, and accepted by the stockholders in said company, as required by their charter.”
In 1867, the Legislature of Louisiana passed an act entitled “an act to amend the charter of the New Orleans, Jackson and Great Northern Railroad Company,” by which last-mentioned act, approved March 10, 1868, and which thus became valid, art least as an interpretative law, the Mississippi statute was, in all respects, adopted, ratified .and confirmed.
With these acts of the Legislatures of Mississippi and Louisiana before us, we will ask Your Honors, what expression of opinion have the Legislatures of those two States, placed upon the laws of Louisiana, granting relief to the New Orleans, Jackson and Great Northern Railroad Company through subscriptions, on the part of the State and City? The answer is obvious. They have not only regarded the State of Louisiana and the City of New Orleans as having the right, under the act of incorporation, to vote upon the strength of their stock; but have declared that this right cannot be taken away until the charter of the company is amended by law, and that amendment accepted by the stockholders according to the provisions of the charter.
5. Relators’ interpretation has been sustained by the action of the company.
In 1866, the State and City were permitted to vote without objection, and this acquiescence on the part of the company, shows its interpretation of the law to be in harmony with ours. It is true, that at certain elections the Governor and Mayor did not see proper to exercise their right to vote; and on one or more occasions such right may have been denied by the commissioners or the company. But while, on the one hand this silence and objection, can have no favorable effect in behalf of respondents, the consent of the company to the right of the State and City to vote, has, on the other hand, the decided effect of showing relators’ interpretation of the laws to be correct. The rule, governing the interpretation of contracts, may be well-invoked to determine the meaning of laws.
Art. 1951, Civil Code: “ When the intent of the parties is doubtful,” (and for the purposes of this argument alone, it is admitted that a doubt haugs around the acts of the Legislature) “ the construction put upon it, by the manner in which it has been executed by both, or by one, with the express or implied assent of the other, furnishes á rule for its interpretation.”
The interpretation placed upon the acts under consideration by counsel for relators is equitable; it gives effect to both laws on the same subject-matter. It does not by implication destroy a right accorded by the charter to the State and City; it has been sanctioned and approved by the Legislature, and has been sustained by the action of the company.
On the other hand, respondents’ interpretation is incorrect, because:
1. It might have the effect of leaving, say 60,000 shares of the capital stock of the company unrepresented.
Tne State owns 61,000 shares, and we will suppose that she transfers, say • 60,000 to private individuals. She can convey no greater right than she herself possessed; and if she, on account of her fixed representation of three in the directory, has been deprived of the right to vote upon the strength of her stock, the transíerree of the 60,000 shares can have no better right. Hence these 60,000 shares in the hands of third parties) who have no permanent representation like the City and State, would be without representation.
It may, however, be urged that the transferree would acquire more rights than were possessed by the State, and would be able to vote, although the State could not. Concede this for the sake of argument. What then? There would, in that event, be a dual representation in the board; the State, having subscribed to one-fifth of the capital stock, and still owning, after the transfer, 4,000 shares, would, under such circumstances, be entitled-to her fixed representation of three; and the 60,000 shares of stock, held by private individuals, would be represented by the directors elected by their votes. The double representation is manifest, and if there can be a dual representation in such an event, why can there not be, when the State holds and controls the 64,000 shares?
, 2. Respondents’ interpretation will have the tendency to prevent many elections from being held.
At every election, a majority of all the stockholders must be represented; and, consequently, there can be no election, unless nuce than 160,000 votes (the one-half of the whole number of shares) be cast. After deducting from 320,000 the whole number of shares of the capital stock, the 144,000 shares held by the State and City, there are left 176,000 Voting shares. More than 160,000 of this number would have to vote to make up-the number required by the charter for a valid election. It stands to reason, that this large proportion of the voting ockholders canrarely.be had; and thus, under defendant’s interpretation of the rights of the State and City, election aider election would fail, and the old board, even when a pressing necessity for change ’existed, would for years be kept in office.
3. This interpretation has the effect of giving to Mississippi a decided advantage over Louisiana.
Mississippi claims the right to vote, and does vote upon the strength of fier stock; and if this privilege be accorded to her and denied to Louisiana, has. not the former State a decided advantage over the latter? Mississippi, with her influence and by her votes, may, at every election, control the directory,.and-by that meaus her interests be promoted at the expense of the interests of Louisiana; a home institution, subjected to the control of non-residents. Is it right to place an interpretation upon the acts under consideration, which will have this inequitable -effect? •
Third. It is contended, on the part of respondents, that thecommissio.uers were jijs.lfied in declaring the minority candidates chosen, on account of the ineligibility of the majority candidates.
To sustain the action of the commissioners, in this respect, counsel for respondents contend that relators knew, or by law were presumed to know, tbeiineiigibiiity of- the candidates for whom they voted; and with this knowledge, actual or presumptive, having voted for ineligible candidates, their votes were properly held for naught and respondents legally-declared elected.
We-reply:
1. The ineligibility was not in fact known to relators.
The .testimony of Mayor Heath and Gov. Wells, proves not only their ignorance of such ineligibility, but shows that they would not have voted for the candidates supported by them, had they have known of that ineligibility.
2. Nor is knowledge of ineligibility by law presumed.
The English authorities, upon winch adverse counsel so confidently rely, and upon the strength of which judgment was rendered by the ■ lower court advfersely'td relators, do not establish this presumption.
Grant on Corporations, the latest and principal authority, quoted on page 2L7, says: “This probably is the rule.” This writer does not lay it down as a well settled rule, or even as a rule which has been positively established. He speaks simply of a probability, not of a certainty.. Grant even leaves the question undetermined; and by a note to p. 216, quoting the case of King v. Trevenne, it will be seen that the doctrine of presumption is restricted to very narrow limits. The members of á corporation, according to the opinion delivered in that case, are presumed to know the contents of the constitution and by-laws of the company. With the fundamental law of their organization they must be acquainted, but the contents of their other books, particularly the blotter, journal, ledger or stock-book, they are not presumed to kuow.
The rule, justifying the presumption contended for, was impliedly deprecated by this Honorable Court, in the case of Slaes v. Gastinel, 18 A. 517. In that case, Gastinel was ineligible because of nonage, and this fact was a matter of public record, in the office of the Recorder of Births and Deaths; yet the Supreme Court did not regard the voters as presumptively aware of the fact of ineligibility, refused to hold for naught the votes for Gastinel, and to regard Staes as having received the majority of the legal votes, and ordered a new election. If the doctrine of presumption was rejected, in the ease of Slaes v. Gastinel, either expressly or by implication, why should it be made to apply in the present case?
The rule of presumption, which would force the Mayor and Governor to know the contents of the company’s stock-book, is not only unsupported by authority, and clearly antagonistic to the ruling in Staes v. Gastinel, but is wrong upon principle. Why should the State and City be deprived of their rights, and important offices given to minority candidates, upon a presumption that the Governor and Mayor were acquainted with all the books, and the entries in the books of the company ?_ Why should important, real and tangible interests of the State and City be sacrificed to a strained presumption of knowledge?
But enough of this. • The point at best is technical; and why, upon a mere technicality, should this case be thrown out of court, and the real, true and substantial question, which divides the parties, remain undetermined? Oui bono? Will it not be better to ignore technicalities, to disregard side issues, and at once decide whether or not the State and City, like any other stockholders, are entitled to vote upon the.strength of their stock? A court of justice never errs, when its decisions tend to a speedy determination of difficulties, and prevent the continuance of expensive and fruitless litigation.

Opinion:
Labauve, J.
In April, 1867, an election was held for directors of said company. The State, owning 64,000 shares of the capital-stock of the company, cast 64,000 votes through the Governor; and the City, owning 80,000 shares, gave 80,000 votes to A. D. Grieff, Robert Watson and sixteen others, the Mayor voting for the City.
The persons voted for by the State and the City, had a majority of votes, but the commissioners of election rejected those votes, and declared the persons voted for by the individual stockholders, and who had a minority of votes, duly elected, and they entered upon the discharge of their duties and elected their president.
The State now prays that a writ of quo warranto may issue, directed to the persons so declared to be duly elected and in office, to-wít: Beaúré-' gard, Blanc, Clark, Eellowes, Gordon, Henderson, Leeds, Ogden, Warren, Swartz, Williamson, Smith, Eorstall, Chalson, Hatch, Carruthers, Brown, Montgomery and Green, requiring them, and each of them, to show by what authority they claim or hold the office of directors of said company, and requiring G. T. Beauregard, above named, to answer by wliat authority he holds the office of president of said company, etc.
, The defendants filed several exceptions, which were overruled by the Court below; but they have called our attention in their brief to one alone. It is, that the State has no right to contest this election, and that the jurisprudence of Louisiana seems to have settled that the persons defeated at the election, must be the contesting parties to the suit. We cannot assent to such a doctrine. These directors are mere agents of the stockholders and of the company, and the State has an undoubted right to see that no one should hold office who is not duly elected. The Court properly overruled the exception.
The answer on the merits, is, in substance, that the defendants were duly elected by the stockholders, and that the State and the City had no right to vote, and that their votes were'properly disregarded as having produced no legal efiec*; and further, that the persons voted for by them were not stockholders, and could not be elected. Act of 22d April, 1853, p. 109, No. 148, H 5, etc.
The first capital of the company was $3,000,000, which was subsequently increased to $8,000,000, divided into shares of $25 each. The State subscribed for 64,000 shares or $1,600,000. The City of New Orleans for 80,000 shares or $2,000,000.
"By section 5 of said act, it is provided that " at ail elections by stockholders, and at all their meetings, each share shall be entitled to one voté.""'
It appears, under the law, and in the evidence, and by admissions in counsel's briefs, that the State and the City, had, and have now, each of them, three directors of their own, respectively appointed by the Governor and City Council. Hence, it is contended by the defendants that they had no right to vote as stockholders at this election, when they are represented in the directory by their own directors. Act of April 28th, 1853, p. 195, No. 231, § 8. Act of 15th March, 1854, p. 72, No. 109, | 7. It is under the first section of this act that the City subscribed to 80,000 shares. >
Now, although the State and the City have the absolute right to appoint each three directors, it must be conceded that they are stockholders, and we 3ee no reason why they should not have the same-privileges and rights as other stockholders have. We cannot make a distinction. The law is clear and free from ambiguity. Ubi lex non dislinguit, nee nos distinguere débemuS. C. C., Art. 13.
We are of opinion that the State and the City had the right to vote, and that the act of the Legislature, approved 15th March, 1860, only provides how the State and City should vote, and it was not necessary that this act should have been accepted by the stockholders; it is not a contract, nor an amendment to the charter of the company. If the State and the City had the right to exercise the franchises and privileges of stockholders in voting, the Legislature could say how, and by whom, their votes should be cast.
It is proved and admitted, that the set of directors voted for by the State and the City, had a majority or plurality of votes over the set voted for by the individual stockholders, and whom have been declared and returned as duly elected, on the ground .that those so voted for by the' State and the City were not stockholders.
We are of opinion that the votes of the State and of the City, being legal, defeated the election of the defendants, although they had no' affirmative effect.
It is the majority or plurality of legal votes cast for a party that elect's him, and not the iucompetency of his opponent, who has obtained a greater number of legal votes. Had the majority or plurality of votek been the result of illegal votes, the case would have been very different.'
We conclude that the defendants, not having obtained a majority or' plurality of votes, were not elected. ' .
It is therefore adjudged and decreed, that the judgment appealed from be reversed, and that the election under which the defendants' hold the office of directors, be annulled and avoided, and that the stockholders proceed to a new election of directors, if one has not yet taken place according to law, and that the defendants pay costs, in solido, iñ both courts. '