Case Name: John Campbell et al. v. The Marietta and Cincinnati Railroad Company
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1872-12
Citations: 23 Ohio St. 168
Docket Number: 
Parties: John Campbell et al. v. The Marietta and Cincinnati Railroad Company.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 23
Pages: 168–192

Head Matter:
John Campbell et al. v. The Marietta and Cincinnati Railroad Company.
1. A grant of power to a railroad company to locate and construct branches to its main road, does not include authority to purchase the railroad of another company constructed under a different charter.
2. Where the railroad of one company is purchased by another railroad company, in pursuance of a statute authorizing the purchase, in the absence of any provision of law to the contrary, the road passes to the purchasing company subject to the same restrictions and limitations as to rates chargeable for transportation as attached to it iii the hands of the vendor.
3. Where a railroad company is authorized to demand and receive compensation for transportation of property “not exceeding five cents per ton per mile, when the same is transported a distance of thirty miles or more, and in case the same is transported for a less distance than thirty miles, such reasonable rate as maybe from time to time fixed by the company,” it is unreasonable, as a matter of law, that the company should fix a greater sum for a less distance than thirty miles than the maximum allowed for full thirty miles.
Appeal. Reserved in the District Court of Scioto county.
This action was brought to obtain an order restraining the defendant from enforcing against the plaintiffs a certain tariff' of rates for transportation of property upon its road. The plaintiffs are owners of certain iron-furnaces situate on the defendant’s road, between Hamden and Portsmouth, .at a distance of twenty-eight miles from the latter station, and the rates sought to be enjoined are for transportation of the plaintiffs’ property on that part of the road.
The case is now presented on demurrer to the reply, and in addition to the facts stated in the opinion of the court, it is sufficient to say that the demurrer must be sustained if the defendant’s tariff of rates is such as is authorized -by law, otherwise the demurrer must be overruled.
Hunter & Daugherty, for plaintiffs:
1. Our first proposition is this: That, by legal necessity, any alienee of a railroad, if the alienation be by authority of law, has the right and power to maintain, operate, and carry it on as a public use; and, as incident to that right, is vested with the power pi’escribed by the charter of the company by whom it was authorized to be constructed, and none other unless conferred by express legislative grant, to demand and receive fares and freight for transporting persons and property on the road.
The Marietta and Cincinnati Company claims that inasmuch as section 24 of the act regulating corporations (S. & C. 281) granted it power to purchase a connecting railroad, it by necessary implication conferred power to operate such road under the charter of the’ Marietta and Cincinnati Company. But clearly such purchase is not limited to the roadway, but includes the right to use it subject to the rights of the public thereiu — to wit, the right to passage and transportation at rates within the limits imposed upon the company that constructed the road. In other words, the company selling can not by its sale give to its vendee any power not belonging to itself. New York & Maryland Line R. R. Co. v. Winans, 17 How. 39; Beman v. Russford, 1 Simon, (N. S.) 550; Winch v. B. & L. R. W. Co., 13 E.L. & E. 506.
The rights of the public are never presumed to be surrendered to a corporation, unless the intention to surrender clearly appears in the law. Perrine v. C. & D. Canal Co., 9 How. 192; C. & A. R. R. Co. v. Briggs, 2 Zabris. 623; Charles River Bridge Co. v. Warren Bridge, 11 Peters, 420; Richmond R. R. Co. v. Louisa R. R. Co., 13 How. 71; Pierce on Am. R. R. Law, 12, 13.
Assuming that the proposition for which we contend as above shall be sustained by the court, a further question is-presented in regard to the rates of toll which the defendant, as purchaser of the road in question, has the power to charge, under the effect of the act entitled “an act prescribing a tariff of freight on railroads,” passed May 1, 1852. “1 S. & C. 318.
It is claimed in the petition of the plaintiffs that, although it may be competent for the defendant, by its board of directors, to' fix and establish a tariff' of rates for the transportation of merchandise, produce, and other property consigned to and from places in the vicinity of which are situate navigable canals belonging to the state, or which are-intersected by said road, in conformity with the above-named act, to be transported over the whole extent of said road, it is not competent, but is unlawful, and directly in violation of the provisions of said act, for the defendant to-charge and receive any higher rate than the rates, or tariff of rates so fix-ed and established, for transporting similar merchandise, produce, or property over a shorter distance-of said road proportioned to distance.
To this the answer responds:
. . . . “That the distances from said Washington and. Monroe Furnaces to any'other point on said road is less-than thirty miles.” . . . “That the rates established by the delendant for the transportation of property to and from said furnaces, to and from other points and places on-said road, are not in conflict with said act of May 1, 1852, because the same are not higher than the rates and charges so fixed for longer distances on said road.”
The answer also explicitly asserts and sets up “that the-defendant has, by authority of law, the right to fix and determine, at discretion, the rates or charges for the transportation of persons or property between any two points on its said main line and on said purchased road or branch, or between any two points on either.”
The prohibition of the first section against charging or receiving any higher rate for transporting over a shorter distance is to be understood as a prohibition against charging a higher rate for the distance between Portsmouth and' any other point (say the furnaces in question, twenty-eight miles) than is, by the fixed rates, charged from Portsmouthtc Hamden, fifty-six miles; and the distance is to be regulated by rates, proportioned to distance.
Would it be admissible to fix and publish a table of rates on any given article — say pig-iron — charging the same price per ton for transporting it from Portsmouth — say five-dollars to each of the designated points or stations — without discriminating between the points on account of their different distances from Portsmouth ? Surely, so to arrange-a table would not be according to the intent of the law. Met it may be said that a higher price is not charged for a shorter distance, but the same price for all distances. The clear answer to this is, that, in the sense of the law, to charge the same price for a shorter as for a longer distance-is charging a higher rate for a shorter distance. Hence the-term “rate” relates to differences of distance, and must result in proportions to distance; and, as' railroad distances-are measured by miles, the table of rates, whatever may be the form of expression, will result in rates, per ton, per barrel, per bushel, etc., per mile.
But it has been argued that the law does not contemplate the rate to be per mile. We concede that it is not so expressed, literally; but we say that the clear intent of the law forbids arty device that can be adopted, the result of which will be the establishing of higher rates per ton, etc., per mile, for shorter distances than for longer.
The terms “tariff’” and “rates,” “higher rates,” “less rates” and “fixed rates,” as used in-this enactment, are undoubtedly so used in their practical sense, as known among the business men of the country familiar with transactions and business in which they are applicable, but so as to effectuate the objects of the law.
And the requirement of the provision that the companies referred to shall “fix and establish a tariff of rates” is a requirement that they shall “fix and establish a table of the proportions of freight.” And the prohibition against charging or receiving any “ higher rates” for transporting property to or from Portsmouth is properly to be rendered “any higher proportions of freight.”
We do not claim that the act of May 1, 1852, in any way affects the right of the defendant, as purchaser of the road in question, to demand and receive fares for passengers generally, and freights to and from other points, not including Portsmouth, in accordance with the act of February 11, 1848, in conformity with the special act incorporating the S. & H. V. R. R. Co.
We are not, in this case, perhaps, concerned with the construction of this act, unless it be holden, for some cause, that the act of May 1, 1852, is not obligatory on the defendant.
This, however, is claimed by the answer to be the case, because, as alleged, the act of May 1, 1852, can not be made operative against the defendant, as purchaser of the road in question, consistently with the constitution of the State of Ohio and of the United States, as to give it such effect, would be to violate a contract between the state and the S. & H. V. R. R. Co., whereby said company has secured to it, by its charter, the perpetual right to maintain and carry on said road, with the power to demand and receive fare and freight, as limited and prescribed by section 12 of said act of 1848; and the defendant claims that, as a purchaser of said road, it has succeeded to the rights, in this regard, which before were vested in said S. & H. V. R. R. Co.
It is obvious that the several defenses are incompatible with each other. If the sale of the road to the defendant vested in it the power to maintain and carry it on under its own charter (which is one ground most distinctly assumed by the defense), it is clear that the defendant has no concern in the question whether the act of May 1, 1852, operates as an infringement of the charter of said S. & H. V. R. R. Company.
The principle is well settled that the grant of corporate rights by legislative enactment, is always to be taken to be subject to a power reserved to the legislature, to exercise police powers, aod power of taxation, and, in general, to-prescribe in the government of the corporate body, such duties as, in the wisdom of the legislature, may be consistent, or required by good policy, unless such power be stipulated by express terms in the charter not to be exercised. Turnpike Co. v. The State, 3 Wal. 213; The Binghampton Bridge, 3 Wal. 51; Charles River Bridge v. Warren Bridge, 11 Pet. 420.
But what will be the effect of a ruling by the court adversely to what we have contended for upon the constitutional question, upon the hypothesis that we shall be sustained in what we have said in opposition to the right of the defendant to demand payment of tolls according to the requirements of its own charter ?
In that case the rights of the parties would necessarily be regulated by the provisions of section 12 of the act of February 11, 1848.
And therefore the question, whether the plaintiffs are en- - titled to the relief prayed for in case the court rules, as last above supposed, upon the questions of law, would depend upon a question of fact whether the rates fixed in the table of rates adopted July 5, 1865, and claimed by the defendant to have been in force at the time of the commencement of this section, as applicable to the case of the plaintiffs, were and are “reasonable,” within the just sense of said section 12 ?
This question of reasonableness is a mixed question of law and fact, and although the proofs of fact may not be fully before the-court, yet enough appears to enable the court to settle and declare the principles of law which must govern.
What kind of relief are the plaintiffs entitled to if the legal questions we have discussed be solved in their favor ?
Should any question be made as to the right of the plaintiffs to equitable relief by injunction, admitting the case to be as claimed in other respects, upon the law and facts, the case of Perrine v. Chesapeake and Delaware Canal Co., 9 How. 172, will be found to be a precedent in point.
W. A. Hutchins and M. A. Daugherty, on the same side:
I. As to the claim of defendant under section 24 of the corporation act, S. & C. 281, we cite, in addition to cases referred to, The Penn. R. R. Co. v. Sly, 65 Penn. St. 205.
See also cases in regard to the duty of fencing, etc., where the .operating road is treated as the agent of the operated road. Bay City R. R. Co. v. Austin, 21 Mich. 390; Clement v. Canfield, 28 Vt. 303; Chicago, St. Paul and Fond du Lac R. R. v. McCarthy, 20 Ill. 385.
II. The defendant, the M. & C. R. R. Co., as reorganized, claims to bo a corporation under and by virtue of the deed from the M. & C. R. R. Co., made and delivered February 22, 1865, conveying, to the reorganized company the franchise to be a corporation, in pursuance of the act of April 4, 1863 (S. & S. 131), and its corporate existence, derived in that way, is admitted by the plaintiffs for the purposes of these suits.
The effect of such a conveyance is declared by the Supreme Court in a case decided at the present term, State ex rel. Attorney-General v: Sherman et al., 22 Ohio St. 411: “ The real transaction in all such cases of transfer, sale, or conveyance, in legal effect, is nothing more or loss than a surrender or abandonment of the old charter by the corporators, and a grant de novo of a similar charter to the so-called transferees or purchasers.”
Then the defendant is a railroad corporation, which, as such, sprung into existence February 11, 1865, with a charter such as then could be granted to it.
The law then and still in force, regulating the creation .and operation of railroad corporations, is the act of May 1, 1852 (S. & C. 271), and the acts amendatory thereof or supplementary thereto. Section 2 of that act prescribes a mode for the incorporation of such companies, and companies formed in pursuance of that section are, of course, controlled and limited by all this legislation.
But this company was not so formed, but was formed under the amendatory act of April 4, 1863 (S. & S. 131)— amendatory by its terms of the act of May 1, 1852. This amendment, of course, as counsel for defendant very clearly show in their argument, at once became, on its enactment, part of the original act; and consequently, after this amendment, the act of May 1, 1852, provided two modes for the incorporation of railroad companies under it — one mode .prescribed by section 2, and the other by this amendment.
There can not, therefore, be any doubt as to under what law the defendant holds its corporate existence and corporate franchises. It is the law of May 1, 1852, taken as a whole, with all the amendments. This answers our purpose very well. We know now what are its powers, and what the limitations on those powers. The statute is the only authority on this subject.
III. But the rate of toll is not necessarily to be controlled by either charter. Coe v. C. P. & I. R. R. Co., 10 Ohio St. 372; Atkinson v. M. & C. R. R. Co., 15 Ohio St. 21.
In this state corporations and powers granted to them stand on entirely different footings under the present constitution from that on which they stood under the old, under which both the above-named corporations were created, and under which they received not only their corporate existence, but all their franchises or corporate powers.
How do the transferees or grantees of a railroad, and, as -connected therewith, of the franchise to take toll or make profit of such road, hold such franchise ? Do they hold it exactly as it was vested in the corporation ? Or, do they hold it exactly as if originally granted under the present constitution, and subject to all the legislation, past and prospective, under the new constitution ? They must hold .it one or the other of these ways. Which ?
These are important questions, and we think they admit of but one answer, and that is, that they take and hold it exactly as they take and hold the land of which it is an incident or appurtenance, as if it was, at the date of the traus fei’, newly granted, and subject to all the legislation under the new constitution relating to such franchise or its exercise.
McClintick & Smith, and Hoadly & Johnson, for defendant:
I. Where a railroad built by one company has been purchased by another, under section 24 of the act of 1852,. and section 4 of the act of March 3, 1851 (49 Ohio L. 96; S. & C. 275), the vendee company in maintaining and operating such road, exercises the powers, and is subject to-the restrictions of its own charter, and not that of the vendor company. McKibben v. Lester, 9 Ohio St. 627; Goodin et al. v. Evans et al., 18 Ohio St. 150; 1 Redfield on Wills, 288; Thompson et al. v. N. Y. & Harlem R. R. Co. et al., 3 Sandford’s Ch. 625.
It would seem that the legislature in using the words “ said road,” in connection with the power to determine rates of toll, included the whole road contemplated by all the provisions of the charter and amendments, being a single railroad, owned by the corporation, composed of the-main line as originally constructed by the company, and all branches, extensions, and purchases.
But the right is confined to “ said road,” and, as is shown by the case of the Pennsylvania Railroad Company v. Sly, 65 Penn. St. 205, does not extend to leased roads, for the precise reason stated by Mr. Justice Sharswood, upon the-authority of Mr. Hargrave’s note to Co. Lit. 239, b, that the lessee is the “bailiff” of the lessor. But the purchaser is no bailiff or representative of the vendor.
This argument derives much additional force from the-language of section 24 of the act of 1852, and section 4-of the act of March 3, 1851, S. & C. 275, and from the inconveniences attending an opposite construction, and which-are so great as to render it extremely unlikely to have been the legislative purpose.
The power to purchase given by the section iu question is-to “ lease or purchase any part or all of any railroad con structed by any other company, if said companies’ lines of road are continuous or connected as aforesaid.” It is confined to the “ railroad,” the corporeal property, the tangible-assets known by that name. It does not extend to the-franchises; it is not necessary that it should, at least in the case of a purchase. See Junction R. R. Co. v. Ruggles, 7 Ohio St. 1; Hatch v. The C. & I. Co., 18 Ohio St. 92.
Section 12 of the act of 1848 plainly indicates that the-franchise in question, committed to the Scioto and Hocking Yalley Company, was not a qualification of the estate,, but a power of the corporation: “Such corporation may demand and receive for the transportation of passengers,” is the language used. This corporation still exists; its-franchises have not been judicially condemned; it may yet build its railroad from Hamden to Newark; non constat but' it may yet purchase the Marietta and Cincinnati Railroad : in such case, would not the specific limitations of its-charter, the act of 1848, apply along its entire line? Have its franchises been sold quoad hoc, and not quoad hoc? Does the power originally granted to it resemble those lower-forms of life of which, when cut in two, each portion becomes a living animal, aud wriggles off to fulfill a separate-destiny?
The absurdity of the view -we are combating becomes very plain, when the actual operations of the Marietta and Cincinnati Company on its main line and branch to Ports-, mouth are considered in the light of financial results. The-road-has never yet earned the interest on its bonded debt. These very plaintiffs allege that it is insolvent. The limitations of the act of 1848 are claimed to require low rates-of freight on the Portsmouth branch. Concede this, and the result is necessarily an increase of tolls on the main line to make good the loss. The people of Scioto and Jackson counties are not the especial favorites of the state. There is no reason why the commerce of Athens and Ross counties should be taxed for their benefit.
The public can not compel the' company to operate its road at a loss. The People v. Albany and Vermont R. R. Co., 37 Barb. 224.
Is it-not the very object of the legislature in granting to railroad companies the right to purchase, to unite and incorporate together two continuous or connected lines into one, and thus simplify and harmonize the management, so that there shall be along the line a single responsibility, one policy, and one system? For this reason, the power to purchase is limited to connected and continuous roads. Would it not be absurd to administer a long line with four different and conflicting systems, with different prices charged for business done upon the several sections, when all belong to a common owner, to whom the legislature gave the right to acquire by purchase ?
The same purpose is evident in the sections providing for consolidations. Consolidation has been defined to amount to the surrender of both charters, and the acceptance óf a now act of incorporation containing the franchises granted by the terras of the statute of consolidation. State v. Bailey et al., 16 Ind. 46; McMahon v. Morrison et al., Ib. 172; Clearwater v. Meredith et al., 1 Wal. 25. Why? Because thus is best carried out the legislative purpose which consolidates into one company and requires a single policy, a harmonious and consistent system 'and management. This purpose is also indicated by the juxtaposition of sections, -consolidation being provided for iu the 21st, 22d, and 23d, and sale in the 24th section of the act of 1852.
We desire to direct the attention of the court to the “act relating to railroad companies,” passed March 3, 1851. 49 Ohio L., 94; Ohio Railway Report of 1870, p. 23 ; 1 S. & C. 275, note.
This act is still in force; its 4th section is identical with the 24th section of the act of 1852. So that, as early as March, 1851, the Marietta and Cincinnati and Scioto and Hocking Valley Companies had acquired the power, afterward exercised in the transfer of part of the Scioto and Hocking Valley Railroad. So that the power was con ferred before the adoption of the constitution of 1851, and does cot rest upon an act passed under that instrument.
II. The railroad act of 1848 authorizes a company to charge for transportation, for distances less than thirty miles, prices fixed by itself in good faith higher than the act permits for longer distances, and allows no revision of such rates, except by the legislature after ten years of profits at the yearly rate of ten per cent., with the probability of equal future success, by the company.
Judge Hunter, in his brief, seems to us to have failed in this — that he does not allow proper weight to two important considerations, viz: First, that the company are made the exclusive judges of the reasonableness of the rate to be charged for distances less than thirty miles; and secondly, if the rate is deemed too high, that is, if it is unreasonable, the legislature, after ten years from the opening of the road, may reduce it; but not unless the company has made an average profit of ten per centum per annum on its capital during such ten years, and is likely to continue to reap an equal harvest.
The general law of 1852 fixes the rate to be paid for transportation for distances less than thirty miles at “ such reasonable rate as may be from time to time fixed by said company or prescribed by law.” In the absence of an allegation of bad faith, can there be any doubt that the omission of the legislature to revise the tariff of rates would be conclusive that it is reasonable? — in other words, that it can be revised only by law or by the company, and not by the courts? See Ranney, J., in Giesy v. C. W. & Z. R. R. Co., 4 Ohio St. 328; Hill v. Western Vt. Ry. Co., 32 Vt. 68; Iron R. R. Co. v. Ironton, 19 Ohio St. 299, 304. To deny to the plaiutiff the right to revise the tariff of rates in the mode they propose is in accordance with the familiar rule that when a right is created by statute, and a remedy at the same time provided for its enforcement, the injured party is confined to that remedy. This is by no means so severe an application of the rule as that made in Cupp et al. v. Commissioners of Seneca County et al., 19 Ohio St. 173.
III. The act of May 1, 1852, “ prescribing a tariff of freight upon railroads,” 1 S. & C. 318, forbids a higher charge for a short than for a long distance, but does not require proportionate rates.
A tariff of rates is usually understood to be a table or list of charges. It is in á far-fetched and recondite sense only, that it can be construed to be a table of charges graduated, by distance, or otherwise exactly proportioned throughout. Distance is referred to, not as an essential part of the meaning of the word “ rate,” but separately from it, and as if the legislator had not been thinking of the subject of distance as entering into the thought of rate, and so he adds, “ not higher for a shorter distance,” that is to say, not higher absolutely or in gross, and he does not add “ not proportionately higher.”
The protection of canal traffic is what the law designed. Does such protection require the exact proportion of charges,, according to distance? Not at all. The legislature was-only interested in forbidding higher rates for less service, in order to prevent the companies from adopting cheap rates from the point of intersection, thus diverting traffic from the canals and making good the loss by higher rates between points where no competition with the canals existed. Having established and published the price to be paid from Portsmouth to our several stations, we shall not charge more for transportation for shorter distances, not beginning or ending at Portsmouth, and shall not (section 2) cut rates to or from that city. This is the meaning and the raison d’etre of this law. See also 68 Ohio Laws, 78 and 69. Ib. 27.
It is a simple prescription that no charge shall be made-for any distance which shall be higher than for an equal, or greater distance from the point on the railway in the vicinity of, or of intersection with, the canal. The reason for this is manifestly, as we have already shown, to prevent the withdrawal of trade by ruinously low rates offered to' shippers at the'competing point, the loss whereby might otherwise be made good by higher charges elsewhere.
The construction we give to the canal law avoids what •otherwise would be a serious impediment to its utility. It makes it constitutional. Besides, it prevents its acting as a repealing statute, repealing by implication the limit “not -exceeding” which the companies may charge for transporting goods the distance of thirty miles or more, according to the general incorporation acts of 1848 and 1852. ’The absurdity of construing an act to bring it into conflict with another passed the same day is obvious. Besides, the question might be pertinently asked, which is the repealing act? How did Judge Hunter learn that the canal act enlarged the general incorporation act? Was it passed at a later hour of the day, May 1, 1852?
IV. Said act can not constitutionally apply to the Marietta ^and Cincinnati Railroad Company, nor to a company organized under the act of 1848. Neither the charter of the Marietta and Cincinnati Company, nor the act of 1848, is subject to legislative amendment or repeal. They are contracts — the former of which gives to the company, in express terms, the exclusive right to determine what charges to make. The latter secures to the legislature the right to revise the schedule after ten years of profitable traffic by the company — a condition not yet fulfilled. Judge Hunter quotes the cases which decide that police power is reserved to the legislature in the grant of charters of incorporation. But the violation of these contracts is not the exercise of police power. The courts of Vermont and Illinois have examined this subject with care. In both states the right of the legislature to-enforce the fencing of railroads is sustained. Thorpe v. Rutland and Burlington Co., 27 Vt. 140; Ohio and Mississippi Co. v. McClelland, 25 Ill. 140.
But the reasons given for this reservation of power in -these cases are decisive against the-view we are combating.
In the former, it was sustained because it did not impair the “essential franchise” of the company, which was de fined to be “ the privilege of operating the road and taking tolls or fare and freight.”
In both, the police power is confined within very narrow limits, and really resolved into legislative intervention in the enforcement of the maxim, “ sic utere tuo, ut alienum non Icedas;” and in the latter the right to compel fencing of railroad tracks is sustained by analogies drawn from the-cases of laws to require the fencing of saltpetre caves and castor-bean fields, for the protection of cattle.
But the “essential franchise” of a company, to which the power has been expressly delegated to fix its own-charges, or to charge iree from legislative interference, until it has made a profit of ten per centum per annum, is-very decidedly impaired by restrictions on its tariff of rates.”
It is suggested by Messrs. McClintick and Daugherty that the Marietta and Cincinnati Company is itself limited by section 13 cf the act of 1852; that the act of April 4, 1863, is amendatory of the act of 1852, and that a reorganization under the act of 1863 is an acceptance of the act of 1852, and a waiver of any provisions in the original charter of the reorganizing company in conflict -with it.
If this were correct, it would only apply to Madison Furnace, section 13 of the act of 1852 leaving the rates for distances less than thirty miles to be “ fixed by the company or prescribed by law.”
But the act of 1863 (S. & S. 131) does not profess to-amend the act of 1852. By its title and its terms, it is supplementary. It is an enabling act authorizing the purchasers of any railroad sold pursuant to judicial decree, or their assigns, to “ acquire the franchise to be a corporation originally vested in the company which held the said railroad prior to such sale.” While it is very true that this court has decided, in the recent case of the State of Ohio v. Sherman et al., 22 Ohio St. 411, that reorganization under the-act of 1863 subjects the reorganized company and its stockholders to the disabilities of the constitution of 1851, they have not decided that it incorporates under the limitations of the act of 1852.
But the case of State of Ohio v. Sherman et al. does very materially bear upon the ease now under consideration. Under item 3 of the syllabus in that case we must refer to the original act of incorporation of the Belpre and Cincinnati Company as that “ similar charter ” by which the rights of the Marietta and Cincinnati Company, as reorganized under the act of 1863, are to be measured, and we find that its eleventh section authorizes the collection of “ such rates of toll as the said corporation may determine.”
Section 13 of the act of 1852, in connection with the previous sections of that act, only applies to corporations organized according to section 2. “ Such corporation,” is the language, “ may demand and receive,” etc.; and the phrase “ such corporation ” points to section 2.
By the sale made in 1860, the franchises of the original Marietta and Cincinnati Company passed to the five purchasers for themselves and their ocstuis que trustent, and they eonvej’ed to the company as reorganized under the act of February 24, 1860. 57 Ohio L. 128.
Among the rights which thus passed to the reorganized company were the powers conferred by section 11 of the charter, and by section 4 of the act of 1851. The company, thus reorganized, was from 1860 to 1865 a corporation cle facto, although, as was held in Atkinson et al. v. Marietta and Cincinnati Co., 15 Ohio St. 21, not de jure. Hence the result reached in that case did not affect the corporate character of the company as far as its customers were concerned. If the plaintiffs wish to claim that the Marietta and Cincinnati Company have not the right, in operating the Portsmouth branch, to exercise the powers conferred by section 11 of the Belpre and Cincinnati charter, because it was not a corporation in 1864, when the purchase of that branch was made, their remedy is by quo warranto; and a judgment, if they are in the right, will be rendered, oust ing it from their exercise. Until such judgment, the remedy is not by bill in chancery for injunction.
Now, for the sake of the argument, concede that this was only a joint-stock company, unincorporated, during the years that it acted as a body corporate, and its shareholders supposed it was such. What, then, was the effect of the actual incorporation when it came to pass? The same joint-stock company owned both railroads. Being composed of natural persons, it had the right to acquire both. Can the conclusion be resisted, that, being incorporated with the powers of the original Marietta and Cincinnati Company, it may exercise them as to all the property it owns ? Is not the effect of such incorporation the same as if the Scioto and Hocking Valley Railroad were conveyed to it? after incorporation, under the authority of sections 4 of the act of 1851, and 24 of the act of 1852? See Merrill et al. v. McIntire, 13 Gray, 163; Happy et al. v. Morton et al. 33 Ill. 398; Lessee of First Presbyterian Church v. Picket et al., Wright, 57.
The only reason why either of these owners must resort to the franchises originally conferred on the Scioto and Hocking Valley Company, for power to maintain and operate their road, is because of the supposed necessity to make the property available for use or profit. Coe v. C. P. & I. R. R. Co., 10 Ohio St. 390. When they acquire franchises of their own, no such necessity exists. It ceases to be an instance of implied, by becoming one of. express power.
W. A. Hutchins and M. A. Daugherty, in reply:
Counsel for defendant, in referring to the Pennsylvania case, seek to make a distinction between a leased and a purchased road. None is made in the law conferring the authority, and without which no such power could be exercised. This authority “ to lease or purchase ” is conferred in the same sentence. But it is said that in the case of a lease the lessee is the “ bailiff'” of the lessor, to hold the possession for him. But if a lessee stands in the shoes of the lessor, why is not a purchaser in the same position with reference to the party from whom the purchase was made ? How can a purchaser acquire more than is sold, or greater rights than are sold ?

Opinion:
McIlvaine, J.
The Belpre and Cincinnati Railroad Company was chartered, by a special act of the legislature of this state, on 8th day of March, 1845, for the purpose of constructing and maintaining a railroad from a point on the Ohio river opposite Parkersburg, Virginia, or Point Harmar, to some point on the Little Miami Railroad between Plainville, in Hamilton county, and the mouth of Obannon creek, in Clermont county, with power also to locate :and construct branches from its main line to towns and places within the several counties through or into which its main line might be located. Section 11 of this act provides : " That said corporation may demand and receive from all persons using or traveling upon said road, or for transportation of property, such rates of toll as the corporation may determine, which rates they shall have posted up at each depot."
The name of this company was afterward changed to "The Marietta and Cincinnati Railroad Company." The main line of the railroad, now owned and operated by the defendant, was constructed by the corporation thus created, .and under the charter aforesaid.
Afterward, on the 31st of July, 1860, and in pursue,nee of .an act of the General Assembly of Ohio, passed February 24, 1860, entitled " an act for the relief of the creditors and stockholders of the Marietta and Cincinnati Railroad Company," the creditors and stockholders of the company organized a new company by the same name, to wit, the defendant; and thereupon such proceedings in law and in fact were had, that all the property, rights, and franchises of the old company, in so far as it was legally competent to do so, were transferred to the defendant. And for the purposes of this case, it is assumed that the defend;ant thereby become a body politic and corporate, and sue ceeded to the right to demand and receive tolls as prescribed in section 11 of the act of March 8, 1845; and that as to the right to demand and receive tolls upon the main line-of' its road, it is subject to no other restriction or limitation than those therein prescribed.
The Scioto and Hocking Yalley Railroad Company was incorporated by a special act of the legislature, passedEebruaiy 20, 1849, for the purpose of constructing and maintaining a railroad from Portsmouth, in Scioto county,, to Newark, in Licking county; and, by the terms of its charter, it was invested with the powers and made subject to the limitations and restrictions contained in section 12 of the act of February 11, 1848, entitled "an act regulating-railroad companies," which provides, " that such corporations may demand and receive for the transportation of passengers on said road not exceeding throe and a half cents per mile, and for the transportation of property not exceding five cents per ton per mile, when the same are transported a distance of thirty miles or more; and in case-the same are transported for a less distance than thirty miles, such reasonable rates as may be from time to time fixed by the company," etc.
Under this charter, the Scioto and Hocking Yalley Railroad Company constructed and put in operation a line of railroad from Hamden, a station on the line of the Marietta- and Cincinnati Railroad, to Portsmouth, a distance of fifty-six miles, intersecting, at Portsmouth, one of the navigable canals of the state.
On the 26th of January, 1864, one J. W. Webb, as receiver and special master, under an order issued from the-Court of Common Pleas of Perry county, Oído, and duly made in an action wherein the Scioto and Hocking Yalley Railroad Company was a party, sold and conveyed to the-defendant the Scioto and Hocking Yalley Railroad between Hamden and Portsmouth, with its equipments and personal property, together with all its franchises, rights, and privileges, except the franchise to be a corporation.. And from that time hitherto the defendant, as a commons carrier of goods and passengers, has owned and operated the Scioto and Ilocking Valley road in connection with its mam line.
Upon this state of facts arises the principal question in this ease, In the management of the road from Hamden to Portsmouth is the defendant entitled to demand and receive tolls at its discretion, as by the terms of the charter under which its main line of road was constructed, or is it subject to the limitations and restrictions contained in the charter of the Scioto and Hocking Valley Company, under which this line of road was built?
The defendant seeks to maintain the affirmative of the former, and the plaintiffs, the affirmative of the latter proposition.
This question is one of legislative intention simply.
In the first place, the defendant claims that under the authority to locate and construct branch roads, as conferred by the charter of the Belpre and Cincinnati Company, it was authorized to purchase the Scioto and Hocking Valley road and operate it as a branch, under the powers and privileges granted by that charter.
In this view we are unable to concur; but, on the contrary, are of opinion that a grant of power to a railroad company to locate and construct branch roads, does not cooler an authority to purchase and operate the railroad of another company constructed under a different charter.
It is also claimed by defendant that, by the act of purchase under any lawful authority, there being no express restrictions as to the use of the purchased road, it became, by operation of law, invested with the same powers and privileges in and about the maintaining and operating of the road from Hamden to Portsmouth, that were conferred upon it' by the Belpre and Cincinnati'charter in the management of its main line, and subject only to the limitations and restrictions therein prescribed.
We are of opinion, however, that the power to demand and receive toll for transportation conferred by the charter granted to the Belpre and Cincinnati Company, has exclusive reference to transportation upon the lines of road therein authorized to be built. Pennsylvania Railroad Co. v. Sly, 65 Penn. St. 205. And that whatever may be the new and additional powers conferred upon the defendant by implication arising from subsequent legislation authorizing it to purchase railroads constructed by other companies,,it can not be said.that the old powers and franchises, specifically conferred by the original charter, were thereby extended, or in anywise enlarged or changed.
The defendants' authority for making the purchase of the road from Hamden to Portsmouth is found in section 24 of the act of May 1, 1852 (S. & C. 281), which provides: "That any railroad company organized in pursuance of law, may lease or purchase any part or all of 'any railroad constructed by any other company, if such companies' lines are continuous or connected," etc. This act is entirely silent as to the terms upon which the purchased road may be maintained and operated by the purchasing company. Indeed, it does not, in terms, authorize the purchasing company to maintain and operate the purchased road at all. But such authority must be implied from the grant of power to purchase, for the reason that the legislature certainly did not intend that the purchased road should cease to be operated as a public highway. And inasmuch as no new mode of use or power of control was expressly provided, and as the power of the purchasing company to demand and receive tolls, as conferred by its own charter, is limited to roads constructed under the charter, it must be inferred that the legislature intended the purchasing company to succeed to the powers and privileges of the vending company, and to none other. And this for several reasons: 1. The intrinsic as well as the market value of such property, as a railroad, largely depends upon the-rates which may be charged for transportation thereon. Now, if the chartered rates follow the property, the contracting parties stand on perfect equality, but if the value, or, in other words, the inducement to contract, depends upon the chartered privileges of the pur chaser, the equality is not preserved, and especially would different companies with different charters occupy unequal grounds as bidders for and purchasers of such property. Again, the right of eminent domain was conferred upon the Scioto and Hocking Valley Company to enable it to-construct this road; and this could not have been done except upon the ground that the road, when constructed, should be a public highway. Thus private property and a. public use were united. But the private interest in the highway was created, with the condition attached that the property should be subservient to the use of the public upon the payment to the company of compensation at the rates specified in the grant. And although we are not, called upon to determine the extent to which this property and its use, m between the public and the defendant, is subject to legislative control, we have no doubt as to the-right of the public to use the road upon the terms secured by the charter so. long as it remains a public highway, unless the legislature shall clearly declare its intention to the contrary. And if it be, that the restrictions imposed by the charter of a railroad company upon its right to demand and receive toll for transportation on its road, is a. limitation upon the right of private property therein, then it is quite clear that by a sale of the road, no greater rights therein can pass to the vendee than were owned by the-vendor.
3. That the legislature did not intend that the purchased road should be operated under the charter of the purchasing-company, may also be inferred from the consequences that otherwise might follow. In the early history of railroads-in this state, a few companies, including the Belpre and Cincinnati, obtained from the legislature irrepealable charters, without any restriction upon the right to fix the rates for transportation. Very soon, however, the evils likely to-result from such legislation were discovered, and a change in the policy of the state took place, as was manifested by the act of February 11, 1848, whereby railroad companies: were limited in the exercise of this power. This restrictive- policy has been continued ever since, unless the granting of power to lease or purchase be an exception. Now if, by purchasing continuous or connecting lines, the purchasing company may extend over the purchased roads the privileges and powers of its own charter, the legislature has opened a way by which all the railroads in the state may pass into the hands of companies having irrepealable privileges, and be operated for all time without restriction as to the price of fare and freight. Such state of things certainly was not contemplated by the legislature.
The next question in the case is, has the defendant, in fixing the tariff of rates sought to be enjoined, exceeded the authority conferred by section 12 of the act of February 11, 1848? The price fixed for the transportation of the plaintiff's' property from their furnaces to Portsmouth, a distance of twenty-eight miles, is $2.25 per ton, while the maximum price allowed by the statute for thirty miles is $1.50 per ton. When the transportation is for thirty»miles or more, distance is the only element which, under the statute, is allowed to control the maximum charge, and it is to be presumed that the same elerneut was intended to be considered in fixing a reasonable rate or price for a less distance. That distance alone does not control the discretion of the company in fixing the rates for less than thirty miles is clear enough ; but as, by the statute, $1.50 per ton for full thirty miles is the maximum sum that can be charged under any and all circumstances, and as distance is an element that must be considered in fixing reasonable rates for distances less than thirty miles, we can see no way to escape the conclusion that the legislature intended that the maximum price per ton for thirty miles should in no case be exceeded for distances less than thirty miles. In the case of Smith v. Pittsburg, Fort Wayne and Chicago Railway Co., decided at the present term (28 Ohio St. 17), it was held, that whether the rate fixed by the company for distances less than thirty miles was reasonable or not, was a question of fact for the jury, to be determined under such instructions by the court as the circumstances of the ease might require; and it was said, that when the price fixed-for a distance less than thirty miles exceeds the maximum allowed for full thirty miles, it is, as matter of law, unreasonable to the extent of the excess. We must therefore hold, that the tariff of rates fixed by the defendant for the transportation of the plaintiffs' property from their furnaces to Portsmouth is unauthorized, at least, to the extent of the difference between $2.25 and $1.50 per ton.
It is also claimed by the plaintiffs that the defendant, in fixing its rates for transportation upon that part of the Hamden and Portsmouth road between their furnaces and Portsmouth, have violated the provisions of the act of May 1, 1852 (S. & C. 318), which provides, "that it shall be unlawful for any railroad company-whose line of road extends to any place in the vicinity of, or to a point of intersection with, any of the navigable canals of this state, to charge or receive any higher rate for transporting similar merchandise, produce, or property over a shorter distance of its road than is charged or received, according to its fixed tariff, for the transportation to and from such place of intersection." The court, however, is of opinion that, upon the facts stated in this record, it is not necessary to determine the true meaning of this provision, or whether the defendant, in the management of the Scioto and Hocking Valley road, is subject to the provisions of this statute. The intent of the statute was not to restrain companies subject to its provisions from charging the maximum rates allowed by their charters, but only to prevent them from fixing rates for longer distances below the maximum and below the rates fixed for shorter distances, either to the prejudice of the canals belonging to the state, or of the public whose shipments might be for the shorter distance. And inasmuch as the tariff of rates fixed by the defendant for longer distances are not below the maximum allowed by law, and below the rates fixed for shorter distances, no question under this statute fairly arises in the case.
Nor is it necessary, in the view we have taken of the case, to consider any question that might otherwise arise, under the act-of April 4, 1863, supplementary to the act of May 1, 1852, entitled " an act to provide for the creation and regulation of incorporated eompanies in the State of Ohio."
Demurrer to reply overruled, and cause remanded to the-District Court for further proceedings.