Court Opinion

ID: 7984575
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:24:10.761452+00
Date Added: 2024-06-11T16:35:07.787501
License: Public Domain

Tarbell, J.,
dissenting.
Quo warranto praying judgment of forfeiture of charter, for the following causes:
1. Neglecting to prepare and file in the office of the secretary of state a map of the proposed line of railway, as required by the charter.
2. Locating a portion of said road, beginning in Yicksburg, running thence in a southerly direction, contrary to requirements of the charter.
8. Failure to organize the company by the election of a board of directors, whereby the company is without a lawfully constituted board of directors.
4. The misapplication and misappropriation of money loaned by the state in aid of the construction of the road to the amount $110,000 for elven miles of pretended road.
A general demurrer to the petition was sustained and the petition dismissed. Hence a writ of error on the part of the state.
This mere intimation of the allegations of the complaint indicates the necessity and duty of investigating the management and transactions of this company, if nothing more. It excites surprise, that charges of the character alluded to should be dismissed without answer, explanation, or denial even, but upon a confession of their truth.
*612If to some of the allegations of the information there had been an answer, and a demurrer to others, this case would be in a condition much more satisfactory to my mind, but it must be disposed of upon the record made by the parties.
In an examination of the record, the attention is attracted to the vast number and magnitude of the rights, privileges, and franchises granted to defendant, as claimed by counsel in argument. If these claims shall be sustained by the courts, what is now a company, straggling for mere existence, may grow into a gigantic corporation, which, with other like institutions, may dictate the legislation of the state. ' Then, this little embryo railroad, of a few miles, may become a vast anaconda, binding the entire state in its iron grasp. Its pretensions, therefore, as protrayed by counsel, become material, in this, that in the interest of the peoplej the manner in which a company of such colossal proportions meets the obligations of its charter, demand closest scrutiny. The analysis of the charter of the defendant, and the rights, privileges and franchises, granted thereby, which follow, are as presented by counsel:
“ The original charter of defendant was granted in 1871, the purpose of which was declared to be the construction of a railroad from or near the city of Vicksburg * * on a southeasterly line through the state of Mississippi, in the direction of Pensacola, Florida, with a branch to Ship Island or to * * such point on the coast of Mississippi, as may be deemed most eligible.” Acts 1871, p. 238, sec. 2.
“ By the same act, a privilege was granted to the company, viz : to ‘ run an additional branch from some suitable point of said road in a westerly direction through Claiborne county, Mississippi, to Grand Gulf, near the Mississippi river.’ ” Act 1871, p. 238, sec. 1.
“ In 1872, an act was passed to facilitate the construction of the road and for other purposes, by which the company was privileged to purchase from the state at the price of two cents per acre all lands ’ held by the state by forfeiture or purchase for *613taxes, and ‘ other lands belonging to the state, lying within ten miles of the main line or authorized branches’ of its road.
“It was also empowered to construct a branch road to Jackson and to build such other branches and extensions as the. directory may deem necessary and expedient.” Acts of 1872, p. 281-2, secs. 1, 2.
“ In 1873, the name of the company was changed, and it was enacted ‘ that so much of said act of incorporation as can be construed as locating the main line of said railroad from Yicksburg, in the direction of Pensacola, Florida, be and the same is hereby repealed, and the main line of said railroad is declared to be that extending from a point on the coast of the Gulf of Mexico, at or near Ship Island, or such other point of the gulf coast of Mississippi as may be deemed most eligible, in a [northerly or northwesterly direction, to the city of Yicksburg.’” Acts 1873, p, 562, sec. 2.
“ By the same act, it was declared that the defendant should be entitled to the full exercise and enjoyment of all the rights, privileges, powers and immunities which are by the law granted to any railroad company in this state,’ excepting the privilege granted to the M. & N. W. R. R. Co., by the act to facilitate its construction.” Acts 1871, approved May 8, 1871. Acts 1873, p. 562, sec. 1.
“ Here was a grant to defendant of a privilege to exercise and enjoy all the rights, privileges, powers and immunities, granted to any other road by the state, excepting only the' privilege granted to the M. & N. W. road to purchase all state lands lying within ten miles ’ oFits road.”
“ Under this last provision, the defendant became entitled to the privilege ’ granted to the Corinth and Nashville road to purchase at two cents per acre, on certain conditions all lands ’ forfeited or purchased by the state for taxes, lying within ten miles of its line of road.” Acts 1872, p. 283-4, sec. 2.
44 There was another privilege granted to defendant, and important to be noticed, viz: The original charter gave the defend*614ant tbe privilege of a free right of way 200 feet wide, 1 through and upon any lands of the state, and also the free use of state lands for depots, stations, cuttings,turnouts,’ ’’etc. Acts 1871, p. 240, sec. 2. And by the same act it has the usual power to force a right of way. Acts 1871, pp. 240, 242-3.
“ It is entitled to the right of ‘perpetual succession.’” Acts 1873, p. 562, sec. 1; acts 1871, p. 137, sec. 23.
“ It is also entitled to the privilege granted to the N. & J. R. R. Co., viz : ‘ In case it shall so happen that an election of directors shall not be made * * said company shall not, lor that cause, be deemed to be dissolved, but such election may be iholden on any day * * and directors and officers shall continue in office until their successors are elected and duly qualified.’ ” Acts 1870, p. 226, sec. 8 ; acts 1871, p. 242, sec. 5.
“It is entitled to the general privilege granted to the N. O., J. & G. N. R. R. Co., viz. : Power to build and construct one or more branch railroads.” Acts, 1871, p. 178, § 10.
“ Defendant is authorized to receive absolute donations of real estate without limit as to value.
“ It might receive subscriptions from counties, cities and towns.
“ It might obtain rights, privileges or franchises from incorporated cities or villages.
“ It might, also, purchase or lease railroads, their charters, franchises and property, and maintain and use the same; and it might, by mutual contract, consolidate with other roads.”
It is further claimed, that the defendant has three years from April 18, 1873, within which to commence the building of the road; and that the charter “ shall be favorably and liberally construed so as to favor all the purposes and the objects of the same, and the operation of the provisions thereof.” Acts, 1871, pp. 251, 252, § 23.
This last claim may be first considered. A liberal construction of the statutes involved was, assuredly, never enjoined for the purpose of excusing the company from the requirements of its charter. Acting up to its spirit and interest, those acts would *615then command a liberal construction. The express direction is to construe these acts favorably and liberally for “ the purposes and objects of the same.” These “ purposes ” and “ objects ” are, therefore, to be sought out and declared. Upon the face of these acts, the “purposes” and “objects” of this legislation were to secure railroad connection with the gulf at Ship Island, and for a harbor within our own state. Cotemporaneous legislation and' public history evidence the same purpose and object. Indeed, it is well known to all, to have been a favorite “ purpose ” and “ object ” to secure a harbor on the gulf with railroad connections elsewhere. The facts are too apparent and too familiar to require' demonstration.
Reference will be made to the acts involved and to other contemporaneous legislation, not as evidence of the purposes and objects just mentioned, but in aid of the construction of the acts in question and of the allegations of the complaint in this case. The original charter of defendant was granted in 1871, and authorized the construction of a railroad “ from or near the city of Vicksburg * * on a southeasterly line through the state of Mississippi, in the direction of Pensacola, Florida, with a branch to Ship Island.” Subsequently, as is well known, public sentiment was concentrated on a harbor within our own limits, and hence, in 1878, the legislature amended the charter of defendant in the following particulars:
1. The name of the company under the original charter was the “ Vicksburg, Pensacola & Ship Island Railroad Company.” This was changed to the Mississippi Valley & Ship Island Railroad.
2. Under the original charter the company was authorized to construct a road “ from or near Vicksburg, in the direction of Pensacola, Florida, with a branch to Ship Island.” Section two of the amended charter uses the following positive and emphatic language : “ That so much of said (original) act of incorporation as can be construed as locating the main line of said railroad from Vicksburg, in the direction of Pensacola, Florida, be and the same is hereby repealed, and the main line of *616said railroad is declared to be, that extending from a point on the-coast of the Gulf of Mexico, at or near Ship Island, or such other point on the gulf coast of Mississippi as may [be deemed most eligible, in a notherly or northwesterly direction to the city of' Vicksburg.”
3. This last amended route is expressly recognized in the amended act as one of importance to the state.
4. Section two of the amended charter contains the following provision, not required by the original charter: “ And said company is hereby required, within twelve months after the passage this act, to cause to be prepared and filed in the office of the secretary of state, at Jacksom, Mississippi, a map of said proposed line of railroad, which shall be certified by the chief engineer of said company, and shall be held and taken as primafade evidence of the location of said line.”
The “purpose” and “object” of the change in the name of this company, in the change of the route or line “ from or near-Vicksburg,” and thence southerly, to the route or line “from a. point on the coast of the Gulf of Mexico, at or near Ship Island,” thence “ in a northerly or northwesterly direction, to the city of' Vicksburg,” and in the command to file the map of the line, will be more manifest when the facts following are considered :
1. Numerous other railroad routes were being chartered.
2. At the same session of the legislature, when the amended charter in question was passed, a charter was granted to thePascagoula & Jackson Eailroad Company, with power to construct a railroad from Pascagoula to Jackson, Mississippi, with, the privilege of connecting with any other railroad, and with authority to extend said road into the bay of Pascagoula. Acts, 1873, p. 496.
3. At the same session another act was passed incorporating the Mississippi City & Helena Eailroad Company, empowering said company to construct a railroad from some point at or near Mississippi City to some point on the Mississippi river, opposite-Helena, Arkansas, with the duty of transporting the cars of any other road with which it connects. Acts, 1873, p. 531.
*6174. In the further prosecution of the “ purposes ” and “ objects ” indicated, the legislature, at its session in 1873, memorialized congress to grant to the Mississippi City & Helena Eailroad Company the lands previously granted to the Gulf & Ship Island Eailroad Company in 1856, which grant had lapsed. In that memorial the legislature said: “ Believing that the construction of a road from Mississippi City to Helena, Arkansas, via Jackson, Mississippi, would lead to the development of the harbor of Ship Island, which is one of the best on the sea coast south of Norfolk, Virginia. * * With the road constructed and in operation, this country (southern Mississippi), now so isolated, would fill up with a large population ; its unsurpassed wealth of timber would become available to the ever increasing demand for lumber; and the agricultural products would find an easy transit to the commercial marts of the world.”
5. By the fifth section of the amended charter of defendant, it is enacted, “ That 100 miles of said Mississippi, Vicksburg & Ship Island Eailroad, next to Ship Island, is hereby declared to be a trunk road, which shall be free to all railroad companies, the southern terminus of whose road shall be Ship Island harbor, and which shall intersect said’ railroad within said distance of 100 miles from Ship Island; and said company or .companies, whose railroad shall intersect said trunk road, as aforesaid, shall have the privilege of running their trains upon said trunk road to and from Ship Island free of charge.”
6. Section 1 of an act approved April 5, 1872 (acts of 1872, p. 281), enacts “ that all lands forfeited to or purchased by the state of Mississippi for taxes due and unpaid thereon, or other lands belonging to the state, and lying within ten miles of the main line or authorized branches of the Vicksburg, Pensacola and Ship Island Eailroad, shall be sold to said railroad company at the sum of two cents per acre, and the auditor of public accounts is hereby authorized and required to sell and convey said land to said Vicksburg, Pensacola and Ship Island Eailroad Co., upon payment of said sum of two cents per acre.”
*6187. Section 2 of the amended charter of defendant concludes thus : “ And said railroad company shall be entitled to all the rights and franchises upon said line (the line to be designated by the map), the same as if the location and termini of said line of railroad had been definitely and specifically set forth in the original act of incorporation of said company.”
The materiality of the map is thus shown:
1. By the quotation last made the map is to take the place of, and answer as a substitute for the omission to define and specify the route in the act of incorporation.
2. By section 2 of the amended charter of defendant, all the rights, privileges and franchises granted are, by the very language and terms thereof, made dependent upon the survey and map.
3. The map was necessary to enable the auditor to carry out the authority to sell and convey the lands of the state to the company.
4. It was necessary to the rights of other railroad companies.
5. It was necessary to the connecting routes terminating on the coast.
Under all these circumstances; in view of all this legislation, and of the evident “ purposes ” and “ objects ” indicated, the map cannot be argued, reasoned, or ridiculed into insignificance. It was clearly material, important and vital, for it was a substitute for the want of specification in the act of incorporation, and the basis of all the rights referred to and involved.
But more than this, the charter declares that the map when filed “shall be held and taken as prima facie evidence of the location of said line.” In other words, and conclusively, without such survey and map, there was no, not even a prima facie, location of the road. The result is fatal.
The second cause alleged against the defendant is in these words: “ That the said Mississippi, Yicksburg and Ship Island Eailroad Co., without color or authority of law, and contrary to and in violation of the provisions of said amendatory act, have located a pretended line of road from Yicksburg in a southerly *619direction towards the town of Warrenton, and now claim and exercise the rights and privilege of appropriating to their use the lands of citizens of said state resident in the said county of Warren, and are taking and have taken the same.”
Two grounds are suggested in the argument in answer to this allegation. 1. That the track towards Warrenton is a necessity of the topography of the country in the vicinity of Yicksburg. In other words, that this southerly direction is sought as an outlet only, and counsel suggests the “Walnut Hills” as rendering a direct course by the compass towards Ship Island impossible. 2. That the track towards Warrenton is within the authority to construct branch roads.
As to the first ground, the courts cannot judge of the feasibility of a direct route out of Yicksburg. The facts must be ascertained by a survey and presented in evidence before the courts can, decide upon this point. With reference to the other ground suggested, it may be said: 1. It is clear from the amended charter that the main line should be first built; 2. that the construction of the main line should begin on the Grulf; 8. A branch road previous to the main line is unauthorized, and a plain, palpable violation of the purpose and object of the charter; 4. The track to Warrenton is not the trunk road within either the letter or spirit of the charter of defendant. Upon the record it is more than absurd to claim this track as a part of the main line under the charter.
The third cause alleged against the defendant is this : “ That under the fourth section of said original act of incorporation, the business and business affairs of the said Mississippi, Yicksburg, and Ship Island Railroad Company are by law required to be conducted and managed by a board of directors, the incorporators named in said act to be directors for the first year of the passage of said act, and until others were appointed or elected to fill their places, and after the expiration of the first year, the said directors were required to be elected annually, at such time and place as might be designated in the by-laws of said company. Notwith*620standing which provision, and that other directors than said incorporators were elected and entered upon the discharge of their duties, the said company has not since the approval of said amendatory act elected according to their charter and by-laws a board of directors, nor has said company now a board of directors lawfully constituted to manage their business, and business affairs.”
The directors of the' Vickshurg, Pensacola, and Ship Island Railroad Go. are not directors of the Mississippi, Yickshurg and Ship Island Railroad Co., but the directors of the latter are to be the lawful successors of the former. Acts, 1873, p. 567, § 8. It does not appear that the company under the amended charter has had any meeting, or has elected any directors, or has accepted the amendatory act of 1873. The charge is that the company has not elected directors under the amended charter, and has not a board of lawfully constituted directors. If directors have not been elected under the act of 1873, the company has not a board of lawfully constituted directors.
The fourth charge is this: “ That under the third section of said amendatory act, the loan before then made to the several railroad companies in said state, under and by virtue of an act entitled ‘An act to provide for the payment of interest on the Chickasaw school fund,’ and for other purposes, approved March 7, 1856, and an act supplemental thereto, was set apart in the hands of the treasurer of said state as a special fund to be used in aid of the construction of said railroad, and for no other purposes; that under said section and section 3 of said amendatory act, the said company obtained from said treasurer one hundred and ten thousand dollars ; and that they have misapplied and misappropriated the same contrary to law and said act.”
This money was loaned in aid of the construction of the trunk road from Ship Island, not in aid of a branch road, which is the most that can be or is claimed for the track from Yickshurg to Warrenton. The money so used was misapplied and misappropriated. However expended, otherwise than in the construction *621of the main line of road from the coast, the money was wrongfully diverted from the purpose and object of the loan. Act 1878, sec. 3. Here is a very large sum of money, which should be sacredly preserved and as sacredly devoted to the cause of education. In its care, the tax payers and the 350,000 educable children of the state are deeply concerned. The demurrer admits the misapplication and misappropriation of this money as charged. The charge is made by the law officer of the state, and it is now become of record in the courts. If the representatives of the company are unwilling to explain, and the courts shield them from investigation and from accountability, let all ears be deaf and all lips sealed forever as to the charges and their infinite changes, which have been rung throughout the state, involving the integrity of officials. Plundering officials and kindred phrases have become as familiar as “ household words.” Let them never more be heard, if $110,000 of a sacred fund can be misapplied and misappropriated by a corporation owing its existence to the legislature, with impunity. For this sum, if the law was complied with, the state holds first mortgage bonds on eleven miles of track, whose value is not given in the record. But more than this, the construction of the track from Vicksburg, down the bank of the Mississippi, is neither within the letter or spirit, or purpose or object of the charter of defendant. To my mind, this track is in clear, palpable disregard of statutes, whose language and intent are so manifest as to be commands, and so plain that “ he may run that readeth.”
The legal status of the defendant is this :
1. Noncompliance with conditions precedent prescribed in sec. 2 of the act of April 18, 1873, so that the rights, privileges and franchises thereinafter contained never vested in the company.
2. The track down the bank of the Mississippi from Vicksburg towards Warrenton is not a compliance with the letter, spirit or substance of the charter of defendant. It is not necessary to charge this deviation to have been “willful,” or with a “bad motive.” On its face it was made knowingly, deliberately, inten*622tionally, and with a view to test the right to do so in the courts. The facts show it “ wrongfully ” done, which is, in legal effect, “ willful.”
3. Neglect to organize under the law of 1873, or to accept the provisions of that act. Sec. 8.
4. Misapplication or misappropriation of the fund loaned to the company by the state.
If it were conceded that the map is immaterial, and its requirement directory only, yet the utter neglect to inaugurate work on the main line within the time limited by statute would entitle the state to judgment. The track from Yicksburg in the direction of Warren ton is hardly a reasonable pretense of compliance with the statute. Add to this the misapplication and misappropriation of the money of the state, admitted by the demurrer, and the result is overwhelmingly conclusive. If this money was used only in the construction of a track from Yicksburg to Warren ton, it was still misapplied and misappropriated, for reasons heretofore shown. The loan was to “aid in the construction ” of the main line, “ and for no other purpose whatsoever.” As the matter presents itself to my mind, the track referred to is not in law, in fact, or intent, any part of the railroad provided for by the charter under consideration, but at most only a branch road to some point short of the coast, while the state is as far as at the first from the long coveted harbor within her own boundaries.
The law of this case is simple. It may be tested by the rule quoted by counsel for the defendant, from Com’l Bank of Natchez v. State, 6 S. & M., 617: “ In the construction of charters a distinction must be observed between those provisions which are intended to apply to the mere internal government of the corporation and those which impose position, conditions, restrictions or duties, in which the public interest is involved. For a violation of the latter a forfeiture occurs, but not so with regard to the former.” The several “ positive conditions, restrictions or duties in which the public interest is involved,” imposed by the charter of defendant, have been pointed out and need not be repeated here. Grant *623on Corporations, 295-6 side p., gives a brief but clear exposition of tbe law governing such cases : “ The general principle on which forfeiture of the charter rests is this, that a corporation cannot be allowed to take a grant and repudiate the conditions on which it is made, and, therefore, a breach of the conditions is punished by withdrawing the grant. But it is said, when there is a body corporate de facto, taking upon themselves to act as a body corporate, but from some defect that has grown up in their constitution, not being able to exercise legally the powers they affect to use, then the proper mode of depriving such body of the pretended powers which they assume is, by an information in the nature of a quo warranto, calling upon them to prove themselves legally entitled to act as they do, in a corporate character; the effect of which is, upon its appearing that their right is defective, to strip them altogether of the power of acting and of being a corporation.” And see the cases cited in the notes. The conditions of the grant in the case at bar have been specified. The map is one. The loan of the money of the state to aid in the construction of the main line of a road connecting the harbor at Ship Island with the interior, is another. And see others herein.
Great stress is laid upon the absence of the term “ willful” from the complaint. The authorities cited do not sustain the view sought to be impressed. All these cases explain what is meant by the term. Thus, in State v. M. In. & T. Co., 8 Humph., 254, it is said to be “ improper neglect; something more than accidental negligence, excess of power, or mistake in the mode of exercising an acknowledged power.”
The adjudication in The P. M. & Co. of The W. & B. T. R. v. The State, 19 Md., 239, was based upon a statute which in words made a forfeiture to depend on “ willful ” neglect. The court say: “ The term does not, in this case, imply criminality,
but must be construed to mean permissive, voluntary neglect.” The term “willful misuser and non user,” in Mumma v. The Potomac Co., 8 Peters, 281, means simply “ permissive, voluntary neglect.”
*624Mr. Justice Cowen, in The People v. K. & M. T. R. Co., 28 Wend., 193, uses “ negligent,” “ contrary to duty,” “ wrongful,” “knowingly,” “breach of trust,” etc., as the synonym of “willful,” and in The People v. B. &. R. T. Co., id., 223, he explains “ willful abuse ” as “ improper neglect, something more than accidental negligence, excess of power, or mistake.”
It does not appear upon what ground the decision was based in The State v. C. & H. T. P. Co., 2 Sneed, 255. There is probably a statute on the subject in Tennessee. Whether there is or not, the case is too brief to be entitled to any consideration. The several cases to be found in 23 Wend., 193, 222 and 254, are completely exhaustive of the law by which the case at bar must be determined. As to the information, it is sufficient. A nonperformance of the conditions of an act of incorporation is per se a misuser that will forfeit the grant. It is not necessary, to work a forfeiture, that the neglect or refusal to perform the duties enjoined should proceed from a bad or corrupt motive ; it is enough that the duties be neglected, or designedly omitted. And, there is no materiality in the distinction between conditions precedent and subsequent; or, that would exact the performance of the one as a condition of corporate being, and not of the other. Nor has the court any discretion to entertain the hardship of particular cases. Eelief in such cases is with the legislature. The utmost limit of judicial discretion is exercised in deciding whether there has been a substantial performance according to the intent of the charter. This cannot be pretended even, in the case at bar. Vide cases in 23 Wend., supra.
And now, while I am cordially in favor of public improvements, and of state aid, under suitable circumstances, restrictions and guaranties, and while my sympathies are with the present managers of the road involved, as honorable gentlemen, nevertheless, my position requires me to hold the scales of justice evenly between these corporations and the people, whose rights must be guarded against charters under which mammoth companies may grow up to defy legislatures, courts and people. This investiga*625tion has been inspired by the feeling that all' officials, and all persons and corporations holding relations of public trust, and charters granted in the public confidence, particularly when they are entrusted with money belonging to the state, either as a loan or as bailee, should be held to a strict, rigid, stern, unrelenting accountability.
Entirely satisfied as to the proper construction of the statutes involved, I have no hesitation in the conclusion that'the judgment should be reversed, and judgment here for the state, or under the Code, §§ 577, 618, that the judgment be reversed and the cause remanded, with leave to amend.