Court Opinion

ID: 3884000
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:14:31.771759+00
Date Added: 2024-06-11T07:42:01.096626
License: Public Domain

I concur in the opinion of Mr. Justice Gary, for the reasons therein stated. I desire, however, to add a few suggestions, which, I think, tend to strengthen the conclusion that the act of 1909 violates the Constitution.
To ascertain the intention of the framers of the Constitution, we must consider first the language used and give it its natural and ordinary meaning. If it is plain and unambiguous, there is no room for the application of the artificial rules of construction. If it is of doubtful meaning, we may read it in the light of events which led to its adoption, considering the evils sought to be remedied. We may, also, call to our aid the contemporaneous construction given the section by the legislature and the courts. The different parts of the same section and other sections of the same article of the Constitution should also be compared, so that effect shall be given, if practicable, to every part, section, clause and word in it (if that can be done by any reasonable method of construction to make it harmonize with the whole), for it must be presumed that, in framing an instrument of so much importance, the language used to express the intention was selected with care and deliberation.
Examining the section under consideration in the light of these well settled principles of construction, we find no authority to the legislature to adopt or domesticate a foreign corporation; in other words, no authority to make a foreign corporation a domestic corporation by merely legislative fiat. *Page 325 
On the contrary, the method by which those interested in a foreign corporation, desiring to enter the State for the purpose of building or operating a railroad, shall be incorporated in this State, is not left to the legislature, but is designated in the Constitution.
In their natural and ordinary signification, the words "owners," "projectors" and "stockholders" refer to the persons or individuals who own or project the railroad, or own or hold the stock of the foreign corporation interested in building or operating it.
By the terms of the Constitution, the "owners" or "projectors" of the railroad "shall first become incorporated under the laws of this State."
We do not ordinarily speak of incorporating a corporation, nor say that a corporation shall be incorporated. It seems, therefore, a strained construction of these words to say that a foreign corporation, being the owner of a railroad to be build into this State, might have been included in the words "owners" or "projectors," for the language of the section shows an intent to distinguish between the "owners" or "projectors" or "stockholders" and the corporation, as a distinct entity. Nor can it be said that the framers of the Constitution had in mind and understood that a foreign corporation might be a subscriber to the capital stock of another corporation desiring to build such a railroad; for section 19 of the same article deals with that subject, and prohibits any evasion of the prohibition contained in section 8, by the owning or holding, directly or indirectly, by any
corporation of the capital stock, or bonds having voting power of any railroad doing business in this State. That section reads as follows: "Nothing prohibited in this article shall be permitted to be done by any corporation or company, persons or person, either for its or their own benefit, or otherwise, by its or their holding or controlling in its or their own name or otherwise, or in the name of any other person or persons, or other corporation or company whatsoever, *Page 326 
a majority of the capital stock, or of bonds having voting power, of any railroad or transportation company, or corporation created by or existing under the laws of this State, or doing business within this State."
Let us consider, next, this language used in the latter part of the section: "No general or special law shall ever be passed for the benefit of any foreign corporation operating a railroad under any existing license of this State or under existing lease, and no grant of any right or privilege and no exemption from any burden shall be made to any such foreign corporation, except upon the condition that the owners or stockholders thereof shall first organize a corporation in this State under the laws thereof, and shall thereafter operate and manage the same and the business thereof under said domestic charter."
It is argued that the use of the words "under any existing
license" and "under any existing lease," makes this part of the section inapplicable to the consideration of the first part, which refers to corporations which are not yet doing business in the State, but only seeking to enter the State, and that the words "such foreign corporations" limit this part of the section to those foreign corporations already doing business under an existing license or lease. While this construction may be sound as to the passage of any law, general or special, for the benefit of such corporation, or the granting of any right or privilege or exemption from any burden, still it is difficult to perceive any reason why the framers of the Constitution should prescribe one method of incorporation of the "owners or projectors" of a railroad, owned by a foreign corporation, seeking to enter the State, and a different method for the "owners or stockholders" of a foreign corporation, already doing business in the State, which seeks the grant of some right or privilege or exemption from some burden, which the legislature is prohibited from granting, "except upon the condition that the owners or stockholders thereof shall first organize a corporation in this State, under *Page 327 
the laws thereof." Why should there be any distinction? It seems from a consideration of the whole section, that the intention is manifest of dealing with both classes as to the manner of incorporation in exactly the same way, to wit, that they shall become incorporated under the laws of this State. That being so, what are we to understand by the use of the word "organize," when it is said that "the owners or stockholders thereof shall first organize a corporation in this State, under the laws thereof?" Giving the word its ordinary and natural meaning, we find no difficulty in getting at the intention. In Walton v. Oliver, 49 Kan., 112, it was said: "The words organize or organization have a well understood meaning; and as we construe them they mean the election of officers, providing for the subscription and payment of the capital stock, the adoption of by-laws, and such other steps as are necessary to endow the legal entity with the capacity to transact the legitimate business for which it was created." To the same effect see Com. v. WilliamMann Co., 150 Pa. St., 70.
The use of the word "organize" is incompatible with the idea of adopting or domesticating a foreign corporation by legislative fiat. In that event, no organization is necessary. The corporation is already organized. It will be noticed that no organization is provided for by the act 1909.
Section 11 of the same article reads as follows: "The General Assembly shall provide by law for the election of directors, trustees or managers of all corporations so that each stockholder shall be allowed to cast, in person or by proxy, as many votes as the number of shares he owns multiplied by the number of directors, trustees or managers to be elected, the same to be cast for any one candidate or to be distributed among two or more candidates." The act of 1909 makes no provision whatever for the election of directors, trustees or managers of the corporations which may be created thereunder and the voting of the stock, as required by the foregoing section, and, therefore, it clearly violates *Page 328 
that section of the Constitution. That ground of objection to the act is not made in this case, and it is alluded to merely for the purpose of showing what was the intention of the framers of the Constitution as to how those who own, project, build, operate, or lease railroads in this State shall be incorporated.
It seems clear, therefore, from a consideration of the language used that the Constitution intended that a new corporation should be created and organized in this State out of the natural persons interested in building or operating a railroad in this State.
Let us next inquire what purpose the framers of the Constitution had in view in adopting the section under consideration.
In Southern Ry. v. Tompkins, 48 S.C. 49, at page 52,25 S.E., 982, the Court said: "What was the intention of the framers of the Constitution in adopting section 8, of article IX? The main object was to require foreign railroad companies operating or seeking to operate railroads in this State to be placed on the same footing with domestic corporations, as to their rights and liabilities under the jurisdiction of the State Courts."
The many and sharp contests which had taken place in the Courts over the removal of cases from the State Courts to the Federal Courts, of which we may take judicial notice, the various acts of the legislature passed in pursuance of the section under consideration, and the language of the section itself, point unmistakably to the conclusion that it was adopted with the intention of requiring all railroad corporations doing business, or desiring to do business in this State, to become incorporated under the laws of this State, in such manner as to make them citizens of this State, and thereby prevent them from removing cases brought against them by citizens of this State into the Federal Courts. If that was not the purpose and intention, it seems to me the constitutional convention took great pains to frame a section which *Page 329 
amounts to nothing. If that was the purpose and intention, and there can be no doubt it was, then, how can it be said that the question whether the corporation is so created and organized as to prevent the removal of cases to the Federal Courts on the ground of diverse citizenship is irrelevant to the discussion?
Having ascertained the intention, it is the plain duty of the Court to construe the act of 1909 in the light of that intention. Having done so, it seems clear that the act falls far short of the requirements of the Constitution, and not only violates its spirit and intent, but also its plain and positive prohibition; for, in effect, it does nothing but grant to a foreign corporation a license to build and operate a railroad in this State. It is said that the corporation created by the act of 1909 is a new and distinct entity. If that be so, who are its stockholders? Who are the directors, president and secretary? How is it organized? And were its officers elected in the manner prescribed by section 11, of article IX, of the constitution, and sec. 1846, Code, 1902, passed to carry into effect that provision? How can it be said that such a corporation is created and organized in the manner prescribed by the Constitution?
In the view which I take of the proper meaning and construction of the Constitution, the case of Southern Ry. v.Tompkins was erroneously decided, and should be overruled, as clearly pointed out by Judge Watts in his concurring opinion in Wilson v. Ry., 64 S.C. 169, 36 S.E., 701.