Court Opinion

ID: 6314279
Source: CourtListenerOpinion
Date Created: 2022-02-18 20:21:45.828968+00
Date Added: 2024-06-11T08:59:11.822790
License: Public Domain

The opinion of ‘the court was delivered by
'Rogers, J.
On the 2d of April, .1811, the legislature passed the act to incorporate the Union .Canal Company oí-Pennsylvania; and, by the 28th .section, gave the company authority to. raise, by ■lottery, three hundred and fifty thousand dollars; and. provided, that the profits arising from the lotteries should not form a capital.stock of the,company, upon which any dividend should be made to-the stockholders, but that the same should he considered 'as a bounty to the corporation, to enable them to make the tolls as low as possible. The company, after having commenced the work, suspended their operations, having raised, and continuing to raise, large sums of money by drawing the lotteries authorized by the act. In the annual return to the legislature, at the session of 1819, the managers made a statement of their accounts; in which it appeared that large salaries had been paid and were paying to the officers of the company, while little or no duties were performed, and that out ,of the funds (for they had no other,) appropriated.by the legislature, for the special purpose of making, the tolls as low as possible. The .plaintiff was *188the secretary of the company, and as such was returned in the statement of their accounts, as in the receipt of a salary of three hundred dollars per annum. With a knowledge of these facts, which are alleged in the preamble to the section to be notorious, and for the purpose of preventing such abuses in future, the legislature enacted, “ That from and after the passage, of this act, no compensation shall be allowed by the company to its-officers until the works are actually recommenced upon the canal; ..after which time the salaries may be regulated by the stockholders in the customary manner; Provided, That if. the said work shall be suspended, or interrupted for the space of three months, the salaries allowed to the said officers shall'cease for the time of such suspension, and until the work be recommenced.” The defendants interpose this seventh section of the act of the'29th of March, 1819, in the way of the plaintiff’s recovery, arid allege.that he comes within its, words a.nd spirit, which is denied by the plaintiff; and this, with th,e.constitutionality of the act, forms the question which we are required to decide. The defendants say, the secretary is not an officer, and, if an officer, that he is the officer of the managers, and not of the company. ■ With this I do not agree. . He is as much the officer of the corporation as the cashier or clerk, of a bank, who clearly are the servants of the company, and not of the directors, by whom they are appointed. And, in tbe 6 th section of the act of the 2d of April, 1811, he is expressly called an officer; for it is provided, that the president and managers shall have authority to appoint a secretary, engineer, and'such other officers, &c., and allow such compensation as they may find necessary and expedient. ,
But the;plaintiff further contends, that although he may be considered an officer, jn the strict sense of the word, he is not-such an officer as,was contemplated by the act; that the legislature had in View the president and managers, and not the secretary. It would appear to me to be strange, that if tbe legislature intended to disferimiriate between the secretary and others, who were in the receipt 'of large salaries out of public monies, they should not have expressed their meaning in explicit terms. And where they have not thought proper to do so, it is not competent for us to make the distinction. It would be wresting language from its'obvious import, in favour of a person, whom it apppeared to the legislature, and to us, has been well compensated for any services he may have performed. The duties of a secretary of a company, which had entirely suspended its operations, could not have been very onerous, and the legislature may well have been struck with the injustice, in his case, of squandering money-appropriated, to a public purpose, on a person whose duties were by no means burdensome.
The legislature, in the enacting clause, drop the word'salary, used in the preamble, and say, “ No compensation shall be allowed, by the company to its officers, until the works are actually recommenced.” ' •
*189They seem to have anticipated, that expedients would be resorted' to, to avoid the operation of the section, and have used a word which embraces every species of allowance which may be attempted for the-services of the officers of the company, all whose proceedings upon the canal had long since ceased, and whose only funds were derived from lotteries, granted by the legislature. It will not do for the officers of the company to say, that although we cannot receive compensation, by way of salary, yet we are entitled to pay, for our services, on a Quantum Meruit. If this should be the construction of the act, it would be in the power of the managers to defeat the manifest intention expressed by the legislature, the preservation of the fund to enable the corporation to lessen tolls to be charged for-the use of the canal. It would only be necessary to allow the whole salary, by way of compensation, for the company-, who had already abused their trust, would be the judges of the quantum of service, and its'value. ' And if this should be permitted, in the case of the secretary, the same.rule must be adopted as regards the president and managers, who, in the opinion of the legislature, had evidently shown their willingness to appropriate to themselves large salaries, for which adequate services were not rendered. It is to be remembered, that the services for which he claims compensation, were performed by him as secretary of the company, and in no-other capacity whatever.
It remains now to inquire how far the act interferes with the 10th section of the 1st article of the Constitution of the United States. “No state shall pass any law impairing, the obligation of a -contract.”
If the monies, arising from the lotteries authorized by the. act,, were public monies, as the legislature considered, and of which no person can- entertain a reasonable doubt, it would be a matter of regret if they could not interpose to prevent the continuance of a system by which the funds were diverted from their legitimate objects. The trust, in the opinion of those whose duty it was to take care of the .public interest, had been-violated, and the legislature, with their accustomed moderation and regard to private rights,, pass a law, not to compel them to refund, but to prevent, in future, a practice calculated to retard, if not wholly to prevent, the object of the grant, an internal communication between -the waters of the Susquehanna and Schuylkill. The Constitution of the United States was not intended to prohibit the legislature from controlling a fund created for the public interest,- and which had been perverted to private purposes by those to whose charge it had been committed.
But, it is said that a grant is a contract; that this is a private corporation, and that the creation of a private corporation by charter, is such a grant as includes the obligation of a contract, which no state legislature can pass a law to impair; and for this we have the authority of the Supreme Court of the United Stales, in the case *190of The Dartmouth College v. Woodward,4 Wheat. 656. Although these, as general positions, are conceded, yet it remains to show their application. The act of assembly did not, it is true, require the consent of the company to the alteration of the charter, yet in point of fact this assent has been given by the stockholders; and I believe no person will be so hardy as to say, that the legislature are prohibited from altering a charter, in its most essential features, if the alteration be agreed to either before or after the passage of the act. The assent of the stockholders relates back to the date of the law, for in no other way could the company entitle themselves to the benefit of its provisions. When the plaintiff performed the duties for which he now claims compensation, he was aware of the consequence of a subsequent assent on the part of the company. I cannot, therefore, perceive that the plaintiff has any right to complain that the president and managers think it their duty to comply with every direction of the law to which the company owes its existence. It would be out of the power of the stockholders to accede to the alteration of the charter in part: they must accept all or none, and the section we are now considering, is among the essential provisions of this act. It violates no contract made with the plaintiffs before the date of the law; for it is worthy of remark, that the secretary was appointed, as is usual, not for a term of time, but that he holds his office during the pleasure of the managers. . He was free to perform the services of secretary at his own will and pleasure. He was neither bound to the company in any contract subsisting at the time, nor were they under any obligations to him. It is a singular feature in this cause, that the company do not complain of a violation of the charter: it is the secretary who insists that it is made in opposition to the Constitution.
Judgment affirmed..