Court Opinion

ID: 6312204
Source: CourtListenerOpinion
Date Created: 2022-02-18 20:16:56.180363+00
Date Added: 2024-06-11T08:59:06.992784
License: Public Domain

*460The opinion of the court was delivered by
Gibson, C. J.
The decision in the Hibernia Turnpike v. Henderson turned on the construction of a statute. The contract of subscription was regulated by the act of incorporation, in the interpretation of which, it was held that the public interest was so much concerned in the scheme that prompt payment of the instalment which was required to be counted down at the time of subscription, could not be dispensed with by the commissioners, or subsequently by the company: the contract before us is regulated, or expressly prohibited by no statute whatever. It certainly was held, that the public had an interest in the question of location which it was the purpose of the legislature to protect by excluding fictitious subscriptions; and to preclude an improper influence from being gained by means of them in the election of the first board of managers, was assigned as the motive which induced the legislature to insist on immediate payment of a part of the subscription as a stake in the company’s concerns. The object evidently was to prevent a choice favourable to the interests of influential proprietors on the proposed route, but prejudicial to the interests, not only of the company, but of the state which also was a stockholder, and we were constrained by these considerations to enforce the condition of payment with extreme rigour. But it was not intimated that if present payment of a part of the subscription had not been expressly exacted by the statute, the public interest would nevertheless have made it indispensable to the legality of the contract. It is here that a corporation, being ens legis, has no inherent power to act, or indeed any power at all beyond what is necessary to accomplish the end of its being: but it is also true that within the scope of its legitimate functions it may act as a natural person might. In defining its powers, it would be impracticable to enumerate them specifically, or to do more than circumscribe the field of its action, leaving it to exercise all those that are incidental and necessary to the purpose of its creation. Now to fix the terminus of a road or the site of a bridge, when that has not been done by the act of incorporation, is certainly an incidental power; and did we recognise any other limitations of it than those that are expressed in the charter, we should fall into a labyrinth of contradictions and doubts. The conditions of the contract of subscription were expressly prescribed in the Hibernia Turnpike v. Henderson,and Irvine v. The Susquehannah and Philipsburg Turnpike; in the latter of which it was said that, though an expectation of benefit to the holders of property contiguous to the route had been a powerful spring in putting these artificial bodies in motion, yet that it had never been suffered to become a condition of the contract of subscription. In the case at bar, the subscription is not to the stock; and there is consequently no express regulation or prohibition of it in the charter; without which the supposed resemblance of it to the cases quoted, is barely imaginary. In Irvine v. The Susquehannah, the rights of the corporators were *461declared to be inviolable; but the public interest was said to be paramount to every thing else. 'If, then, the right to determine a question of location is a corporate one, it is paramount even to the public convenience; and there is abundant reason that it should be so. A company is not bound to make the best road, and upon the best ground that can be had by an unlimited outlay: it is enough for the public that it does the best it can with its means. The sum subscribed is usually inadequate to the end, and it would surely not promote the public convenience to preclude recourse to any other means which might be put by accident within its reach. As inducements to the undertaking, contributions on the ground of individual, as well as of corporate interest, maybe legitimately calculated upon. Without the purchased assistance of a part of the inhabitants of Harrisburg, this company might possibly have been unable to construct any bridge at all; and how public convenience would have been promoted by interdicting the use of it, is a mystery which it would be hard to penetrate. To say that the competitors for the location might equally have encouraged the work by subscription to the capital stock, is to say nothing. For its own sake, they were not disposed to encourage it at all; and we should ask too much did we require the company to forego the power given to it by its position of procuring assistance in compensation of equivalent advantages bestowed. Nor is it to be inferred from the clause which allows of an increase of the capital by an increase of the shares, that it was intended to prohibit an increase of it in any other away. That is an enabling, not a disabling clause, its object being to enlarge the sphere of the company’s action for general purposes, not to restrain il in a particular thing. And a subscription of additional shares to the stock would have directly given the subscribers that very influence in the direction of the company’s affairs, which has been so earnestly deprecated. The election of managers by means of a fictitious subscription, is certainly an evil which the legislature, in the cases quoted, wisely interfered to prevent; but to be allowed to do the best for the company’s welfare by the use of every .means not expressly interdicted is one of the conditions on which the stockholders subscribed their money, and it is one by which the public will not be found to suffer; for managers will doubtless have sufficient sagacity to see that the location which best serves the public, is that which will give the company the greatest run of customers. It is most politic, therefore,to let such a company manage its affairs according to the dictates of its interest. Its managers will doubtless select the best route and occupy the best positions in order to enjoy the present advantages of them, as well as to preclude future competition; and for that reason, the interest which the state' has in the work, may safely be committed to their direction. We cannot say, therefore, that the contract on which this action has been brought, is illegal on grounds of public policy.
Judgment reversed, and a venire de novo awarded.