Court Opinion

ID: 6672579
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:13:32.034611+00
Date Added: 2024-06-11T16:00:35.627420
License: Public Domain

The opinion of the Court was delivered by
Moses, C. J.
The Court, in The State, Ex Rel., The South Carolina Railroad Company vs. The Columbia and Augusta Railroad Company, (January, 1869, 1 S. C., N. S., 46,) held that, by virtue of the power conferred by the 4th Section of the 4th Article of the Constitution, it had authority to issue writs of prohibition in cases properly cognizable by it.
So holding, for the reasons there given, the right cannot be doubted, as to the writ of mandamus, by. express words granted in the same Section.
It is not necessary to duscuss so much of the return of the respondents as affirms “ that they are not public officers, nor officers of a public corporation.” Conceding this, still there are duties in*42cumbent on them, outside of those,'which devolve upon them as trustees for the corporations.
Neither can they sustain their claim, that, in respect to the shares of the capital stock of their company, they owe no public duty whatever, and that, as to these, they are not subject to the writ of mandamus.
There is a marked difference between charters granted by the legislative power, which exact no public duties, and those under which the public acquires such rights that it can compel the corporation to respect them. A distinction has always been observed between companies chartered as trading associations, or scientific societies, or others of that character, “aiming only at objects of their own, and not contemplating any benefit to the public, or taking upon themselves any public government, duty or responsibility,” which are exclusively private, and those where, although the inducement to their creation is individual gain, yet the interests of the community are so inseparably connected with them that what affects the one will be sensibly felt by the other.
Indeed, so much do railroad companies partake of the nature of public corporations, that Mr. Grant, in his work on corporations, at page 9, includes them in that class, “ because they are established to secure great purposes of State, and holding out advantages and benefits, either to the public without restriction, or to every one who chooses to comply with their conditions.”
Mr. Redfield, in his Law of Railways, (1 Vol. 53,) divides corporations “into eleemosynary, and those, which are mere civil or political bodies, entrusted with certain rights, or duties, and required to perform certain functions more or less connected with the polity of the State or nation,” and among the last ho places railway companies.
According to the authorities of this country, the respondents may properly, claim to be the official agents of a private corporation. This position, however, affords them no exemption from the liabilities which attach, by reason of the “great purposes of State,” which, doubtless, to no small extent, induced the grant under which their company enjoys the large immunities conferred upon it.
Such has been the rapid increase of railroad companies, with the extended and exclusive privileges which they enjoy, that the material interests of the country are, to no small degree, influenced and controlled by them. The great facility which they afford for the transportation, not only of passengers, but of freights, has pre*43vented all rivalry by other means, and given them almost a monopoly of the whole carrying trade. If the State, through the Courts, has no power over them by a short and speedy remedy, the injury they may inflict, on not only private, but public interests, might be so prejudicial and detrimental as to counterbalance all the benefits derived from their establishment. FromHheir number, and the magnitude of their capital and operations, without the means of an adequate check to their encroachment on private rights, they might, indeed, become a power which the State itself might have cause to fear.
The ground of the respondents, in this regard, cannot be maintained. Carried out to the extent proposed, any of the members who desired to abandon their company, by selling out their shares, might be beset with difficulties and embarrassments, and the management of their ovrn private interests, against their will, subjected to the guidance and control of their associates.
It is very true that, whatever rules they may have adopted for the transfer of their stock must be observed, but when a compliance with them is offered, the officers are not at liberty to inquire into the motives of the seller and the vendee, the purpose which prompts the sale, or what will be the effect either on their own road or some friendly one. Nor, if the formalities which they have prescribed as the law which is to govern on such transfer are complied with, can they withhold the proper action demanded of them, no matter what may be the equitableinterests of others, who, with notice of the sale, have yet not taken any legal measures to prevent it.
The fact that this company, with a charter granted in 1849, and an organization soon after following, has, up to this time; governed its direction without any by-laws or specific rules and regulations, although the power to make them is expressly granted, does not show much foresight or care on the part of those so deeply interested in the proper management of their own investments.
It is not necessary, in the absence of all by-laws, with respect to the sale of stock-in an incorporated company, to inquire if anything more is necessary than a mere written assignment or transfer of'the certificate by the holder to the purchaser, to vest the latter with the title. Such an inquiry here is not required, for it appears that this company has, in effect, (not in the form of a by-law,) a regulation as to the transfer of its stock, which, not only from long established usage, but from its incorporation into the certificate, may well be recognized as its own law in the matter.
*44“This certificate is transferable in person, or by attorney, at the office in Cheraw, South Carolina, on the surrender thereof.”
The mode of the transfer has thus become a part of the contract with the holder.
The certificate of the shares in question was held by the Cheraw and Salisbury Railroad Company, of which the relator, Townsend, was the acting and ostensible President. The return seeks to justify the course of the respondents in refusing the transfer, on the ground of a notice by some of the stockholders of the said company, that the title and the right of Townsend and the Directors were disputed, and that legal proceedings would be instituted to test the questions. This might have been sufficient to suspend the act demanded .by the relators, so that proper opportunity might be afforded for the course proposed, but cannot operate to justify a denial, still persisted in, when, after full time allowed for access to the Courts, it has not been 'made to appear that any process to enjoin has been granted or even asked for. Townsend was, for all purposes necessary to the safety and security of the respondents in dealing with them in transactions affecting the Cheraw and Salisbury Railroad Company, its President, claiming to have been so elected, and must be so recognized and regarded. Whether he was elected in clue form, was not a question for the relators. He filled the office, and was so accepted and received, and until an act of ouster, by competent authority, he was the President, presumed to be rightfully in office.— Bank of U. S. vs. Dandridge, 12 Wheat., 79; All Saints Church vs. Levett, 1 Hill, 191; Mohawk R. R. Co., matter of, 19 Wend., 135.
To entitle the relators to the writ, it is necessary to shew a demand and refusal. It is not essential, however, that “the word ‘ refuse,’ or any equivalent to it, should be used, but there should be enough from the whole of the facts to shew the Court that, for some improper reason, compliance is withheld, and a distinct determination not to do what is required.” — Tapping on Mandamus, 285; 3 Stephens, N. P., 2292; Angel and A. on Corp., 104.
Whatever obligation there may have been on the relators to appear at the office, and there demand the transfer, was removed by the notice of the responients that it would not be made. It is not in-dispeusable to a-complete right to the remedy they ask, that so useless a ceremony should have been performed. It would have been a. mere idle form, after the peremptory refusal by the President- of the Cheraw and Darlington Railroad Company, for, without his *45sanction, tbe transfer could not be made, and be had expressed his conclusion in plain and positive terms.
It is true, as alleged by the respondents, that to entitle a party to this writ, he must be clothed with a clear legal and equitable right to the thing which is withheld. — Tapping on Mandamus, 28 ; Moses on Mandamus, 115.
Is die claim of these relators founded on such right ?
The stock is held by the Cheraw and Salisbury Railroad Company. Its Directors, having its control, and vested with sufficient power to dispose of it, authorize their President, the relator Townsend, to make the sale, and so carry out the purpose of those who, to that end, represented the whole company. He contracts to sell it to his co-relators, Walters and Newcomer, at the price fixed by the Board of Directors; part of the purchase money was paid, and the balance stipulated to be paid “as soon as the proper and lawful' transfer thereof could be made on the books of the Cheraw and Darlington Railroad Company, at their office in Cheraw.” The fact that the transfer wa? prevented by the act of the respondents in no way affected the clear legal right of Townsend to make the sale, or that of Walters and Newcomer to be vested with the title to the stock on the payment of the money promised. The thing withheld was the stock, that was the subject of the contract; unless the transfer was had, its end could not be consummated, and the design of the parties would be entirely disappointed. Were not the terms of the undertaking sufficient, if its performance had not been prevented by die respondents, to vest the title in Walters and Newcomer ?
The President of the Cheraw and Darlington Railroad Company had been informed of the sale by Townsend, and by Bridges, the agent of the other relators, previous to the letter of August £0,1861), and the objection urged against the application for the transfer was not any impression on his own mind as to their legal right, but was the consequence of the notice of some of the stockholders of the Cheraw and Salisbury Railroad Company, above referred to. From regard to it, he refrained from the performance of the ministerial duty imposed on him through the contract of his company with that of the Cheraw and Salisbury Railroad as to the shares so held.
Why, in the absence of all legal proceedings, to which his company was a party, he undertook to favor, or protect the said stockholders of the Cheraw and Salisbury Railroad Company against the act of its President and Directors, directly representing them, is not *46consistent with any obligation which he owed to the one company or the other. Whether the money was paid before the transfer, did not enter into the duty imposed on him by virtue of his office to transfer the stock. The seller and the buyer (by his agent) were both present, and it was for them to prescribe the terms of their contract — their terms became the law of it.
That Walters and Newcomer are joined in the writ, cannot prejudice the remedy to which Townsend may be entitled, had they not united with him. “Where two or more persons join, whose interests and cause of complaint are entirely distinct, it may well be doubted whether a joint application for the writ prayed for can be sustained.” — Moses on Mandamus, 198. This proceeds on the general rule of pleading applicable in all actions, that several distinct rights, held by separate persons, cannot be included in the same writ. As in the instance put in the book, from which we have last above quoted, “ where a record shews a certain sum awarded to Doe, and another to Blackwell, as damages severally sustained by them by reason of a road laid out across their lands, they have no such common interest as would authorize them to join in an application for a mandamus to compel payment.”
The object of the writ is to compel the transfer of the stock, and in this the parties have a common interest. The right to it has grown out of a contract which they desire to complete, and occupying this position, they have a common purpose tobe effected through the remedy which they claim. It might have been a cause for comment, if the persons who had contracted to buy the stock had not united in the application through which they were to become vested with its title.
The most important question remains to be yet considered.
Do the facts set forth in the suggestion, taken in connection with the statements of the return, entitle the relators to the writ which they ask ?
It is urged “that it comprehends the execution of the common law and of statutes, Acts of Parliament, or of the King’s charter, in all cases for which there exists no legal remedy; but not applicable, however, as a private remedy to enforce simple common law rights between individuals, as to compel payment of money due on a bond, or the restitution of chattels, still less to command a party to abstain from a tort or the abuse of his office.”
Although it is difficult to lay down the precise line which' separates the rights which an individual may demand from a railroad *47company, growing out of the obligations which it owes to the public, from the fact of its being constituted for public purposes, and those which, as a separate and distinct individual, lie may demand, proceeding from relations in which other' members of the community are not directly concerned, yet such a distinction does exist, and is well founded.
The Courts do interfere by mandamus to compel the discharge of their duty by corporate officers. Angel & A. on Corp,, 646, 651. Such interposition, however, could only be demanded where the act is enjoined by law, and must be of the character of the duties pertaining to the public. Any individual may become a member of the corporation by the purchase of its stock, and would be entitled to all the rights and privileges conferred by the charter, to the extent of the shares he might hold. It is a right .given by the charter to the public, and to whichsoever office of the company appertains the duty to execute the new certificate which is to follow the trans-. fer, as the evidence of the title, such officer is in violation, of the statutory duty required if he refuses.
The duty, although a public one, will not be enforced by mandamus, if the party claiming the right to its performance can (in the language of the argument) have recourse to any “ other specific remedy adequate to enforce that right.”
While the general principle, thus affirmed, may be conceded, yet the rule, as now understood and acted, on by the Courts, does not deny the writ, where, formerly, it would not have been allowed, because' a remedy, affording compensation in damages for the wrong committed, might be found in a resort to an action on the case. “ The remedy for satisfaction must not only be adequate, but it must be for complete satisfaction, equivalent to a specific relief.”— Tapping on Mandamus, 20. . •
“If the remedy be not equally convenient and efficacious, the - Court will grant the writ.” — Ibid, 19. “And it must be specific and adequate to enforce the right.” — Angel and A. on Corp., 653.
“Mandamus'Hes to compel an officer to execute the duties of his office,' though he be liable to penalties, or an action on the case for the neglect of them.”' — Ibid, 655.
Notwithstanding these principles, which would seem to require the other remedy to be “specific, and adequate” to the purposes sought by the writ, many authorities, both in England and this country, may be adduced to shew that, although the compensation *48in damages will not accomplish the end proposed by, and consequent on the writ of mandamus, yet, if recourse can be had to' an action, through which it may be had, the writ will be refused.
Can it, therefore, issue where the purpose is to require the transfer of shares in a railroad company ?
Various cases have been cited, where, for the same object, it has been refused against- banking corporations, on the ground that a recovery of damages may compensate for the loss; but yet, in Rex vs. Worchester Canal Company, 1 M. and R., 529, it was held that the writ could issue to compel the entry on the books of the defendant of the probate of the will of a deceased shareholder under which the executrix was the proprietress of his shares, leaving any question as to its validity and effect to be raised by the return.
So, too, in Regina vs. The Liverpool, &c., Railway Company, 11 Eng. C. L. R., 408, where a mandamus was applied for against the company to command them to enter a memorial of transfer of shares, though it was refused, on the ground that the relator was not proceeding bona fide, in answer to the argument that the writ would not lie to permit a transfer of stock to be made on the books of the company, Lord Campbell, C. J., said, “In an action, only damages could be recovered, and the full object of the party would not be answered.” ,
In Harris vs. The Irish Land Company, 3 Ellis and B., 512, the same C. J. said: “But where there is a duty, in the fulfillment of which the plaintiff is personally interested, and which ought to be fulfilled under royal charter, the non-performance being a grievance to an individual, that is clearly a case within the intention of the Legislature, and it is precisely this case. The plaintiff is entitled to the shares, the company refuse to register his name; before tlie act, in such a case, a prerogative writ would have been granted.”
Coleridge and Wightman, J. J., both concurred.
Mr. Moses, in hi3 work on mandamus, page 108, says: “It seems unquestionable that a right of action for damages generally exists against public officers who refuse or neglect to perform their duty in favor of those persons whose rights are injuriously affected by such neglect of duty. But this remedy, by action against the officers, is of such doubtful and uncertain character as not to supersede that of mandamus. The unliquidated damages to be assessed by a jury would not necessarily be the amount due the party.”
At page 161, he says: “That a writ of mandamus will lie in *49such ease, seems to be sustained by the weight of modern authority.” Mr. Redfield, in his work, before referred to, at page 144 of 1st Vol.,'says: “There can be no question, probably, in this country, that where the company refuse, on reasonable request, to make thé proper entry on their books; of the transfer of shares, whereby the owner is liable to be deprived of any legal right or pecuniary advantage, the company may be compelled to .do their duty, in the premises, by writ of mandamus."
And.at page 281, of his 2d Yol., he says: “And this is the proper remedy to compel a corporation to allow the transfer of stock upon their books, or the company may be compelled to pay damages for such refusal by an action at law.”
In the case of the State vs. Lehre, 7 Rich., 234, which has been referred to in the argument, it was not decided that‘mandamus would not lie, because the relators might be indemnified through an action if they were wronged; but the writ was refused because “of the legal inability of the Commissioners and the practical difficulty, if not impossibility, of their compliance with the required demand.”
In the State vs. N. E. R. R. Co., 9 Rich., 253, Judge Glover, in delivering the opinion of the Court, says, “ the general rule has béen restricted to cases where the specific-remedy is equally convenient, complete and beneficial.” ' .
What did these relators propose to accomplish by the writ? Townsend, on his part, desired to make available the shares of his company in the Cheraw and Darlington Railroad Company, through his contract with his co-relators, while they sought to obtain them, that, through their possession, they might have an interest and influence in the company. What damages recoverable for the alleged breach of duty would vest them with'the stock ? That, with the proceeds of a verdict, they might supply its place by another purchase, is no answer, for it might follow that, on an application for the transfer and certificates of the new bought shares, they might encounter the same difficulty, and the result would be that the Cheraw and Darlington Railroad Company could compel the Cheraw and Salisbury Railroad Company to hold their stock against their will, and forever exclude Walters and Newcomer from becoming members of their corporation. Suppose, however, the Cheraw and Salisbury Railroad Company brought their action and recovered; then, being owners of four thousand shares, they would be called on to contribute to tho payment of a judgment debt due in part to themselves. Suppose it brought by the other, relators, and a verdict *50had, then they would hold a money demand against a company with which they were seeking association, and which demand, by increasing the liabilities against it, might affect the very stock which they sought to purchase.
The return of the respondents illustrates the fact that, besides the market worth of railroad stocks, they may have a value which might recommend them by reason of the power and patronage which they might command. Their chief objection to the transfer of the shares appears to be the purpose to which they are to be devoted in the hands of the purchasers, “to control the said Cheraw and Darling-ton Railroad, and Cheraw and Salisbury Railroad, for the purposes of their own rival line by way of Wilmington, for their own interests, and for the benefit of interests foreign to the interests and policy of the State, as expressed by the Statute Book of South Carolina.”
With what was so often alluded to in the argument, “as the politics of the case,” the Court has no concern. It decides on the rights of parties involved in the issue before it, without regard to the extrinsic circumstances which may be the consequence of its adjudication.
The jurisdiction under this writ has been so “amplified,” since it was first known as a “mere letter missive from the sovereign power, commanding the performance- of some particular act or duty, to which no return was allowed, and disobedience of its command was punishable by attachment,” that it can only be accounted for by the fact, that its prompt and speedy action, and the specific relief which it affords, recommended it to adoption as one of the favorite remedies of the law. While its limits have been extended in England, there has never been an attempt by the Legislature of any State in the Union to contract them.
If, in those rude days, when' commerce scarcely existed, and the improvements of the time in which we live, if they could have been then even imagined, would have been received as the vagaries of a lunatic, or the pictures of a dream, the writ was regarded with favor, and preference over those forms of action which were attended with so much uncertainty and delay, is it surprising that the beneficent ends it was designed to attain should be so increased as to keep pace with the enlarged trade and business of the country? No insignificant portion of these are carried on by corporations, which have so multiplied in number and enlarged in capital that they have become a power so strong in the country as 'to render necessary a remedy through which their breaches of duty to the public may be *51the more speedily met than through the slow progress of an action at law. This necessity has not been confined to the remedies at law. The jurisdiction of equity, by the force of the same circumstances, has been enlarged to meet the exigencies demanded by the material changes which the intelligence of the day is effecting.
It was for a long time held that Courts of Equity would not decree specific performance of a contract for the sale of personal chattels. The necessity, however, for the prompt process of that Court, in cases where damages were uncertain, and might not' be adequate compensation for the thing withheld, so by degrees extended the jurisdiction, until at last it was 'held, in Adderly, vs. Dixon, 1 S. and S., 607, “that it would be decreed at the suit -of the vendor, of a contract for the sale of debts proved under-a commission of bankruptcy.”
The extent and use of railroads have outstripped the anticipations of even the most hopeful and visionary of their friends.- Charter after charter is granted, and the whole country is almost connected by the roads upon which their trains are run.
They were granted' as well for public purposes as individual profit. Combined, they form a power that, unrestricted by law, could control the State.
They owe duties as well to the community at large as to their-stockholders; and by reason of its prompt, speedy and decisive action, and the adequate service it is calculated to render where breaches of duty are committed by those'companies, there seems to be no well sustained reason why the writ of mandamus should not be called into requisition.
The order granting the application has been filed.
Willard, A. J., and Wright, A. J., concurred.