Charlotte, C. & A. R. Co. v. Gibbes

• Decision Date: 18 October 1887
• Parties: CHARLOTTE, C. & A. R. CO. v. GIBBES.
• Court: South Carolina Supreme Court

4 S.E. 49

27 S.C. 385

CHARLOTTE, C. & A. R. CO. v. GIBBES.

Supreme Court of South Carolina

October 18, 1887

Appeal from court of common pleas, Richland county; T. B. FRASER Judge.

Action by the Charlotte, Columbia & Augusta Railroad Company plaintiff, against Gibbes, as treasurer of Richland county defendant, to recover a tax paid to defendant under protest. Plaintiff was defeated and appealed. The tax was levied under the South Carolina general railroad act of 1881, § 41, (Gen St. 1882, c. 40, § 1453,) which section is as follows: "The entire expenses of the railroad commissioner, including all salaries and expenses of very kind, shall be borne by the several corporations owning or operating railroads within this state, according to their gross income, proportioned to the number of miles in this state, to be apportioned by the comptroller general of the state, who, on or before the first day of October in each and every year, shall assess upon each of said corporations its just proportion of such expenses, in proportion to its said gross income for the current year ending on the thirtieth day of June next preceding that on which the said assessment is made; and the said assessment shall be charged up against the said corporations, respectively, under the order and direction of the comptroller general, and shall be collected by the several county treasurers, in the manner provided by law for the collection of taxes from such corporations, and shall be paid by the said county treasurers, as collected, into the treasury of the state, in like manner as other taxes collected by them for the state."

Defendant claimed that the law under which the tax was levied was in conflict with the two following constitutional provisions. Const. S.C. 1868, art. 1, § 36, provides that "all property subject to taxation shall be taxed in proportion to its value." Article 9, § 1, provides that "the general assembly shall provide for a uniform and equal rate of assessment and taxation, and shall prescribe such regulations as shall secure a just valuation for taxation of all property, real, personal, and possessory." Defendant further claimed that the tax was illegal because it was not levied according to the value of its property, and was not uniform, as required by the constitution. The act here in question was passed after the defendant corporation had received its charter under the act of March, 1869, and the opinion sustains the former act as being a valid amendment of the charter under the reserved legislative power of amendment contained in Const. 1868, art. 12, § 1, and act of 1841, § 41, which are quoted in the opinion, and were both in force when the defendant was created; this reserved power of amendment being apparently held to have been exercised in view of Const. 1868, art. 12, § 5, which is referred to in the opinion, and provides as follows: "All general laws and special acts shall regulate the public use of all franchises which have heretofore been, or hereafter may be, created or granted by or under the authority of this state, and shall limit all tolls, imposts, and other charges and demands under such laws." The general railroad act of 1881, further provides for the election of an officer to be known as the "Railroad Commissioner," and also provides by section 43 (Gen. St. 1882, § 1455) as follows: "The commissioner shall have the general supervision of all railroads and railways in this state operated by steam, and shall examine the same, and keep himself informed as to their condition, and the manner in which they are operated with reference to the security and accommodation of the public, and the compliance of the several corporations with the provisions of their charters and the laws of the state; and the provisions of this chapter shall apply to all railroads and railways, and to the corporations, trustees, receivers, or others owning or operating the same."

Jas. H. Rion, for appellant.

Chas. Richardson Miles, Atty. Gen., for respondent.

SIMPSON C.J.

Section 1453, Gen. St., imposes liability, in certain proportions, upon the railroad companies of this state for the salaries of the officers known as "Railroad Commissioners." The appellant denies the constitutionality of this act, and claims exemption therefrom on that ground. The appellant was brought into existence under its present name in 1869, by the consolidation of two other companies, previously chartered and in operation at that time as separate companies. This consolidation was made by virtue of the act of March, 1869. The two original companies, which by consolidation made the appellant company, it is conceded, were not subject to the forty-first section of the act of 1841, whereby the power to alter, amend, etc., certain charters granted by the legislature was reserved. On the contrary, said companies were expressly exempted from the operation of said section, thus giving them vested rights which could not have been interfered with by any subsequent legislation, had they remained separate and distinct, and continuing to exercise the rights and powers conferred upon them in the original charters. Dartmouth College Case. The consolidation, however, in 1869 dissolved the two original companies, and created an entirely new company, the appellant, with rights and privileges not dependent on or derived from the charters of the original companies, but upon the act authorizing the consolidation, and the law governing corporations at the time. Now, at the time of this consolidation, the constitution of 1868 and the act of 1841 in reference to corporations were of force; the constitution (article 12, § 1) declaring "that corporations may be formed under general laws, but all such laws may, from time to time, be altered and repealed;" and, further, "that the legislature shall regulate the public use of all franchises, and limit tolls, imposts, and other charges and demands under such laws." The act of 1841 provided in section 41 "that it shall be deemed a part of the charter of every corporation created under the provisions of any general laws, and of every charter granted, renewed, or amended by act or joint resolution of the general assembly, unless such act or joint resolution shall, in express terms, declare the contrary, that such charter, and every amendment thereof, should always remain subject to amendment, alteration, or repeal by the general assembly." Act 1841, (11 St. 168, now section 1361, Gen. St.) It is hardly necessary to discuss the question whether the appellant company, having been brought into existence in 1869, since the adoption of the constitution of 1868, and while the act of 1841, supra, was of force, is subject to amendment, alteration, and repeal at the discretion of the legislature, there being no exemption from section 41 of the act of 1841 in the act under which the consolidation took place.

The case of Hoge v. Railroad Co., 99 U.S. 348, is full to this point, where the act of 1841 was construed, and where the court said: "Every charter amended or modified was subject to repeal, amendment, or modification. Such is evidently the meaning of the forty-first section of that law, though the intention is inaptly expressed; and if an exemption from further legislative control had been originally acquired by the company, it ceased when the amendment to the charter was obtained." If such is the effect of a mere amendment surely a consolidation of two companies into one, as was had here, thereby creating an entirely new company and destroying the others, (Sheilds v. Ohio, 95 U.S. 319,) would bring the new company under the legislative control of the act of 1841, whatever may have been the vested rights of the previous companies. It is perfectly clear, then, that the appellant company cannot successfully claim exemption from legislative control by virtue of any rights derived from its charter; nor can it deny that the general assembly has general power to amend, alter, or repeal said charter, as provided in section 41 of the act of 1841, and in article 12, § 1, Const. 1868. This was the contract under which said company was created, and it is bound thereby. In fact, the rights of all corporations are founded in contract, which must be construed and enforced as all other contracts, to-wit, according to the intent of the parties. It was upon this theory that the great Dartmouth College Case was decided. There being no reservation of power applicable to that case, either in the charter itself, or in any general law upon the subject, the court was compelled to hold that the rights of the college, as specified in the charter, were matters of contract, and were therefore inviolate, and could not be assailed or impaired in any way by subsequent legislation. It has been upon this theory, too, that many cases have since decided that where a corporation accepts a charter under a general law, or under a provision of the constitution of the state reserving control over all corporations created therein, or under a special provision of the charter itself to that effect, it is subject to such control, and may be amended and altered as in the judgment of the general assembly the public interests may demand. See Black, Const. Prohib. §§ 33, 34, et seq., and the cases there cited. And it was upon this theory also that the recent case of Railroad Co. v. Gibbes, cited post, was decided, in which the constitutionality of the act now under consideration was sustained as to said company; this court holding that said company, having organized since said act was passed, had thereby contracted with reference thereto, and was bound by its provisions as a part of the act of incorporation. And it is upon this theory that the appellant here must be held bound. In fact, we can...