Columbia & Greenville R. Co. v. Gibbes
| Decision Date | 05 December 1885 |
| Citation | 24 S.C. 60 |
| Parties | COLUMBIA & GREENVILLE R. R. COMPANY v. GIBBES, TREASURER. |
| Court | South Carolina Supreme Court |
1. An act of the legislature will not be declared unconstitutional unless it is clearly so.
2. The State may grant a charter to a corporation upon such terms as she pleases, and the conditions so imposed become binding on the corporation upon an acceptance of the charter. The State may grant a franchise conferring vested rights beyond future legislative control, but to have such effect it must be clear, explicit, and unconditional.
3. Where a railroad company holding a charter that was, in express terms, not liable to amendment, was sold out under orders of the court, and the purchasers formed a new corporation under a general law permitting it in such cases with all the rights, immunities, & c., possessed by the old corporation previous to the sale under its charter, and amendments thereto, and of other laws of the State, the new corporation became subject to all laws on the statute book applicable to railroads, at the date of their organization.
4. Where an act created a railroad commission and provided that the expenses thereof should be borne by the several railroads of the State according to their gross income, this statute became a part of the charter of every railroad company thereafter incorporated, and assessments for this purpose annually included in the several tax acts were not successive amendments of these charters, but merely a provision to carry into execution a law already enacted.
5. An exaction of a yearly contribution laid by the legislature upon a railroad corporation is not unconstitutional where the corporation accepted its charter subject to such an exaction.
6. This case distinguished from Railroad Company v Howe , 32 Kan. , 737.
7. Where a corporation claims that its vested rights are impinged by a law on the statute book, the burden is upon the corporation to show that its charter antedated the statute.
8. This court cannot, even with the consent of parties authoritatively determine general propositions not involving points fairly arising upon the record of the case.
9. Petition for rehearing refused, no important fact or principle having been overlooked.
Before WITHERSPOON, J., Richland, April, 1885.
The opinion fully states the case. Upon the points considered by the court, the arguments were as follows:
Mr. C. R. Miles , attorney general, for appellant.
The amount paid by the plaintiff corporation to the county treasurer, and which this action is brought to recover, was a liability to the State, imposed by an amendment of its charter, as a condition upon which it shall exercise its corporate franchise of operating a railroad within the State accepted by it; and was therefore not illegally or wrongfully collected; and the plaintiff cannot maintain an action to recover it. Gen. Stat. , §§ 1416, 1453; 18 Stat. , 810. The Columbia and Greenville Railroad Company was established in 188, and chartered under the provision of the general law, " to enable the purchasers of railroads to form corporations, and to exercise corporate powers, and to define their rights, powers, and privileges," approved March 24, 1876 (16 Stat. , 160), and is therefore expressly subject to the liabilities and provisions contained in the " general railroad law" of the State, which, if inconsistent with its said charter, are to be taken as in alteration and amendment thereof. As to the inherent power of the State to subject corporations chartered by it to such new regulations as may, from time to time, be considered necessary for protection and safety of the public, without thereby violating the contract created by the charter, see Cooley Cons. Lim. , 576.
The constitution of 1868, art. XII., sec. 1, declares that " corporations may be formed under general laws; but all such laws may from time to time be altered or repealed." Section 5 of the same article declares that " the legislature shall regulate the public use of all franchises, and limit all tolls, imposts, and other charges and demands under such laws." The provisions of the act of December 17, 1841, are incorporated in section 1361 of General Statutes, which declares that " it shall be deemed a part of the charter of every corporation created under the provisions of any general law, 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 shall always remain subject to amendment, alteration, or repeal by the general assembly." This section was construed by the Supreme Court of the United States in the case of Hoge v. Railroad Co. , 99 U.S. 348.
The legislature having created railroad commissioners, and made it their duty to exercise a " general supervision of all railroads in the State operated by steam, and to examine the same, and keep themselves 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 having declared that all the provisions of the general law on this subject shall apply to all railroads, and to the corporations or others owning or operating the same (Gen. Stat. , § 1455), has required that the entire expenses of the said railroad commissioners in performing these duties, shall be borne by the several corporations owning or operating railroads within the State; and has made these several provisions a part of the charter of every corporation operating a railroad within the State over which it possesses the power of control.
Now, do not these several provisions of the general railroad law, made part of the charters of the plaintiff railroad corporation, " prescribe the way in which it shall exercise its corporate powers" ? Do they not " require the compliance with these provisions as a condition upon which the corporation shall exercise the privileges granted it; " and having been accepted by the corporation, may they not be " exacted, not because the legislature had a right to impose them, but because the corporation has agreed, as one of the conditions of its being, to assume them as matter of contract and for value" ? Is the plaintiff entitled to recover back, as illegally and wrongfully collected from it, the amount which it has paid in discharge of its liability to the State imposed by these provisions of law, which it has accepted by acting under its charter? A constitutional provision designed solely for the protection of the property rights of a citizen may be reviewed. Cooley Con. Lim. , 185. Sedg. Stat. and Con. Law , 111.
Mr. J. C. Haskell , contra.
Is section 1453 an amendment of the charter of the railroad company? The answer to this claim is, I think, readily found by an examination of section 1361, General Statutes of South Carolina, which provides that " all charters and amendments, or renewals thereof, shall always remain subject to amendment or repeal or alteration by the general assembly." Now, if this gives the power to exact additional taxes to those which others bear, it means that the legislature has reserved to itself the right to confiscate; for if it can exact one extra dollar, it can exact all, and take the entire property of a corporation without compensation or process of law, in direct violation of article I., section 23, of the constitution of South Carolina. If it can amend or repeal as it will, it can act judicially and declare forfeited a charter, and so, by violating section 26, article I., of the constitution, it destroys or takes at will private property and that of corporations without process of law or that adequate compensation imperatively required by the constitution. It may be answered that corporations take their charters in full view of the reserved power of the legislature; but the legislature cannot reserve a power which it never possessed, nor even by the consent of a party assume a power prohibited by the constitution.
None will question that the forfeiture of a charter is a judicial act, or that the legislature is forbidden by the constitution to act judicially. No one will contend as an abstract proposition that the legislature can by act take private property or that of a corporation; and no one will deny that uncontrolled extra taxation is pro tanto confiscation. The fact that the amount is small does not affect the principle one particle, for there is no limit once the right is established, save the uncontrolled and fickle whims of each new legislature, and what to-day is comparatively a trifle may to-morrow be an overwhelming burden, breaking down and destroying both the rights of the owners and the security of creditors, who extended the credit in full view of ordinary taxes, but with no thought or possible foresight of extraordinary taxes, which, if unpaid, will take the whole of the property which is their security. They can, it may be said, protect themselves by paying the taxes. So they can, and must, as to ordinary taxes; but once let them become liable for extraordinary taxes, and their liability is practically unlimited, and the securities on which they have relied may at any time become worthless by reason of those arbitrary burdens which no prudence could foresee and against which they have the right to expect full protection from the law.
The question then may arise, What can the legislature do under section 1361? And the answer is, it can act as it will in all special rights conferred by the charter where such action does not conflict...
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